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Property Outline

A. Co-Ownership

Tenants in Common Joint Tenancy (4 Tenancy by entirety

(presumed unless unities-time, title,
specific language interest ,
otherwise or possession
husband and wife)
Shares Can be uneven Trad. Even (can be Must be uneven
uneven)
Survivorship No Yes Yes
Partition Yes Yes No (4 ways out
1.death 2. Divorce
3. Mutual creditor
4. Mutual
agreement
 If ambiguous language
o Granting clause is given more weight than language that describes type of deed unless
granting clause is ambiguous
1. Germaine v Delaine-though conveyance looked like TIC b/c it said survivor gets in
fee simple (survivorship) it was construed as JT
2. Kipp v Chips- though conveyance said JT, b/c it said then to heirs forever this made it
ambiguous and interest clear enough to make TIC

a. Tenants in Common-separate but undivided interest, each is descendible and can be

passed through a will
b. Joint Tenants- Must have 4 unities-

o Four “unities” essential to a joint tenancy

 (1) Time – JT must receive their interests at same time
 (2) Title – all joint tenants must acquire title by the same
instrument or by a joint adverse possession; cannot arise by
intestate succession or other act of law
 (3) Interests (equal shares) – each JT must have the identical
interest in the property
i. Same share of the undivided whole
ii. Each JT must have same durational estate
 (4) Possession – at creation each JT must have the right to
possession of the whole property; however, one joint tenant
can voluntarily give exclusive possession to the other joint
tenant; also essential to tenancy in common

 Can only partition by judicial partition or by selling and breaking a unity

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 If secret inter vivos deed that grantee knows about before death→good but
if grantee finds out after death right of survivorship prevails
 Popular especially among husband+wife b/c if one JT dies property is passed
and probate of that property is avoided
 Where promise to convey at future date split-
 Common Law- JT continues even if one dies before conveyance so
only one gets proceeds
 Other- TIC is created when contract is made so if one dies before
conveyance→ estate gets proceeds
c. Tenancy by the entirety-Have to be Husband+Wife +4 unities
o Not recognized in community property states
o IRS only one that can reach TBE
o Feds can take property interest of owners engaged in illegal
activity, in TBE only take illegal owners survivorship interest
so innocent not hurt.
o Deed or mortgage by only one is ineffective

Severance of Joint Tenancy

BY CONVEYANCE

1. Riddle v Harmon-P married and conveyed her JT to herself rather than common law way
through straw man as TIC so can convey to daughter at death rather than to survivor if she
died first.
o Can unilaterally convey interest to self don’t need straw man, just makes it more
difficult
 Simultaneous death act- 120 hours w/ in each other

BY MORTGAGE

2. Harms v Sparague- P+D JT, D took out mortgage on his part of JT→died, P took control and
wants to quiet mortgage.
o Doesn’t sever 4 unities so title not severed so mortgage dies with mortgagers
interest in property.
o Title Theory- pass title when mortgage-not here v Lien theory-just charge on
property not conveyance so JT survive- here
 Lien Theory (majority)-If bought at foreclosure b/c lien first before died→ P
plus buyer would be TIC 4 unities would be destroyed
 Title Theory-Minority of states hold mortgage is transfer of title so would
sever 4 unities when take out
a. Joint Tenancy Bank Account

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o True joint tenancy account – Both have access to their half and survivorship
rights
I. Banks prefer joint tenancy accounts; has little risk
o Payable-on-death account – It’s mine until I die and then it is yours
I. Not permitted in some jurisdictions because it viewed as essentially
a will (but with no witnesses, not signed, etc)
II. Initially much resistance, permissible in many jurisdictions now
o Convenience account - O makes a deposit into O & A’s joint account but
intend that A only have the power to draw on the account to pay O’s bills
and not for A to have survivorship rights (similar to power of attorney)

 Majority of jurisdictions hold the surviving joint tenant take the sum remaining on
deposit in a joint account, unless there is clear and convincing evidence that a
convenience account was intended; burden of proof placed upon those challenging
the joint tenant to prove otherwise

 Regarding present rights, the majority of jurisdictions hold that the joint account
belongs to the parties in proportion to the net contribution of each party

Relations among concurrent owners

o Both own all, neither can act to prejudice other

o Partition if can decide on division (In Kind)if not→equitable partition (By Sale)
available to any JT or TIC
o Restriction on prohibiting partition good if last for only a reasonable time-not
unreasonable alienation
1. Delfino v Vealencias-P+D TIC, D had house+business on land but P owned
99/144 interest. P wanted partition so could develop and D wanted in Kind
partition so could stay on land b/c livelihood. T.C. partion by auction sale.
 Cts. Favor in kind b/c land can be sentimental and more value to
one owner
 So in Kind unless party seeking by sale can show partition by sale is
1)in best interest of all parties not just one tenant or
2)impracticable or inequitable in kind- T.C. didn’t recognize that one
party derived livelihood from land, so sale is not in best interest and
need to see if can practically divide land.

 Most courts do sale b/c efficient saves time and effort b/c parties wont agree to
division and just want out plus don’t want to divide land too much or becomes less
efficient tragedy of anti commons

Sharing benefits ad burden of co-ownership

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1. Spiller v Mackereth- P+D owned building, D didn’t use and P started using
the whole thing as a warehouse, D wanted P to vacate half or pay half
rental value. Judgment for P
o Absent specific agreement for rent, adverse possession or
ouster (majority)- a cotenant in possession is not liable for
value of use as long as doesn’t deprive other of use or run SOL
for adverse possession-
 there was none, D never tried to use, and locks on
building could be construed as security measures to
protect objects in warehouse and D never requested
keys.
 Ouster- D did not act as sole owner b/c didn’t stop P
from enjoying land b/c P never tried.
o Minority-pay rent based on possession even w/o ouster
2. Swartzbaugh v Sampson-P+husband joint tenants, husband entered into a
lease w/ D knowing P didn’t want it and walnut trees were removed to build
boxing pavilion. P seeks to cancel lease cant do only can get rent.
o Cannot eject cotenant, can only demand her share of rent
collected from 3rd party if paying full but not for profit made
by own labor on land
o Neither tenant can act to prejudice other in TIC or JT, lessee
risks partition and lessor doesn’t get that land.
 P could have went for ouster and get half of what fair
rental value for property only if adverse possession has
begun or if won’t let P enter from cotenants tenant so
would have to pay double rent unless already paying
full rent in which case husband would have to pay
o If reduced value of property→ can recover for that, but P
didn’t bring that
o P could have moved for partition against D but married so
probably don’t want to do that and since built boxing ring
could also probably collect for improvement on land
o JT not canceled merely suspended til end of lease(if lessor
die→either 1)lease ends (Majority) 2)lease continues til end
of lease→ to survivor, some states hold that lease is
severance

Recovering cost of Repairs and Improvements

 Cotenant can try and recoup losses or benefits in partition action, action for accounting
(equitable), action for contribution

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o Rents and profits

 Has to share rent w/ cotenants but if ouster→FMV

o Taxes, mortgage payments, and other carrying charges

 Contribution = to value of their share in the property
 Cotenant paying more than his share receives a credit for the excess payments
in an accounting or partition action
 EXCEPTION: if the tenant who has paid taxes has been in sole possession of the
property, and the value of the use and enjoyment which he has had equals or
exceeds such payments, no action in any form for contribution
o Repairs and improvements
 Co-tenant may get recovery in separate action only for necessary repairs if give
notice to other tenants or in action for partition or accounting w/o
 Minority-co-tenant cannot get contribution for necessary repairs
 A cotenant has no right to contribution for improvements
o General RULE: interests of the improver are to be protected if
his can be accomplished without detriment to the interests of
the other cotenants
 If land physically partitioned, the improved portion
awarded to the improving cotenant, if possible to do
without jeopardizing the interest of non improving
party as before improvement. If not then payments to
improver may be due from noncontributing cotenants
in sale ex. Swartzbaugh if moved for partition

Marital Property (TBE)

o Community (8 states)- more accurate representation of what people want-

property you bring in is separate and inheritance is separate. Anything
earned during marriage is shared
o Common Law (most states)-originally women property now owned by man
and subject to creditors, reformed under married womens property acts-
now women in control of property and immune from husbands debt and
wife in control of all earnings outside of home

1. Sawada v Endo- P got hit by D in car who had no insurance, after D

conveyed property to sons. P seeks to set aside conveyance. D property
held in TBE by D + Wife.
o Under married womans property acts in TBE is not subject to
claims of individual creditors for joint lives of spouses
o Since debt arose after TBE creditors had notice of it so not
unfair b/c creditors can insist on having both TBE be subject

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 Spendthrift trust protected even against beneficiary

creditors but you cannot make one yourself (except in
DE and AL)
 PP-interest in family solidarity
 Exception : IRS can always reach TBE, No forfeiture of land if illegal acts and
innocent tenant doesn’t know of activity (Lincoln), if land used in criminal
acts→forfeiture of criminals survivorship interest

Common Law Property rights upon termination of marriage

Divorce-

 Ct. determines at discretion based on equitable distribution-

o Majority states divide up marital property
 Some all property during marriage (gifts,inheritance)
 Some just earnings during marriage (community-PP-
partnership as marriage)
o Some states divide up all property

Death-

 “Forced Share” Legislation- surviving spouse has elective share in all

property-
o Conventional-can take what will has or fraction of his property
whatever the state holds usually ½ or 1/3
o Uniform probate code-keep what in will and credit toward elective
share
 Doesn’t apply to property held in JT nor to life insurance policies

**** GA only common law state to not have elective share

Community Property System ( 8 states AZ, CA, ID, LA, NV, NM, TX, WA) also by statutes WI and AL-PP
marriage is shared and contribute equally

 Three property regimes usually available:

o Hold all their property in separate ownership (American common
law system)
o Hold property acquired from earnings as community property
(American community property system)
o Hold all their property from whatever source as community
property (Universal property system)
 Property shared is all earnings and property during marriage/ not shared-
gifts, inheritance, property before marriage
 Divorce-half community property and all other property
 Death- ½ interest of dead spouse in community property according to will

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 No TBE-but only difference is no survivorship in community property and tax

advantage b/c taxes step up for community property when one spouse dies
and some state allow one party to transfer or mortgage (minority on this
provision) and creditor can follow manager so one creditor subject to entire
community if equal manager (majority)

Management of community property

 Can only be conveyed as undivided whole

 Equal management power-most states require joint transfers and management but
some don’t so either has to act in good faith toward other
 Majority-creditor can follow manager so if = → one creditor can reach all community

Mixing Community w/ Separate Property

 “inception of right rule”- if buy before marriage even if paid off w/ community funds it is
separate property
 “time of vesting rule”-title does not pass until all payments paid
 “pro rata sharing rule”-% paid when separate is % own separate and % paid when
community is % owned by community
Migrating Couples
 Where domiciled at time of property is whether subject to community property system
and can only change characterization if change domicile and both parties agree not
subject to system
 Where domiciled at death governs personal property and where land located at death
governs land
 Quasi Community (CA)- at divorce or death ½ of a spouses property that would have
been community had they been domiciled in CA all along now belongs to other spouse
B. Landlord Tenant Law
o Tenancy for years-set period of time can be less than year, ends when time up
o Can be made terminable on a condition also
o Death of LL does not end it

o Periodic tenancies- recurring periods that continues until notice-one full period if less
than year-must be actually delivered to person in writing
o Can be express or implied
 Month to Month- Give notice and ends at end of month
 Year- Have to give 6 month notice but now most states 30 days (if set 1,000 due
each month 12k year→year to year)

a. Tenancy at Will-No fixed period end whenever either party wants out
o If only right in LL, tenant right at will is usually implied but not vice versa just a
life estate but if SOF not satisfied→TAW
o Ends if either party decides no notice needed, tenant wastes, tenant attempts to
assign tenancy, LL transfers interest, LL executes a term lease

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1. Garner v Garrish- D got right to terminate on day of his choice, P inherited

and wanted to terminate
o Life tenancies are becoming more accepted
o P cannot terminate if D keep paying
b. Tenancy at Sufferance (holdovers)-when tenant stays when tenancy ends
o Cant use self help forcible entry to evict, some states say cant even change locks
b/c judicial cheap and fast
 Landowner can 1. Evict (plus damages) sue or act as trespasser 2. Consent
(express or implied) to creation of new tenancy (need before old tenancy ends if
new terms added)
 If accept payment depending on jurisdiction can be implied consent to
new tenancy either by length of original tenancy but not longer than a
year or month by month
c. The lease- gives rise to LL/Tenant duties that others don’t have. Ct may interpret
something that looks like lease as something else
 1)SOF - >1 year→ must be in writing
 2) Must list price but if don’t ct. can assign fair price if method for doing so given
Exceptions:
a)Partial Performance
b) estoppels-serious reliance from oral agreement
o If sublease- no privity b/w original lessor and sub lessee
o If assignment-privity b/w original assignor and remote assignees
o LL can go after T1 if T2 defaults
o 2 ways LL can go after sublease- 1. By statute 2. If subleasee agrees to be bound
by original lease
d. Discrimination
Federal Fair Housing Act
 §3604
o Cant discriminate on race, color, religion, sex, familial
status (except in senior citizen housing or if unmarried),
national orgin, handicap (not drug addictions, need to
make reasonable accommodations but can charge for
animal)
o Cant advertise or solicit that discriminate
o Don’t need motive to prove and can sue for injunction
and damages
 §3603(b)(1)-Can discriminate if renting less than 3 single family
dwellings if don’t use real estate agent and don’t advertise showing
discriminatory intent

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   § 3601: private clubs, dwellings for religious organizations, and certain

specified persons are exempt from the FHA
 Can discriminate against gays and don’t have to rent to unmarried
couples or against people who would pose a threat to the dwelling or
other tenants
 Have to allow pet for handicap unless impossible
 Attorney fees from D to P if P win but only from P to D if claim is
frivolous
 Civil Rights Act of 1866-same for racial discrimination- except that
doesn’t prohibit advertising and doesn’t have exemptions of FHA and
applies to all sale and rental of all types of buildings not just housing
o Need proof of intentional discrimination

e. Holdover Problem Delivery of Possession

1. Hannan v Dusch- D leased to P for 15 years and supposed to make

available for move in date but old tenants still there and D failed to
bring action to oust. D does not have an implied covenant to oust
for the start of a lease w/o express covenant
 English rule (Majority)-implied covenant to put tenant in
actual possession for first day but after that Lessee’s job
o LL in better position to Oust and know if old tenant
still there and can evict at less cost(weighing
fairness and efficiency)
o Tenant can move to oust, can cancel contract and
get damages, can get other housing and make LL
pay until oust
 American Rule (minority)-Lessee has legal right of
possession but no duty on lessor to put in actual possession
just need to deliver legal title
o Can oust and get damages, can collect the rent, can
evict
f. Sublease and assignments-Tenant wants to end early

Assignment

 Whoever LL contracts w/ has privity of estate and privity of contract, if

assign to T2 then T2 has privity of estate and liable to LL
 Novation- If LL release T1 of obligations and creates new contract w/ T2
where T1 assigned to T2, puts T1 off hook for rent but if not still on
hook. T1 cant release his duty in contract to T2

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2. Ernst v Conditt- P leased to Rogers, lease said couldn’t sublease and

has to clear stuff off land when lease up. Rogers sold business to D
and D stopped paying rent, P sued D, D said Rogers only liable for
rent. Debate over whether it was an assignment or a sublease.
 Though said sublease intentions are for assignment b/c gave
to D for remainder of term intentions clear Rogers did not
intend to keep interest so LL and assignee are in privity and
liable to each other but so is original T if easier to sue
 Common law rule if grants for the entire term of
lease→assignment despite terms or intention.
 Words in instrument are not conclusive, intentions are

Sublease-if hold any right to “re-enter”(→ not at common law but rest of this is) or
reversion before end of term of lease, an interest less than whole conveyed

 LL not in privity w/ sublesee so can’t sue them

` Restraints

 T1 can transfer freely if no covenant to contrary

 LL can cancel future sublease and assigns by canceling w/ T1 but if T1 forfeits his
right future one remain in tact
3. Kendall v Ernest Pestana- Bixler got commercial lease from D who,
Bixler builds business and sells to P. Lease required written consent
of D before could assign interest and failure to do so would render
lease voidable. D wants to void b/c wants different terms/ increased
rent. D cannot deny consent b/c want to raise lease higher

 Majority- LL can withhold consent foe whatever reason

when approval clause but often avoided by waiver and
estoppels and can be contracted around
o Contractual restrictions on alienability are allowed
b/c lessor has interest and should be allowed to
protect interest and lessee could have bargained
around it

 Minority but growing (followed here)- consent can only be

withheld where lessor has commercially reasonable
objection to assignment but this does not apply to
residential leases-can contract around this
o When discretion is given have to act in good faith
and b/c policy against restraints in alienation
g. Defaulting tenant

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1. Berg v Wiley- D said need to make repairs w/ in 2 weeks and

follow health code and if don’t comply can re-enter. On last day
P closes business and says closed for repairs. Since P defaulted
D came and changed locks when P was not there.
 Modern (large minority)-No self help unless
tenant abandons, need to use judicial
proceeding only takes 3-10 days if P didn’t
abandon, don’t want violence even if it costs a
little wont effect rent too much
o Applies to both residential and
commercial
 Common Law (majority)- may use self help if LL
entitled to possession and re-entry means are
peaceable and reasonable
o May differentiate b/w if do→ home-
usually no re-entry, commercial-re-
entry if express provision

h. Landlord remedies in addition to eviction

Tenant abandons-no intention of returning and default in rent

1. Sommer v Kridel- D backed out of tenancy after signed lease, P wants to

recover total lease from D. D owes nothing b/c P never tried mitigating
 Modern Rule (large minority)-P has a duty to try and mitigate
damages by treating just as any other empty apt (advertisement ,
showing it) don’t need to make special effort to rent that one out.
Treated more as a contract not conveyance.
o Would be unfair to D if something devastating happened.
o Breaching party has duty to show damages could be
mitigated and bear cost of mitigation and difference b/w
what mitigates and actual rent and landlord has duty to
show took reasonable efforts to do so b/c in best position
has to take fair market value
o If fail to mitigate can either (split authorities) 1. No rent
recovery or 2. Difference b/w rent and amount which can
be avoided
 Old Rule (majority)-LL no duty to mitigate b/c transfer of property
so LL should not concern himself with tenants. LL can terminate
lease, leave lease and sue for remaining rent, try and mitigate.

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Security Devices- 1)can sue for back rent and damages 2)can terminate lease 3) can
sometimes recover for difference in rent supposed to be paid and new reasonable rental
value (abandonment if Jurisdiction extends contract doctrine to leases) 4) Security
Deposits (for damages and breaches but LL often withholds for menial
reasons=problem) 4) Rent Acceleration (all rent due at point if default)

Landlord Duties: tenants rights and remedies

 If substantial breach can leave and sue for constructive eviction but should stay and
keep paying rent until know substantial breach b/c could be liable for default if not
breach

i. Quiet enjoyment and constructive eviction

 Needs only be nuisanish and not be able to use land for enjoyment as
contemplated
 Constructive Eviction
o Tenant has to give reasonable notice and LL has to be in control
or has to be LL tenants and LL has to take reasonable steps to
abate can only sue for constructive eviction if Tenant moves out
but can sue for difference in property value w/ breach if stay on
 Partial Eviction-
o Traditional Rule- If only partially evicted don’t have to pay rent
until made whole w/ land again
o Rest 2d §6.1-only partial abatement of rent or termination and
sue for damages
o Majority-not relieved of obligation to pay rent unless move off
all land
 Can waive these if know of before of problem before
1. Reste Realty Corp. v Cooper- D leased from P, and due to improperly graded
driveway it flooded. Officer of P knew of it and fixed but then quit and told
new guy how to fix it but didn’t so D left after complaints ignored. Debate
over whether flooding is constructive eviction because violate implied
covenant of quiet enjoyment→ is constructive eviction so doesn’t have to
pay rent
 Anything that materially disrupts or impairs a tenants
enjoyment of leased premises of what meant for and tenant
didn’t know about or didn’t expect to be a problem and that
tenant is forced to move out → this is substantial breach and no
further rent needs be paid

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j. Doctrine of illegal lease- if deplorable at time of lease was signed and LL has notice
tenant can walk or stay and use as defense not to pay/ LL can kick out or collect
reasonable rental value (tenancy at sufferance) and lease is unenforceable (brown v
Southall realty)

k. Implied warranty of habitability-(more widely adopted rarely to commercial lease)-

every lease implied warranty that it will be habitable- need to give reasonable time to
cure and has to be substantial interference w/ enjoyment.

o Urban tenant does not have time to inspect and LL knows more about
premises so better position to remedy, housing shortage so less
bargaining power
 LL needs to take reasonable steps
 Cant waive this even if know of condition before
1. HIlder v St. Peter(best case for implied warranty)- P leased shit hole and
it was dangerous, smelly, and ugly so couldn’t enjoy it but stayed there
and wants to not have to pay rent. D did no repair. Broke health code/
building codes
o Major housing code violation is prima facie evidence of breach. One
or two small ones that don’t endanger health or welfare→ no
breach
o 1. Must effect health or safety 2. Must notify and give LL
reasonable time to repair 30 days
 Damages can get specific performance, application
of rent to repairs, recovery of lost attorney fees or
[rent reduction is Diff b/w fair value as warranted
and value as it exists (followed here)]
 Others follows difference b/w rent and fair
rental value as exists or percentage
diminution approach (lease value lost by
tenant)

 Can use as sword or shield allowed to withhold rent

and can deduct from rent if repair at own expense,
punitive damages allowed if dire enough
 Need to show willful and wanton or
fraudulent conduct
o Some cts. Don’t allow retaliatory eviction within 90-180 days after good
faith complaint in residential leases some allow after reasonable time to
find adequate housing. After period tenant bear burden of proof to show
retaliatory

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 Tenants Duties
o Make minimal repairs
o Cant waste-cant change appearance or change realty extraordinary
in scope
2. Chicago Board of Realtors v City of Chicago- D codified implied warranty
of habitability and P challenged→ critique of Implied warranty of
habitability
o Purpose to improve health/safety in housing
o Provision not allowing LL to change interest at market value for late
payments will not further goal will have opposite effect
 LL will have less resources to improve so will increase prices
and tenant will be worse off and will be tougher for poor
people to get housing
l. Landlord tort liability
o Common law (majority)-no duty to make safe premise for tenants except:1)
latent defects(just warn of them and if T occupy→assume risk) 2) public use
(has duty of ordinary care to correct where LL know or should know T wont fix
before admitting public) 3)reasonable care over common areas (criminal activity
ect.)
o Minority-LL liable if failed to act as reasonable person. Common law factors
considered but not rule
o Exculpatory clauses (relieving LL of liability) are generally valid but some cts.
refuse to enforce in residential leases b/c unequal bargaining power and
thought to increase personal injury
o If premise Destroyed-
o Old rule-Tenant still has to pay b/c land still there though building not
o New Rule- (doctrine of impossibility)-LL cant deliver to Tenant so
doesn’t have to pay rent
m. Tenants Duties While in possession:LL rights and remedies
o Law of Waste-
o Tenant breaches if make change to affect vital and substantial portion
of premises: characteristic appearance,purpose of premises, uses
contemplated, change affecting realty
o Common law-duty too repair to keep premises in good repair, not
normal wear and tear or substantial repair- BUT now LL duty to repair
for most part b/c in better position
 Implied warrant of Habitability seems to overrule tenant duty to
repair but IWH doesn’t generally apply to commercial leases
o Majority- no duty to rebuild even if tenants fault unless express
promise to
C. Transfers of Land

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Intro to buying and selling real estate-

 1)Negotitaiton-legal description, price, date of closing-this is executor
contract b/c though sign no transfer of deed yet b./c still have obligations
parties need to complete before closing 2) inspection by buyer 3)buyer does
title search to make sure “good title” marketable title free and clear
4)mortgage loan (look to se if married and can transfer property w/o wife)
5)satisfy contingencies 6)delivery of deed-some states all parties need to be
present others 3rd party can handle
o Only way to transfer or cancel transfer of property is in a signed writing

i. Liabilities and duties of Broker

 Broker no duty to tell seller what buyer willing to pay b/c interest in closing
but still has to make seller happy-Lawyers have ethical obligation to put
clients interest in front of even his own b/c get paid same no matter what
1. Licari v Blackwelder- P hired D to find buyer at best possible price. D
bought for 115,000 making P believe that was best price and that
they were going occupy it but turned around and sold it for 160,000
soon after to someone P said not to deal with.
 D had fiduciary duty to act in best interest and good faith of
P’s and disclose potential other dealings. 45,000 profit
unconscionable so P gets it
 D intentionally misrepresented facts to trick to sell
o Majority Rule:
o Seller usually has selling broker and listing broker-A broker’s failure to
communicate facts concerning a more advantageous sale or exchange renders
him liable for whatever loss the client may suffer as a consequence and
precludes recovery of a commission. May also lose broker’s license. RST
(Second) of Agency § 387. Act in best interest of their principals
o Minority Rule:
o Buyers should have brokers b/c will increase efficiency b/c will reveal more info
to broker
o Dual agents- both have same broker and owes duty to act in good faith to both,
broker has to tell acting as dual agent\
o Disclosure- duty to tell sellers agent and material defects known to broker and not
buyer
o Types of listings-agreement to broker to pay commission if fulfill duty
 Open-least protective, seller can sell self or give to another broker and
not pay commission
 Exclusive agency listing-permits only one broker to sell property for
specified time, owner can still sell self. Broker gets commission even if
another broker secured buyer

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 Exclusive right to sell- gets commission if any buyer buys during

specified time. Most protected and majority of listings
o Lawyers give better advice b/c get paid regardless brokers only get paid on closing
and lawyers have ethics standard but cost more

Commission is due

o Traditional(majority)-when broker bring ready buyer even if sale fails-can be

contracted around by making commission conditional
o Minority-When closing or seller not acting in good faith to close

Requirements of contract for sale

n. Statute of Frauds-
o Except for leases less than 3 years, no interest in land can be created or
transferred unless writing, and no action can be brought against a person for
sale of land unless that agreement is in writing
o Need (1)signed by party to be bound (2)describe real estate (3)state price if no
price cts. may imply reasonable price if method given for doing so
o Exceptions: Part Performance and Estoppel (induced to rely on contract and
would be unconscionable injury if not enforced)→rest 2d §129
1. Hickey v Green- D agreed to sell to P for 15k P sends check but
doesn’t fill in payee line b/c wasn’t sure who to put D holds onto
check doesn’t refuse it but since doesn’t cash no partial
performance, check is binding on P though. D sold house for 18k to
someone else P offered to pay that D refused, P already sold own
house.→estopppel to P
 If don’t meet SOF can be enforced if reasonable reliance
and on continuing assent of D and P position has so
changed that only specific performance can remedy it
o Since D didn’t reject quick enough and P relied
by selling house rapidly which should have been
expected + reasonable
 Emails have been found sufficient to constitute a “written document” and
satisfy SOF; some courts have ruled otherwise b/c emails tend to lack
caution

Marketable Title-implied in every contract

 Majority-recorded easement that buyer can see can still render title
unmarketable
 Minority-recorded easement that buyer can see cannot render title
unmarketable
 Hazardous waste on property cannot make title unmarketable

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1. Lohmeyer v Bower-P bought lot but in violation of zoning ordinance, P

wants to rescind D tries to remedy by giving more land to fix violation→
can rescind if no clear marketable title
 So no marketable title-must be substantial defect that
subject buyer to injury (here was hazard of litigation
and covenant restricting use) has to be encumbrance
not just effect market value like wetlands restrictions or
zoning laws unless violation of them and don’t know
about
o Covenant restricting use wouldn’t be if was a
benefit to land or if has bargained for special
use
 D agreed to free and clear marketable title and wasn’t
 D entitled to fix w/ in reasonable time but by buying
more land is making P agree to something that was not
in contract
 If P had title insurance→ could be obligated to continue
anyways
 Following equitable conversion, most courts hold that from the time of the contract
of sale of real estate the burden of loss is on the purchaser, even though the seller
retains possession
 Some courts decline to apply equitable conversion and hold the loss is on the seller
until legal title is conveyed.

i. Duty to Disclose-caveat emptor- Buyer has duty to prudently inspect if fail to

cant rescind, unless 1. Latent defects 2.fiduciary relationship 3.act of
concealment-affirmative misrep.4. Or Johnson- punishes non feasance now
 Majority-disclose all known defects
1. Stambovsky v Ackey- P from not in the area bought well known
haunted house in the area as advertised by D which impaired value
of the house and D didn’t disclose.→ P can rescind
 If seller knows of a condition that is unlikely to be
discovered by careful and prudent buyer and impairs
value of contract non disclosure allows rescission
 As is clause does not extend to paranormal activity b/c
not reasonable interpretation only physical condition
2. Johnson v Davis-D bought house, P said roof ok but leaked like a
mofo and D wanted to rescind
 Where seller knows of facts materially affecting value of
property which are not readily observable and are not

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known to buyer, seller has to disclose. Punishing for

nonfeasance (inaction) now and not just misfeasance
 Materiality 2 standards- (majority) 1.Whether
reasonable person would think was important in
deciding to buy (objective) (Minority) 2.whether
defect effects value or desirability of property to
buyer (subjective)
o Encourages people to pick a bad decision when faced
w/ two bad ones increases risk taking
 Defense to hazardous materials if buyer knew about it or as is
clause and reasonably discoverable and no fraud

Merger of Contract into Deed

 When buyer signs deed and becomes final expression of agreement,

will not be enforced word for word ex. If say no warranties but
seller misrepresented something or fraud→warranty would survive
ii. Deed Warranties of Title-
a. General Warranty Deed-Warrants against all defects in title (6 express
warranties)(first 3 present covenants so evaluate at time of deed SOL runs
then) i. covenant of seisin (own it or not) ii. Covenant of right to convey iii.
Covenant against encumbrances (liens, mortgages, easements, covenants)
(last 3 future covenants problems arise after deed and SOL runs when
broken) iv. general warranty (protection against lawful claims of superior
title) v. quiet enjoyment (protection against superior title) vi. Further
assurances (execute any documents to perfect title)
1. Brown v Lober- P bought from D got GW and conveyed land w/ no
restrictions but D only had 1/3 mineral rights and didn’t tell P. P
says constructive eviction b/c breach of quiet enjoyment. Couldn’t
sue for breach of warranty b/c 10 yr SOL up on present covenants
seisin in this case.
o No breach of quiet enjoyment just b/c there is a
superior title b/c not stopped from enjoyment of land
and mineral yet so this doctrine does not secure a
perfect title
o Should have done title search or could have started
mining and hoped someone tried to evict them and
then sued on quiet enjoyment

 Encumbrances- Passes of fee by conveyance has to affect title not just price
of property-mortgage, judgment liens, tax liens, assessments, Estates or
interests in the property less than the fee (leases, LE, dower rights), Easements
or servitudes on the land

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 Knowledge of such does not exclude covenant, just need intent to

include in deed
2. Frimberger v Anzellotti- D conveyed to P w/ warranty saying no
encumbrances but since on wetlands property was in violation b/c
house encroaching on wetlands. P also claims misrepresentation
o Latent violations of land use regulations that seller did
not know of and no one ever tried to enforce regulation
and that does not appear on land record→ not
encumbrance does not affect marketability of title
 P should have been more specific in deed if
wanted to protect against this
 No damage yet b/c no one tried enforcing so
would only be speculative and P could have
requested waiver of this violation and didn’t.
o b/c no encumbrance no misrepresentation
 Recovery for breach of seisin-loss of consideration or interest-but
cannot recover for more than was grantor sold for
o Rockafellor v Gray- American Rule (majority)- cant sue on
present covenants if breach → transfer
 English Rule-Can
 Recovery for encumbrances-limited by price received by grantor-
tries to put grantee in as good of position as if covenant had not
been breached

Future Covenants-runs w/ land so needs something to attach to ex. Title to pass

 For warranty and quiet enjoyment, coventees possession actually

has to be disturbed
b. Special warranty deed-Warranty against grantors own acts
c. Quit Claim deed-no warranty just conveyance

Hypos- If B hasent been sued by C yet cant sue A but can ask to put money in
escrow to cover contigent liability so that doesn’t have to sue

 B Can get title insurance if A warrants 15k but B warrants 20k to C

and C sues B for 20k, B would only be able to sue for 15 k
 Transfer of warranty deeds-
o Minority- Warranty that grantor assigns to grantee who sells or assigns to
3rd party remote grantee is also transferred to them against grantor
o Majority-remote grantee can only sue for future warranties not present
warranty

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o Seller not responsible for loss b/c of depressed price so if A→B(GW

20K)→C(GW 15k) if C sues B, B can only recover 15k from A. Sellers limited
to what bought for to recover.
iii. Financing real estate transactions
o If default on loan lender can:
o have power of sale which makes it cheaper than going through
ct.
o Maybe get deficient judgment if sale is less than loan- sale
needs to be fair and warranted ( some cts. Use fmv rather than
what high bid is to determine if deficiency judgment). Scrutinize
borrowers private sale more than foreclosure sale against
lender to make sure not unfair sale.
o Buyer of foreclosed property taking risk b/c defaulter can come
back w/ in 6 months to year and pay back and plus don’t have
owner exposing all latent defects
o Acceleration clause-get all payments when default
o Borrower can- Sell property, give title to lender in return for forfeiture of
claims, accept foreclosure
o Financing not subject to UCC article 2 b/c not personal property
1. Murphy v fin dev. Corp- P had loan w/ D w/ power of sale. P defaulted and
postponed sale once for P . Lenders bought for 27k as much as loan was b/c
no other buyers present and sold 2 days later for 38k to house trading client
o As buyer+seller D had fiduciary duty to P so had to exert
reasonable effort (good faith) to obtain fair reasonable price under
circumstances and not act in bad faith (intentional disregard of duty
or purpose to injure)
o No bad faith/c didn’t shock judicial conscience but did no good faith
didn’t act in due diligence (negligence) to obtain fair price or
whether reasonable person in D position would have adjourned
sale-the fact that D offered at much higher price later that day
showed knew could make money should have had upset price or
postponed
o D should have published at more than P house and cuty hall
and postoffice should have put in newspaper like last listing
before postponement, or adjourned sale, or set min price
o If bad faith would be fmv-actual sale but only fair price-
actual price mere negligence cases
o P had 19k in equity and house appraised at 46k so 27k sale price did
not cover equity wouldn’t be fair
 Cts. Usually uphold low price unless procedural irregularity like chilled
bidding

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 2 standards for invalidating foreclosure sale 1)shock conscience 2)grossly

inadequate
iv. Subprime Mortgage Crisis
 Securitize- Bundled many different levels of mortgages (prime/alt
a/subprime) form many different area together to make it look like a
grade A investment b/c seems safer that all area wont become
depressed.
o But even Grade A loans people were having trouble paying so
threw balance off and banks started foreclosing to make lendee
eat drop in market.

1. Commonwealth v Fremont Investment & Loan- P claims D unfairly gave

subprime loans and wants restrictions on D foreclosing. The ones that were
deemed unfair were the ones secured by homes and low initial payment but
after 2 years often skyrocketed above 50% of income but in hope of
refinance before then and b/c value of mortgage was often 100% couldn’t
get new loan.→ Injunction granted
 Warning put out 1 yr before loans that even if comply w/ state+fed.
Regulatory guideline like did can still be unfair
 Unfair to base loan off of speculating rising house prices and ability
to refinance and not expected payment ability and low introductory
period gives false sense can afford
 For public interest company still gets to recover and people keep
home by working out better plan.
 Pre-payment penalty not fair b/c benefits lender not borrower
v. Mortgages-merely creates lien
 Seller should not accept late payments b/c may make buyer think
promptness is not needed and may bar P from bringing forfeiture and
remainder of purchase price
 Future mortgages are subject to prior mortgages first, subsequent ones are
riskier
o If only default on 2nd loan, acceleration clause in first makes you pay
off first right then.
1. Bean v Walker-D bought property from P w/ agreement to pay over 15
years w/ clause that said if defaulted P could eject and keep equity as
liquidated. D paid just over half and defaulted but also made
substantial improvements on land
 Buyer gets equitable title and seller holds legal title in trust until
pays in full, mortgage merely creates a lien and D entitled to
increase in property, so interest is created superseding terms of
contract

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 P can only foreclose on D and move for sale, would be inequity

to lose all money put into house and house
 Maybe can utilize forfeiture if minimal payments and where P
paying for upkeep or if D abandons
Installment land sale contract-pay in installments and get title when done
 Usually restrictive b/c people who cant get mortgages
 Buyer forfeits land and payments if default (no foreclosure expense)
 Accepting late payments may waive sellers right to forfeiture

vi. Recording of title

 Tract Recording- all land divided into tracts and look up by parcel id
number, takes long time so cost a lot of money
 Grantor + Grantee system- 2 large books one of grantors one of
grantees alphabetically
a. Types of recording acts
 Race statute-whoever records first is true owner (bright line rule)
(few jurisdictions)
 Notice statute- if subsequent purchaser has notice of prior
purchaser either constructive (recorded) or actual, last bonafide
purchaser w/o notice wins(half jurisdictions)
 Race-Notice-Combo (Half Jurisdictions GA)-w/o notice of prior
conveyance and record before prior conveyance
o Just need sufficient info to put on notice, inquiry notice
good- where should have asked more questions sufficient
way to be put on notice
o Eliminates law suits b/c extrinsic evidence
 Be careful of wives that don’t take husbands surnames
 Shelter rule- Defense where conveyee takes position of conveyor usually
helps more w/ notice
1. Luthi v Evans- Owen conveyed to Intl. Tour through recorded
mother hubbard conveyance just general description of everything
in county and then conveyed to Burris another parcel in county.
Burris claims made it impossible to find in ct. house b/c didn’t have
names of lessor/lesee, date or legal description so no constructive
notice.
 Subsequent purchasers need actual notice or prior sales not
good
 Improper indexing but proper description so can find
land→constructivre notice (can be found b/c recorded)
 Land not described w/ sufficient specificity and Burris had
no knowledge

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 Mother Hubbard (all property in a county)only good in

emergency but as soon as possible need to specify, this was
not emergency→ too much burden to find MH does not
give constructive notice so would need actual notice to be
good
2. Orr v Byers- P won 50k judgment against Elliott, but in judgment
note made by P attorney spelled Elliott wrong slightly. So lien did
not show up on Elliott property and was able to sell to D. P wants to
foreclose b/c iden sonans(alternative spellings D is responsible for
looking up minor mistakes if pronunciation close to same)
 Iden Sonans is inapplicable where name is material b/c too
prejudicial, not going to extend to real property would be
too burdensome on transfer of property to look up all
spelling only used for ID’ing people not constructive notice
in good faith. If misspelled grantee probably still good b/c
have to look up by grantor.
 Alternative procedure(soundex) for searching for names has
too many drawbacks too b/c brings too many choices
3. Board of Education v Hughes-H to D recorded Dec. 16 1910. H to
D&W Dec 21 1910 filed in grantee name just prior to recording→P
recorded Jan 27 1910. Race notice Jurisdiction
 Deed not operative til grantee name on it
 D protected b/c recorded before D&W recorded, not
enough constructive notice to D from D&W to P b/c P (wild
deed) stranger purchaser and stranger seller b/c not
recorded
 Need chain of recorded title for subsequent purchaser to
be valid over another
4. Guillette v Daily Dry Wall Inc.- P wanted to stop D another lot owner
from breaking restriction/term on P deed and a couple others that
says neighborhood will not contain more than a single family
dwelling. D deed did not mention but did refer to the deed plan
that P has
 Subsequent purchasers subject to restrictions of prior
purchasers
 Usually SOF bars restrictions not expressly written but
where remaining land has restriction can be enforced
 P had interest in rest of grantors land and P deed properly
recorded so D subject to those restrictions and index was
grantor grantee so not impossible to find restrictions set out
in plan requiring that grantee look into all person right of
subdivision in common grantor

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o Half jurisdictions follow half don’t b/c really

expensive to look up and burdensome on transfer
of property and say not constructive notice b/c not
in chain of title
 Can convey to straw person then convey back with restrictions
 title insurance to protect title in imperfect recording systems

Notice- 1)Actual 2)Constructive-Record and Inquiry (if reasonable prudent

person would investigate further and would have revealed unrecorded interest)

D. Private Land Use Controls: the law of servitudes-increase total value of both parcels usually by
burdening one

i. Covenants
a. enforceability by law
b. enforceability by equity

ii. Easements – interest of one person holds in the property of another (dominant
estate-benefited parcel and Servient Estate burdened parcel)

Types of Easements:

1. In gross-both servient tenement, right to some person w/o regard to

land ownership, states differ on if transferable
2. Appurtenant-a dominant and servient tenements, right goes to
landowner of parcel of land, goes with land
 Presumption in favor of appurtenant if ambiguous
o Cannot have easements in own property but can reserve when sell
3. Negative Easement- right to prevent some use of servient estate
 Common law only 4- 1)light 2)air 3)subjacent or lateral support
4)continual flow of artificial streams
4. Conservation Easement-generally negative easement in gross for
conservation of resources or history
 If wont recognize as easement in gross as valid may be enforced
as real covenant or equitable servitude
5. Licenses-oral/written permission by occupant of land allowing licensee
to do some act that otherwise would be tress pass-this is revocable
when servient owner die or sell(unless expressly or impliedly makes it
not 1. Intention 2.equitable estoppels 3)license w/ interest) and
easement is not until dominant owner died

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 Last until nature of it doesn’t call for it anymore

 Cases of ambiguity b/w easement in gross or license are
considered license b/c hard to get rid of easement and less
alienable
 Assignable only if intended to be or estoppels and becomes
irrevocable
1. Holbrook v Taylor- D been using P haul road for many years w.
permission. D bought land and built house near P land and
wants to continue using road but P wants to revoke/get in
writing.
 Estoppel- cannot revoke license if erect
improvement of considerable expense so license
becomes easement appurtenant
 P agreed to let D use pass way and didn’t say
anything when machines using road to build house
and considerable expense
o Sheppard v Purvine-close friends and word considered bond, to
require for a deed would be embarrassing to integrity so oral is
binding. (majority)Estoppel applies to oral contracts
o Henry v Dalton-oral not enough need writing to create
easement/irrevocable liscence even if relied upon and expended
great money (minority)-estoppel does not apply to oral contracts
b/c SOF should bar
o policy against irrevocability-punishes good neighbor who doesn’t
say anything so licensee should pay for it

Create Easement: 1.express grant 2. Estoppels 3.by implication 4.by necessity

 Express grant only one that needs to pass SOF

o By Grant-
 can reserve easement in grantor
 (majority) cant reserve easement in 3rd party need two
transactions or exception
 distinction b/w reservation ( new easement) and exception
(exisiting easement)
1) Willard v First Church of Christ- P bought lot from Peterson who
never told of easement that land had when bought from
Mcgurgon, but did say that D would want to use lot and clearly
was at time using lot → appurtenant (but could be in gross b/c
goes w/ church) runs with the land
 Common law rule-one cannot reserve interest in
property to stranger of title (could have used

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strawman)-but this is moot now b/c was to limit

conveyance by deed
 Follow grantors intent from four corners
 No reliance by P b/c did not get title insurance
 D openly using land when purchased so no
prejudice
 Must balance equitable/policy considerations to
determine if old rule should apply to prior
grants→D b/c no reliance and intent for D
 Mcgrugen reserved not excepted land so created
new interest that did not exist before he is not
excluding conveyance from something that existed
before

By estoppels-makes liscence an easement/irrevocable

By Implication- easement implied under circumstances of prior use-

1)common owner 2)reasonable necessity 3)continuous use 4)intended
continuation at time of division (look at price paid) 5)existing use (at time of
division) 6)apparent (foreseeable, could be inferred by reasonable
inspection, could be detected)

 Doesn’t go away once get

By necessity-where property has been divided by common owner un such a

manner that an easement for access was necessary at time of split-
1)common owner 2)necessity (strict-othen or reasonable) at severance
(don’t need prior use or for someone to use at time of severance, last for as
long as necessary)

2. Von Sandt v Royster- P wants to stop D from using underground sewer

across P property which was owned by one person at one point and
deeded to P and D. P basement keeps getting flooded D wont stop
using. P claims took land free of burden b/c gw deed but D says
appurtenant easement
 Quasi easement-when a person uses part of his land for benefit
of another-if of apparent necessary and continuous
nature→transfers to grantee when convey if not expressed only
if 1. Buyer + seller know of drainage but don’t know where it
runs but had opportunity to find out 2. Both know of drainage
and buyer knows of location +assumes A knows

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o P knew of easement b/c knew had plumbing the fact

that not visible does not mean not apparent (can see
on prudent inspection known or forseeable) property
needs for comfortable enjoyment of property, if would
require disproportionate effort+expense to not use
easement implied reservation is good
o Test quasi (apparent+continuous)- 1. Implied prior
existing use 2. By necessity for enjoyment
 New rule-reaosnable necessity for implied
easement
o Ct. uses necessity as big factor b/c cant sotp
using w.o great expense and wouldn’t know
where pipes go if just knew plumbing
3. Othen v Rosier- P wants to enforce easement on D land b/c
necessity/prescription. P used land many years before purchased in
1904. River threatening D land so built levee which made road
impassable
 For implied necessity reservation need 1. Unity of ownership[ of
dominant and servient estates 2)roadway is a necessity not
convenience 3)necessity existed at severance of 2 estates
o D got land and P not using land yet not necessity
o Necessary- 2 tests- 1. Strict necessity 2. Reasonable necessity
o Ct. here uses strict saying can get to land some other way even if
that is walking
o Necessary easement exists only so long as necessary
o In west cts. allow land locked landowners to condemn easement but have
to pay for it as long as unity at one point by private owners not u.s..
o Cts. reluctant to do easements by necessity
b. Implication- doesn’t go away once get=difference w/ necessity
o Wet sand right after upland and dry sand in some states is privately owned and
some owned by state under public trust doctrine

Transfer of Easement/Assignability

Appurtenant-transferable if parties intended b/c part of title so transferable

In gross- commercial easements are assignable and non commercial are not
unless parties intend otherwise

4. Miller v Lutheran Conference Camp Association- P had right to fish +

boat and granted an extra right to Rufus who gave license to D w/ extra
right. P says in gross and cannot give away. D claims got by prescription

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and so alienable + divisible b/c P was bathing for period of time→D has
no right
 Done by prescription b/c bathing done systematically for
commercial purposes and no one objected. It was intent to
share business w/ rufus so P got fishing and boating by grant
and got bathing by prescription
 In gross conveyance to more than one owner so need to act as
one owner and need permission to assign, cant assign just a
share not divisible would be transferable if did get permission
 Doctrine of mountjoy-if assignee decides to assign rights further
to one or two or more but if two or more has to work together
as one stock as no division
5. Brown v voss- D granted easement to P who obtained another parcel of
land and wanted to use easement for that land too only 1 house still→D
wins 1 dollar for misuse but not overburden not unreasonable burden
 Any extension of easement appurtenant to other parcels is
misuse and can overburden if unreasonable burden.
 Easement got no extra use by use of 2 nd parcel and it
was reasonable development of property and D sat by
and let P spend 11k on land and said nothing

Scope of Easements

o Can move someone’s easement to build if- 1)dominant owner agrees

(older view) 2) it doesn’t significantly cause dominant inconvenience
and servients own expense-Rest 3rd
 Dominant owner pays to maintain so if more expensive to
maintain could be burden
o Dominant owner can improve easement as long as promotes use of
easement, w/in scope of easement and don’t unreasonably burden the
easement or servient estate or owners use of property
o Easement holder can use as long as doesn’t overburden servient estate→
flexible but uncertain

Real Covenants and Equitable Servitudes

o Damages: must prove that it is an enforceable real covenant→ get money

damages, if cant only remedy is injunction equitable servitude
o Not condition where can forfeit estate
c. Negative easements-prevents owner of property from doing something on own land like
covenants but cts. reluctant to create so often construe as covenant
d. Covenants- run with land and say how own land can be used- can be created by written
instrument, estoppels, or implication- can only collect money damages

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o If signed by grantor only and contains promise by grantee, promise is

enforceable against the grantee
o Burden only imposed who acquire identical estate that was initially burdened
o Elements for covenant to run with land- 1)Intent of original parties for covenant
to run w/ land 2) Rest 3rd-negative covenants binding on all future owners don’t
need horizontal privity
o Burdens of negative and affirmative covenants runs to adverse
posessors
o But if haven’t acquired title yet may only enforce affirmative
covenants (1) to repair, maintain, or render services to
benefitted property or (2) that confer benefits that may be
enjoyed by the possessor without diminishing the value of the
covenant to the true owner and without materially increasing
the burden of performance on the burdened party.
o No VP- Negative-all burdens and benefits run to subsequent owners
o Affirmative- VP required for affirmative burdens only

o Third Restatement Requirements for Creating Running covenants:

Intent Required

Horizontal Privity Not Required

Existence of General Plan Not Required

Writing Required (creation by estoppel and

implication ok)

Benefits in Gross OK

Affirmative Burdens OK

Touch or Concern Not Required; covenant OK unless illegal or

against public policy

Vertical Privity Required for affirmative burdens only

Notice Recording Act

 Restatement (Third): eliminates many remaining distinctions b/w equitable servitudes and real
covenants
o Horizontal privity not required to create a servitude
o Benefits in gross may be freely created
o Only requirements to create: intent, writing that satisfies SOF (or implication, estoppel,
prescription)
o Servitude correctly “created” unless illegal or violates public policy

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o Which successors are bound or benefited is determined by nature of the performance called
for
o Defenses based on notice arising out of the recording acts

e. Equitable servitude-enforceable in equity (injunction) against successors to benefitted

or burdened estate w/ notice of them (easier that covenants to prove and most people
prefer injunctions). No privity needed and can be created by implication and writing
(must be signed by covenanter if in writing)
Elements of creation- 1)intend for promise ot run 2)actual or constructive notice
1. Tulk v Moxhay- P sold to Elms who sold to D w/ notice of covenant by P
to elms. P still owns houses in neighborhood and doesn’t want D to
alter property and ruin garden
o Cant w/ notice of covenant have greater rights than person
purchased from b/c original owner sold for reason of not ruining
own property
o Would be inequitable to sell to elms at depressed price
and then allow elms to buy at increased price w/o
covenant
f. Termination n of covenants- 1)merger 2)release 3)acquisition 4)abandonment 5)unclean
hands 6)laches 7)estoppels 8)eminent domain 9)substantial change 10)unanimous
agreement
1. Western Land CO v Truskolaski- D seeks to enforce covenant by P saying
can only have single family house in neighborhood. P says
neighborhood has changed so much so inequitable/oppressive b/c pop
increase and commercial increase.
o Covenant still of substantial value to homeowners, and changes
were in vicinity not subdivision
o As long as original purpose can still be accomplished even if
greater value in other uses should be enforced
o Zoning ordinances even if changed to commercial does not
override private covenants
o Though two lots break law, p subdivided so as much at fault
o No abandonment even though 1 babysitting too sporadic to
amount to general consent, must be so general to frustrate
original purpose
2. Rick v West- P subdivided land and sold to D a lot zoned for residential
and covenant for single family home. P tried selling to business D would
not release covenant and P said substantial change
o Though D owns modest lot, relied on covenant in buying. Not a
question of balancing interests no damages to P
o No substantial change took place in area

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 Rest 3rd §7.10- modification and termination of servitudes b/c of

changed condition
o If change has occurred which make original purpose
impossible ct. may modify to complete purpose if this is not
possible or practicable ct. may terminate and compensation
for any harm may be awarded even if just modification
o If purpose of servitude can be accomplished but b/c of
changed conditions no longer suitable for that use, a ct. may
modify to permit other uses to preserve benefit of original
servitude
o Servitudes held by public bodies or conservation
organization not subject to this section
 This is superseded by this-if no substantial benefit to person seeking
enforcement or not capable of accomplishment can be extinguished
upon payment
 Could buy D land
3. Shelley v Kraemer- when someone goes to ct. to enforce racial
covenant, cts cant enforce so covenant exist but can’t enforce in ct.
4. Pocono Springs- as long as have perfect title in fee simple can’t just
abandon and not pay anymore fees. Land not valueless only D claiming
it is. Intent ot abandon doesn’t matter
o Deed need to be sold or transferred b/c PA law has no
way to abandon when have fee simple or perfect title
E. Common Interest Communities- 1)cooperatives-don’t need reason to reject someone,
exclusivity only as long as don’t violate state+fed civil rights law 2)condominiums-TIC but
separately owned
Condominiums-each unit owned separate in fee simple w/ home owners associate
enforcing rules, and all common areas are TIC of owners. Monthly charge to insure
liability and upkeep
1. Nahrstedt v Lakeside Villiage Condominum Assoc.- D restriction limited
specific animals including cats which P moved in with one. P said didn’t
create nuisance b/c indoor cats so can’t regulate
 As long as apply uniformly and don’t violate constitutional right
or public policy or burden doesn’t outweigh benefit to residents
should be enforced if in master deed even if a little
unreasonable
o Restriction promote health, happiness, and peace of
mind of majority, could have lived any where but
owners chose to live there for reason so protects
expectations
 Reasonableness standard for things that get voted in

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 Civil Code Section 1354-enforceable equitable servitudes unless

unreasonable, arbitrary, or violate fundamental pp.
 Enforcing only after litigation would strain social fabric of
condominiums and increase price b/c have to defend + flood ct..
So don’t look at fact specific circumstance look at
reasonableness in light of whole community like here so need
general rule
 Plus if make exception other people would want exception and
if change too much agreement is void.
 Restriction was recorded so could have looked up even if didn’t
know
rd
o Restatement 3 §3.1- Servitude is valid unless it is illegal, unconstitutional or
violates public policy(unreasonably burdening a fundamental const right, imposing
unreasonable restraint on alienation if they are unreasonable by balancing purpose
served against the harm) or if indirect restraint (value of land) then only invlaid if
lacks rational justification
o Reasonableness standard for regulation on community

Cooperative-title to building owned by corp. Residents own all stock and control through board.
Long term renewable lease. One mortgage, if one fails to pay others must make up, can deny
anyone want unless applicant can prove ethinc or racial discrimination

F. Legislative Land Use Control the law of Zoning-doesn’t violate 14 th amendment police powers
due process
 First restriction were height, every city has zoning except Houston
1. Village of Euclid v Ambler Realty-suburb of Cleveland mostly farms. D is
owner of land which was divided into multiple zones. P approves makes
decision if unfair by seeing if unnecessary hardship. Zoning of
residential greatly decreases property value. D made no effort to get
building permit or try to building through P.
 Only need legitimate state interest and law that achieves those
ends to pass due process
o Look to nuisances for help look at circumstances at whole
o One apartment building can destroy residential area its safety,
traffic, and health and can be nuisance, bd. Just trying to protect
area of health safety and morals by refusing
infringement→police power
o P has power to limit buildings to prevent nuissance
o No evidence that would have an appreciable effect on
marketability of land b/c D wasn’t doing anything w/ land at
time

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o Dissent: increases sprawl, inefficiency of land use, separate

work from home, no mix
 Euclidean zoning-higher uses permited (U1) permitted when lower apply
(u7)
 Non-euclinean-exclusive to those enumberated in section
G. Non conforming use-runs with land
1. P.A. Northwestern Distributors v Zonining Hearing Board- Adult book
store, D said cant have passed ordinance after
 OLD RULE- Non conforming uses is constitutional police power
as long as reasonable (benefit to community more than loss to
landowner). Must be be necessary to health, safety and
morals,- burden to prove is person challenging validity.
 New RULE- right to use property unless against law, nuisance,
or violate covenant restriction or easement, eminent domain or
abandon 1)Need reaosnablness-90 days not reaosnbale for
amortization wont get full price for sale of stuff. 2) Whether
taking under state constitution
o Can stay open and expand if reasonable for business
purposes

o Cant change existing lawful use of property-

unconstitutional unless nuisance, illegal, abandoned, or
eminent domain
o Would be different if future use not current use
o If restrict current use could restrict future economic
development b/c people would be worried
o Slippery slope if allow this one b/c distasteful to part of
community what cant be regulated
 Concurrence- public gain v private burden-3months not
enough time to sell for reasonable price or find new income
should use reasonableness standard not amortization of
non conforming uses is per se unconstitutional
o Factors-amount invested, nature of use, public
detriment, character of surrounding land, amount
time needed to amortize
2. Toys R US- only need substantial discontinuance to conform like not sell
but maybe use as warehouse and then use again 2 years later.
o Reasonableness-nature of use, amount invested, number of improvements, public
detriment, character of surrounding hood, amount of time needed to amortize
investment, how long rule has been around

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o Zoning can promote non efficient of land so need flexibility-special exception or

variance
a. Variance-used to avoid unfavorable holding or constitutionality holding

1. Commons v westwood zoning board- Person wanted to build 4

bedroom house on only undeveloped land but lot too small under
ordinance neighbors objected thought would not look good.
o Variance- to avoid undue hardship on owner of land (no
effective use of land if variance not granted)-1. Owner
must have made reasonable efforts to comply w/ zoning
and exceptional hardship must not be self inflicted 2.
Variance must not do substantial hardship public good
and intent and purpose of zoning ordinance (even though
neighbors objected)
o Bd. Cant base decision on size of house b/c did
not violate any traditional zoning purpose of light,
air or open space reflected in ordinance. They
didn’t base decision on aesthetics or value of
neighborhood. If they did house was closely
conforming w/ other houses and values
o If no variance land would go to waste no utility
b/c no one will sell extra land to conform
 Special Exceptions- Ordinance can list special exceptions if fall within also
need to prove not detract from public health safety or welfare. Since more
predictable are regulated less than variance

2. Cope v Inhabitant of the town of Brunswick- P wants apartment

and need variance . But discretion given to board are broad need
to give board conditions to pass, cant just give broad discretion
w/o a standard to limit + guide for special exceptions. So by
enacting this broad discretion apartment is good. Was given: to
make or not make zoning exceptions based on a Zoning Board’s
assessments of health, safety, welfare and essential property
characteristics could lead to selectivity in enforcement of the law
H. Expanding Aims (exercising the muscle) of zoning-
a. Aesthetic regulation- nuisances, building height, spacing, and location- resolves (light
and air, avoid and control fires, prevent overcrowding, exclude offensive industries)
 (Majority)-aesthetic is part of public welfare
 Important in historic zoning
1. State v ex rel staynoff v berkely- D applied for building permit and
though met all zoning regulation + ordinances except not uniformity and

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grotesque b/c it was denied b/c of unusual design. Are they

unconstitutional too vague and not uniform standard for aesthetics only
generally
o Ordinances meant to protect health, safety and welfare of
existing expensive houses
o Grotesque would impair value + stability of surrounding
property, experts testified. P didn’t take into account later
provision saying if impair value + stability + welfare + happiness
of community and that can be measured.
o Furthers this goal clearly b/c experts and community
has traditional house while trying to build modern

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