Property II

private, not enforced by government

Easements
Real Covenants
Equitable Servitudes

Right / Privilege to use land of another
Grants of property interest, not estate in land
Generally created by deed (ex: driveway)
Continues to burden the land (passes through if there is a sale)

Damages plus Injunctive relief

Dominant Tenant- the one who purchased and owns the easement
Dominant Estate- land that benefits from an easement
Servient Tenant- owns a servient estate
Servient Estate- land that is burden by an easement

Appurtenant- benefits land and not a person
In gross- benefits a person not land (does not have a Dominant Estate)

1.Grant
2.Irrevocable license/ easement by estoppel
3.Easement by implication
4.Easement by necessity
5.Prescriptive easement
6.Public Trust Doctrine

Agreements between parties for one party (the promisor) promises to do or to not do something (binding on the people who later own the promised land)
Limit on promisor's actions (or promisor's promise to act
Generally created by contract
Not estate in land, and historically not a property interest

damages

Limit on promisor's actions (or promisor's promise to act)
Generally created by contract
Not estate in land, and historically not a property interest

Like RC but bind the promisors' successors and interest (ALSO have a notice requirment from old owner to new owner)

Injunctive Relief

Look at the instrument that created that servitudes
1. Easement
a. right to use by dominate tenant
b. property interest
2. Real Covenants and Equitable Servitudes
a. promises made regarding their own property

ES requires that notice is given; if notice is given then he is bound by it

the dominant estate: the land benefitting (raising market value of the property, ex: driveway)
Benefit (dominant estate)
1.Transfer --> yes
2.Divide --> yes, so long as reasonable
Burden (servient estate)
1.Transfer --> yes
2.Divide --> yes, burden remains on each part
a. So long as there is no increase in burden for servient estate

runs with the person (ex: utility easements-- toledo edision poles)
Benefit (dominant estate)
1. Transfer
a. CL (min): no
b. Modern (maj): yes, if commercial
c. Most modern (min): yes, if intended by the parties (rest. 3rd)
2. Divide
a. Modern: no
i. Exception: one-stock exception --> when dominant tenant is in a relationship with another person/ partnership stuff then we good
Burden (servient estate)
1. Transfer--> yes
2. Divide--> yes, burden remains on each part

Look at the document
Look at the context

we assume easement are appurtenant
easements in gross are not favored. easements won't be presumed to be a mere personal right when it can fairly be construed to be appurtenant

Grant
Irrevocable License/ Easement by Estoppel
Easement by Implication/ Implied Easements
Easement by Necessity
Prescriptive Easement
Public Trust

Does not run with the land
License: privilege to use licensor's land. revocable at licensor's will
Exceptions
a. irrevocable license, aka easment by estoppel or executed license
b. license couple with an interst
i. privileged to go on to the property to get your property

a. Expenditures by licensee
b. Reasonable reliance by licensor
c. Able to use until licensee expenditures are paid off (if they paid $10,000 in repairs, they can use until they reach $10,000 of use)
(Easement by Estoppel is not alienable, devisable, or descendible)
(Can use for as long as they live on the property)

a. expenditures by licensee
b. benefit by licensor
c. contemplated by licensor

Unity of title
Permanent
When implied was it intended to be forever (ex: plumbing clearly yes)
Apparent
Visible under an inspection by someone who is an expert in that field
“Reasonably necessary”
Reasonable necessary or convenient to the beneficial use of the property
Severance of title

something that would be an easement but because both properties are owned by the same person. There is no dominant and or servient tenant, so it’s not an easement.

arises when, due to a conveyance property becomes landlocked

Landlock (lack of access)
Unity of title (land needed to be owned by the same person at one point)
Reasonable Necessity (access to public right of way) ex: roach for such an easement for the beneficial use and enjoyment

to make use out of land
the party conveying or reserving the landlock parcel intends to convey or retain whatever is nessessary for the benefitical use of property

deals with use of the property

Actual (use)
Open and notorious (use)
Exclusive (of other non-owner uses; inconsistent with adverse use does not have to exclude truw owner)
Continuous (use)
Hostile and Under claim of Right (no permission to use = assumption of adverse and claim of right)
Statutory Period (adverse possession SOL is used)

Maj
Connecticut- Objective (reasonable person)
Min Subjective
Maine- bad faith, knows they do not have easement and uses anyway
Iowa- good faith believe they have easement

Lost Grant
Adverse Possession

a long period of visible access to the property of another is best explained by a "grant" that had been made to the claimant's predecessors by the predecessors of the person against who the claim is made (US rejects)

like the general theroy of adverse possession of possessory interest

Common Law does not permit public prescriptive easement

use by public (not only one party) and
public entitled to use the easement (not only one party)

1. Land covered by the ebb and flow of the tide, and all navigable inland lakes and rivers up to their ordinary high-water mark, are held in trust for public use (Maj)
2. Right to use that public has
3. What uses are the public entitled to?
a. Navigation, fishing, and Recreational use (usually limited to wet sand and ocean)

Servient tenant / Promisor promises to NOT act (in a specific way)
No prescriptive negative easements (in US)

Light, Air, Water, Support

conservation (purchase right from property owner to not do something) + implied reciprocal negative easement (in US)

Intensity of use
Size of dominant estate

Frequency
Type of Use
Effects on the servitude estate

easement itself (primary easement)
reasonably necessary to use and enjoyment (secondary easement)
reasonably anticipated future use, in light of circumstances

effects on the servitude estate
how large is the property serviced by servitudes
i. size of dominate estate when easement was purchased

differnt type of use (commerical v. resident)
intensity and frequency that is beyong residential scope
effect it has

•Use of easement must be reasonable and as little burdensome to the landowner as the nature and purpose of the easement will permit
•Each party cannot use (easement/ servient estate) to the disadvantage of each other
•Owner of easement may enter land to remove such that interferes with use of easement
•Every easement comes with the right to do this (even if not stated)

Enforceable Contract
Intent to bind successors
Touch and Concern the land (or reasonableness- Rest 3rd)
Privity

signed by the person against whom enforcement is sough
decsribes land with particularity
consideration stated
complies with SOF

1.CL --> “It affects the land”
2.Enhances or reduces value of land
3.Promises to pay money usually touches and concerns land
4.Personal promises don’t touch and concern
5.Affirmative covenants (those promises to do something) at CL did not touch and concern the land
a.Modern: If it’s helping the value of the land, it touches and concerns
6.Negative covenants (those promises to not do something) at CL did touch and concern the land

Horizontal
Vertical

1.Horizontal -- between the 2 OG parties (has to occur for successor in interest to sue each other)
a.CL (Massachusetts) (Small minority position)
i.Promisor and promisee need to have simultaneous interest in land (I.e. landlord/ tenant relationship; joint tenant; 2 ppl having the same interest in the same parcel)
b.Modified (majority)
i.The common law rule and promises in deeds which transfer the grantor’s entire estate to the grantee
c.Restatement 3rd
i.No need for horizontal privity

2.Vertical – OG promisor and successor and OG promisee and successor
a.CL + Maj
i.For burden (the thing the promisor is bearing) to run vertically- successor has to have the exact same estate as the original promisor (I.e. fee simple to fee simple
ii.For benefit to run vertically- successor only has to have a possessory interest (doesn’t have to have a fee estate, can have a life estate)
iii.Need both in order for a successor promisee to sue a successor promissor
b.Homeowners Associations are in vertical privity with the original promisee (realty company)

enforceable contract
intent to bind successors
touch and concern
notice to promisor's successors

1.Exception: Implied negative reciprocal easement—equitable servitude (when there is no enforceable contract
a.When there’s restriction on the deed
b.The exempted property is subject to the equitable servitude
Elements
i.Common grantor
ii.Intended general scheme
1.Grantor through real covenants created a way of living
iii.Has to touch and concern the land
iv.Notice

(if its valuable to promisee it’ll be assumed he intended to pass it down to his successors

1.Actual: it was told to you
2.Constructive: it’s in the chain of title
3.Inquiry: a reasonable person would have suspicion about it (the restriction)

Abondonment
Merger
Condemnation by the Government
Prescription
Release
Natural Expiration
Destruction of the servient estate
Equitable defense (injuctions)

i.Where the person benefiting from the servitude doesn’t want it anymore and abandons it (intent + action)
ii.Once there is abandonment the land goes back to OG owner (O)

Where 1 party owns the dominant and servient estate

government cancels the servitudes

a way for a servient tenant to eliminate the servitude
servient

dominant tenent releases servient tenant from obligations of the servitude

some have set time to end

for this one the servient estate can't be land (pipe example)

i.Unclean hands: when plaintiff complaints about the defendant are the same of what the plaintiff is doing himself (maybe to someone else)
ii.Acquiescence: plaintiff has failed to sue a 3rd party to enforce a similar servitude
iii.Laches: plaintiff unreasonably delayed bringing their action
iv.Estoppel: defendant relied on plaintiff’s representations
v.Changed conditions: it would be unfair to enforce the restrictions because change in conditions make the restrictions invaluable.

a.Easements
i.Damages
ii.Injunctive relief (if damages is inadequate)
b.Real Covenants
i.Damages
c.Equitable servitudes
i.Injunctive relief

a.Real covenants and equitable servitudes
i.Unanimous consent required by many states
ii.Many states permit majority amendment
1.But require “reasonableness”, such as uniformity of application of amendment
b.Easements
i.Unanimous consent required

(1) D’s conduct (action or inaction- 824)
(2) Interfered with P’s interest in use and enjoyments (821-D)
(3) Interference was significant (+ normal person standard- 821-F)
(4) D’s conduct was:
•Intentional and (purpose, knowledge-of conditions and consequences) 825)
•Unreasonable (826-A and/or B)
o 826 A: If seeking injunctive relief --> if harm > benefit then relief may be granted
o 826 B: if seeking damages --> elements: (1) conduct is serious (2) if damages were issued defendant would be able to continue the conduct --> damages will only issues if the conduct continues
(5) P has interest in land (any possessory interest—license doesn’t count- 821-E)
When analyzing if the conduct was serious--> 827 a-e

Statutorily regulated
Compensated injunction (rare)- the plaintiff who is entitled to injunction may have to pay the other party compensation (maybe because he came to the nuisance)

Landowners are entitled to have subjacent and lateral support
If neighbor is excavating their own land and that messes up with your structure --> strictly liable
Mineral rights: one owner may own the “bottom area” of someone’s land. That owner may not disrupt the top owner’s surface rights. If he does --> strictly liable

a.Rational basis review (look if it’s within police power and if rationally related/ reasonable)--- lots of deference
i. Public use
b.Intermediate scrutiny --- some skepticism
i. “exactions” cases
c.Strict scrutiny
i. Not applicable

“Nor shall (1) private property (2) be taken (3) for public use, (4) without just compensation

a.Eminent domain:
Government (here the plaintiff) takes formal legal action to acquire title to private property
i.Power and tools to enact the takings clause
b.Inverse condemnation:
Government takes action that property owner (here the plaintiff) claims is the equivalent of eminent domain therefore he’s entitled to just compensation.

a.Two widely accepted clear rules
i.Government title (I.e. schools, post offices)
ii.Government transfer to private party legally obligated to permit public use (I.e. train stations/ tracks)
b.Third disputed category
i.Public purpose

a.Just compensation = monetary damages measured by owner’s loss (fair market value)
i. Fair market value is a question of injury

Per se rule
Denies all economically beneficial use rule
Diminution in Value Test
Police Power Rule

Permanent physical occupation is a taking (Loretto, Horne)

Is a taking (Lucas, Palazzdo)

i.How much less value is the property after the application of a regulation
ii.If a government regulation of use (that is not a nuisance)
1.“goes too far” then it’s a taking (Pa. Coal)
2.Thwarts “distinct investment backed expectations” then it’s a taking (PennCentral, Pruneyard)
a. Penn Central Test: (1) character of governmental action (2) its economic impact, and (3) its interference with reasonable investment-backed expectations

i.If government acts beyond its police power (to abate a nuisance), then it’s a taking (Mugler, Pa. Coal- dissent)
ii.No longer a rule/ test because it was incorporated into Penn Central and Lucas analysis

where the government conditions a development permit (burden is on the government—heightened scrutiny) -- in exchange for a development permit we’ll add an easement to your property or some condition like that

i.If met—not a taking
ii.Need a connection between the means and the end
1.Means: lateral access easement (condition)
2.End/police power/ legit state interest: public access
iii.There must be an essential nexus between the condition and the legit state interest the gov is trying to get

i.Needs to show an essential nexus and rough proportionality between means and end
ii.Rough proportionality between condition and the impact of the development
1.Burden on the government

The government can’t condition a discretionary benefit on the relinquishment of a constitutions right

i.When the government exercises the eminent domain power by an appropriate police power—it is not a taking
ii.If within police power --> not taking
iii.Physical appropriation --> taking

i.The value of the right taken (the use the regulation is restricting)/ what’s the value of the legal entitlements of the property owner
1.What is the source of the denominator?
a.State law (how does the state under the law prior to when the reg was applied- how does the state law explains the interest? Estates and future interest for example—fee simple)
b.Judge’s judgment (tends to be entire property interest of the property owner)
ii.Numerator/ denominator = value of right taken/ ??? (state law or whatever the justices think)

i.Economic impact of regulation (the regulation prevents a reasonable rate of return)
ii.Character of government action and
iii.Regulating nuisance-like activities

1.Economic impact and
2.DIBE (Diminution investment back expectation)-- does the regulation prevent new use?
3.Was the value of the property completely gone?
a.How to figure this out?
i.Using state law in the denominator --> value of the right taken/ state law

1.Physical invasion or not?
2.If there is a deprivation of all economic beneficial use = taking

1. There’s not a deprivation of all economic beneficial use if the restriction was already in the title when the property owner bought the property

i.Lucas really means valueless
ii.Skeptical of “geographic” divisions of parcel
iii.Passage of title alone does not create a Lucas background principle

i.No “temporal” division of parcel
ii.Public Use Clause inapplicable to regulatory takings

Damages for taking during the period in which regulation was in force

Zoning enabling act
Municipal Comprehensive Plan
Municipal zoning ordinances
Zoning Restrictions

what authorizes municipalities to zone land

i. Textual plan and literal map
ii. Rational plan

i.Zoning commission
1. Enforces ordinances
ii.Zoning board of appeals
1. Appeals
2. Amendment proposals

i. Use restriction
1. Cumulative zoning
2. Exclusive zoning
ii. Lot and building

State authorizations to zone- limit zoning
Federal and State Constitutions limit zoning
Federal and State statute limit zoning

i. Act explicitly maty say what zoning can’t be used for
ii. Implicitly say what you can’t zone

i. Takings Clause
1. Penn Central
ii. Due Process Clause
1. Rational basis review
2. Rarely limits zoning
iii. Equal Protection Clause
1. Rarely limits zoning
iv. Free Speech and Free Exercise Clauses

i. Anti-discrimination laws
1. Fair Housing Act
ii. Environmental Laws

i. Zoning enabling act- gives authorization and limits zoning
ii. Federal Due Process Clause limits zoning
1.Rational basis review (not much of a limitation because of high deference)
a.Are the means rationally related to that goal of state interest?
iii. State may adopt a more rigorous standard of the due process clause that creates a limitation on zoning

i. Zoning laws need to be reasonably clear
ii. Zoning laws for esthetic reasons are usually constitutional and legal so long as the requirements are not too vague – usually court will employ a reasonable person standard to determine vagueness

i. Equal protection clause is a limit but it’s a weak limit
1. Need to show discrimination INTENT not just impact
2. (here it was an argument that the zoning regulation created a racially based discriminatory regulation—court disagreed)

i. (1) There needs to be a reasonable variety of housing available (2) it has to be a fair share of the (3) regional need
ii. Burden shifting analysis
1. P provides evidence that D has not provided a reasonable variety or fair share or regional need (prima facie case)
2. D provides reasonable non-discriminatory reasons why it passed the shit (what doesn’t count here is $$)

1. Here the court told the township to change ordinances according to its findings
2. If a jurisdiction refuses to rezone as the court demanded there is a “builders remedy” available
a. The builder goes straight to the court (skipping the zoning officers) and requests rezoning straight from the court.

unintentional economic discrimination makes the ordinance invalid (this is a minority opinion in the US)

Zoning ordinances implement plan
Spot Zoning is amendment that classifies parcel inconsistent with plan
Standard of review of amendments

Amendments change the ordinances

i. Spot zoning results when a zoning ordinance creates a small island of property with restrictions on its use different from those imposed on the surrounding property
ii. Spot zoning is NOT automatic invalid
iii. Legal v. Illegal Spot Zoning

1. To determine whether spot zoning is valid consider:
a. Whether the new zoning is germane to an object within the police power
b. Whether there is a reasonable basis for making a distinction between the spot-zoned land and the surrounding property
c. Whether the rezoning is consistent with the comprehensive place

1. Legal: there is a reasonable basis to treat the spot-zoned property differently from to surrounding properties
2. Illegal: not a reason to justify the rezone and the other surrounding properties
3. How to determine if there is a reasonable basis for spot zoning?

a. Consider the size of the spot zoned
b. The uses of the surrounding property
c. The changing conditions of the area
d. The use to which the subject property has been put and its suitability
e. Adaptability for various uses
f. Most important one --> whether the rezoned tract has a peculiar adaptability to the new classification as compared to the surrounding property
g. Spot zoning for the benefit of the owner and contrary to the comprehensive plan is unreasonable

Federal Approach
State Level

1. Treat ordinances as legislative action and review it under rational basis review
2. Zoning amendments are also subject to rational basis review
a. Burden is on the challenger

1. Most states follow the federal approach
2. Handful of states follow the Fasano Approach (minority)
3. Fasano Approach
a. Don’t treat zoning amendments and changes as legislature like the federal approach, instead, they treat it as “quasi-adjudicative.” This allows the courts to review it in more depth
b. Don’t use rational basis review- no deference to government decisions
i. Burden is on the government for both facts and law
ii. Harder for the government to justify its conclusions
iii. More protective of party that is challenging the gov.

a. Exception to application of zoning ordinance granted through administrative relief
b. Runs with the land
c. Two standards (depending on type of variance requested)
d. Variance v. Special Exception

i. Use variance: undue hardship
1. Person is saying: “I’m zoned for one thing and I want to use it for something else”
2. Undue hardship (it’s hard for the property owner to show undue hardship)
a. No reasonable rate of return (0% 1% of return)
b. Unique circumstances (when compared to surrounding places)
c. Won’t alter the character of locality (wouldn’t change the neighborhood)
3. Areal variance: practical difficulty
a. Height requirements, surface to area requirements things like that
b. Practical difficulty
i. No consensus on meaning, less rigorous than undue hardship though
ii. Property owner is not able to fully enjoy the benefit of his property without the variance

i. Variance: use that deviates from zoning, with permission
ii. Special Exception: use expressly authorized by zoning -- baked into the system—exception that should be in certain places but not everywhere (gas stations, library)
1. We want this stuff- but only in some places
2.Standard: reasonably necessary for the public welfare
a. Do we have something similar in the area? Is it reasonable?

a. Definition: legal use in effect prior and contrary to zoning ordinance -- suddenly inconsistent with the zoning ordinance
b. Reasonable amortization period
i. The reasonable period during which the property owner takes to recoup his investment
1. What the investment is varies
ii. Test--> reasonable period and rationally related from legitimate state interest
c. Owner who has this can’t transfer to anyone else—this is personal for him only
d. Property owner may not significantly alter nonconforming use

Conditional zoning
Floating zones
Planned Unit development

i. Conditions imposed in exchange for zoning changes
ii. Zoning jurisdiction has limited power to put in conditions in exchanges for requests of rezoning or variance

i. Zoning when requested
ii. Assignment of a particular zone isn't actually established until a property owner requests it to be zoned a certain way and then they compare it to the comprehensive plan to see if the request is gucci or not.

i. Developer discretion
ii. There's not a designation for zoning (like floating zones)-- developer will develop and zone that area themselves. Zoning authority gives general guidelines and the developer implements the zoning.

Common Law
Statutory modifications
Sexual harassment
Equal Protection Clause

Seller/ renter could refuse to sell/ rent property to another party for whatever reason he wanted

seller/ renter could refuse to sell/ rent property to anyone unless it was due to the following reasonings then not allow
Federal protected classification: race, color, religion, sex (including sexual harassment), national origin, family status (the existence of or absence of children, including pregnancy--- not the fact that someone is married or not), and handicap

i. Quid pro quo-- I'll give you a better deal if you do a sexual favor
ii. Hostile work environment sexual harassment-- whether or not the LL action's is reasonably likely to humiliate or intimidate on basis of gender
1. Typically need more than one action of sexual harassment

doesn’t apply to private individuals just to government action or government bodies (officials)

a. The constitution applies (only) to the government (federal and state) and government officials
i. Shelley v. Kraemer

1. Private racially restrictive covenants are not a violation of the constitution because it only applies to the government
2. A state court enforcing a private agreement according to the Kramers, it's not state action
3. The court said that once the state court enforced the private agreement then it became a state action
a. Because it was state action, that was a violation of the equal protection clause

Disparate Treatment: Intent
Disparate Impact: Effect

Goal to show the defendant intentionally discriminated against plaintiff because of protected class

Defendant may not have intended to discriminate, but his actions or policies have the effect of dicrimination against plaintiff

i. Plaintiff allege/support prima facie case
ii. Defendant shows legitimate nondiscriminatory reason
iii. Plaintiff shows pretext

P is a member of a protected class
P applied for and was qualified to buy/ rent
P was rejected and
The opportunity to rent/purchase remained open

D’s actions/policies had adverse effect on protected class

1. Person owns 3 or fewer family residences
2. Has only one sale in any 2 year period
3. Does not use a real estate broker
4. Does not advertise

1. Applies to 4 or fewer units
2. Owner lives in one of the units

Religious organizations
1. It is not illegal to only let people who are memebers of a certain religion to live in the residence
2. Unless membership in such religion is restricted on account of race, color, or national origin
Old folks provision
1. Allows state and local governments to create communities for older people only

DOJ (public)
HUD (public)
Civil action (private)

Buyer search
Selection by buyer
Negotiations
Sale contract -- land sale agreement
Performance of contract
Closing
Buyer possession (significant time between the contract and possession)

a. Deposit-- varies from region
b. Evidence to seller that buyer is earnest buyer
c. Not the down payment

a. Writing
b. Parties
c. Land
d. Consideration
e. Signed by person charged
f. Other "essential" terms (varies)
g. Part performance of an oral contract lets contract for land of sale be enforceable in the court of equity (despite SOF) -- need more than one of the bellow to be considered part performance
i. Payment
ii. Delivery
iii. Improvement

a. Implied duty of good faith in performance of land sale
b. Objective standard

permitted in land sale contract if they are reasonable-- to be reasonable look at the bellow characteristics
a. Actual damages difficult to measure and
b. Proportional to actual damages

a. Title that is reasonably free from doubtful questions of law or fact
b. Implied condition in land sale contract
c. Parties can modify this requirement within the contract
d. Caveat emptor does not apply to any defects in the title

i. "doubtful questions of law or fact" -- likely to get involved in litigation
ii. Test-- reasonably likely to be litigated

i. If seller violates condition buyer can rescind the contract and get any earnest money, he put down back
ii. Seller has until when conveyance is executed to cure any cloud on the title
iii. If title is unmarketable at the time the contract in entered into or after the contract is entered into-- buyer needs to give the seller reasonable time to cure
1. This reasonable time can be extended till after the closing date so long as that time is reasonable

i. Buyer and seller can get it
ii. Depends on the breaching party actually being able to perform
iii. Doctrine of Equitable Conversion
iv. Doctrine of Mutuality of Remedy (traditional rule) (majority)

1. Buyer becomes "equitable owner" of land and seller becomes "equitable owner" of purchase price
2. Sellers interest in land is converted into personal property (money, consideration) and the buyer's in interest in land (real property) once the parties enter into the land sale contracts
3. Impact of Equitable Conversion

The Risk of Loss
Seller Death
Buyer Death

i. Who bears the loss of any damage to the property after the sale of contract but before conveyance of deed (closing)
ii. Courts that apply equitable conversion --> buyer is responsible for it
iii. To make this more fair
1. Buyer gets insurance proceeds from sellers insurance
2. If loss is caused by seller's negligence, then buyer is not responsible for risk of loss
iv. Buyer bears loss if subject matter of land sale contract is damaged or destroyed during period of execution

Seller's heirs must convey land legal title to buyer

Buyer's heirs must convey consideration to seller

i. Last 6 months of lease, had option to buy out after
ii. Both parties identify appraise, then average them
iii. Went from a lease to land sale contract
iv. Busch at end, vacated premises and took insurance off but other party had no insurance on it
v. Storm caused damage to store
vi. Parties fighting over who bore the risk of loss
vii. LC: busch bore the risk of loss via the risk of loss doctrine
viii. CO follows minority position
1. Risk of loss shifts to buyer only when buyer is in possession of the property

1. Buyer and seller entitled to specific performance
2. Centex Homes Corp. v. Boag (minority)

a. Doctrine of mutuality of remedy doesn't apply to sellers today and to ppl who are buying condos (bc the apartments are all the same)
i. Reason: all seller wants is cash that's their damages they don't need specific performance
ii. Seller in NJ have to show that damages would be inadequate or hard to identify (not the case here)
b. In the alternative they asked for liquidated damages-- which they got.

i. Expenses and earnest money to buyer and seller
ii. Benefit-of-bargain to seller
iii. Benefit-of-bargain to buyer
iv. Damages are mostly seen when

Benefit of the bargain is the market price minus the contract price

1. Yes, if seller bad faith
2. American rule --> yes, always, even if seller good faith (50% states)
3. English rule--> no, if seller good faith (50% states)
a. Law shouldn’t punish sellers that acted in good faith

1. Buyer defaults
2. When seller defaults and is unable to give specific performance
3. If the buyer/ seller defaults and the plaintiff elects damages

a. Seller has no obligation to disclose defects/ conditions that affect land's value
b. Majority rule
c. There are exceptions: (don't need to know them- just know that they exist)
i. If there's a fiduciary relationship between seller and buyer
ii. Have to disclose latent defects
iii. If seller caused the defect

a. Contractual promises that are “fulfilled” by the deed are not merged into the deed and cannot be sued upon therefore
i. Promises that pertain to conveyancing of title
b. Collateral promises do not merge
i. Promises that don’t have to do with the title or deed, do not pertain to conveyance
c. Most states follow this

Implied promise in land sale contract between builder and initial purchase that house fit for residential purposes

a. Most buyers borrow to purchase real estate
b. Mortgagor - homeowner borrowing money
c. Mortgagee - bank lending money
d. Bank gets a promise from homeowner of a payment monthly
e. Once payment is finished, homeowner gets title without mortgage
f. Homeowner fails to make payments - foreclosure on the house
g. 2 redemption periods for if homeowner comes up with money
i. Equity of redemption
ii. Statutory redemption

After homeowner has breached terms of loan agreement but then comes up with money, foreclosure stops

6 mos-1 year after foreclosure sale, if homeowner comes up with proceeds they can regain title

a. At closing - 2 key things: consideration and transfer of deed
b. Land given in old England with dirt in front of witnesses

Started to convey land in writing

Writing:
Parties
Land
Grantor's present intent to convey
Grantor's signature
Written doc is strong evidence that transfer has occurred
Makes it clear to both parties what is being transferred and bought

“For the consideration of $100,00, I, Jane Doe hereby convey to John Smith the following real property located at 5063 Green Pine Court, Sylvania, Ohio. Date. Signature of grantor."

i. Premises - includes names of parties, consideration, description of land, granting clause (intent to convey)
ii. Habendum - what kind of title being transferred, warranties/covenants/promises (made by seller supporting)
iii. Reddendum - reservations made by seller in interest being conveyed (maybe there is a mortgage or easement over property)
iv. Execution - by the grantor and the date, and the signature lines
v. Acknowledgment - notary
1. Acknowledge not necessary for deed to be valid, but under state recording statutes

i. Did grantor have present intent to convey interest?
ii. Letters meet elements of deed
1. Parties were identified - recipient and sender
2. Land is identified
3. Grantor’s signature
4. There was a present intent to convey
iii. Not formally written deed but constitute a transfer of the land

i. Metes and bounds - human used instrument to measure perimeter
1. By describing the land starting with a comer, identifying monuments, boundary by boundary, buyers get survey done
ii. Government survey
1. Township by township
2. 6 miles by 6 miles
iii. Plat map - most common to deinty residential parcels
1. References a lot number in a plat, recorded in city recorder’s office

i. Natural monuments
ii. Artificial monuments
iii. Adjacent tracts and boundaries
iv. Courses and directions
v. Distances
vi. Area or quantity of parcel

i. Grantor intends that deed be presently operative as conveyance of title
ii. Physical delivery is presumed to be delivery
iii. Grantor retaining possession is presumed to be non-delivery
iv. Delivery of the deed to one grantee is presumed to be delivery to all granties
v. Recording a deed by a grantee presumes delivery
vi. Must be acceptance by grantee
1. Presumption of acceptance
vii. Conditional grant
1. Grantor delivers to grantee
2. Becomes effective when a condition occurs

Delivery to a third party to deliver a grantee upon the occurrence of the condition

Common Law
Title Search
Title Insurance

Priorities
Covenants
Estoppel

Problems:
Malicious grantor, grants to A and fraudulently grants to B as well
Innocent mistakes - grantors/ grantees give or receive title that has mistakes

Limits
Warranty Deed Covenants (grantor delivers to grantee)
Quitclaims Deed

i. Defects may show up after closing and sometimes the seller is out of the picture so there’s nothing you can do
ii. Even if the seller if in the picture he may not be able to cure it
iii. The remedies you can get is damages - may not make the buyer whole

i. Seisin [present covenant]
ii. Power to convey [present covenant]
1. 1 and 2 are interpreted identically
iii. Against encumbrances [present covenant]
1. Parcel is not subject to third party interest other than those stated in the deed
iv. Quiet enjoyment [ future covenant]
v. Warranty [future covenant]
1. 4 and 5 are interpreted identically
vi. Further assurance [future covenant]
1. Grantor promise to execute the documents necessary to perfect title to the grantee

no promises by grantor regarding quality of life

By deed - grantor who conveys lesser interest than deed purports to convey, and who later acquires part or all of that purported interest, by operation of law, passes the later-acquired interest to the grantee

i. 1 must fail to record and
ii. 2 meets statute’s requirements
iii. #1 didn’t record and #2 didn’t have notice

Bona fide purchaser for value:
1. Purchaser gave something of value in exchange for title and
2. Purchaser had no notice of 1’s interest

who records first

at time when subsequent purchaser got title had no notice of earlier grant and prior purchaser had not recorded

i. An unrecorded instrument is invalid against a subsequent purchaser w/o notice
ii. Prior purchaser didn’t record and subsequent purchaser has no notice all that’s is required for subsequent buyer to beat prior buyer
iii. Actual notice: subsequent buyer has actual knowledge of prior buyer’s interest
iv. Constructive notice: instrument in the chain of title (something besides the deed (ex mortgage)
v. Inquiry notice: facts that cause a reasonable person to do investigation

Prioritize subsequent purchaser interest if 2 things occur
(1) subsequent purchaser records first
(2) subsequent purchaser takes title without notice

Prospective buyer is on constructive notice of a potential interest by a current lessee if the current lessee is (visibly) in possession

i. Docs outside of the purchaser’s direct chain of title do not need to be searched
ii. Not on notice outside of direct chain of title

Policy protects the grantees title
Ensures that it will defend the title (pay for title inspection, attorney fees etc.)
Broader than warranty deeds

defects
boundary disputes
defects outside the public record (wild deed, wild encumbrance)

unless doc is filed by owner within a period of time interest is treated as expired
Applies to: reversionary interests and springing executory interests

eliminate interest that conflict with root title
a. title: most recent conveyance of property older than a specified period of time
i. Usually the specified period is 30 years
b. Title clearing mechanism
c. Modern mechanism to make titles as clean as possible

Can only get damages which often wont make the buyer whole because they cant use the property how they wanted