Property Outline – Professor Kieff Property Law Theory
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Community property Basic rule: separate title; management follows title (i.e. A’s property- owned and managed by A; B does the same; concurrent property, acquired during the marriage, is managed together) Intestate death (no will)- surviving spouse generally takes all of dead spouses’ prop.; w/will- will disposes of the property many common-law states have a Forced Share Rule (even if there is a will)- allow spouse to elect whether to force the state to give that spouse a share of the estate Divorce many common law states follow an equitable division approach- all things considered analysis alimony/ maintenance- provides support for the dependant spouse (may consider hardship, dependence, as well as comparative fault) O’Brien v. O’Brien- couple divorces, ex-wife sues for earning potential of med. license received during marriage; Court assumes ex will be surgeon; Held: medical license is marital property, and its value (enhanced earning capacity) is subject to equitable distribution; ct. treats value of the license as having both certainty and upside Marvin v. Marvin- couple lived together for 7 years w/o marrying; contracts case- Π must prove consideration (not sex- illegal); Held- non-marital partner may only recover for value of household services rendered (less value of support received) when parties expressly contract for such rights (w/ $ expectation); no contract here Debt vs. equity (categorically different types of risk) debt- highly predictable; low risk and variance; certain payments at pre-determined rate equity- (i.e. owning shares in a business) great variability depending on how bus. does Entity Property Background entity property devices permit the management of entity resources to be separated from their use and enjoyment devices whose function is to govern multiple possessory interests in the use of a single complex of assets- leases, co-ops, condos devices whose function is to govern multiple nonpossessory interests in the enjoyment of assets- trusts, corp.s, non-profit entities, and partnerships Leases why enter into a lease? allows for management by someone else, less capital required to share in the larger enterprise, risk-spreading device (if you end up wanting to unload quickly) Types of leases term of years- has fixed termination date; SOF in most states- must be in writing if longer than 1 year; neither party must give notice before terminating, just ends on specified date periodic tenancy- a lease that automatically rolls over for a stated period of time (usually a year or a month); termination by either party requires notice tenancy at will- a tenancy that lasts only so long as both parties wish it to continue; either party can terminate at any time for any reason tenancy at sufferance- when an individual, who was once in rightful possession of property, holds over after this right has ended Independent covenant model- all covenants must be performed w/o regard to whether other covenants have/ can be performed; i.e. if landlord fails to perform a covenant (repair premises), tenant must still pay rent; remedy- sue for breach of covenant Paradine v. Jane- tenant frustrated from harvesting his crops, expelled by Prince, behind on rent; issue: should landlord or tenant bear risk? Held- tenant bears risk, must pay rent; tenant is “residual claimant” w/respect to economic gains/losses; he’d also get any upside; covenant to pay rent independent of a range of other obligations most important covenant by landlord: the covenant of quite enjoyment - promise not to interfere w/tenant’s possession of land during term of lease (implied in law); promise to pay rent by lessee also implied in law Constructive Eviction Bleckett v. Olanoff- landlord owns apt. bldg. and bldg. w/bar; Δ tenants land and refuse to pay rent b/c of noise from bar, assert constructive eviction, Πs claim no control over bar tenants; Held- 3 part test: landlord has power, conflict was foreseeable, failure by landlord to control problem; here, landlord is responsible Surrender landlord and tenant create mutual release of further lease obligations by implied contract; i.e. tenant leaves permanently, and landlord accepts offer of surrender Rule: requires overt act of surrender (offer); and overt act of acceptance (can’t be silence) tenant off the hook for rent at the moment of acceptance In re Kerr- landlord recognized surrender, rent only due up till time of acceptance Dependent Covenants contractual aspect of landlord tenant law moved away from independent covenants toward the dependant covenant model Medico-Dental Bldg. v. Horton- tenant pharmacist leaves bldg. after new doctor starts drugstore; consideration in contract was that he’d have exclusive right to sell meds; Held- does the agreement go to the essence of the deal? yes, money/rent is linked to exclusivity here (goes to essence of the deal), so no ongoing obligation to pay rent Implied Warranty of Habitability (IWH) Javins v. First Nat. Realty Corp.- tenants refuse to pay rent b/c of housing code violations in bldg., assert violations were not pre-existing to moving in; Held- the housing code violations are a breach of the implied warranty of habitability, entitling the tenants to withhold rent remedies? 1. rescission of lease by tenant, 2. order of spec. perf., 3. damages for breach of IWH, 4. set-off against rent liability, 5. w/holding rent until corrected method for determining damages? 1 option: value of premises if compliant w/IWH, minus value in non-compliant condition (awards windfall to tenant) Landlord’s duty to mitigate if tenant defaults Sommer v. Kridel- tenant changes his mind about moving in, writes letter, landlord ignores letter, waits 16 mos. and attempts collection; Held- landlord has a duty to mitigate (and burden of proof mitigation occurred) if tenant defaults consider surrender as an option; i.e. changing locks amounts to acceptance of surrender (at which point tenant’s responsibility to pay rent ends) Transfer of Interests Mullendore Theatres, Inc. v. Growth Realty- issue: does a covenant run w/the land (can orig. security deposit be recovered after prop. changes hands)? Held: Analysis: 1. does it “touch/concern” the land (i.e. benefit the land); 2. do parties intend it to run w/the land; here, does not run when reversion is sold, new landlord and tenant only bound by provisions of the original lease that “run w/the land” (use of funds to benefit the property) $ is fungible, less likely courts will consider it to have a particular purpose Transfers of tenant interests: Assignment and Sublease 2 sources of landlord-tenant obligation- privity of contract and privity of estate (requires interests directly nested w/each other and 1 party in actual possession) sublease: landlord has fee simple, carves out a prime lease from the fee simple, prime tenant carves out a sublease from the prime lease each person deals w/the tenant immediately below landlord and sub-tenant not bound by privity of contract if they have not entered into a contractual rel’ship assignment: landlord has fee simple, carves out lease to prime tenant, prime tenant transfers prime lease to first assignee (prime lease transferred as whole) assignee steps into shoes of prime tenant, deals directly w/orig. landlord orig. landlord and first assignee are in privity of estate Jaber v. Miller- Jaber transferred lease to someone whom Miller leased it from, Miller- sublease terminates b/c of fire, Jaber- assignment, $ still due b/c contract; Held- intention of parties at time of lease formation determines whether transfer of a lease is a sublease or assignment; here, assignment was intended court assumes provision in orig. lease providing termination in event of destruction is not a covenant that runs w/the leasehold upon assignment Kendall v. Ernest- provision in lease that lessee may not assign/sublet w/o lessor’s consent; Held- default for approval clauses now presumptively not okay (changed) (rel’ship btw landlords/tenants is now more impersonal, need to protect esoteric preferences less impt) Rule- where a commercial lease provides for assignment only w/prior consent of lessor, such consent may be w/held only where lessor has a commercially reasonable objection to the assignee/ proposed lease Form Leases Check-out sample online immutable rule- cannot be changed/ contracted around default rule- may be contracted around Co-ops and Condominiums why do they persist at a high frequency? H. Hansmann- tax environment is conducive to condos; subsidies given in order to increase ownership; big deduction on income taxes people want more freedom to change interior of their home Nahrstedt v. Lakeside Vill. Condo Assoc.- woman buyers condo, clause in assoc. agreement prohibits her keeping cats; Held- under CA law, clause not unreasonable (not arbitrary, burden doesn’t outweigh benefits, and not against pub. pol.) more externalities created by cats and fewer alternatives open to lady, more likely that the rule is unreasonable 40 W. 67th St. v. Pullman- crazy tenant, Pullman, unanimous vote to kick him out; Held- if there is a legit co-op/condo purpose to kicking person out, board may do it (condo boards are given a lot of deference) Non-Possessory Interests: Trusts and Corporations Spend-thrift Trusts- limit ability to assign assets of trust cannot be reached by individual creditors of beneficiaries purpose- provide $ support for ppl regarded as less than capable of managing $ affairs Broadway Nat’l Bank v. Adams- creditor tries to obtain debt from trust created for Δ Adams by brother; Held- income of a trust created for benefit of Δ cannot be reached by attachment before it is paid to him; trust- separate legal entity that owns stuff; also, brother can’t transfer right to the payment criticism: creditors don’t know his assets; restraint on alienation allows stuff to sit around w/o being efficiently used (by dead hand control); C. Gray- people never learn to handle their $ (moral view) Principal-agency relationships Agency cost- i.e., having management rune your bldg, cost of making sure it’s done right Agent owes principal some duties: Duty of care- do a good job; standard? business judgment rule- must use reasonable business judgment Duty of loyalty Trust Fiduciary Duties Rothko v. Reis- executors of Rothko’s trust breached fiduciary duties (made sales contrary to int’sts of beneficiaries for personal gain); determination of damages (sale price, market value at time, today’s value)? Held- Court uses today’s value b/c there was a duty to retain the paintings (Kieff- duty was just to sell them honestly) Changed Circumstances Wilber v. Owens- Wilber, Bamford’s executor, seeks construction of the will, which created a trust to carry forth research from his incoherent “Random Scientific Notes,” ; Held- testator had gen. charitable intent; apply cy pres to change terms/ purpose b/c fulfillment of specific intention would frustrate Bamford’s gen. charitable intent Corporations corp.s allow an artificial entity to own property in its name as if it were a person shareholders own corp., which owns title to various assets shareholders elect board of directors, who appoint managers to manage/control corp.s and partnerships shield individual shield individual shareholders/partners from claims of creditors officers of a corp. are subject to fiduciary duties (loyalty) Title Records and the Transfer of Property Nemo Dat “no one can give that which he does not have”; derivation principle- the transferee’s rights derive from those of the transferor nemo dat analysis requires finding everyone in the chain, particularly the Π (i.e. tracing back ownership through a series of legitimate transfers to an act of legitimate original acquisition) Rule- one cannot acquire good title from a thief Kunstsammlungen Zu Weimar v. Elicofon- 2 paintings stolen from German museum during WWII, bought by Elicofon from service-member; Held- transfer of possession but not of property right service-member was unable to convey title b/c paintings acquired by theft The Good Faith Purchaser- Exception to Nemo Dat If Δ purchases good(s) in good faith, the law will generally give Δ title to goods as a good faith purchaser; Rule: voidable title gives a power to transfer to a good faith purchaser Kotis v. Nowlin Jewlery, Inc.- Kotis buys Rolex from Sitton, who bought it w/a forged check at Nowlin’s; Held- Sitton had voidable title, but Kotis did not act in good faith; evidence of lack of good faith: unreasonably low price (ev. it’s stolen), inquiry notice- duty to ask more Qs if seems too good to be true, Kotis admitted lying to Nowlin (hurt credibility) Hauck v. Crawford- Hauck, farmer, thought he was signing a lease, but it was actually a deed to mineral rights; Held- if Hauck was negligent in signing (w/o knowing contents), he should be held responsible Proving Ownership – Title Searches and Recording Acts Title Searches- title search requires building a chain of title; will involve a relevant time period (usually 30- 40 yrs.) Method: search back through grantee index (who person you are buying from bought from and back) until you can stop; then work back up through grantor index (coming forward in time) want them to match up and ensure nothing funky happened baseline is nemo dat, and “first in time, first in right” Registration- resolves potential disputes about title ex ante (at the time of transfer) Recordation- disputes about title resolved ex post (once they arise) makes available for public inspection copies of in personam transactions; generates constructive notice to all subsequent purchasers in the chain of title nearly all U.S. localities use recordation recording acts protect good faith purchases for value; incentive to file deeds Statutes: Race Acts- first of 2 property claims to file has the better claim (1st to record wins) theory: once you’ve recorded, everyone else has constructive notice exception to the good faith purchaser rule Notice Acts- a subsequent good faith purchaser for value will win unless he has notice; preserves good faith purchaser rule Race-Notice Acts- purchaser for value will only win if she has no notice and records first Shelter Rule- allows a person protected by statute to transfer, and that person will have claim of right (i.e. O conveys to A, A doesn’t record, O then conveys to B, who doesn’t know about the prior conveyance to A, B records; if B gifts to C, C prevails against A PRACTICE PROBLEMS, p. 923 Hood v. Webster- woman’s husband devised her farmland; he wanted the estate to go to his bro upon her death; she granted it to her brother, nephew for $1, then died; Race Notice Recording Act; Held- Π, brother, wins; the $1- not enough evidence of consideration; party claiming good faith for value bears the burden of proof dissent- not adequate showing of bad faith to cut off the claim Limits of Title Searches Adverse possession exception- when adverse possession occurs, a new chain of title is started in the adverse possessor; exception to nemo dat- allows shift in title other than by claim of voluntary transfers Mugaas v. Smith- woman gains title by adverse possession (fence- open and notorious); once SOL has run, AP has title against appellants, who purchased the land; holds despite there being no record in registry and that possession is no longer open/notorious Wild deeds- recorded but cannot be located in the transferor’s chain of title Zimmer v. Sundell- issue: Π’s entire chain of title back to the common grantor not recorded until after Δ’s entire chain of title was recorded; Held: Πs lose b/c their deed wasn’t recorded back to orig. grantor 1st Rule: if 2 claims originate from same grantor who had a wild deed, winner is the one who had the chain of title recorded first Law of Neighbors Nuisance- anything which disturbs free use of one’s property, or renders its ordinary use uncomfortable Private nuisance- a substantial and unreasonable interference w/the private use and enjoyment of one’s land Hendricks v. Stalnaker- Πs putting in septic tank, Δ raced to have a well drilled; Πs then unable to obtain permit for their septic tank; Held- well not unreasonable use of land (less invasive burden than septic tank) racing problem (racing toward common prize)- incentive to deploy assets sooner than they need – problematic; consider externalities from both directions Test- reasonableness in relation to particular locality; balance landowners’ int’sts Adams v. Cleveland-Cliffs Iron Co.- landowners, Adams, sue for vibration/dust coming from mine; Held- not trespass, but is possibly nuisance b/c the intrusion is intangible; remanded modern approach/ test: trespass: must have physical invasion by a tangible thing; usually immediate; SL (no state of mind requirement) nuisance- thing/activity that substantially and unreasonably interferes w/Π’s use and enjoyment of his land Boomer v. Atlantic Cement- neighbor landowners complain bad air quality/smoke/dirt “Permanent damages” (or no damages) may be applied if economic/ social value of nuisance is high enough. Look at CCA. Remedy options: 1. enjoin for period of time to give time to make technological changes; 2. grant injunction for finite period, vacated upon receipt of perm. damages. Ultimate Coasian problem- 2 resources in conflict. Expansion of the universe: homeowners: others suffering from pollution; cement plant- closure causes lost jobs, lost taxes, loss of needed cement, collateral businesses hurt Spur Industries- geriatric development next to cattle feed lot, smells; development has to pay for relocation- equitable remedy. Coasian problem. Easement- contract in which an owner agrees to waive his/her right to exclude certain kinds of intrusions by another; always run w/the land Baseball Publishing Co. v. Bruton- Δ makes contract (but doesn’t seal) to rent wall to Π for billboard for 5 yrs.; Δ returned Π’s payment, and after 1 yr., removed Π’s sign; Held- not a lease (b/c owner maintained possession) and more than a license; it is an easement, negative injunction granted to Π Fontainebleau Hotel Corp. v. Forty-Five Twenty-Five, Inc.- Δ hotel constructing addition whose shadow would block light/air to Π’s property in South Beach, FL.; Rule: Access to light/air is NOT a lawful right; Ancient lights concept (you have some possession of light/access; idea of property as cylinder going up to god) repudiated in U.S. Creation of Easements Schwab v. Timmons- petitioners want court to grant them an easement on a private road so they can get to their land; Held- no easement; petitioners had created the necessity by selling off part of their land Warsaw v. Chicago Metallic Ceilings, Inc.- Π had been using Δ’s property to turn his trucks around for 7 yrs.; Held- elements necessary for prescriptive easement (use that is open, notorious, continuous, and adverse for an uninterrupted period of 5 yrs) satisfied Δ could have prevented easement by giving permission to Π to use land (not adverse, lowest cost option, revocable) damages rule- entitlement stays w/true owner, but adverse owner can force transfer by paying owner Holbrook v. Taylor- appellant granted permission to use rd. to others, then appellees used it w/permission and improved it; Held- a license becomes irrevocable (owner is estopped) where licensee has exercised the privilege and made improvements Covenants- generally involve the right to insist on the use or nonuse of land; prescribe a system of governance rules Equitable Servitudes Tulk v. Moxhay (Engl.)- negative covenant not to build on Leicester Square, Δ refuses to abide by covenant b/c it wasn’t incl. in his deed (was only in 1st deed) so no horizontal privity; Held- enforceable by court of equity, does “touch/concern” land; there was notice, requires enforcement Rule: horizontal privity not req. for burden of covenant to run at equity Real Covenants- U.S. covenant doctrine- under certain circumstances, a covenant attached to fee simple property will bind successors Neponsit Property Owners’ Assoc.- common-interest community has a covenant to pay $ for maintenance of public areas (roads, parkets, etc.); sunset clause incl. (endpoint for covenant); Held- covenant enforceable; there was intent it would run w/land, does “touch and concern” courts dislike these covenants b/c lack incentive for seller to transmit the info to a buyer Requirements of covenant that runs to successors of orig. landlord or tenant: the landlord and tenant intend that they will run the covenant is one that “touches and concerns” the land In Neponsit- 3rd req. added: there must be “privity of estate” btw the party claiming benefit of covenant and party subject to the burden Requirements for covenants to run Directory: outlines -> Property outlines -> Adil Khan Contracts Midterm outline- waldron outlines -> Remedies for breach of promise (1) The Interests Protected outlines -> Basic Process for Assessing Damages: 97 Select interest that deserves vindication 97 a. Restitution 97 outlines -> Chapter Five: Written Documents 1 Unsigned Documents 1 outlines -> Cases and Materials on Contracts outlines -> College of Science and Health outlines -> Evidence outline outlines -> 2. Act, Omission, Status or Circumstances 4 Consequences and Causation 8 Introduction to Mens Rea and Intent 10 Levels of Fault 11 Property -> Property outline Download 266.24 Kb. Share with your friends:
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