List of property concepts in common law

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Property

Defeasible fees:

Fee simple subject to a condition subsequent -- includes terms such as “except that if,” “upon the condition that,” “but if,” etc.. The grantor retains power to terminate the estate of the grantee upon the happening of this event. (the right of re-entry)

Fee simple determinable -- includes terms such as “while,” “so long as.” Has in inherent “possibility of reverter,” a future interest held by the grantor if this event occurs. This reversion is not subject to the RAP

Fee simple subject to an executory interest -- like a FSD but a third party has the possibility of reverter. This IS subject to the RAP but sometimes falls under the charity-to-charity exception to the RAP. The exectory interest is almost always stricken under the RAP when it is phrased as “to A as long as X occurs, then to B” (X might not occur for 21 years or more)

Rule Against Perpetuities: No interest in property is valid unless: 1) it must vest, if at all, 2) not later than 21 years 3) after one or more lives in being 4) at the creation of the interest. This period begins in 1) wills at death of testator, 2) deeds at delivery.

Applies to 1) contingent remainders, 2) executory interests, 3) class gifts, even if vested remainders, 4) options/rights of first refusal, 5) power of appointment. Vested interests held by ascertainable individuals are not subject to this rule (to A for life, then A’s children, then to B), but class gifts are subject to the RAP as long as the class remains open. “Lives in Being” are simply anyone mentioned in the conveyance, whether they are beneficiaries or not.

“Unborn Widow” conundrum -- a widow of course cannot be identified until her husband dies. So she might not be the same as the spouse/prospective widow named in the devise, therefore the “widow” CANNOT be used as a life in being. Therefore her potential offspring might vest beyond the 21 year period.

“Age contingency beyond age 21 in open class” -- VIOLATES the RAP

Class gifts/Rule of convenience -- the class closes when one in the class can call for distribution. In the case of an outright gift in a will, the class closes when the gift is made (at the time of testator’s death). If no one is in the class at this time, the class stays open as long as possible, regardless of convenience to the class members.

Charitable trusts -- must be an indefinate group and reasonably numerous

Remainders -- takes possession upon the natural termination of preceding estate.

Vested remainder subject to open: aka vested remainder subject to diminution or partial divestment by condition subsequent (to A for life then to his children…[more children might be born before death of A])

Vested remainder subject to condition subsequent: remaindermen ascertained and interest not subject to condition precedent, but rights are subject to being defeated by some condition subsequent (to A for life, then to B for life)

Contingent remainders: arise in cases where remainder is created in favor of unborn or unascertainable persons (the remainder is contingent on these persons being born or discovered) OR wholly subject to a condition subsequent (to A for life, then to B if he graduates from college before A‘s death).

"Common law destructibility of contingent remainders” -- A contingent remainder had to vest prior to the termination of estate. (to B for life, then to C if she reaches age 21... If B dies before C turns 21, then C’s remainder destroyed) abolished statutorily in all but a few states. If a contingent remainder is to be destroyed, the grantor would have a reversion and the remainderman have a springing interest.

Executory interests follow in other cases. Two kinds:

1) Shifting executory interest: title shifts to another grantee in the occurrence of something stipulated. 2) Springing executory interest: Follows a gap. “To A when and if A marries B” or “To A for life, then after one year after A’s death, to B”

Future interests -- transferring a future interest by deed carries no legal significance

Basic allocation rule -- a life tenant pays only interest on encumbrances, nothing on the principal (which is paid by the remaindermen)

Life Estates -- holder obligated to pay taxes on the property only to the extent of rents/profits generated by property and NOT required to make repairs that were necessary when he got the property

Leases -- non assignment clauses, however impractical, are quite legal, however will be strictly construed (assignments are not sub-leases)

Periodic tenancy -- has right of notice equal to the period

Improvements -- landlord keeps securely affixed improvements to the property. Tenant keeps chattels IF they can be removed without substantial damage to the property or the chattel itself.

Ameliorative waste -- improves the value of the property but still is actionable if there is no reasonable justification for the change

Open Mines -- exception to the waste doctrine allows for uses existing prior to the life estate, not necessarily the uses “in use” at time of transfer

Tenancy by the Entirety -- like a joint tenancy specifically of legal husband and wife. Presumption of tenancy by the entirety arises in a conveyance to husband and wife. Cannot be terminated by involuntary partition, and one spouse cannot encumber the property alone. Right of survivorship as well. Can be terminated by 1) death of spouse, 2) divorce, 3) mutual agreement, 4) execution of joint creditor of both spouses

Tenancy in Common -- concurrent estate with NO rights of survivorship. No one tenant has any exclusive right to any particular part of the property. Judicial partition a remedy if the tenants in common are squabbling. Language of “undivided interest.” co-tenants cannot force other co-tenants to contribute to improvement schemes

Joint Tenancy -- is formed when right of survivorship or intention to create a joint tenancy is clearly and explicitly expressed. Four unities are needed to form a Joint tenancy: 1) time, 2) title, 3) interest, 4) possession. When one joint tenant dies, his interest directly transfers to the fellow joint tenants, regardless of his own will or wishes. A conveyance by a living joint tenant may sever the joint tenancy and create a tenancy in common.

Licenses -- are oral, permissive. An orally-created easement is nothing more than a license. Are revocable at will but espoppel is a defense.

Adverse possession -- changes in ownership of land do not terminate adverse possession. Disability only tolls the statute of limitation if the owner under the disability at the start of the adverse possessing. Intermittent periods of occupancy not sufficient for adverse possession. Also, in adverse possession, one must occupy the whole tract within reason. Otherwise, only the part occupied will be adversely possessed

Easements -- a right to use anothers land for a special purpose, with NO right to possess and enjoy that land. Basic changes in the nature of use of an easement not allowed. Express easements take precedence over implied (necessity etc).

Easement termination -- To abandon an easement, the easement holder must demonstrate by physical action (e.g. removing a path) his intention to permanently abandon the easement. Improper recordation does NOT affect the easement rights of the original parties, as long as the original easement was in writing

Easement appurtenant: two plots, servient and dominant. Passes with the land regardless of whether mentioned in the conveyance. An easement is appurtenant when the easement benefit’s the holder of the dominant tenement in the use and enjoyment of his own land. (therefore, not to mining rights etc)

Easement in gross: rights granted to use another’s property independent of the ownership or use of another parcel of land. Generally not transferable unless for economic/commercial use. (right to build a pipeline across anothers land, the right to use anothers lake for swimming, etc)

Easement prescriptive: easement by adverse possession excepting the requirement of exclusivity. Distinguished from easement by necessity in the notorious aspect. Not applicable to negative easements.

Easement by necessity: usually arise when a plot is subdivided. terminated when the necessity ends (a new road built etc). Servient estate holder has the right to choose the location of an easement by necessity

Easement by implied reservation: exception to Statute of Frauds, created after the division of property. Similar to a Easement by necessity

Real covenant -- a promise to do or refrain from doing something on one’s own property that one would otherwise be privileged to do

Covenants that “run with land” -- like in common schemes for a development, “touches and concerns” in that the effect of the covenant makes the land more useful to the benefited party

“General Scheme”-- evidencing grantor’s interest to benefit the entire subdivision, courts will enforce the same restrictions on subsequent deeds from the common grantor

Reciprocal Negative Servitudes -- When a developer divides land into several parcels and some deeds contain negative covenants, but some do not, negative covenants or equitable servitudes binding all parcels in the subdivision may be implied under the doctrine

Recording Statutes -- Generally only protect subsequent BFPs (including mortgagees). Judgement creditors, heirs and donees are generally not protected. Record notice found in the county office is constructive notice. Even casual familiarties with rumors that someone else holds the property is enough notice. Therefore, proper recording prevents anyone from becoming a subsequent BFP.

“First in time” common law -- rule applies where recording statutes would not have changed the result in a dispute (as when nobody records)

Bona Fide Purchaser -- a person who gives valuable consideration and has no notice of prior instrument

Shelter Rule -- a subsequent grantee from a BFP (including mortgagees) prevails over a prior grantee who failed to record by the time of the subsequent conveyance, even this the first grantee knew of the prior instrument. (A person who takes from a BFP will prevail against any interest that the transferor-BFP would have prevailed against)

Race Statutes -- first in time. Whoever records first wins. Notice irrelevant

Race/Notice -- unless conveyance is first recorded

Notice Statute -- unless conveyance is recorded, and the burden on subsequent BFPs is to check this out before buying

Wild Deeds -- deeds outside chain of title cannot be “noticed” easily, esp. in a grantor-grantee index, and so therefore might not be valid in a property dispute

Equitable Mortgage -- a private mortgage, but the court may order the “creditor” to formally foreclose on the property

“Due on sale” clause -- in mortgage, are valid for all substantive transfers. Allows the lender to demand full payment of loan if the mortgagor transfers any interest in the property without lender’s consent.

Equitable Conversion -- once a land sale contract is property signed, the buyer is now the equitable owner of the property, and bears any risk of loss

Foreclosure priorities -- junior mortgagees terminated. Senior mortgagees remain

Mortgages are freely assignable/transferable. A mortgage is a security interest in a property and the “note” is the evidence of the underlying debt. Physical possession of the mortgage or not is NOT required for ownership thereof

Assumption clause -- only when signing an assumption clause does a grantee become personally liable for a mortgage that runs on the land. If assumption not undertaken, the mortgage is still valid and property subject to foreclosure.

Specific Performance -- available in all contract disputes over real estate, as long as the land is properly described, and NO ambiguities at closing. If so, then abatement of purchase price is allowed.

Surveys prevail over plattes

A sale of a new house by a builder carries an implied warranty that the house was constructed in a reasonably workmanlike manner

Marketable title -- reasonably free of doubt has no unreasonable risk of litigation. Title gained by adverse possession is unmarketable. Implied covenant of marketability is inherent in a land sale contract, but NOT in the deed itself. Necessary to provide marketable title at closing. Encumbrances to be paid off at closing with proceeds from the closing are fine.

Color of Title -- possession of an instrument purporting to convey title

Estoppel by Deed -- if a grantor purports to convey an estate that he does not own, his subsequent acquisition of the estate inures to the benefit of the grantee

Zoning Violations -- and also violations of private restrictions by covenant, servitude, or condition renders a title unmarketable

Doctrine of Merger -- acceptance of deed makes any contract provisions for the quality of title inoperative, barring fraud. Then the terms of the deed control.

A deed is “merely evidence of its own existence.” Physical destruction of a deed, even intentional by owner, does NOT render a change in title.

Specific Warranty Deed -- covenants that the grantor himself did not create any title defects

Quitclaim titles have no covenants but still marketable

Restraints on alienation -- all disabling restraints are void. Bust forfeiture and promissory restraints on life estates are valid, along with forfeiture restraints on future interests.

Covenants -- distinction between present and future covenants

Subjacent Support -- if land would not have subsided but for a structure, then the normal strict liability standard does not apply, a NEGLIGENCE standard thus applies

Trespass -- does not require the showing of damages to be enforced

Riparian rights -- 1) riparian doctrine (eastern states): reasonable use allowed. Natural uses prevail over artificial (irrigation/manuf) 2) prior appropriation (western states): water belongs to the state, the right to use it by license. State orders priorities of use and licenses.