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#Post#: 56--------------------------------------------------
Property 2 -outline1
By: SunsetSailor Date: February 17, 2011, 9:32 pm
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I. Land Transactions
a. Buying and Selling Real Estate
i. Broker Hired
ii. Agree on House and Price  Contract
1. Need Atty?
2. Statute allows brokers instead of attys?
iii. Financing; mortgage & down payment
iv. Title search & title insurance
v. Closing (deed & money change hands)
vi. Contract Flags:
1. Fixtures – What is included?
2. Type of deed
3. Type of financing
4. Time of possession (at closing, one month after, etc…)
5. Inspection
b. Contract
i. Statute of Frauds
1. All Land transactions must satisfy
2. All land transactions need writing
3. Ways around
a. Part performance
i. Reasonably rely on transaction
ii. Rely to detriment
b. Estoppel – because of seller’s acts and buyers reliance,
seller cannot raise the defense of statute of frauds.
c. For Both, need irreparable damage
ii. Marketable Title – implied in all land transactions –
marketable title IF it would not cause just apprehension of the
hazard of litigation in the buyer.
1. Policy  how much looking into the R.C’s and zoning
must a buyer do?
2. Restrictive covenant  restrictions on the land deed.
Contract between past buyer and seller, runs with the deed, all
subsequent buyers are subject to it
a. Dead Hand Rule? No because of the contractual relationship
b. Existance OR Violation  encumbrance
c. When in conflict, statute overrules R.C.
d. Modern Trend:
i. Courts only enforce obvious R.C.’s
ii. Contract around R.C. encumbrances
3. Zone  by gvn’t restricts land to particular use and
rules
a. Existence of zoning  no hazard of litigation, no
encumbrance
b. Violation  hazard of litigation  encumbrance
4. Statute
a. Prior to Closing
i. Latent violations are encumbrances
ii. Patent violations are encumbrances
b. After Closing
i. Latent violations are not encumbrances
1. Why? Hazard of litigation is low
2. Too much uncertainty for sellers (buyer returns 10 yrs
later….)
3. Can contract around
ii. Patent violations are encumbrances
iii. Court looks to substiantality of violations (kinds, cost to
fix, etc…)
5. Why? R.C.’s are special private encumbrances, zoning apply
to all land owners in area
c. The Deed
i. Warrantees of Title
1. General Warrantee Deed (good for buyer, bad for seller)
a. Seller promises:
i. Present: (statute of lims start at closing)
1. Covenant of Seisin: Seller owns estate
2. Covenant of Right to Convey: Seller can convey
3. Covenant Against Encumbrances:
ii. Future: (statute of lims start at breach)
1. Covenant of General Warrantee: Seller will defend against
lawful claims
2. Covenant of Quiet Enjoyment: No other superior title
3. Covenant of Further Assurances: Seller will execute needed
future documents to perfect the title conveyed
2. Special Warrantee Deed
a. No promise against bad past title
b. Promise buyer that nothing was done by seller to interfere
with title
3. Quit-Claim Deed (good for seller, bad for buyer)  No
promises
d. The Mortgage
i. Foreclosure  foreclosing the right of the mortgagor
to redeem the mortgage
1. Deficiency Judgment  foreclose for less than owed,
remainder is still owed to bank
a. most states do not allow Deficiency judgment
b. Good Policy?
i. Yes, bank can protect against risk of bad investment (house)
by research
1. down payment
2. interest rate
3. force mortgagor to buy mortgage insurance
2. Due Dilligence In foreclosing, bank must exercise due
diligence in finding buyer (high standard)
3. Good Faith – bank has duty to not act in bad faith (no
intentional malice toward mortgagor)
II. Title Assurance
a. Recording System (grantor-grantee index  must go both
ways)
i. Race Statutes – first to record gets title
1. Clear and easy
2. Promotes fraud and unfair circumstances
ii. Notice Statutes – need to have no actual or constructive
notice to protect land interest
1. Actual = factual knowledge that land cannot be re-sold
2. Constructive = recorded
3. Innocent purchaser = purchaser with neither actual nor
constructive notice
iii. Race-notice Statute – To be protected:
1. Must be innocent subsequent purchaser AND
2. must record first
b. Mother Hubbard Clause – “sell all land interests I own in X
County…”
i. Good for title transfer between parties BUT
ii. Give no constructive notice to subsequent purchasers
c. Chain of Title
i. Give constructive notice  can trace back to original
owner, follow all purchasers to self
ii. Latent defects in deeds still provide constructive notice
(?) – point of argument
d. Alternatives to Grantor-Grantee indices
i. Tract Index
1. All Changes recorded in parcel #
2. Problems:
a. Still have to search grantor/grantee index backward from
instatement
b. Changes in land & Property lines, not easy to make permanent
property lines.
ii. Finality in Temporal Searching (Marketable Title Act)
1. Search only to the latest transaction more than 40 years
previous to current
2. Anything not re-recorded in last 40 years is eliminated
3. Problems:
a. Can’t find good title if older that 40 years even if
re-recorded (see notes)
b. Judges continue to rule equitably, diminishing
enforceability.
iii. Register Title
1. Put all interests in one document
2. Court certify document, no other interests are let in
3. Transactions simply add to title and register
4. Fee for specified exceptions
5. Problems:
a. Exceptions get out of hand
b. Equitable judges again, no force in registering title, no fee
paid, back to GR/GE indicies.
III. Easements
a. Types of Easements
i. In gross (run with a party)
1. 3rd parties
ii. Appurtenant (run with the land)
1. Serviant Tenement
2. Dominant Tenement
b. Creation of easements
i. Express Easements
1. Statute of Frauds requirements
2. Reservation in a deed
ii. Easement by estoppel (in only some jurisdictions)
1. Permission Given
2. Reasonable Reliance
3. irrevocable – Detriment if not continued ($ spent on
improvements)
iii. Implied Easements
1. Implied Reservation  easement to grantor
a. Disfavored b/c grantor should expressly reserve easement in
grant of land to grantee
b. Minority: No implied reservation
c. Majority: Weigh Factors:
i. Notice
ii. neccessity
2. Implied Grant  innocent party buys dominant estate
3. Prior Use
a. Common owner severed the property
b. Use in a place before parcel was severed (pre-existing)
i. Quasi-easement – Easement to self on own land. Should it
continue? Factors: (Would reasonable person have intended use to
continue?)
1. Reservation or grant?
2. terms of conveyance
3. consideration given
4. necessity (reasonably necessary use)
5. Use  Notice: (good reason to expect serviant tenant
knows of use?
a. Apparent/continuous use
b. Improvements?
c. Seasonal?
c. Use was visible or apparent at time of severance
d. Easement is necessary for the enjoyment of the dominant
estate
4. Strict Necessity
a. Common owner severed the property
b. Necessity for egress and ingress existed at the time of the
severance (severance caused the necessity)
c. The easement is necessary for egress and ingress to the
landlocked parcel
iv. Easement by Prescription - like adverse possession
1. Actual Use
2. Open and notorious use
3. Hostile
4. Continuous and Uninterrupted
5. Exclusive – only as to the interest in easement
6. For statutory prescriptive period
c. Scope of Easements
i. Factors:  applies to all types of easements, express
or implied, estoppel, proscriptive, etc…
1. Written easement – look to words
2. Intent at time of making of easement
3. Burden on serviant estate
4. Passage of time (horse vs. SUV example)
5. IS CHANGE EVOLUTIONARY OR REVOLUTIONARY?
ii. Duration
d. Termination of an Easement:
i. Abandonment
ii. Owner of dominant tenement purchases serviant easement
iii. Passing of statutory period
iv. Termination by prescription
IV. Covenants - Restrictive and affirmative covenant
(affirmative disliked)
a. Creation of a Covenant/Equitable Servitude:
i. Pre-Restatement: Equitable Servitudes – covenant that equity
will enforce against assignees of the burdened land who have
notice of the covenant
1. Creation
a. express in writing
b. Implied from a general plan
c. reciprocal negative easement
2. Intent – contracting parties must intend that the servitude
3. No privity of estate required
4. Touch and concern – may be as slight as enhance the value of
the land
ii. Pre-Restatement: Real Covenant – covenant that runs with
the land at law so that each successor may enforce or is
burdened by the covenant  only money damages
1. Burden will run to assignees if:
a. the parties so intended
b. privity of estate
i. horizontal –
1. between original promisor and promise
2. original parties must be in privity
3. covenant in conveyance or in mutual relationship
ii. Vertical
1. Privity between covenanting party and the assignee
c. touches and concerns the land
d. assignee has notice of the covenant
e. Need Notice
2. Benefit will run to assignees if:
a. the parties so intended
b. some form of privity of estate
i. Vertical
1. Privity between covenanting party and the assignee
c. touches and concerns the land
iii. Post Restatement: Equitable Servitudes = Restrictive
Covenant
1. No need for privity
2. Do need Touch and Concern Land
iv. Reciprocal Servitude – Building plan by developer will bind
all parcels in the subdivision – notice to subsequent
purchasers?
1. At Time of Grant of first parcel – Reciprocal Covenant?
a. common owner
b. lots bear relation of reciprocity
c. sells one with restriction that benefits the other
d. servitude is reciprocal
2. Reciprocity is not retroactive
a. Mutually Restrictive Covenant
i. New promises do not bind past buyers IF there was no common
scheme when land was bought by first buyer
b. State enforcement:
1. Court action IS state enforcement  can’t enforce
racially restrictive covenant
2. Most states just strike racially restrictive covenants.
3. Because state cannot enforce, striking restrictive language
in covenants does not mean much…
c. Scope: Covenants cannot interfere with superior laws, ie
Fair Housing Act
d. Destruction of Restrictive Covenant
i. Changed Conditions
1. Factors:
a. If covenant outlives usefulness, cts. can destroy covenant
b. Argue intent & purpose  if benefit still exists,
purpose and intent are fulfilled
c. Argue Burden
2. Boarder creep: Court strikes covenant, purpose is destroyed
on boarder again
e. Common-interest communities RC’s are enforceable unless
Unreasonable:
i. Arbitrary
ii. Burden outweighs benefits to community
iii. Violates fundamental public policy
iv. Determined in the ABSTRACT (don’t look case-to-case)
V. Zoning
a. Restrictions on uses of land by state to prevent incompatible
uses
b. Source of power
i. State Legislature has police power to regulate human affairs
(usually for health, morals etc… of society)
ii. State grants to municipalities power to zone in enabling act
iii. Municipalities appoint zoning board to create, make a
comprehensive plan
1. Local zoning ordinances must be made in accordance with the
plan
2. Plan is a guide for development of the city
iv. Municipalities then pass the plan & Zone
c. Constitutional Limitations
i. 14th amend Due Process
1. Procedural – no notice, no representation
2. Substantive – ordinance must bear a reasonable relationship
to a permissible state objective
a. Strict Scrutiny
i. If infringes on a fundamental right, state must show that it
has a compelling state interest
ii. Housing is not a fundamental right
b. Courts otherwise must give deference to legislature unless
abuse of discretion
i. Spot zoning
1. argument is quasi-judicial act
2. board used zoning as an individual case, not broad policy
ii. Arbitrary
iii. Malice
ii. Equal protection
1. Π must prove discriminatory purpose or intent
a. Legislation need only bear rational relationship to
permissible state objective
b. Same strict scrutiny standard
iii. Taking (detailed later)
d. Non-conforming uses
i. Amortization – zone ordinance requires that existing uses
cease that become non-conforming when zone is passed. – policy
 give time to conform or change, save money. SPLIT
1. Some J’s Amortization is O.K. with reasonable period,
2. others is Unconstitutional
a. if in jurisdiction of unconstitutional, or during period
b. act as shelter rule in that:
i. can sell as is and allow non-conforming use to continue
ii. keep same scope of non-conforming use
iii. can change to new non-conforming use as long as it is less
of a burden
ii. Variances – non-conforming use that was not specifically
zoned out, legislature did not provide a way to keep use in
zone.
1. must apply for variance with zoning board
2. must show:
a. Practical Difficulty or Undue Hardship AND
i. Diminish property values don’t matter. Zone deals with
Light, Air, Open Space, Health, Safety, Morals – Not property
values
ii. No effective use if no variance
iii. Has made efforts to comply
iv. Not self-imposed
b. No substantial impairment to Plan if granted
i. No impair purpose of zone
ii. No harm to public good
3. Court must have reasons for denial to guard against Arbitrary
zoning board decisions and malicious zoning board decisions
iii. Special Exception – specifically anticipated non-conforming
use, legislature outlined circumstances for granting special
exception
1. Separation of powers:
a. legislature makes general guidelines for general good
b. Zoning board makes individual judgments. Cannot make broad
policy
2. Criteria for special exception cannot be too broad, leave too
much discretion to zoning board (they are not elected, separate
powers to the legislature)
e. Exclusionary zoning
i. Fair Housing Act
1. must reasonably accommodate for protected classes
2. Exception – if zoning ordinance is a reasonable cap on the
maximum occupancy
ii. Nontraditional families
1. zone must bear reasonable relationship to objective of plan
2. may also attack constitutionally
a. arbitrary – must meet higher standard
b. Freedom of association
VI. Eminent Domain
a. 5th Amendment: “…nor shall any property be taken for public
use without just compensation.”
i. Public Use
1. narrow = public right to use (old interpretation)
2. broad = benefit the public (new interpretation)
a. rationally related to a conceivable public purpose
b. does not need to ever be in the possession of
public/government
ii. Taking
1. Nuisance prevention is not a taking
a. Nuisance is not a right granted to land, cannot be taken
b. To prevent a harm
2. Any permanent, physical occupation by authority is a taking
a. Legislature can overcome “permanent” with a sunset clause
“this expires in…”
b. End up weighing burden on the owner to determine permanent
c. Occupation does not depend on size
d. Compensation will reflect size
3. Where a regulation denies all economically beneficial or
productive use of interest a taking has occurred UNLESS the
regulation is in agreement with the common law of property and
nuisance in that state
a. Common law of property must substantially advance a
legitimate state interest
b. Shifts the power to determine nuisance prevention from the
legislature to the courts
c. Regulation is not common law simply because state legislature
passes the regulation
4. Regulatory taking (taking disguised as a zoning ordinance)
a. Harm test:
i. If purpose is protecting public from harm, then Zoning
(nuisance)
ii. If purpose is to extract a public benefit, then taking (need
compensation)
b. Severe economic loss
i. If regulation “goes too far” it is a taking
ii. Conceptual severance problem:
1. any regulation can be a 100% taking if the interests in the
property are conceptually severed properly
2. to be persuasive, the severance must bear some relation to
reality
3. (Distinct Investment Backed Interest)
iii. Average Reciprocity of Advantage
1. if regulation also protects the Π in some way, it is not
a taking
2. can also apply this to any regulation, but must bear some
relation to reality.
5. Method of analysis
a. Permanent Physical Occupation? Yes = taking
b. Nuisance Control? No = not a taking
c. 100% Diminution of value to individual? Yes = taking
i. conceptual severance problem:
1. Distinct Investment Backed Expectation
a. Post-regulation purchase
i. The right to sue for taking should run with the land
b. Same as easement by estoppel, non-conforming use, etc…
2. Severance must bear some relation to actual property interest
ii. Average Reciprocity of Advantage
1. Any regulation can be seen as to benefit Π
2. Advantage must bear some relation to reality
d. Benefit to society?  Substantially Advance a
Legitimate State Interest (2-parts)
i. Prevent public harm  nuisance control
ii. Provide public good  permanent occupation (abuse?
Arbitrary?)
iii. Just Compensation
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