Property Outline PDF

Property Outline 1. Principles of Personal Property: A. Possession and Found Property Abandoned Property: Flavor 1 - thrown away/possession voluntary forsaken true owner has no claim, finder has claim Flavor 2 - involuntarily lost/left w/o hope/...

Property Outline 1. Principles of Personal Property: A. Possession and Found Property Abandoned Property: Flavor 1 - thrown away/possession voluntary forsaken true owner has no claim, finder has claim Flavor 2 - involuntarily lost/left w/o hope/expectation of getting it back ex. throwing something overboard > first person to find property gets possession but not ownership. Owner highest hierarchy Lost Property: Owner involuntary parted through neglect, carelessness, or inadvertence True owner > finder > property owner Mislaid Property: Intentionally put in a certain place, later forgotten True owner > property owner > finder Treasure Trove: Property is old, has antiquity value, found concealed in earth or building NOT laying on ground Only applies to forms of money ex. gold, silver, dollars, plate, bullion ex. very old necklace doesn't apply True owner > finder > property owner A. Possession and Bailments Legally cognizable pre-possessory interest: When a person takes significant but incomplete steps to get possession of a piece of abandoned personal property which is interrupted by other's unlawful acts Povo v. Hyashi (baseball case) – split by an undivided interest Bailments - giving the property to a person for some purpose and expecting it back Express or implied agreement to create bailment Delivery of property in good condition Acceptance by the bailee of the property Return of property in same or worse condition Bailment example: person gives valet driver the keys to her car but let wallet in the car, valet driver takes the car but later the car goes missing, the wallet has money in it, can the wallet owner sue the valet driver for the missing wallet on the basis of bailment? No – valet driver only has a bailment for the car, no acceptance on either party’s part for the wallet was established – just because wallet in the car doesn’t mean there is a bailment for it Constructive bailment - court created bailment between two parties based on facts of the case *Can be made by thief taking items and then not giving them back, by not giving them back breach of bailment occurs, explicit agreement is not required, doesn’t apply to abandoned flavor 1 property Bailor - person giving the property Bailee - person who got possession of the property given by bailor 1  Rebuttable presumption - presume bailee acted negligently but bailee can rebut the presumption and show they did not act negligently If prima facia case of bailment is established a rebuttable presumption is allowable Gratuitous bailment - bailment only benefits one party Slight diligence required For hire bailment - bailment benefits both parties Reasonable care Applies to any commercial business C. Transfers of Personal Property; Personal Property Causes of Action General Rule #1: a transferee (purchaser/donee) gets all the title that the transferor (seller/donor) has or has power to transfer Void Title: if transferor doesn't have good title (thief), can't transfer good title Voidable title: title can be either good title or void title depends on actions of true owner Person with voidable title can transfer good title to BFP BFP: "good faith purchaser & fair market value” Legit interest in purchase (not trying to take advantage) Pay fair market value BFP only applies in the context of entrustment and when a true owner gives title to a wrongdoer that then sells to a BFP – doesn’t apply if thief just sold property to someone who didn’t know it was stolen, thief can’t transfer title when he doesn’t have title, merchant who “deals in goods of those kind” can transfer title to BFP because they got a voidable title from true owner, can transfer voidable title, not void title How is a voidable title created: Entrusting of property To a merchant who deals in kinds of that good Doesn't matter if true owner puts conditions on the delivery/acquiescence, doesn't matter if true owner tells merchant NOT to sell General Rule #1 + void title = General Rule #2 Once void always void True owner can assert power to get title back Exceptions to general rule 1 and 2: If true owner undertakes actions (creates risk of losing title to a buyer), true owner makes title voidable If buyer is right kind of buyer, voidable title becomes good title, buyer now owns property (true owner cannot get it back) Replevin: action to regain possession The defendant against whom replevin is sought must have possession of property Conversion: Wrongful exercise of dominion or control over personal property Requires wrongful exercise of dominion or control be substantial, all value of property is lost ex. thief steals car and totals it Conversion can apply if items stolen but no damages but can be considered a total loss in value in the perspective of the owner because they were deprived of all its value while it was stolen If property is intangible, conversion claim cannot work UNLESS "merged into a document" 2  Trespass to Chattels: Interference with the use of property but the result to the property is some loss in value, indirect or temporary control is loss of property Impact on property is less than conversion A matter of degree of control over and harm done to the property distinguishes from conversion claim 2. Principals of Real Property Ownership A. Creation of Property Interests by Gift and Purchase; Legal and Equitable Title Inter Vivos Gift: gift was given during the donor's life, irrevocable Bequest: giving personal property to someone via will Devise: gift of real property via a will All property (personal and real) passes to one's heirs when they die (everyone has heirs) Causa Mortis gift: Made during the donor's lifetime in reasonable belief of imminent death Is revocable Elements of a gift: (same in real and personal property) Donor intends to make a gift (donative intent) Donor delivers property (delivery, giving up interest) Acceptance Types of delivery for a gift: Actual (handing you a laptop or car keys) Constructive (giving you the key to a locked box) Symbolic (giving you a deed) Equitable conversion: title is split into legal title and equitable title, also applies to contractual duties, think about the practice exam; jeweler had contract to give ring to Gerry > jeweler has legal title (because is the owner) > Gerry has equitable title (because will get the benefits) Legal title: listed as owner but nothing more, seller holds it if closing fails, legal and equitable title get reunited, seller holds it – when transaction is done title is not split, buyer gets both legal and equitable title, only situation when title is split is between selling and buying of a house Equitable title: all the benefits of ownership, bears all the risks too, purchaser holds it B. Adverse Possession Actual (any kind of structure of land) and exclusive (only one person) possession Open and notorious - must be something that would reasonably put the true owner on notice Hostility (nonpermissive) o Possession can be "hostile" without any actual dispute between the true owner and adverse possessor's use o The adverse possessor is on the property w/o permission of true owner and acting in a way inconsistent with true owner's rights o Can happen w/o true owner's full knowledge ex. owner gives permission to be on land w/o knowing that it is actually their property Limitations period 3  o Must be able to show that all other elements have been continuously met for a certain number of years (default is 20yrs) o If for some reason one of the elements stop then the limitations period clock resets o Adverse possessor can rely upon prior adverse possessors to meet the limitations period. This is tacking Ejectment (true owner's remedy to adverse possession) Suit to quite title: claim an adverse possessor can file to claim title formally General rule that adverse possessor gets title to the land actually possessed Adverse possession by color of title: Only triggered by documents that claim to transfer title but do not actually give title Defective deed is most common way this happens Adverse possessor would get what they actually possessed through adverse possession and then what the deeds says they own C. Types of Ownership and Trusts Fee Simple Absolute: highest, most complete form of real property ownership Tendency in Common, Joint Tendency with right of survivorship, Tendency by the entirety have all these in common: Each tenant owns an undivided interest in the fee – joint tenants and tenants by the entirety each own equal shares of the fee; tenants in common can have different %s of the fee; regardless of the % of ownership, each square inch of the land is owned by the tenants in their respective % Each tenant can enter onto and avoid exclusion from the other Each can use the land but must account to the other tenants for any profits – if a tenant uses the land, then that tenant must account for (show the costs and profits) so that each tenant gets a share of the profit according to the ownership % - can use the land without the approval of others Each must not commit waste – if a tenant does something that adversely affects the value of the land (fails to maintain house), if the tenant uses the land but not to its full potential for that use ex. tenant rents to someone but rent is below market rental rate Types of Transfers: Tenancy in common (T/C) – can transfer (sell, gift) their interest without agreement/involvement of other tenants, the transferee gets what the transferring tenant had Joint tenancy with right of survivorship – when transferring interest, the transferee does not get the same thing; if transferred JTWROS gets destroyed, transferee gets interest as T/C, must use specific language of JTWROS, requires 4 unities (time, title, interest, possession) when transferred automatically breaks two unities and turns into T/C no matter what Tenancy by entirety (T/E) – must be married to transfer, if not married and one transfers the transfer is not legit. one tenant cannot transfer without the other, only way for it to be broken is by divorce or death and then reverts back to default Death of a tenant, what happens: Tenancy in common – when a tenant dies, his/her interest passes to their heirs divided equally between them all Joint tenancy with right of survivorship – when on tenant dies, the right of survivorship passes on to the surviving tenant, the deceased tenant’s heirs get nothing 4  Tenancy by the entirety – death of one tenant means that the surviving tenant gets complete ownership and the deceased tenant’s heirs get nothing Notion of partition – selling something and splitting up the profits equally, sell the property and divide proceeds by interest fractions Fiduciary Duties of the trustee: Duty of loyalty – must act in the sole benefit of the beneficiary Duty to avoid self-dealing – must avoid doing anything that could be perceived as benefitting oneself Duty of reasonable, prudent investment – must be careful with the Res, buying safe investments to grow the Res Duty to protect and preserve the Res – protect against normal wear and tear, fixing a room when needed Duty to avoid co-mingling the Res – Res needs to be kept separate from other property, separate bank accounts Duty to account to the beneficiary – must be able to show the beneficiary what has been done with the Res Creation of trust uses the split but on a permanent basis, that the trustee has the legal title and the beneficiary has the equitable title 3. Landlord and Tenant Law A. Types of Tendencies and Rent, Transfers of Interest by the Tenant and Landlord/SNDA Types of Leases: Estate of years/fixed term tendency: refers to any lease that is for any fixed term or time, there must be a fixed end date so that we know when the “term” ends, requires an express agreement, the parties need to do nothing (like providing notice) to make the lease end; it simply ends on the fixed date Tendency at Will: each party wants or wills the lease to exist, if one party no longer wants the lease to exist they can terminate the lease, at common law the lease can be formed by express agreement or implied by the action of the parties, no fixed end date, to terminate one party needs to give notice to the other Periodic Tendency: identified by some period built into the lease, ANY SENSE OF A PERIOD ex. month-to-month tenancy, at common law the lease can be formed by express and implied agreement, one party needs to notify the other when they want to terminate Tendency at Sufferance: when a tenant who originally had the right to be in possession, stays in possession after the right to possession has ended (holding over), tenant becomes a trespasser Types of Rent: Gross (or fixed) rent: a single fixed amount each month while the landlord pays the TIM Triple Net Rent: very common in non-retail commercial leases, the tenant paying some fixed amount of small “r” rent (calculated on a square foot basis) plus paying TIM, tenant bears the cost and risk of TIM, the amount of rent is less than was a gross rent would be % Rent: very common in commercial retail leases, landlord covered TIM but tenant pays some amount of small “r” rent (less than Gross Rent amount) but also pays a % of sales or revenue generated on the premises, ex. shoe store in mall, tenant pays some rent plus a % of the store’s sales during the month 5  Types of Tenant Transfers: Assignment transfers the lessee’s entire interest in the property ex. if lease the entire 3 years of the lease not just 1 year, needs to be the entire length of the lease - Landlord can get rent Sublease transfers only a portion of that interest with the original lessee retaining a right of reentry at some point during the unexpired term of the lease, ex. if lease 1 year out of the 3 years of the lease – landlord can’t get rent Even though the original tenant has given all rights and obligations to her transferee the original tenant is still liable to pay outstanding rent and repair damages this is privity of contract The majority rule is that a transfer of all rights for the remainder of the term but with the limited right of reentry only for default is still an assignment The minority rule is that the retention of even that limited right of reentry means that not all rights were transferred and so it is a sublease Transfers by the landlord: Subordination - the tenant agrees to subordinate (lower) its interests to the interests of purchaser or lenders that would be inferior to the tenants’ interest NOT subordinate to an already higher interest Attornment - landlords get the tenant to agree to pay rent to a subsequent owner. Non disturbance clause - the tenant will non-disturbed in its enjoyment of the lease SNDA clause, S for Subordination, ND for non-disturbance, and A for attornment solves the concerns of the landlord The ability of tenants to transfer, three types of leases: 1) no clause at all, 2) clause requiring consent without constraints on consent 3) clause requiring consent with constraints on consent No clause at all – follow common law and rule on alienability (LL has right to not consent for any reason) ▪ Clause requiring consent with constraints on consent – follow the contract ▪ Clause requiring consent without constraints on consent – look at majority or minority rule ▪ Majority rule – landlord can withhold consent for any reason, common law ▪ Minority rule – landlord can withhold consent only for commercially reasonable reasons ▪ If you don’t know if the state applies majority or minority rule, apply both rules B. Landlord's Duty to Deliver Possession; Tenant's use and Occupancy American/Massachusetts Rule (majority): Landlord obligated to convey and not itself prevent tenant from taking possession, holdover tenant is new tenant’s problem English Rule (minority): Landlord obligated to deliver actual possession at the start of the of lease regardless if any third party is holding over, hold over tenant is landlord’s problem Court favors the English Rule because need a uniform federal law and conforms to commonsense notion of a lease if you don’t know which rule to follow, apply both Use of Premises Clause: defines how property is to be used ex. use property as discount store Continuous Operations Clause: requires that the property be used continuously in junction with what the use of the premise is, doesn’t have to be injunction with premises clause can 6  apply as long as the store is being operated even if for storage/meetings still meets the requirements ex. use property as discount store continuously C. Premises Quality, Tenant’s Duty to Restore, Waste, & Fixtures; Implied Covenants in Leases Caveat Emptor: At common law, landlord has no duty to provide suitable premises, tenant must pay regardless Independent v. dependent – independent only applies to tenant needs to pay rent and dependent applies to landlord maintaining premises and tenant paying rent injunction Waste: Tenants have a duty at common law not to commit waste Common law viewed it as conduct beyond ordinary use that is injurious to the landlord’s reversionary interest (installing hot tub) Destruction of the property is waste, punching a hole in the wall “voluntary waste” Nail holes from hanging picture frames is not waste but falls under the category of ordinary use Duties Tenants have when ending a lease: When the lease is silent – no obligation to restore accidental damages When the lease requires the tenant to maintain the premises – no obligation to restore accidental damages When the lease requires the tenant to return the premises in as good a condition as at the start of the lease – obligation to restore accidental damages The Implied Covenant of Quiet Enjoyment/constructive eviction: Any interference with the tenant’s proper activities in the leasehold that is by or attributable to the landlord implicates the covenant but be severe enough that it causes a constructive eviction of the tenant – promise by landlord that tenant can quietly enjoy rights under the lease 1) conduct that is by or attributable to the landlord 2) substantial deprivation of enjoyment/disturbance of premises 3) notice to landlord 4) reasonable time/opportunity to cure 5) tenant abandons premises within reasonable time, must have all 5 elements to prove a breach in quiet enjoyment results in constructive eviction – GOES TO LL CONDUCT Implied Warranty of Habitability: Promise of landlord that the premises are habitable and premises must be maintained to inhabit or live in the rented space Limited to residential lease situations Has a minimalist view – only essential features need to be available Restatement test to trigger the Dependent Covenant: 1) landlord fails to promise in lease 2) landlord’s promise was significant inducement for tenant to enter lease 3) tenant gives notice 4) reasonable time given to the landlord to cure the promise 5) interference of lease space must be substantial not merely uncomfortable = tenant can terminate the lease and leave without paying rent Fixtures: fix or to add something that becomes part of the land (lumber used to build the house, fence in the ground) General Rule for Fixtures for Tenants: fixtures added by the tenant become part of the real property and the tenant cannot claim them back – exception to rule: trade fixtures (something used for the job the tenant) can be 7  removed by tenant as long as no substitutional damage is done to the house, intent of the fixture matters in determining if fixture or trade fixture A. Conclusion of Tendency: Termination and Renewal, Holdover Surrender: both the tenant and landlord agree, though express words or by implication from their actions, that the lease is terminated Abonnement: involves a unilateral decision on the part of the tenant to move out, the landlord does not agree, lease is not automatically terminated, it gives the landlord the option to either treat the lease as still in effect or chose to terminate. Risky option for the tenant because could owe on the lease Destruction does not terminate the lease B. Landlord Remedies for Tenant Breaches and Fair Housing Act Security Deposits (Residential): Purpose – funds for landlord to use for repairs if tenant causes any, remaining amount goes to tenant Within 30 days of termination LL has to give itemized list If LL doesn’t give back security deposit forfeits any right to 1) counterclaim 2) withhold any amount of security deposit 3) shall be liable to tenant for court costs 4) claim any damages Fair Housing Act: Fair housing act makes it illegal to discriminate on basis of race, sex, religion, handicaps, doesn’t apply to age Three part test – discriminatory intent is present (prima facia case), defendant has ability to rebuttal, proof that reasons offered in the rebuttal are not discriminatory Landlord has a duty to mitigate damages when a tenant leaves the lease, this means the landlord has a duty to try to fill the lease again as soon as possible Landlord can evict tenant if needed 4. Estates in Real Property A. Possessory and Future Interests A Possessory estate (PE) is a currently existing right to take actual possession of the property right now A future interest is a currently existing right to take actual possession of the property at some time in the future (at the end of a preceding possessory estate) There must always be a possessory estate – because there always must be a possessory estate, the first step you will always do is identify the possessory estate, whether there is a future interest depends on which possessory estate you have Possessory estates and future interests are created in two ways: ▪ By deed – they are effective upon the completion of the deed, meaning the interests are created right then and there ▪ By will – not effective until the grantor dies and the will becomes effective, even though a will can be written today, the interests conveyed in a will are not actually created and effective until the day the grantor dies, gift of land in a will is called a divise 8  If the holder dies the heirs will be entitled to continue to hold the interest which means that the interest does not end merely because the holder (whether grantor or grantee) dies (unless the interest is tied to the life of a person) Fee Simple Absolute (FSA) is the most complete form of ownership possible - because the possessory estate of FSA deals with the entire timeline, there are no corresponding future interests that go with FSA The Method (outside source) 5. Limits on Governmental Power on Property A. Constitutional and Regulatory Takings 5th amendment and 14th amendment Rational basis test – used of equal protection claims Government action/regulatory takings – no intent to take property Eminent Domain - Take private property for public use but must compensate Loretto Type Taking: permanent physical occupation of property Nollan/Dolan Type Taking: ▪ Quid pro quo type of taking ▪ Exaction: government demanding (something) the construction of the easement for example in this case ▪ An essential nexus between: 1) the government interest being advocated and 2) the condition being imposed ▪ A rough proportionality between: 1) the burden of the condition and 2) the burden created by the imposed project– the condition imposed must be roughly proportional to ONLY the proposed project not serve the greater community ▪ Must have both elements to not be a taking – if have only one element, is a taking The four “Penn Central” factors for takings by general Government regulations: ▪ 1) The public purpose for the regulation 2) the nature/character of the governmental action/regulation 3) the investment backed expectations affected by the regulation 4) the economic effect of the regulation – independent factors that the courts use to determine if a taking has or has not occurred, go through each factor when determining if the regulation is a taking or not ▪ If looks like a Lucus taking but is not because no total economic loss, apply the Penn central factors to determine if it is a taking or not Lucus type taking: ▪ When you deprive a property owner of all economic value, carries with it a heightened risk that private property is being pressed into some form of public service under the guise of mitigating serious public interest. ▪ a regulation in total deprivation of a property’s economic value is a taking Condemnation another word for eminent domain Court has recognized need for compensation in situations where taking is only temporary (cases during WW1) how long is temporary? The court doesn’t answer this, based on a case- by-case basis – this is an inverse condemnation remedy 9 B. Eminent Domain and Just Compensation: Concept of Eminent Domain: ▪ The limits on that power to intentionally seize – public use and just compensation Kelo Case: the polar propositions: 1) government cannot take from one private party to give benefit to another private party or 2) state may transfer from one private party to another if future use by public is the reason ▪ A valid public purpose satisfies public use requirement ▪ economic development can qualify as a public use, promoting economic development is a traditional and long-accepted function of government Just Compensation: measured by what the property owner lost, not what the taker/government takes, valued at the fair market value at the time the property is taken, measure the value of what property you are giving up ▪ The government’s strategy – will try to pay the lowest amount needed or buy a piece of a land title instead of a piece of property an example would be an easement, buy part of the title instead of the land needed for an easement C. Intro to Zoning: How common law regulates use of land: o Public nuisance – affects rights of public in general, enforced by the state/city/government o Private nuisance – affects rights of few, private people, enforced by private people o Trespass – physical invasion of another’s property o private nuisance: 1) invasion of P’s use/enjoyment of their property 2) D’s conduct proximate cause of the invasion 3) invasion was either intentional and unreasonable OR unintentional and negligent/reckless – D’s use can be reasonable but still create an unreasonable interference with P’s property o Public Nuisance: 1) condition complied of has natural tendency to create danger/inflict injury 2) danger created is continuing 3) use of land was unreasonable or unlawful 4) nuisance was proximate cause of P injuries/damage Concept of zoning: o Court’s view of justification for Zoning – exercise of police power to protect public welfare o Similar to rational basis test to justify the legality of zoning o Use Penn Central Factor Test to determine if zoning is a taking o Industrial uses tend to be higher in value than residential o R-2 = Residential 2 houses per acre o Spot zoning – benefit particular private interests rather than the collective interests of the community ▪ P has to prove spot zoning, has to overcome presumption that ordinance is valid, one lawful purpose of the zoning is sufficient to find that it is valid ▪ Upzoning and downzoning o Nonconforming use - A Use which, prior to the new Ordinance/Provision, was allowed, but after the new Ordinance/Provision, does not Conform to the new Ordinance/Provision 10 o What are the possible ways to treat a nonconforming use after ordinance/provision making it nonconforming goes into effect? 1) apply the law and require the use to end immediately [issue: can amount to a taking] 2) not apply the law as long as the use continues [issue: inconstant with zoning, creates monopoly/preferences, defining what it means to continue, when does it end] 3) allow the use to continue to some period of time and then require it to end [issue: defining time period/end point] o Void for vagueness doctrine: when a statute forbids/requires act in terms so vague that people of common intelligence must guess at its meaning, it violates due process and is void o Amortization period – period of time granted to owners of nonconforming use for which they may phase out their operations as they see fit and make other arrangements, once the owner sells the house amortization period no longer applies o Putback requirement – requires buildings to be back from property lines or streets o Area requirements – how much impervious surface is allowed, certain amount of open space o Variances: 1) variance will not be contrary to public interest 2) specific conditions exist such that enforcement of the variance will result in unnecessary hardship 3) sprit of the ordinance shall be observed 4) substantial justice shall be done o Hardship if: 1) application of ordinance interferes with the owner’s reasonable use of land considering its unique setting 2) no fair and substantial relationship exists between general purposes of ordnances and specific restriction on the property 3) variance would not injure the public or private rights of others o Area variance – use is allowed in the zoning district, seeks to vary one or more requirements on such allowed use ex. building single family house in a residential district that allows single family homes – use is permitted but want to change it o Use variance – use is not allowed in the zoning district, seeks to vary the requirement so that the non-allowed use would be allowed, because more serious a change, harder to get than area variance - Ex. use that is not permitted but want to change it o Subdivision = Plan for multiple instances of the permitted use (most are residential, but could be Industrial Park) 11