Easements
1. In writing (SOF compliance)
2. Grantor intended it to Run (express or implied)
3. Notice to the servient estate owner (actual, inquiry, or record)
What are the elements of a equitable servitude and real covenant?
Equitable Servitude
1. In writing
2. Intended to run
3. Notice to Burdened Party
4. Touched & concerns land
Real Covenant
1. In writing
2. Intended to run
3. Notice to Burdened Party
4. Touched & concerns land
5. Horizontal & Vertical Privity
A real contract must:
1. Be written contract or memorandum
2. Includes essential terms of the contract
3. Signed by the "party to be charged" meaning by the person who allegedly transferred out the property interest & is resisting enforcement of contract
What are the exceptions to the Statute of Frauds?
1. Estoppel: an oral contract may be recognized and enforced if:
a. one party makes a promise; and
b. another party reasonably & detrimentally relies on the promise
2. Part Performance: an oral agreement for the sale of real property may be enforced if the buyer has detrimentally changed their position and taken steps to complete the transaction. 3 factors (possession, payment, improvement)
3. Constructive trust: allows a party who has invested money or labor into another's property to make a claim for unjust enrichment (based in equity). Claimaint must show:
a. there was a benefit conferred on the titled owner;
b. knowledge of the benefit; and
c. it would be unjust under the circumstances to allow the titled owner to retain all/some benefits conferred
What are all of the Mortgage Protection Law?
1. Equity of Redemption
2. Statutory Right of Redemption
3. Anti-Deficiency Rules
4. Price Grossly Inadequate
5. Mortgage duty to prevent unjust enrichment
What are the implied easements? What is the alternative?
1. Estoppel: a landowner grants a license, and the licensee reasonably and detrimentally relies on it, making revocation inequitable.
2. Implied by Prior Use
3. Necessity: reated when a property is landlocked and requires access to a public road or utility, ensuring the dominant estate owner can reasonably use their land.
Alternative: Constructive Trust: may be imposed when denying a claimant access would lead to unjust enrichment, ensuring fairness and preventing wrongful conduct.
What is an implied reciprocal negative servitude?
Common grantor/developer with a general scheme with multiple conveyances, deeds out with substantially uniform restrictions, community voting rights, or other evidence. Notice is imputed.
Sellers must disclose what?
1. Known
2. Latent (hidden)
3. Defects that
4. Materially affect the value or desirability of the property
What are the 3 types of deeds and explain?
General Warranty: grant or warrants and defends against any title defects regardless of whether they arose during the period of grantor's ownership or that a predecessor owner.
Special Warranty: grantor warrants and defends against title defects that were created during her period of ownership (caused by her) but not a predecessor owner
Quit Claim: the grantor makes no warranties whatsoever. Grantor simply quits and releases her claim if any to title.
What is subordination?
Parties can contractually agree to change places in the priority line. A senior creditor might agree to subordinate her interest and become a junior creditor with respect to another’s interest. For example, a tenant renting commercial property might agree in the lease contract that the lease is junior to any later recorded mortgage.
List the ways to terminate an easement
What termination doctrines can be used for covenants?
Changed Conditions Doctrine: Fundamental/ drastic change in intended character or neighborhood. Such that there is no longer any substantial benefit from enforcement.
Relative Hardship: Hardship to the servient estate. Is greater by a considerable magnitude than the benefit gained from enforcement.
What are the 6 grantor covenants? Which ones are present and future covenants?
1. Covenant of Seisin: promise that grantor owns the property & the particular estate is purporting to transfer. Breached if the grantor owned a life estate and promised to convey a fee or if a tenant in common with a fractional interest promised to convey the entire estate.
2. Covenant of Right to Convey: promise that grantor has the power to transfer property. Breached if an owner has record title but has lost some portion of ownership due to adverse possession.
3. Covenant Against Encumbrances: promise by grantor that there are no encumbrances against the property other than those stated in the deed.
4. Covenant of Warranty (General or Specific): Grantor's promise to compensate the grantee if a claimant with superior title prevails.
5. Covenant of Quiet Enjoyment: Grantor's promise that possession and enjoyment will not be disrupted by a superior claim
6. Covenant of Further Assurances: Grantor's promise to take the necessary steps in the future and proactively defend against and cure any title defects.
Present covenants: Seisin, Right to Convey, Against Encumbrances.
Future covenants: Warranty, Quiet Enjoyment, Further Assurances
What is the merger doctrine and the exceptions?
Merger: contract merges into the deed & replaces the contract; terms of purchase sale agreement are no longer enforceable post-closing
Exceptions:
1. grantor promises about the physical condition of the premises fall out the scope of merger
2. parties might agree in the contract that some aspects of the sales contract do survive at closing
3. buyer can claim for fraud or breach of the housing merchants warranty of quality (actionable after closing)
A PMM has priority only over mortgage claims and liens that arise:
1. out of the obligations of the buyer
2. Prior to the buyer's acquisition of the property
A restauranteur's friend owned land that included a lake within its boundaries. In a writing, the friend granted the restauranteur a profit that gave her the right to access the lake for the purpose of taking fish from it. For nine years, the restauranteur took fish from the lake and served them in various dishes at her restaurant. During the tenth year, the restauranteur entered negotiations to sell the restaurant to a chef who planned to continue operating the restaurant. The terms of the profit did not address it transferability.
Which of the following would be most important in determining whether the restauranteur could assign her right to remove fish from the lake to the chef as part of the sale of the restaurant?
A. Whether the friend and the restauranteur intended the right to be personal to the restauranteur.
A seller conveyed a lot in fee simple to Buyer 1, keeping the adjoining lot for himself. The recorded deed contained a covenant providing that the conveyed lot (the burdened lot) would be used solely for residential purposes. The seller then conveyed the adjoining lot to Buyer 2 in fee simple. Some time later, Buyer 1 conveyed his lot to yet another buyer, Buyer 3, in fee simple. However, neither the deed to Buyer 2 nor the deed to Buyer 3 contained the covenant. Buyer 3 wanted to build a law office on his lot (the burdened lot).
Does Buyer 2 have standing to enforce the covenant against Buyer 3?
a. Yes, because Buyer 2 was a bona fide purchaser for value, without notice that his deed did not contain the covenant.
b. Yes, because Buyer 3 had actual notice of the covenant.
c. Yes, because Buyer 3 had constructive notice of the covenant.
d. No, because Buyer 3 did not have notice of the covenant.
c. Yes, because Buyer 3 had constructive notice of the covenant.
Six months ago, a man told his cousin that he would give her his farm as a gift on her next birthday. The cousin then entered into a valid written contract to seel the farm to an investor with the closing to take place "one week after [the cousin's] next birthday."
The man failed to convey the farm to the cousin on her birthday. One week after the cousin's birthday, on the intended closing date, the investor first learned of the cousin's inability to convey the farm because the man had breached his promise. The investor considered suing the cousin but realized that the cousin could not be compelled to convey the farm because it was still owned by the man.
Two weeks after the cousin's birthday, the man died. Under his valid will, the man devised the farm to the cousin. Within a week, the executor of the man's estate gave the cousin an executor's deed to the farm in compliance with state law. The investor promptly learned of this transfer and demanded that the cousin convey the farm to her. The cousin refused.
The investor sued the cousin for specific performance.
Who will likely prevail?
D. The investor, because the contract to convey remained enforceable by her within a reasonable period of time adter the proposed closing date
An uncle was the record title holder of a vacant tract of land. He often told friends that he would leave the land to his nepher in his wil. The nephew knew of these conversations. Prior to the uncle's death, the nephew conveyed the land by warranty deed to a woman for $100,000. She did not conduct a title search of the land before she accepted the deed from the nephew. She promptly and properly recorded her deed. Last month, the uncle died, leaving the land to the nephew in his duly probated will. Both the nephew and the woman now claim ownership of the land. The nephew was offered to return the $100,000 to the woman.
Who has title to the land?
C. The woman, because of the doctrine of estoppel by deed
A land developer executed and delivered a promissory note and a mortgage securing the note to a bank. The bank was named as payee in the note and as mortgagee in the mortgage. The note also included a statement that the indebtedness evidenced by the note was "subject to the terms of a contract between the maker and the payee of the note executed on the same day" and that the note was "secured by a mortgage of even date". The mortgage was promptly and properly recorded.
Subsequently, the bank sold the land developer's note and mortgage to an investor and delivered to the investor a written assignmentof the land developer's note and mortgage. The assignment was promptly and properly recorded. The bank retained possession of both the role and the mortgage in order to act as collecting agent.
Later, being short of funds, the bank sold the note and mortgage to an asset management company at a substantial discount. The bank executed a written assignment of the note and mortgage to the asset management company and delivered it to the note, the mortgage, and the assignment. The asset management company paid value for the assignment without actual knowledge of the prior assignment to the investor and promptly and properly recorded the assignment. The principal of the note was not then due, and there had been no default in payment of either interest or principal.
Is the issue of ownership of the land developer's note and mortgage is subsequently raised in an appropriate action by the investor to foreclose for whom should the court hold?
a. The asset management company as to both the note and the mortgage.
b. The investor as to both the note and the mortgage.
c. The asset management company as to the note and the investor as to the mortgage.
d. The investor as to the note and the asset management company as to the mortgage.
b. The investor as to both the note and the mortgage.
A man owned a lakefront home in a gated community when a pier where he docked his boat. His neighbor, whose home did not have pier, told him that she was interested in purchasing a boat but that she had nowhere to dock it expect for the community clubhouse. The club house was located at the other end of the gated community far from the neighbor's home. However, the man told the neighbor that she could use his pier to dock her boat, and as a result, the neighbor purchased a boat knowing that she could dock it close to home. For the next 11 years, the neighbor used the man's pier to dock her boat. During this time, the neighbor also paid for the pier to the be rebuilt due to corrosion. Thereafter, the man told the neighbor that she could only use the pied if she paid a monthly fee od $600. When the neighbor refused to pay the fee, the man built a fence around the pier and refused to give the neighbor a key to unlock the fence.
The statutory period for acquiring rights by prescription in the jurisdiction is 10 years.
Does the neighbor have the right to use the man's pier to dock her boat?
C. Yes, because the neighbor detrimentally relied on the man's permission to use the pier
A landowner sold a portion of his estate to a buyer. The two plots shared a driveway that extended from the street and bifurcated at the top of a hill, leading to a garage on each property. The portion of the driveway that ran from the street to the top of the hill was entirely on the landowner’s property. In the sale, the landowner promised that the buyer could use this portion of the driveway. In exchange, the buyer agreed to pay half the costs of maintaining this portion of the driveway. Six years after the sale, the landowner hired a contractor who demolished the shared portion of the driveway and began constructing a new driveway on the opposite side of the landowner’s property. In response, the buyer retained a concrete company to construct a new driveway on his own property, paying a $3,000 deposit. Unbeknownst to the buyer, the landowner also planned to repave the existing shared driveway and expected that the buyer would continue to share in its maintenance costs. All of the land is located in a jurisdiction which observes the historical distinctions between the remedies available to enforce equitable servitudes and real covenants.
To what remedies, if any, is the landowner entitled in enforcing the buyer's restrictive covenant to pay half the costs of maintaining the shared driveway?
a. money damages only
b. injunctive relief only
c. both money damages and injunctive relief
d. neither money damages nor injunctive relief.
d. neither money damages nor injunctive relief.
Answer option D is correct. Estoppel renders a restrictive covenant unenforceable either as a real covenant or as an equitable servitude and thus, makes both money damages and injunctive relief unavailable, if three conditions are met. First, the plaintiff must act in a way that indicates to a reasonable person that, in the plaintiff's mind, the covenant is no longer to be enforced. Here, the landowner hired a contractor and demolished the shared driveway, and then began building a new driveway in another location. To a reasonable person, this action would indicate that the landowner did not expect the buyer to continue to contribute to maintaining the original driveway, which no longer existed. Second, the defendant must undergo a substantial and detrimental change in his position in reasonable reliance on the idea that the plaintiff no longer wishes to enforce the covenant. Here, the buyer retained a concrete company for $3,000, in reliance on the assumptions that the landowner did not continue to expect him to pay to maintain a shared driveway and that the buyer would need a new way to access the street from his property. Third and finally, the plaintiff must reasonably be able to anticipate that the defendant would take such an action, based on the overall circumstances. Here, a reasonable person in the landowner’s position would anticipate that the buyer would change his position and make alternative arrangements for a driveway after demolition of the original shared driveway. Answer options A, B, and C are therefore incorrect.
A woman owner her home. Her daughter lived with her and always referred to the home as "my property." Two years ago, the daughter, for a valuable consideration, executed and delivered to her ex-husband an instrument in the proper form of a warranty deed purporting to convey the home to him in fee simple, reserving to herself an estate for two years in the home. The ex-husband promptly and properly recorded his deed.
One year ago, the woman died and by will, duly admitted to probate, left her entire estate to her daughter. One month ago, the daughter, for a valuable consideration, executed and delivered to her only son an instrument in the proper form of a warranty deed purporting to convey the home to the son, who promptly and properly recorded the deed. The daughter was then in possession of the home and her son had no actual knowledge of the deed to the ex-husband. Immediately thereafter, the daughter gave possession to her son.
The recording act of the jurisdiction provides: "No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice unless the same be recorded according to law."
Last week, the daughter fled the jurisdiction. Upon learning the facts, the son brought an appropriate action against the ex-husband to quiet title to the home.
If the son wins, what will be the reason?
B. The daughter's deed to the ex-husband was not in the son's chain of title
A seller entered into a written contract to sell a tract of land to an investor. The contract made no mention to the quality of title to be conveyed. The seller and the investor later completed the sale, and the seller delivered a warranty deed to the investor.
Soon thereafter, the value of the land increased dramatically. The investor entered into a written contract to sell the land to a buyer. The contract between the investor and the biuer expressly provided that the investor would convey a marketable title. The buyer's attorney discovered that the title to the land was not marketable and had not been marketable when the original seller had conveyed to the investor. The buyer refused to complete the sale.
The investor sued the original seller for breach of contract, claiming damages from the seller's failure to convey marketable title, which resulted in the investor's loss of the sale to the subsequent buyer.
Who is likely to prevail on this count?
C. The original seller, because her contract obligations as to the title merged into the deed
A man borrowed $500,000 from a bank, securing the loan with a mortgage on a commercial building he owned.
The mortgage provided as follows: "No prepayment may be made on this loan during the first two years after the date of this mortgage. Thereafter, prepayment may be made in any amount at any time but only if accompanied by a prepayment fee of 5% of the amount prepaid."
One year later, the man received an unexpected cash gift of $1 million and wished to pay off the $495,000 principal balance still owed on the loan. Concerned that the bank might refuse payment– despite a rise in market interest rates in the year since the loan was made– or at least insist on the 5% prepayment fee, the man consulted an attorney concerning the enforceability of the above-quoted clause.
There is no applicable statute.
What is the attorney likely to say?
a. The entire clause is unenforceable, because it violates a public policy favoring the prompt and early repayment of debt.
b. The entire clause is unenforceable because the rise in interest rates will allow the bank to reloan the funds without loss.
c. The two-year prepayment prohibition and the prepayment fee provision are both valid and enforceable.
d. The two-year prepayment prohibition is unenforceable, but the prepayment fee provision is enforceable.
c. The two-year prepayment prohibition and the prepayment fee provision are both valid and enforceable.