-
alienation= property transfer
-
To create a fee simple= O to A
-
If grant is ambiguous, creates a fee simple, as fee simple is the default estate
-
fee simple determinable language=
- so long as
- while
- during
- until
-
In NY, fee simple determinable= fee on limitation
-
fee simple subject to condition subsequent uses language like:
- but if
- provided
- on the condition that
-
in NY, fee simple subject to condition subsequent= "fee on condition"
-
In fee simple subject to condition subsequent, grantor MUST CLAIM the right (right of entry)
-
In NY, right of entry= "right of reacquisition" or "power of termination"
-
In NY, right of reacquisition is transferable to a third party like an possessory estate
-
possibility of reverter= future interest held by a grantor following a fee simple determinable. Interest vests AUTOMATICALLY
-
In NY, "possibility of reverter"= "right of reverter"
-
In NY, right of reverted is not necessarily self-executed. The grantor has to petition to retake possession.
-
Fee simple subject to executory interest= will end upon the happening of an event and the future interest will vest in a 3rd party (i.e. someone other than the grantor and the grantee)
-
fee simple subject to executory interest is held by the third party, no the grantor
-
executory interest= future interest that will cut short, or terminate, and earlier interest (i.e it will divest the interest)
-
life estate= present estate that is limited by a life
-
life estate uses the words "for life"
-
life estate ends when the measuring life dies. So it cannot pass by will or intestate succession
-
life estate is transferable (NOTE: while the person is alive)
-
reversion= when possession of the land goes back to the grantor after a life estate ends.
-
remainder= future interest when possession of the land goes to the third party
-
affirmative waste= waste caused by voluntary conduct that decreases value of real property
-
permissive waste= waste caused by neglect that decreases the value of real property
-
ameliorative waste: life tenant or other person in possession changes the use of the property and increases its value
-
In NY, defense to ameliorative waste if proposed alteration is one a prudent owner in fee simple absolute would make in view of conditions on the property; the proposed alteration when completed will not reduce the market value of the interests following the state; the proposed alteration is not in violation of the terms of any agreement regulating the conduct of the life estate holder' the life expectancy of the life tenant or the term left on a "term of years" interest is not less than 5 years and the person proposing the alteration has served on all future interest holder notice of alteration at least 30 days prior to the commencement of the alteration.
-
To spot a waste problem. think:
- do multiple parties have simultaneous interests
- is there a change in the value of the property due to the action/inaction of the party in possession
- will the waste substantially change the interest taken by the party of out possession?
-
waste: RULE homeowner cannot commit waste that will impair the lender's security interest.
-
waste- life estate holders are limited by the law of waste to protect the rights of the future interest holder
-
Concurrent estates: concurrent owners each have right to use/posses the whole property BUT they can contract out of the basic rule
-
tenancy in common is the default concurrent interest. Any conveyance to more than one person is presumed to be a tenancy in common
-
concurrent owners have separate but undivided interest in the property
-
tenancy in common has no right to survivorship -->each tenant can transfer the property freely at death as well as during life
-
joint tenancy: right of survivorship --> surviving joint tenants automatically take the deceased tenant's interest
-
to create a joint tenancy, grant must make a clear express of intent PLUS use survivorship language (e.g. as joint tenants with a right of survivorship)
-
Four unities that must be in place to create a joint tenancy
1. possession: requires every joint tenant to have an equal right to possess the whole of the property (also required for a tenancy in common and tenancy by the entirety)
2. interest: joint tenants must have an equal share of the same type of interest
3. time: must receive their interests at the same time
4. title: must receive their interests in the same instrument of title
-
joint tenancy: if any of the unities are severed (i.e. destroyed) then the joint tenancy is terminated and turns into a tenancy in common
-
inter vivos transfer=
transfer during life that will destroy the right of survivorship and convert the estate into a tenancy in common
-
conveyance by only one or more than two joint tenants does not destroy joint tenancy of the remaining joint tenants
-
any lien against a joint tenant's interest terminates upon that tenant's death, so the surviving tenants' interests are not encumbered
-
If a joint tenant grants a mortgage interest in the joint tenancy to a creditor, a majority of jurisdictions follow lien theory.
-
lien theory=
the mortgage is treated as a lien and does not destroy joint tenancy
-
NY follows lien theory. Only default or foreclosure sale severs joint tenancy
-
If a joint tenant grants a mortgage interest in the joint tenancy to a creditor, a minority of jurisdictions will follow title theory
-
title theory=
the mortgage severs title and the tenancy between the joint tenants and creditor is converted into a tenancy in common
-
tenancy by the entirety=
joint tenancy between married spouses
-
tenants by the entirety has right of survivorship
-
tenants by the entirety cannot alienate or encumber their shares without the consent of their spouse
-
general RULE: each concurrent owner/co-tenant has right to possess all of the property regardless of that co-tenant's share and regardless of the type of co-tenacy
-
ouster=
co-tenant in possession denies another co-tenant access to the property
-
ousted tenant can:
- get an injunction granting access to the property and/or
- recover damages for the value of the use while the co-tenant was unable to access the property
-
RULE: rent received from a third party's possession of the property, minus operating expenses, are divided based on ownership interests of each co-tenant
-
RULE: operating expenses: necessary charges, such as taxes or mortgage interest payments, are divided based on ownership interests of each co-tenant. A co-tenant can collect contribution from the other co-tenants for payments in excess of her share of the operating expenses
-
Repairs: There is NO right to reimbursement from co-tenants for necessary repairs. The co-tenant who makes repairs can get credit in a partition action
-
there is no right to reimbursement for improvements. However, the co-tenant who makes the improvements can get credit in a partition action
-
Joint tenants and tenants in common have an equitable remedy of partition
-
partition occurs when a court divides the property into distinct portions.
-
courts have a preference for a physical division
-
courts will order a partition by sale if the physical partition is not practical or not fair to all parties
-
proceeds from a partition by sale are divided among the co-tenants based on their ownership interests
-
co-tenants can agree not to partition if the the agreement is clear and the time limitation is reasonable
-
executory interest=
future interest in a third party that cuts short (i.e divests) a prior vested interest
-
springing executory interest divests grantor
-
shifting executory interest divests grantee
-
a remainder follows a life estates
-
Contingent remainders (i.e. remainders subject to condition precedent) are NOT subject to destructibility. The termination of the preceding estate does not terminate the remainder
-
a remainder cannot follow a vested fee simple
-
vested remainder= interest that is:
- 1. given to an ascertained grantee (someone who can be identified)
- 2. not subject to a condition precedent
If either 1 or 2 --> contingent
-
RAP generally applies only to contingent interests
-
vested subject to open=
vested remainder in a class gift; and full class membership is unknown
-
doctrine of worthier title prevents against remainder in a grantor's heirs; creates presumption in a reversion to the grantor (abolished in NY)
-
rule in shelley's case prevents against remainders in grantee's heirs; uses doctrine of merger to create a fee simple (abolished in NY)
-
fee tail abolished in NY; an attempt to create a fee tail will result in a fee simple absolute
-
Rule Against Perpetuities: all interests created under a will must vest or fail within a life in being plus twenty-one years
-
RAP limits contingent future interests, i.e.
- contingent remainders
- executory interests
- vested remainders subject to pen if remainder not closed by rule of convenience
-
validating life must have been alive when the interests were created; can validate her own interest.
-
If no validating life, then interest is no good and strike it from grant
-
If the gift to any member of the class is void under RAP, then the gift is void as to all members of the class.
-
To avoid RAP, a class may close as soon as a member of the class is entitled to immediate possession (i.e. Rule of Convenience)
-
RAP does not apply to a gift from one charity to another charity
-
RAP does not apply to an option held by a current tenant to purchase a fee interest in a leasehold property
-
New York presumes a woman over the age of 55 cannot have additional children.
-
In NY, RAP applies to commercial options
-
In New York, there are four estate in land under which the tenant has a present
possessory interest in the leased premises and the landlord has a future interest: (1) tenancy for years; (2) periodic tenancy; (3) tenancy at will; and (4) tenancy at sufferance.
-
A tenancy for years is a tenancy for a fixed, determined period of time that
terminates on the agreed to termination date.
-
A periodic tenancy is a tenancy that continues for successive periods, until
terminated by proper notice by either party. A periodic tenancy may be created
expressly by a lease, by implication, or by holding over after the expiration
of a term longer than one month.
-
A tenancy at will is a tenancy with no fixed period of duration. A tenancy at
will is characterized by uncertainty with respect to duration and the right of
either party to terminate the tenancy by a proper notice.
-
A tenancy at sufferance is a tenancy that is created when a
tenant has wrongfully held over past the expiration of the lease.
-
In a tenancy at sufferance, the terms of the prior lease control. It may be terminated by the tenant voluntarily leaving, landlord evicting the tenant, or landlord re-renting to the tenant.
-
If the term of the lease is longer than one year, the agreement must be in writing to satisfy SOF
-
termination lease occurs automatically at the expiration of the term, and notice is not required to terminate
-
If lease has not expired, will terminate if tenant surrenders the lease or if tenant or landlord commit a material breach of the lease.
-
parties must intend to create a periodic tenancy. Intent can be express or implied
-
periodic tenancy renews automatically, so terminating party must give notice before the start of what will be the last term. Notice is effective the last day of the period.
-
tenancy at will may be terminated by either landlord or tenant at any time for any reason.
-
In NY, landlord must give 30 days' notice for a tenancy at will or tenancy by sufferance
-
Upon the expiration of the notice, a summary proceeding can be initiated to evict
the tenant. Alternatively, a landlord’s acceptance of rent from a tenant
holding over from a term lease creates a month to month periodic tenancy,
unless the lease agreement provides otherwise
-
In NY, tenancy at sufferance becomes a periodic month to month tenancy if landlord accepts rent
-
Duty to pay rent suspended if:
- premises are destroyed, so long as the tenant didn't cause the damage
- the landlord completely or partially evicts the tenant
- the landlord materially breaches the lease
-
If a landlord resorts to self-help, but wrongly evicts the tenant, the tenant may recover treble damages (i.e. triple damages)
-
Although a commercial lease may contain a provision authorizing the landlord to reenter premises, such re-entry must be preceded by a demand for rent due
-
If the premises are destroyed, the tenant does not have to pay rent
-
Leases cannot include a "no children" clause except for in facilities exclusively for people over 55 years old
-
Landlords are under a duty to keep the property in good repair
-
implied covenant of quiet enjoyment=
the tenant can withhold rent when the landlord takes actions that make the premises wholly or substantally unsuitable for their intended purposes
-
four elements of constructive eviction
- premises were unusable for their intended purpose
- tenant notifies the landlord
- the landlord does not correct the problem and
- the tenant vacates the premises after a reasonable amount of time has passed
-
implied warranty of habitability=
landlord has obligation to maintain the property such that it is suitable for residential use.
Note: this concerns conditions that threaten tenant health and safety
-
implied warranty of habitability: tenant cannot waive
-
implied warranty of habitability: landlord's failure to comply with applicable housing codes constitutes breach
-
implied warranty of habitability: applies to residential properties, usually multi-family buildings, NOT TO COMMERCIAL LEASES
-
IWH and rent: if premises are not habitable. tenant may:
- refuse to pay rent
- remedy the defect and offset costs against the rent or
- defend against eviction
-
IVH and rent: if tenant chooses to withold rent, tenant must notify the landlord of the problem and give the landlord a reasonable opportunity to correct the problem.
-
IWH does NOT require tenant to vacate the premises
-
tenant has a duty not to commit affirmative or permissive waste
-
in a residential lease, the landlord is presumed to be responsible for repairs. Tenant must notify the landlord of any needed repairs. Landlord not responsible to make repairs caused by tenant's actions.
-
in a commercial lease, the landlord can place the duty to repair on the tenant
-
duty to mitigate damages: Landlord must make reasonable efforts to re-rent the property (majority rule)
-
In NY, landlord does not have duty to mitigate damages by trying to re-let the premises in the event of breach
-
duty to mitigate: if landlord does not make diligent efforts to mitigate, tenant is relieved from obligation to continue paying rent
-
if landlord mitigates, entitled to the difference b/w the original rent and the rent received from the replacement tenant
-
the landlord does not have to accept an unacceptable replacement tenant
-
minority rule is that landlord has no duty to mitigate damages (more common in commercial leases)
-
A landlord can evict a holdover tenant, or continue with the tenant by treating the holdover as a periodic tenant. Rent amount under the old lease is the amount due. BUT landlord can impose a higher rent if the landlord had informed the tenant of the increase prior to the expiration of the old lease.
-
NY: Under the RPL, if a tenant holds over after the expiration of the lease term, the landlord can: (1) evict the tenant who is refusing to surrender possession of the premises; or (2) elect to holdover the tenant by accepting rent for a period subsequent to the expiration of the lease.
-
In NY, a holdover tenant creates an implied month to month tenancy if the tenant continues to pay rent and the landlord accepts the rent
-
landlord must deliver actual possession of the leasehold (i.e. physical possession)- majority rule
-
in minority rule, landlord required to deliver legal possession (just the right to be there)
-
Quiet enjoyment is violated when the landlord, or someone connected to landlord, render the premises unsuitable for the intended purpose.
-
landlord must control common areas (e.g. lobby, hallway, laundry room), and nuisance (e.g. behavior of other tenants)
-
landlord does not have control of off-premises actions of third parties beyond the landlord's control (e.g. noisy bar across the street)
-
landlord is responsible in tort for: latent or hidden defects about which the tenant has not be warned under negligence, faulty repairs completely negligently; injuries in common areas of the property due to negligence
-
Assignment=
complete transfer of the tenant's remaining term
-
sublease=
transfer for less than the entire duration of the lease
-
in assignment, landlord can collect rent from the tenant (privity of contract) OR the subsequent tenant (privity of estate)
-
in sublease, landlord can collect rent from tenant (privity of contract and estate). Subtenant only has rent obligations to the original tenant
-
A landlord may deny permission to a transfer only for a commercially reasonable reason (majority rule)
-
A landlord may deny permission at her discretion which means for any reason or no reason at all (minority rule)
-
In NY, a landlord may withhold consent to an assignment of the lease for any reason. For a sublease, landlord cannot arbitrarily withhold consent.
-
In NY, both sublease and assignment require landlord's consent. In a sublease, landlord's silence deemed consent.
-
A landlord does not need the tenant's permission before transferring her interest. The new landlord is bound by terms of the existing lease
-
Fair Housing act primarily focuses on multi-family residential housing; doesn't protect sexual orientaiton. Includes mandate for reasonable accomodations for the disabled.
-
in adverse possession, new title relates back to the date of the person's entry onto the property. There is no transfer of title from the former owner.
-
adverse possession four elements=
- 1. continuous for statutory period (10 years in NY)
- 2. open and notorious
- 3. hostile
- 4. exclusive
-
RULE: to be continuous, seasonal or infrequent use may suffice if the use is consistent with the type of property being possessed (e.g. a vacation home)
-
if the adverse possessor cannot satisfy the continuity requirement on her won, she can tack on her predecessor's time on the property to satisfy the statute of limitations.
-
to tack the time, the current adverse possessor must be in privity with the prior adverse possessor
-
SOL will not run against a true owner who has a disability at the time the adverse possession begins (e.g. insanity, infancy, or imprisonment). But disability MUST exist when the trespasser enters the property
-
a true owner can interrupt the adverse possession period by ejecting the adverse possessor.
-
open and notorious= use that would put a reasonable true owner on notice of the adverse use
-
hostile (majority rule): doesn't matter if good or bad faith.
-
hostile (minority rule- good faith): adverse possessor must think the land is unowned or that she is the rightful owner. This is adverse possession based on a mistake.
-
hostile (minority rule- bad faith)- adverse possessor must try to acquire via adverse possession (aka aggressive trespass).
-
exclusive: adverse possessor cannot share possession with the true owner.
-
generally, adverse possessor will have title to the legal boundaries of the property. BUT, if it's an adverse possessor via color of title (i.e. fraudulent deed), adverse possessor has constructive possession of remaining land described in the deed, not just that adversely possessing.
-
If two ppl possess property together, can both acquire title as tenants in common
-
In NY. If co-tenants adversely possessing against each other, in general both co-tenants have equal right to possess the property
-
In NY, a tenant in common seeking to assert adverse possession against a fellow co-tenant is required to show more than mere possession; the co-tenant must commit acts constituting ouster
-
NY: ouster is an express communication of an intent to exclude or deny the right of the co-tenant
-
NY: implied ouster: In the absence of an actual ouster, a co-tenant can begin to claim an implied ouster if the co-tenant has held the property exclusively for 10 years. After the 10 year period, a cotenant may then hold the property subject to the normal adverse possession period, totaling 20 years
-
adverse possession includes rights to subsurfaces, unless those rights already belong to a third party
-
easements can also be acquired by adverse possession (aka prescription)
-
doctrine of merger=
covenants under the K are merged into the deed and therefore cannot be enforced unless the covenant is also in the deed
-
land sale Ks must:
- be in writing
- be signed by the party to be chargedinclude essential terms
-
land sale K essential terms:
- parties
- description of the property
- price and payment info (e.g. money, financing)
-
2 main exceptions to SOF:
- part performance doctrine
- detrimental reliance
-
partial performance by either the seller or the buyer is treated as evidence that the K existed
-
performance= payment of all or party of the purchase price or posession by the pur
- payment of all or party of the purchase price possession by the purchaser OR
- improvements by the purchaser
-
detrimental reliance= party has reasonably relied on the K and would suffer hardship if the K is not enforced
-
marketable title=
free from an unreasonable risk of litigation
-
types of defects in title:
- title acquired by adverse possession that hasn't been quietd
- private encumbrances e.g. mortgage, covenant, easement
- violation of a zoning ordinance
-
RULE: defect in title must be cured or fixed before closing, at which point the K and deed merge and the deed controls
-
RULE: if seller cannot deliver marketable title, buyer's remedy is rescision of the K
-
In NY, remedies for unmarketable title, if seller is not at fault, are limited to:
1) recovering purchase monies paid (e.g. down payment)
2) expenses of title examination
3) nominal damages
-
In NY, the existence of a possibility of reverter makes title unmarketable
-
implied warranty of fitness or suitability applies to defects in new construction
-
RULE (majority): both the initial homeowner-purchaser and subsequent purchasers may recover damages.
-
suit for breach of IWFS must be brought within a reasonable time after discovery of the defect
-
RULE (majority): seller has duty to disclose to buyer all known, physical, material defects
-
In NY, a seller is required to provide a buyer with a statutory disclosure form ("property condition disclosure statement") and requires seller to provide detailed information about the condition of the property. If chooses to not fill out form, credit buyer with $500.00 at closing. Applies to 1-4 family residential dwellings
-
Material defect must substantially affect the value of the home, heath, and safety of its occupants, or the desirability of the home
-
General disclaimers (e.g. "as is") will not satisfy the seller's duty to disclose
-
remedies for seller: damages are the difference between the contract price and market price
-
remedies for buyer: damages are the difference between the K price and market value on the date of breach
-
if seller breaches but acts in good faith, buyer can only recover out of pocket expenses
-
buyer's remedies: in recision, seller returns payment to the buyer and cancels the K
-
RULE (majority) (equitable conversion): The buyer holds equitable title during the period between the execution of the K and the closing and delivery of the deed
-
RULE (majority) buyer responsible for any damage to property during that period.(aka buyer has the risk of loss)
-
RULE (majority) Seller, as holder of legal title, has a right to possess the property
-
RULE (minority) risk of loss on the seller until closing and delivery of deed
-
In NY, follows minority rule: the risk of loss is with the seller until the buyer takes possession or title is transferred (Uniform Vendor and Purchaser Risk Act)
-
purchase money mortgage= person takes out a loan for the purpose of purchasing property
-
future advance mortgage (aka line of credit aka second mortgage) used for home equity, construction, business, and commercial loans.
-
Majorty rule (lien states): a mortgage is a lien that does not sever a joint tenancy
-
Minority rule (title states): A mortgage does sever a joint tenancy and coverts it into a tenancy in common
-
installment land contract- seller finances the purchase; seller retains title until the buyer makes final payment on an installment plan
-
installment land Ks: if buyer breaches (i.e. missed a payment) some states will treat installment K as a mortgage and require seller to foreclose. Other states will give buyer equitable right of redemption. Others allow seller to retain ownership but require some restitution for what's been paid
-
NY has no statutory right of redemption
-
A mortgagee has two options for recovering unpaid debt: 1) suing to recover the unpaid debt and bringing a foreclosure action as part of the recovery or 1) filing a foreclosure action on the property
-
absolute deed=
mortgagor (borrower) transfers the deed to the property instead of conveying a security interest in exchange for the loan
-
RULE: mortgagor remains personally liable for mortgage after a transfer unless:
- release by mortgage/lender
- modification of transferee's obligation by mortgagee/lender
-
due on sale clause=
clause giving lender option to demand immediate full payment upon transfer-. This accelerates payments when property is transferred.
-
due on sale clause applies when property is sold, devised, or otherwise alienated
-
due-on-encumbrance clause=
clause that accelerates payments when mortgagor obtains a 2nd mortgage OR otherwise encumbers the property
-
RULE: if the transferee assumes the mortgage, mortgagor/borrower is secondarily liable= BOTH the original mortgagor and transferee liable upon default
-
RULE (majority): Assumption agreement does not need to be in writing
-
"subject to" mortgage=
transferee is NOT personally liable upon default
-
RULE: if deed is silent or ambiguous as to liability, transferee/buyer is considered to have taken title subject to the mortgage
-
RULE: If mortgagee/lender transfer note but not mortgage, mortgage follows the note
-
RULE: if mortgagee/lender transfer mortgage but not the note, transfer is either i) void (b/c note is evidence of the debt) or ii) note an mortgage are considered a single entity, thus the note follows the mortgage
-
foreclosure: in lien theory state, mortgagee/lender cannot take possession prior to foreclosure because lender has a lien until foreclosure is complete. Mortgagor is owner up until foreclosure
-
foreclosure: in title theory state, lender technically has the right, as the holder of title, to possess the property at any time.
-
foreclosure: in an intermediate title theory state, minority of jurisdictions modify the title theory- the mortgagor retains the title until default, at which point the lender can take possession.
-
equity of redemption=
a common law right held by the mortgagor(borrower) to reclaim title and prevent foreclosure upon the full payment of the debt
-
equity of redemption: mortgagor(borrower) must exercise the right before the foreclosure sale
-
deed in lieu of foreclosure=
rather than face foreclosure, mortgagor can convey the property to the lender in exchange for releasing her from any outstanding debt.
-
"clogging" the equity of redemption- mortgagor may waive the right to redeem in exchange for valuable consideration.
-
foreclosure=
a forced sale of an asset to pay off a debt
-
RULE: mortgagee must give notice before foreclosing
-
NY: before foreclosing, a bank must:
- send notice 90 days in advance
- advise the debtor to avoid default and enter state counseling and
- appear at a mandatory conference within 60 days with someone authorized to settle the debt
-
In NY, usury is available as a defense for a mortgage, so long as the mortgage holder is not a corporation. Usury is the existence of unfair terms like a statutorily high interest rate)
-
two common methods of foreclosure:
-judicial sale: sale under supervision of a court
-power of sale: (private sale)- sale is held by the lender
-
NY has abolished non-judicial foreclosures. A power of sale clause in a mortgage is ineffective
-
in a foreclosure, proceeds of the sale are used to pay off the debt; excess proceeds will be used to satisfy other creditors
-
foreclosure: if the sale produces less than the mortgagor owes, the mortgagor is responsible. Court can issue a deficiency judgment for the remaining balance
-
RULE: generally, interests acquired BEFORE the interest that is being foreclosed (senior mortgage) survive the foreclosure. Interests acquired after the interest that is being foreclosed (junior interests) are extinguished by the foreclosure. surviving debts are satisfied chronologically (first in time)
-
foreclosure: exceptions to first in time rule
- 1. purchase money mortgage has priority over all other mortgages, even those earlier in time
- 2. recording act exception
- 3. subordination agreement between mortgages (i.e. a senior mortgagee can choose to subordinate its interest to a junior interest
- 4. mortgage modifications- a senior mortgagee who enters into an agreement with the mortgagor/landowner to modify the mortgage by making it more burdensome subordinates its interest, but only as to the modification. The original mortgage will otherwise remain superior
- 5. future-advances mortgage- line of credit
-
foreclosure: recording act exception to 1st in time rule
a senior mortgage may sometimes not get recorded. a junior mortgage that satisfies the requirements of the state recording act may take priority over the unrecorded senior mortgage.
-
foreclosure eliminates the mortgagor's interest in the property UNLESS in a state where mortgagor allowed to redeem the property even after hte foreclosure sale
-
Absent statutory redemption, the purchaser of property at a foreclosure sale takes the property free and clear of any junior mortgage and subject to any senior mortgage
-
A buyer at a foreclosure sale is not subject to the same buyer beware principles as in a typical property transaction. However a purchaser is not excused from completing performance on account of an apparent defect of title of which he or she had notice at the time the bid was made
-
RULE: for a deed to be valid, it must be delivered and accepted
-
controlling question for deeds: did grantor have the present intent to transfer the property?
-
physical transfer of a deed is not required (so a phone call can manifest the necessary intent to make an immediate transfer of real property)
-
If delivery is seemingly revocable, not been transferred.
-
grantor can make proper delivery to an agent
-
Acceptance is generally presumed provided the gift is for value
-
hypo: Garrent conveys a deed to Blackacre to Barbara. Moments later, Barbara changes her mind about Blackacre and says she doesn't want it. Has Barbara accepted the deed?
Yes
-
A valid deed must:
- -identify the parties (i.e. grantor and grantee)
- - be signed by the grantor to satisfy the statute of frauds
- - include words of transfer with evidence of a present intent to transfer
- - include a sufficient description of the property
-
for a description of property to be valid, it does not have to be a legal description. It can be based on monuments or physical attributes of the property
-
extrinsic evidence may be admitted to clarify an ambiguous description of the property being transferred in a deed.
-
Record= publicly registering a deed
-
Recording does not affect the validity of a deed. a deed is valid at delivery.
-
under the common law, a deed does not have to be recorded to be valid
-
under common law, the first grantee to receive a deed wins (i.e. first in time, first in right)
-
common law recording rule is modified by statute in every state that gives priority to certain deeds when there are competing claims to title
-
In the absence of a recording statute, the common law rule controls
-
Interests covered under recording act:
- deeds
- mortgages
- leases
- options
- judgments affecting title
- easements and covenants
-
Recording acts protect subsequent purchasers
-
Recording acts do not protect grantees who acquire title by gift, intestacy, or devise
-
Types of notice:
- actual
- constructive
- inquiry
-
actual notice=
subsequent grantee has real, personal knowledge of a prior interest
-
constructive notice (i.e. record notice)=
prior interest is recorded
-
inquiry notice=
a reasonable investigation would have disclosed the existence of prior claims
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two common situations where someone put on inquiry notice:
- - there is someone else living on the land; if subsequent grantee investigated the land, he would have discovered the person in possession
- - when there is an interest mentioned in the deed to some other transaction; had subsequent grantee inquired, he would have discovered the interest
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If a race statute, first to record wins, even if the subsequent purchaser had notice of a prior unrecorded conveyance. Language= "first recorded"
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If a notice statute, subsequent purchaser has good title if she buys without notice of a prior, unrecorded conveyance. language= "in good faith" or "without notice."
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race-notice: subsequent purchase has good title if 1) purchase without notice of a prior unrecorded conveyance and 2) recorded first. language= "in good faith" + "first duly recorded."
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NY is a race-notice jurisdiction. In order for a subsequent purchaser to take good title, she must:
-take without notice of the prior interest and
be the first to record
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shelter rule: a person who takes from a bona fide purchaser protected by the recording act has the same rights as his grantor
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shelter rule hypo: Oliver sells Blackacre to Anna, who does not record. Later, Oliver sells Blackacre to BEnny, Benny has no knowlege of the prior conveyance. Carter is interested in buying Blackacre from Benny, though Carter is aware of the prior transfer to Anna. Benny sells to Carter. the state is a "notice" regime. Does Carter have good title? Why or why not?
Yes. Even though Carter had notice of the prior conveyance, Carter stands in the shoes of Benny who did not have notice of the conveyance to Anna
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estoppel by deed: if a grantor subsequently acquires title to the land, the grantor is estopped from trying to repossess on grounds that he didn't have title when he made the original conveyance
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after closing, the land sale contract is merged into the deed. any liability must arise out of the deed, not the contract.
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three kinds of deeds
- general warranty
- special warranty
- quit claim
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general warranty deed provides the greatest protection. Grantor warrant title against ALL defects, even if the grantor didn't cause the defects
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six implied covenants in the general warranty deed: present covenants (list and describe):
- covenant of seisin: warrants that the deed describes the land in question
- covenant of the right to convey: warrants that the grantor (i.e. the seller) has the right to convey the properyt
- covenant against encumbrances: warrants that there are no undisclosed encumbrances on the property that could limit its value
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six implied covenants in the general warranty deed: future covenants (list and describe):
- covenant of quiet enjoyment: grantor promises to defend against the future challenges to the grantee's title to the property
- covenant of warranty: grantor promises to defend against future assertions of encroachment
- covenant of further assurances: grantor promises to fix future title problems
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special warranty deed=
grantor warns against defects caused by the grantor
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special warranty includes the same six covenants as a general warranty deed, but they only apply to the acts (or omissions) of the grantor
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quitclaim deed=
the grantor makes no warranties as to the health of the title. Provides the least amount of protection
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breach of the present covenants occurs at the time of the conveyance
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breach of the future covenants occurs after the conveyance, once there is interference with possession
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damages: covenant against encumbrances= lesser of the difference in value between title with or without the defect, or the cost of removing the encumbrance.
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damages: covenants of enjoyment or warranty: lesser of the purchase price or the cost of defending title that is in fact defective
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damages: covenants of seisen, right to convey, and further assuranes: lesser of the purchase price or the cost of perfecting title
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fixture=
tangible personal property that is attached to real property in a manner that is treated as part of the real property (e.g. a wall or a bridge)
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a fee simple owner of property is free to make improvements to the property, including fixtures, subject to governmental land use regulations (contra holders of life estate or tenants, who are limtied by the doctrine of waste)
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the buyer of real property is generally entitled to the chattel, unless the seller reserves, in the contract, the right to keep the chattel
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life tenants and tenants: presumption that they can remove fixtures unless doing so would permanently destroy the property
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fixtures: trespassers: old rule is that they could never remove fixtures they installed
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fixtures: trespassers: modern/majority rule: they can remove an improvement, or at least recover the value added to the property, so long as they acted in good faith
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specific gift=
a devise of property that can be distinguished from the rest of the testator's estate
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general gift= a devise of personal property that will be satisfied from the general assets of the estate
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demonstrative gift= a general devise that is satisfied from a particular source
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residuary gift: the balance of the estate after all the general and specific gifts have been made
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ademption (by extinction)=
devise of property that fails because it is no longer in the testator's estate at the testator's death (e.g. the testator sold it or destroyed it during life)
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if a gift is adeemed, the beneficiary gets nothing
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exception to ademption: ademption by satisfaction: if the testatory gives the property to the beneficiary while the testator is alive, the gift is adeemed by satisfaction, i.e. the beneficiary takes the gift during the testator's lifetime
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lapse=
a devise of property fails if the beneficiary dies before the testator dies, and no alternate beneficiary is name in the will
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traditionally, a lapsed gift becomes part of the residuary gift
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anti-lapse statute: if these two elements are satisfied, gift won't lapse and will go to the issue
- - lapsed gift was made to a party specified in the statute (family member)
- - deceased beneficiary survived by issue (i.e. children, grandchildren)
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trust=
device for managing property whereby one person (trustee) own property for the benefit of another person (beneficiary)
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settlor= person who creates the trust
beneficiary= person who has the beneficiary of the trust.
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beneficiary holds equitable title (no obligations and all of the benefit) and has standing to enforce the trust
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res= property subject to the trust
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absolute restraint on alienation is void
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partial restraint is valid if it is for a limited time and a reasonable purpose
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if the restraint is valid, any attempt to alienate the property is null and void
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if the restraint is invalid, the restraint is rejected and the property can be alienated in violation of the restraint
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servient estate=
land burdened by the easement
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dominant estate=
land benefitted by the easement
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affirmative easement gives the holder the right to do something on someone else's property
negative easement gives the holder the right to prevent someone from doing something on her land
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easement appurtenant=
tied to the land
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easement in gross
benefits holder personally; so doesn't matter where holder lives
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no dominant estate in easement in gross, only a servient estate
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express easement: subject to SOF --> must be in writing
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express easement: can be created by a grant
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easement created by reservation=
grantor conveys land but reserves an easement right in the land for the grantor's use and benefit
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express easement: subject to recording statute
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a negative easement must be express; it cannot be created by implication
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express easement: scope: if the terms are ambiguous, the court considers the intent of the original parties as to the purpose of the easement
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express easement: scope: the future use must be reasonably foreseeable
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express easement: if the use exceeds the scope, the dominant tenant is trespassing on the servient estate
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express easement:scope: holder of the dominant estate is not entitled to use the easement to access property acquired after the easement is created
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implied easement: arises out of factual circumstances. Is not subject to SOF or recording statutes, unless
the subsequent purchaser had notice of the easement
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four kinds of implied easements [just the list]:
- easement by necessity
- easement by implication (i.e. easement by prior use)
- easement by prescription
- easement by estoppel
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implied easement by necessity=
created when property is virtually useless (e.g. landlocked)
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implied easement by necessity can only arise when:
- 1) dominant and servient estates were owned by one person
- 2) necessity arose when the estates were severed into two separate estates, and after the severance, one of the properties became virtually useless
NOTE: must be strictly necessary
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implied easement by necessity ends when it is no longer necessary
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implied easement by implication is created by:
an existing use on a property
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easement by implication requirements:
- 1) a large estate owned by one owner (common ownership)
- 2) before division, the owner of the large tract uses the land as if there's an easement on it ("quasi easement")
- 3) use must be continuous and apparent at the time of severance
- 4) use must be reasonably necessary to the dominant estate's use and enjoyment
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easement by prescription elements:
- continuous for a statutory period
- open and notorious; and
- hostile
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easement by estoppel elements:
- 1) permissive use (e.g. one neighbor permits the second neighbor to use her land)
- 2) second neighbor reasonably relies in good faith on the first neighbor's promise
- 3) first neighbor withdraws the permission then
- 4) first neighbor estopped from withdrawing permission
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implied easement: scope: determined by the nature of the prior use or the necessity
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the owner(user) of the easement has the duty to maintain the property unless parties agree otherwise
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easements: termination: release=
the holder expressly releases it and it must be in writing
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easements: termination: merger=
owner acquires fee title to the underlying estate--> easement merges into the title
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easements: termination: abandonment=
- - owner acts in an affirmative way that shows a clear intent to relinquish the right.
- -requires more that non-use or statements
- - usually need non-use PLUS an act demonstrating intent to abandon
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easements: termination: prescription=
holder fails to protect against a trespasser for the statutory period
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easements: termination: sale to a bona fide purchaser
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easements: termination: estoppel=
servient owner changes position to his detriment in reliance on statements/conduct of the easement holder that the easement is abandoned
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easements: termination: end of necessity=
if implied easement by necessity is no longer necessary, the easement ends
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not easements: profit=
right to enter another's land and remove a specific natural resource
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not easements: license=
- a revocable permission to use another's land (e.g. the permission you give plumber to come into your house)
- easements are not revocable but licenses are
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real covenant: when an agreement binds a successor, it "runs with the land"
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the benefit of the covenant is the ability to enforce the covenant
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the burden of the covenant is being subject/bound to it
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real covenant: requirements to run:
- writing
- intent
- touch and concern
- notice
- privity
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real covenant requirements: writing so subject to SOF
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real covenant requirements:intent=
the original parties must intend for the covenant to run with the land (e.g. "and his heirs and assigns"
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real covenant requirements: touch and concern=
benefit or burden of the covenant must affect both the promisee and promisor as owners of the land
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negative covenant usually fulfills "touch and concern" requirement
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modern trend is that affirmative covenants (e.g. homeowners associations fees) touch and concern
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real covenant requirements: notice=
either actual or constructive
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to run the burden to a successor, the original parties to the promise must have been in horizontal privity
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horizontal privity: refers to privity of estate, where the estate and covenant are contained in the same instrument (e.g. the deed)
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vertical privity refers to the relationship between the original party to the agreement and his/her successor to the property
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vertical privity: to run the burden of the covenant to the successor, the successor must take the original party's entire interest (aka strict vertical privity)
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to run the benefit of the covenant to the successor, the successor need only take an interest that is carved out of the original party's estate (relaxed vertical privity)
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the remedy for breach of real covenant is damages
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equitable servitude: requirements to bind a successor:
- 1. writing
- 2. intent to run with the land
- 3. touch and concern
- 4. successor must have notice (actual, record, or inquiry)
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there is no privity requirement for an equitable servitude!
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implied equitable servitude need not be in writing (think of subdivision communities)
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implied equitable servitude created when:
- - there is an intent to create a covenant on all plots in the subdivision
- - reciprocal (i.e. benefits and burdens each and every parcel)
- - negative (i.e. a restriction on owner's use)
- - successor must be on notice of the restriction (at least inquiry notice) and
- - must be a common plan or scheme
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implied equitable servitude: for common plan, look for
- -a map of the community showing the common scheme that is recorded
- - marketing or advertisements of the community
- - oral or written mention that the lots are burdended by a common restriction
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equitable servitudes terminate as easements do (i.e. merger, release, etc.)
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In NY, a buyer must have actual or constructive notice of an implied servitude in order to be bound
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changed circumstances doctrine=
a restriction no longer makes sense to drastic changes in the surrounding are since the restriction was put in place. i.e. does the property subject to the restriction still retain some benefit from the restriction?
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water rights: doctrine of riparian rights=
landowners who border a waterway own the rights to the waterway
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riparians share the right to reasonable use of the water, such that one riparian is liable to another for interference with the other's use
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water rights: doctrine of prior appropriation=
the first person to use the water, regardless of where their land is located, has the rights to the water
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prior appropriation: user must put the water to a beneficial use. Any productive use satisfies this standard
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prior appropriation (majority view)- the surface owner may make reasonable use of the groundwater
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lateral support rights: neighboring land owner cannot excavate so as to cause a cave in on a neighbor's land
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lateral support rights: when the landowner's actions caused subsidence on a neighbor's land and the neighbor's surface buildings contributed to the subsidence, landowner responsible has liability in negligence
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lateral support rights: when the landowner's actions caused subsidence on a neighbor's land and the neighbor's surface buildings did not contribute to the subsidence, landowner responsible has strict liability
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subjacent support= rights of surface landowners not to have their land subside from the activities of the owners of underground rights
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owner of the mineral rights is strictly liable for any failure to support the land and any buildings on it that existed when the rights were created
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owner of the mineral rights is liable for negligence for damage to any buildings built after the rights were created
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owner may request a variance from zoning if owner can demonstrate that the ordinance imposes a unique hardship
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when a developer is in the middle of building a project and zoning ordinance changed, developer's use is acceptable if started in good faith before the change in the law (i.e. doctrine of vested rights)
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eminent domain=
gov't takes title to the property for public use and pays the landowner "just compensation"
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eminent domain: public use means public purpose, and not necessarily a use by the governemnt
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regulatory taking=
gov't regulates a piece of property and the regulation reduces its value to the point where gov't must pay "just compensation"
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private nuisance= a substantial and unreasonable interference with another individual's use or enjoyment of his property
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private nuisance: substantial= one that would be offensive, inconvenient or annoying to an average person in the community
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private nuisance: unreasonable=
the injury outweighs the usefulness of the D's actions
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public nusiance=
unreasonable interference with the health, safety, or property rights of the community.
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public nuisance: a private party must show that:
she suffered a different kind of harm than the rest of the community
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nuisance: usual remedy is damages, but court can impose injunctive relief if damages inadequate or unavailable
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