Ownership basics: four ways to alienate property
- By sale
- By gift
- By devise (will)
- By intestate succession
Fee simple absolute
- to X. default assumption for conveyance; in the event of ambiguous conveyance, this is what we default to.
- Transfer of all property rights to the other party without condition or limitation. No future interest associated.
- A grant of a present estate measured by the life of a named individual usually the grantee, but if by anothers life, permissible pur autre vie.
- Magic words are for life.
- May transfer estate, but because the estate terminates upon death, the estate cannot be devised or inherited.
Fee simple determinable
- A transfer in fee simple which may be terminated by the occurrence of a named event which will cut short the estate.
- While, during, until are magic words.
- Reversion to the grantor.
Fee simple subject to condition subsequent
- A transfer in fee simple which may be terminated by the occurrence of a named event which cuts the estate short.
- The grantor (or heirs) must affirmatively exercise the right over the interest for the right to vest.
- Conditional language + may reenter, may retake.
Fee simple subject to executory interest
- A transfer in fee simple which may be terminated upon the occurrence of a named event.
- Reversionary interest goes to a named third party.
- Possibility of reverter
- Interest held by grantor following fee simple determinable; interest vests automatically upon named occurrence.
- MD: reverters and rights of entry limited to 30 years.
- MD: claim subject to 7 year SOL.
- MD: right of entry can be transferred inter vivos.
Right of entry
Interest held by a grantor following fee simple subject to condition subsequent; interest must be exercised by the grantor upon the named occurrence.
Interest held by a third party (anyone other than the grantor and his heirs); interest vests automatically upon named occurrence. Subject to RAP
Springing executory interest
Divests grantor (must return to grantor before going to third party).
Shifting executory interest
Divests prior grantee
An interest which follows the conclusion of a life estate.
(1) given to an ascertained grantee and (2) not subject to a condition precedent.
Is any remainder which has not yet vested.
Vested subject to open when (1) remainder is vested as to a class of people and (2) the full class membership is unknown. Subject to RAP.
Doctrine of worthier title
Presumption in reversion to grantor.
Rule in Shelleys Case
- No remainder in the grantees heirs, and the grant is merged into fee simple absolute.
- MD has rejected.
- A future interest holder can prevent the present interest holder from using the estate in a way that harms the value of the estate to the future interest holder.
- Affirmative waste: waste caused by voluntary conduction which creates a decrease in value.
- Permissive waste: waste caused by neglect to the property, which causes a decrease in value.
- Ameliorative waste: a change to the use of the property which increases the value of the property.
Rule Against Perpetuities (RAP)
- A rule designed to limit the ability of a grantor to tie up properly endlessly. MD does not test on this rule.
- When: measured from time of grant or testators death
- What: only contingent remainders and executory interests are subject to RAP.
- Who: first relevant life of original grantee, then validating life of the subsequent grantee.
- If no validating life, then interest is struck for violating RAP.
RAP Special rules
- If a gift to one violates RAP, then the gift to all is also void.
- Rule of Convenience allows for immediate closure of the group once a member of the class is entitled to immediate possession.
- RAP does not apply to gifts from one charity to another.
- RAP does not apply to options held by a current tenant to purchase a fee interest in the property.
- Wait and see approach future interests will not violate RAP until they actually violate RAP.
Ownership of real property by two or more persons simultaneously.
Tenancy in common
- The default concurrent interest, and what other joint ownerships become upon destruction of unities.
- The concurrent owners have a separate but undivided interest in the property (equal share, equal right to possess the whole of the property).
- No right of survivorship exists, and each co-tenant can freely transfer property in life or upon death.
A special kind of joint ownership which requires (1) separate but undivided ownership and (2) four unities of interest. Creates a right of survivorship.
Unities of interest (PITT)
- Possession equal right to possess/control
- Interest equal share of same interest in the type of interest.
- Time must occur at the same time
- Title must be granted via same instrument of title.
- MD: general intent requirement requiring express language of the joint tenancy.
Joint Tenancy Special Issues
- Right of survivorship: no right of inheritance; the surviving joint tenants automatically take the deceaseds interest in the property.
- Severance: in the event that any one unity is severed, then the joint tenancy is terminated and the joint ownership is turned into a tenancy in common. If three or more joint tenants and one party severs, the other parties remain joint tenants with one another while maintaining a tenancy in common with the severing party.
Mortgages and Joint Tenancies
- Lien theory (majority): the mortgage is a lien which does not destroy the unity of title.
- Title theory (minority): the mortgage is an interest in the property which severs the unity of title and the property is converted into a tenancy in common.
- MD is a Title Theory State.
- Leases - split in authority. Some, like MD, hold that a lease in a JT is severance, while others hold that the lease temporarily suspends the JT.
- MD: option contracts do not sever the Joint Tenancy until the option is exercised.
MD: slayer statute.
When one joint tenant kills another, the killer must hold the victims property in constructive trust for the decedents family/heirs.
Tenancy by the entirety
- A JT between married spouses.
- Five unities JT + marriage.
- Maintains the right of survivorship, but TBTE means that spouses cannot alienate or encumber their shares without the consent of the other spouse.
- Severance of unity of marriage is a divorce.
- MD: Separation does not sever TBTE.
Rights and duties of joint owners
- General rule is that each co-tenant has the right to possess all of the property, regardless of the co-tenants share except where the co-tenants have an agreement to the contrary.
- Ouster when one co-tenant denies another co-tenant access to the property or to equal use of the property. The aggrieved co-tenant can seek an injunction and recover damages.
Joint Owners: Income and expenses.
- Rent collected on the property is split based upon ownership interests of each co-tenant after operating expenses are deducted.
- Operating expenses are divided based upon the ownership interests of the co-tenants. One co-tenant can collection contribution from other co-tenants for their fair share.
- Repairs and improvements are not divided between co-tenants, although the co-tenant who makes the repairs can get credit in a partition action.
- Partition is an equitable remedy available to all holders of a TIC, JT or TBTE.
- Unilateral right (except for TBTE) when the parties no longer wish to own the property.
- The effect of partition is that the courts will divide the ownership interest.
- Partition in kind splitting the property between owners
- Partition by sale selling the property and distributing the proceeds. Disfavored, but permitted if (1) impracticable or (2) unfair to the parties.
- An agreement not to partition is enforceable when (1) clear and (2) subject to a reasonable time limitation.
Landlord and tenant interests
A lease creates both contract and property interests
Tenancy for years
- A lease which is (1) created by agreement between landlord and tenant and (2) is measured by a fixed, ascertainable amount of time.
- Will implicate SOF if > 1 year.
- Terminated automatically at the end of lease without notice.
- May terminate early if (1) tenant surrenders or (2) lease is materially breached.
- MD: one year lease presumed
- MD: written lease required for landlord who offers five units or more for residential lease.
- MD: three months notice to be released.
A lease which is repetitive and ongoing for a set period of time, and will renew automatically at the end of each period unless one party provides notice (effective on last day of the period).
Tenancy at will
- An agreement (express or implied) that the tenant will occupy the land for as long as the parties agree.
- This may be terminated at any time, for any reason and without notice.
- Death of either party will terminate.
- If landlord is not given the right to terminate at will in the agreement, only the tenant can terminate.
- If only the landlord is given the right to terminate, the tenant keeps the right by implication.
Tenancy at sufferance
- A tenant holds over after the lease has ended.
- This is a temporary residency which exists before the landlord evicts the tenant or re-rents the property to the tenant. Because the tenant no longer has the right to remain on the property, this is adverse use of land.
Tenant duties to the landlord
- Pay rent: the tenant has the duty to pay rent for the property except when (1) premises are destroyed and (2) the tenant did not cause the damage; (2) Landlord evicts the tenant; and Landlord materially breaches the lease.
- MD: if term less than seven years, and tenant did not cause the damage.
- Military activation: only one month after proper notice that a member of the armed forces has been activated for more than three months.
- Medical reasons: only two months after proper notice when tenant is forced to leave for medical reasons.
- Implied covenant of quiet enjoyment
- A tenant can withhold rent when the landlord takes actions that make the premises wholly or substantially unsuitable for their intended purposes, and the tenant is constructively evicted.
- When (1) premises were unusable for their intended purposes, (2) the tenant notifies the landlord of the problem, the landlord does not correct the problem and (4) the tenant vacates the premises after a reasonable amount of time has passed.
- MD: tenant must give notice to landlord and must vacate the property within a reasonable amount of time.
Implied warranty of habitability
- The landlord has an obligation to maintain the property such that it is suitable for residential use concerns with health and safety.
- Cannot be waived, but only applied to residential buildings.
- Failure to comply with housing codes is a breach.
- MD: Return leased premises in good repair. Not implicated if building was destroyed except for fault.
- If a tenant chooses to hold rent, the tenant must (1) notify the landlord and (2) give the landlord a reasonable opportunity to correct the problem.
- No requirement of vacating.
- MD: material breach allows the tenant to establish a rent escrow, but tenant still must pay rent.
- MD: Failure to pay rent allows landlord to evict, seek damages for unpaid rent.
- MD: landlords can use security deposit to pay for damages and cover costs, but they must itemize list of repairs.
- MD: security deposit limited to two months rent, can only be used upon itemization of damages, and any unused portion must be returned to a tenant who demands it.
- MD: abuse of security deposit, landlord is subject to treble damages.
Duty to Avoid waste
- A tenant has a duty not commit affirmative or permissible waste.
- Ameliorative waste is permissible, but approval is often required in the lease.
Duty to repair
- In residential leases, landlord has duty of repair.
- Tenant must notify the landlord.
- Landlord is not responsible for repairs caused by tenants actions.
Landlord's Duty to Mitigate Damages
- What happens when the tenant abandons the property early?
- Majority: landlord must make reasonable efforts to re-rent the property. Failure to make diligent efforts means that tenant is relieved from obligation to pay rent. Landlord does not need to accept an unacceptable replacement tenant. MD follows the majority.
- Minority: landlord has no duty to mitigate common in commercial leases.
- A landlord deals with a holdover tenant by (1) seeking to evict the tenant or (2) continuing the relationship with the tenant by treating the holdover tenant is periodic and accepting rent.
- Amount of rent is due is that of the old lease, unless tenant informed of higher rent prior to expiration of the lease.
- MD: ejectment requires written notice to court seeking repossession, amount due and court fees. If holdover tenant has not moved out in time ordered, landlord can seek warrant of restitution. Landlord can move tenants personal belongings in the presence of a sheriff. Tenant can pay rent due to avoid eviction.
- MD: notice required for eviction.
- Tenancy for years 1 month.
- Periodic tenancy (year-to-year) 3 months.
- Farm lease 6 months.
- Month-to-month one month.
- Tenancy at will one month.
Duty to Deliver Possession
- Majority Landlord must deliver actual possession of leasehold (physical possession of property)
- MD: if breached, then tenant does not need to pay rent, may cancel contract, is owed return of deposits, and may sue for damages.
- Minority Landlord must deliver legal possession
Conditions of Leased Premises
- Tenant has right to quiet enjoyment, and this is violated when landlord or someone related to the landlord renders the premises unsuitable for the intended purpose.
- In residential leases, landlord must provide for habitability.
- Landlord must also control common areas and guard against nuisance of other tenants.
- Landlord does not need to control off-premises actions of third parties. Landlord cannot retaliate via eviction.
- MD: grounds for tenant not to pay rent, as landlord is liable.
- MD: in Baltimore City, this cannot be waived.
Tenant's Duty of Care
- Tenant owes a duty of care to invitees, licensees and foreseeable trespassers (ILFT).
- Landlord owes a duty of care in the following circumstances:
- ILFT latent or hidden defects for which the tenant has not been warned.
- ILFT Faulty repairs completed negligently
- ILFT injuries in the common areas of the property
Assignment and Subleases
- Assignment is the complete transfer of the remaining term of lease, while subleases are less than complete transfer (reversionary interests as well).
- Assignment: landlord can collect from original or subsequent tenant.
- Sublease: landlord can only collect from the original tenant, and original tenant can collect from the subtenant.
- Permission to sublet majority rule requires denial for a commercially reasonable reason, while minority rule allows denial for any reason.
- Transfer of landlords interest no permission from the tenant is required to transfer interest, but the new landlord is bound by the existing lease.
- Fair Housing Act restricts landlords ability to choose tenants.
- Focus: multi-family residential housing
- Protected classes: race, color, religion, national origin, sex, disability, familial status (children under 18).
- Prohibitions include (1) refusal to rent, (2) different rents, (3) false denial of availability, (4) providing different services.
- A person in unlawful possession of property may acquire good title to that property.
- Requirements: (1) continuous possession for statutory period (2) which is open and notorious, (3) hostile and (4) exclusive.
Continuous (adverse possession)
- begins when possessor begins to use property, and the possessor is a trespassor until the end of the statutory period.
- Use must be consistent with the type of property, and the court may allow for tacking of different possessors uses when there is justification (privity of K, bequest).
- May be defeated due to disability (insanity, infancy, incarceration).
- MD: 20 year statutory requirement.
Open and notorious (adverse possession)
- possession much be such that it would put a reasonable true owner on notice of adverse use.
- Hostile: adverse to the true ownership interest. Majority rule no inquiry as to possessors state of mind.
- Minority rule good faith mistake required.
- Superminority rule bad faith intent required.
Exclusive (adverse possession)
- possessor cannot share possession with true owner.
- However, multiple possessors can adversely possess as tenants in common.
- An easement is a right held by a person to make use of anothers land (burdened land is subservient, benefitted land is dominant).
- Must be in writing, and SOF is implicated, and easements are subject to recording statutes.
Types of Express Easements
- Easement appurtenant
- In rem easement which the benefit is in the use of the land.
- Easement in gross - in personam easement which benefit the holder personally.
Easement by necessity
- (1) when property is virtually useless without access to the highway.
- Arises when (1) dominant and subservient estates were owned by one person, (2) there was a later severance, and (3) one of the properties became virtually useless without an easement.
- Necessity is strictly construed, and ends when it is no longer necessary.
Easement by implication
(1) common ownership (2) with an obvious prior use (3) which is continuous and apparent at the time of severance, and (4) use reasonably necessary to the dominant estates use and enjoyment.
- One property owners use of anothers property which is (1) continuous for the statutory period, (2) open and notorious and (3) hostile.
- Need not be exclusive.
- MD: must be 20 years.
Easement by estoppel
- (1) promise of permissive use of the land (2) relied upon another to his detriment and (3) promise is withdrawn.
- Scope of express easement determines what is permissible and what is trespassory.
- Scope of implied easements governed by nature of prior use or necessity.
- Owner of easement has duty to maintain.
Termination of easement
- Release owner can release easement; must be in writing (SOF)
- Merger when the owner of one property obtains the other property, the easement is subsumed.
- Abandonment - owner acts in an affirmative way that shows clear intent to relinquish the right (1) non-use + (2) act demonstrating the intent to abandon.
- Prescription if easement holder fails to protect against a trespasser for the statutory period of time.
- Sale to a bona fide purchaser.
- Estoppel servient owner changes his position to his detriment in reliance on statements/conduct of the easement holder re abandonment.
- End of necessity.
Easement like things
Profit (right to entry and remove), license (revocable permission to use anothers land).
- A promise concerning the use of the land that runs to successors in the promise. When an agreement binds a successor, it runs with the land, and the opposing party has ability to enforce the covenant.
- Five requirements to run (1) writing, (2) intent, (3) touch and concern, (4) notice, and (5) privity of contract.
- Must be in writing to satisfy SOF, and are subject to recording acts.
- Original parties must intend for the covenant to run with the land.
- Touch and concern means that the benefit or burden of the covenant must affect both the promise and promisor.
- Notice actual or constructive notice. Inquiry notice insufficient.
- Remedy is damages.
- Horizontal privity privity of estate that is found in the same instrument. Burdens and benefits will run.
- Strict vertical privity when the successor takes the original partys entire interest. Burdens and benefits will run.
- Relaxed vertical privity successor takes an interest which is carved out of the original partys estate. Only benefits run.
- An agreement to bind: (1) in writing, (2) intended to run with the land, (3) touch and concern the land, and (4) successor has notice (actual, record or inquiry). No privity required; remedy is injunction.
- Implied Reciprocal Servitude is implied, derived from common interest communities. Requires (1) intent to create a covenant, (2) reciprocal, (3) a negative restriction, (4) successor is on notice, and (5) a common plan or scheme.
- Terminated just like easements.
Changed Circumstances Doctrine
- An equitable servitude may be terminated when the restriction no longer makes sense due to drastic changes in the surrounding area since the restriction was put into place.
- Does the property subject to the restriction retain some benefit of the restriction?
- Real property can be transferred by devise based upon the testators intent.
- If no will, distribution by intestate succession (statute).
- If no heirs, property escheats to the government.
Devise of property which can be distinguished from the estate.
A devise of personal property satisfied from general assets
A general devise from a specific source
The balance of the estate after all the general and specific gifts have been made.
A devise of property fails because it is no longer in the testators estate at the time of his death sale or destruction except where the beneficiary takes during testators lifetime (ademption by satisfaction).
A devise of property fails because the named beneficiary dies before the testator and no alternate beneficiary is named. This gift becomes part of the residuary.
A gift will not lapse if (1) lapsed gift was made to a party specified in the statute, such as a close family member, and (2) the deceased beneficiary is survived by issue.
- A device for managing property whereby one person, the settlor, owns property for the benefit of another person, the beneficiary.
- Beneficiary has equitable title in the trust and standing to enforce the trust. Trustee has legal title and is entitled to
Restraints Upon Alienation
- Absolute restraints on alienation are void.
- Partial restraint is valid if for a limited time and when reasonable.
- Restriction upon use of property is generally permissible.
Riparian rights landowners who border a waterway own rights to the waterway. Riparians share the right to reasonable use of the water (like a TIC). MD follows riparian.
- First in time, first in right - first to use owns.
- Beneficial use first to put the water to any productive use.
- Groundwater - surface owner may make reasonable use of groundwater.
- MD: natural flow theory - you should not make changes to the natural flow that causes unnecessary harm to other. Allows reasonable use of water, but may be liable for unreasonable uses. Domestic > commercial.
Lateral support rights
- Neighboring landowner cannot excavate so as to cause a cave-in on a neighbors land.
- Negligence when neighbors surface building did contribute to cave in.
- Strict when neighbors surface buildings did not contribute to cave in.
- Surface owners have a right not have their land subside from activities of the owners of underground rights.
- Strict liability for existing buildings at the time rights were created.
- Negligence for buildings built subsequently.
- State and local governments may regulate the use of land through zoning laws under the police power for the protection and safety of the community.
- Intend to segregate seemingly incompatible uses from developing in the same areas.
- Permission contrary to the zoning may be granted if ordinance imposes a unique hardship.
- Cannot be contrary to public welfare.
- Non-conforming use which lawfully existed before ordinance permit continued use but prohibit its expansion.
- Doctrine of vested rights allows a good faith developer of land to finish a project which began before zoning ordinance.
- (1) private property (2) taken for (3) public use (4) with just compensation.
- Compare to regulatory taking, where the government does not actually take the property but regulates the property such that it reduces its economic value to the point where the government must pay just compensation.
- Substantial and unreasonable interference with another individuals use or enjoyment of his property.
- Public nuisance: unreasonable interference with health/safety/property rights of the community.
- To bring private suit, party must show that she suffered a different kind of harm than the rest of the community.
- Remedy: damages or injunction when (1) inadequate or (2) unavailable.