Category : Science and Education
Archive   : THELAW1.ZIP
Filename : PROPERTY.ONE

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Copyright, MCMLXXXVII, All Rights Reserved, Charles E.
Brown, Attorney at Law

Notice: This information is provided for those who wish
to learn the law in a way that teaches you the basic
principles of the law. This disk will also help you pass the
multi-state portion of the bar exam.
This disk is provided as shareware. I have spent
hundreds of hours compiling this information and provide it
for only $75. If you'd like, you may substitute information
compiled on a legal subject for the $75. Please send check
or disks to:

Charles E. Brown IV
Attorney at Law
11526 Raymond Avenue
St. Louis, MO 63138

I have other legal information--including the one
principle that is guaranteed to get you through the
multistate--available for those who are interested. Include
your name with your letter and I'll make it available to you
as a service to my brethren in the law.
I also have two other disks with legal subjects on them.
These subjects include estates, administrative law, equity,
personal property, agency, secured transactions, civil
procedure, corporations and partnerships, commercial paper,
conflicts of law, and admiralty. I will provide them free to
registered users.


Property 

Most of the questions will be pure terminology, so we
must know what the words mean. The bar examiners love the
concept of estoppel even in the context of peoperty law, so
know about detrimental reliance.
The multistate will cover estates in land, future
interests, concurrent ownership, and landlord-tenant.
Fixtures, water rights, etc. will not be covered.

I. Estates in Land

Two basic categories of interests in land:
A. Estates. An interest in land that gives possession
in land.
Freehold--fee estates or life estates
--Fee simple absolute. Has an infinite life.
On the bar exam, when the question starts out
with someone owning land they usually tell you
it is a FSA. If they don't, assume it is a FSA
unless some limiting words appear. At common
law, a fee simple absolute could only created by
the language "to A and his heirs". Today, an
estate in land is presumed to be a FSA so we do
not need to use the code words anymore.
--Fee simple defeasible. Something could happen
in the future to defeat this interest. Whenever
someone gets less than a FSA he gets a future
interest. Most courts permit a future interst
to be sold or given away. There are three kinds:
a) Fee simple determinable. When it ends
it ends automatically. Example: "To A so
long as no liquor is sold on the property."
"To A until the Russians pull out of
Afghanistan." The common words used are
"until", and "so long as". The grantor
holds the future interest, here called a
possibility of reverter.
b) Fee simple subject to condition
subsequent. This interest does not end
automatically and the grantor retains an
interest in the reversion. "To A, but if A
ever sells liquor on the premises, I may
enter it and take it back." The grantor's
interest is called either a right of entry
or a right of termination.
c) Fee simple subject to an executory
interest. This also does not end
automatically but the reversion goes not to
the grantor but to a grantee. "To A but if
A ever sells liquor on the property, to B.
This future interest is called an executory
interest. On past bars the future interest
question was either a classification
question or a rule against perpetuities with
a fee simple subject to an executory
interest.
The Rule Against Perpetuities. Life in being or twenty-
one years thereafter. Lifetime + 21 years. This applies to
future interests (executory interests) but never, ever
applies to a possibility of reverter or to a right of entry.
The usual tip-off in a rule against perpetuities problem is
there is no time limit on the future interest. If so, then
void. Example: "To A but if liquor is ever sold on the
property to B." This is void. "To A but if A ever
personally sells liquor on the land to B." A is the only one
that can sell the liquor, consequently the FS will vest or
fail in A's lifetime. To A but if the Russians pull out of
Afghanistan within the next twenty years to B. This is
valid.
If the future interest is void as against the rule, you
cross off the void future interest but do not cross off the
present interest. Example: in the first example above, the
court would cross off the part from "but if", the result
being A is left with a fee simple. "To A so long as no
liquor is sold on property but if liquor is sold then to B."
Cross off the underlined part; A now has a fee simple
determinable.
So the rule on handling a perpetuitites problem is:
1) Is it an executory interest?
2) If so, is there a time limit?
3) If so, is it shorter than life in being + 21 years?
4) If not, then it's void.
5) Cross out the nonsense and you have your estate.

Life estates. An estate which is measured by one or more
lives. It is possible for another person's life to measure
the estate--"to A for the life of B". Additionally, A could
give away his life estate, but the estate would still be
measured by A's life. The measuring life does not change.
If the estate goes to A for the life of B, and A dies before
B, the estate goes to A's next of kin like personalty instead
of like real estate. In most states today this does not
matter.

Waste. Someone has a present possessory interest and
someone else has a future interest. Two remedies--damages or
an injunction. This comes up a lot in real property because
it is unique and courts of equity will step in.
1) Voluntary waste. Consciously destroying the value
of the property.
2) Permissive waste. The life-tenant just lets the
property go. He has the duty to at least keep it up.
3) Waste of an economic sort. The life-tenant has a
duty to pay taxes and interest on the mortgage.
Some kinds of waste are OK.
1) There is already some kind of extractive process
going on when you get the land (mining, logging, etc.). Open
mind doctrine: you can keep it going as long as you do it
reasonably.
2) Ameliorative waste.
a) The neighborhood has changed.
b) The property value actually will be increased.

Dower and curtesy. These are two ways of protecting a
surviving spouse by granting the surviving spouse a life
estate in the property of the decedent. Curtesy is for
husbands, and gives him a life estate in all that the wife
owned. Dower is for the wife, and gives her a life estate.
If the couple buys a house in a state which has dower and
curtesy, the wife can claim her dower if she did not sign the
deed. Same with curtesy. This is not limited to property
owned at death but includes property owned anytime during the
marriage if the other spouse did not sign off.

Five kinds of future interests (first three always
created in the grantor):
1) Fee simple determinable (comes before a possibility
of reverter).
2) Power of termination.
3) Reversion--"to A for life". Fee tails? The magic
words to create a fee tail are "to A and the heirs of his
body". This meant that A got the land until death, then the
land went to A's bodily heirs until the line died out. The
court did not like fee tails because this tied up the land in
families. Today most states either have statutes which say a
fee tail is a fee simple, or statutes which easily convert a
fee tail to a fee simple.
4) Remainders. Rules:
a) A remainder must be created at the same time and
by the same instrument as the prior estate.
b) The prior estate has to be a life estate.
Example: "To A for life, then B for life, then C for
life."
c) Remainders do not try and cut short the prior
life estate. Example: "To A for life, but when A
dies or gets married then to B." This is not a
remainder, this is an executory interest.
d) Remainders do not have a built in time gap
between the life estate and the remainder. "To A
for life, then one year after A dies to B." This is
not a remainder but an executory interest. "To A
for life then to B after B passes the bar." This
only becomes an executory interest if the time gap
is certain.
Remainders can be divided into vested and contingent.
The rule against perpetuities only applies to contingent
remainders. A contingent remainder is one which has either:
a) An expressed condition (subsequent) or
b) An ascertainable taker.
"To A for life then to B when B passes the bar." This is
an expressed contingent remainder. "To A for life, then to B
for life." This is not expressed.
"To A for life, then to A's children." A has no
children. This is contingent, because it cannot be
ascertained. "To A for life, then to B's heirs." B is still
living. One does not know who anyone's heirs will be until
they are dead.
The rule of destructibility of contingent remainders.
"To A for life, then to B if he passes the bar." The old
rule is if B had not passed the bar when A died, then too
bad. Today, nearly all states have abolished this rule. The
land would go to the grantor temporarily, then to B when he
passed the bar.
Executory interests. These usually followed a fee
simple instead of a life estate. "To A." No remainder. "To
A but if A ever sells liquor, then to B." Shifitng executory
interests are those that "shift" at a future date, and divest
a transferee. Example: "To A and her heirs; but if B
returns from Canada, then and in that event to B and his
heirs." A springing executory interest follows a gap, or
divests a transferor. Example: "To A when and if A marries
B."
How does the rule against perpetuities apply to
contingent remainders? "To A for life, then to A's kids (A
had no kids to date). Is the future interest certain to vest
or fail within a life in being + 21 years? Yes, because A
either has kids during his life or he doesn't. "To A for
life, then to B's heirs (B is alive)." Here we can use B,
and B's heirs will be ascertained. Who can be a life in
being? Only people named in the conveyance. If a person is
named in the conveyance, they are a life in being, and can
use any of them in the problem. "To A for life, then to A's
heirs 21 years after A's death." This is OK because it is 21
years after the life in being.
The rule against perpetuities does not apply if both the
present interest and the future interest are charities.

The importance of preventing restraints on alienation.
Generally, the law does not approve restraints on alienation.
Can't prevent the fee simple holder from transferring this
interest.

Concurrent ownership. A situation in which two or more
people simultaneously have the right to possess the same
land. Includes:
1) Tenancies in common. This is always presumed; if we
want another type of concurrent ownership it must be stated
in the conveyance.
2) Joint tenancy with right of survivorship. This must
be created by language stating "jointly with right of
survivorship". Example: Joint property owned by A, B, and
C. A dies, leaving all the estate to X. B dies, leaving all
property to SLU. Then C dies, and leaves all property to
Wash. U.. What effect do the wills have? The first two have
none. When these wills spoke the two property owners had
nothing to bequeath. C's will is the only one that can leave
any property. What happens if the conveyance to A,B, and C
was for a tenancy in common rather than a joint tenancy?
Then each party can deal with their share as if they were
independent (but the property remains undivided).
Joint tenancies operate by different rules:
a) Unity of time. The parties must get their
interests at the same time.
b) Unity of title. The parties must get their
interest by the same instrument.
c) Unity of interest. The parties must have equal
shares in the property.
b) Unity of possession.
At common law, if A tried to convey to A and B as joint
tenancies he would have to utilize a strawman.
For a joint tenancy to continue, the four unities must
operate throughout the tenancy. Severance is a process by
which the joint interest is converted to a tenancy in common
interest. It is usually done by a conveyance to an outside
person. Example: A and B have a joint tenancy. A conveys
to Z. Z has a half interest as a tenant in common.
Example: A, B and C have a joint tenancy with right of
survivorship. A conveys to Z; B dies. Who owns the land? Z
becomes a tenant in common with a one-third interest. B and 
C are still joint tenants. When B dies, C has a two-thirds
interest. So Z has one-third as a tenant in common, and C
has two-thirds as a tenant in common. Only the share
conveyed to the outsider gets severed (converted to a tenancy
in common).
What about a situation where A and B are joint tenants
with the right of survivorship. A borrows money and gives
back a mortgage. A takes the money and goes to Europe; he
spends it all, the plane crashes on the way home and A dies.
A's estate is insolvent, and the bank seeks to foreclose on
the mortgage. B claims to be the sole owner; says he did not
sign the mortgage. If the state follows the title theory of
mortgages, the mortgage causes a severance and the bank holds
as a tenant in common. If the state follows a lien theory,
the mortgage does not cause a severance and B gets the land
as an incident of his right of survivorship.
Example: A leases property to Z for a year. We could
analogize this to a mortgage. If the lease causes a
severance, the landlord and other co-owner could become
tenants in common.
Example: A enters a contract to sell the land. In most
states, a contract to sell land is an equitable conversion
and causes a conversion and severance.
Partitions. Do not confuse with severance. This
applies to either joint tenancies or tenancies in common. It
allows the parties to become separated.
The relationship between joint tenancies and tenancies
in common. Example: A and B are brother and sister. A
lives on the property; B applies to law school and has to go
away out of town. A remains in the house. B decides he
wants to collect rent for half of the house. Will B win?
No, because A does not have to pay any money for occupying
her house. If on the other hand, she makes a profit from the
house, she will have to account for the net profit.
Suppose when B comes back A threatens B with a gun.
This is referred to as an ouster. Once this occurs A owes B
for FMV of half the rent.
Repairs. A today is entitled to a reasonably necessary
recovery. Improvements. A cannot recover for improvements
unless at some future time there is a partition. Example:
House goes for $100,000 at a partition sale. The court may
give A $10,000 for the improvements and then split the
remaining $90,000. A is entitled to the lesser of the cost
of the improvement or the value of the improvement.
Usually there is a limited fiduciary duty of co-tenants.
This usually comes up when there is a forced sale for taxes,
mortgage, etc.. B is entitled to buy back in for half of
what A payed at the forced sale if he makes a request within
a reasonable time.
3) Tenancy by the entirety. The tenant has the right
of survivorship. Only exists in about twenty states as a
husband and wife relationship. Odd features:
a) It is non-severable. The conveyance to an
outsider does not destroy the right of survivorship.
If both parties convey, then it is destroyed.
b) Creditors of one spouse cannot reach the
property.
3) The husband has the exclusive right to manage
and control the property.

Non-freehold--Associated With Landlord-Tenant 

A. Tenancy at will
1) Either party can call it off at anytime. This
is very rare. In a situation where rent is paid
regularly, the courts will construe it as periodic.
B. The Fixed Form
1) Ends automatically when the lease expires.
C. Periodic Form
1) It can be renewed indefinately until one party
notifies the other to terminate.

Common law rules to terminate:
1) Must give at least a full period of notice (if
one year, then six months notice).
2) Must terminate at the end of the natural lease
period. Month to monthe concludes with the
calendar; if T gives notice June 10, then the
earliest day the lease could end would be June 30.

Landlord's Responsibility
1) Bad conditions that cause personal injury.
a) At common law, the rule was caveat emptor.
Exceptions:
--Landlord takes the tenant through to show
him the place and warns him of a rotten
step. If the defect is latent, the landlord
must warn the tenant of it.

--The landlord has the responsibility for
the common area and will be liable for
dangerous conditions there.

--Furnished short-term residence
liability.

--If landlord knows that the
public will be invited in then the landlord
is liable for dangerous conditions there.

--If landlord does work and does it
negligently, then the landlord is liable.
--If the lease says that the landlord shall
keep the premises in safe condition, then
the landlord has the duty to do so.
Most state courts have now made landlords liable
if they are negligent in the way they have
maintained the property. California holds
landlords strictly liable for defects in the
property.
What does negligence mean? The landlord was not
a reasonable landlord under the circumstances.
Can the landlord be negligent of something he
did not know about? Yes. A landlord could be
liable for third-party criminal activities
(robbing, mugging, etc.) if the apartment is not
in compliance with the housing codes, if the
landlord took no precautions, if the landlord
made representations about the great security
devices, etc. The tenants might not be totally
off the hook if a third party is involved; there
might be joint and severable liability.

2) Conditions that don't cause personal injury.
Rule: in every lease there is deemed to be an
implied covenant of quiet enjoyment. Examples
of breach:
a) Landlord does not really own the
property. The real owner shows up and
throws the tenant out. The tenant can sue
and get damages because of the implied
warranty of title.
b) Landlord is responsible to get holdovers
out. The tenant has the right to exclusive
possession.
c) The landlord changes lock on the garage.
If partially evicted, the tenant does not
have to pay any rent until he gets all the
space back.
d) Conditions are terrible because of an
act or ommission of the landlord (not
another tenant). The tenant can move out
and terminate the lease. This is the
doctrine of constructive eviction. The
action must be really bad and the tenant
must move out because of this condition.
A new theory is the implied warranty of
hability. This only applies to housing, not to
commercial rentals. The standard is the housing
code; if the property has substantial housing
code violations the landlord breaches the
implied warranty of habitability. The tenant
has the remedies of:
a) Move out and terminating the lease
b) Sueing for damages
c) Asking the landlord to abate the rent
(can be either prospective or retrospective)
d) Tenant can repair the property and
deduct the cost of repairs from the rent

What if the tenant wants to own the land? The
landlord has two interests in the land: a reversion and
rents. The landlord can convey these to the tenant (this
is called a release). The tenant will now get a fee
simple.
What if the tenant now wants out of the lease? This
is called a surrender and should be put in writing if
more than one year remains on the lease. If the landlord
won't let the tenant surrender, an abandonment may be
seen as an offer of surrender. If so, then the tenant is
still responsible for the rent.
Does the landlord have the duty to mitigate? Today,
more courts say yes, the landlord has a duty to mitigate.
Suppose the tenant was paying $500 a month and if the
landlord could have used a reasonable effort he could
have gotten $400 a month. Tenant will only be liable for
$100. Landlord gets whatever premium over the $500 he
can collect from another tenant.
Other ways that leases can terminate are:
1) Condemnation. The landlord's and tenant's
interest are both wiped out. Does the tenant get
any compensation? If the lease does not cover this
situation look to see if the tenant really has any
damages. Look at the present value of the actual
rent for the rest of the term and subtract the fair
rent. If the fair rent is greater than the present
value, then the tenant gets the difference. Usually
this is about the same, and the landlord gets the
entire amount of the condemnation award.
2) Fire or other natural disaster. At common law
this did not terminate the lease. The modern view
is if the tenant is leasing space within a building
and the building has burned down or been severely
damaged by fire, the tenant has the option to
terminate.

When the lease terminates, what power does the landlord
have to get the tenant out?
1) Landlord may not legally use self-help even if
the lease has terminated. The landlord must use the
legal process, "legal detainer". If the landlord
does use self-help, the tenant can sue for forceable
entry.
2) The landlord can make the tenant a periodic
tenant. If tenant was paying monthly, then the
tenant becomes a month to month tenant and all those
rules apply. If the landlord accepts the tenant's
rent then he has made this choice.

Assignments and subleases. These are transfers by the
original tenant to a new tenant. This is a very popular bar
exam topic.
Can the tenant do this? Yes. Does the tenant need the
landlord's approval? No. But most landlords like to control
who is living on their property, so the majority of leases
have clauses in them stating that the tenant cannot sublease
or assign without the landlord's consent. If the clause does
not say that the landlord has to reasonably give consent,
then he doesn't have to in the majority of the states. What
is reasonable? If the landlord has a legitimate objection to
the new tenant's income or credit rating, these are uniformly
found to be good reasons. Sometimes the landlord will say,
"I'll consent but I'll raise the rent." These are uniformly
found to be unreasonable. The landlord cannot use a clause
in the lease to extract more rent out of a tenant.
What if the tenant subleases or assigns without the
landlord's consent? This is a breach, therefore, the landlord
may terminate the lease and at least theoretically also get
damages.

Rights of a new tenant with subleases. Whether the
tenant is new or old he is personally liable to pay the rent.
We must distinguish here between an assignment, which
transfers the entire remaining term to the new tenant, and a
sublease, which transfers only a portion of the remaining
term to the new tenant. The new tenant is personally liable
to pay the rent if the transfer is an assignment, because all
the original covenants run with the estate including the
covenant to pay rent. If the transfer is a sublease, there
is no privity of estate and the new tenant is not personally
liable to pay the rent. The old tenant is always liable
unless the landlord expressly releases him in either lease.
If there is an assumption agreement then the new tenant
is liable, since this is a promise from the new tenant to the
old tenant to pay the rent. The landlord in this instance is
considered a third party beneficiary and therefore can
enforce the agreement.
What if the person who took the assignment reassigns?
The first tenant is off the hook. He is only liable for rent
that accrued while he had the estate.
General rules:
1) Anyone who personally promises to pay rent is
liable, including the original tenant.
2) Anyone who has the full tenant's estate is liable
for rent while there.

Assignments by landlord. Selling the landlord's entire
interest in a building. The sale is of course subject to all
the leases. Tenants have to start paying new landlord right
away. The new landlord can enforce all the covenants just as
the old landlord did.
What about security deposits? The tenant paid to the
old landlord and wants to collect from the new landlord.
Does the duty to refund the deposits touch and concern the
land? Recent cases say no, unless the lease provided money
was to go to restore the premises.

GO TO PROPERTY.TWO