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I. Fee SimpleAbsolute
III.Defeasible Fees (three species); and
Absoluteownership of potentially infinite duration
1.Freely devisable, descendible, and alienable.
2. No accompanying future interest
a. Language: “To A for so long as . . .”; “To A during. . .”; “To A until . . .”
1.The Grantor must use clear durationallanguage
2. Automatic forfeiture if the statedcondition is violated.
3. Devisable, descendible & alienable BUT always subject to the condition
4. Accompanying future interest: Possibility of reverter
a. Language: “To A, but if X event occurs, grantorreserves the right to re-enter and retake.”
1. Grantor must use (1) clear durationallanguage, and (2) carve out the right to re-enter
1. Grantor’s Prerogative: The estate is not automaticallyterminated, but can be cut short at thegrantor’s option if the stated condition occurs
c. Accompanying Future Interest: Right of entry, aka power of termination
a. Language: “To A, but if X event occurs then to B.” à a defeasible fee that places futureinterest in a third party
1.This estate is just like fee simple determinable à if the condition is broken the estate is automatically forfeited BUT in favor of a third party rather than thegrantor
c. Accompanying Future Interest: Shifting Executory Interest
1)Words of mere desire, hope, or intention are insufficient to create adefeasible fee
a.Courts disfavor restrictions on the free use of land and thus require clear durational language
2) Absolute restraints onalienation are void
a.An absolute restraint on alienation is an absolute ban on the power to sell ortransfer, that is not linked to a reasonable, time-limited purpose
a. Open Mines Doctrine: If mining was done on the land before thelife estate began, the life tenant may continue to mine, but is limited tomines already open. No new ones!
2. Repairs: LT may consume natural resources for repairs and maintenance
3. Grant: LT may exploit if granted that right
4. Exploitation: The land is suitable only to exploit
Landis allowed to fall into disrepair
a. Obligation to Repair: Life tenant must maintain thepremises in reasonably good repair
b. Taxes:Life tenant obligated to pay all ordinary taxes on the land to the extentof income or profits from the land. If no income or profits, life tenant requiredto pay all ordinary taxes to the extent of the premise’s fair rental value.
TheLT must not engage in acts that will enhance the property’s value, unless allof the future interest holders are known and consent.
a. Reversion: Future interest held by the grantor
b. Remainder: Future interest held by athird party
Atcommon law, a surviving wife’s dower right entitled her to a life estate in anundivided 1/3 of her husband’s lands. A surviving husband’s right of curtesygave him a life estate in all of his wife’s lands if issue were born.
a. MarylandRule: Has abolished common law dower & curtesy. A surviving spouse mayrenounce the decedent’s will & elect to take a statutory forced share: 1/3of the estate if surviving children and ½ if none.
1) Possibility of Reverter: Accompanies only the fee simpledeterminable
2) Right of Entry aka Powerof Termination: Accompaniesonly the fee simple subject to condition subsequent
3) Reversion: The future interest that arises in agrantor who transfers an estate of lesser quantum than she started with, otherthan a fee simple determinable or a fee simple subject to condition subsequent
Aremainder is a future interest created in a grantee that is capable of becomingpossessory upon the expiration of a prior possessory estate created in the sameconveyance in which the remainder is created
Remaindermanalways accompanies a preceding estate of known,fixed duration. That preceding estate is usually a life estate or a term ofyears.
2. Patient& polite: Remainderman NEVER follows a defeasible fee!
Aremainder is vested if it is both createdin an ascertained person and is NOTsubject to any condition precedent.
Aremainder is contingent if it is created in an (1) unascertained person OR is(2) subject to a condition precedent, or both
1. ConditionPrecedent: A condition is a condition precedent when it appears before the language creating theremainder or is woven into the grant to the remainderman.
Atcommon law, a contingentremainder was destroyed if it was still contingent at the time the preceding estate ended.
a. ON MBE: When you see at common law, apply thisrule.
b. Today:Rule has been abolished: when preceding estate ends, grantor or grantor’sheirs hold estate subject to remainderman’s springing executory interest
Atcommon law, when O conveyed a present interest to A, and the futureestate to A’s heir, the interests wouldmerge, giving A a fee simple absolute.
a. Note: Was a rule of law, not a rule ofconstruction, and therefore would apply even in the face of contrary grantorintent
b. Today: Virtually abolished, interests don’tmerge.
1. MD: Has abolished Rule in Shelley’scase.
(akarule against a remainder in grantor’s heirs). STILL viable in most statestoday.
1.Applies when O, who is alive, tries to create a future interest in his heirs -> voids future interest in O’s heirs andinstead gives O a reversion.
2. Rule of Construction: not a rule of law -> therefore the grantor’s intent controls: if the grantor clearly intended tocreate a CR in his heirs, that intent is honored.
“Nostrings attached.” The holder of this remainder is certain to acquire anestate in the future w/ no conditions attached.
Remainderman’sright to possession could be cut short because of a condition subsequent
1.Condition subsequent v. Condition Precedent
a. Comma Rule: When conditional language in a transferfollows language that, taken alone and set off by commas, would create a vestedremainder, the condition is a condition subsequent
A remainder is vested in a group of takers, at least one of whom is qualified to take, BUT each class member’s share is subject to partial diminution because additional takers can still join in.
Class Closes: Common Law Rule of Convenience: The class closes whenever any class member can demand possession.
Womb Rule: A child in the womb at this time will share in the class gift
Predeceased Class Member: At common law, the share goes to her devisees or heirs
A future interest created in a transferee (a third party) which is not a remainder, and which takes effect by cutting short a preceding defeasible estate, either in another person (shifting),or in the grantor or his heirs (springing).
a. Shifting Executory Interest: Always follows a defeasible fee and cuts short someone other than O the grantor
b. Springing Executory Interest: Cuts short the grantor’s interest
Certain kinds of future interests are void if there is any possibility, however remote,that the given interest may vest more than 21 years after the death of a measuring life.
1.Identify the future interests created by the conveyance
a. RAP applies to: Contingent remainders, executoryinterests, and certain vested remainders subject to open
b. RAPDOES NOT apply to:
- Any future interest in O the grantor
-Indefeasibly vested remainder
-Vested remainders subject to complete defeasance
2. Identify the conditions precedent to the vesting of the suspect future interest
3. Find a measuring life
4. Ask: Will we know, with certainty, within 21 years of the death of our measuring life, if our future interest holder(s) can or cannot take?
1) A gift to an open classthat is conditioned on the members surviving to an age beyond 21 violates the commonlaw RAPa. “Bad as to one, bad as to all"
2) Many shifting executoryinterests violate the RAP. An executory interest with no limit on the timewithin which it must vest violates the RAP.
a. Charity to charityexception: A gift fromone charity to another will not violate the RAP
Offensivefuture interest is stricken, however resulting language must remaingrammatically intact à if not,entire conditional clause will be stricken, resulting in a fee simple absolute.
a.Right of Survivorship: When one joint tenant dies, her share goes automaticallyto the surviving joint tenants à last survivor takes it all
b.A joint tenant’s interest is alienable but is not devisable or descendible
Joint tenantsmust take their interests
1.Time: at the same time
2.Title: in the same instrument
3.Interest: interests are identical
4.Possession: each has the right to possess the whole
a. MBE Rule: Grantor must clearly express the right ofsurvivorship
1.Joint tenancies are disfavored à thus in addition to the 4 unities, grantor must clearlystate the right of survivorship
b. MD Rule: Specific language not required, justmust show intent to create a joint tenancy: “in joint tenancy” is sufficient.
Step 1: Holder conveys to the strawman
Step 2: Strawman conveys it back to Holder and Friend as JT w/ ROS
MD Rule: Does not require a strawman conveyanceto create a joint tenancy that includes the grantor.
Ajoint tenant can sell or transfer her interest during her lifetime even withoutthe other joint tenant’s knowledge or consent
a.Result: severs the joint tenancy as to the seller’sinterest because it disrupts the 4 unities
1. Buyer is a tenant in common
Equitable conversion: In equity, a joint tenant’s mere act of entering into a K for the saleof her share will sever the joint tenancy as to the contracting party’sinterest
i) By voluntaryagreement: a peaceful way to end the relationship
ii)Partition in kind: Court action for physical division of Blackacre if in thebest interest of all
iii)Forced sale: Court action if in the best interests of all where Blackacre issold and the proceeds are divided proportionately.
a. Title Theory of Mortgage(minority of states): Onejoint tenant’s execution of a mortgage or a lien on his or her share will severthe joint tenancy as to that now encumbered share in the minority of statesthat follow the title theory of mortgage.
1. Maryland = title theory state
b. Lien Theory of Mortgage(majority of states): Ajoint tenant’s execution of a mortgage on his or her interest will not severthe joint tenancy.
Bw marriedpartners with the right of survivorship
a. Presumption that atenancy by the entirety is created in any conveyance to married partners,unless stated otherwise.MD follows this presumption
Creditors of one spouse cannot touch this tenancy
Unilateral conveyance: Neither tenant, acting alone, can defeatthe right of survivorship by unilateral transfer to a third party à becomes a nullity
Severed by absolute divorce in MD
i) Eachco-tenant owns an individual part, and each has a right to possess the whole
ii)Each interest is devisable, descendible and alienable. There are nosurvivorship rights between tenants in common
iii)The presumption favors tenancy in common.
6) Repairs: The repairing co-tenant enjoys a rightto contribution for reasonable and necessary repairs provided that she has told the other of the need.
7) Improvements: During the life of the co-tenancy, thereis no right to contribution for “improvements.”
8) Waste: Co-tenant must not commit waste
9) Partition: A joint tenant or tenant in common has a right to bring an action for partition
Leasewhich continues for successiveintervals until L or T give proper notice to terminate.
Express: The periodic tenancy can be createdexpressly. For ex: to T from month to month, or year to year, or week to week
1. Land is leased with no mention of duration, but provision is made for the payment ofrent at set intervals.
2. An oral term of years inviolation of the Statute of Frauds createdan implied periodic tenancy.
a.Measurement: by the wayrent is tendered.
3. Holdover: Residential lease, L elects to hold over a T who wrongfully stays past conclusion of original lease. Measured by how rent is tendered.
2. MarylandRule: Only 3 months notice required for year to year or greater UNLESS itis a farm -> 6 months notice forfarms.Private Agreement: May lengthen or shorten notice period
Tenancyfor no fixed duration. (i.e. “To Tfor as long as L or T desires.”
Express agreement required: Unlessthe parties expressly agree to a tenancy at will, the payment of regular rentwill cause a court to treat it as an implied periodic tenancy.
Termination: May be terminated by eitherparty at any time BUT in most states, a reasonable demand to vacate isneeded.
a. MD Rule: 1 month’s notice required by statute.
i.Created when T has wrongfully held over pastthe expiration of the lease à wrongdoer gets a leasehold estate to permit L to collect rent.
ii. Lasts until L either evicts T, or decides to hold Tto a new tenancy.
As a matter ofTORT law
a.T is responsible for keeping the premises ingood repair.
b.T is liable in tort for injuries sustained by third parties T invited, even where L promised to make all repairs.
a) When lease is silent…
i) MBE standard: T must maintain the premises and makeordinary repairs.
ii) Maryland Rule: In a residentiallease only, the lease must spell out the parties’ duties with regard torepair.
iii) T must not commitwaste: saying that T must make repairs meansthat T cannot commit waste on the premises.
MD Statute: Where T commits waste after beingenjoined, L may get double damages.
a. When a tenant removes a fixture, she commits voluntary waste.
b. Fixture: A fixture is a once movable chattel that,by virtue of its annexation to realty objectively shows the intent topermanently improve the realty.
c. T MUST NOT remove a fixture, NO MATTERTHAT she installed it à FIXTURES PASS WITH OWNERSHIP OF LAND.
1. Express agreementcontrols: any agreementbetween L and T is binding (freedom of contract)
2. Absenceof agreement: T may remove a chattel that she has installed so long as removalwon’t substantially harm the premises.
a.If removal will cause substantial damage, then in objective judgment, T has shown the intent to install a fixture.
1.Property law doesn’t care what T was subjectively intending!
1. At common lawhistorically àT was liable for anyloss to the property including loss due to force of nature (Hawaii chateau story)
2. Today, majority view: T may end the lease if the premises aredestroyed w/o T’s fault à MD Rule as well.
a. MD: A tenant’s covenant to keep the premisesin good repair does not obligate the tenant to rebuild or repair absentnegligence or fault.
Landlord’sONLY options are to:
1. Evict through the courts
a. MD:Procedure is called a 8-401 action: File complaint in district court.
b.If the landlord moves to evict, she is nonetheless entitled to rentuntil the tenant, who is now a tenant at sufferance, vacates.
2. Continue the relationship and sue for rent due
LANDLORD MUST NOT engage in self-help!
i. Surrender: L could choose to treat T’s abandonmentas an implicit offer of surrender which L accepts.
a. Surrender: T shows that she wants to give up thelease
b. Unexpiredterm greater than 1 year: Surrender must be in writing to meet the SOF
theabandonment and hold T responsible for the unpaid rent, just as if T were stillthere.
iii. Re-let the premises and hold tenant liable for any deficiency
a. Mitigation: Majority Rule: L must as least try to re-let
1. MD Rule: Duty to try to re-let in residential leases, but no such duty in commercial leases
a. Majority/English Rule: Requires that L put T in physical possession of the premises.Thus, if at the start of T’s lease a prior holdover T is still in possession, Lhas breached and the new T gets damages.
1. MD: Follows this rule, and allows new T toterminate lease. If T doesn’t terminate, the duty to pay rent is abated untilpossession is delivered.
b. Minority/AmericanRule: L has no duty to provide physical possession, just legalpossession (keys, lease).
a. Applies to bothresidential and commercial leases.
1. Applies in MD: In a residentiallease, the covenant cannot be waived by the lessee.
b. Covenant: T has a right to quiet enjoyment &use of the premises w/o interference from L.
Occurswhen L wrongfully evicts T or excludes T from the premises.
i) Substantial Interferencedue to L’s actions orfailures.
1.Does not necessarily mean a permanent problem à could be a chronic one like a leaky roof.
ii) Notice: T must tell L about the problem & Lmust fail to act meaningfully
iii) Goodbye: T must vacate w/in a reasonable timeafter L fails to fix the problem.
Liability of L for acts of other tenants: General rule is that L is not liable. Two exceptions:
1) L must not permit a nuisance on site
2) L must control common areas
R: Repair & deduct, allowable bystatute in a growing number of jurisdictions. T may make the reasonable repairsand deduct their cost from future rent.
R: Reduce rent, or withhold all rent untilthe court determines fair rental value. Typically, T must place withheld rent into escrow to show her good faith.
1. MD Rule: T MUST place withheld rent inescrow
R: Remain in possession, pay rent, and affirmatively seek money damages
If T lawfully reports L forhousing code violations, Lis barred from penalizing T, by, for example raising rent, ending thelease, or harassing T or taking other reprisals.
T may freely doeither absent a prohibition in the lease
1)Assignment: T transfershis or her interest in whole
2) Sublease: T transfers his or herinterest in part
3) Prohibitions on: In the lease, L can prohibit T fromassigning or subletting w/o L’s prior written approval.
a. Waiver:Once L consents to one transfer by T, L waives the right to object tofuture transfers by that T, unless L reserves the right.
T1 assigns leaseto T2
a. L and T2 are in privity of estate
1.Means that L and T2 are liable to each other for all of the covenants in theoriginal lease that “run with the land” –Have something to do with Blackacre
2. NOT in privity of contract UNLESS T2expressly assumed all promises under the original lease
L and T1 are no longer in privity of estate (property-basednexus) but remain in privity of contract, and are secondarily liable to each other
T2 to T3: T2 no longer liable bc no privity
T transferslesser estate.
a.L and sublessee are in neither privity of estate nor privity of contract -> share no nexus.
b.Relationship bw L and T unchanged.
The common law of caveat lessee: The norm is T beware
a.In tort, L was under no duty to make the premises safe.
a. Common areas: L must maintain all common areas (i.e.hallways and stairways)
b. Latentdefects rule: L must warn T of hidden defects that L knows about orshould know about.
c. Assumptionof repairs: A L who voluntarily makes repairs must complete them withreasonable care.
d. Public Use Rule: L who leases publicspace and who should know, because of the nature of the defect and the length of the lease that T will not repair, is liable for any defects on the premises.
e. Short term lease of furnished dwelling
Thegrant of a non-possessory property interest that entitles its holder to someform of use or enjoyment of another’s land, called the servient tenement
Affirmative Easement: Theright to do something on servient land (i.e. lay utility lines)
Negative Easement: Entitlesits holder to prevent the servient landowner from doing something that wouldotherwise be permissible. Negative easements are generally recognized inonly 4 categories: LASS
Streamwater from Artificial Flow
a) Appurtenant: When the easement benefits its holder in his physical use or enjoyment of his property.
1.It takes two: two parcels are involved.
1)Dominant tenement: gets benefit
2)Servient tenement: bears the burden
b) In gross: When the easement confers upon its holder only some personal or pecuniary advantage that is not related to his use or enjoyment of his own land.
1. Servient land burdened: No dominant tenement
a) Appurtenant easement passes automatically w/ the dominant tenement, regardless of whether it iseven mentioned in the conveyance.
1. Servient tenement: Burden of the easement appurtenant alsopasses automatically w/ the servient estate, UNLESS the new owner is a bona fide purchaser w/o notic
b) In gross: NOT transferable unlessfor commercial purposes.
1.An easement to endure for more than 1 year must be in a writing thatcomplies with the formal elements of a deed because of the Statute of Frauds.
a.The writing to evidence the easement is called a deed of easement.
1. An easement of right of way will beimplied by necessity if grantor conveys a portion of his land with no way outexcept over part of grantor’s remaining land.
Aneasement required by satisfying the elements of adverse possession
1. Continuoususe for the statutory period
a. MD Statute: 20years
2. Open& notorious
4.Hostile Use: w/oservient owner’s consent
a. Permissiondefeats because not hostile
Determined bythe terms that created it.
a. MD Rule: An easement by necessity may beexpanded to meet the reasonable & necessary needs of the dominant estate.
b. Unilateral Expansion -> NOT allowed.
a. BUT:if the easement attributable to necessity was created by express grant, theeasement will not end when the necessity ends.3) Destruction of the servient land, other than through the willful conduct of the servient owner
1) A mereprivilege to enter another’s land for some delineated purpose.
2)No subject to the SOF: Nowriting required.
3) Freely revocable at the will of the licensor unlessestoppel applies to bar revocation
4) Unenforceable easements:An unenforceable oraleasement creates a freely revocable license.
5) Estoppel will apply to bar revocation only when the license has invested substantial money, labor, or both in reasonable reliance on the license's continuation
1)Entitles its holder to enter the servient land and take from it the soil, or some substance of the soil,such as minerals, timber, oil
2)Apply all easement rules to profits
1)A promise to do or not do something related to land. UNLIKE the easement bc itis not the grant of a property interest, but a contractual limitation orpromise regarding land.
2) Restrictive Covenantsaka Negative Covenants: Apromise to refrain from doing something related to land.
3) Affirmative Covenant: A promise to do something related toland.
4) One tract is burdened by the covenant and the other benefits
Distinguishby REMEDY sought
a.Covenant:money damages (legaldevice = legal remedy)
b.Equitable servitude:injunction (equitydevice = equitable remedy)
When will a covenant be capable of binding successors in interest (A1 and B1) to the original covenantors (A and B)?
1. Must analyze whether the burden runs, and whether the benefit runs separately
2. Analyze the burden first
i) Writing: Original promise was in writing
ii) Intent: Original parties intendedthe benefit to run
iii) Touch and Concern: Promise affects the parties as landowners
iv) Vertical Privity: A non-hostile nexus bw B and B1
- HP NOT required
i) Writing: Generally, the original promise was inwriting
ii)Intent: Parties intendedthe promise to bind successors
iii)Touch and Concern:Promise affects the parties as landowners
iv)Notice: Successors ofburdened land had notice of the promise
Generalor common scheme doctrine
a.Will arise where a subdivider sells multiple lots including restrictivecovenants, then sells a lot not containing the covenant.
Court will imply a reciprocal negative covenant (aka implied equitable servitude) to hold the unrestrictive lot holder to the restrictive covenant.
1) When the sales began, the subdivider had a general scheme of residential development, which included D's lot.
2) The defendant lotholder had notice of the promise contained in the prior deeds.
1. Actual notice: D had literal knowledge of the promise inthe prior deeds.
2. Inquirynotice: Neighborhood conforms to the common restriction such that “the layof the land” should have put D on notice.
3. RecordNotice: the form of notice sometimes imputed to D buyers on the basis ofthe public records
1. Some: A subsequent buyer is on record notice of the contents of prior deeds transferred to others by a common grantor. Title searcher will have to look at those prior deeds.
MD follows this view
2. Others: Subsequent buyer does NOT have record notice of the contents of those prior deeds transferred to others by the common grantor
a.The changed circumstances alleged by the party seeking release from the terms ofan equitable servitude must be so pervasive that the entire area has changed.
1.Mere pockets of limited change are never good enough.
Possession for astatutorily prescribed period of time can, if certain elements are met, ripeninto title.
i) Continuous: Uninterrupted for the statutory period
a. MD: 20years
ii) Open & Notorious: The sort of possession the usual ownerwould make under the circumstances
iii) Actual: Entry must be literal
iv) Hostile: Possessor does not have the true owner’sconsent to be there
MD; Exclusive and under claim of right or color of title
Objective: Possessor's subjective intent is irrelevant
Tacking: One adverse possessor may tack on to his time with the land his predescessor's time, so long as there is privity
Disabilities: The statute of limitations will not run against a true owner who is affected by disability at the start of the adverse possession.
1. The Standard: The land K must be in writing, signed bythe party to be bound (D in litigation).
- It must describe Blackacre
- It must state some consideration
2. Whenthe amount of land recited in the land contract is more than the actual size ofthe parcel, the remedy is specific performance of the land contract with apro rata reduction in price.
Mustsatisfy 2 of the following 3 elements -> equity will decree specific performance of an oral K forsale of land
a) B takes possession
b)B pays all or part of the price
c)B makes substantial improvements
Equityregards as done that which ought to be done.
a.In equity once the K is signed, Buyer ownsthe land subject to the condition that he pay the purchase price atclosing.
1. Result: In case of destruction before closing, Bbears the risk of loss unless the K says otherwise
i) Standard: Title free from reasonable doubt à free from lawsuits and the threat oflitigation
ii) Three circumstanceswill render title unmarketable
1. Adverse possession: If even part of the title rests onadverse possession, it is unmarketable à seller must be able to provide good record title
a. MD Rule: Title acquired by adverse possession ismarketable.
2. Encumbrances: Marketable title means an unencumbered fee simple. Thus, servitudes & mortgages render title unmarketable, unless the buyer has waived them.
a. Note: Seller has the right to satisfy an outstanding mortgage or lien at the closing with the proceeds of the sale
3. Zoning Violations: Title is unmarketable when Blackacre violates a zoning ordinance
1. Majority rule: Most states also holder suller liable forfailing to disclose latent material defects. Seller is liable for material lies& material admissions.
2. Effectof disclaimer: i.e. “as is” or “with all faults” will NOT excuse sellerfrom liability for fraud or failure to disclose.
Must be Lawfully Executed & Delivered (LEAD)
1) Lawful execution of a deed
a. Standard: The deed must be in writing signed by the grantor
1. No consideration required to make a deed valid
2. MD Rule: A deed must be recorded for legal title to pass.
b. Description of the land does not have to be perfect
1.Requires only an unambiguous description and a good lead.
i)Can be satisfied when the grantor physically or manually transfers the deed tothe grantee
ii) Physical transfer not required
iii) Legal Standard: Did the grantor have the present intent to be bound irrespective of whether the deed was handed over?
iv) Express rejection by recipient defeats delivery
v) Oral Conditions: If a deed, absolute on its face, is transferred to grantee w/ an oral condition, the oral condition drops out
a. MD: Cts will enforce an oral condition, but the burden is on the Grantor to prove its existence
vi) Delivery by Escrow: The Grantor may deliver an executed deed to a third party, known as an escrow agent, with instructions that the deed be delivered to the grantee once certain conditions are met. Once the conditions are met, title passes to grantee.
Itcontains no covenants. Grantor is not even promising that he has title toconvey
1. BUT: Grantor still bound by implicitpromise in the land contract to provide marketable title at closing(finite promise): seller is off the hook for any problems post-closing.
Bestdeed a buyer could hope for. Warrants against all defects in title, includingthose attributable to grantor’s predecessors. Contains 6 covenants.
1. PresentCovenants: First 3: apresent covenant is breached, if ever, atthe time of delivery. Statute of limitations for breach begins to run fromthe moment of delivery.
i) Covenant of seisin
ii) Covenant of right to convey
iii) Covenant against encumbrances
2. Future Covenants: Not breached, if ever, until grantee is disturbed in possession. Statute of limitations for breach does not begin to run until that future date
iv. Covenant for Quiet Enjoyment
v) Covenant of warranty
vi. Covenant for further assurances
Grantorowns this estate
Thereare no servitudes or liens on Blackacre
Granteewon’t be disturbed in possession by a 3d party’s lawful claim of title (thereis no one with better title)
Grantorpromises to defend grantee against lawful claims of title brought by others.
Grantorwill do whatever is needed in the future to perfect the title.
Providedfor by statute in many states, this deed contains two promises that grantormakes only on behalf of himself. (Grantormakes no promises on behalf of his predecessors in interest)
1)Grantor promises that he hasn’t conveyed Blackacre to anyone other thangrantee; and
2)Blackacre is free from encumbrances made by grantor.
1) If B is a BONA FIDEPURCHASER, and we are in a NOTICE JX, B wins, regardless of whether or not sherecords before A does.
2) If B is a BONA FIDEPURCHASER, and we are in a RACE-NOTICE JX, B wins if she records properlybefore A does.
a. Maryland isa race-notice jurisdiction.
Protect ONLYbona fide purchasers & mortgagees (creditors)
a.A BFP is one who:
i)Buys Blackacre for value; and
ii)without notice that someone else got there first
b. MD Rule: Specifically imposes a good faithrequirement on BFPs: must buy Blackacre for value, without notice, and in goodfaith
Requires that Bremit substantial pecuniary consideration
1. Heirs, donees anddevisees are NOT protectedby recording statutes, UNLESS the shelter rule applies (see below)
i) Actual Notice: Prior to B’s closing, B learns of A
ii) Inquiry Notice: Whether he looks or not, B is on inquirynotice of whatever an exam of Blackacre would show
iii) Record Notice: B is on record notice of A’s deed if atthe time B takes, A’s deed was recorded properly.
“A conveyance of an interest in land shall not be valid against any subsequent purchaser for value, without notice thereof, unless the conveyance is recorded.”
“Any conveyance of an interest in land shall not be valid against any subsequent purchaser for value without notice thereof, whose conveyance is first recorded.”
To prevail, B must 1) be a BFP, and 2) win the race to record
Onewho takes from a BFP will prevail against any entity that the transferor-BFPwould have prevailed against à transferee “takes shelter” in the status of her transferoreven though she otherwise fails to meet the requirements of the BFP status.
Oto A -> A does not record deed. A to B. Brecords the A-to-B deed
Result: A to B deed is NOT connected to the chainof title, and therefore not properly recorded.
Rule: If a deed, entered on the records, has agrantor unconnected to the chain of title, the deed is a wild deed, and is incapableof giving record notice of its existence.
B may lose to a later BFP.
One who conveys realty in which he has no interestis estopped from denying the validity of that conveyance if he later acquiresthe previously transferred interest.
a. However à transferee’s deed is a version of a “wild deed” and willlose against a subsequent BFP
A mortgage is the conveyance of a security interest inland, intended by the parties to be collateral for the repayment of a debt.
Unionof two elements:
ii)A voluntary lien in debtor’s land to secure the debt
i. Debtor à mortgagor
ii.Creditor à mortgagee
The mortgage must typically be in writing tosatisfy the SoF -> thelegal mortgage.
Wherea creditor lends a debtor a sum of money with both parties understanding thatdebtor’s land is collateral for the debt, but instead of executing a note ormortgage deed, the debtor hands the creditor a deed to the land that isabsolute on its face.
a. Parole evidence is admissible to showthe parties’ intent.
b. Creditor sells land to BFP à BFP owns the land.
1. If Debtor sells the land to a BFP, BFP owns the land and Debtor's only recourse is to sue the creditor for fraud and the proceeds of the sale.
a.Debtor-mortgagor: Unless and until foreclosure has title & theright to possess
b. Creditor-mortgagee:Has a lien
i)Creditor-mortgagee can transfer his interest by:
(1) Endorsingthe notice and delivering it to the transferee; or
(2)Executing a separate document of assignment
If note is endorsed and delivered, transferee can bea holder in due course --> takes the notefree of any personal defenses that could have been raised against theoriginal creditor-mortgagee
a.Personal defenses include lack of consideration; fraud in theinducement; unconscionability; waiver; estoppel
1.Can foreclose despite any such personal defense
b.Still subject to “real defenses”:
1. Materal Alteration
3. Fraud in the Factum
a) the note must be negotiable, made payableto the named mortgagee
b) the original note must be indorsed à signed by the named mortgagee
c) the original note must be delivered to thetransferee. A photocopy is unacceptable
d) the transferee must take the note in goodfaith, without notice of any illegality; and
e)the transferee must remit value for the note à some amt that is more than nominal.
1. The lien remains on the land so long as themortgage was properly recorded --> recording statute protectsmortgagees!
a. A later buyer takes subject to a properlyrecorded lien
1. Race-notice statute: even if lien not recorded when buyer purchases, ifmortgagee records before buyer records deed, buyer takes subject to the lien
2. In a notice state, a subsequent BFP prevails over a prior grantee or mortgagee who has not recorded properly at the time the BFP takes.
Whois personally liable on the debt if debtor-mortgagor (“O”) sells to B?
a.B has “assumed the mortgage”: Both O and B are personally liable
1. B = primarilyliable
2. O =secondarily liable
b. B takes“subject to the mortgage”: B assumed no personal liability --> only O is personally liable.
1. BUT --> mortgage sticks with the land, so if O does notpay, the mortgage may be foreclosed.
1. MD Rule: Foreclosure may take place bynonjudicial sale when the mortgage allows it and proper notice is given to thedebtor-mortgagor and any junior creditors.
2. Proceedsof sale less than amount owed: Mortgagee may bring a deficiency action against debtor
3. Surplus: Junior liens are paid in order of priority. Remaining surplus goes to debtor.
1. First: attorney’s fees, foreclosure expenses,and any accrued interest on the foreclosed lien.
2. Then,the sale proceeds are used to pay off the mortgages in the order of their priority.
a.Each claimant is entitled to satisfaction infull before a subordinated lienholder may take.
3. Surplus to debtor
a. Rule: Foreclosure will terminate interestsjunior to the mortgage being foreclosed, but will not effect senior interests.
1. If junior lienholders are not fullysatisfied by foreclosure, they should be able to proceed for a deficiencyjudgment, but once foreclosure of a superior claim has occurred, they can no longer look to the land forsatisfaction
a. Therefore, those with interests subordinate to those of the foreclosing party are necessary parties to the foreclosure action.
b. Debtor-mortgagor is also considered a necessary party & must be joined, particularly if a creditor wishes to proceed against the debtor for a personal deficiency judgment
2. Failure to include a necessary party results in the preservation of that party's claim: Mortgage remains on the land.
b. Senior Interests: Not affected by the foreclosure of a junior interest, and buyer at the sale takes the land subject to that interest
i. Creditors must record: Until they properly record their lien,they have no priority.
ii. Rule:First in time, first in right --> The first to record properly gets to look to Blackacrefirst in the event of a default.
iii. Exception:The purchase money mortgage: A mortgage given to secure a loan that enablesthe debtor to purchase the land.
a. Purchasemoney mortgagee has “superpriority” as to the parcel he financed over all other creditors
iv. After-acquired collateral clause or "floating lien": Where a creditor takes a security interest in all of the debtor's real estate holdings "whether now owned or hereafter acquired."
v. Subordination Agreements: Are allowed. Where a senior creditor agrees subordinate its priority to a junior creditor
Equitableredemption is universally recognized up to the date of sale. At any time priorto the foreclosure sale the debtor can try to redeem the land.
a. Once a valid foreclosure has takenplace, the right to equitable redemption is gone.
b. Exerciseof equitable redemption: debtor pays off the missed payment(s) + interestand costs
c. Acceleration Clause: Permits the mortgagee to declare the full balance due in the event of a default. To redeem, debtor must pay the full balance + accrued interest and costs
d. The debtor/mortgagor MAY NOT waive the right to redeem in the mortgage itself: Clogging the equity of redemption and prohibited as a matter of public policy
½the states have statutes providing an additional grace period à gives debtor-mortgagor a statutory rightto redeem for some fixed period after the foreclosure sale has occurred(typically 6 months to 1 year).
Amountto be paid: The foreclosure sale price
Mortgagor has the right to possess Blackacre duringthe statutory period
Whenmortgagor redeems: effect is to nullify the foreclosure sale.
MD: Does not recognize statutory redemption
1. Rule: If land is improved by buildings and anadjacent landowner’s excavation causes that improved land to cave in (subside),the excavator will be held to anegligence standard.
a. Exception: If P can prove that D’s actions wouldhave caused P’s land to collapse even in its natural state, strict liability applies. High burden à has to show that improvements did notcontribute to the land’s collapse.
a. Rule: The water belongs to those who own theland bordering the watercourse (these people are called riparians)
b. Standard: Riparians share the right of reasonableuse of the water. Thus one riparian will be liable if his or her useunreasonably interferes with others’ use.
APPLIES TO WATERCOURSES
c. Natural v. Artificial Use: A riparian owner can use all the water necessary for domestic use (natural use) and will always prevail over a downstream plaintiff who is using the water for commercial use (factory, farming irrigation)
The water belongs initially to the state, but the right to divert it and use it can be acquired by an individual, regardless of whether or not he happens to be a riparian owner.
a. Rights are determined by priority of beneficial use --> first in time, first in right
1.A person can acquire the right to divert & use water from a watercourse merely by being the first to do so.
b. Any productive or beneficial use of the water, including use for agriculture, is sufficient to create the appropriation right.
Waterbeneath the surface of the earth that is not confined to a known channel.
1. Rule:The surface owner is entitled to reasonable use of groundwater. However, the usemust NOT be wasteful.
Those which come from rain, springs, or melting snow, and which have not yet reached a natural watercourse or basin --> a nemesis
1. The Common Enemy Rule: A landowner may change drainage or make any other changes/improvements on his land to combat the flow of surface water.
a. Many courts have modified this rule to prohibit unnecessary harm to others’ land.
The invasion ofland by tangible, physical object.
a. To remove a trespasser, bring an actionfor ejectment.
Thesubstantial & unreasonable interference with another’s use and enjoyment ofland.
a. Note:Unlike trespass, does NOT require tangible physical invasion. Thus, odors& noise could give rise to a nuisance, but not a trespass.
b. Hypersensitiveplaintiffs: There is no nuisance where the problem is attributable to theplaintiff’s hypersensitivity.
Gov’t’s 5th Ampower to take private property for public use in exchange for justcompensation.
1) Explicit takings: Acts ofgovernmental condemnation
2) Implicit or regulatorytakings: a gov’talregulation that, although not intended to be a taking, has the same effect.
a. Argue that the regulation has worked aneconomic wipe out of your investment.
b. Remedy: Gov't must either
1. Compensate owner, or
2. Terminate the regulation & pay owner for damages that occurred when it was in effect
Pursuant to itspolice powers, gov’t may enact statutes to reasonably control land use
1) The variance: The principal means toachieve flexibility in zoning.
a. Proponent must show:
1.Undue hardship; and
2.The variance won’t decrease neighboring property values
b.Variance is granted or denied by administrative action -> typically a zoning board
2) The nonconforming use: A once lawful, existing use now deemed nonconforming by a new zoning ordinance. It cannot be eliminated all at once unless just compensation is paid. Otherwise, it could be deemed an unconstitutional taking.
Exactionsare those amenities gov’t seeks in exchange for granting permission tobuilding.
a. Rule:To pass constitutional scrutiny, these exactions must be reasonably relatedin nature and scope to the impact of the proposed development.
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