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Course: Property Fall 2000
School: unknown
Year: 2000
Professor: unknown
Course Outline provided by Legalnut.com

Property

 

 

 

Estates – freehold – Keyword for estates is possession; you have a freehold of estates if you have possession at any time.

 

Two types of freeholds: fee simple and life estate

 

Present Possessory estates – six categories

  1. Freehold estates – 2 types – fee simple and the life estate

 

 

Fee simple absolute – runs forever and fully alienable; no restraints on transfer of ownership = alienable. Any time you try to put a direct restraint on a fee simple’s alienabilty the restraint is void.

 

You can put conditions, but cannot restrict the right to transfer.

 

Right of first refusal - if will and try to sell during willers lifetime; willer has option to buy first.

 

Fee simple – created by words; to A and her heirs; this was in past, now courts will presume fee simple was granted unless language clearly shows wanted to create something else, every state follows this rule.

 

2nd freehold estate – life estate – never measured by time only by life. Not a life estate if can go to calendar and see the end date.

 

Life estate by implication – to Lucy and Linda after the death of Lady Bird; lady bird has an applied life estate according to the terms of the will. It can be also for the life of someone else; this is a life estate pur autrivie - the measure of someone else’s life to A for the life of B. When A dies the life estate just goes to A’s estate until B dies.

 

To A for life; then A sells her life estate to B: B now sells a life estate measured by A’s life still the same thing as above only, now the life estate passes to B’s estate for A’s life; till A dies.

 

Forfeiture restrictions on life estates are OK; Bill to Paula for life then to Jennifer, but if Paula tries to sell it then to Jennifer automatically; that’s a forfeiture restriction. Can’t do this with fee simple but can with life estate; does not violate alienability rule here.

 

 

Waste – Maintain the estate, means continuing the normal use of the land in its present condition, no more and no less.

3 kinds of waste:

  1. Affirmative waste: any affirmative action that causes harm to the premises.

    1. If farm land; farm it, mining land; mine it but only what its normal use.

  2. Permissive waste – life tenant has failed to maintain the property

    1. Three things life tenant has to do here to avoid this.

      1. Life tenant has to perform ordinary repairs but not replacement, never have to replace only repair.

      2. Life tenant has to pay the taxes on the property, not future interest responsibility; but if life tenant does not pay the taxes and is sold at auction because of this the future interest is terminated; so future interest must make sure taxes paid for his own sake.

      3. Life tenant has to pay the interest on the mortgage, future interest pay the principle.

 

Limitation on amount for life tenant on how much money has to pay out – limited to the amount of rents and profits received from land, or if no profits received limited to reasonable value of rental if using land; if life tenant not using land not responsible for any repairs or anything. Repairs taxes and interest all have this limitation. Life tenant does not have to insure the property.

 

 

  1. Amealuatrvie waste – when affirmative act you do does alter property substantially; except here it increases the value. Really only one way seen on exam; give you old residential mansion, now surrounded by industry or office buildings; life tenant wants to tear mansion down making the land more valuable for sale, future interest says don’t tear down old family house, want to live there someday. Depends if life tenant can tear down or not. If changed conditions have made the property relatively worthless; the life tenant can tear it down without responsibility to future interest. No unless satisfy the relative worthless requirement then its going to be waste and life tenant will be liable.

 

 

Concurrent estates:

 

Estates held by more than one person at the same time.

 

Need to able to do two things describe and identify the three types of concurrent estate and define their rights and duties.

 

  1. Joint tenancies – have the right of survivorship – 4 people each have a ¼ interest in a property when one dies the others divide the pie between them, the surveying joint tenant swallow up the share. 2nd characteristic here is the right to partition – two people own the same property partition means what it says cut it up, court may draw the lines if needed, if can’t draw a line like in house the court can order a sale and spilt the proceeds.

 

Creation of Joint tenancy – 4 things must coincide for this to work the 4 unites

  1. Time

  2. Title

  3. Interest

  4. Possession

 

 

  1. Time – all interest must have vested at the same time.

  2. Title – it must be the same instrument

  3. Interest – all must take same kind and same amount of interest.

  4. Possession – all must have identical rights of possession.

 

 

What language need to create joint tenancy - today must clearly make you intention known to create a joint tenancy; otherwise court will construe that interest as a tenancy in common, must make it clear.

 

Jointly or to them as joint owners = still not clear enough

 

Have to have words such as to A, B, C as joint tenants with rights of survivorship; or in joint tenancy with rights of survivorship – this is not true in MI. This creates the funky thing in MI.

 

How can JT be destroyed – 2 ways;

  1. Through partition – voluntary

  2. A severance – occurs when anyone of the 4 unities disturbed there is a severance; 4 facts will sever a JT;

    1. A conveyance by one of the JT’s, it destroys the seller JT but none of the others, turns JT in tenancy in common with other JT’s the others are not disturbed they still have a JT.

    2. A mortgage in a title theory state: Ringo mortgages his ¼ interest, does the mortgage create a severance: depends which approach state uses.

      1. Lean theory state – no a severance of JT, Lean theory = no severance. Lean attach to property no title transfer no severance

      2. Title theory state – there is a severance in this type of state.

Title gets severance because title severed.

 

 

  1. Contract of sale – Doctrine of equitable conversion takes place at moment contract is signed so severance at time of signing.

 

 

  1. Creditors sale – Ringo got credit problems – creditor tries to sell property – severance does not occur until actual judicial sale.

 

2nd Concurrent estate –

 

The tenancy in common has 2 characteristics – first the right to partition, and second no right of survivorship. No unities are required except one, all tenancies in common have equal rights of possession.

 

Tenancy by the entirety –

Exists only between husband and wife and required the 4 unities.

How it worked in common law – any grant of any concurrent estate to husband and wife would create TE if 4 unities are there.

TE has two characteristics – first the right of survivorship, and there is no right of partition and not sever able by any unilateral act by either parties.

TE can end in 4 ways only:

  1. Death; other now has fee

  2. Mutual agreement in writing

  3. Divorce will end TE, and change it to Tenancy in common; each will hold half

  4. Execution by a joint creditor. Not individual creditor.

 

 

Allocating rights and duties among co-tenants:

What get and what got to do:

 

 

 

 

 

Begin notes for the West Video

 

 

 

Tape 1 of 3 -

 

 

Property only asks two basic questions –

 

  1. Can you identify the interest in land that can exist in our legal system, only 3 kinds:

    1. Estate gives A right to possess black acre

    2. Easement gives A, a second right, right to use black acre

    3. Restrictive covenant gives A the right to restrict someone else’s use of black acre.

 

2. How then can those 3 basic interests be: 1. Acquired – adverse possession, 2. Retained – raises problem of recording, 3. Transferred – leads to problem of conveyance.

 

The largest of the interests: Estates:

 

One word captures the essence of the estate; Possession – Any time A has some right to possession, even for a limited time, you know A has some type of estate.

 

Freehold estates – Fee simple, fee tail, life estate.

 

Fee simple; how know if have fee simple? Black acre transferred to A, A has a fee simple; all courts presume this today. Words of limitation have now been abolished by every state; and A’s heirs….

Describe; every fee simple necessarily contains two key elements: 1. It can potentially last forever. 2. Every fee simple by definition must always be freely alienable and inheritable. Restraints are void here, cannot restrain her right of use, any attempt to do so makes the restraint void.

 

Two categories fee simple is divided into: Fee simple absolute; largest category known to law, next category the 3 defeasible fees. These are also fee simples interests; why; can sell them, and potentially can last forever. But difference is O the grantor has reserved some right, if a stated event happens in the future.

 

Fee simple determinable – look for magic words; so long as or while or until, words of duration.

Black acre given to A as long as used for farm = fee simple determinable, if factory built then estate that A has terminates automatically upon happening of the stated event.

 

Fee simple subject to condition subsequent – look for magic words; words of condition; if or provided or on condition that. O conveys to A provided that land used for residential purposes and if A fails this O may re-enter and re-claim the estate. If factory built, nothing initially happens A’s estate continues, now O –grantor; has option to re-enter and terminate the estate upon condition happening.

 

Fee simple subject to executory limitation – the estate here will go to a third party upon happening of an event. Look for magic words; but if than to… O convey Black acre to A but if A dies without children then to B. Cut short by a future event transferred to a third party.

Imagine event occurs; A dies without children, A’s estate automatically terminates and goes to B.

 

One problem have to worry about understanding these fees; magic words all jumbled together; to A so long as land used for residential purpose but if ever used for business purposes O may re-enter and take back, whenever language ambiguous can lead to more than one fee; follow common law; law abhors forfeiture; so if choice between fee simple determinable of fee simple subject to condition subsequent then choose subsequent so have option but not automatically take away right.

 

 

Fee tail – can only identify a fee tail when look back in time at the common law – at common law could image O conveys Black acre to A and heirs of his body – here A has a Fee tail at common law. Difference it makes – if A holds only a fee tail still has full right of enjoyment but no power or right to transfer or convey the estate, no matter what, goes generation after generation, no one can transfer it out of the family. No longer around today, if see today O conveys black acre to A and heir of body this today = a fee simple absolute, cannot create a fee tail today – book says five states still have it.

 

Life estate – 3 different way this can be created and identified:

  1. Can create life estate through express conveyance: O devises black acre to A for 100 years if she lives that long, this is not a life estate because must always be measured by life and not time. Means in order to create a life estate must see something like to A for life or to A till she dies and that a life estate.

  2. Estate pur autorvie : to a for life of B. This time B is the measuring life.

    1. Life estate that arises by implication; interpret will says O devises black acre “to Mary after the death of my faithful employee bill, bill gets implied life estate and Mary has an executory interest

  3. Life estates can also be created automatically through dower and courtesy, how could a legal life estate by way of dower be created at common law? Assume at common law H purchases black acre and marries W, 2 years later and sells it to P, and then 30 years goes by H dies W claims dower right; she can; wife is allow 1/3 dower (a 1/3 life-estate) right as long as H held it at any point time while they were married.

 

Describing the life estate: what exactly can the life tenant do without incurring liability to the remainder. Magic words; must maintain and preserve the estate. Defines the minimum and the maximum, no more and no less than to maintain. If ever does anything more or less will be liable for waste. 3 categories of waste:\

    1. Voluntary waste: any action by life tenant that involves physical change in use of property. Can’t mine property if previously used for farming, must maintain and preserve, cannot change the use of the maintained standard.

    2. Almealrative waste: tear down relatively worthless, tear down and increase the value; cannot do this because it is a physical change in use of black acre that increases value of the land. May not do this still constitute waste. The life tenant can avoid liability if it significantly increases value of land and the land is relatively worthless as it is.

    3. Permissive waste: involves inaction a failure to at least maintain nominal repairs. Can’t simply move to Florida and let property rot if life tenant. Must maintain. Just have to prevent decay, duty to repair leaking roof; only have to patch it not replace.

 

 

Future interests:

 

Any time A conveys less than a fee simple there is something left over that something is called a future interest.

 

If know three things about law of future interest will be good to go –

  1. Must be able to classify present estates and future interest together by putting together with the right present estate with right corresponding future interest in order to make up the entire estate.

 

 

Present estate Future interest

 

Fee simple absolute Nothing

 

Fee simple determinable Possibility of reverter

 

Fee simple subject to a condition subsequent Right of re-entry

 

Present estate Future interest

 

Fee simple subject to executory limitation executory limitation; third party holds interest

 

Fee tail Reversion – interest retained by grantor

Following the termination of the interest.

Remainder – interest goes to a third party

After termination

 

Life estate Reversion. Remainder.

 

 

 

 

 

Have to call a remainder either vested or contingent?

2 question for vested:

  1. Who is the remainder man, requires the remainder be born and ascertained.

    1. If not born yet hold a contingent remainder, e.g. to A and heirs.

 

  1. Can the remainder take without condition? No, must marry C therefore only a contingent remainder.

 

 

Old days had property not gift tax, so because tax avoidance on this issue came up with three rules:

 

1. The rule in Shelley’s case:

O conveys to Black acre to A for life remainder to A’s heirs.

 

Trying to save A taxes so A no die with it and pay no taxes. Can’t get away with this….

 

Rule in Shelley’s case says when ever have life estate in A and purported remainder directly to heirs not fooled by it, and the remainder man again become A. Why? So A dies with it and pays his fair share of taxes then goes to his heirs.

 

3 conditions had to be satisfied for this rule to apply:

  1. Conveyance must be in the same instrument.

  2. Both estates had to be of the same character, no other decent reason to create this estate, the life estate either both legal and equitable.

  3. Purported remainder to A’s heirs the phrase A’s heirs had to be used in a technical sense for A’s estate.

 

Once these three conditions apply, the rule in Shelley’s applies and he dies with it and pays his taxes. Rule has for the most part been abolished.

 

Doctrine of Destructibility of contingent remainders:

 

O conveys to A for life then to the first child of A who reached 21.

A has life estate and a remainder to child, contingent remainder, something left over if contingency does not occur, that is, a reversion in O.

 

2 Facts can intervene and destroy contingent remainder held by the first child to reach 21:

  1. A dies, daughter 16 so O gets the reversion at common law. There can never be an abeyance (void, empty time) of seisin. Can’t wait until she is 21 to see if pay taxes.

  2. A sale: O who sells reversion to A the life tenant, A now has a fee simple absolute.

 

This isn’t about fair its about taxes. Seisin was common law social security number; the taxpayer.

 

For the most part this doctrine has been abolished.

 

 

Doctrine of Worthier title:

 

O conveys black acre to A for life remainder O’s heirs.

 

Trying to save O estate taxes; so no die with it and no pay taxes; remainder to O heirs no good and the remainder is in O so he has to die with it and pay taxes on it. Now remains as a rule of construction, now just a synonym for a reversion to O

 

Rule Against Perpetuities –

 

No contingent interest is going to be valid unless it must necessarily vest not later than 21 years after the death of the last person who was alive at the time the interest was created. – Rule against perpetuities.

 

 

Reason – rule designed to prevent property rights from being tied up in contingent claims too far into the future.

 

The application of rule is impossible, according the guy on tape?

 

4 steps to life long happiness and success in handle RAP –

  1. Identify when or when not have a RAP question.

    1. Only two times do you even think RAP in future interest question; i. the contingent remainder, when will it be a contingent remainder; when you cannot answer successfully who the contingent remainder is; ii. Can that remainder man take without condition, got to marry c no can’t take, has a condition.

 

2. If you see executory limitation (interest) which is subject to some external event that will cut short, a present estate and convey to third party and that external event is of uncertain duration (alcohol example) than executory limitation always fails and always violates RAP, anytime event is of uncertain duration; then executory limitation always fails; always violate RAP. Because you do not know when it is going to vest.

Example for above: to X in fee and if ever used for commercial purposes ten to B. Violates RAP; may not be used for commercial proposes 427 years from today.

** Well beyond the lives in being.

 

Contingent remainder little worried; executory limitation really sweating only time think about RAP on a test.

 

 

 

 

Black acre conveyed to X in fee from and after this date of probate by will.

Idea will spring out of A’s estate to X, violates RAP because do not know when will, will be probated.

 

These are the only two future interests that go to a third person.

 

 

 

To apply the rule you use the crack the safe test; ask; is there any possibility no matter how silly; is there anyway I can think of a situation that will go beyond the 21 years limit, was that interest in a deed or in a will, if deed or a will, will make all the difference in the world.

2 hypothetical:

1. O conveys Black acre to all my grandchildren who reach the age of 21;

Always violate RAP; because interest is in a deed and O still alive and can still have more children, and they can have more children, and this can invariably go beyond the limited time period of 21 years, measuring lives may not yet be lives in being.

  1. O devises black acre to all my grandchildren who reach 21; is interest OK; yes; does not violate RAP; because this time in will and the interest does not take effect until O dies and only the lives in being can be part of this; plus 9 months because bun in oven.

 

 

 

 

The unborn widow rule: O devises black acre to X for life, X is 85 years old and married, remainder to widow of X and her life, remainder of children of X who survive the widow, does this violate RAP; yes; why; widow can apply to more than one individual, present wife dies tomorrow X grieves for 15 years, then X marries a14 year old not alive when interest created, new wife has a child, then X dies 1 year later because tired, then have to wait to see if child survives this widow and this could take 50, 60 years, what ever, so violate RAP. Measuring here is the widow; have to wait to see if children are going to survive the new widow (Twinkie).

 

Problem here is looking for lives in being at the time the will takes effect; that is at moment of death.

 

Next problem: Fertile Octogenarian rule: O conveys black acre to X for life remainder to her children for their lives remainder to X’s grandchildren. Can still have children even if 95 years old; silly crazy fantasy X having a baby, and that baby can still have grandchildren; crazy. Has to vest sometime within 21 years of some life in being. X will vest and her children are now measuring lives, but she still can have another child, not a life in being, this has to vest in 21 years using some measuring life; can’t determine life in being, knowing not for sure who the children, some meaning it will not vest in grandchildren necessarily in 21 years.

 

 

Class gifts:

 

Common class here generally children. Gift contingency beyond 21.

 

O devises black acre to children of X who reach the age of 30. RAP violation because X can have more children will/may violate 21 years.

General rule: the gift must vest within period of rule for each and every member of class or void for all.

Three ways can solve class gift problem: at common law:

  1. Watch to see if class closed by X’s death so it is saved.

  2. Class may be closed by convenience, X alive at time of conveyance and X survived by conveyance, one is 20 years old, the other 33 so one already gets his part the class closes around the living member to ascertain rest of living members share.

  3. Specific bequest exception: O specifically bequest to each child of X who reaches 21 years old. X alive has a 21-year-old son; the gift to living child valid, the unborn will not be valid, why, because shares have been specified so can separate the class on this basis.

 

 

 

 

 

 

 

Gifts to charities:

 

2 hypothetical:

 

O convey black acre to John Smith till war ends then to helping hand charity. This is an executory limitation that is subject to an unknown duration, so violates RAP, war could go on for who knows how long.

 

O devises to the heirs peace foundation then to helping hand charity. This time over to helping hand charity is valid; why; charities are governed by rule against perpetuities; with one key exception; rule of two charities, but a gift over from one charity to another does not have to vest in time period of the RAP rule.

 

 

Reform statute: solve common RAP problem:

 

Uniform statutory rule against perpetuities: using an alternative vesting period.

 

Does the interest to these children who reach 30, does it actually vest within 90 years; wait and see. If at end of 90 years everything is vested; then valid good to go. MI does have the wait and see doctrine.

 

 

Concurrent Estates:

 

Joint tenancy: O conveys black acre to A and B jointly. Not joint tenancy anymore; today; two separate elements must be established:

 

First: 4 unities; Time, interest, title and possession.

** Means for A and B to have JT must have everything exactly the same.

 

Next: O’s intention to create a joint tenancy must be expressly and clearly; to A and B as joint tenancy.

 

Describe JT by common law maxim: JT own two different ways, own by the whole and also by the part.

Means: JT own by the whole; whole means survivorship; A dies B continues as owner of estate; B does not inherit idea is they own by the whole.

Also own by the part: part means partition; JT also has right to demand a unilateral partition of the property. A and B can’t get along so partition, by court order, get to go in court by yourself and ask judge split it up.

Severance occurs; transforms the JT in 4 fact situations: transform to tenancy in common:

  1. If A and B are JT, A sells her interest to third party; C will own with B in a tenancy in common.

  2. Watch for a mortgage; A and B, JT, A mortgages interest; only destroys JT if in title theory state; if yes then have TC, as opposed to a lien theory state.

  3. A contracts to sell interest to X, but effective 6 months from now, still severed because of doctrine of equitable estoppel, able to get specific performance so have severance.

  4. Creditor sale as severance: X 3rd party creditor of A if have sheriff sale of X interest.

 

Tenants in Common:

Common law maxim: Tenant in common owns only in part not by the whole: Part means partition. TC also have an individual right to partition, A and B tenants in common don’t get along can partition. No survivorship. If A dies, A’s interest will pass according to her will or terms of the estate.

 

Watch out for relationship between parties as long as co-tenants. As long as you are both co-tenants each of you get to possess the whole, subject to others right to do the same. Can partition. TC is one of the tenants in common dies then goes to estate, no right of survivorship.

 

How know TC and not JT: JT = 4 unities and clear language

TC is anything else, anytime not clear; interests are not even, always tenancy in common.

 

MI exception: Normally JT have rights of survivorship, generally use language to A, B in joint tenancy with rights of survivorship; in MI if you use the language with rights of survivorship you are creating a joint life estate with indestructible dual alternative contingent remainders. In MI just say, as joint tenants do not use with rights of survivorship.

 

The tenancy by the entirety: form of concurrent ownership limited to husband and wife. Next the intent to create this; under modern statutory presumption, must be clearly stated; minimum requirement; to H and W as tenants by the entirety. How different from other two forms. Common law maxim: TE only own one way; flip side of TC, they own only by the whole not by the part. Whole means survivorship, so if H dies W continues as owner of the estate. Just by whole not by the part, so no partition, if H and W no get along still can’t partition, or sold in part, absolutely not subject severance by the individual actions of H and W. Creditors cannot attack; immune form the individual creditors of H and W, only can be reached by joint creditors of H and W.

 

 

 

Adverse possession:

 

Second question property asks. How can those three interests be acquired, transferred, conveyed?

 

 

How do you acquire property rights by adverse possession?

To do this is must give the true owner an action of ejectment against you for 20 years that is statute of limitations at common law, in MI its 15 years, trespass you do not get anything must be possessing. Simply ask do X’s actions show an wrongful possession of the land, and not just series of trespasses.

Elements of adverse possession: HELUVA

  1. Hostile – X is holding in his own right, not a tenant, against interest of true owner.

  2. Exclusive

  3. Last for full statute of limitation of ejectment (or you state statute)

  4. Uninterrupted: continuous.

  5. Visible – open, notorious.

  6. Actual – you must be there; no notion of constructive possession here.

 

4 special rules need to be alert to for adverse possession:

  1. If true owner actually know or not about the possession does not matter; X is a bad person.

  2. Doctrine of constructive adverse possession – enters a portion of a large unitary tract; clears 15 or 40 acres to live on; at end of statute of limitations X owns not only 15 acres but the rest of the 40 acre as well; possession of part of the unitary tract carries possession of the whole.

  3. The life tenant remainder: if true owner conveys property to O for life remainder to R. If before you enter the property is divided between life estate and remainder and 20 years pass only claiming against life estate and have to start all over again against the remainder.

  4. Disabilities: X enters black acre 1 year later true owner goes insane and after 20 years the insane person sane, can she reclaim; no; in order for the disability to be effective then disability would have had to have occurred on same date of adverse possession start; if disability happened subsequent to possession does not take effect.

 

 

 

Retaining the rights: Recording:

 

O conveys black acre to A, then O conveys black acre again, this time to B.

 

What results: in the absence of any recording statutes A gets it not B, because O had nothing left to convey to B after sold to A.

First in time first in right: at common law.

 

Statutes here serve to protect the B, the subsequent purchaser.- Rules in different statute in different jurisdiction:

  1. Notice recording statute: B wins if she purchases black acre from O before A has recorded

  2. Res notice recording statute: two step recording statute: B has to do things to prevail: B must have lack of notice; buys before A has recorded, step 2 if B then records before B does.

 

 

 

 

Tape 2 or 3 ----

 

Non-freehold estate – 4 of them –

These are also known as leaseholds – not part of future interest law that governs the others –

 

When is a leasehold estate a lease for years – any estate measured by a period by time is called an estate for years – if it begins begins at point a and begins at b – no notice it quit is ever required, only non-freehold subject to s/f – if more than one year must be in writing

 

Periodic estate – continuous – it rolls over on itself – unless one of the parties upon proper notice one party decides to terminate – can be created expressly – A to B at 200 per month, month to month can go on forever – it can also arise in 3 diff fact situations wholly by implication – silence plus payment of a periods rent – A leases to B at 200/mnth key fact is silence at to duration of estate – a tenant at will – but once a payment made has periodic mistake that is month to month – second way by implication – an invalid term of years – orally A to B for 5 years a 200/mnth – s/f violation here so becomes a periodic, tenant year to year – third the holdover case, 1 year B does not leave after 1 year sends check to A and A cashes becomes a periodic on month to month basis – before check cashed tenant at sufferance, the check cashing showed acceptance – key chara of periodic goes on forever unless proper notice given to terminate

 

How is notice good – have to give notice equal to the period of rental – if week to week then one week notice month to month – common law rule

 

Estate at will – shortest potential period of duration either party can terminate the lease at any time no notice required

 

Estate at sufferance – any time tenant wrongfully holds over after the end of lease and landlord can recover damages for your trespass – at landlords sole option he can treat you a tenant at his sufferance and make liable for rent – until that election made no notice to quit required

 

 

 

 

 

 

 

 

 

 

When describe leasehold estate describing L and T – five parts to this relationship:

  1. What is the T’s responsibilities to L in this relationship

    1. Two duties – maintain and repair premises, example black destroyed by hurricane, does not have to repair that, repair means duty not to commit waste of any kind permissive or which ever kind – liability changes when lease not silent – with general covenant to repair will have to repair after hurricane, you indemnify in this situation – don’t sign general covenant to repair

 

    1. Duty to pay the rent each and every period as it comes due – when is the tenant ever going to be excused from failure to make payments – 4 facts can arise that give excuse for non-payment – 1. surrender, any voluntary agreement in writing, terminates all duties 2. constructive eviction, L promises heat and ends up no heat, cannot stay must leave, cannot buy a heater and withhold rent, you have to leave – two elements have to be established for this to work, 1st substantial interference with tenants implied covenant of quite enjoyment of , must be really bad to point where premise is unfit for human habitation – 2nd , you must get out, cannot, cannot stay. Third basis for excuse, anytime have condemnation by eminate domain – all or nothing rule – state going to widen highway, state takes parking lot of restaurant on side of new highway, T is still liable for rent, a partial taking not enough must be all or nothing, but in partial taking concept T may recover loss from state as a portion of the condemnation award. 4th grounds for excuse – unjustified abandonment of premise by tenant – L to T for 1 year, T leaves after 3 months no notice nothing, whenever T abandons get three options, first, can if want repossess the premises and this excuses the tenant, next do nothing and try to collect rent from T, T still owns the land, third may try to mitigate and recover deficiency from old T – so must notify T re-letting and plan on collecting the deficiency

 

  1. What L responsibilities to T – 3 –

    1. Duty to deliver actual possession of property – modern rule, landlord must evict the prior tenant who wrongfully refuses to leave, unlike American rule

    2. Must give quite enjoyment of property –tenant will be excused any time you interfere with his enjoyment either by physically kicking out or constructive

    3. The implied warranty of habitability that extends to all residential leases – common law does not provide this protection caveat lessee but there is an exception that applies to residential leaseholds only, commercial leaseholds the idea of caveat emptor still applies

 

  1. Problem of transfer – assignments and subleasing:

 

L leases black to T, then T to t2 – now ask is this assignment or sublease – if T transferred entire interest to t2 and left no reversionary interest for himself, then it is an assignment

 

Sublease is only when on the facts when T is reserving an estate for herself, where T says to t2 I want to come back for last three months of lease

Assuming assignment what is parties’ liability -

 

Every lease has two different feature at the same time – 1st privity of K, lease is K btwn two individuals, 2nd privity of estate a lease is also a conveyance of an estate in land creating a relationship between L and T

 

L to T for 1 year and T assigns to t2 and then t2 assigns to t3 – what’s the liability

 

One at a time – what is liability of L versus T even after assignment to t2, answer T has K with L to pay rent, so T is always secondarily liable after the assignment to t2, t3 is also liable to landlord under privity of estate, he is the tenant, that simple fact alone cinches it, so L can go after T under privity of K and t3 under theory of privity of estate – now if t2 has not made an independent K with L then L cannot sue t2, there was never privity of K and no longer privity of estate

 

Now contrast the liability of the assignment to a sublease – T when transfer to t2 will not convey the entire interest, not whole period or something like that – what is liability to t2 if rent not paid, t2 is a sublease, so has no relationship with L at all, no privity of K or estate, no liability at all

 

Legal effect of non-assignment clause – clause in which the tenant promises will not assign or sublet premises without permission of L – what happens if T violates clause, and assigns to t2 who has a lot of money, L can object just because he feels like – but what happens if gives permission to assign, now t2 assigns to t3 a bad risk, can he object no, waiver kicks in “nice guys, finish last” – Leo Derosha rule – waived once, waived forever – subsequent assignments can be made forever unless expressly reserve the right to object to future assignments

 

Part 4 – of L/T relationship the tort liability – what are landlords responsibility that might occasion a breach – what is L responsibility for the condition on black – common law rule – majority- does not have any responsibility to maintain property in good repair during the term, ordinarily not liable for conditions subsequent which give rise to injury, theory, tenants land not L’s so L has no obligation for conditions that arise subsequently – but over time common law has crafted six exceptions to no maintained rule –

 

  1. Latent defect rule – L is responsible for injuries as a result of a latent defect you know about or had reason to know about, you must alert the world

  2. Furnished dwelling rule – the no maintains rule does not apply here – short term lease of a furnished vacation property – you rent a vacation cottage for 3 weeks it’s a sale of space no transfer of estate in land – therefore implied warranty property free from defect

  3. Common passage ways – L still responsible for common areas, because retains control or possession even after lease is entered into, liable for defects there

  4. Negligent repairs – may have no duty to act but if does must do so carefully, if under takes repairs and in course of doing so covers up condition so it can no longer be noticed, still liable even if repairs are under taken reasonably – you must make the condition better otherwise creating a deceptive illusion of safety

  5. Public use rule – what if you are a L of property used by general public – retail store in shopping center – are you liable in a situation where there is a structural problem, as L yes because tenant will not fix those types of problems – deep pocket theory for business invitees

  6. Most common – Breach of covenant to repair – typically L’s today will K to repair to maintain – if L promise to maintain held to that promise, and also held in tort

 

 

What is tenants responsibility if any –

 

One rule – the occupiers rule – regardless of L responsibility the tenant is always liable to 3rd parties so has primary responsibility as the occupier to maintain premises in good repair while in possession – fact pattern, 3rd party comes over get hurt, sues tenant, tenant says not me landlord, wrong, its tenant, does not matter if tenant has cause of action against landlord its tenant who get sued – tenant must maintain if good repair

 

 

Law of fixtures –

Can arise in sale or mortgage – are fixtures included with mortgage, typically fixtures pass with mortgage – question - Can the tenant take it with him when he goes – furnace, brick walls, washer/dryer – asked L before did, the furnace and everything – asked L if could take with me when left said yes, now says no – what is a fixture a chattel connects to land by tenant with intent permanently improve the property then it becomes a permanent part of land. It is and essential test, if it is an essential use to that property becomes a fixture – washer/dryer can take not essential, gotta have walls so cannot move, regardless of prior agreement essential, furnace he can take it if, he has express permission from the landlord, gotta have heat but has express permission, or if it is a trade fixture, trade fixtures presumes L’s permission

 

The 2nd interest in land – Easement, defined as a non-possessory interest in land -

 

What does this tell, non-possessory – tells you – always, possession of black will be with someone else, second if you are owner of easement you do have a distinct property interest and that is the right to use land of another as distinct from the right to possess that land

 

Carries right of use as distinct as right to possess

 

Classify the easement – break into three fundamental categories –

  1. Appurtenant or in Gross

 

Abbreviations for this section are – easement appurtenant = appr.

 

e.g. assume a owns lot 1 b owns neighboring lot 2, b transfer right of way to 1 to get in and out

 

that is an easement appurtenant – created in connection with his use and enjoyment of a specific land then always easement appurtenant – just have to ask does it directly benefit the use and enjoyment of the dominate estate, lot 2 is the servant estate, the one burdened by the easement, if answer yes then always apprutaent

 

Anything else is an easement in gross – where not particular parcel of land benefits, railroad right of way, or utility lines

 

One key fact turns on these classes and that is method of transfer is have appr. Easement clings to lot 1 and this is inseverable from dominant easement, runs with land – if A sells the land then new owner automatically get it – second is my easement affirmative or negitive – tells you what kind of use been granted – affirmative is any easement that authorizes the doing of an act on a the serviant estate always me to use land in some designated way, drive across, hual water what ever, negative easement – restricts activities done on your land, allows me to restrict your use – similar to restrictive covenant but not, only difference, common law only recognizes 4 negative easements:

  1. Light

  2. Air

  3. Support

  4. Flowing water

 

Every other restriction on use will have to issue restrictive covenant

 

3 ways easement can be created:

  1. Express easement – watch for s/f – easement is a property right and must have a writing

  2. Implied easements – if O owns 2 tracts of land and starts to drive across lot 1 to get to house on lot 2 – easement by implication – decides to sell lot 2 to X and starts to drive across lot 1 to get to house, O can’t complain – 4 elements must be satisfied to get this implication 1. must have been a prior use by a common grantor, O common owner used one part to benefit another, 2. prior use must be apparent 3. prior use must have been continuous 4. O’s previous use must be reasonable necessary is X were to enjoy lot 2 – that’s it, no written expression needed

 

  1. Prescription – differ from #2 in the way they arise by a prior use by a stranger – A owns lot 1 drives across a portion of B’s lot to get to his garage and does for 22 years so gets easement by prescription – this requires an 1. Adverse use of someone else’s land for period of statue of limitation, 20 yrs, 2. must be B acquiesces but not his permission, otherwise will revocable license – need the elements of adverse possession except for exclusivity

 

 

 

 

 

 

Two fundamental issues that remain in easements –

 

What kind of use can I make of my easement once I have it – nature of use – if agreement is silent – perpetual duration is assumed and have a presumption of normal development, and if it does and effects the easement in that matter it expected and OK

 

What happens if a parcel developed into two hundred houses – under presumption of development – as long as long as development was reasonably contemplated then each and every subdivided owner can use the easement

 

But there can be excessive use – what if O who owns easement and goes and acquires huge additional adjoining tract and starts hauling the lumber across you land, you can enjoin him – use of easement can only be used with the use consistent with enjoyment of use of lot 1 that’s all, benefit other land then by definition that is an excessive use and can be enjoined

 

Second major issue -

How can easement be terminated – 5 diff situations that can terminate an easement –

 

A owns lot 1 and B owns lot 2 and B grants easements so A can get to lot 1

 

  1. Merger – if same person owns both lots then destroy, A buys both lots – and if sell later will have to create the easement all over again

  2. Release – can terminate by release – but need a deed or release, an instrument in writing, and express writing needed

  3. Abandonment – requires special facts – in order for A to abandon, A’s intention to abandon msut be estb by some definite action on dominate estate, a builds a house on lot 1 so blocks his own access so could not use it even it wanted to – common drive way

  4. Estoppel – can be terminated by estoppel – req. representation by A, A says will not use anymore coupled a material change in position by B in reliance – B builds a swimming pool A now is estopped from using the easement

  5. Termination by prescription – will need to resolve – what will B have to do to terminate this easement – key is what ever he does has to work – put up a wall and maintain for s/l and that will terminate

 

Oral expression of intent to abandon – A can say to B do not want to use anymore or mere non-use does not terminate – standing all these will not terminate - make no difference

 

License –

 

This defined as a mere privilege to use land – difference is easement is a property right – a license is only a K privilege to use land, since it’s a K it is always revocable – no in rem rights in the land

 

 

 

When is an interest a license – 2 categories:

 

  1. Ticket cases – tickets to go to game or hotel – these create licenses only, means tickets are always revocable

  2. Any time its oral – A orally gives right to B for easement so not in writing it is a revocable license – no transfer of property right w/o a writing

 

 

Final interest in land – Right to restrict someone else’s use:

 

Key legal question that always arises –

How do we enforce a restrictive covenat against a remote party who has purchased burdened land?

 

A owner of lot 1 and B neighbor owns lot 2 - they go to lawyer sign an agreement that a fence will be maintained for rest of time, heirs and so forth – B now sells to X – can A enforce against X the subsequent purchaser of lot 2?

 

Two ways A can try to enforce – 1. Walk into court and try to enforce as a covenant that runs with land at law 2. try to enforce by bringing an action in equity, file an action in equity, seeking to enforce as an equitable servitude

 

Take law side first – running with land at law – files c/a for 20,000 for failure to maintain fence, cannot enforce at law – because at law very rigid narrow rules serve to prevent most restrictive covenants from being enforced – you need to fill 5 elements to enforce at law – 1. must be in writing, 2. must be an intention by parties to be enforcement against subsequent purchasers, successors or assigns, 3. must touch and concern land, deal with real property, must enhance and restrict, - the fence restricts lot 2 and enhances use of lot 1, 4. there must be vertical privity – meaning that when B sells burdened land must sell identical interest to X have all these the fifth is hardest 5. Horizontal privity of estate – meaning – to enforce a restrictive covenant at law there must in the first instance be a grantor – grantee relationship between A and B original granting parties – means, at a minimum, in order to enforce covenant at law, would have to tell you that A owns both lots, there is your grantor/grantee relationship (here is horizontal part) now in a deed in which A is selling lot 2 to B, in that deed B must make promise to maintain the fence – at law a covenant must always be carried by a deed

 

But a can go to court of equity – seeking a mandatory injunction to maintain fence as promised by predecessor B, now is this enforceable against X in equity, yes, a valid equitable servitude binds and restricts lot 2 and runs with the land, and is enforceable against X or and subsequent purchasers who purchases with notice – what elements must be estb to get this enforced as equitable servitude – it must be in writing, has to contain agreement to restrain use of land, parties must intend it to run with land, and key difference, equity says, we do not care about privity we care about notice, instrument must be recorded or some notice must be there

 

 

 

Major question – mutually enforceable servitudes – how do you create this – mutually enforceable restrictive covenants – so that every lot owner can enforce against all others –

 

O developer owns a large tract – sets out lots – no restrictive plat – sells a lot to A and in that deed puts a single family residence restriction and deed is recorded, same story for B – and then key fact, assume rest of 20 lots are sold over time and the last 16 of 20 no restriction - D or E build an office building – can rest enjoin –

 

Yes, a valid equitable servitude binds and restricts all of the land in subdivision and enforceable against any lot owner who tries to violate (see common scheme stuff), this runs with land

 

What do you have to show – 3 elements –

  1. Must first have the restrictive covenant in writing

  2. You must have a plaintiff and must estb intention of O the developer not to just give himself an individual right to enforce, mutual rights of enforcement but intention to give every lot owner the right to enforce, and where do you get this, if says nothing – can be inferred from common developing scheme – that fact he did it shows must have had a plan

  3. Notice – for plaintiff to sue must so defendant had notice – record notice in chain of title works

 

 

How do you create mutually enforceable servitudes – you have restrictive covenant in deeds, and intent to common plan and notice to any possible violator – second issue – whether a particular defendant can escape liability by estb a personal defense – say restriction says, cannot build within 40’ of other house, start buildings within 30’ and defense – 4 defenses possible:

 

  1. Latches – you waited too long, saw when I poured foundation the problem and said nothing, stopping no is undue hardship

  2. Unclean hands – hey you are dirty violator yourself, you violated same restriction so you cannot complain

  3. Estoppel – I was cautious – I asked you and you said ok, I relied on your waiver so can’t make me stop now

  4. Defense of acquiesces – you did not say anything to other person who did this so you can’t enforce against me

 

Final issue here –

 

Issue of termination – can you get rid of these mutually enforceable servitudes – by and large no, they are there to say – can do maybe like a lease agreement 2/3 or ¾ of people agree to release each from the servitude

 

Or one other way – termination by changed circumstances – requires and all or nothing rule – by lot on border of subdivision and later across street commercial pops up can I change mine, no because the rest of subdivision no infected, what about the ones in middle, everything must go or nothing goes, because once start to nibble will effect further into subdivision

Can get title by adverse possession – hostile just means does not have permission

 

Tape 3 or 3 ----

 

Recording:

Recording statutes are mean to protect the subsequent purchasers over-turn common law rule first in time first in right

 

Notice statute – B wins if purchased Black from O before A has recorded – one step

 

Second type of recording statute – Res notice – two step recording statute – B ahs to do two things to prevail – must have lack of notice, but also must have priority of record – B will prevail over A if buy before A did and records be A does

 

Title examinations – 2 step process – must establish a chain of title – Grantee index – index that list every single buyer of everyone of those deeds alphabetically, start with current seller, Jane, then will tell you name of her grantor, Tom, then look up Tom’s grantor and keep going back till hit the marketable title statute limit – 40 years in MI – step 2 – exam, adverse each of the parties in your chain of title to see whether or not your chain strong enough to support claim of your client B – adverse by using Grantor index, this list every seller of deed, alpha, look at each one during their record period of ownership and ask the following qeus – while they owned it did they place an encumbrances on land, easement mortgage, whatever and second has grantor conveyed property to someone else, if so, then there is a fatally break in chain of title

 

In examining the title can wear legal blinders, meaning – only begin looking each grantor alpha from time they acquire property – if G acquired in 1930 and now come forward in time seeing if any entries under G till get to next owner H then move upward till next owner and so forth until you get to your client trying to attain title

 

 

Bone fide purchaser – bfp – only going to protect B she is a bfp – to get bfp must purchase black for value – 2 value questions – the bargain basement sale – if b buys black for 50000 and land worth 1000000 B is a bfp absent any fraud – B is entitled to bargain basement sale – contrast with doomed donee – if B is O’s heir then she is doomed never be bfp will lose to A every time – means basically out of pocket something makes you a bfp – second B must also purchase without notice that A got there first – several ways B might be charges with notice, 1. somebody tells B, A bought land already – 2. Record notice – key thing here – chain of title limitation, not good enough to give record notice to B – A must have recorded in the chain of title so that it will be found by B’s attorney when she looks for it during title examination- when is recorded deed outside chain of title – will have no record notice if A records late or any time A record too early – only begin search from deed in date

 

Recording late problem – assume O convey Black to A and A no record, O now conveys to X also, but X has actual notice of earlier conveyance – X cannot prevail on his own, but X records immediately – A now records late – X now conveys to B who records – B v. A – B wins why, because B will never find A’s deed, recorded title – why because B’s attorney will start with O, then go to X in index and you will never find deed to A which was recorded late, after the deed out to X and I will never find it so no record notice to me

 

Recording early problem – no record notice when record to earlier – estoppel by deed situation –

O owns Black but first conveyance comes from X, X who does not own black conveys to A who records – later O conveys to X who then records, then some time after that X does something similar again because worked the first time – X turns conveys to B and B records –

Take this two step process – as between X and A who acquires the title – A gets it by estoppel by deed, when there after X acquires land from O then that shoots right through X right to A – so A does acquire the rights – now can A retain rights when B enters picture – No, A loses because A recorded to early will never find A – when B adverses – she goes to O and moves to X conveyance and will never find A – B is allowed to assume that now one sells land until someone owns it – so A recorded to early

 

Inquiry notice – test, if B in possession of facts that might lead a reasonable person to make a search then he is stuck with what that search may have found – whether she does search or not – means that there are two specific ways can be placed on inquiry notice – 1. first thing buyer must do when buy land is examine the records, you are on inquiry notice imputed from records, that is, you are on inquiry notice of any unrecorded instruments if ever referred to in any recorded instrument – 2. Must then examine the land – you then have inquiry notice of whatever a physical examination may reveal – stranger in possession you have inquiry notice

 

Final question – How can those interests be transferred:

Law of conveyancing: every conveyance of real property involves two steps:

 

  1. There will be a contract of conveyance –

  2. Date of closing – get to deed, or conveyance itself

 

 

Land contract reg. K just s/f issue here – only significant exception in land K – is the doctrine of part performance – terms of K that buyer is relying must be clear, 50,000 cash deal, closing on X – further they must, second, super proof – they must unequivocally estbl the terms of K in fact finder mind – only two things = good enough proof – in interim buyer takes possession and pays full consideration or second, buyer takes possession and begins substantial improvements

Then and only then will you get specific performance

 

 

2 fundamental question in land K – any warranties that buyer can rely on that are automatic – implied warranty of marketable title – this is automatic in every land K – don’t worry my title is marketable – means 3 things – 1. I will deliver to you proof of my title, adverse possession renders title unmarketable, because cannot establ the rights to the land 2. Will also give you title free from encumbrances – encumbrance is either an easement or restrictive covenant that either limits use of lowers market value 3. seller say finally to buyer and ultimately I will give you at date of closing will give you proof, possessory estate and free from any encumbrance

 

Implied warranty of habitability and workman like quality – not generally available – typical rule is cavet emptor – but have an exception for consumer protection –applies to builder/seller, new homes, of a new home – making builder seller implied warranty is that workman construction makes it habitable and merchantable

 

Risk of loss – Doctrine of equitable conversion – remember here interest of party converted from time contract is signed not at the time deed given, buyer owns land not seller anymore, watch out for problem of risk of loss – seller merely has land security for debt – what happens after contract is signed but before land is transferred seller is still in possession and property burns down who bears the risk of loss – equitable conversion applies – buyers land therefore buyers bears the loss even though seller in possession at time of fire

 

Deed –

 

The doctrine of merger – once deed is handed to buyer the K mergers with deed and it is destroyed the deed represents the final expression of parties after the date of closing

 

Now how does deed pass legal title from seller to buyer –

 

Step 1- must be validly executed, this is formal which req. the writing, name of parties, a granting clause in which we proport to transfer land from seller to buyer and finally needs to be signed by the seller –

 

Once executed must then describe the land with sufficient accuracy to identify it, test can you identify property if yes good enough

 

Step 2 –must deliver deed, standard delivery req. is a test of present intent – did grantor have present intent to part with legal control – it matters not that physical instrument remained in hands of grantor – what if have grantor wants a conditional delivery – e.g. you understand this title passes only if pay money within 90 days of delivery – once use a conditional delivery – and use this then you require in addition to present intent an escrow – must hand to third party escrow, and tell them once get cash then deliver deed

 

Now we have our deed – see what he got –

If deed has no express promises one way or the other then got not much – silence not good in real property – silence is a quitclaim deed – meaning – whatever rights, if any, I have I convey to you and I make no promises what so-ever - but if want more, if want a covenant of title it must be express – typically expressed by seller giving to buyer one or more of the five English covenants as they are know:

 

The first three we call the present covenants –

  1. Covenant of seisin

  2. Covenant of right to convey

 

Both mean will give possessory estate to the property

  1. Covenant against encumbrances – means no encumbrances on property, no easement or restrictive use that limits your use or lowers the market value of this land

 

Last two we label future covenants –

  1. Covenant of general warranty – covenant of quite enjoyment – promise to indemnify you from any third party interference

  2. Covenant of further assurances – e.g. what if seller forgets to sign the deed – will do anything necessary to effectively convey property to you

 

 

Three questions arise here – when can I sue for breach of covenant of title – as to the fist three covenants – immediately your have immediate c/a as to the breach – as to the future covenant cannot sue until it hurts – when you are ousted from property by true owner

 

Who can sue for breach of covenants – 1st three covenants they are broken immediately land conveyed and do not run with land and only first purchaser can sue not the subsequent ones. The future covenants however, they are not broken immediately – therefore future covenants run with land, they are available to all subsequent purchasers may sue

 

Finally, how much money can you get for breach of covenants of title – measure is a limited liability – may not get lost expectancy – only allowed to recover the value of land lost as limited by the purchase paid to that defendant, person suing, can get no more money than he was paid when sold the land plus any actual out-of-pocket expenses for defending the title – sucks because you do not get rising market values, if sue someone 50 years later do not get current market value

 

End

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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