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Course: Real Property Outline For Bar Exam
School: unknown
Year: 2003
Professor: BarBri Bar Exam
Course Outline provided by Legalnut.com
  1. PRESENT FREEHOLD ESTATES;

    1. FSA; (fee simple absolute)

      1. Fully alienable; no restraints on transferability. Any attempt is void – ignore the restriction.

        1. Rt of refusal is not an invalid restraint on alienation.

      2. Conditions; are OK.

      3. Creation of fee simple: “To A” or “to A & his heirs”

      4. If corp owns residential units & pays monthly charges for use of residence, occupants are shs or corp & have leasehold. Corp own residences

    2. FSD;

      1. Uncertain or potentially infinite duration; that can be terminated upon the happening of a stated event. R#147: “So long as operates as a Rail Road” = FSD.

      2. FSSTCS-rt of re-entry

      3. FSSTEI; “but if, then to B” B#95 dies w/o children fsd-stei- not subject to doctrine of waste. Can extract as much as you want. EI has no rt to an acctg. If LT then subject to waste & liable for acctg.

    3. LE; (life estate) “to A for life”

      1. Characteristics;

        1. MI; has DOWER; widows entitlement to use during her lifetime % of all the property her husband property seized at any time during their marriage.

        2. Never mentioned by time, but only by life.

        3. Can be by implication.

        4. Measuring life can be the life of someone other than the life estate holder – “pur autre vie”.

          1. If life tenant dies b4 measuring life dies then

        5. Forfeiture restrictions on LE are OK.

        6. Restrictions on transfer of LE don’t violate rule-prohibiting restraint on alienation.

        7. Rule in Shelly’s case; the life estate merges with remainder t heirs this gives him FSA. R#16

      2. RTs of LT;

        1. Ordinary use of profits;

          1. Rt to removal is incident to possession to FSA or FSD. A shifting EI has no vested interest R#81.

          2. Lt-heirs are entitled to proceeds from fruitis naturalis-unharvested wheat. R#102.

      3. Duties of LT;

        1. Pay RE taxes

        2. Maintain” the estate; continue “normal use”.

        3. Legal waste; remedy is $ damages.

          1. Affirmative/Voluntary waste-Natural resources; is an affirmative action beyond rt of maintenance causing harm to the premises.

            1. LT is liable to remainder-man for voluntary waste, accounting and proceeds. Doesn’t apply to contingent remainder b/c not vested. R#90.

          2. Permissive waste; T failed to maintain in “reasonable state of repair”.

            1. LT must repair not replace (LT = life tenant)

            2. LT pays all the taxes; pay special assessment for public improvements of short duration.

            3. LT pays any interest & holder of future interest pays principle.

            4. Limitation on life tenants liability;

              1. For repair, taxes, & interest the LT obligation is limited to amt of income rec’d

            5. LT does NOT have to insure the property.

          3. Ameliorative waste; voluntary waste that occurs when the act alters the property substantially but INCREASES the value (benefits the property economically). If changed conditions have made the property relatively worthless in its current use, LT can tear dwn. R#62

        4. Equitable waste;

          1. Remedy is an injunction. LT cant tear dwn trees if land has never been used to cut dwn trees. Likewise LT can only make use of open mines & can’t open any new mines. Remainder man can sue for injunction & an accounting for proceeds. Prevent more damage to the reversionary interest. R#61/R#63

    4. Class Gifts;

      1. Gifts to a class of un-named persons; (A’s children)

      2. If members die b4 T then their gift lapses.

      3. Rule of Convenience; class closes when anyone of the class is entitled to distribution.

 

 

 

 

 

  1. FUTURE INTEREST

    1. Interest Exists now but possession will occur later

    2. Topics on the Exam;

      1. Classification rules and

      2. RAP: “rule against perpetuities”.

    3. Classification rules;

      1. Future interests Retained by grantor (aka “OR”);

        1. Reversion; ex LE.

          1. Give less than the durational estate that the OR had

          2. O to A for life. O has reversion & A has life estate (LE)

          3. Reversion is never subject to RAP

          4. Reversions can be transferred freely

        2. FSD - Possibility of reverter; EXCEPTION TO “PROHIBITING T FROM MORTAGING PROP”

          1. Look for conditions in transfer

          2. Whenever the OR gives a fee simple determinable (aka FSD), OR keeps the possibility of reverter.

            1. Ex; O to A “so long as” no liquor is sold on premises.

          3. Look for language:

            1. So long as

            2. While

            3. During

            4. Until

        3. FSTCS - Right of re-entry (aka power of termination) (alternative to a trust)

          1. OR gives “FS to a condition subsequent” (aka FSTCS), OR keeps a right of re-entry.

            1. EX; O to A & A’s heirs provided however, that if liquor is ever sold on the premises then O shall have the rt to re-enter and retake the premises.

          2. With FSSTCS title does not automatically go back to OR if the condition is violated. OR must Exercise the rt of re-entry.

          3. Look for language:

            1. Provided however,

            2. Give OR the rt to “go & re-take” the property.

            3. But if, & upon the condition that

            4. WATCH OUT; “for the purpose of” has no effect on title.

              1. EX. To U of M “for the purpose of” a library. If U of M doesn’t build a library then U of M still gets to keep the land. All you can do is sue for breach of K.

          4. To get a FSSTCS, OR must Expressly reserve the right of re-entry.

          5. Rt of re-entry is NOT subject to RAP (R#78/79); but it can’t be transferred inter vivos by will or intestate succession.

        4. MI. EXAM. In MI the possibility of reverter and rt of re-entry are limited to 30 yrs unless between 25 yrs & 30 yrs; A letter of continuance is filed.

      2. Future interest given a grantee (aka EE).

        1. Remainders;

          1. Vested remainder [(1) born & (2) alive now]; nothing stands in the way of it becoming possessory on the Expiration of the estate that becomes b4 it. That is we know who will take and there are no conditions to the taking.

          2. EX; O to A for life, then to B and her heirs. B has VR; O has nothing; A has LE.

          3. A – B – C. C died b4 conveyance to B so C & C’s heirs are cut off & reversion to A if dies b4 conveyance. R#178. C is not vested.

          4. Vested remainder subject to open (aka VRSTO); where the remainder interest is to a class whose members are not fully known; the class remains open to allow for future persons who qualify as members of the class (e.g. future children).

            1. EX; O to A then to A’s heirs. O has nothing; A has LE; A’s children have a vested remainder subject to open.

            2. VRSTO is also called VRS to partial divestment.

          5. Contingent remainder; something has to happen b4 the remainder can become possessory.

            1. Freely alienable; CR can quitclaim his interest – its freely alienable.

            2. Conditions; no rt to rent until vested / no rt of possession.

              1. EX; O to A for life then to B and his heirs if B is 21 on A’s death. B has CR; O has reversion; A has LE.

            3. Grantee not in Existence;

              1. EX; O to A for life then to A’s children. A has no children. O has reversion; A’s children are contingent remainders.

            4. Identity of Exact taker is unknown.

              1. EX; O to A for life then to A’s widow. A is married to B. A’s widow is a CR b/c widow cant be identified until husband dies.

              2. Remainders never affect the estate that comes b4 them.

        2. Executory interest;

          1. Operates to cut short the estate that comes b4 it. It doesn’t come into possession at the natural Expiration of the earlier estate.

            1. EX; O to A for life then to B and his heirs “;” (Punctuation breaks up the estates) but if at B’s death B is not survived by issue, then to C and her heirs. B has VRS to an Executory interest (aka VRSTEI). C has EI.

          2. VRSTEI is sometimes called a VRST total divestment.

          3. Holder of an Executory interest CAN’T sue life tenant for waste.

            1. EX; O to A for life then to B but if B marries D then to E. B has VRSTEI; E has EI. If A commits waste B can recover b/c she is vested remainder but E can’t recover.

 

    1. RAP;

      1. Applies to:

        1. CR;

        2. Shifting executory interest; “to A for life remainder to B but if B predeceases A then to C & c’s heirs.” C has shifting interest if B dies. R#66.

          1. To M to care for horses & if not proper care then to D. Violates RAP. R#160&161.

        3. Springing executory interest; “to X when and if he becomes a doctor”

        4. VRSTO; “to A for life, then to A’s children equally”

        5. Options & rt of 1st refusal; No RAP violation if limited to “his lifetime”. R#114.

        6. Trusts

      2. Defined; no interest is good unless it must vest, if at all, not later than 21 yrs after some life in being at the creation of the interest. If there is any chance that an interest might vest outside a life in being + 21 yrs , that interest is void.

      3. Don’t look for a particular person as the life in being. Life in being means anyone alive at the time of the grant dies, and 21 yrs pass, b4 the interest might vest? If so, it’s void. .

        1. EX; O to A and his heirs so long as no liquor is consumed on the premises; and if liquor is consumed on the premise title shall go to B and her heirs. O has nothing; A has FSDSTEI; B has EI. After RAP; O has Possibility of reverter; A has FSD; B has nothing.

        2. In case of deed, the period is measured by date of delivery; S had no children @ time of conveyance, so children portion violated RAP. R#156.

      4. Perpetuity savings clause; saves a grant from being voided by RAP by making sure vesting occurs w/in time period of the rule.

        1. EX; O to A and his heirs so long as no liquor is consumed on the premises; and if liquor is consumed on the premises during the lifetime of A or B “or within 21 after the death of the survivor “ of A or B, then title shall pass to B and his heirs.

      5. MI has a “wait and see” statute, which is for 90 yrs for RAP.

      6. MI; No doctrine of worthier title.

      7. Options and right of 1st refusal violate RAP.

      8. Charity Exception; RAP is never violated if the gift over is from one charity to another.

        1. EX; O to church so long as used for church purposes, and if ever cease then to church2. Church 2 has EI; no RAP violation.

        2. Both EE’s must be charities.

      9. RAP and class gifts: gift over to a class following an earlier estate;

        1. Age contingency in an open class: watch for facts where the class is open and the gift over is contingent on a class member reaching a certain age.

          1. O to A for life, then to A’s heir that reach 30. At O’s death A has no children. Provision regarding A’s heirs violates RAP.

          2. WATCH OUT; fertile octogenarians; anyone, regardless of age, is capable of having children for purposes of RAP.

          3. If RAP operates to void the gift over to any member of the class because of the possibility that interest might vets outside the present time, then ALL members of the class lose, even those who satisfy the condition and thus are already vested.

 

        1. The unborn spouse; watch for a gift over following a widow or widower’s estate, where the gift over cannot vest until the widower dies.

          1. EX; O to A for life then to A’s widow for life, then to A’s children who are then living. A has a LE; A’s widow has a remainder for life that is contingent; A’s children have a CR; RAP doesn’t void the gift to widower; but the RAP does void the gift to A’s children. This is because A’s widow may not be born at the time of the creation of the interest.

        2. Transfer by will; if transfer is by will look at situation as of time of testator’s death if by deed look at situation in deed.

          1. EX; O by will leaves land to O’s widow for life, then to O’s children who are then living. A will operates on the death of the testator, not when the will is executed.

      1. Restraint on Alienation; is void strike that clause.

 

  1. TRUSTS

    1. Created in writing by a settlor giving title to property to a trustee who holds and manages the property using the highest care and skill for the benefit of the beneficiaries of the trust.

    2. Trust can be created intervivos or by will.

    3. Trust is subject to RAP.

    4. MI; restraints on alienation of an “equitable int in a spendthrift trust is valid in MI b/c the is not a “real property int”.

    5. Charitable trusts unlike private trusts do not have named individuals as beneficiaries but organizations or groups of people.

      1. Cy Pres. A court may alter the terms of a charitable trust in order to further settlor’s intent. For Example the settlor’s purpose of the trust becomes impossible to perform or it’s illegal. EX. Polio trust no longer needed.

    6. Resulting Trust; an attempt to establish a trust that fails.

 

  1. CONCURRENT OWNERSHIP; Talk about “TERM & TERMINATION.”

    1. Joint Tenancies (JT) each tenant has an undivided interest in the whole estate, & surviving co-t has the rt to the whole estate.

      1. Two characteristics;

        1. RT of survivorship

        2. Rt to partition

      2. 4 unities;

        1. Time; all interest must vest at the same time

        2. Title; grant to all JT must be by the same instrument

        3. Interest; JT’s must take the same KIND & same AMOUNT.

        4. Possession; identical rts of possession.

      3. Use language “as joint tenants with rts of survivorship.”

        1. NOT “as joint owners” or “jointly”

      4. Destruction of joint tenancy; 2 ways

        1. Partition; (by equity ct) which is a voluntary destruction.

          1. JT has no rt to contribution against other JT for repairs/improv, but if partition then ct will consider. R#54

        2. Severance; which is an involuntary destruction. Occurs whenever any one of the four unities is disturbed.

          1. Ways to sever;

            1. Conduct of parties” B#91.

            2. Conveyance by one JT. Severance as to extent % of interest conveyed. R#200.

            3. Mortgage; in a title theory. MI us a lien theory so no severance. Sale of a portion, creditor can involuntarily take JT shs & severe jts. R#115. Mortgagee owns int mortgaged. Severs jt R#155.

            4. Contract of sale; equitable conversion-severance occurs when a contract of sale is signed.

            5. Creditor’s sale; must have a judicial sale.

            6. Death; if simultaneous death then divide as if tnc R#146.

          2. No severance

            1. ; leasing property

      5. MI; JT with indestructible survivorship. In MI if you use Express language “with rts of survivorship and the survivor…” this creates a joint life estate with each person having a contingent remainder. In MI JTWRS can’t be destroyed by partition.

    2. Tenants in common; TIC; each t has a distinct, proportionate & undivided interest in the prop. No rt of surv.

      1. 2 characteristics;

        1. Right to partition. Concurrent owners maybe charged for use & occupation of property (the reasonable rental value) & may be given credit for the value of improvements, repairs or taxes paid. R#54.

        2. No rt of survivorship.

      2. Unities required;

        1. Only one unity is required: possession. All T’s must have equal rts of possession.

      3. Duties; no duty to pay rent to other co-t but must acct for rents rec’d.

    3. Tenancy by the Entirety; yes in MI.

      1. Rt of survivorship;

        1. Death; if simultaneous death then divide as if tnc R#146. Same as in JTWROS.

      2. But no rt of partition; creditors of one spouse cant reach (2/00)

      3. Cant advice C to make fraudulent transfers.

    4. Allocating rts and duties btwn or among tenants;

      1. Possession; each co-t has the rts to possess all the property; can occupy w/ no rent liability.

      2. Accountability; one co-t does not have to account to another for a share of profits the co-t rec’d.

        1. Four Exceptions;

          1. Ouster (for adverse possession); accounting is required if one co-t is either keeping a co-t off the property or claiming a rt of Exclusive possession. R#28/#55.

          2. Agreement to share;

          3. Lease of the property to a 3rd party

          4. Depletion; of the natural resources.

      3. Contribution; rt of one co-t to force others to pay their share of some Expenditure co- made.

        1. No contribution for improvements but yes for repairs that is necessary. Upon sale the co-t that paid for the improvements can recoup his improvements cost at partition or sale of the property.

        2. Contribution is available for any mortgage on the property or tax, assessments for streets, sewer.

        3. Rt to rec/ ½ the rents & accounting.

 

  1. NON-FREEHOLD (LANDLORD-TENANT) ESTATES;

    1. 4 kinds of leasehold; leaseholds are an estate in land where the t has a possessory interest & LL has future int “reversion”;

      1. Tenancy for yrs; fixed period of time; “A to B for 2 yrs”

      2. Periodic tenancy; successive periods; month to month

      3. Tenancy at will; terminable at will of either LL or T.

      4. Tenancy at sufferance;

    2. T 4 yrs;

      1. Key word: Specified time-fixed time; does not have to be 4 yrs

      2. EX. 1-1-1999 to 6-1-2004

      3. Measured for a fixed period of time; no matter how short.

      4. Statute of frauds; if tenancy is over 1 yr. One yr is ok; one yr & one day is not.

    3. Periodic Tenancy;

      1. Keyword; is repeating; an ongoing, continuing, repetitive estate, until one party gives valid notice. (e.g. month to month or yr to yr). Tenancy for yr to yr can be terminated at any time in MI.

      2. At time of signing lease didn’t convey a term of yrs at law but a term of yrs at equity. Once you take possession then have a term of yrs at law. R#170.

      3. Three ways to create;

        1. Periodic tenancy by Express agreement;

        2. Periodic tenancy by implication; where lease is silent to its duration.

        3. Periodic tenancy by operation of law;

          1. 2 situations;

            1. Oral lease; violating S of F. Acceptance of rent by landlord (aka LL) creates a periodic tenancy by operation of law, even though the lease itself violates the S of F.

            2. Hold over; tenant stays after Expiration of lease & LL accepts rent. This creates a periodic tenancy by operation of law.

              1. EX; after the end of a one yr lease – then a periodic tenancy from month to month will have been created.

      4. Termination of a periodic tenancy; occurs by giving proper notice.

        1. 2 requirements for proper notice.

          1. Time; equal to the period. Exception; if tenancy is year to yr, just 6 months notice is required. MI 1 yr notice is required for an yr-to-yr lease.

            1. M 2 M requires 1 M notice. MI; one-month notice. 6 months notice if lease is 1 yr or longer. LL doesn’t need to give notice if lease expires at a certain date.

            2. Licensee needs no notice, he must vacate upon revocation of license.

          2. The rt effective day of termination; the last day of the period.

            1. EX; lease starts on 7-15-1997 as PT from month to month. Effective day should be 9-14 of that yr which is the last day of the period.

    4. Tenancy at will;

      1. Either party can terminate at any time without notice. MI must give one month notice.

      2. Five ways to terminate;

        1. Death of either party

        2. Waste by the tenant

        3. Assignment by the tenant

        4. Transfer of title by the landlord

        5. Lease by the LL to someone else.

    5. Tenancy at Sufferance;

      1. LL can;

        1. Hold T as a wrongdoer trespasser and sue to throw T off the property and recover damages for the hold over OR

        2. Impose a new periodic tenancy on T:

          1. For residential property, the new period will always by month to month

          2. For commercial property, the new period is determined as follows;

            1. If the old Expired tenancy was for a yr or more then the new tenancy is yr to yr.

            2. If the old tenancy was for less than a yr, the new tenancy is measured by the rent of the old tenancy.

        3. New tenancy must be reasonable.

          1. LL must tell T of higher rent b4 the Expiration of the lease.

      2. Self Help;

        1. NO self – help must get judicial notice. LL owes treble damages.

          1. Damages by statute; simple damages by jury are tripled; for forcible entry/self help.

 

  1. DUTIES OF LL & T;

    1. Tenants duties;

      1. If lease is silent on T’s duties, T must;

        1. Pay rent; MI if leased premises is unfit for habitation and T is not at fault then T has no obligation to pay rent. CMN LAW: must pay rent even if premises are destroyed (even by acts of GOD). R#20/#29

        2. Condemnation of parking lot; no rent abatement look to “apportionment” of damages b/c can still occupy premises. R#120.

        3. Not commit waste; Ameliorative waste changes the physical condition of the property.

        4. If lease covenant says that T will repair & maintain then T must do so. This makes T an absolute insurer. But T is not responsible for ordinary wear & tear.

          1. EX; if house is burned down then T is liable to rebuild.

          2. EX; if lighting strikes T’s house and it burns then T is liable & must rebuild.

      2. LL remedies;

        1. If T fails to pay rent then LL can sue for both damages and to throw T off the property.

        2. If T unjustifiably abandons the leasehold LL has 2 choices.

          1. Treat abandonment as an offer of surrender and accept the offer by retaking the premises; thus ending T’s liability as to that date.

          2. Re-rent the premises on T’s account and hold T liable for any deficiency. (Mitigation of damages).

    2. LL duties;

      1. To give possession of the premises when lease begins

        1. If LL cannot give possession, LL has breached.

      2. To deliver residential premises in a habitable condition:

        1. There is an implied warranty of habitability (in residential property ONLY!; ex/ m/have wiring in house). LL must provide property that is reasonably suited for residential use.

          1. If LL knows or s/h known of dangerous conditions @ commencement of lease then LL is liable to all foreseeable P’s. R#47.

        2. If LL breaches implied warranty, then T has 2 options:

 

          1. T can just move out and end the lease.

          2. T can stay & sue for damages.

      1. Implied covenant of quiet enjoyment; in every lease LL makes an implied covenant that he will not breach the covenant. 3 ways LL can breach:

        1. By total eviction of T which terminates the lease, ending T’s obligation to pay.

        2. Partial eviction of T, which does not terminate the lease, T can stay and pays NO rent to LL. EX LL has locked T out of the basement.

          1. If partial eviction is by someone with better title, T’s rent is apportioned by the amount taken away.

        3. Constructive eviction; where LL fails to provide a service LL is supposed to provide, thus making premises un-habitable. MI every lease the LL covenants that the property is FIT for intended use & LL will keep the property in reasonable repair & T can w/hold rent until repair is made.

          1. Liability for rent is not affected by 3rd persons if 3rd persons only interfere w/ ee’s enjoyment of land. But if substantial then constructive eviction & ee doesn’t have to pay rent. R#173.

          2. For T to be Excused, 3 requirements:

            1. LL has to do it;

            2. Must be substantial interference with the covenant of quiet enjoyment;

            3. Must be an abandonment of the premises within a reasonable time after the breach;

        4. Condemnation;

          1. Partial taking of a leasehold estate by condemnation & the remaining portion is susceptible to occupation; rental pmts are not abated. T s/look to apportionment of damages based on reduced rental value of lease. R#43.

        5. Doctrine against retaliatory conviction. B#100 complains and LL increases rent or evicts T.

          1. Doesn’t apply if lease is expired. 2/88

 

  1. ASSIGNMENTS & SUBLEASES;

    1. Assignment; when T transfers everything. EX. T transfers his “remaining interest in the land.”

    2. Sublease; when T transfers a portion of the lease period. Lease for 3 months of a 10 yr lease.

    3. Assignments;

      1. If LL sells bldg then for T to be liable to LL2 then T must have notice of assignment B#86.

      2. If K is in writing then assignment m/be in writing.

      3. A lease is both a conveyance and a K, and these are separate and independent grounds of liability.

      4. Privity;

        1. Liability on the conveyance comes out of privity of estate (POE-assigee is liab). Ask is there POE btwn LL and whichever T is being asked about? If yes then there us liability on the conveyance.

        2. Liability on the K comes out of privity of K (POC-assignor is liab). Ask is there POC btwn LL and whichever T is being asked about? If yes then there is liability on the K.

        3. POE Exists only btwn the present LL and the present T

        4. POC Exists where there is an agreement btwn the parties, or where assignee “Expressly assumes” the obligations under the lease.

          1. EX; LL lease to T1. T1 leased to T2. T2 leased to T3. LL can collect rent from T1 after T1 has assigned to T2 b/c of POC over T1.

          2. EX; LL can collect rent from T2 b4 T2 assigns to T3 b/c LL has POE over T2. “Present T & present LL”.

          3. EX; T2 assigns to T3; LL can’t collect from T2 b/c no POE or POC.

          4. T1 remains liable for fire ins even if he assigns to T2. Liability doesn’t terminate with assignment.

      5. Running with the land; In addition to rents, other covenants will run with the land if they touch & concern the land. (pay taxes) R#41.

        1. T&C test; if performance of covenant makes the land more valuable or more useful, then it meets the T&C test and runs with the land.

          1. EX; a covenant to have T fix the fence runs with the land.

          2. EX; a covenant to have T pick up LL’s mail doesn’t touch and concern the land so it is not enforceable against successor T’s. Its personal in nature.

        2. T sues LL; if LL sells to a successor LL, can T sue the original LL and any successor LL on the lease?

          1. Original LL continues to be liable b/c of POC.

          2. Successor LL is also liable to T, provided lease covenant runs with the land and there is either POE or POC.

            1. EX; if LL leased to T. Then LL sells to LL2. T can sue LL2 if the covenant T&C the land.

    4. Subleasee (SLE);

      1. SLE is not liable to LL b/c no POC or POE. R#42/#37. LL cant sue sublease

    5. Non-assignment clause or non-sublease clause.

      1. T may not assign or sublease w/o L’s permission.

      2. Two Q’s:

        1. Valid and enforceable? Yes even though a restraint on trade.

          1. Clauses are construed narrowly; non-assignment clause does not prohibit subleases

          2. Violation of a non-assignment or non-sublease clause merely makes the attempted transfer void able at the option of LL, and if LL does nothing.

          3. Rule in Dumpors case; if LL grants consent to one transfer he waives rt to contest future transfers.

        2. What is the effect of LL’s giving permission for an assignment?

          1. Permission given once means the non-assignment or non-sublease clause is waived for all time, unless LL states otherwise at the time of giving permission.

          2. Acceptance of rent by LL gives permission for a transfer even if there is a non-assignment or non-sublease clause. This creates LL’s waiver.

 

 

  1. CONDEMNATION;

    1. If state takes property under a lease by its power of condemnation, there are 2 Q’s

      1. Is T Excused from paying rent?

      2. Will T share in the condemnation award?

    2. Answer: look to see if only part or all of the leased property is taken.

    3. Partial taking; doesn’t release T from obligation to pay FULL rent, but T gets an amount equal to the rent that will have to be paid over the remainder of the lease for the property taken.

    4. Full taking; Extinguishes the lease and T is Excused from paying rent.

      1. T shares in the condemnation award only to the Extent that fair rental value of the lease Exceeds rent due under the lease.

 

  1. LL’s TORT LIABILITY; p40

    1. General rule at cmn law: no duty of LL to T or T’s invitee for injuries on the premises during the life of the lease.

      1. 5 Exceptions;

        1. Latent defects. LL is under a duty to disclose latent defects, which LL either knows or has reason to know of.

          1. Latent defect is a defect that T does not know of and a reasonable person in T’s position would not discover.

          2. LL doesn’t have to repair on to disclose.

        2. Short-term lease (3months or less) of a furnished dwelling; LL is liable for defects even if LL neither knows nor has reason to know of them.

        3. Common areas under LL’s control; if injury is in an area subject to LL’s control then LL is liable if LL failed to use reasonable care. EX; hallway in an apt bldg.

        4. Negligent repairs; LL is liable for injury resulting from LL’s repairs of a defect in the premises, even if LL used all due care in making the repair. Rationale is that LL has created a deceptive appearance of safety for which LL is liable.

        5. MI; LL is not liable for consequential damages resulting from his failure to repair.

        6. Public use Exception; invitee tripped on floor.

          1. LL is liable for injury form defects in the premises, if three requirements are satisfies:

            1. LL must know or should know of major defects and

            2. LL must know or should know that T will not fix the defect and

            3. LL must know or should know the public will be using the premises.

 

  1. T’s TORT LIABILITY;

    1. T’s liability to 3rd P

      1. T is always liable to 3rd P invitees for negl failure to correct dangerous conditions on the premises, regardless of whether L may be contractually liable or not.

 

  1. FIXTURES; description doesn’t have to be in deed description.

    1. T installs chattel on the prop. If the attached property became a fixture, chattel cant be removed by either S or T.

    2. KEY; to determine if something is a fixture: look at T’s intent.

    3. If there is an agreement regarding the matter, that controls. If no agreement look at 5 facts;

      1. Intent;

      2. Degree of attachment (w/cement) the more that has to be done to attach it to the property, the more likely the intent that it stay

      3. General custom; is this the type of thing that S or T would normally leave?

      4. Degree of harm to the premises on removal.

        1. Substantial damage; if T can remove item w/o substantial damage to the premise, then cts will allow an inference that there was no intent that the item was a fixture.

      5. Trade fixture; is not a fixture and can always be removed. TF are chattel used in a trade or business.

        1. Mortgagee’s claim to trade fixtures is greater than LL upon foreclosure. R#65.

    4. Washers & dryers are not fixtures. T can always take them when they go;

    5. If T can remove the chattel, it must be removed B4 the end of the lease

    6. If owner can remove the chattel; it must be removed b4 closing.

    7. Oral consent to remove fixtures by LL at end of lease is enforceable on new LL. R#193.

    8. T can remove fixtures b/c she used them for beneficial purposes. B#48.

 

  1. EASEMENTS;

    1. KEY: concept with easements is USE.

    2. License is a revocable privilege to enter on land of another.

    3. Defined; an easement is a non-possesory interest involving the right to use land.

    4. 2 types;

      1. Easement appurtenant; when the easement directly benefits the use and enjoyment of a specific piece of land. Conveyance of easement appurtenant carries with it all easements and profits appurtenant unless expressly provided otherwise. R#136.

        1. Always 2 pieces of property involved in an easement appurtenant:

          1. Burdened property aka servient estate.

          2. Benefited property aka dominant estate.

      2. Easement in gross; where there is no dominant estate. EX; utility easement R#125 (pwr lines, railroad tracks) if easement holder makes “proper use” of easement – implied consent to damage servient estate B#52.

    5. Creation of easements;

      1. Express easement; Express grant of an easement to someone or the reservation of an easement when land is sold to another.

        1. If exact location is not established then look at “use & acquiescence”.

        2. An easement is an interest in land and must comply with Statute of Frauds. Easements for one yr or less do not have to be in writing.

        3. In writing and signed by the holder of the servient estate and Executed like a deed.

      2. Easement by Implication; look for:

        1. Previous use by a common owner and the previous use is:

          1. Continuous

          2. Apparent (open & obvious, not hidden)

          3. Reasonably necessary

          4. Preexisting use

        2. Absolute right of access situation; an easement by NESSESITY Exist when the property is land locked. A landowner can’t be land-locked.

        3. The owner of the servient estate can choose the location of the easement so long as the location is a reasonable one.

 

      1. Easement by prescription; like adverse possession. R#83.

        1. Oral permission can ripen into easement by prescript’n.

        2. 4 requirements:

          1. Use m/be adverse to the owner-just like trespass on title of owner.

          2. Use must be Continuous and Un-interrupted for the statutory period.

            1. Seasonal use can be OK.

            2. Time period is 20 yrs under cmn law; MI 15 yrs.

          3. Use must be either Visible and Notorious or with the owner’s knowledge

          4. Use must be Without the Owner’s Permission.

    1. Transfer of easements;

      1. Indenture; indenture granting cross easements is a deed to which two or more parties enter into a reciprocal & corresponding grants and obligations servient & dominent tenement are involved. Indentures have restrictions in covenants. R#122.

      2. If the easement is appurtenant, it goes Automatically along with the dominant estate, whether it is mentioned or not in the conveyance and Cant be transferred separately from the dominant estate.

      3. If easement is in gross; then easement in gross that are Commercial can always be transferred, but easements in gross that are personal cannot be transferred.

      4. Transferring the Burden of the easement:

        1. Easements are always binding on subsequent holders of servient estate, even if the easement is not in their deeds, provided that the subsequent holder had Notice of the easement.

    2. Use of easements;

      1. Look at terms of the agreement if one Exists.

      2. If easement is silent there are 2 presumptions:

        1. Its presumed that the easement is perpetual; aka lasts forever

        2. The use presumed is that of reasonable development of the dominant estate, that is, the kind of use that would have had reasonably contemplated by the parties when the easement was created.

      3. Excessive use; remedy is to enjoin NOT terminate the easement. Constructing an office bldg on residential lot servient tenement can “enjoin” office workers from use. R#129.

        1. If the easement is for ingress & egress then can enjoin DE from putting up a fruit stand. B#30.

    3. Repair of the easement;

      1. Holder of the easement must keep the easement in repair and can always go on the servient estate to repair the easement, even if the grant of the easement doesn’t specifically provide the right to enter and repair.

      2. Holder of the easement is obligated to make necessary repairs; holder of the servient estate has NO obligation of repair.

      3. Ex. A owned lot 1 & 3 & put pipe along lot 2. If pipe bursts & floods lot #2 then no S.L for damage b/c only liable for unreasonable interference w/ use & enjoyment.

    4. Termination of the easement; 6 ways to terminate the easement;

      1. Unity of ownership aka merger R#80; dominant estate purchases the servient estate or vis versa

        1. Once an easement is terminated through unity of ownership, it is dead and never revives.

      2. Valid release; must comply with the statute of frauds. Cant be oral

      3. Abandonment; the intent to abandon must be manifested by taking some physical act on the property itself that would show intent to abandon.

        1. Mere NON-USE; no matter how long is not abandonment.

        2. Need abandonment by action.

      4. Termination by estoppel;

        1. 2 elements;

          1. There must be a representation of relinquishment by the holder of the dominant estate AND

          2. Change of position in reliance by the holder of the servient estate.

      5. Termination by prescription;

        1. Owner of servient estate must stop the use of the easement and keep it stopped for the statutory period.

      6. End of necessity;

        1. Once the necessity that created the easement ceases to Exist, so does the easement.

        2. NO implied easement for AIR or LIGHT.

 

  1. LICENSES;

    1. Defined; a license is a privilege of use, and NOT a property interest; it’s only a K rt; and it’s revocable at the will of the licensor.

    2. Licensor may have to pay K damages for wrongful revocation; but there are no property rts.

      1. Hotels; R#60.

      2. Tickets are always licenses. Tickets give no in rem (property) rts, only K rts

        1. Can always be revoked; but K damages may be imposed.

      3. Irrevocable License; license + $ spent on property furthering the license

        1. 2 rules;

          1. Anytime an easement is attempted but fails due to the Statute of Frauds, there is a license.

          2. If $ spent on the property in furtherance of that oral license, the license becomes irrevocable and just as good as an easement, and can be enforced under the principle of estoppel.

    3. Profit;

      1. A profit gives the rt to go onto land and take a natural resource away (e.g. timber, coal).

      2. Along with a profit goes an implied easement to go on the land to get the resource and take it away.

      3. Profit a prendre; interest in real property similar to an easement. Permits removal from land. Property interest is subject to SF. B#57.

 

  1. RESTRICTIVE COVENANTS; ENFORCED AT LAW

    1. RC gives the rt to restrict someone else’s use of their land. 2 categories:

      1. Covenants at law; is less than an easement, its not an interest in land. Covenant is a land use restriction.

      2. Equitable servitudes;

    2. The only thing that distinguishes them is the way they are enforced/remedy; either at law ($ damages) or at equity (injunction).

    3. Covenants running with the land at law (P wants $)

      1. 4 requirements:

        1. Intent that it run with the land;

        2. Notice to the person against whom enforcement is sought;

        3. The covenant must touch & concern the land; that is it must make the land more valuable or more useful.

          1. Covenants not to compete DO touch & concern the land (B#58 selling all your recyclable goods to B doesn’t affect land); so it runs with the land.

        4. Privity; a conveyance of the property form one party to another. NO POE R#162.

          1. 2 kinds;

            1. Horizontal privity always refers to the original parties to the covenant.

            2. Vertical privity; refers to those who subsequently obtain the property subject to the covenant.

              1. The successor in interest must take the full estate of the one up in the line.

            3. 1st step find the successor in interest (SII);

              1. If the SII is the D then someone is trying to have the burden of the covenant run on that successor

              2. If the SII is the P then someone is trying to have the benefit of the covenant run to him or her.

              3. Burden analysis; for the burden to run against a SII must be both horizontal privity and vertical privity.

                1. EX; A & B agreed on a covenant. B to C. VP-yes btwn B & C. HP-No b/c no conveyance from A to C. C cant sue A

              4. Benefits analysis; for the benefit to run in favor of the SII you need only vertical privity. C can sue B not A.

              5. What if both P & D are SII? No

              6. Benefit & Burden Nutshell; if the SII is a D, then for P to get damages the burden must run and you need both horizontal privity and vertical privity. If the D is not a SII, then for the benefits to run to a SII P needs vertical privity.

    4. Implied Reciprocal Servitude; aka Negative Reciprocal Covenant; aka Equitable servitudes; ENFORCED IN EQUITY

      1. 2 enforce you need:

        1. Intent that the restriction be enforceable by SII. C sold 4 lots w/o restrictions and then sold 100 with. The 1st 4 are w/o es b/c no intent. The 100 have es.

        2. Notice to the subsequent purchaser and

        3. The restriction must touch & concern the land

        4. NO privity is required.

      2. ES in subdivisions; “mutual rts of enforcement” aka reciprocal negative easements.

        1. 2 requirements;

          1. Intent to create a servitude on all the land in the subdivision;

            1. Look for common subdivision/building plan;

            2. If bldr retains acres for himself then not part of sub plan. B#68.

          2. Notice;

            1. 3 ways to get notice;

              1. Actual notice;

              2. Record notice;

              3. Inquiry notice;

        2. Public dedications are in the building plan. Aka a designation for a park. It can be enforced.

      3. Equitable defenses to enforcement;

        1. Unclean hands; P did the same thing as D

        2. Acquiescence; P let neighbor on other side do same thing.

        3. Latches; P sat by while D built the office bldg and only now after D has finished does D complain.

        4. Estoppel; P earlier said she did not mind if D put up an office bldg.

      4. Termination of ES

        1. Can always be done by:

          1. Release

          2. Unity of ownership, or

          3. Changed conditions to all lots in the subdivision.

 

  1. ADVERSE POSSESSION; AP

      1. Elements HELUVA;

        1. Hostile; being on property with no rt to be there

        2. Exclusive; Excluding others from possessing the property

        3. Lasting; for the statutory period. Cmn law = 20 yrs. MI is 15 yrs if claimant is there by tax deed then 10 yrs & 5 yrs for any other color of title.

        4. Un-interrupted; m/be continuous use an ordinary owner would make. Adverse possessor was disposed (ousted) & then no tacking & adverse possessor must start clock over. R#149.

        5. Visible; out in the open/notorious.

        6. Actual; must actually possess the land to get title. With 2 Exceptions: constructive adverse possession, and leasing of land not owned.

      2. WATCH OUT; 2 things not required;

        1. O does not have to know trespasser is on land.

        2. X does not have to think that X owns the property. It’s ok for X to be a trespasser & know it. No need for a claim of right by the adverse possessor.

      3. Special rules for AP;

        1. Doctrine of constructive AP. X enters property under color of title to 100 acres, but actually possessed only 85 acres. The statutory period ran; X has constructive AP to the 100 acres. RULE: if someone goes on property under a color of title to a larger tract, but only actually possesses a portion of the larger tract, constructive AP can give title to the rest of the property.

          1. Color of title means: a bad title; possessor is not a naked trespasser, but hold a claim that is no good.

          2. Additional requirements;

            1. The amount actually possessed must bear a reasonable relation to the whole; (i.e. not be only a small part)

            2. The property must be unitary. (Cant be split by a highway)

        2. Leasing land to someone else qualifies as possessing it for AP

        3. AP against concurrent owners;

          1. Can only occur when the possessor Excludes (OUSTER) the other current co-owner from possession and the statute runs.

          2. Exclusion/ouster starts the clock running, not the mere absence of the other co-T.

        4. Life estate + future interest;

          1. The clock does not start to run against the holder of a future interest until the life tenant dies; that is until the interest has become possessory when the LE is over.

          2. FSD (grantor has possibility of reverter); the happening of the condition starts the clock running for purposes of AP

 

          1. FSSOCS; clock wont start to run until grantor Exercises rt of re-entry.

          2. Tacking; can tack periods of AP, but the periods must pass directly from one AP’r to another. NO GAPS.

            1. Blood relationship or by K. R#52.

          3. Disability; “tolling”; of owner; being a minor, insane, or being in jail. If the owner is under a disability at the time the AP disability, the AP clock doesn’t start to run until O is free of disability.

            1. If disability arises after the AP begins, it’s an intervening disability, and its IGNORED.

              1. AP began & owner willed property to minor; no tolling unless jurisdiction has enacted a tolling statutes.

            2. NO tacking of disabilities.

          4. No AP against gov lands.

          5. Title acquired by AP is not marketable.

 

  1. CONVEYANCING;

    1. 2 step process;

      1. 1st the contract of sale, then at closing the deed.

    2. Contract of sale;

      1. Statute of frauds; any contract of sale of an interest in property must be in writing and signed by the party to be charged.

        1. Need a writing which includes;

          1. Description of the land; if monuments/boundaries are used & there is a discrepancy then look at the intent of the parties. Improper boundary description is never a mere technicality. R#166.

            1. Deed says 20 acres but only have 19. It’s adequately described. B#27.

            2. Deed conveyed crops not acreage. Insufficient. B#7

            3. A rec’d a deed and the description was left blank- it created an agency coupled w/ an interest, which is irrevocable.

          2. Names of the parties; conveyance to a group or association will fail unless membership is relatively small & readily ascertainable R#182.

          3. Consideration; land K must state pmt terms: int rate, pmt schedule, or its invalid.

      2. Exception to S of F is doctrine of part performance.

        1. The acts of part performance must prove the Existence of a K.

          1. 2 theories for part performance: R#8

            1. Estoppel aka reliance theory; show substantial hardship.

            2. Evidentiary theory.

        2. Look for claimant in possession and:

          1. Paying FULL purchase price

          2. Erecting improvements.

    3. Legal effect of the K of sale btwn time of signing of K and closing; 4 issues;

      1. Risk of loss; if property is damages or destroyed b4 closing the B loses. Once the K is signed it is B’s land and B has risk of loss b/c of equitable conversion, even if the S remains in possession and control.

      2. Death of a party b4 closing; equitable conversion preserves rts as set in the K, and death of a party b4 closing doesn’t affect them.

        1. If S dies b4 closing, B closes with equitable title; S interest is legal title.

        2. If B dies b4 closing, S closes with B’s estate; B interest is real property.

    4. Marketable title; not perfect title just one that a reasonable person would accept.

      1. EX. Undelineated lot is not marketable if don’t know if its part of a cmn plan subject to ES. 25 lots and 24 are subject to ES. B#73.

      2. EX; a ½ inch encroachment on S property is MINOR and doesn’t present a significant threat of litigation.

      3. S must give B 3 things:

        1. Proof of title (abstract if title)

        2. Title free of encumbrances/defects (e.g. easements, no restrictive covenants, no mortgages, no options.) These would breach the warranty of title.

          1. Zoning is an encumbrance if in violation of zoning ordinance.

            1. Discovered land use restrictions that existed after signing the K don’t make land unmarketable. 6day #41.

            2. ½ inch zoning violation is unmarketable.

          2. Violation of housing codes is NOT an encumbrance.

          3. A mortgage on the property is not an encumbrance if the mortgage is to be satisfied out of the proceeds of the sale.

          4. Judgment liens become a lien on all D’s property except not on property D has transferred by unrecorded conveyance b4 judgment liens attached.

          5. Vested remainder is an encumbrance to title. 6day #42.

        3. Valid legal title on the day of closing. Doesn’t matter if title is unmarketable the DAY B4 closing.

      4. Remedies of B if S’s title is unmarketable.

        1. B must notify S and give S reasonable time to CURE the defect, even if that postpones closing. If problem is not corrected, B has 3 remedies:

          1. Recession; B walks

          2. Damages;

          3. Specific performance; B takes what S can give and price gets reduced to cover defect.

        2. If B goes to closing and accepts deed w/o problems being cured, then no recourse against seller based on the K. Any action must then be based on the deed.

    5. Time of performance;

      1. General rule; even if there is a closing date specified, time is NOT OF THE ESSENCE in land sale contracts, unless the K says so or the facts make clear that is what the parties Expected.

      2. If time is not of the essence then performance must be tendered w/in a reasonable time after the date of closing. 2 months is ok.

      3. BUT if K has a time is of the essence clause, and it is violated, the party who failed to perform on the date can no longer enforce the K.

      4. If time is not of essence then can demand a reasonable time. If reasonable & agreed then can enforce. B#18.

    6. 2 remedies for breach of sales K;

      1. Damages; measure the difference btwn K price and value of the land on the day of breach.

      2. Liquidated damages; B’s deposit can be forfeited as liquidated damages so long as it is not more than 10% of the sales price.

      3. Specific performance; of a land sale K is always available to both B & S

    7. Defects on the property; land not fit for the ordinary purposes and B wants to rescind.

      1. General rule; B CANT recover.

      2. 2 Exceptions;

        1. S must disclose serious defects that the S knows of and are not obvious. R#199.

          1. S can’t actively conceal.

          2. There is an implied warranty of fitness or merchantability for new homes sold by a builder.

          3. Sue for fraud or negl.

            1. Sue for recession if fraud; 7/92 “AS IS” disclaimer has no effect if conceal known defects

              1. Silence about subst’l defect = misrep/fraud

              2. Innocent misrep

    8. Estoppel by deed aka after acquired title; & relation back. R#194.

    9. Can’t compel conveyance if rec’d property by gift.

    10. FORGED deed is a nullity even if jt forges other jt’s name. R#167.

 

  1. DEEDS;

    1. Once a deed is accepted, the K merges into the deed and is destroyed, and all K provisions (implied warranty of merchantable title) are lost unless included in deed (or K specifies that they survive)

    2. 2 legal requirements for passage of legal title from S to B.

      1. Execution;

        1. Must be in writing; Deed is subject to S of F; S must sign the deed.

          1. Description of the land need not be very specific; just be able to identify the property. If it can’t then its void for vagueness and nothing gets transferred. “All of my prop aka 44 Ling rd” OK.

          2. Minor discrepancy in description is not a problem if property can still be ID’d.

          3. “My condo in Miami” is a valid description if S owned only one condo in Miami—use parol evidence.

          4. A land description by METES & BOUNDS always controls over a description by acreage or any other description.

        2. Delivery; doesn’t always mean physical transfer. Legal test is a Q of intent to pass title.

          1. Delivery refers to state of mind or OR. Delivery to A for B along w/ stmts “this is for B” is valid delivery. Delivery to one of many JT’s is delivery to all. B#39

          2. RE can be a deemed so will doesn’t apply. B#41.

          3. If S safeguards the deed for the child that S gave property to that is ok.

          4. D took signed deed out of P’s drawer. P never delivered it. R#187.

          5. Recording a deed raises that presumption of delivery, even if the grantee never sees the deed and knows nothing about it.

          6. Once delivery occurs, title passes and later returning the deed to grantor or tearing up the deed has no effect.

          7. In showing intent of OR regarding delivery, can use any parole evidence.

          8. One presumption of delivery: if OR dies and still has the deed in OR’s possession, there is a presumption of NO delivery. This can be rebutted by EE.

          9. Asking for future re-conveyance has no effect on delivery. B#40.

          10. Conditional delivery; OR hands over deed but tries to condition delivery on some event.

            1. 3 situations;

              1. Where condition is in the deed: “to A, but not until I die” this is a valid future interest. O has LE, A has VR.

              2. Oral condition; oral conditions are disregarded.

              3. Making delivery conditional on EE paying the purchase price. Is valid provided OR makes delivery to a 3rd P in ESCROW with instructions to deliver to EE when the condition is satisfied.

                1. Once deed goes to escrow/transfer agent OR cant get deed back as long as EE satisfies the condition, EE gets property no matter what subsequent changes of mind OR has.

                2. NO consideration is need for a deed (unlike the K for sale).

        3. Shelter doctrine; if take deed w/notice or paid no $ then can shelter under a BFP.

 

  1. COVENANTS FOR TITLE;

    1. QCD;

      1. If OR makes no promises regarding title, EE get QCD.

      2. If rec qcd then SUE ON IT. Wrong answer is “merger” b/c in a qcd there were no covenants stated. B#12.

    2. GWD;

      1. 6 traditional covenants in a general warranty deed.

        1. Present covenants; can sue immediately on these, thus they are person to EE and DO NOT RUN WITH THE LAND. Subsequent grantees can’t sue based on them. R#94.

          1. Cov of Seisen; rt to covey & S has title and possession and can convey them both.

          2. Cov against encumbrance; OR promises no easements, no restrictive covenants, no liens, mortagage.

        2. Future Covenants; not breached immediately, but later EE is disturbed in his possession (true owner shows up) RUN W/ THE LAND.

          1. Cov for quiet enjoyment and cov of warranty represent the promises of S that S will protects B against anyone who later shows up and claims title.

          2. Cov of further assurances; the mop up covenant. If S forgot to do something to pass title S promises to do whatever is necessary.

    3. Damages for breach of covenant; if there is a breach of warranty, damages are limited to purchase price rec’d by warrantor plus incidental damages.

      1. Breach of deed covenants can only give rise to $ damages limited to what EE paid for prop. If rec prop as gift & rec warranty deed & there is a breach of covenant cant get $ damages from OR. B#31.

    4. Estoppel by deed; after acquired title. If A deeds property to B that A does not own, and then A later does acquire title, then B gets title b/c OR gave implicit covenant that title w/be transferred to EE.

    5. BUT if OR transfers to a BFP after getting title, then the original grantee loses and cant rely on estoppel by deed.

 

    1. A deed to a dead person is invalid; but enforcement of the K of sale can still be had by either the S or the B estate; and a new deed is made to the B’s estate.

 

 

 

  1. RECORDING OF INTEREST;

    1. Recording acts protect;

      1. Purchases of property;

      2. Mortgagee; is an interest in land created by written instrument providing security for performance of pmt of debt.

      3. But don’t protect:

        1. Judgment creditors

    2. Recording a deed is not necessary to make it valid; it’s only done to give NOTICE.

    3. Recoding Acts;

      1. Notice;

        1. If deed falls o/s chain of title then no constructive or record notice.

      2. MI has Race-notice; MI; has Merchantable title act: only have to look back 40 yrs to see if there is unbroken title.

      3. Pure race; subsequent purchaser need not be a BFP (gd faith/value/without notice)

    4. BFP;

      1. Elements;

        1. In gd faith

        2. For value;

          1. $1 is not enough; no donee.

        3. W/o notice

      2. Shelter rule;

        1. Anyone can shelter under a BFP; (donee or heirs) whether they paid value or had knowledge.

 

  1. SECURITY INTEREST;

      1. Devices used to secure a loan.

      2. 3 types;

        1. Mortgage; given by debtor (mortgagor) to creditor (mortgagee)

          1. Sheriff sells the land at a ct-ordered foreclosure sale if mortgage isn’t paid. MI advertisement & sale by EE by statute or sheriffs sale – by circuit ct.

          2. Treated as mortgage;

            1. Absolute deed; with separate promise to re-conveyance (equitable mortgage)

            2. Sale / Leaseback with option to repurchase; ct treats this as a mortgage. Therefore must be foreclosed as a mortgage get equitable redemption.

          3. Deed of Trust; given by debtor to a 3rd party TTEE who holds it until the loan is paid off.

          4. Installment Land K; debtor signs a K promising to make pmt and seller keeps title until loan is paid off.

 

  1. CONSEQUENCES OF HAVING A MORTGAGE OR DEED OF TRUST;

    1. Equity of redemption; rt to redeem cant be waived (clogging) in mortgage but can be done later in a K w/ consideration.

      1. Applies to commercial bldgs R#14.

    2. Acceleration clause; debtor has rt to pay off entire balance; MI.

      1. .

    3. If there are multiple mortgages; 1st in time 1st in rt.

    4. Purchase money mortgage; are given priority over other mortgages Executed at about the same time even if other mortgage get recorded 1st.

    5. Owner increases a senior mortgage then that mortgage loses it priority over junior mortgages only to the Extent of the change.

    6. Protection to holders of junior interests; they have the rt to pay off any mortgage being foreclosed in order to keep their junior interest from being wiped out and thus they are Necessary parties to any foreclosure.

      1. WATCH OUT; not just junior mortgages are wiped out, but any junior interest (e.g. any junior easement or junior lease).

    7. Assumption- personally liable

    8. Subject to- not personally liable.

    9. Proceeds of foreclosure sale in this order;

      1. Pay cst of foreclosure including attny fees.

      2. Pay the mortgage that was foreclosed, including accrued interest.

      3. Pay off junior interest, in order (pay 1st one fully b4 paying any on second)

      4. Anything left goes to OR

      5. If there is a deficiency then SUE debtor for the balance.

      6. Mortgage can’t go after LT for deficiency on mortgage b/c LT can’t encumber more than what he owned; LT can’t mortgage interest that remainder man has. 6day #29.

    10. Foreclosure must be by public auction sale;

      1. MI; requires foreclosure by either:

        1. Advertisement AND

        2. By action of judicial ct

    11. Junior mortgagee m/be named as a party to foreclosure to senior mortgagee if not then junior interest is not eliminated

    12. Due on Sale; valid in MI; Garn St Germain Depository Act.

 

  1. CONSECQUENTCE OF LAND K;

    1. Look for forfeiture clause; says if debtor misses a pmt seller can cancel the contract, keep all the money paid to date and get the money back.

 

  1. TRANSFER OF SECURITY INTEREST;

    1. Due on sale clause; they are enforceable. Due on sale cl w/ prepmt penalty is valid. R#184.

 

  1. RT OF SUPPORT;

    1. Lateral support; support from the sides. A landowner has the rt to have his land supported by the adjoining landowners and STRICT LIABILITY results if the land is not supported. Cmn law rt to lateral support of land in its natural state. R#10. Not an absolute right. Sl doesn’t apply to additional weights of artificial structures on land. For this must prove negligence.

      1. If remove water and land sinks then no liab b/c only liab if remove SOIL. Majority view B#83.

      2. If land w/have subsided even w/no bldg on it then SL for all damages caused by the subsidence; including damage to all bldg. B#82

      3. Facts said that there was a home on the property & Q said “property damages” so assume damages to improved portion & use negl std. R#58.

      4. No negl if damage to property is by mudslide b/c no negl. R#59.

    2. Subjacent support; support the surface form the bottom STRICT LIABILITY, LOOK FOR MINERAL RTS

      1. Can build a wall & have water stand (common enemy rule) R#11; rt to protect your prop.

      2. Landowner is absolutely liable for collapse & damage to neighboring structures even if excavation is done w/o negl so long as it can be shown that land w/have collapsed in its natural state. R#134.3

      3. Negl failure to inform neighbor of excavation (neighbor c/have erected support D is liab if his negl excavation for the bldg) results in damage to bldg on adjacent property. Even if cant prove w/not have settled in its natural condition. B#81.

 

  1. MINERAL RTS;

    1. Rivers & lakes;

      1. Riparian rts R#77; refers to those whose properties borders on a lake or stream.

        1. Owner can use all the water needed for DOMESTIC purposes as long as reasonable. Domestic use is superior to agricultural use.

        2. Prior Appropriation; 1st in time takes. R#175.

    2. Water under the ground;

      1. Landowner is entitled to reasonable use of groundwater.

    3. Surface water;

      1. Natural flow approach; cts allow reasonable steps to deal w/ flood water (drainage pipes or ditches to divert the h2o are ok.

      2. Cmn Enemy approach; can do anything with floodwater whether reasonable or not.

    4. Percolating waters;

      1. Water beneath surface that is not confined to a channel – there is no restriction on its consumption.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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