978-1285770178 Lecture Note BL ComLaw 1e IM-Ch29 Part 1

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whole or in part.

Real Property and

Landlord-Tenant Law

responsibility to pay compensation when condemning private land for public use.

This chapter also examines the landlord-tenant relationship, briefly discussing the rights and responsibilities

of the landlord and tenant in negotiating a lease, in using and maintaining the leased property, in paying and

collecting rent, and in transferring interests in the property.

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B. AIRSPACE AND SUBSURFACE RIGHTS

Significant limitations on air or subsurface rights normally have to be indicated on the deed.

1. Airspace Rights

Generally, plane flights do not violate owners’ rights, but strung wires, leaning buildings, and pro–

rights are absolutely liable if their excavation causes the surface to subside.

C. PLANT LIFE AND VEGETATION

When land with growing crops is sold, the sale includes the crops, unless otherwise specified. Crops

sold by themselves are goods (and the sale is covered by the UCC [UCC 2–107(2)]).

condition. The rights that accompany a fee simple absolute include the right to use the land for whatever

purpose the owner sees fit (but not to unreasonably interfere with others’ use of their land).

ADDITIONAL BACKGROUND—

or clothes or automobiles.

Many contracts involving the lease or sale of land use the terms “property,” “land,” and “premises”

interchangeably but these terms are distinguishable. “Property” refers to both the land and the premises.

“Land,” by contrast, is generally used to refer to the land itself as well as any mineral deposits or vegetation

CHAPTER 29: REAL PROPERTY AND LANDLORD-TENANT LAW 3

whole or in part.

C. CONCURRENT OWNERSHIP

Concurrent owners include tenants in common, joint tenants, tenants by the entirety, and community

property owners.

1. Tenancy in Common

a. Right of Survivorship

A deceased joint tenant’s interest passes to the surviving joint tenant or tenants. The

surviving joint tenant or tenants acquires a deceased tenant’s interest—instead of the interest

passing to the deceased tenant’s heirs.

separately his or her interest during his or her life.

4. Community Property

Only some states allow property to be owned as community property. If property is held as

community property, each spouse technically owns an undivided one–half interest in it.

Both the joint tenancy and tenancy by the entirety require that certain preconditions exist before a valid

tenancy can be said to exist. First, the owners of the estate must have both received their interests at the

same time (unity of time). Second, the owners of the estate must both draw their title from the same deed or

document (unity of title). Third, the owners of the estate must have equal interests in the land (unity of

interest). Fourth, the owners must have an unrestricted right to use the entire property (unity of possession). A

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whole or in part.

2. Periodic Tenancy

A periodic tenancy is created by a lease that does not specify how long it is to last but does specify

that rent is to be paid at certain intervals. Some of the incidents of a periodic tenancy are

discussed—that, at the end of a period, the tenancy is automatically renewed, termination requires

4. Tenancy at Sufferance

A tenancy at sufferance is the possession of land without right, created when another tenancy ends

and the tenant remains in possession without the owner’s consent.

E. NONPOSSESSORY INTERESTS

2. Easement or Profit in Gross

An easement or profit in gross does not depend on the proximity of property—it requires the exis-

tence of only one parcel of land, which must be owned by someone other than the owner of the

easement or profit in gross.

4. Termination of an Easement or Profit

There are three methods of termination: (1) deed an easement or profit to the owner of the land

burdened by it; (2) abandon it and evidence an intent to relinquish the right to it; or (3) deed the

burdened land to the owner of the easement or profit. Nonuse is not enough unless it is

accompanied by an overt act showing intent to abandon.

whole or in part.

III. Transfer of Ownership

• A contract may be made contingent on the buyer obtaining financing at or below a certain rate of

interest, or selling other property, or obtaining a survey and title insurance. A contract may be

contingent on the property passing an inspection for defects and insect infestation.

1. Closing Date and Escrow

ADDITIONAL BACKGROUND—

Title Insurance

quality of title to the land itself. A property owner could file an action against the title insurance company if

some defect that was not disclosed in the title insurance policy rendered title unmarketable, but that very

same property owner would have no right to proceed against the title insurance company simply because its

investigation revealed that there are defects in the title.

company with the option of paying the claim (up to the full amount of the policy—which is generally the

purchase price of the property) or litigating the claim. The policy itself remains in force only for as long as the

insured continues to own the particular property. Subsequent purchasers of the land must purchase their own

policies.

whole or in part.

fit for human habitation (in reasonable working order and of reasonably sound construction). In a

few states, a later buyer can recover from the original builder under this warranty.

CASE SYNOPSIS—

Case 29.1: Stambovsky v. Ackley

Helen Ackley believed that her house in Nyack, New York, was haunted, and promoted and profited from

reputation. The reputation proved to impair its resale value, however, and Stambovsky filed a suit to rescind

the contract.

The court allowed rescission. Ackley had created the story of the house that harmed its resale value. She

so had an obligation to disclose it. Her failure to do so amounted to an unfair advantage, and thus she could

not enforce the contract.

………………….………….………………………….…………..…………………………………….…………………..

ANSWER TO “THE ETHICAL DIMENSION”

QUESTION IN CASE 29.1

have known—would potentially impact Stambovsky’s decision to purchase the house. Ethically, a party

should disclose all material facts to the other party in negotiating contracts. [This answer could go either way

depending on the ethical models and theories discussed in class.].

whole or in part.

ANSWER TO “THE LEGAL ENVIRONMENT DIMENSION”

QUESTION IN CASE 29.1

Why is applying the strict rule of caveat emptor inappropriate in this case? How would applying

this doctrine increase costs for the purchaser? The court ruled that applying the rule of caveat emptor

searching and costly review to determine whether the home and its reputation were free of ghosts.

ENHANCING YOUR LECTURE—

 POTENTIAL PROBLEMS

WHEN REAL ESTATE IS ADVERTISED ONLINE

The Internet has transformed the real estate business, just as it has transformed other industries. Today’s

misrepresentations? Such questions are likely to arise in the future as more and more people use the Internet

to search for properties.

STATE LICENSING STATUTES AND ADVERTISING

Often, a state agency, such as a real estate commission, is in charge of granting licenses and enforcing the

laws and regulations governing real estate professionals.

Although some states have rules regarding the advertising of real property, these regulations usually do

not specifically address Internet advertising, which necessarily reaches consumers beyond the state’s

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whole or in part.

damages or cancel the contract, however, he or she will have to sue the agent for fraud. At this point,

jurisdiction problems may arise.

If the real estate agent and the buyer are located in different states and the Internet ad was the agents

only contact with the buyer’s state, the buyer may have to travel to the agent’s state to file the suit. Courts

depending on the state where they live.

FOR CRITICAL ANALYSIS

Do your students think that the federal government should regulate the advertising of real

c. Telco Communications v. An Apple A Day, 977 F.Supp. 404 (E.D.Va. 1997); Inset Systems, Inc. v. Instruction Set, Inc., 937 F.Supp.

161 (D.Conn. 1996).

d. State by Humphrey v. Granite Gate Resorts, Inc., 1996 WL 767431 (Minn.Dist. 1996), aff’d, 568 N.W.2d 715 (Minn.App. 1997), aff’d

again, 576 N.W.2d 747 (Minn. 1998); Hasbro, Inc. v. Clue Computing, Inc., 994 F.Supp. 34 (D.Mass. 1997).

• A legally sufficient description of the land.

• The grantor’s (and spouse’s) signature.

• Delivery.

specific point of beginning around the boundaries of the property. In earlier times, metes and bounds

CHAPTER 29: REAL PROPERTY AND LANDLORD-TENANT LAW 9

whole or in part.

Modern metes and bounds descriptions typically avoid references to monuments but instead use a

succession of courses and distances that eventually return (if properly done) to the starting point. Other types

of legal descriptions of property may be used instead of metes and bounds descriptions. If a subdivision plat,

for example, has been filed in the public records, then it is not necessary for the deed to include a metes and

bound description because it can make a reference to a specified lot and block in that plat which will suffice

land; and that transfer is made without unknown adverse claims of third parties.

ENHANCING YOUR LECTURE—

Greenfield, Wisconsin, they began constructing a detached garage on the edge of their property. Their

that prevented property owners in the subdivision from erecting any buildings other than one house and one

garage on their land. After the garage had been built, Pietrowski asked a court to issue an order that the

garage be razed (destroyed).

The Dufranes argued that Pietrowski herself had violated the covenant because she had built a shed on

garage was a “major violation” that materially breached the covenant. According to the court, “enforcement

against a major violation of the restrictive covenant by a party who committed a minor violation does not result

in an injustice.” The court ordered that the garage be razed.a

THE BOTTOM LINE

whole or in part.

a. Pietrowski v. Dufrane, 634 N.W.2d 109 (Wis.App. 2001).

3. Quitclaim Deed

This warrants less than other deeds, conveying only whatever interest the grantor has.

4. Grant Deed

ADDITIONAL BACKGROUND—

Basic Types of Recording Statutes

• Race statutes, which provide that the first purchaser to record a deed has superior rights to the

property, regardless of whether he or she knew that someone else had already bought it but had failed to

record the deed.

Irrespective of the particular type of recording statute adopted by a state, recording a deed involves a fee.

The grantee typically pays this fee, because he or she is the one who will be protected by recording the deed.

D. ADVERSE POSSESSION

Adverse possession is a means of obtaining title to land without delivery of a deed.

1. Elements of Adverse Possession

The elements are—