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Business Law Chapter 49 Homework The Court The Case Which This Problem

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9 pages
Word Count
5486 words
Book Title
Business Law: Text and Cases 14th Edition
Authors
Frank B. Cross, Kenneth W. Clarkson, Roger LeRoy Miller
1
CHAPTER 49
REAL PROPERTY AND LANDLORD-TENANT LAW
ANSWER TO CRITICAL THINKING QUESTION
IN THE FEATURE
ETHICS TODAYCRITICAL THINKING
At what point might the predicted benefits of a new private commercial endeavor outweigh
the constitutional requirement of a taking only for public use? Some people would say
neverthat the predicted benefits of a commercial endeavor never justify the taking of real
property owned by individuals when it is not truly for public use. Others would say that if the
predicted benefits were large enough, taking for private development is justified.
ANSWERS TO QUESTIONS
AT THE ENDS OF THE CASES
CASE 49.1CRITICAL THINKING
ECONOMIC
Why would the owner of a life estate refuse to pay the taxes and insurance premiums on
the property of the estate? Should any reason for this refusal have influenced the court’s
decision in this case? The owner of a life estate would most likely refuse to pay the taxes and
insurance premiums on the property of the estate due to a lack of funds to make those
payments. This may be a result of any number of economic constraintssudden unforeseen
obligations, poor returns on investment, a job loss or medical issue, or a lack of foresight in
planning to meet one’s financial goals, for example. This circumstance seems most likely
CASE 49.2CRITICAL THINKING
ETHICAL
In not disclosing the house’s reputation to Stambovsky, was Ackley’s behavior unethical
because she knew something he did not, or was it unethical because of the nature of the
information she omitted? What if Ackley had failed to mention that the roof leaked or that
the well was dryconditions that a buyer would normally investigate? Explain your
answer. Yes. Using a values-based ethical approach, it would be wrong for Ackley to withhold
information that she knewor should have known—would potentially impact Stambovsky’s
LEGAL ENVIRONMENT
Why did the court decide that applying the strict rule of caveat emptor was inappropriate
in this case? How would applying this doctrine increase costs for the purchaser? The
court ruled that applying the rule of caveat emptor was inappropriate in this case because it
would be very difficult for a buyer from out of town to learn that a house was supposedly
CASE 49.3LEGAL REASONING QUESTIONS
1. Bhatt claimed to have met all of the requirements to acquire a strip of public land
through adverse possession. Which element did the court find had not been met? Why?
The requirement to acquire property by adverse possession that the court expressly found had
not been met in this case was the duration. To state a claim for adverse possession in
Maryland, a claimant must possess the claimed property for a statutory period of twenty years.
But, according to the appellate court in the Montgomery case, time does not run against the
state. Therefore, public highways are not subject to claims for adverse possession (unless the
state has clearly abandoned the property). “By parity of reasoning” the same rule applies to a
rail line, which although owned by a private corporation is analogous to a public highway.”
2. What is the “potential trouble, both ahead and behind, for a pair of public works
projects” hinted at in this case? In whose favor is that “trouble” likely to be resolved?
The “potential trouble, both ahead and behind, for a pair of public works projects” hinted at by
the court in the Montgomery case is that Bhatt’s situation may be only the tip of the virtual
iceberg. Many similar cases are likely to arise. The former rail line (and current trial) runs
between Georgetown in the District of Columbia and Silver Spring, Maryland, so there is likely to
be a considerable number of abutting private property owners. Those owners have had a
considerable period of time to build encroaching structures because the right-of-way has existed
3. Should a private party, by encroaching on a public right-of-way, be able to acquire title
adverse to the public rights? Discuss. No, a private party, by encroaching on a public right-
of-way, should not be able to acquire title adverse to the public’s rights. Those rights are
paramount. As the court in the Montgomery case phrased it for the context of the case, “nothing
is more solidly established than the rule that title to property held by a municipal corporation in
its governmental capacity, for a public use, cannot be acquired by adverse possession.”
Yes, it should be possible to acquire municipal property not devoted to a public use
4 UNIT TEN: PROPERTY AND ITS PROTECTION
ANSWERS TO QUESTIONS IN THE REVIEWING FEATURE
AT THE END OF THE CHAPTER
1A. Citizens’ right
Here, the right conveyed by the deed is nonpossessory and gives citizens a limited right to
travel on a trail over Shoepke’s land. Therefore, it is an easement.
2A. Deed’s covenants
A warranty deed conveys the most covenants, or promises of any other deed. The seller
promises that he or she has title to the property, the power to convey it, that there are no
encumbrances against the property, and that the buyer will not be disturbed in her or his
possession (i.e. quiet enjoyment).
3A. Homeowners’ agreement
A promise between a group of landowners protecting the interests of individuals who come onto
4A. Tenant’s responsibility
When Slater sublet the apartment, she remained liable under the lease agreement. If a
ANSWER TO DEBATE THIS QUESTION IN THE REVIEWING FEATURE
AT THE END OF THE CHAPTER
Under no circumstances should a local government be able to condemn property
in order to sell it later to real estate developers for private use. The Constitution’s Fifth
Amendment is clear about giving the power of condemnation to government. Such power can
only be used to take private property for public use (and with appropriate compensation, of
course). When a local government uses this taking power to condemn property that it later sells
to private developers for a shopping mall development or nicer houses and apartments, that
government is acting in violation of our Constitution.
CHAPTER 49: REAL PROPERTY AND LANDLORD-TENANT RELATIONSHIPS 5
ANSWERS TO ISSUE SPOTTERS
AT THE END OF THE CHAPTER
1A. Bernie sells his house to Consuela under a warranty deed. Later, Delmira appears,
holding a better title to the house than Consuela has. Delmira wants Consuela off the
property. What can Consuela do? . This is a breach of the warranty deed’s covenant of quiet
2A. Grey owns a commercial building in fee simple. Grey transfers temporary
possession of the building to Haven Corporation (HC). Can HC transfer possession for
even less time to Idyll Company? Explain. Yes. An owner of a fee simple has the most rights
possiblehe or she can give the property away, sell it, transfer it by will, use it for almost any
ANSWERS TO BUSINESS SCENARIOS
AT THE END OF THE CHAPTER
49-1A. Property ownership
Linda cannot claim title to the land over Rafael’s quitclaim deed. A quitclaim deed conveys
whatever interest the grantor has in the land. Because Madison’s interest in the land included
full title to the property, full title was passed to Rafael when the quitclaim deed was executed.
Madison, following the execution of the quitclaim deed, retained no interest whatsoever in the
49-2A. Eviction
The issue centers on whether Juan was constructively evicted and whether James breached the
lease’s covenant of quiet enjoyment. Under the covenant of quiet enjoyment, the landlord
promises that during the lease term neither the landlord (or anyone who acts under authority or
legal right from the landlord) nor someone with superior title to that of the landlord will disturb
6 UNIT TEN: PROPERTY AND ITS PROTECTION
ANSWERS TO BUSINESS CASE PROBLEMS
AT THE END OF THE CHAPTER
493A. Commercial lease terms
Park might seek to recover from Landmark for breach of its lease obligation to provide a roof “in
good repair” and to provide the tenant with the quiet enjoyment of the premises. Landmark
might assert that it did not have notice the new roof would fail. The landlord might also argue
that the provision of the lease requiring the tenant to obtain insurance and absolve the landlord
of liability to the extent of its proceeds insulated Landmark from a claim for breach. Park would
be most likely to succeed because the lease did not make her solely responsible for any
property loss, either expressly or impliedly by requiring her to maintain the premises. Instead,
494A. BUSINESS CASE PROBLEM WITH SAMPLE ANSWERAdverse possession
The McKeags satisfied the first three requirements for adverse possession:
1. Their possession was actual and exclusive because they used the beach
and prevented others from doing so, including the Finleys,
2. Their possession was open, visible, and notorious because they made
improvements to the beach and regularly kept their belongings there.
3. Their possession was continuous and peaceable for the required ten years.
They possessed the property for more than four decades, and they even kept a large
float there during the winter months.
CHAPTER 49: REAL PROPERTY AND LANDLORD-TENANT RELATIONSHIPS 7
Nevertheless, the McKeags’ possession was not hostile and adverse, which is the fourth
requirement. The Finleys had substantial evidence that they gave the McKeags permission to
495A . Rent
Yes, Flawlace owes rent for the three months between the time that it moved out and the new
tenant moved in. A lease typically indicates the amount of the rent and the length of the term.
Normally, the tenant must pay rent even if he or she refuses to occupy the property or moves
out, as long as the refusal is unjustified and the lease is in force.
In this problem, Flawlace leased unfinished commercial property from Francis Lin to
operate a beauty salon. The lease required Flawlace to obtain a “certificate of occupancy” from
the city to commence business. This required the installation of a fire protection system. The
lease did not state whether the landlord or the tenant was to install the system. Lin voluntarily
496A . Landlord-tenant relationships
The court could impose liability on PI based on its ownership of the premises on which the injury
occurred. Depending on the provisions of the lease, Pretty Girl could be the liable party. Kumar
might be at least partially responsible for her injury if it was a result of her own negligence.
Landlords must comply with any applicable state statutes and city ordinances regarding
maintenance and repair of buildings. Generally, a landlord is required to maintain the premises
in good repair. A tenant is responsible for any damage to the premises that he or she causes,
intentionally or negligently. Unless the parties have agreed otherwise, however, the tenant is not
responsible for ordinary wear and tear. State statutes often allow tenants and landlords flexibility
497A. Ownership and other interests in real property
Under the law of the Cayman Islands, and according to Arthur’s will, the three disputed
Cayman properties became Diana’s sole property when Arthur died. In a joint tenancy, each of
two or more persons owns an undivided interest in the property. A deceased joint tenant’s
interest passes to the surviving joint tenant or tenants. The right of a surviving joint tenant to
inherit a deceased joint tenant’s ownership interest is referred to as a right of survivorship.
In this problem, Arthur and Diana owned three properties in the Cayman Islands in a joint
tenancy. (For this purpose, Cayman law is the same as U.S. law.) When the couple divorced,
the decree did not change the tenancy. Later, Arthur died. His will provided that any property he
held in joint tenancy will pass to the survivor, and I instruct my Personal Representative to
make no claim thereto.” Despite this provision, his brother Curtis, personal representative of his
49-8A. SPECIAL CASE ANALYSISAdverse possession
Case No. 49.3
Montgomery County v. Bhatt
Court of Appeals of Maryland, 2016
446 Md. 79, 130 A.3d 424
(a) Issue: What conflict, and between which parties, did this case highlight? The
Montgomery case highlights the conflict between a private property owner next to a rail/trail line
and the public owner of that right-of-way with regard to the rights of each to the property within
CHAPTER 49: REAL PROPERTY AND LANDLORD-TENANT RELATIONSHIPS 9
its boundariescan the private owner satisfy the requirements to acquire a portion of the right-
of-way by adverse possession?
In this case, Ajay Bhatt owned a single-family residential lot in Montgomery County,
Maryland. The lot abutted the B&O Railroad/Capital Crescent Trail. This had been a freight line
of the Metropolitan Southern Railroad Co. until 1985. Three years later, the county acquired the
(b) Rule of Law: On which specific requirement of what rule of law did the outcome in
this case depend? To acquire property by adverse possession, a claimant must show that his or
her possession of it was actual, open, notorious and visible, exclusive, hostile, and continuous
(c) Applying the Rule of Law: What exception to the applied rule of law might have
resulted in a decision in the plaintiff’s favor? Why did that exception not apply in this case?
There is an exception to the rule stated aboveif the government has abandoned its interest in
property, the property can be acquired by adverse possession. Abandonment can occur, for
example, when a public right-of-way ceases to be used by the public.
This exception did not apply in the Montgomery case, because the claimant did not
provide any evidence that the property he asserted to have acquired by adverse possession had
been abandoned.
In this case, Bhatt was cited for a violation of the Montgomery County Code for a fence
and shed that encroached on a county hiker/biker trail. The trail had been a rail line for nearly
one hundred years before the county obtained it and converted it. Chiefly because the
10 UNIT TEN: PROPERTY AND ITS PROTECTION
(d) Conclusion: In light of the rule of law that applied in this case, what was the
judgment? The higher state appellate court in the Montgomery case reversed the judgment of
49-9A. A QUESTION OF ETHICSAdverse possession
(a) No, Mansell’s occupation of Hunter’s property did not vest title in her by adverse
possession. Adverse possession is a means of obtaining title to land without delivery of a deed.
Essentially, when one person possesses real property for a certain statutory period of time
(generally no more than thirty years), that person acquires title to it. There are four elements that
must be satisfied: (1) possession must be actual and exclusive; (2) possession must be open,
visible, and notorious; (3) possession must be continuous and peaceable for the required
period; and (4) possession must be hostile and adverse to any other party’s interest or claim.
Because Mansell initially occupied the property under an informal agreement with Hunter,
ANSWERS TO LEGAL REASONING GROUP ACTIVITY QUESTIONS
AT THE END OF THE CHAPTER
4910A. Adverse possession
(a) An easement arises by prescription when one person exercises an easement,
such as a right-of-way, on another person’s land without the landowner’s consent, and the use
is apparent and continues for the length of time required by the applicable statute of limitations.
CHAPTER 49: REAL PROPERTY AND LANDLORD-TENANT RELATIONSHIPS 11
(b) The court should rule in favor of Drake, whose use of the driveway satisfied all of
the requirements for either easement by prescription or adverse possession, as explained in the
answer to the previous question.
(c) As stated in the text, there are a number of public-policy reasons for the adverse
possession doctrine. These include society's interest in resolving boundary disputes,
determining title when title to property is in question, and ensuring that real property remains in

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