© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 1 Chapter 36: Real Property and Landlord- Tenant Law

2 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Learning Objectives What can a person who holds property in fee simple do with the property? What are the requirements for acquiring property by adverse possession? What limitations may be imposed on rights of property owners? What is a leasehold estate? What types of leasehold estates, or tenancies, can be created when real property is leased? What are the respective duties of the landlord and tenant concerning the use and maintenance of leased property?

3 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Nature of Real Property Real property is immovable and includes: –Land & Permanent Buildings. –Airspace & Subsurface Rights. –Plant Life and Vegetation. –Subsurface (mineral) rights. –Fixtures. 

4 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Fixtures A fixture is personal property that becomes permanently affixed to real property. –Intent that it become a fixture is necessary. –Intent is determined by: The fact that the property cannot be removed without causing damage to the realty. The fact that the property is so adapted to the realty that it has become part of the realty.

5 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Trade Fixtures Trade fixtures: installed for commercial purposes by a tenant. They remain the property of the tenant and can be removed when tenant leaves, repairing any damage caused by removal.

6 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Ownership in Fee Simple The Fee Simple (sometimes called fee simple absolute) gives the owner the greatest aggregation of rights, powers and privileges possible under American law and can assigned to heirs. –A “conveyance” (transfer of real estate) “from A to B” creates a fee simple. A is the Grantor and B is the Grantee. Case 36.1 Biglane v. Under the Hill Corp. Interference with owner’s quiet use and enjoyment of his property must be “materially uncomfortable and annoying.” Court fashioned an equitable remedy.

7 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Estate that lasts for the life of some specified individual. “A grants Blackacre to B for B’s life” grants B a life estate in Blackacre. When B dies, Blackacre returns to A or his heirs or assigns, or a third party in the same condition, normal wear and tear excepted. Grantor A retains a “future interest” in the property. During B’s life, she can possess, use, and take the fruits of the estate, but not take from the property itself. Life Estates

8 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. An easement is a right of a person to make limited use of another person's real property without taking anything from the property. A profit is the right to go onto land in possession of another and take away some part of the land itself or some product of the land. Property that is benefited by easement/profit carries the the interest with the sale of land. Nonpossessory Interests

9 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Appurtenant vs. Gross If the owner of the easement (A) or profit has the right to go onto another’s land (B) that is adjacent to A’s own, it is said to be appurtenant. If A’s property is physically separated from B’s, it is said to be in gross. ABAppurtenant A B In Gross

10 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Creation of an Easement or Profit Easements or profits can be created by: –Deed (physical delivery is sufficient). –Will (at Grantor’s death). –Contract between Grantor and Grantee. –Implication: circumstances surrounding creation of easement imply its creation. –Necessity. –Prescription: easement by adverse possession.

11 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. By deed back to owner of the land burdened by it. Owner of easement or profit becomes owner of the land burdened with it. Abandonment by the owner of the right. Termination of an Easement or Profit

12 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. License Revocable right of a person to come unto another’s land without removing anything from the land. Personal privilege that arises from the consent of the owner of the land that can be revoked. Case 36.2 Roman Catholic Church of our Lady of Sorrows v. Prince Realty Management, LLC. License to install temporary plywood fence around construction site, does not extend to more permanent structures such as steel piles and beams.

13 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Ownership in real property can be transferred by: –A written Deed. –A Gift. –A Sale. –An Inheritance. –Adverse Possession. –Eminent Domain. Transfer of Ownership 

14 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. A Deed is the instrument setting forth the interests in real property being transferred. Necessary components of a Deed: –Names of Grantor and Grantee. –Words evidencing intent to convey. –Legally sufficient description of the land. –Grantor’s signature. –Delivery of the Deed. Deeds

15 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Warranty Deed. –Special Warranty Deed. –Implied Warranties in New Homes. Quitclaim Deed. Grant Deed. Sheriff’s Deed. –Period of redemption. Types of Deeds

16 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Recording a deed (or any interest in real property) puts the public on notice of the new owner’s interest in the land and prevents the previous owner from fraudulently conveying the same interest to another buyer. Race statute. –Pure notice statute. –Notice-race statute. Recording Statutes

17 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Owner of real property dies, his property is transferred by: –Will (testate). –Without Will (intestate). Title is transferred at the time state law so provides in its testate and intestate laws. Will or Inheritance

18 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. One person possesses the property of another for a certain statutory period of time, that person automatically acquires title to the land, just as if there had been a conveyance by deed. Must be: –Actual and exclusive. –Open, visible and notorious. –Continuous and peaceable. –Hostile and adverse. Adverse Possession

19 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Rights in property are not absolute. They are constrained by federal and state laws, e.g., nuisance, tax and environmental. A “Taking” By Eminent Domain: The 5 th amendment gives the government the right to “take” private land for public use with just compensation. Eminent Domain Case 36.3 Drake v. Walton County. Drakes reasonably relied on a stabilized drainage system when they purchased property. When the county permanently changed the drainage, a portion of Drake’s property was taken without just compensation.

20 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Leasehold Estates Anyone who rents housing to the public for commercial purposes subjects herself to various state and federal Landlord- Tenant laws. Owner of the property is the LESSOR and Tenant is LESSEE; the contract is called the LEASE. The property interest is called a leasehold estate.

21 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Tenancy Interests Tenancy for Years. –Created by an express contract. –Property is leased for a specified period of time. Periodic Tenancy. –Does not specify how long lease lasts. –But rent paid at certain intervals. Tenancy at Will. –For as long as both agree. Tenancy at Sufferance. –Wrongful possession without the right to possess.

22 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Lease Agreement can be oral or written (oral may not be enforceable). Lease gives Tenant the temporary right to exclusively possess the property. Sources of Law: –Common Law. –State and Local Statutes, and –The Uniform Residential Landlord and Tenant Act (URLTA) which has been adopted by 1/4 of the states. Landlord-Tenant Relationships

23 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Trend in the law is to curtail, by contract and real estate law, the immense freedom that Landlords had in the past. –Possession. –Using the Premises. –Maintaining the Premises. –Rent. Rights and Duties

24 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Rights and Duties Landlord has a duty to deliver actual physical possession under URLTA or legal right to possession (“American” rule). –Tenant’s right to exclusive possession is only subject to Landlord’s limited right to come unto the property. –Tenant has a “covenant of quiet enjoyment” by which Landlord promises Tenant’s peace and enjoyment of the property.

25 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Eviction occurs when Landlord: –Deprives Tenant of possession of the leased property; or –Interferes with this use or enjoyment of the property to the extent that Tenant cannot use or enjoy. Constructive eviction occurs when Landlord: – Breaches lease or covenant or quiet enjoyment; and –Makes it impossible for the Tenant to use and enjoy the property. Rights and Duties

26 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Implied Warranty of Habitability: Landlord must furnish premises in habitable condition.  –Landlord is responsible for maintaining common areas such as stairs, parking lots, elevators and swimming pools. –Commercial property -- may still require Tenant to maintain depending on the lease. Implied Warranty of Habitability

27 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Implied Warranty of Habitability To determine whether a breach has occurred, courts consider: –Whether Tenant caused damage. –How long defect existed and age of building. –Defects impact on Tenant’s safety and health. –Whether defect contravenes relevant statutes.

28 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Rent is Tenant’s payment to the Landlord for the Tenant’s occupancy or use of the Landlord’s real property. –Payment based on agreement, custom, state statute, waiver. Security Deposits. –A deposit by Tenant which Landlord may retain for non-payment of rent or damage to premises. –URLTA has specific provisions as to when it may be kept and when it must be returned. Rent

29 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Transferring Rights to Leased Property Transferring Landlord's Interest. –Landlord may sell any and all of his rights in the real property. –New owner buys “subject to the lease,” if lease is recorded. Transferring Tenant’s Interest. –Landlord’s consent may or may not be required by statute or the lease itself.

30 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Transferring the Tenant’s Interest (cont’d) –Assignments: Tenant transfers his entire interest in the lease to a third person. Original Tenant is not released from liability under the lease. –Subleases: Tenant transfers all or part of his interest in the lease for a shorter period of time than the lease. Original Tenant is not relieved of liability under the lease. Transferring Rights