1. Real Property chapter 48
Landlord - Tenant
Real Property

2. The Nature of Real Property
Real property is immovable and includes:
Land.
Buildings.
Trees and vegetation.
Airspace.
Subsurface (mineral) rights.
Fixtures.

3. Ownership Interests in Real Property
Ownership interests are classified as either Possessory or Non-Possessory:
A Possessory interest such as a fee simple, life or leasehold estate, gives the owner a right to possess the land.
A Nonpossessory interest such as an easement, profit or license, does not give the owner a right to possess the land.

4. Fee Simple (Absolute) Chart on 968
Although not absolute, 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.
Chart on 968

5. Life Estates
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.

6. Life Estate
Nancy never married she lived with her parents and her brother Tom. Nancy was considered slow by some standards but she was able to hold a job at the local hospital. When Nancy was 20 years old, her parents were killed in an automobile accident. The will left a “life estate” to Nancy in the family home which was valued at $220,
1. Can Nancy sell the property?
2. Can Nancy rent the home and live somewhere else?
3. Can Tom claim any part of the home?
4. When Nancy dies what happens to house if, the parents left no other will?

7. Leasehold Estates
A real property owner or lessor agrees to convey the right to possess and use the property to a lessee for a certain period of time.
Tenancy for Years:
Periodic Tenancy/specified number of years.
Tenancy at Will/may terminate by either party.
Tenancy at Sufferance/lease expires, tenant remains.

8. Non-Possessory Interests
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 interest with the sale of land.

9. Easements
George owns a 300 acre farm in Nebraska. He grants Mobil Oil the right to pump oil out of a certain area of his farm.
Mobil Oil has a_____________
George lets Sam bring his cattle across the East end of the farm to a pasture that Sam owns just East of George’s farm.
Sam has a_________________

10. More on easements…
Donna buys a 10 acre plot of land next to George’s farm. Donna plans to grow Christmas trees and let her customers come onto the land and cut down the Christmas trees. George granted Donna an easement to cross his land to get to hers. When George see several cars cross his property to get over to Donna’s tree lot. He calls her and demands that she stop immediately and he asks the court for an injunction to prevent Donna from allowing others to come across his land. Will George win?

11. NonPossessory Interests
If the owner of the easement or profit is contiguous to the owner of the land, it is said to be appurtenant (‘easement appurtenant”). If the owner’s property is separated, it is said to be gross. A B
In Gross A B
Appurtenant

12. Non-Possessory Interests
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.

13. Termination of an Easement or Profit
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.

14. Licenses
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.
Difference between an Easement and License is a License can be revoked an Easement cannot.

15. Transfer of Ownership
Ownership in real property can be transferred by:
A written Deed.
A Gift.
A Sale.
An Inheritance.
Adverse Possession.
Eminent Domain.

16. Deeds
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.

17. Types of Deeds Warranty Deed. Warrants that the owner has clear title
Quitclaim Deed. Passes any interest that owner may have without warranty.
Grant Deed. Grants the property to another w/o title
Sheriff’s Deed. Forces sale and deed to the buyer.

18. Recording Statutes
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. All states have recording statutes. All interest in property should be recorded
IMMEDIATELY

19. RECORDING STATUTES
RACE: The first purchaser to record a deed has superior rights to the property, regardless of whether she knew someone else had a prior, unrecorded claim.
NOTICE: Regardless of who files first, a person who knows that someone else had a prior claim of ownership takes subject to the prior claim.
NOTICE-RACE: The first purchaser to record a deed without knowledge that someone else had a prior, unrecorded claim has superior rights to the property.

20. Recording Statutes II
Jim knew his grandfather was getting absent minded. He had been taking care of the old man for years. He was afraid his grandfather might forget his promise to leave him the home place of 200 acres. Jim ask his wife’s brother, a realtor to bring a blank Deed over so he could have his grandfather deed the farm over to him.
The next day, the grandfather signed the Deed and gave it to Jim. Jim put the deed in his desk and planned on getting it recorded next time he was in town.
The brother-in-law called George, Jim’s brother and told him about the deed and that their grandfather had signed it. George came out to the farm when he knew Jim was out harvesting and told his grandfather he had signed the wrong deed and then had the grandfather sign a deed that gave George the farm. George went immediately to the Recorders office and recorded the deed and did not tell Jim.
Two weeks later the grandfather passed away. Who owns the farm

21. Contracts for the Sale of Real Estate
Contracts must be in writing and signed to be enforceable under the Statute of Frauds.
Brokers and Agents.
Formation of the Sales Contract.
Warranty of Habitability.
Seller’s Duty to Disclose Defects.
Seller must deliver marketable title.

22. Contracts sale of Property II
Names and address of all parties
Legal description of the property
The closing date
The type of deed to be conferred
The sale price
Earnest money/Escrow agent/Escrow monies

23. Sale Process Buyer’s Purchase Offer Home Inspection Seller’s Response
Title Exam & Insurance
Purchase & Sale
Agreement
Escrow
Financing
Closing

24. Buying Property Mortgage Loan: Property is collateral
ALWAYS..ALWAYS..ALWAYS..BUY TITLE INSURANCE.
protects you against undiscovered defects at time of purchase.
Mortgage Loan: Property is collateral
Closing/ final of all papers, title is recorded.

25. Seller’s Duty Implied Warranty of Habitability Duty to disclose:
Any know defects that materially affects the value of the property which the buyer could not reasonably discover.

26. Rotten Railings
Martha bought the house in The prior owner had imported some “monkey wood” for the stair case railings. In 2006 she put the house on the market. She knew the railings were rotten and needed to be replaced. She was able to insert plywood and apply ornate dressing, which covered up the rotten railing and made it appear stable.
Mr. and Mrs. Duffus bought the house, after Mr. Duffus made his own inspection. After three months the railings began to rock and the cover up was discovered.
Mr. And Mrs. Duffus bring an action against Martha..

27. Transfer By Inheritance
When the owner of real property dies, her property is transferred by either:
Will (testate).
Without Will (intestate).
Title can be transferred at the time of death, as provided in state testate and intestate laws.

28. Transfer By Adverse Possession
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.

29. Adverse Possession
Tootsie a well know movie star, thought someday she would retire to Colorado so she bought a large 500 acre ranch. Tootsie was busy making movies and only made it out to her ranch once a year. Whenever Tootsie visited her ranch there was much in the local papers and everyone in town knew about it.
Bad Bart was a hermit who seldom made it to town. He knew Tootsie owned the little area (on her property) that he had self proclaimed as his. He had a garden, panned for gold, set up a tent, had a camp, and hunted.
If Bart moved off the land when Tootsie was there and came back after she left?
If Bart did not remove any of his stuff and remained on the property whether Tootsie was there or not and lived on the property for the prescribed time.
If Tootsie saw Bart and told him he could camp out on the property.

30. Limits: Eminent Domain
Rights in property are not absolute. They are constrained by federal and state laws, e.g., nuisance, tax and environmental.
Transfer By Eminent Domain: The Fifth Amendment gives the government the right to “take” private land for public use with just compensation.

31. Limits: Zoning
Zoning is the State’s power to control the use of land through legislation without having to compensate the owner (unless so severe that it is a “taking”).
Must be rational in advancing state interest and must be non-discriminatory.
Variances.
Building Permits.

32. Creation of the Landlord-Tenant Relationship
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.

33. Creation of the Landlord-Tenant Relationship
Form of the Lease:
Must express intent to establish the lease.
Provide for transfer of possession to the Tenant.
Provide for the Landlord’s “reversionary” interest.
Describe the property.
Indicate length of the term, amount of rent, when and where rent paid.

34. Lease Agreement 1. Get it in writing before you move in.
2. Make a complete inspection before you move in, check plumbing, windows, appliances. Make note on the lease of any defaults.
3. Add anything you told the LL prior to signing, you work nights and need quiet to sleep during the day.
4. Inquire about guests, make sure it is in the lease.
5. Read the security deposit, understand it.
6. Walk through the apartment and take photos of everything before you move in.

35. Illegality
URLTA prohibits clauses requiring Tenants to pay attorney fees in enforcement actions.
State statutes prohibit leasing when property is not in compliance with local building codes.
Landlords cannot lease in violation of state (gambling) or federal (discrimination) laws.
Uniform Residential Landlord Tenant Act

36. Unconscionability
The unconscionablity doctrine of the UCC has begun to be followed in some states’ lease laws.
Courts are finding that a clause or even the whole contract may be unconscionable and therefore unenforceable.
Clauses attempting to absolve Landlord from liability for common areas or essential services may be unconscionable.

37. COMMON AREAS
Sue had a one year lease for her Apt. The lease had several clauses that Sue did not read at the time of the lease. One of clauses stated:
Landlord not responsible or liable for any common areas shared by tenants.
Sue had been having trouble with the front door, the key would stick in the door lock and she could not open the door. Sue had to enter the common entrance door to reach her apt.
One night she was followed home, she could not get the door open, the man assaulted her and robbed her on the doorway entrance.
Sue Brings an action against Landlord for Negligence. Assume it was determined the fault was in the door lock not in Sue’s key.
Landlord claims he is not responsible for crimes of others and by the contract lease. How should the court decide?

38. Parties’ Rights and Duties
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.

39. Possession
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.

40. Quiet Enjoyment Danny leased apartment, there was a clause for
quiet enjoyment, etc. A new guy moved in next door and played the drums.
What if the neighbor only played the drums between the hours of 10A.M. and 9P.M./
What if Danny worked nights and slept during the day?

41. 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.(lock out..construction..fire)

42. Use and Maintenance of the Premises
Tenant’s Duty Not To Commit Waste:
Tenant is liable for destruction or abuse of the property.
Tenant not liable for normal wear and tear or depreciation in value over time.

43. Use and Maintenance of the Premises
Altering the Premises:
Tenant needs Landlord’s consent to make material alterations.
Installation of fixtures become the property of the Landlord. Whether Tenant can remove depends on state law and consent of Landlord.

44. Use and Maintenance of the Premises
Residential property -- 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.

45. Implied Warranty of Habitability
Applies to major (substantial) defects if Landlord knew or should have known about & he had a reasonable time to repair.
To determine breach, 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.

46. Habitability: Tenant’s Remedies
If Landlord breaches the warranty of habitability, depending on state law, Tenant may:
Withhold rent -- put in escrow.
Repair and Deduct -- notify, repair, and deduct repair from rent.
Cancel the Lease -- must be constructive eviction or breach of habitability.
Sue for Damages -- difference between what paid for and what received.

47. Rent
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 that 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.

48. Rent Late Charges. Rent Escalation. Property taxes.
Legal, if reasonable.
Rent Escalation.
Not unless provided in lease, or at termination of lease and beginning of new lease.
Property taxes.
Landlord is usually responsible for property taxes.

49. 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.

50. Transferring the Tenant’s Interest
Landlord’s consent may or may not be required by statute or the lease itself. 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.

51. Termination of the Lease
Leases can be terminated by:
Notice—how much notice depends on lease or term.
Release and Merger—Tenant becomes owner, needs writing.
Surrender By Agreement—Parties agree to terminate early, need writing.
Abandonment—Tenant abandons; automatic termination, no writing required.

52. Termination of Lease Termination of Lease (cont’d):
Landlord takes possession -- considered acceptance of surrender.
Forfeiture -- clause in lease which makes termination automatic upon the happening of a condition.
Destruction of the Property -- from some cause outside Landlord’s control.

53. Termination of the Lease
Landlord’s Lien on all Tenant’s personal property. Must obtain legal Lien
Lawsuit to Recover Possession -- ejectment or unlawful detainer.
Landlord’s Duty to Mitigate Damages.
Must make reasonable efforts to re-rent the premises.