1. Chapter 1: Legal Ethics 1

2. © 2013 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 1.What can a person who holds property in fee simple absolute do with the property? 2.What are the requirements for acquiring property by adverse possession? 3.What limitations may be imposed on the rights of property owners?  2

3. © 2013 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 4.What is a leasehold estate? What types of leasehold estates, or tenancies, can be created when real property is leased? 5.What are the respective duties of the landlord and tenant concerning the use and maintenance of leased property? 3

4. © 2013 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. The Nature of Real Property  Real property is immovable and includes: – Land and Structures: land includes the soil, and all natural and artificial structures on it (unless agreed otherwise).  4

5. © 2013 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. The Nature of Real Property  Real property is immovable and includes (cont’d): – Airspace and Subsurface Rights: subsurface rights can be titled and sold separately. – Plant Life and Vegetation: crops can be sold separately.  5

6. © 2013 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. The Nature of Real Property  Real property is immovable and includes (cont’d): – Fixtures. Personal property that is intended to be permanently attached to real property. CASE 28.1 APL Limited v. State of Washington Department of Revenue (2010). CASE 28.1 APL Limited v. State of Washington Department of Revenue (2010). What was the parties’ intent regarding the crane? 6

7. © 2013 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 and Other Interests in Real Property 7  Ownership interests are either Possessory or Non-Possessory: – Possessory interests (fee simple, life or leasehold estate) give the owner a right to possess the land.  – Nonpossessory interests (easement, profit or license) do not give the owner a right to possess the land. 

8. © 2013 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 and Other Interests in Real Property 8  Ownership in Fee Simple. – Absolute gives the owner the greatest aggregation of rights, powers and privileges possible under American law. – Owner has indefinite right to exclusive possession and use of property. 

9. © 2013 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.  Life Estates. – Estate that lasts for the life of some specified individual. – During life tenant’s ownership, she can possess, use, and take the fruits of the estate, but not take from the property itself. Ownership and Other Interests in Real Property 9

10. © 2013 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 and Other Interests in Real Property 10  Nonpossessory Interests. – Easement: right of a person to make limited use of another person's real property without taking anything from the property. – Profit: right to go onto another’s land and take away some part of the land itself or some product of the land. 

11. © 2013 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 and Other Interests in Real Property 11  Nonpossessory Interests (cont’d): – Easement or Profit Appurtenant: owner of property (dominant) has right to go onto adjacent property (servient). Easement goes with the land at sale or transfer. 

12. © 2013 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 and Other Interests in Real Property 12  Nonpossessory Interests (cont’d). – Easement or Profit in Gross: right to go onto non-adjacent property by business or utility company. Easement goes with the land at sale or transfer.

13. © 2013 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 and Other Interests in Real Property 13  Nonpossessory Interests (cont’d). – Creation of an Easement or Profit: Must be in writing created by deed, contract, or will. Can be created by implication. Can be created by necessity. Can be created by prescription.

14. © 2013 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 and Other Interests in Real Property 14  Nonpossessory Interests (cont’d). – Termination of an Easement or Profit. – License: revocable right of a person to come onto other person’s land. Grants no interest in the land.

15. © 2013 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. Transfer of Ownership 15  Real Estate Sales Contracts: must be in writing and signed, to be enforceable under the Statute of Frauds. – Contingencies. – Closing Date and Escrow. – Implied Warranty of Habitability. – Seller’s Duty to Disclose Hidden Defects.

16. © 2013 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. Transfer of Ownership 16  Deeds--written instruments setting forth the interests in real property being transferred.  Necessary components: – Names of Grantor and Grantee. – Words evidencing intent to convey. – Legally sufficient description of the land.

17. © 2013 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. Transfer of Ownership 17  Deeds. – Grantor’s Signature. – Delivery of the Deed.

18. © 2013 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. Transfer of Ownership 18  Deeds: – Warranty Deeds. – Special Warranty Deed. – Quitclaim Deed. – Grant Deed. – Sheriff’s Deed.

19. © 2013 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. Transfer of Ownership 19  Deeds: – 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. 

20. © 2013 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. Transfer of Ownership 20  Deeds: – Recording Statutes. Marketable Title: grantor is obligated to transfer title that is free from encumbrances and defects. Title Search. Methods of Insuring Good Title: most common is title insurance.

21. © 2013 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. Transfer of Ownership 21  Adverse Possession. – Occurs when 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. 

22. © 2013 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. Transfer of Ownership 22  Adverse Possession: (cont’d). – Must be: Actual and exclusive. Open, visible and notorious. Continuous and peaceable. Hostile and adverse. – C ASE 28.2 S CARBOROUGH V. R OLLINS (2010). What was the key factor in Rollins’ proof of title to the land?

23. © 2013 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. Transfer of Ownership 23  Eminent Domain. – The Fifth Amendment gives the government the right to take (condemn) private land for “public use” with just compensation to owner. CASE 28.3 T OWN OF M IDLAND V. M ORRIS (2011). CASE 28.3 T OWN OF M IDLAND V. M ORRIS (2011). Is taking private land for a pipeline development a true public use of private property?

24. © 2013 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 24  Leasehold estate is created when a landowner (or landlord) agrees to convey her rights to possess and use the property to a lessee for a certain period of time. 

25. © 2013 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 25  Periodic Tenancy: no definite duration, but rent paid at certain intervals.  Tenancy at Will: termination of lease without notice.  Tenancy at Sufferance: tenant wrongfully possesses property.

26. © 2013 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. Landlord-Tenant Relationships  Lease Agreement can be oral or written (oral may not be enforceable).  Lease gives Tenant the temporary right to exclusively possess the property. 26

27. © 2013 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. Landlord-Tenant Relationships  Rights and Duties. – Possession: tenant has “covenant of quiet enjoyment.” Landlord has a duty to deliver actual (or right to) physical possession. Eviction: landlord interferes with tenant’s right to possession. Constructive eviction: landlord fails to perform duties under the lease, making use of premises impossible. 27

28. © 2013 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. Landlord-Tenant Relationships  Rights and Duties (cont’d). – Use and Maintenance of the Premises. Tenant is responsible for damages to property, and cannot be a nuisance and interfere with others quiet use of property. Landlord is responsible to maintain common areas such as stairs, pools, and elevators. 28

29. © 2013 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. Landlord-Tenant Relationships  Rights and Duties (cont’d). – Implied Warranty of Habitability. Premises are safe and habitable for humans to live in. Landlord is responsible to keep leased premises in good repair. – Rent: rent can be withheld but it must be put into escrow pending repairs. 29

30. © 2013 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. Landlord-Tenant Relationships  Transferring Rights to Leased Property. – Assignment: lessee can transfer lease to assignee, if allowable under lease. Assignor is still liable for rent. – Sublease: tenant transfers all or part of premises for less than duration of lease. 30

31. © 2013 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. Landlord-Tenant Relationships  Termination of the Lease. – Usually a lease terminates when its term ends, and landlord retakes possession. – Release and Merger—Tenant becomes owner, needs writing. – Surrender By Agreement—Parties agree to terminate early, need writing. 31

32. © 2013 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. Landlord-Tenant Relationships  Termination of the Lease. (cont’d) – Abandonment—Tenant abandons; automatic termination, no writing required. Landlord is required to mitigate her damages and rent the property. 32

33. © 2013 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. Land-Use Control  Zoning Laws. – Purpose and Scope of Zoning Laws. Permissible Uses of Land: residential, commercial, and industrial. Other Zoning Restrictions: residential areas. 33

34. © 2013 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. Land-Use Control  Exceptions to Zoning Laws. – Variances: allows exception to the zoning rules. – Special-Use Permits. – Special Incentives: encourages development, usually by tax incentives and abatements. 34

35. © 2013 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  Parties’ Rights and Duties. – Possession: tenant has “covenant of quiet enjoyment.” Landlord has a duty to deliver actual (or right to) physical possession. Eviction: landlord interferes with tenant’s right to possession. Constructive eviction : landlord fails to perform duties under the lease, making use of premises impossible. 35

36. © 2013 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. Landlord-Tenant Relationships  Parties’ Rights and Duties (cont’d). – Use and Maintenance of the Premises. Tenant is responsible for damages to property, and cannot be a nuisance and interfere with others quiet use of property. Landlord is responsible to maintain common areas such as stairs, pools, and elevators. 36

37. © 2013 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. Landlord-Tenant Relationships  Parties’ Rights and Duties (cont’d). – Implied Warranty of Habitability: premises are safe and habitable for humans to live in. Landlord is responsible to keep leased premises in good repair. – Rent: rent can be withheld but it must be put into escrow pending repairs. 37

38. © 2013 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. Landlord-Tenant Relationships  Transferring Rights to Leased Property. – Assignment: lessee can transfer lease to assignee, if allowable under lease. Assignor is still liable for rent. – Sublease: tenant transfers all or part of premises for less than duration of lease. 38

39. © 2013 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. Landlord-Tenant Relationships  Termination of the Lease. – Usually a lease terminates when its term ends, and landlord retakes possession. – Release and Merger—Tenant becomes owner, needs writing. – Surrender By Agreement—Parties agree to terminate early, need writing. 39

40. © 2013 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. Landlord-Tenant Relationships  Termination of the Lease (cont’d). – Abandonment—Tenant abandons; automatic termination, no writing required. Landlord is required to mitigate her damages and rent the property. 40

41. © 2013 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. – Created when owner or lessor conveys right to possess or use the property to a lessee (tenant) for certain period of time. – Fixed-Term Tenancy (or Tenancy for Years): express contact for specified period of time.  Ownership and Other Interests in Real Property 41

42. © 2013 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 (cont’d). – Periodic Tenancy: no definite duration, but rent paid at certain intervals. – Tenancy at Will: termination of lease without notice. – Tenancy at Sufferance: tenant wrongfully possesses property. Ownership and Other Interests in Real Property 42

43. © 2013 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.  Restrictive Covenants: a private restriction on the use of land and is generally binding on the purchaser of the land because it “runs with the land” as stated in the deed.  Inverse Condemnation. Government takes land without paying compensation at all. Limitations on the Rights of Property Owners 43

44. © 2013 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. Zoning and Government Regulations  Purpose and Scope of Zoning Laws. – Permissible Uses of Land: residential, commercial, and industrial. – Other Zoning Restrictions.  Exceptions to Zoning Laws. – Variances: allows exception to the zoning rules.  44

45. © 2013 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. Zoning and Government Regulations  Exceptions to Zoning Laws (cont’d). – Special-Use Permits. – Special Incentives: encourages development, usually by tax incentives and abatements. 45