Property I Outline

Chapter 2: Adverse Possession
 
Adverse Possession
A.     Theory: if a person who does not own land possesses it for the period of time specified in the statute of limitations, she acquires title to the land; and the owner loses her right to the land.
a.       Statutory, not common law
Elements of Adverse Possession
Actual entry onto and possession of the land
→It has to be possession and entry such that the community would think it was the adverse
possessor’s land
→Exclusive possession
The possession must be open and notorious
→Constructive possession is not enough
→These acts must be considered reasonable notice to the owner that the land is occupied
The possession must be continuous for the statutory period
→Test: is the adverse possessor using the land in the same way the true owner would be
using it? Ex. summer house.
The possession must be adverse, i.e. without owner’s consent
B.     Underlying policies
a.       Reward those using the land beneficially
b.      Protection of title: It’s hard to prove owner of land after a while… can the ∆ be expected to be prove his ownership back to the Republic of Texas? No. Too costly, and records can be deficient.
c.       Bringing suit while witnesses’ are alive is another plus to having a statute
d.      Psychological: after a long time, the possessor may have an emotional attachment to the land and expectations that they can use the land the way they want
C.     Detrimental Reliance: If true owners or neighbors watch you use the land, then one day says it’s not yours. That’s not cool. Adverse possessor has relied on silence of neighbor or true owner.
D.     Texas
a.       3 (with color of title), 5, 10, and 25 (disabled person) year statutes depending on what the circumstances are
b.      Trial court has jurisdiction over land titles
c.       Statute of Frauds necessary to convey land in Texas
E.      “Quiet titles” (a.k.a. “Trespass to try title” in Texas): Title acquired by AP cannot be recorded in the courthouse because it does not arise from a recorded document. In order for an adverse possessor to have the title put in his name, he must file a quiet title action against the former owner barred by the statute.
F.      Van Valkenburgh v. Lutz, 1952: There was land between ∆ and Π. ∆ used it for years, because the street adjacent to his property was a paper street. 16 years later, the street was made. Π later bought it. Π wanted ∆ off. At trial, ∆ admitted that the land belonged to Π. To get land by adverse possession does a party have to occupy the land under a claim of title? Yes. Under the statute here, there must be clear evidence of actual possession for 15 years under a claim of title. The court found that ∆’s garden, chicken coop, and storage was not substantial occupation. Also, since ∆ had admitted that it was Π’s land, ∆’s occupation was not under a claim of title. In the first trial case, Lutz claimed he had a prescriptive easement. He changed his tune for the second case and said he had AP. The court didn’t like that and found a way to fudge it and say he was not an AP, even though he really was.
G.     Prescriptive Easements
a.       A cousin to AP
b.      Differs from AP in the type of interest obtained. AP gets title in a fee simple. PE gets a right to use, but title remains with true owner.
                                                   i.      “exclusive” element is what’s different.
H.     Hypo: grandmother goes to nursing home. Grandson moves in next day. What are his rights on that day? No rights. Grandson is a trespasser. Over time, though, he would get the land through adverse possession.
I.        Relation Back: if adverse possessor enters land at point in time 1 and satisfies elements of A.P., at point in time 2 (which is when the statute of limitations runs), adverse possessor has fee simple absolute that goes back in time to point 1.
J.       The modern trend is to shorten the period of adverse possession
K.    Tacking: there need not be continuous possession by the same person. The period of adverse possession of one possessor can be tacked to the period of adverse possession of another possessor when there is privity between the two.
L.      Possessor’s Rights before Acquiring Title: same as true owner against everyone except the true owner. True owner can take the land back at any time before statute runs.
M.   Deed vs. Title: Deed is the instrument that conveys title. Title is the ownership of property.
N.    Claim of Title: the possession of a piece of property with the intention of claiming it in hostility to the true owner.
a.       Three views of state of mind of adverse possessor
                                                   i.      State of mind is irrelevant (objective)
1.      English
2.      Majority rule today
                                                 ii.      “I thought I owned the land” (good faith belief)
1.      American
                                                iii.      “I knew it wasn’t mine, but I want it anyway”
O.    Property rules vs. Liability Rules
a.       When property is protected by a property rule, the interest cannot be taken from the owner without consent… the transfer is voluntary.
b.      When property is protected by a liability rule, the interest can be taken without consent… the transfer is forced.
c.       Compensation approach says the transfer can be forced, but only with compensation.
P.      Color of Title: a written instrument or other evidence that appears to give title, but does not do so (it may be invalid or defective)
a.       Not required in most American jurisdictions
b.      Advantage for adverse possessors: statute of limitations may be shorter for those adverse possessors with a color of title.
c.       In Texas, this must be pretty good, but only requires 3 years for statute
Q.    Constructive Adverse Possession example: suppose Greenacre is 120 acres. Adverse Possessor uses 5 acres. If he has no written instrument, he’d only get the 5 acres by AP and the true owner would retain the remaining 115 acres. But, if he has an instrument (even if defective or invalid), he’d get all 120 acres (provided he satisfied all elements of AP).
a.       What if there was another person seeking AP on another section of Greenacre. And he also had a deed. Who wins? Hmm… Burton said good exam question.
b.      What if the true owner comes by and says, “hey! Get off my land!” But you’ve built a house and improved it… Innocent Improver doctrine, supra, may protect you.
R.     Mannillo v. Gorski, 1969: Π and ∆ had adjacent land. Over time, improvements were done to ∆’s house, including raising it up, which resulted in extending steps to reach the house. The steps then were 15” over Π’s land. Is there adverse possession, when the occupancy is of a small part of the land and it unknown to both parties? No. If the encroachment is so small that it would require surveyors to confirm the boundary, it would be an undue burden to expect the owners to do so. The court says that only if the true owner has actual knowledge of the possession is the possession open and notorious. Therefore, the statute of limitations will run against the owner only if the owner has actual knowledge of the encroachment. Constructive notice is not good enough here because it’s such a small area.
S.      You can’t claim AP against municipality unless they say you can (ex. Chicago flat iron building example: 12” of building was in street right of way. Chicago wanted it back, the building had to be modified)
T.      Innocent Improver (a.k.a. Good Faith Improver): someone made a dumb mistake by improving someone else’s land. True owner either likes or dislikes the improvements
Texas §22.041: If market value increases, true owner owes damages to adverse possessor. If market value decreases, adverse possessor owes damages to true owner. (damages = change in market value)
Texas §22.051: AP seeks removal of improvement from TO land to somewhere else. To do this:
1. No fraudulent intent
2. No permanent injury to owner of fee simple
3. AP provides surety bonds
4. AP pays only the §22.041 damages
5. Remedies cumulative with other remedies provided by common law or other statutes
6. 21 day deadline—no longer in effect
a.       If improver was not acting in good faith, statute cannot be used.
U.     Boundary Disputes
4 ways to create boundary:
a.       Doctrine of Agreed Boundaries: if they’re unsure of the true boundary line, they can agree orally to settle it.
b.      Doctrine of Acquiescence: long acquiescence (implied consent) is evidence of an agreement between the parties fixing the boundary line
c.       Doctrine of Estoppel: when one neighbor treats the boundary as if it is in one spot, and the other neighbor goes about his business thinking it’s there, and then it’s there.
d.      Adverse Possession
V.     Howard v. Kunto, 1970: There are several tracts of land that are adjacent and screwed up. Surveying is difficult on this land, and somehow, all the neighbors built their houses on the lot next to the one they owned. The deeds were correct. Π want quiet title. Is adverse possession denied because the house was only used during summer, thus failing the continuous element? No.  Summer occupancy fulfills continuity requirement because owners in the area only occupy their houses during summer months. Using the land during summer and continued improvements satisfy the uninterrupted element of AP. Can a person who owns tract A, but thinks he owns B, use possession by previous occupiers to get adverse possession? Yes. Tacking (adding successive possessors together to establish enough time to claim adverse possession) is permitted if the successive occupants are in privity. They are in privity of estate because of the deed between the parties transferring land. This privity of estate is implied by the actions of the parties.  Quiet title to ∆ granted.
a.       England does not require privity for tacking.
W.   Riparian Land Surveys
a.       Size and area of lakes and rivers change
b.      These lands are usually surveyed wrong. When it’s discovered, it’s better to let sleeping dogs lie than to upset everyone’s land.
c.       If a natural lake dries up, the riparian land owners get the land to the midpoint. The riparian owners have rights to the lake: things like fishing, boat, swimming. But if the lake moves, riparian owners out of luck. Risks and benefits.
d.      Artificial lakes are different… adjacent owners don’t have automatic rights to the lake.
e.       Shoreline changes constantly. Accretions: the little build up that occurs naturally. Relictions: the little removal that occurs naturally.
Midpoint
1
2
3
X.     Howth v. Farrar, 1938: Chain of title: Texas→War Hero Howth Sr→life estate to oldest living son (Howth Jr.) →Remainder to his oldest living son (Howth III). But Howth Jr. deeded off land to ∆’s in 1882, then died in 1930. So the life estate becomes fee simple in Howth III. Do ∆’s have AP, since they were deeded the land in 1882 and Howth Jr died in 1930? No. While their possession was open and notorious (they had deeds), they only have a life estate because that’s all Howth Jr. had. The life estate is a huge defect in the color of title. And, the courts give the dead guy’s intentions huge weight, and Howth Sr wanted the remainder to go to his grandson.
 
Chapter 7: The Land Transaction
Parties Enter into Land Sale Contract
→Letter of intent (commercial) or EMK
→K must be in writing
→Presumption that time is not of the essence, unless so stated.
→Implied warranty of marketability arises
Pre-Closing
→Title Exam. If defective, Buyer must notify Seller and allow time to cure.
→Survey
→Inspections
→Financing Commitment
→During this time, risk of loss is on Buyer.
Closing
→Title passes if valid. 
→Valid execution requires writing signed by grantor containing an adequate description of land. 
→Valid delivery requires intent by grantor to immediately part with control.
→payment
→possession delivered (keys, etc.)
→Land sale K and implied warranty of marketability merge into deed.
→Only basis for suit by Buyer after this is under an express covenant.
Recording
→Buyer records deed for protection from subsequent BFP’s.
→Usually done by title insurance company
 
Negotiations
New Occupancy or Management
Timeline of the Sale of Land
Land Transactions
A.     Steps to Buying and Selling Land
a.       Seller lists property with real estate agent
b.      Buyer contacts real estate agent
c.       Buyer signs contract, usually a form provided by real estate agent
d.      Arrangements for agreement, down payment, mortgage made
e.       Mortgager wants proof of good title; Buyer wants assurance that seller has good title
f.        Buyer gets credit, usually with assistance of real estate agent
g.       Title investigated and transfer begins
h.       Closing
i.         Transfer recorded in courthouse.
j.        Deed gets stamped and goes to buyer. Lender gets certificate of title
B.     Attorney’s Role: draft contract of sale, examine title, draw up a deed, close transaction.
C.     The Contract of Sale
a.       Some elements of a K explained
                                                   i.      Earnest Money: money to secure the deal
                                                 ii.      Closing date: money and deeds and title exchanged on this day. If the date is not specified, the court will insert a reasonable date determined by custom
                                                iii.      Possession: money should be exchanged only when possession is taken
                                               iv.      Prorations: taxes and special assessments. Make sure these payments are current at closing
Statute of Frauds
These items are needed to satisfy the Statute of Frauds:
→Name of Buyer
→Name of Seller
→Description of Property
→Agreed upon terms, such as price and condition
            If no price is included, the court may imply a reasonable price
→Signature of party to be charged (usually requires signature of buyer and seller)
 
Exceptions to Statute of Frauds
1. Part Performance: allows the specific enforcement of oral agreements when particular acts have been performed by one of the parties to the agreement. Such as the buyer taking possession and paying part of the purchase price or making improvements.
2. Estoppel: applies when unconscionable injury would result from denying enforcement of the oral contract after one party induced another to rely on the contract. Also applies in cases of unjust enrichment.
b.      Hickey v. Green, 1982: Greens (G) wanted to sell their land. Hickey (H) offered. H told G that he was going to sell his house and build on their land. H listed his house and sold it to someone. Then G told H that she decided to sell to a higher “bidder.” H offered the price that the other purchaser was paying, but G refused. There is no doubt that G made a promise to which H relied, and then she backed out. Per §129, a K may be specifically enforced if the party seeking enforcement proves the K and, in reasonable reliance on the K, has changed his position such that injustice can only be avoided by specific enforcement. Remanded. TC may, instead of seeking specific performance (because it’s been 2 years), demand that G owe restitution to H (including advertising, deposits, cost of litigation plus interest).
c.       Option to Put: when A sells, B has to buy
d.      Option to Call: when B decides to buy, A has to sell
Texas Property Code Handout
Buying and Selling Land
§5.069 Seller’s Disclosure of Property Condition: Seller must provide Buyer a survey, descriptions of encumbrances, restrictive covenants or easements, and written disclosure of the condition of the property.
§5.008 Seller’s Disclosure of Property Condition (residential): Seller must provide Buyer written disclosure of condition of property.
§5.064 Seller’s Remedies on Default: A seller can rescind, forfeiture, or accelerate against a purchaser if the purchaser is notified and doesn’t cure in 60 days.
§5.065 Right to Cure Default: buyer has 60 days to cure a default
§5.022 Standard Warranty of Deed Form: includes this language “And I do hereby bind myself, my heirs, executors, and administrators to warrant and forever defend all and singular the said premises unto the grantee.”
 
Marketable Title
A.     A marketable title is a title reasonably free from doubt, one which a prudent purchaser would accept.
a.       Same as Merchantable title
B.     Defects in Title
a.       defect in chain of title
b.      encumbrances (mortgages, liens, covenants, and easements)
C.     Zoning and subdivision restrictions do not normally make title unmarketable
D.     A seller can satisfy a mortgage or lien at closing with the proceeds of the sale. So, the buyer cannot claim title is unmarketable because it is subject to a mortgage prior to closing, if the closing will result in marketable title.
E.      Lohmeyer v. Bower, 1951:
a.       If the property is in violation of a zoning ordinance or subdivision law, and correction of the violation can be demanded by the government, the title is usually held unmarketable
b.      To render the title to real estate unmarketable, the defect must be of a substantial character and one from which the purchaser may suffer injury.
F.      Conklin (Seller) v. Davi (Buyer), 1978: Seller wants to sell his property to Buyer, who refuses to go through with the sale because of defects in title caused by adverse possession. Marketable title can be based on adverse possession, as long as it’s clearl