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Property II
South Texas College of Law Houston
Moya, Olga

PROPERTY II – PROFESSOR MOYA
FALL 2012
 
 
Introduction
Bundle of Rights (ETPU)
1.      Right to Exclude
a.      Others from the use or occupancy of the property
b.      It’s not absolute
c.       Owner may grant others the legal right to cross or otherwise use the land
                                                                          i.      Easements
                                                                        ii.      License
                                                                      iii.      Profits
2.      Right to Transfer
a.      Can sell rights to buyer
b.      Can donate to charity
c.       Can devise property upon death
3.      Right to Possess/Use
a.      Any way the owner wishes as long as…
                                                                          i.      No nuisance
                                                                        ii.      Follow applicable laws, statutes, restrictions
1.      Covenants
2.      Regulatory Takings
3.      Eminent Domain
 
 
 
 
 
Non-Possessory Interests (Servitudes)
A possessory interest allows for general use of property for the owner of the interest
A non-possessory interest allows for a specific use for the owner of the interest, e.g., easement, covenant
Servitudes:
1.      ROL: serve as an efficient adjustment of land use externalities, i.e., good use of land
2.      serve a purpose of increasing value of property
3.      gives owners the right to use…
License
1.      they are temporary in nature
2.      example: concert ticket
Example of local ordinance: land restricted to residential use only
Easements
A property interest can be obtained in an un-owned property; example: easements
ROL: Rest. Of Prop. §450. Defines an easement as follows:
An easement is an interest in land in the possession of another which
(a)   entitles the owner of such interest to a limited use or enjoyment of the land in which the interest exists;
(b)   entitles him to protection as against third parties from interference in such use or enjoyment;
(c)    is not subject to the will of the possessor of the land;
(d)   is not a normal incident of the possession f any land possessed by the owner of the interest; and
(e)    is capable of creation by conveyance.
The land subject to the easement (i.e., the burdened by the easement) is called the servient estate. The land benefited by the easement (if any) is called the dominant estate.
Generally, easements:
1.      can be purchased
2.      typically less than fee simple
3.      fall under the umbrella of servitudes
5 Categories of Easements
1.      Express easement
2.      Easement implied from prior existing use
3.      Easement by necessity
4.      Prescriptive easement (adverse possession)
5.      Irrevocable license or easement by estoppel
Note: Only express easements arise only by express agreement, i.e., when the property owner agrees in writing to burden land. All other easement categories arise as a matter of law without the need for an express agreement.
Note: Easement Holder (EH): person or entity who holds the easement
Note: Easements are viewed as an interest of land, i.e., it’s not a contract.
Express Easements
Classification and Manner of Creation
Must satisfy the Statute of Frauds
1.      Must be in writing
2.      Identify the grantor/grantee
3.      Contain words manifesting an intent to create the easement
4.      Describe the affected land(s)
5.      Must be signed by at least the grantor (preferably the grantee as well)
6.      Must be dated
Exceptions to Statute of Frauds:
1.      estoppel, i.e., detrimental reliance
2.      in-part performance
Purpose of Statute of Frauds
1.      enacted prevent fraud; and
2.      discourage perjury
3.      three functions
a.      channeling function: allows parties to distinguish between multiple oral negotiations and their final legal agreement
b.      cautionary function: cautions the parties that it is a formal/important transaction taking place
c.       evidentiary function: the final document that is being signed will be used as evidence in court to uphold duties, rights, and obligations
An affirmative easement allows the EH to do something
A negative easement restricts the land to a limited purpose, i.e., restrictive covenants
Dominant Estate: the estate benefited by the easement
Servient Estate: the estate burdened by the easement
Easements Can Be:
1.      Appurtenant – “Tail follows the dog”
a.      easement attaches to the property
2.      In Gross
a.      easement attaches to an individual
 
RP: It is a rebuttable presumption that an easement is appurtenant
1.      since most easements are intended to be appurtenant, it is reasonable to assume that the one in question is as well
2.      since an appurtenant easement passes automatically with the grant of the dominant estate, a finding of appurtenancy tends to protect the grantee of that estate from the consequences of an inadvertent failure to include a separate grant of an easement with a grant of the fee
3.      any detriment to the servient estate is usually offset by a benefit to the dominant estate
Rules of Construction
1.      Intent of the original parties, and the grantor in particular, is to be ascertained by a fair consideration of the entire instrument, and the language therein, without undue emphasis on any particular part or provision of the document.
2.      Each word and provision should be given that significance that is consistent with and will effectuate the manifest intentions of the parties.
3.      A grant is to be construed in favor of the grantee and against the grantor.
4.      A fee simple is presumed to be intended to pass by a grant of real property, unless it appears from the grant that a lessor estate was intended.
5.      Where the term “right-of-way” is used in a deed, it usually indicates that only an easement or a right of passage is being conveyed or reserved.
6.      When construction of the instrument as a whole leaves the intention of the parties in doubt, consideration must be given to the situation and circumstances of the parties at the time of execution of the deed in order to determine what was within their contemplation at that time. (Look at factors)
Public Policy
1.      Discourages separate ownership of strips of land, thus fee simple
Factors for Determining Parties’ Intent (Table 1)
1.      amount of consideration;
2.      particularity of the description of the property conveyed;
3.      extent of the limitation upon the use of the property;
4.      type of interest which best serves the manifested purpose of the parties;
5.      the peculiarities of wording used in the conveyance document;
6.      to whom the property was assessed and who paid the taxes on the property; and
7.      how the parties to the conveyance, or the heirs and assigns, have treated the property.
Note: A reservation retains for the grantor a newly created property right.
Note: An exception retains for the grantor a pre-existing interest in a described geographical part of the property or recognizes a previously existing property right in a third party.
Note: “Stranger-to-the-deed” was a common law rule that an exception or a reservation could not create rights in a third party. Many states uphold the rule on the grounds that the rule protects BFP and avoids conflicts of ownership.
Interpretation and Extent
ROL: If an easement is clear, it is given the full force of the law. If not, the court will look to the intent of the parties at he time of conveyance.
ROL: Once a location has been fixed, it can’t be moved without the consent of both parties. There are, however, exceptions.
1.      Rest. (3d) of Prop. §4.8(3). Unless expressly denied by the terms of the easement, the owner of the servient estate is entitled to make reasonable changes in the location or dimensions of an easement, at the servient owner’s expense, to permit normal use or development of the servient estate, but only if the changes do not
a.      Significantly lessen the utility of the easement;
b.      Increase the burdens on the owner of the easement in its use and enjoyment; o

be given full effect.
ROL: If the document is silent:
1.      Super-Traditional View
a.      Pre-1934
b.      EIGs are not assignable
2.      Traditional View
a.      1944-1st Restatement
b.      Rebuttable presumption that EIGs that are commercial in nature are assignable
                                                              i.      commercial in nature – Use results primarily in economic benefit rather than personal satisfaction
c.       Rebuttable presumption that purely personal EIGs are not assignable
3.      Modern View:
a.      2000-3rd Restatement
b.      All EIGs are assignable except those clearly intended to benefit the individual of the first benefit
Note: Assignments must be in writing and fulfill the Statute of Frauds
 
 
Termination and Extinguishment
 
 
Non-Express Easements
 
Covenants
Introduction
·         Moya: Covenants are promises you make regarding how you are going to behave/conduct self on the premises.
·         Historically, a covenant was a solemn written promise under seal.
·         Today, seals are rarely used and the word “covenant” is synonymous” with “promise”
·         Purpose is to help create a peaceful law-abiding environment
·         Requirement that the covenant touch and concern land
·         In order to be bound by the promise, the burdened person must have notice (which is met by the developer meeting the restrictions of moving into this neighborhood)
·         CC&R’s: covenants, conditions, & restrictions
·         Horizontal Privity: need a special relationship (e.g., GOR/GEE or LR/LE); and need the GOR and GEE signature
ROL: Covenants are promises to do or refrain from a specified act. There are both negative covenants and affirmative covenants. Negative covenants restrict usage whereas an affirmative covenant forces a party to do something.
ROL: There are two types of covenants, real covenants and equitable servitudes. Real covenants are enforceable through damages and equitable servitudes are enforceable through injunctions or specific performance.
ROL: With covenants, there exists the burden and the benefit side. The burdened side has to perform the promise whereas the benefit side has the right to enforce the promise. Generally, but not always, the plaintiff will have the benefit while the defendant will have the burden.
Creation and Validity
ROL: Covenants must fulfill the SofF requirements.
ROL: Successors to the burden must have actual, constructive, implied, or imputed notice.
ROL: Covenants are valid when they:
1.      serve a valid purpose which is reasonable;
2.      are not arbitrary; and
a.      rational relationship to purpose;
b.      benefits to the whole outweigh the burden to one complaining;
c.       uniform enforcement
3.      do not violate fundamental property rights or policy.
Two Types of Covenants
Covenants In-Gross
·         They are not real covenants – they don't run with the land
·         They are personal (i.e., not contractual)
·         Ex. – “I promise to wash my car if you cut my grass”
Real Covenant
·         They are enforceable against successors
·         Two Types
o   Affirmative
§  Ex. – promise to pay HOA fee
o   Negative
§  Ex. – height restrictions on building; only single-family residential