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Property II
South Texas College of Law Houston
Rensberger, Jeffrey L.

Property II-Fall 2010
Professor Rensberger
Adverse Possession
A.    Definition: Method of transferring interests in land w/o consent of prior O; If TO fails to sue to remove AP from land w/in SOL, TO is barred from removing AP; AP takes whatever title TO had to land (AP is new TO); New title relates back to entry, law acts as though A =TO from that date (rule of increase)
B.     Policy:
a.       Reward AP
                                                  i.      Earning principle: (AP’s mind irrelevant) productive land use is good, AP earned rights  
                                                ii.      Industrious-personal: good faith maybe relevant; don’t like that you’re taking someone’s land but we like what you’re doing w/ it
b.      Punish TO
                                                  i.      Sleeping Principle: TO is lazy; AP’s mind irrelevant; encourages TO to care for prop
c.       Quiet title, cure title defects, proof of meritorious title
d.      (Holmes) Reliance of AP—AP psychologically attached to prop, TO’s attachment fades away
e.       Squatters: redistribute wealth from haves to have-nots; protects status quo; G/B faith irrelevant
f.       Criticism: AP favors those exploiting land (exploiting land); (pg. 147—leaving no trace of use)
C.     Elements: (BOP is on AP to prove elements)
a.    Actual entry
                                                  i.      Actual, physical possession of land required; stakes out what AP might end up claiming
                                                ii.      Van Valkenburgh v. Lutz: (statute) AP occupying w/o color of title must prove substantially enclosed or usually cultivated or improved prop (no improvements=no entry)
                                              iii.      MAJORITY: “ordinary owner standard”—given circumstances, entry must be in manner that neighbors & others would regard as exercising exclusive dominion (must consider ordinary owner at time of ENTRY, NOT when SOL expires) (improvements=factor)
b.     Open & notorious
                                                  i.      Objective standard: requires constructive, NOT actual notice
                                                ii.      Underground occupation: Marengo cave—Cave under A’s & B’s land, entrance on A’s land, after SOL runs, B notices cave under his land, A tries to claim by AP; A’s use was NOT O&N (“ad coelum” doctrine—you own air above and soil below prop)  
                                              iii.      AP of Subsurface minerals: if TO didn’t own subsurface minerals, when AP acquires title, he only acquires title to surface of land; to acquire mineral rights, AP would have to remove minerals in way that satisfies all 4 requirements
                                              iv.      Boundary Disputes—Major v. Minor Encroachments: (Mannillo v. Gorski)
1.      Major: (possession clear, unequivocal, immediately visible), TO presumed to have knowledge of AP 
2.      Minor: (small area, not clearly & self-evidently apparent), no presumption; must prove TO had actual knowledge in order for entry to be open and notorious
a.       Policy: presumption burdens TO; knowledge would require survey)
c.    Continuous
                                                  i.      Requires continuous but not literally constant occupancy
                                                ii.      TEST: how would ordinary TO use property?
1.      Howard v. Kunto: K occupied house every summer under color of title for entire SOL; even though K left prop for majority of year, continuity was satisfied b/c reasonable TO would use prop in question + surrounding prop was intended for summer use only & not at other times
                                              iii.      Tacking—Adverse Possessors:
1.      (Old test) If privity of estate (deed b/t parties) b/t successive possessors, permitted  
2.      (New test) (Kunto) if privity of estate (some reasonable connection) exists b/t successive possessors, tacking permitted; privity raises claim of right above status of wrongdoer (does NOT require written doc.)
a.       “Some reasonable connection” = voluntary transfer of possession b/t successive possessors (Policy: reward AP instead of wrongdoer)
3.      When AP claims MORE land than described in deed: Purchaser may tack adverse use of predecessor in interest to his own where land was intended to be included in deed b/t them, but was mistakenly omitted from description
4.      Abandonment: (subjective) if AP abandons prop (leaves w/ no intention to return) before SOL has run, statute stops, new entry required, process starts all over again
5.      Interruption: if TO interrupts AP before SOL runs (ejectment action), lawsuit interrupts period of possession even if TO doesn’t oust AP, SOL starts over again 
                                              iv.      Tacking—Owner:
1.      Tacking follows automatically on owner’s side; once SOL begins, COA for ejectment (+ its expiring SOL period) goes along w/ ownership
2.      AP cannot be defeated by an inter vivos conveyance or devise of land
                                                  i.      Ouster: if AP is ousted from prop by 3rd party, 3rd party may not tack ousted possessor’s period of possession onto his; privity is lacking b/c transfer was not voluntary
1.      If ousted possessor returns, courts take 3 views:
a.       Most favorable to TO: SOL starts over w/ re-entry (minority view)
b.      Most favorable to AP: ouster doesn’t interrupt SOL (problem-allows ousted party to tack possession after re-entry to 3rd party)
c.       SOL Tolled: (MAJORITY) ousted AP can tack new & old possession but can’t use 3rd party’s occupation—SOL + period of 3rd party’s occupancy
d.      Adverse & under a claim of right (AKA Hostile & under a claim of right)
                                                  i.      NOTE: some Js require AP to enter under color of title; w/o it, can’t acquire title by AP
1.      Policy: deters squatters/trespassers
2.      Advantages: shorter SOL; AP gets all land in deed (constructive + actual possess) 
                                                ii.      AP must occupy (1) w/o consent & (2) w/ intention to remain (claims right to stay there)
                                              iii.      3 Views on State of Mind:
1.      Objective: (MAJORITY) state of mind irrelevant; requires: (1) No permission; & (2) AP’s acts & statements objectively appear to be claims of ownership
a.       SOL begins when TO dispossessed by some1 taking possession inconsistent w/—not subordinate to—his title
2.      Good faith: (minority) AP must have good faith belief that she owns occupied prop; can’t acquire title by AP if you know prop you are occupying is not yours
3.      Aggressive trespass: AP must know prop isn’t his but intend to claim it anyways
                                              iv.      Boundary Disputes: (State of Mind/Mistake)
1.      Maine Doctrine/Subjective hostility: (MINORITY) possession can’t be based on mistake; requires (1) aggressive trespasser/bad faith; OR (2) AP ignorant of actual boundaries, enters upon mistake, but if land isn’t his, he will make it his
a.       AP not possessing adversely if occupy under good faith but mistaken belief that land is hers & AP wouldn’t occupy if she actually knew it wasn’t hers 
b.      Criticisms: rewards intentional wrongdoer, disfavors honest, mistaken entrant
2.      Connecticut Doctrine (MAJORITY): any entry & possession for required time which is exclusive, continuous, uninterrupted, visible & notorious, even though under mistaken claim of title, sufficient
a.       State of mind irrelevant; same result whether mistaken or intentional—TO is ousted out of possession by AP
3.      Resolution of Boundary Disputes:
a.       Innocent Improver Doctrine: if innocent AP (unavailable if intentional ) of small portion of land b/t boundary line can’t remove/elim encroachment w/o great expense, OR removal/elim. impractical/would cause great hardship, TO may be forced to convey land upon payment of FMV w/o regard to whether TO had notice of encroachment at its inception
                                                                                                                          i.      This ONLY applies if adverse possession fails
                                                                                                                        ii.      Variation: give TO option to buy improvements for FMV
                                                                                                                      iii.      If inconvenience caused by encroachment is so minor as to be trivial, relief to AP might be denied
                                                                                                                      iv.      If encroachment takes up substantial part of land, removal might be ordered, regardless of encroaching party’s good faith, if:
1.      (1) TO proves that it would suffer irreparable harm if removal denied; AND
2.      (2) Even if TO would suffer irreparable harm, balancing test—compare TO’s hardship if removal denied v. AP’s hardship if removal granted
a.       If AP’s hardship > TO’s hardship, AP gets title OR easement in land & pays TO damages
3.      If intentional, most cts order removal no matter how costly
D.    Adverse Possessor’s Disclaimers of Title/Ownership:
a.       Before SOL runs: makes AP’s possession non-adverse, prevents title from vesting in AP
b.      After SOL runs (AP has title): title can’t be divested by oral disclaimer, only by transfer of land
E.     Extent of Property Acquired by Adverse Possession:
a.       Entry WITHOUT Color of Title (no written instrument): AP acquires only land that he actually physically possessed for SOL period; NO constructive possession (Van Valkenburgh)
b.      Entry UNDER Color of Title (defective/invalid written instrument): AP deemed to possess all land described in defective deed; AP acquires land actually possessed + vacant land b/c of constructive possession   
                                                  i.      AP’s CP of vacant land does NOT beat TO’s CP of same vacant land (prior in time & CP arises out of valid, superior title)
1.      Even if TO entered under invalid deed, his CP still beats AP’s CP b/c he is prior in time (assuming TO satisfied SOL)
                                                ii.      AP’s actual possession of land beats TO’s constructive possession of same land
                                              iii.      AP’s CP of land does NOT beat TO’s (or squatter’s) actual possession of same land
F.      Statutory Issues:
a.       Length of SOL period: modern—10-15 years, some states as short as 6 years
b.      When TO’s cause of action accrues: TO’s COA to recover possession accrues when there’s an adverse entry of land (SOL begins)
c.       Disabilities: statutes protect TO w/ disability by providing that if TO is disabled at time COA accrues (entry), TO may bring suit for specified time period after disability ceases, even though normal SOL has expired (when initial SOL expires, SOL tolled until disability ceases (no matter how long it takes), then new SOL (usually 10 years) begins to run from date of removal)
                                                  i.      Disabilities: insanity, imprisonment, or of minority age
                                                ii.      You CANNOT tack disabilities: disabilities only matter if existed at time of entry
                                              iii.      Cause of action goes along w/ title when title is transferred
                                              iv.      Death is treated as removal of disability
1.      Person taking under decedent gets extended statutory period if TO would have
2.      If TO dies w/o disability & heir has disability, heir doesn’t get extended SOL; heir needs guardian to file suit w/in SOL for him
                                                v.      If dis

  Equitable estoppel: unconscionable injury would result from denying enforcement of oral K after 1 party induced by other seriously to change position in reliance on K (perform acts other than acts required by K in reliance on oral K); Equitable Estoppel ≠ PP
a.       Reliance must be w/in seller’s contemplation (foreseeable)
                                                                                                                          i.      If further negotiations expected, buyer’s reliance (selling his house) ≠ reasonable b/c parties never discussed B’s action & it wasn’t foreseeable to seller, seller wins (Walker v. Ireton)
                                                                                                                        ii.      If no further negotiations are expected by parties, buyer’s reliance on oral K (selling his house to get $ to buy S’s house) = reasonable, buyer wins; ct. orders specific performance (Hickey v. Green)
c.       Implied Obligations in Contracts for Sale of Realty:
                                                  i.      Good faith: party must exercise reasonable efforts to discharge express duties of K; (i.e. buyer obtaining financing or satisfaction w/ inspection; lack of good faith = default)
                                                ii.      Time of closing: “time is of the essence” clauses
                                              iii.      Marketable title: implied duty of seller, if can’t deliver MT, buyer can rescind; title not subject to such reasonable doubt as would create just apprehension of its validity in mind of reasonable, prudent & intelligent person, 1 which such persons, guided by competent legal advice, would be willing to pay FMV (reasonably sound, NOT perfect title)
1.      General test—free from reasonable doubt (low threshold)
a.       Requiring perfect title would give buyer easy out if any minor defect & too much protection b/c reasonable person doesn’t expect perfect title
2.      Standard is negotiable b/t parties (can agree to higher or lower standard)
3.      Proof of Marketable Title: (1) good record title or (2) title by adverse possession
                                              iv.      Unmarketable (Defective) title: defect must be substantial & likely to expose person holding it to hazard of litigation; defects don’t always prevent transaction from taking place (buyers can & do waive certain defects (easements, mortgages assumed by buyer) and certain defects can be removed prior to closing (pay off existing mortgage w/ sale $)
1.      Defective Chain of Title: faulty link (deed describes wrong land) or nonexistent link (no record evid of deed in chain of title)
2.      Encumbrances: generally render title unmarketable (burden on title, i.e. mortgage, lien, judgment, covenant, easement)
a.       Existence of zoning ordinances/municipal restrictions do NOT affect marketability b/c they do NOT give govt. ownership interest in your prop
b.      Existence of restrictive covenants/private restrictions, make title unmarketable b/c regarded as interest in real estate (creates title issue) (ex. master-planned communities)
                                                                                                                          i.      EXCEPTION: do NOT make title unmarketable if K excludes them
                                                                                                                        ii.      Fact that encumbrance adds value to prop does NOT matter
                                                                                                                      iii.      Knowledge of E does NOT matter UNLESS open & notorious
c.       Violation of EITHER zoning ordinances OR restrictive covenants renders title unmarketable (Lohmeyer v. Bower)—damages = rescission, buyer gets his $ back, seller keeps prop
                                                                                                                          i.      EXCEPTION: Frimberger—violation of building or housing reg. does NOT affect title; you still have marketable title
3.      Land-locked land: lack of access affects FMV, NOT marketability
4.      Hazardous Waste: presence on prop does NOT render title unmarketable
d.      Duties of disclosure & implied warranties:
                                                  i.      Duties of disclosure: caveat emptor (CL rule) absent fiduciary r/ship, seller has no duty to disclose (must refrain from intentional misrepresentation or active concealment)
1.      Modern Rule: seller obligated to disclose all known material defects, buyer’s remedy = rescission or damages
2.      Exceptions to Caveat Emptor: (CE does NOT apply)
3.      Fiduciary R/ships: fiduciary obligated to reveal all defects known to him