Medill, Property, Spring 2010
Common Law Marital Property System.. 3
Common Law – During Marriage (The Fiction that H and W Are One)3
Married Women’s Property Act (MWPA)3
Common Law – Termination of Marriage by Divorce. 5
Division of Property:5
Common Law – Termination of Marriage by Death. 6
Community Property. 6
Community Property – Termination of Marriage by Divorce. 7
Community Property – Termination of Marriage by Death. 7
Community Property – Management7
Common Law v. Community Property Concurrent Interests8
Capital Gains (Death of Spouse / Sell House)9
Rights of Domestic Partners10
Common Law Marriage. 10
Same Sex Marriage. 10
The Land Transaction. 10
When Ownership of Real Property is Transferred:11
Types of IV Transfers:11
The Land Transaction – Voluntary IV Transfer by (Bargained for) Sale. 11
Steps in the Sales Transaction:11
Listing Agreement with Real Estate Broker12
The Sales Contract13
Written Contract Required. 13
Marketable Title. 15
Duty to Disclose Defects17
Remedies / Damages for Breach of Sales Contract17
Doctrine of Merger20
Builder or Vendor’s Implied Warranty of Quality. 20
Deeds and Deed Covenants21
Delivery of Deeds23
Title Assurance. 26
The Recording System.. 26
Hierarchy of Rules to Resolve Title Disputes (Checklist)26
Marketable Title Acts31
Title Insurance. 31
Land Use Controls31
Private Land Use Controls: The Law of Servitudes31
Easements / Profits32
Creation of Easements / Profits33
Covenants Running with the Land. 38
Real Covenants: Covenants Enforceable at Law. 38
Equitable Servitudes: Covenants Enforceable in Equity. 40
RC v. ES Elements41
Touch and Concern. 41
Use of Defeasible Fees Instead of RC / ES as Land Use Control41
Modern Issues Concerning Covenants42
Termination of Covenants43
Legislative Land Use Controls: The Law of Zoning. 44
The Evolution of Zoning. 44
Key Events in the Evolution of Zoning. 44
Source of Legal Authority for Zoning. 44
Key Parts of Zoning Implementation. 44
Euclidean Zoning. 45
Modern Issues / Criticisms of Zoning. 46
Infringement on Other Federal and Constitutional Rights46
Power of Eminent Domain (Taking)49
Public Use. 49
Just Compensation. 50
General Rule. 51
Analysis of Regulatory Taking. 52
i. Capital Gains
Law of domicile where acquired
1. CP (check first)
Common Law Marital Property System
Fundamental principle: H and W can separately own property; title is determined by whose name is on the document of ownership.
Law in majority of states:
o States: All non-CP states
Common Law – During Marriage (The Fiction that H and W Are One)
Married Women’s Property Act (MWPA)
o Before MWPA: In common law jurisdictions, all of the W’s property rights submerged in the H’s rights (coverture). Married women could not own separate property. If W brought property to the marriage, creditors to the H could get that property b/c law said H had ownership rights to the property.
o Purpose of MWPA: by 1900, ALL common law property states had enacted MWPAs
§ 1. to protect W’s property from creditors
§ 2. to give her legal autonomy to own her own property
o Asset Protection Under MWPA: MWPA can be used by couples to protect assets by putting in one spouse’s name in case the other is sued.
o Tenancy by the Entirety (TBE): There may be a fort around TBE property.
§ TBE Recognized in Common Law: TBE was assumed to be part of common law until a state supreme court opinion or state statute said it was not part of law.
· NE: Not recognized in NE. See notes for details.
§ General Rules: Split among states with regard to Creditor’s Rights and whether creditors of only one spouse have a right to TBE property. There may be fort around TBE property.
· Group I: The estate is essentially the common law TBE, not affected by MWPA. The H, but not W, may convey the entire estate subject only to the possibility that the W may become entitled to the estate upon surviving H. (Only 3 states à )
o In Mass., the entire estate is subject to being attached by the H’s creditors (but is subject to ROS of non-debtor spouse).
o In the other 2 states, the use and income of the estate is not subject to levy by creditors of either spouse.
o (p. 314 (T))
· Group II: The interest of the debtor spouse in the estate may be sold or levied upon for his or her separate debts, subjectto the other spouse’s contingent right of survivorship. In these states, a joint conveyance by the spouses will be subj to the C’s lien against the interest of the D spouse. If the conveyance is sale producing cash proceeds, the C should be entitled to the portion of the proceeds attributable to the D spouse. But, if the non-debtor spouse retains her survivorship interest, and if she survives, then the C’s lien should be worthless.
· Group III – Majority: The interest of the H and W in TBE is not subject to the claims of his or her individual creditors during the joint lives of the spouse. The estate may not be subjected to the separate debts of one spouse only. It is an absolute bar to creditors of one spouse as long as the property is held as TBE. Under this rule, the spouses have the right to convey the property jointly free from the creditor’s claim. (p. 314 (T))
o Sawada v. Endo (Hawaii): Where 2 pedestrians are hit by a car driven by a man without insurance obtain a judgment against the man and after the accident the man and wife convey their TBE property to their sons and then the W died (= H gets TBE property), the court held that the pedestrians could not void the transfer under fraudulent conveyance theory in order to attach the judgment lien to the formerly TBE property. (See Property Stories, Ch. 5.)
§ Issue: Whether creditor of H who owns property with W as TBE can reach property while both are alive and continue to hold the property as TBE. (If so, then conveyance was a fraud and should be voided).
§ Court: The court held that a creditor of either spouse cannot attach to TBE property while both spouses are living. Additionally, while both spouses are living, they can act together to transfer the TBE property to a third party without any encumbrance.
· Policy Reason: Protect family property. Give support to MWPA that married woman’s property should be held from the debts of her H by protecting whole interest (including survivorship right and right to convey).
· Group IV: The contingent right of survivorship in either spouse is separately alienable by
property? Where W is a superstar in the Opera world at time of divorce and H spent much of their marriage coaching her and taking care of family matters, the court held that b/c H’s contributions and efforts led to an increase in the value of W’s future earnings (see statute) the W’s future earnings are a product of the marital partnership and are thus marital property subject to equitable division. Note: that the court went beyond O’Brien. New York follows approach 1 for defining marital property.
o Goodwill: business has a track record / reputation in a community (has value in marketplace)
§ Professional goodwill is a divisible marital asset in most jurisdictions, p. 334 (T), even in those that don’t treat enhanced earnings capacity from a professional degree as a marital asset. (lawyers / doctors)
§ Ante-nuptial agreements are generally enforceable, provided that
· they are “fair and reasonable”
· or – or perhaps and –
· they are “based upon full knowledge” of each other’s property
Common Law – Termination of Marriage by Death
At Death: Property passes by type of ownership and will.
CP States: 1) Arizona, 2) California, 3) Idaho, 4) Louisiana, 5) Nevada, 6) New Mexico, 7) Texas, 8) Washington, 9) Wisconsin (by statute), 10) Alaska (elective by statute)
o Other concurrent ownership
§ CP states do not recognize TBE
§ CP states may recognize JT and TC but cannot hold as CP at the same time
Fundamental Principle: H and W are a marital partnership (a “community”) and share their acquests equally. To determine title, it doesn’t matter whose name is on the document of ownership.
Hypo: W wants to sell home that she says is hers alone. In CA, buyer does
How Judgment Liens Work
§ Judgment Lien: A judgment lien that has been properly recorded is enforceable against any subsequent owner of the property to which the lien has attached.
o How judgment liens work (normally)
§ 1. Creditor obtains court judgment ($ verdict) against a debtor.
§ 2. Creditor files a “judgment lien” (court order of judgment) in the county land records.
§ 3. The lien then “attaches” to the legal title of all real property (presently) owned by the debtor in the county where the lien is filed.
§ 4. If the debtor tries to sell any real prop subject to the judgment lien, the prospective buyer will take the property subject to the lien (and must pay it off to avoid foreclosure).
· Reason: Prospective buyer was on notice b/c it is recorded.
§ 5. If the lien isn’t paid off, the creditor can enforce the lien by a judicially-ordered sale of the property, with any sale proceeds being applied first to the creditor until the lien is paid in full.
o Key: A judgment lien that has been properly recorded is enforceable against any subsequent owner of the property to which the lien has attached.