Chapter 8 The Property System October 20th 2014 8 2 Real Property Learning Objectives Understand the concept of real property Understand different interests in real property including ownership Examine methods of acquisition of real property interests and scope of interests Examine the landlord tenant relationship Methods of Acquisition of Real Property Real property can be produced purchases inherited gifted or acquired through adverse possession Real property can be produced by o Building a house or other permanent fixture onto the land o Planting crops or other plant life provided that the flora remains attached to the land Ownership rights are transferred by title o Title Ownership rights in property Methods of Acquisition of Real Property Claim in nuisance can be made if someone substantially interferes with the use and the enjoyment of other s real property o Nuisance Tort in which the torfeasor unreasonably interferes with the use and quiet enjoyment of the plaintiff s real property Title and Closing Purchase o Seller transfers the title via deed Deed Writing that conveys title to real property o Contract related to property must be in writing to be valid against the defendant according to the Statute of Frauds Statute of Frauds Requires certain types of contracts to be in writing to be enforceable o Quitclaim Deed Conveys whatever interests in title that the grantor has in the property to the party to whom the quitclaim is given o Warranty Deed Conveys title and a warranty against defects in title and states that there are no undisclosed encumbrances Types of deed Recording a deed o Done after title is transferred o Places others on notice that whoever has recorded the deed to the property owns the property Title and Closing Race Statute Notice Statute o State statutory scheme that recognizes superior rights in real property to the party who records the interest in the property first o State statutory scheme that recognizes superior rights in real property to the party who acquired the interest first without notice of other claims Race Notice System o Combination of race statue and notice statue concepts where priority is given to the first bona fide purchaser on record where there is a conflicting claim to ownership Bona Fide Purchaser o Purchaser who takes title in good faith with no knowledge of competing claims to title Inheritance and Gift Inheritance Real property may be bequeathed through a will or may transfer per state statues when a decedent dies intestate o Escheat When the state gains ownership of property when there is no owner such as when a decedent has property but no heirs Gift Voluntary transfer of property o Valid when the donor makes the gift of title delivers the deed to the recipient and the gift is accepted Adverse Possession Method of acquiring ownership of the real property of another which requires several elements to be met o Possessor must be in actual possession o Possessor must be open and notorious o Possession must be hostile o Possession must be continuous o Possession must be exclusive o State statutory length of time must be met Adverse Possession If all the elements are met possessor can bring a claim to quiet title o Quiet Title Civil action used to determine title to real property o If successful possessor becomes the owner without any compensation to the former owner o Ouster Actual or constructive eviction of a lawful tenant Interests and Scope purchasing land Buyers of real property have a duty to exercise due diligence when o Due diligence Duty of care imposed on prospective buys of real property to exercise reasonable judgment or prudence to inspect property for defects Duties of Landowners Landowners owe different duties to different types of people who enter their land o Trespasser Person who voluntarily intentionally enters the land of another without permission or privilege o Licensee Person who has permission to be on the land o Invitee Person who has entered real property by invitation Level of Duty of Landowners Classification Level of Duty Trespasser Duty not to intentionally injure Attractive nuisance doctrine requires a duty to protect children from dangerous conditions Duty not to intentionally injure but to warn about known defects Duty to inspect for defects correct defects and warn about defects Licensee Invitee Ownership Interests in Real Property Fee Simple Absolute Form of ownership in real property in which the owner has absolute ownership subject to legal restrictions on usage Fee simple defeasible Form of ownership based on condition or restriction the violation of which can result in loss of ownership o On violation of condition the land would revert back to either the original owner or whoever owner the reversion interest Reversion Interest Future interest in real property Ownership Interests in Real Property Life Estate Possessory interest in real property measured by the life of the person who has the life interest Reverse Mortgage Enables the seller of real property to realize the equity in the property while retaining possession until death in exchange for ownership interest Tenancy in common All owners have an undivided interest in the property equal rights of possession and devisable interest o Devisable Ownership interest that may be transferred upon death Joint Tenancy Surviving owner has the right of survivorship o Right of survivorship Power of a successor to acquire ownership interest in property upon the death of a joint tenant Tenancy by the entirety Type of joint tenancy that can only occur between a husband and wife o If join tenants disagree about the use of the property or its disposal courts can step in to grant partition of the land Partition Method of dividing real property Scope of Interests in Real Property Scope of ownership is essential to determine what can or cannot be done with the land Subsurface or mineral rights o Rights beneath the actual surface of land including rights to the minerals found there Riparian water rights doctrine o Right of property owner adjacent to a water source to use the water and a duty to share the waterway with other property owners adjacent to the water Prior Appropriation Doctrine Water allocation scheme that grants the rights to water to the first who uses the water Easement Nonpossessory interest in real property Covenant Voluntary restriction on the owner s use of land Run with the land Means that restrictions on real property will apply to