1. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. Twomey & Jennings BUSINESS LAW Chapter 47 Real Property Chapter 47 Real Property

2. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 2 Nature of Real Property Real property includes land, buildings and fixtures, and rights in others’ land. Uses of land that do not involve ownership include: –Easements: the right to use a portion of another’s land such as for access to yours –Profits: the right to take part of the soil or produce of another’s land –Licenses: privilege to use land for a reason –Liens: claim on land to secure a debt Real property includes land, buildings and fixtures, and rights in others’ land. Uses of land that do not involve ownership include: –Easements: the right to use a portion of another’s land such as for access to yours –Profits: the right to take part of the soil or produce of another’s land –Licenses: privilege to use land for a reason –Liens: claim on land to secure a debt

3. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 3 Creation of Easements 1.Deed 2.Implication 3.Necessity 4.Estoppel 5.Prescription 1.Deed 2.Implication 3.Necessity 4.Estoppel 5.Prescription Express grant Express reservation Express grant Express reservation Carnahan v Moriah Property Owners Ass’n, Inc. (1999) Was an easement by prescription created?

4. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 4 Easement by Necessity BA Easement

5. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 5 FixturesFixtures Personal property is attached to or associated with real property in such a way that it becomes real property. Courts look to the method of attachment, to how the property is adapted to the realty, and to the intent of the person originally owning the personal property. Personal property is attached to or associated with real property in such a way that it becomes real property. Courts look to the method of attachment, to how the property is adapted to the realty, and to the intent of the person originally owning the personal property. Adams Outdoor Adv., Ltd. v Long (1997) Who owns the billboard?

6. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 6 Nature & Form of Ownership The interest held by a person in real property may be defined in terms of the period of time for which the person will remain the owner. A fee simple estate lasts forever, while a life estate lasts for the life of a person. –These estates are known as freehold estates. If the interest in the land will vest at a later time, it is called a future interest. If the ownership interest exists for a specified number of days, months, or years, the interest is a leasehold estate. The interest held by a person in real property may be defined in terms of the period of time for which the person will remain the owner. A fee simple estate lasts forever, while a life estate lasts for the life of a person. –These estates are known as freehold estates. If the interest in the land will vest at a later time, it is called a future interest. If the ownership interest exists for a specified number of days, months, or years, the interest is a leasehold estate.

7. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 7 Liability to Third Persons Under common law, the liability of an occupier of land for injury to third persons on the premises is dependent on the status of the third persons as trespassers, licensees, or invitees. –Attractive Nuisance Doctrine. Under common law, the liability of an occupier of land for injury to third persons on the premises is dependent on the status of the third persons as trespassers, licensees, or invitees. –Attractive Nuisance Doctrine.

8. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 8 Liability to Third Persons Many jurisdictions, however, are ignoring these common law distinctions in favor of an ordinary negligence standard or are giving licensees the same protection as invitees. Delta Tau Delta v Johnson (1999) Is the fraternity liable for criminal acts?

9. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 9 Co-OwnershipCo-Ownership Real property may be the subject of multiple ownership. The forms of multiple ownership are the same as those for personal property. In addition, there are special forms of co- ownership for real property, such as condominiums and cooperatives. Real property may be the subject of multiple ownership. The forms of multiple ownership are the same as those for personal property. In addition, there are special forms of co- ownership for real property, such as condominiums and cooperatives.

10. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 10 DeedsDeeds A deed is an instrument by which a grantor transfers an interest in land to a grantee. –It may be a quitclaim deed or a warranty deed. A deed must be signed or sealed by the grantor and delivered to the grantee. A deed is an instrument by which a grantor transfers an interest in land to a grantee. –It may be a quitclaim deed or a warranty deed. A deed must be signed or sealed by the grantor and delivered to the grantee. Sargent v Baxter (1996) Was the deed delivered?

11. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 11 DeedsDeeds Recording the deed is not required to make the deed effective to pass title, but recording provides notice to the public that the grantee is the present owner. Eminent domain and adverse possession may also acquire title to real estate. Recording the deed is not required to make the deed effective to pass title, but recording provides notice to the public that the grantee is the present owner. Eminent domain and adverse possession may also acquire title to real estate.

12. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 12 Classification of Deeds transfers whatever interest the grantor may have in the property without specifying that interest transfers a specified interest, and makes certain guarantees sets forth the details of the transaction recites that a named person is making certain conveyance to a named grantee Quitclaim deedWarranty deedCommon law deedStatutory deed

13. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 13 Grantor’s Warranties The warranties of the grantor relate to the title transferred by the grantor and to the fitness of the property for use. In the absence of any express warranty in the deed, no warranty of fitness arises under the common law in the sale or the conveyance of real estate. Most states today hold that when a builder or real estate developer sells a new home to a buyer, an implied warranty of habitability arises. The warranties of the grantor relate to the title transferred by the grantor and to the fitness of the property for use. In the absence of any express warranty in the deed, no warranty of fitness arises under the common law in the sale or the conveyance of real estate. Most states today hold that when a builder or real estate developer sells a new home to a buyer, an implied warranty of habitability arises.

14. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 14 Other Methods of Transfer Eminent Domain. –5 th Amendment allows government to take private property for public use, as long as there is just compensation. Adverse Possession. Eminent Domain. –5 th Amendment allows government to take private property for public use, as long as there is just compensation. Adverse Possession.

15. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 15 MortgageMortgage An agreement that creates an interest in real property as security for an obligation and that ends upon the performance of the obligation is a mortgage. A mortgage must be in writing under the statute of frauds. The mortgage should be recorded to put good- faith purchasers on notice of the mortgage, but even an unrecorded mortgage is valid between the parties. An agreement that creates an interest in real property as security for an obligation and that ends upon the performance of the obligation is a mortgage. A mortgage must be in writing under the statute of frauds. The mortgage should be recorded to put good- faith purchasers on notice of the mortgage, but even an unrecorded mortgage is valid between the parties.

16. © 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW Twomey Jennings 1 st Ed. 16 Liability for Mortgage A purchaser of the mortgaged property does not become liable for the mortgage debt unless the purchaser assumes the mortgage. The mortgagor still remains liable unless the mortgagee agrees to a substitution of parties. If the mortgagor defaults, the mortgagee may enforce the mortgage by foreclosure. A purchaser of the mortgaged property does not become liable for the mortgage debt unless the purchaser assumes the mortgage. The mortgagor still remains liable unless the mortgagee agrees to a substitution of parties. If the mortgagor defaults, the mortgagee may enforce the mortgage by foreclosure.