1. Property

2. “It is a comfortable feeling to know that you stand on your own ground. Land is about the only thing that can’t fly away.” Anthony Trollope, English author

3.  Property falls into three categories: ◦ Real ◦ Personal ◦ Intellectual  Real property includes: ◦ Land ◦ Buildings ◦ Plant life (only if sold with the land) ◦ Fixtures  An object is a fixture if a reasonable person would consider the item to be a permanent part of the property

4.  Rights in real estate usage and ownership vary ◦ A person may own property outright, having unrestricted use and unlimited right to sell it  Fee simple absolute: Full ownership privileges in a property  Estates: The different rights that someone can hold in real property

5.  Two or more people owning property at the same time  Most common forms: ◦ Tenancy in common ◦ Joint tenancy ◦ Tenancy by the entirety

6.  Two or more people holding equal interest in a property, but with no right of survivorship ◦ Partition – All co-tenants have an absolute right to partition ◦ A court will normally attempt a partition by kind  Partition by kind: Dividing the land equally among the co-tenants

7.  Two or more people holding equal interest in a property, with a right of survivorship ◦ Joint tenants may not convey their interest by will  They may do so during their lifetime

9.  The husband and wife each own the entire property, and they both have a right to survivorship

10.  Easement: The right to enter land belonging to another and make limited use of it  Profit: The right to enter land belonging to another and take something from it  License: The right to enter land belong to another temporarily  Mortgage: A security interest in real property ◦ Mortgagor: An owner who gives a security interest in property in order to obtain a loan ◦ Mortgagee: The party acquiring a security interest in property

11.  Nuisance law ◦ Nuisance: An unprivileged interference with a person’s use and enjoyment of property  Zoning statutes: State laws that permit local communities to regulate building and land use  Eminent domain: The power of the government to take private property for public use

12.  The parties have created a landlord-tenant relationship when: ◦ An owner of a freehold estate allows another person temporary, exclusive possession of the property  Landlord: The owner of a freehold estate who allows another person temporarily to live on his property  Tenant: A person gives temporary possession of the landlord’s property

13.  Three legal areas are combined: ◦ Property law – The landlord is conveying rights in the real property to the tenant  Reversionary interest: The right of an owner to property upon the death of a life tenant ◦ Contract law – The basic agreement between the landlord and tenant is a contract  Lease: A contract that creates a landlord-tenant relationship ◦ Negligence law – Determines the liability of landlord and tenant when there is an injury to a person or property

14.  The statute of frauds generally requires that a lease be in writing  Some short-term oral contracts may be enforceable ◦ A written contract avoids many misunderstandings  A well-drafted lease includes: ◦ Covenant: A promise by either the landlord or the tenant to do something or refrain from doing something ◦ Condition: Similar to a covenant, but allows for a landlord to evict a tenant if there is a violation

15. Tenancy for Years A lease for a stated, fixed period Periodic Tenancy A lease for a fixed period, automatically renewable unless terminated Tenancy at Will A tenancy with no fixed duration, which may be terminated by either party at any time Tenancy at Sufferance A tenancy that exists without the permission of the landlord, after the expiration of a true tenancy

16.  Duty to deliver possession ◦ Landlord’s first important duty  Quiet enjoyment ◦ All tenants are entitled to the right to use the property without the interference of the landlord  Eviction: An act that forces that forces a tenant to abandon the property  Actual eviction: If a landlord prevents the tenant from possessing the premises, he has actually evicted her  Constructive eviction: If a landlord substantially interferes with the tenant’s use and enjoyment of the premises, he has constructively evicted her

17.  Duty to maintain premises ◦ A landlord has a duty to deliver the premises in a habitable condition and to maintain it  Lease – Generally obligates the landlord to maintain the exteriors of any buildings and the common areas  Building codes – Mandate minimum standards of commercial and/or residential property  Implied warranty of habitability - Requires that a landlord meet all standards set by the local building code, or that the premises be fit for human habitation  Duty to return security deposit - Landlord must return a security deposit after a tenant vacates  Or notify the tenant of the damage and the cost of repairs

18.  Duty to pay rent - The tenant’s foremost obligation ◦ Rent: Compensation paid by a tenant to a landlord ◦ Escalator clause: A lease clause allowing the landlord to raise the rent for specified reasons ◦ Landlord’s remedies for nonpayment of rent:  Apply security deposit to rent  Sue tenant for non-payment  Evict tenant ◦ Duty to mitigate – In most cases, the landlord must try to minimize losses by finding a new tenant quickly

19.  Duty to use premises for proper purposes – These do not include retail, commercial, industrial, or illegal purposes  Duty not to damage premises ◦ A tenant is liable to the landlord for any significant damage he causes to the property  Duty not to disturb other tenants ◦ Repeated playing loud music late at night or disturbing the quiet enjoyment of other tenants are reasons for eviction

20.  Tenant’s liability ◦ A tenant is generally liable for injuries occurring within the premises she is leasing  Whether that is an apartment, a store, or otherwise

21.  Landlord’s liability ◦ Common law rules – Landlord is responsible for injuries on the premises only in a limited number of circumstances:  Latent defects  Common areas  Negligent repairs  Public use ◦ Modern trend – In many states, a landlord must use reasonable care to maintain safe premises and is liable for foreseeable harm

22.  All property other than real property  Two aspects of personal property ◦ Gifts ◦ Bailments

23.  A voluntary transfer of property from one person to another without any consideration  A gift involves three elements: ◦ The donor intends to transfer ownership of the property to the donee immediately ◦ The donor delivers the property to the donee ◦ The donee accepts the property

24.  The donor must intend to transfer ownership to the property right away, immediately giving up all control of the item

25.  Physical delivery: The donor must deliver the property to the donee  Constructive delivery: A donor makes constructive delivery by transferring ownership without a physical delivery  Delivery to an agent – A donor might deliver the property to an agent ◦ Either someone working for him or for the donee  Property already in donee’s possession – No delivery is required

26. Inter Vivos Gift A gift given during life, when the donor is not under any fear of impending death Gift Causa Mortis Made in contemplation of approaching death

27.  The donee must accept the gift  If a donee should refuse a gift and then change her mind: ◦ She has no rights in the property

28.  The rightful possession of goods by someone who is not the owner, usually by mutual agreement between the bailor and bailee ◦ Parties generally create a bailment by agreement  Involuntary bailment: A bailment that occurs without an agreement between the bailor and bailee

29.  To create a bailment, the bailee must assume physical control of an item with intent to possess

30.  The bailee’s primary right is the possession of the property ◦ Anyone who interferes with the bailee’s rightful possession is liable to her  The bailee is typically, though not always, permitted to use the property

31.  The bailee is strictly liable to redeliver the goods on time to the bailor, or to whomever the bailor designates  The bailee is obligated to exercise due care

32.  Depends on who receives the benefits of the bailment ◦ Sole benefit by bailee - Extraordinary care of the property is required when the bailment is for the sole benefit of the bailee ◦ Mutual benefit - Ordinary care is required when the bailment is for the mutual benefit of the bailor and bailee ◦ Sole benefit of bailor – The bailee must use only slight care when only the bailor benefits  Known as gratuitous bailment  The bailee is liable only for gross negligence

33.  Once the bailor has proven the existence of a bailment and loss or harm to the goods, a presumptive of negligence arises ◦ The burden shifts to the bailee to prove adequate care

34.  The bailor’s rights and duties are the reverse of the bailee’s ◦ The bailor is entitled to:  The return of his property on the agreed-upon date  Receive the property in good condition  Recover damages for harm to property if the bailee failed to use adequate care

35. “Real property law is ancient but forceful. Although real property today is not the dominant source of wealth that it was in medieval England, it is still the greatest asset that most people will ever possess— and is worth understanding.”