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Table of Contents: Property
I. Fundamentals of Property ........................................................................................................................... i
II. Personal Property ....................................................................................................................................... i
III. Contracts of Sale and Closing .................................................................................................................. iv
1) Overview ........................................................................................................................................... iv
2) Requirements for the contract of sale and the closing .................................................................... iv
3) Damages for breach of the contract ................................................................................................13
4) Fitness and suitability ......................................................................................................................14
IV. Recording Acts: How to Figure out a Recording Act Problem ................................................................15
1) Recording acts (race, notice, and race-notice) ................................................................................15
a) General principle to remember ...................................................................................................15
b) Common law default rule: first-in-time, first-in-right! ................................................................15
c) Does the recording act change the result under the common law default rule? .......................16
d) Shelter rule exception..................................................................................................................17
V. Mortgages and Security Devices .............................................................................................................18
1) Types of security devices .................................................................................................................18
2) Transfers by mortgagor ...................................................................................................................19
3) Transfers by mortgagee ...................................................................................................................19
4) Discharge .........................................................................................................................................20
5) Rights and duties prior to foreclosure .............................................................................................20
6) Foreclosure ......................................................................................................................................21
VI. Ownership of Property: Present Interests and Introduction to Future Interests ..................................23
1) General overview of present and future estates ............................................................................23
2) Present estates & overview of grantor’s future interests that generally go with them .................23
VII. Future Interests .....................................................................................................................................30
1) Overview. .........................................................................................................................................30
2) Future interest that a grantor possesses .........................................................................................31
3) Future interests “B” (the grantee that comes after the present interest) possesses .....................31
4) Rules affecting these interests ........................................................................................................34
VIII. Concurrent Estates ...............................................................................................................................36
1) Types of concurrent estates ............................................................................................................36
2) Relations among cotenants .............................................................................................................39
IX. The Law of Landlord and Tenant ............................................................................................................40
1) Types of holdings: creation and termination ..................................................................................40
2) Possession and rent .........................................................................................................................41
3) Special problems ..............................................................................................................................45
4) Assignment and subletting ..............................................................................................................45
X. Rights in Land—Including Covenants, Easements, Licenses, and Profits ................................................48
1) Covenants at law and in equity .......................................................................................................48
2) Zoning ..............................................................................................................................................51

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 3) Property owners’ associations and common interest ownership communities .............................52
4) Easements, profits, and licenses......................................................................................................53
XI. Fixtures ...................................................................................................................................................60
1) Fixtures (including relevant application of Article 9, UCC) ..............................................................60
a) Definition .....................................................................................................................................60
b) A fixture issue may arise in two kinds of cases ...........................................................................60
c) Rule on removing fixtures ............................................................................................................60
d) Rule on removing chattels ...........................................................................................................61
e) Controlling factors to determine whether something is a fixture ..............................................61
XII. Support Rights and Water Rights ..........................................................................................................61
1) Support rights—two types of support .............................................................................................61
2) Water rights .....................................................................................................................................62
3) Land rights by change in course of water ........................................................................................63
XIII. Adverse Possession ...............................................................................................................................63
1) Overview ..........................................................................................................................................63
2) Constructive adverse possession by color of title ...........................................................................65
3) Disabilities ........................................................................................................................................66

Property Mini Outline .................................................................................................................................. vii

Present and Future Interests Cheat Sheet .................................................................................................... v

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 Property
I. Fundamentals of Property
1) Attributes of property (together referred to as the “bundle of sticks”)
a) Right to exclude,
b) Right to dispose, and
c) Right to use, possess, and enjoy.
2) Real property (“immovables”):
a) land,
b) buildings,
c) plants,
d) subsurface, and
e) air/water.
3) Freehold estates
a) Involves ownership in property (e.g., a life estate).
4) Nonfreehold (leasehold) estates
a) Involves leasing property without actual ownership (e.g., a tenant’s lease).
5) Caveat emptor (“let the buyer beware”)
a) The buyer is responsible for checking the quality of what he is receiving.

II. Personal Property

1) Findings
a) Abandoned property
i) Property is abandoned if the owner intends to relinquish ownership or control and there is
an act of abandonment (e.g., setting trash out on the curb).
ii) The finder has a right of possession that is superior to that of all others (including the
original owner).

There are helpful

images
throughout
explaining each
concept or giving
more examples!

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b) Mislaid property
i) Property is mislaid if the owner intends to place it somewhere and simply forgets to retrieve
it (e.g., the owner leaves keys or a wallet at a cash register when checking out).
ii) Under common law, the finder is not entitled to possession.
iii) Locus in quo: mislaid property found on private property goes to the private property
owner, not the finder.

c) Lost property
i) Property is lost if the owner does not intend to relinquish possession or ownership (e.g., a
wallet falls out of a person’s backpack).
ii) The finder’s right of possession is superior to all others except the true owner.
(1) Ex.: Armory v. Delamirie (1722): Armory found a piece of jewelry and took it to
Delamirie, a goldsmith, to determine its value. Delamirie’s apprentice removed the
jewels while appraising the jewelry and returned to Armory only the empty socket.
Armory sued Delamirie. The court determined that Armory was the owner of the jewel in
relation to everyone but the true owner. Armory therefore had a right to recover the
jewelry’s value from Delamirie.
(2) Treasure trove
(a) Gold, silver, coins, or bullion found hidden (often underground or in a basement or
attic). The treasure has been hidden so long that the original owner has died, and
the owner’s heirs cannot be found.
(b) When treasure is lost under the original rule, the treasure trove goes to the state or
the owner of the land.

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 (c) Under the American common law, finder laws apply.

2) Gifts
a) Inter vivos gift
i) A gift given during life. Elements:
(1) donative intent,
(2) delivery, and
(3) acceptance.

There are helpful

images
throughout
explaining each
concept or giving
more examples!

ii) The donor must intend to make the gift. Mere delivery without donative intent does not
create a gift.

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 iii) An inter vivos gift may not be revoked once it is complete.
iv) Note: symbolic delivery (giving a representation of the item) and constructive delivery
(giving a means of access to and control over the item) may be permitted if actual physical
delivery is impracticable (e.g., a donor would be permitted to deliver keys to a car when
giving the gift of a car because actual delivery (handing over the car) is impracticable.
v) Acceptance is presumed unless there is evidence that the donee rejected the gift.
b) Gift causa mortis
i) A gift made in contemplation of death. Elements:
(1) made in contemplation of imminent or very likely death,
(2) delivery (actual of constructive),
(3) intent is conditioned to become absolute only upon death, and
(4) acceptance (presumed unless rejected).
ii) Note: title to the property does not actually pass until the grantor dies. Thus, the gift may be
revoked by the grantor during his life.

III. Contracts of Sale and Closing

1) Overview: To complete a real estate transaction, first a contract of sale is signed. Then, the closing
occurs.
2) Requirements for the contract of sale and the closing
a) The contract of sale
i) Requirement #1: must satisfy the Statute of Frauds
(1) The contract of sale must:
(a) be in writing;
(b) signed by the party to be charged (to comply with the Statute of Frauds); and
(c) contain the essential terms, including:
(i) identity of the parties,
(ii) description of the land, and
(iii) price.

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 (2) Exception to the Statute of Frauds—part performance exception
(a) There are two requirements:
(i) a contract exists and all conditions precedent have been fulfilled, and
(ii) the actions of the parties clearly show there is a contract because the claimant
does two of the following three things:
1. takes possession,
2. makes a full payment of the purchase price or a substantial portion,
3. improves the property in a significant way.

ii) Requirement #2: the contract of sale must satisfy the implied warranty of marketable title
(or otherwise exclude it).

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 (1) Marketable title does not mean perfect title. Title is marketable if it is reasonably free of
defects such that a reasonable person would accept it.
Law school tips can be
(2) The seller must give marketable title on the day of closing.
found throughout the
(3) What makes title unmarketable? (mnemonic = DEVA)
outline!
(a) A defect in the chain of title
(b) An encumbrance not mentioned in the contract (e.g., a mortgage, an easement that
reduces the value of the property, or a covenant, an option to purchase vested in
another). Exam Tip: A mortgage on the property is not an encumbrance if it is
going to be paid off by the proceeds of the sale.
(c) A violation of a zoning ordinance
(i) Note: a zoning ordinance itself does not pose an encumbrance!
(ii) Note: a violation of a housing or building code is not an encumbrance.
(d) Title acquired by adverse possession is not marketable (unless the adverse
possessor gets a judicial decision that renders her the record owner).

b) The time between the contract of sale and the closing date
i) Effect of signing the land sale contract—there are two types of title:
(1) Equitable title: passes to the buyer immediately.
(2) Legal title: remains with seller until closing.
ii) The doctrine of equitable conversion states that once the contract is signed, the buyer’s
interest is real property (i.e., the land he contracted to buy) and the seller’s interest is
personal property (i.e., the money he will get from the sale).

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We include many charts and diagrams to illuminate difficult concepts. These are
especially helpful for visual learners.

At the end of each outline, we have a mini outline to give you a broader overview
of the subject.

Property Mini Outline

1. Contracts of Sale and Closing
• There is a two-step process in selling real estate: a contract of sale is signed and closing occurs.
o The contract of sale must be in writing, signed, and contain essential terms (unless the
part performance exception applies). The contract of sale must satisfy the implied
warranty of marketable title. After the contract is signed, under equitable conversion,
the risk of loss shifts to the buyer.
o Closing is when the seller hands over the deed with intent to pass title. It is also the date
where the implied warranty of marketable title must be satisfied.
▪ For a general warranty deed, there are six covenants that must be satisfied.
▪ A quitclaim deed contains no covenants.
▪ Once the deed is handed over, under the doctrine of merger, one can only sue
on the deed, not the contract.

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2. Recording Acts
• Common law: First-in-time, first-in-right. One does not need to record to have title.
• Notice act: a subsequent bona fide purchaser for value without notice can change the common
law default rule and have superior title to someone who technically received the property
before them.
• Race-notice act: a subsequent bona fide purchaser for value without notice who records first
can take title to a superior interest.
o Notice can be (mnemonic = AIR): actual, inquiry, or record notice.
3. Mortgages and Security Devices
• A mortgage indicates the existence of a debt. The mortgagor is the debtor. The mortgagee is
usually a bank who lends money.
• Transfer by the mortgagor:
o If mortgagor gives away her interest “subject to” the mortgage, the original mortgagor
is liable.
o If the new transferee “assumes” the interest, both the original mortgagor and the new
transferee are liable.
o If there is a novation, then only the new transferee is liable.
• Theories:
o Title theory: title is transferred to the bank right away.
o Lien theory (majority): the mortgagee (the bank) only has a lien on the land.
• Foreclosure
o Equity right of redemption: allows a debtor to redeem the property and get it back by
paying everything due under the mortgage agreement prior to foreclosure.
o Statutory right of redemption (recognized by half the states): allows the debtor to get
property back after the foreclosure sale by paying the full purchase price within a
specified period of time (usually six months).
• Who gets paid first? The bank that forecloses and anyone “junior” to them. Any senior interests
remain on the property.

The remainder of the mini outline is not included in the sample.

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