I.

QUESTION 1-RULE AGAINST PERPETUITIES

Topic: The topic is the Rule Against Perpetuities.
Sources of Law: The sources of law are the Rule Against Perpetuities and the
Common Law.
Issues:
1. What is the Rule Against Perpetuities (RAP)?
2. When and how is interest created?
3. What interests are subject to the RAP?
4. What interests are not subject to the RAP?
5. What kinds of interests will violate the RAP?
6. What is a cy pres jurisdiction?
7. What happens in a wait-and-see jurisdiction?
8. What is a savings clause?
9. What happens when an interest is vested outside of the perpetuities period?
10. How long can a grantor control his property after his death?
Rules and Authorities:
1. No interest is good unless it is vested, if at all, within the lives in being at the
time of its creation plus 21 years. The Rule Against Perpetuities.
2. A life in being is someone who is alive at the time the interest is created and is
used to measure the vesting period. The Rule Against Perpetuities.
3. In order to be a validating life, the life must be able to affect the termination or
vesting of the interest. The Rule Against Perpetuities.
4. Vested remainders, possibilities of reverters, and reversions are not subjected to
the RAP. The Rule Against Perpetuities.
5. An interest that has the possibility to vest outside of the perpetuities will violate
the RAP and is therefore void and unenforceable. The &le Against Perpetuities.
6. If the interests vest outside of the perpetuities period or will possibly vest
outside the period, the court can strike out the language and the interest goes to the
next valid future interests. Blue Pencil Rule.
7. Contingent remainders, class gifts, executory interests and commercial
transactions are all interests that are subjected to the Rule Against Perpetuities.
The Rule Against Perpetuities.
8. The corporate measuring time for a commercial option to purchase is 21 years.
Symphony Space.
9. In a wait-and-see jurisdiction, courts will wait and see if the interest vests
within the perpetuities period, without consideration of when it might vest.
Symphony Space The court does not strike the interests right away, it waits to see
if the interests will vest within the perpetuities period.
10. In an all or nothing jurisdiction, if the interest of one member of the class has
the possibility of vesting too remotely, the interest in the entire class gift is void.
Leake.
11. A fee simple determinable is a vested interest. The Rule Against Perpetuities.
12. A fee simple determinable creates a reversionary interest in the grantor.
13. If an interest is written into a will, it is considered created and the courts will
analyze whether it violates the Rule Against Perpetuities based on when the
testator dies and not when the will was created. The Rule Against Perpetuities. A
revocable trust is created at the time of execution. Uniform Trust Code.
14. In a cy pres jurisdiction, the courts will interpret the deed/will so as to not
violate the Rule Against Perpetuities but will attempt to adhere to the intentions of
the grantor. Cy Pres Doctrine.
15. A savings clause protects interests that would otherwise violate the RAP.
Symphony Space. A person can add a savings clause to their deed, stating that
interest must not violate the Rule Against Perpetuities. The Rule Against
Perpetuities.
Rationale
The Rule Against Perpetuities is a compromise between the dead hand control and
the promotion of marketability and alienability of property.
Application 1:
Issue: Under the original RAP, who would own fee simple absolute in Neverland,
following the death of Diana Ross?
Rule/Authority: Contingent remainders, class gifts, executory interests and
commercial transactions are all interests that are subjected to the Rule Against
Perpetuities. The "Rule Against Perpetuities. A savings clause protects interests
that would otherwise violate the RAP. Symphony Space.
Fact: The reversionary interest belongs to Diana Ross. Diana Ross dies.
Application: The fee simple absolute would go to Diana Ross' estate.
Application 2:
Issue: Can Disney exercise its option to purchase?
Rule/Authority: In a wait-and-see jurisdiction, courts will wait and see if the
interest vests within the perpetuities period, without consideration of when it
might vest. Symphony Space
Fact: CA is a Wait-And-See Jurisdiction and Disney has the option to purchase
within 21 year and purchases within those 21 years.
Application: Since this is a wait-and-see jurisdiction and Disney has the option to
buy within 21 years, they have the right to purchase Neverland and in fact do so
within those 21 years.
Application 3:
Issue: Is MJ's gift to the City of Los Olivos valid on July 7, 2002? Is interest
created on July 7, 2002?
Rule/Authority: If an interest is written into a will, it is considered created and
the courts will analyze whether it violates the Rule Against Perpetuities based on
when the testator dies and not when the will was created. The Rule Against
Perpetuities.
Fact: MJ executes a will on July 7, 2002.
Application: On July 7, 2002 MJ is still alive and the interest is not created until
his death on June 25, 2009.
Application 4:
Issue: What happens in a cy pres jurisdiction? In a cy pres jurisdiction, who
would be entitled to a property interest in Neverland?
Rule/Authority: In a cy pres jurisdiction, the courts will interpret the deed/will so
as to not violate the Rule Against Perpetuities but will attempt to adhere to the
intentions of the grantor. Cy Pres Doctrine.
Fact: The court would basically translate anything that violates RAP into
something that does not violate the RAP. It appears that his children, City of Los
Olivos and Brother Tito.
Application: Everyone would be entitled to the property interest as MJ intended.
Application 5:
Issue: Under a savings clause, which of the "MJ children" would be entitled to a
lifetime interest?
Rule/Authority: A person can add a savings clause to their deed, stating that
interest must not violate the Rule Against Perpetuities. The "Rule Against
Perpetuities.
Fact: Assuming MJ included a savings clause in his will, and that Disney did not
exercise the option to purchase.
Application: Any interest created in MJ's will must vest within the perpetuities
period thus saving interest that would have otherwise vested outside the
perpetuities period. The children in existence within the perpetuities period -the
gift will close the class of children -would be entitled.
Answers:
1. Diana Ross's estate.
2. Yes.
3. No, MJ was still alive on July 7, 2002.
4. Katherine -Life Estate, His children -Future Interest, City of Los Olivos -Future
Interest, and Brother Tito -Fee Simple Absolute.
5. The Children in existence within the perpetuities period -the gift will close the
class of children.
h. Comment:
Interest or wealth should not be in perpetuities -there should always be individuals
to dispose of property. Also, one cannot put an absolute restriction on property as
this places an undue restraint on alienation which essentially violates public
policy.

II. QUESTION 2
Question 1.
Issue: Can Abel successfully sue Brian for the gain that Carol made on the sale of
Blackacre? Contract Recession due to Statute of Frauds violation.
Rule: Doctrine of Merger states that once a deed is exchanged for valuable
consideration, the sale contract mergers with the deed as a final sale. Statute of
Frauds governs a contract and what items are necessary for a valid and binding
contract.
Authority: Doctrine of Merger, Statutes of Frauds and the Common Law.
Application: Under these circumstances, Carol made the deposit for the property,
then she and Abel closed the sale, deeding Black.acre to Carol
Answer: No
Question 2.
Issue: Can Darla successfully sue Abel for specific performance to force Darla to
purchase Cinnamonacre at the negotiated price? Whether marketable title allows
for specific performance of a remedy.
Rule: Specific performance is generally used by a buyer for breaches of certain
terms within a contract; however, marketable title does not allow for specific
performance as a remedy.
Authority: Green and the Common law
Application: Abel is not able to sue for specific performance because he cannot
force Darla to purchase the property.
Answer: No, Abel cannot make Darla purchase the property under specific
performance.
Question 3.
Issue: Can Erica successfully sue Abel to rescind the contract for the sale of
Darkacre, because of the defective roof? Whether a merger doctrine becomes
effective with an "as is" clause, even though the seller intentionally lied?
Rule: The buyer and seller may bargain about what contract warranties survive
the closing; however, only latent defects that were not discoverable upon
inspection and fraud will survive.
Authority: Lumpke and the Common Law.
Application: Abel lied to Erica about the roof being new, per the contract, and she
made sure to inspect the property only to find nothing. Because she took
precaution to inspect and was defrauded by Abel, Erica can successfully sue for
the defects she did not discover during the inspection and Abel intentionally lying
to her. Answer: Yes.
Question 4.
Issue: Can Freda successfully sue Abel to pay off the "mechanic liens" on the title
prior to closing the sale?
Rule: In signing over a warranty deed, the deed is a warranty of covenant against
encumbrances, which means that the grantor warrants no liens against the
property. ‘
Authority: Brown and the Common Law.
Application: In this instance, the mechanic liens that are stated, even though they
predated Abel's ownership of Elephantacre, the General Warranty deed is the
greatest bundle of rights, and the seller promises to that the title will be clear and
marketable. Therefore, Freda can successfully sue Abel.
Answer: Yes.
Question 5.
Issue: Can Georgia Bank successfully sue Abel for the "deficiency" of $200,000?
Rule: Creditors have priority when a foreclosure occurs.
Authority: Creditor's Rights; Mortgages.
Application: Abel owes $ZOOK on Fireacre which he bought for $SOOK but is
now worth $300K due to the Coronavirus. Georgia Bank foreclosed on the
property and sold it at the auction for $300K Depending on the state that Abel
lives in, Georgia may sue after the foreclosure seeking the difference between the
loan balance and the market value. Once Georgia Bank gets a deficiency
judgment, the bank may use the judgement to go after Abel.
Answer: Yes.
Question 6.
Issue: Does Irene always take fee simple title to Greenacre free and clear of
Harriett Bank's mortgage in a pure race jurisdiction?
Rule: The race statute gives priority of title to the party that records first, even if
the party had notice of an earlier recorded claim.
Authority: Common Law.
Application: Because Irene failed to promptly record her interest before Harriett
Bank, and Harriet bank actually recorded the mortgage secured by Greenacre, she
would not take fee simple title to Greenacre free and clear of Harriett Bank's
mortgage in a pure race jurisdiction, instead Harriett Bank would because they
recorded first.
Answer: No.
Question 7.
Issue: Does Irene have priority over the Harriett Bank, if Irene recorded her title
before the Bank recorded the mortgage, in a "race notice,, jurisdiction”
Rule: The race-notice statute gives priority of title to the party that records first,
but only if the party also lacked notice of prior unrecorded claims on the same
property. Under a race statute, the person who wins the race to record prevails in
titles. Donees do not benefit from recordation statutes.
Authority: Board of Education efMinn and the Common law.
Application: In this instance, Abel gifted or donated Greenacre to Irene, even if
Irene records her interest before Harriett Bank, donees like Irene cannot benefit
from recordation statutes.
Answer: No
Question 8.
Issue: If Irene were a not bona fide purchaser with notice, how could she get
priority of title over Harriett Bank, in a pure race or a race-notice jurisdiction?
Rule: A bona fide purchaser furnishes value-based consideration in exchange for
an interest in property without proper notice and takes the claim of title to property
without encumbrances.
Authority: Common Law.
Application: As Irene is not a bona fide purchaser, she would need to furnish
consideration for the property and record her interest in the property with the
county court house in a timely manner.
Answer: She could get priority of title by BFP recognition and recordation.
Question 9.
Issue: What unrecorded interests in Greenacre would Irene be subject to?
Rule: Bona fide purchases are subject to any encumbrances that deal with the
location of the property or anything that effects the property. A purchaser of
property has the burden of diligently researching title of the property to ensure that
he is getting clean title.
Authority: Guillette and the Common Law.
Application: In this instance, Irene would be subjected to and would have to
comply with the zoning laws that are not recorded on the title as well as the liens
and easements.
Answer: Irene would be subjected to and would have to comply with the zoning
laws that are not recorded on the title as well as the liens and easements.
Question 10.
Issue: Can Irene successfully sue the title closing attorney for malpractice her loss
was due to a failure to complete a competent title search?
Rule: Title insurance covers the amount of the policy taken out by the buyer of
real property. Upon receipt of a real estate purchase agreement or a request from a
bank or mortgage broker, the closing attorney must begin to check the title to the
property being sold. The title examination is for the purchaser and the lender to
evaluate title to the real estate. The purchaser will need to know whether there are
certain restrictions of use, easements, encroachments or whether the title is
marketable and clear for the seller to transfer the property to the purchaser.
Authority: Common Law
Application: Irene was issued a title insurance policy for $200K for coverage on
title to Greenacre. She paid $300K. Because the title insurance covers the amount
of the policy bought, in this case the damage was the value she paid for the house
$300K minus the title insurance amount of $1 00K, leaving her with $1 00K
upside or underwater.
Answer: Yes, because her title insurance only covers $200K and not the total
damage of $300K She can go after her attorney for the $1 00K balance.

III. QUESTION 3 - LEASEHOLD AND QUALITY OF TITLE

Topic: The topic is Quality of Title in landlord-tenant law.
Sources of Law:
The sources of law are the Common Law, State Statutes, the Lease, and the Fair
Housing Act.
Issues:
1. What types of leasehold exist?
2. Can new forms of leasehold be created?
3. Is a tenant entitled to actual possession?
4. What is the English rule regarding actual possession?
5. What is the American rule regarding actual possession?
6. What are a landlord's options regarding a holdover tenant?
7. When can a landlord discriminate against potential tenants?
8. What is a restrictive covenant and how are they interpreted?
9. Does a landlord have a duty to mitigate damages if a tenant abandons?
10. What is the difference between an assignment and a lease?
Rules and Authorities:
1. Generally, new types of leasehold cannot be created. Gamer.
2. However, courts should not interfere with the intentions of the parties as stated
in the lease. Gamer.
3. In each lease, there is an implied right of legal possession. Hannan.
4. The American rule regarding possession is that the landlord is not required to
give the tenant actual possession on the day that the lease commences, only legal
possession. Hannan.
5. The English rule regarding possession is that the landlord is required to deliver
actual possession and legal possession on the day that the lease commences.
Hannan.
6. After the first day of the lease, the landlord is not responsible for keeping
property free of trespassers who disturb the tenant. Hannan; American Rule of
Law. Under the English rule, the landlord is responsible for dealing with a
trespassing occupant. English Rule of Law
7. A tenant defaults when he/ she breaches a clause in the lease, such as making
adjustments to the property without written consent. Berg. Not paying rent is a
material breach, whereas making renovations without permission is a non-material
breach.
8. A landlord does not have the right to use self-help against a tenant who defaults
but should take legal action. Berg. The landlord has a duty to mitigate damages
when a tenant abandons the apartment, including making efforts to re-let.
Sommer.
9. An assignment is created when a tenant transfers the entire remainder of the
lease term to a subtenant. Ernst. A tenant must give a landlord notice before
assigning or subletting an apartment. Ernst.
10. A sublease is created when a tenant transfers a part of the remainder of the
lease term to a subtenant, even if it is only for a day. Ernst. If the entire term of
lease is transferred, it is an assignment. If only a part of the lease is transferred,
then it is a sublease regardless of the terminology used in the instrument. Ernst. If
the court cannot determine the express or implied intention, the default rule is that
a sublease will likely prevail. Ernst.
11. If a term is ambiguous, a restrictive covenant should be interpreted for free
enjoyment. Hill
12. In a commercial clause, a landlord must have a reasonable commercial basis to
deny an assignment. Kendall
13. When a tenant holds over, a landlord can choose to accept the tenant for
another period or treat him as a trespasser. Crechales. If a tenant holds over and a
landlord accepts rent, then they are rightfully holding over and must provide 30
days' notice to terminate. If the landlord does not accept the rent, they can treat the
tenant as a trespasser. Crechales
14. If a landlord accepts payment and cashes a check for rent at the end of the
term, a periodic tenancy is created, and the landlord cannot treat the tenant as a
trespasser. Crechales
15. A landlord cannot discriminate against a potential tenant based on race,
religion, sex, country of origin, familial status, or handicap, but can discriminate
based on sexual orientation. Fair Housing Act.
Rationale: The rules regarding quality of title are intended to promote ease of
transferability and alienability of real property interests and tend to favor the
landlord.
APPLICATION
Application 1:
Issue: Can Charlie successfully sue Andi to rescind the lease?
Rule/Authority: After the first day of the lease, the landlord is not responsible for
keeping property free of trespassers who disturb the tenant. Hannan; American
Rule. The American rule regarding possession is that the landlord is not required
to give the tenant actual possession on the day that the lease commences, only
legal possession. Hannan.
Fact: On May 1, 2019 Charlie took possession of Greenacre and discovered that
Bobbie was still in occupancy on May 5, 2019.
Application: Because Charlie discovered that Bobbie was still in occupancy on
May 5, 2019, after the first day of the lease, Andi would not be liable for keeping
the property free of any trespassers like Bobbie. Additionally, Andi is not required
to grant Charlie actual possession under the American Rule.
Application 2:
Issue: Can the executors of Andi's estate successfully terminate Bobbies' lease of
Greenacre without further notice?
Rule/Authority: If a tenant holds over and a landlord accepts rent, then they are
rightfully holding over and must provide 30 days' notice to terminate. Crechales.
If a landlord accepts payment and cashes a check for rent at the end of the term, a
periodic tenancy is created, and the landlord cannot treat the tenant as a trespasser.
Crecha/es. If a landlord dies, the rental property passes to the landlord's estate.
Common Law. A tenant defaults when he/she breaches a clause in the lease, such
as making adjustments to the property without written consent. Be,;g.
Fact: Bobbie is a rightful holdover tenant because he sent his rent to Andi of
which Andi then deposited into her account thus creating a periodic tenancy. Andi
died the next day.
Application: Andi accepted Bobbie's payment for May rent and thus a periodic
tenancy was created, and because of this Andi cannot treat Bobbie as a trespasser.
Furthermore, the lease would continue even after Andi's death unless Bobbie
breaches by doing something material such as defaulting on rent payments.
Application 3:
Issue: Can the condo association successfully sue to stop Catholic Charities from
using Greenacre as a group home?
Rule/Authority: If the entire term of lease is transferred, it is an assignment. If
only a part of the lease is transferred, then it is a sublease regardless of the
terminology used in the instrument. Ernst. In a subleasing arrangement, there is no
privity between the landlord and the tenant who is subleasing. Common Law
Fact: Charlie leased Greenacre to Catholic Charities for use as a group home for
homeless veterans.
Application: It is unclear whether this is an assignment or a sublease. In the event
that it is an assignment in which Charlies transfers the entire term of
lease (in this month-to-month tenancy, so complicated), the condo association can
sue Catholic Charities. But in the event that it is a sublease, they would have to
address the challenge with Charlie.
Application 4:
Issue: Can Donnie successfully sue Andi to replace Donnie's damaged
equipment?
Rule/Authority: In a subleasing arrangement there is no relationship between the
subtenant and the landlord because there is no privity between them, there is only
relation between the tenant and the sub-tenant. Ernst. Tenant to subtenant
relationship should be in writing and should outline the duties and obligations of
each party. Ernst.
Fact: Donnie was subleasing when his electronics were damaged .
Application: Because Donnie was subleasing when his electronics were water
damaged, he cannot sue Andi for the damage caused to his property because there
is no privacy between them. He would have to look at his relationship with
Charlie.
Application 5:
Issue: Can Andi successfully sue Charlie for breach of the extended lease of
Greenacre, for the entire one-year value of the leasehold, totaling $18,000?
Rule/Authority: A tenant defaults by physically abandoning a lease. Berg. A
landlord does not have the right to use self-help against a tenant who defaults but
should take legal action. Berg. The landlord has a duty to mitigate damages when
a tenant abandons the apartment, including making efforts to release. Sommer.
Fact: Charlies decided to vacate Greenacre.
Application: Because Charlie physically abandoned the property, Andi can sue so
long as she can show that she made an effort to mitigate the damages by trying to
re-let.
Answers:
1. No.
2. No, unless there is material breach by Bobbie such as defaulting on rent
payments.
3. If assignment, yes. If sublease, no.
4. No.
5. Yes, if Andi can show that she tried to mitigate the damage caused.
Comment: The rules should make a greater effort to accommodate tenants'
interests because there is rarely equal bargaining power between a landlord and a
tenant, so tenants have to take it or leave it. Additionally, private property should
be alienable otherwise it would violate public policy.

IV. QUESTION 4 -CONCURRENT OWNERSHIP

Topic: The topic is Concurrent Ownership.
Sources of Law: The sources of law are the Common Law, State Statutes and
Deeds.
Issues:
1. What distinguishes a tenancy in common from a joint tenancy?
2. What is the right of survivorship?
3. How is a joint tenancy severed?
4. What happens when a joint tenancy is severed?
5. How is a tenancy in the entirety severed?
6. Does a mortgage sever a joint tenancy?
7. How is a tenancy in common severed?
8. What is a partition and what types are there?
9. How does the court decide whether to partition in kind or by sale?
10. Can a co-owner collect rent from another co-owner that is in exclusive
possession of the co-owned land?
Rules and Authorities:
1. The right of survivorship distinguishes a joint tenancy from a tenancy in
common. Riddle.
2. The right of survivorship gives the surviving joint tenant(s) the land interest of
the decedent. Riddle.
3. A joint tenancy can be conferred as a gift, it can even be conveyed to one's self,
thus severing the joint tenancy without a strawman. Riddle.
4. A joint tenancy becomes a tenancy in common when severed. Riddle.
5. In a lien jurisdiction, a mortgage is a lien and does not sever a joint tenancy.
Harm.
6. In a title jurisdiction, a mortgage is a conveyance that severs joint tenancy.
Harm.
7. A tenancy in common is severed by a partition in kind or sale, but a partition in
kind is preferred. Delfino.
8. In a partition by sale, the petitioning party has the burden of proof. Delfino.
9. A partition in sale is granted when a partition in kind is impractical, and a
partition by sale is in the best interest of all parties. Delfino.
10. If a partition in kind is inequitable, a money award can be given from one
owner to the other. American Property Law.
11. A co-owner cannot collect rent from a possessing co-owner unless there is an
ouster. Spiller.
12. An ouster occurs when a co-owner requests rent from the possessing co-owner
and is denied. Spiller.
13. A co-owner can lease the co-owned land without the permission of the other
owner so long as it does not prejudice the other owner. Swartzbaugh.
14. When the possession by one co-owner interferes with the enjoyment by the
other of the co-owned land, rent can be owed. Swartzbaugh.
15. The court can divide the land by a partition in kind or a partition by sale.
Delfino.
Rationale: The rationale behind these laws is to establish the rights and
responsibilities of owners of jointly owned properties.
Application 1:
Issue: What ownership interest does a tenant in common have?
Rule/Authority: A joint tenant can convey his share of the property to himself,
thus severing the joint tenancy and converting the interest to a tenancy in
common. Riddle.
Fact: Able transferred his interest in Greenacre to himself.
Application: Because Able transferred his interest in Greenacre to himself, it
severed the joint tenancy, and when the property was willed to his son, when Able
died, his son became the tenant in common of Greenacre.
Application 2:
Issue: Does a mortgage survive the death of the person who took out the mortgage
in a lien jurisdiction?
Rule/Authority: In a lien jurisdiction, a mortgage is a lien and does not sever a
joint tenancy and does not survive the death of the person who took out the
mortgage. Harm.
Fact: Charles took out the mortgage and died.
Application: Because this is a lien jurisdiction, and a lien does not survive death,
Daring Bank can claim no ownership interest in Greenacre.
Application 3:
Issue: Can a co tenant claim rent when refused entry to shared land?
Rule/Authority: When the possession by one co-owner interferes with the
enjoyment by the other of the co-owned land, rent can be owed. Swartzbaugh.
Fact: Able demanded entry to the land, and Betty denied it.
Application: Because Betty refused enjoyment to Able who co-owned the land as
a tenant in common, Able can successfully sue Betty for rent as there was an
ouster.
Application 4:
Issue: Can a tenant in common lease the property without permission of the other
cotenant?
Rule/Authority: A co-owner can lease the co-owned land without the permission
of the other owner so long as it does not prejudice the other owner, but they can be
entitled to the moiety of the lease. Swartzbaugh.
Fact: Betty leased five acres on Greenacre to Eve for ten years.
Application: Betty is not required to get permission from the other co tenant but
can be required to share the money.
Application 5:
Issue: Is a cotenant entitled to a partition by sale?
Rule/Authority: A partition by sale is granted when a partition in kind is
impractical, and a partition by sale is in the interest of all parties, and the burden
of a partition by sale falls on the petitioner. De!fino.
Fact: Charles is requesting a partition by sale, and it [has been divided for a lease
in the past.
Application: Because the court favors partition in kind, and since it has been
partitioned in the past, there is no guarantee that Charles receives a partition by
sale.
Answers:
1. A one-third undivided tenancy in common interest in Greenacre, as Able
severed the joint tenancy.
2.No.
3. Yes.
4. No. Cannot terminate the lease, and there is no ouster.
5. No. He can only be "guaranteed" to cash out if there is a partition by sale, which
is only available if a partition in kind is not practical or equitable.

Comment: Courts should not order a partition by sale unless co-tenants that
collectively represent a majority interest in the property have agreed.

V. QUESTION 5 -RESTRICTIVE COVENANTS

Topic: The topic is Restrictive Covenants.
Sources of Law: The sources of law are the Common Law, Contracts Law/State
Statutes and the Tulk case.
Issues:
1. What is a restrictive covenant?
2. How is a restrictive covenant created and when is it enforceable?
3. How is a restrictive covenant terminated?
4. What are zoning laws?
5. What is redlining?
6. What are discriminatory covenants and are they legal?
7. What are Condominium Associations?
8. What are Homeowner Associations?
9. What happens if a condominium restriction is breached?
10. What are the effects of title recordation on servitudes?
Rules and Authorities:
1. Restrictive Covenants are affirmative and negative promises that run with the
land, and they must touch and concern the land. Tulk.
2. Restrictive covenants are created by a written instrument and cannot be created
by prescription. Tulk; Third Restatement of Property. Restrictive covenants may
be implied from a general plan when (1) they are not in the chain of title, (2) there
is notice, and (3) there is common unity of ownership. Third Restatement of
Property.
3. Once a restrictive covenant is declared in a plan, it is not easily terminated
unless something unique happens and one is unable to receive services or benefits
of the fee. They may be terminated by expiration of term, merger, abandonment or
eminent domain. Common Law. Courts would rather modify the restrictive
covenants than to terminate them when the parties are interested in maintaining
the covenants. Common Law.
4. Zoning laws allow for the city/county to dictate how real property can be used,
either for commercial or residential use. City Ordinances; Common Law. Zoning
originated in nuisance law. The Standard State Zoning Enable Act of 1916 was the
first act that addressed zoning issues in the United States. Zoning protects the land
and the people that use it. To change zoning for an area, one must petition the
city/county to change the area for commercial or residential use. City Ordinances.
5. Redlining is the process of not allowing certain groups of people to buy real
property in certain areas. Equal Protection Clause; Shelly. The constitution
prohibits expressed discrimination. Equal Protection Clause.
6. Discriminatory covenants expressly disallow a certain class of people from
purchasing property in a specific place. Sheffy.
7. Condo Associations are legal restrictive covenants that dictate how a person can
use their condo and what the condo can look like should pets be allowed.
Common Law; Condo Associations. A condo owner does not own the shared
space, they only own their unit. A condo owner does not own the land which the
building sits.
8. Condo fees, Home Owner Association fees, back taxes and liens transfer to the
new owner on the title after the sale. Common Law. -1
9. Home Owner Associations dictate how a person should make their home look
in a neighborhood, and what they can and cannot do with the real property.
Common Law; HOA. Home Owner Association dues are collected monthly by the
association in order to pay for community. Common La1v.
10. Remedies for breach of restrictive covenants are liens and injunctions in the
court of equity. Tulk. If a party breaches a restrictive covenant, the association
may enjoin the breaching party.
11. A restrictive covenant is enforceable when there is a (1) showing that it was
properly created, (2) that one has privity of estate, (3) that the land use restriction
touches and concerns the land, and (4) that the violator had notice. Sanborn.
12. A restrictive covenant is not enforceable if it is (1) unconstitutional, (2)
violates the federal law, (3) is illegal or (4) violates public policy. Sheffy.
13. Restrictive covenants are not enforceable against assignees who did not have
notice of them. Tulk.
14. Prior to the Tulk case, restrictive covenants did not run with the land and they
required the owner and the seller to be in privity, they were mere contracts.
Common Law.
15. Restrictive covenants are essentially private zoning contracts and there must
be consideration for when the contract was created as well as the meeting of minds
in order to form a valid contract. Common Law; Contract Law
Rationale: Restrictive covenants are typically not created by those being
restricted; they are created by the developers in order to maximize the value for
the entire community or for themselves.
Application 1:
Issue: Under the common law (1600) and prior to the Tulk case, could Zayda
have successfully enjoined any of the home owners from violating any of the
Resort's restrictive covenants?
Rule/Authority: Prior to the Tulk case, restrictive covenants did not run with the
land and they required the owner and the seller to be in privity, they were mere
contracts. Common Law.
Fact: Zayda's Whiteacre subdivision plan included three particular use
restrictions.
Application: Since the Tulk case is monumental and foundational for restrictive
covenants, under the common law (1600), Zayda would not have been able to
enjoin against any of the home owners from violating any of the Resort's
restrictive covenants.
Application 2:
Issue: Whether a restrictive covenant that discriminates is valid?
Rule/Authority: Discriminatory covenants expressly disallow a certain class of
people from purchasing property in a specific place. Sheffy. The constitution
prohibits expressed discrimination. Equal Protection Clause. A restrictive
covenant is not enforceable if it is (1) unconstitutional, (2) violates the federal law,
(3) is illegal or (4) violates public policy. Sheffy.
Fact: Brian sold Home #2 to an unmarried, same sex couple despite the restrictive
covenant to sell only to legally married, heterosexual couples.
Application: 'This restrictive covenant is invalid because it violates the EPC
which is federal law and simply violates public policy.
Application 3:
Issue: Can the HOA successfully sue Eve's bank for the HOA fees?
Rule/Authority: Condo fees, HomeOwner Association fees, back taxes and liens
transfer to the new owner on the title after the sale. Common Law. In a
foreclosure, the purchasing owner must pay any creditor's that pertain to
HOA dues. Common Law
Fact: Eve owes $10K in HOA fees. Eve's bank foreclosed on home #2.
Application: As the owner, Eve must pay any creditor pertaining to the HOA
fees. Her bank is not liable.
Application 4:
Issue: Can any Resort property owner successfully enjoin Catholic Charities from
renting out Home #3 as a group home for Coronavirus survivors?
Rule/Authority: If a party breaches a restrictive covenant, the association can
enjoin the breaching party.
Fact: The homes are single family residences. Catholic Charities is using a home
as a group home which is in violation of a restriction.
Application: But because coronavirus patients would be considered handicapped,
they would benefit from living here under the FHA.
Application 5:
Issue: Can Zayda successfully enjoin Wal-Mart from using the Resort lots as
commercial parking for a Super Wal-Mart although most of the Resort owners are
in favor of the development and the city zoning permits it?
Rule/Authority: Zoning laws allow for the city/ county to dictate how real
property can be used, either for commercial or residential use. City Ordinances;
Common Law.
Fact: After the tornado, the city re-zoned allowing for Whiteacre to be used for iv
commercial use. Walmart sought to use it as a parking lot next to their superstore.
Application: Walmart can use Whiteacre for commercial use; they need not
petition the city as it is already permitted.
Answers:
1. No.
2. No, it would be against discriminatory and public policy.
3. No, Eve is liable for the fees.
4. No.
5. No.
Comment: One must never invest in land or buy property without knowing the
incumbrances on that piece of land -whether it be easements, servitudes or
restrictive covenants.