Real Property

A. Landlord and Tenant Issues

a. Leasehold Interests
i. Pursuant to a lease, a landlord grants a tenant the exclusive use of his land for a limited period of time,
subject to certain terms and conditions. A lease provides the tenant with a present possessory interest in the
land, and gives the landlord a future interest in the land. Three types of leaseholds exist: (1) tenancy for
years; (2) periodic tenancy; AND (3) tenancy at will.
B. Easements and Licenses
a. Termination of an Easement
i. An easement may be terminated by: (1) estoppel (when the servient estate owner reasonably relies on, or
materially changes his position, due to the easement holders assurance that the easement will no longer be
enforced); (2) termination of the necessity that created the easement; (3) involuntary destruction of the
servient estate; (4) condemnation of the servient estate; (5) written release; (6) abandonment (easement
holder demonstrates, through physical actions, an intent to never use the easement again); (7) merger
(holder of the easement obtains title to the servient estate); OR (8) prescription.
C. Adverse Possession
a. Adverse Possession
i. Adverse possession allows someone in possession of land owned by another person to acquire title to that
land. A person may acquire title to property through adverse possession if the possession of the property is:
(1) continuous for the statutory period; (2) open and notorious (possess the property as the true owner
would); (3) exclusive; (4) actual (possess the property as the true owner would); AND (5) hostile (without
the true owners consent).
ii. An adverse possessor acquires the same title the original owner possessed, and is therefore subject to any
applicable easements (unless the easement was terminated thorough prescription or other valid means).
D. Title to Real Property
a. General Warranty Deed
i. A general warranty deed contains six covenants of title; three present and three future covenants.
ii. The present covenants are the covenants of: (1) seisin (the grantor is the rightful owner); (2) right to
convey (the grantor has the right to make the grant); AND (3) against encumbrances (there are no
encumbrances against the title). These present covenants can only be breached at the time of conveyance.
iii. The future covenants are the covenants of: (1) warranty (grantor will defend grantee against any third
party claims to title); (2) quiet enjoyment (grantee will not be bothered by a third partys lawful claim to
title); AND (3) further assurances (the grantor will do whatever is reasonable to perfect title if problems
arise). These future covenants can be breached at any time upon the interference with the grantees
possession of the property.
iv. Under common law, present covenants contained in a general warranty deed (seisen, right to convey, and
against encumbrances) were NOT enforceable by remote grantees. However, some states will enforce such
covenants against encumbrances if the remote grantee did not have notice of the encumbrance.
b. Recording Statutes & Notice
i. At common law, if property is transferred multiple times, whoever rightfully received the property first had
valid title against successive owners. Today, every state has enacted a recording statute altering the
common law rule. Three types of recording statutes exist to protect those who record their interests in land.
1. In a notice statute jurisdiction, a subsequent purchaser who has no notice at the time of the
conveyance will prevail over a prior grantee that failed to record.
2. In a race statute jurisdiction, whomever records first prevails; notice is irrelevant.
3. In a race- notice statute jurisdiction, a subsequent purchaser who has no notice at the time of the
conveyance is protected ONLY IF he records before the prior grantee.
ii. Notice may be actual, constructive, or inquiry. A person has actual notice of information directly received
(i.e. may be contained in the deed or expressly stated). A person is on constructive notice of any
information that could have been obtained from an inspection of public land records (i.e. search of the
grantor-grantee index). A person is on inquiry notice of information that would be revealed upon a
reasonable inspection of the land.
c. Bona Fide Purchasers & The Shelter Rule
i. A bona fide purchaser (BFP) is a person/entity who: (1) takes real property without notice (actual,
inquiry, or constructive) of a prior instrument; AND (2) pays valuable consideration. A donee or
heir/devisee is not a bona fide purchaser because they do not pay valuable consideration for the property.
However, if said person sells the property, the subsequent owner may be deemed a bona fide purchaser.
ii. Under the shelter rule, those who purchase from a bona fide purchaser (BFP) receive the same status
and rights as the BFP.