PRIVATE LAND USE CONTROLS: law of servitudes: Ktual mechanism for controlling land use/access; non-poss right of use

Easement: non-possessory right to use land in the possession/owned of/by another; is to own real property Dominant Estate: land benefited by easement; Servient Estate: burdened by easement; ex: shared driveway: both estates will dom and serv. Classifying Easements: Affirmative: gives owner of easement affirm. right to do something on burdened prop; ( Cross) Negative: entitles the dominant owner to prevent the servient owner from doing a particular act on the servient land imposes a restriction; reserves some rights like novel things (light, air, view) Appurtenant: benefits the property to which the easement goes to/is on. i.e. acess road on the servient estate, benefits the dominant estate it leads to ; benefits the easement holder in using the dominant land. Has both servient and dominant In Gross: personal to the holder (benefits the holder onlyno dominant estate) ex. cable co. runs lines over your landbenefits you Creation of Easement: Express Easementsvoluntarily created in a deed, will or other written instrument preferred By Grant: must comply with the Statute of Frauds (w/ exceptions of estoppel and part performance) Must be (1) in writing, (2) identify the Gor and Gee, (3) contain words manifesting an intention to create an easement, (4) describe the affected land, and (5) be signed by the Gor By Reservation: Gor conveys land to another but retains an easement. At common law, reservation couldnt create an easement in 3rd person; however, today, most courts have abandoned that rule; i.e. Willard: allows reservation of parking lot in 3rd party.-dont ignore Gors intentdeed reserving easement in lot is evidence of intent Creation is the same as By Grantnet result is the same but conceptually different (reservation= a grant from Gor to Gee; and a revsting/re-granting from gratee back to Gor/3rd party); MODERN: distinction irrelevant Easements by Implication contrary to S of F but still recognized ->Implied from Prior Use: Required Elements: 1. Severance of title to land held in common ownership(dom. and serv. estate owned by same person @ 1 time); could be very far back in the line of the title 2. An existing, apparent (visible but has also been defined by Cts to include uses that are discoverable through reasonable inspection, i.e. sewer pipe connected to visible utilities), and continuous use when severance occurs, and 3. Reasonable necessity for the use at time of severance Reasonable necessity=easement must be convenient or beneficial to use and enjoyment of the dominant estate, not absolutely necessary (minority view=absolute necessity)Romanchuck v. Plotkin: Held: for Pwhen bank foreclosed, title severed, and sewer pipe was an existing, apparent and continuous use, and is a reasonable necessity (b/c lien theory Jx, prior mortgage didnt sever title= existing use @ time of severance) Easement by Necessity: requires a high degree of necessity when title is severed, but no prior use.landlocked parcels, problem created by common GorPresumption: Gor conveys whatever is necessary for beneficial use of parcel. Required Elements: (1)Severance of title to land held in common ownership (dom and serv by same owner) that creates a (2) necessity (at the time of severance, not later) Majority strict necessity (if owner has any legal means of reaching (ingress/egress) the landregardless of convenience, cost, or impracticabilityno strict necessity exists) at time of severance (severance occurs, then later a river cuts your drive off, NO necessity); Minority reasonable necessity (must be convenient or beneficial to the normal use and enjoyment of the dominant land) when conveyed -> Easement lasts as long as necessity does. Easement by Prescription: closely related to the doctrine of Adverse Possessiononly affirmative easement can be created this way Open and notorioususe must be sufficiently visible and apparent that a diligent owner who was present on the land at the time would be able to discover itnot hidden or concealed from view; Adverse and hostile under a claim of right (cant be permissive) These are presumed when open, visible, continuous, & uninterrupted ->Objective test (majority): claimant need only use the land as a reasonable owner would use it, w/o permission from the servient owner/ Subjective test (minority): good faith belief that entitled to use: Note: adverse use reqd not just possession Ex: Two owners shared cost of paving a driveway (1945). Both used it. After survey, subsequent owner tore up driveway, built fence, and tried to prevent Ps use. P sought injunction. Held: When adjoining landowners lay out a way to their land, each devoting a portion of their land to it, each partys use is adverse of the other. When SOL is met, subsequent owners cant prevent others use. Two Theories: (1) Lost Grant (built on fictional permission from prior use); (2) Adverse Use (hostility is required) Continuous and uninterrupted for the statutory period- appropriate given the nature of easement and character of the land ExclusiveSome cts require, but not like APmeaning distinguishable from use by general public, i.e. can be shared use w/record owner Irrevocable Licenses or Easements by Estoppel or License coupled w/ an intst (not transferable) License: permission (usually revocable) that would otherwise be trespass, not real property. Irrevocable=functional equivalent of an easement except for transferability Required Elements for Irrevocable license: 1) A license, typically for access purposes (Express or implied (can be by conduct of parties))2) The licensees expenditure of substantial money or labor in good faith reliance; and 3)The licensors knowledge or reasonable expectation that reliance will occur (licensor must know or have reason to believe that reliance will occur) ->irrevocable until licensee can recoup costs/benefit conferred or at most the life of licensee Shearer- Man had license to access road; his improvements directly benefited the licensor (paving/repairing). Held: Irrevocable License. Public Trust Doctrine: State governments act as trustee over navigable waters and certain related lands in order to protect the publics right to use these areas for navigation, commerce, fishing, swimming, and other activities. Applies to quasi-public orgs as well-not truly private ones

-Full enjoyment of the foreshore necessitated some use of upper sand; Public has a right to reasonable access of beach, including to cross privately-owned land to gain access to foreshore.Matthews v. Bay Head: held against quasi-public assn-cant discriminate access to the beach; difference here, so no takings problem, private land is @ the end of every street so completely blocks access to public waters/beach -5th Amendment limitationtaking clause may limit States ability to reclaim public beachfront property rights that is privately owned. Note on Implied Dedication: 1) owners consent to let public use his land; 2) evidence of intent to dedicate-over long period=dedicate to public Scope of Easementsusually relates to intent of orig. parties (If easement is express then the language determines the scope and responsibilities) Two scope issues: 1)The intensity and type of use by the dominant tenant; 2) How large the dominant estate is now or may become in the future In determining intent, courts look at: circumstances surrounding the creation of the easement-> whether the easement is express (language), implied (use), or prescriptive (limited to purpose for which it was acquired and state use for statutory period); and -> the purpose of the easement RULE: In general, the law presumes that the parties to an express or implied easement intended that the easement holder would be entitled to do anything that is reasonably necessary for the full enjoyment of the easement, absent contrary Evid. Reasonable changes in the manner/frequency/intensity of use to accommodate normal development of the dominant land are permitted, even if this somewhat increases the burden on the servient land. BUT must be as reasonable and little burdensome to LO as nature/purpose will permit Divisibility: dominant estate may be subdivided and partitioned and the owner of each part may claim right to enjoy the easement appurtenant to the dominant estate, if no additional/unreasonable burden is placed upon the servient estate -Most courts view the subdivision or other intensified use of the dominant land as acceptable development, absent evidence that it substantially interferes with the rights of the servient owner (burden cant be greater than was foreseeable when easement was created) Martin v. MusicP granted D an easement in land for a sewer line. D subdivides his parcel into 6 units, each of which had access to sewer. P sues to stop the easement. Held: estate was not enlarged; each party has a right to enjoy the easement (no greater harm to servient holder) Servient estate has a duty not to interfere with dominant estates use and enjoyment. (city maintains sewer lines but I cant block them with landscaping) KY Utility- Utility Co., by reason of its primary easement, has a right to enter upon the servient property beneath the lines and in the immediate vicinity thereof for the purpose of repairs and maintenance.Penn Bowling- An easement holder CAN increase # of users of the easement but cant extend it to nondominant lands; misuse of easement not enough to forfeit right (old CL rule); the usu. remedy is an injunction. Recent courts, however, have refused to order an injunction for misuse of an easement, and instead suggest remedy of nominal damages and/or value of the easement to the servient estate. Transfer of Obligations and Benefits Easements Appurtenant: attached to land, transferable; divisible if not unreasonable use=interferes w/servient estates use Easements in Gross: CL: Gen Rule: not transferable or divisible b/c assignment of such easements might unfairly increase the burden on the servient land Exceptions: If multiple owners are acting as one interest one stock , can exercise their right to divide-> Commercial easements are assignable (not divisible but NOTE: benefits can be divided, but right to use cannot)-> Trend: allow transfer and discard distinction b/n non and commercial easements unless parties shouldnt reasonably expect it. Profits: right to take something from burdened land-presumed in gross; generally implies easement to enter land to take subject of the profit Termination of Easements: (1) Express limitationprovision limiting easement to certain # yrs OR Easement holder Voluntarily releases his rights NOTE: removal of a need for an easement expressly created doesnt terminate it (2) Doctrine of Mergerone owner acquires dominant and servient landsmust acquire ALL land benefited and burdened by easement (3) Abandonment will be found if: Non-use for a long period of time; and Clearly manifest intent to relinquish the easement (Non-use alone is not enough) Preseault v. US- Court found abandonment for a railroad easement where holder: failed to use the easement for 26 years, removed the rails, switches, and all other railroad equipment from the servient land, making future railroad use impossibleNOTE: MisuseOld CL: will extinguish; MODERN: will extinguish the easement in cases where injunctive relief is wholly ineffective(4) Prescription: but easement must already be in existence; if one is created but no occasion has yet arisen for usecannot be adversely possessed -Servient owner may terminate an easement by prescription (just as a dominant owner may acquire one by prescription) -Example: S builds a brick wall across Es access easement, completely preventing any use of the easement by Eif continued for the prescriptive period, it will terminate the easement. Eminent Domain or estoppel-Conveyed to a BF purchaser w/o notice (unless implied easement or necessity) LICENSES- permission that allows the licensee to use the land of another for a narrow purpose; frequently created orally (parking, seat in theatre) License v. Easement: Not considered an interest in land/estate--personal; Licensor may revoke a license at any time (automatically revoked if licensor dies or conveys title to another) License can become irrevocable: 1. Due to estoppel; OR 2. If coupled with an interest (A buys truck from B, A has irrevocable license to enter Bs land and retrieve the truck)

REAL COVENANTS: a promise/agreement concerning the use of land that (1) benefits and burdens the original parties to the promise and also their successors/heirs/assignees (runs with the land) AND (2) is enforceable either (1) at law (real covenant running with the land at law for compensatory damages) OR (2) in equity (equitable servitude usually as an injunction against future conduct) Two types of Real Covenants: Affirmative Covenant- a promise to perform a particular act (usually the payment of money like H.O. Assn dues)Negative Covenant- a promise not to perform a particular act (restricts use of landtouches and concerns)-Each real covenant has 2 sides: (1) burden- the promisors duty to perform promise and (2) benefit- the promisees right to enforce the promise. Courts will strictly interpret restrictive covenantsa court will not rewrite a covenant to say something it doesnt itself say. Common Law Rule for a BURDEN of a real covenant to run with the land (only damages): Enforceable K in writing (interest in land, S of F applies) b/n original parties- Intent of original parties that it runs with the land (intent to bind successors, i.e. to A, her heirs, devisees, and assignees) Touch & Concern(affects nature, quality, value or mode of enjoyment of land of both burdened and benefited land) -Burden: affects an interest in property if the burden relates specifically to that property, and diminishes or limits/restricts the promisors (or his successors) use or enjoyment/value of it/Benefit: the benefit of a promise touches and concerns the promisees interest if it relates directly to the property, and increases his (or his successors) use and enjoyment/value of it. Many Jxs today instead use a reasonableness test and include touch and concern as a factor Note: Non-compete covenants generally held to touch and concern land; problem created for privity though whether burden is only personal Note: $ usu. not enough to meet this, unless funds set aside for maint. of prop.like assoc. funds for subdivision Horizontal Privity: must exist b/t original covenantor and covenantee; shared intst in the land independent of the covenant ( Owner of servient estate and owner of an easement)-Old Eng rule: Requires parties to a K to have a simultaneous interest in the same piece of property burdened by promise (when K is created) i.e. Landlord tenant relationship ONLY - Strict MA rule: simultaneous or other similar mutual intst in the burdened prop; LL-tenant, common Gor, easement holder-owner of servient estate - Majority(nearly all Jxs today): allows sequential/successive interests in estate; Gor-Gee, transfer even of whole estate Vertical Privity: must exist b/t the original party to the covenant and his successors seeking to enforce the covenant or against whom the covenant is being enforced -> Privityfor burden to run, successor must receive exact estate or estate of equal dignity i.e. same potential duration Noticemost real covenants are recordedimpart constructive notice; only on the burden side (so that the person is bound), otherwise its not foreseeable to a BFP (actual, constructive, inquiry)-more of an equitable consideration For BENEFIT to run: (writing), intent, touch and concern, and Many cts have relaxed the std for vertical privity successor need not receive exact estate; need to succeed to some intst, not exact same intst, i.e. FSAlife tenancy moist cts would say okay [most Jxs dont require horizontal or notice] Termination of Real Covenants Expires (if for a fixed period); OR Benefited party might release his rights Merger- one party acquires ownership of all the land benefited and burdened by covenant->Anti-discrimination statutes bar enforcement of a covenant (Shelly v. Kraemer) or eminent domain ABANDONMENT/waiver/acquiesence- the conduct of the person entitled to the benefit of the covenant demonstrates the intent to relinquish his or her rights; Is found when the average person, upon inspection of a subdivision and knowing of a certain restriction, will readily observe sufficient violations so that he or she will logically infer that the property owners neither adhere to nor enforce the restriction. (99 of 100 lot-owners with a recorded covenant of not building houses over 1 story build 2 story housesthe 100th person would presumably conclude that the conduct of the other lot owners constituted abandonment of the restriction. CHANGED CONDITIONS(doesnt apply to easements)- A Ct will not enforce a restrictive covenant when a fundamental change has occurred in the intended character of the neighborhood that renders the benefits underlying the imposition of the restrictions incapable of enjoyment. Three scenarios: Promisee seeks to enforce promise against promisors successor burden must run, Promisees successor seeks to enforce promise against promisor benefit must run, Promisees successor seeks to enforce promise against promisors successor both must run REMEDIES for Breach of Real Covenants-(Historically)Compensatory damagesdifference b/t the fair market value of Ps property before and after Ds breach.-(Modern)Choice of remediesalmost any restriction that can be enforced as a real covenant can also be enforced as an equitable servitude; giving choice of compensatory damages or an injunction and damages for the past violation. EQUITABLE SERVITUDESa real covenant running w/the land in equity, subject to remedy of SPsometimes called an equitable easement A promise concerning the use of land that (1) benefits and burdens the original parties to the promise and their successors and (2) is enforceable in equity.*Factors that distinguish it from a real covenant: 1.The standard for enforcing a promise as an equitable servitude is easier to meet than the parallel standard for a real covenant; 2. A broader array of defenses applies to the equitable servitude; 3. The traditional remedy for violation of an equitable servitude is an injunction, not damages; [4. Burdened party must have notice] Each equitable servitude has two sides: (1) burden- the promisors duty to perform the promise and (2) benefit- the promisees right to enforce.

Requirements for burden/benifit to run (promisee v. promisors successor): (no privity required) -> Writing or implied from a common scheme Intent to bind successors-> Touch and Concern the land (burden must touch and concern land, benefit must (in states)) *Successor must have NOTICE-ACTUAL OR CONSTRUCTIVE of the promise(arises indirectly from state recording statutes) either in writing or implied from a common plan/scheme replaces privity req. BUTnotice NOT required for benefit to run: Promisee successor v. Original Promisor Modern Deviation: Davidson (restrictive covenant not allowing supermarket on land) Reasonableness Test (replaces touch and concern but uses it as a factor): Intent--Covenant impacted consideration exchanged (burden/benefit)--Clearly expressed restriction--Writing/notice--Reasonable time/area/duration-Unreasonable restraint on trade (monopoly)--Interferes with public interest--Circumstances have changed to make covenant unreasonable IMPLIED BURDENS: implied reciprocal negative easement used to enforce similar restrictions against the residential lot or lots retained by the Gor or subsequently sold w/out the restrictions to a purchaser w/actual or constructive notice of restrictions & covenants From reference in deed to plat map, covenant of restrictions, or visible common scheme enough for inquiry notice Termination of Equitable Servitudes: Defenses to enforcement of an Equitable Servitude: Anti-discrimination protections Shelly v. Kraemer: barred enforcement of racially restrictive covenants on constitutional grounds -> CHANGED CONDITIONS (Policy behind this: parties would not intend this result if benefits cant be realized; obsolete restrictions interfere w/productive use of land) THE BORDER LOT PROBLEM Changed conditions outside a subdivision that impact only border lots do not trigger the doctrine (majority)it would cause a chain BUT, if the changed conditions outside the subdivision adversely affect ALL lots to the point that the benefits of the restriction cannot be realized, the defense does apply: Release/Abandonment/Merger/Eminent Domain-Estoppel (P manifests an intention not to enforce a land use promise, and D reasonably relies on it to her detriment, defense available) Lacheswaits too long to enforce a restrictive covenant/equitable servitude- Relative Hardship- court may deny injunction if hardship to D is high but benefit to P is small. Unclean Hands- one who violates a covenant cannot have it enforced on another Waiverpermitting another to act a certain way ; AcquiesenceProperty owner passively endures/allows multiple violations by other lots Remedies for Breach of an Equitable Servitude >Injunctionbars D from continuing to act a certain way in the future (and court may give incidental. and consequential damages for past violations) PRIVATE NUISANCEnon-trespassory invasion; unreasonable interference with anothers use and enjoyment of land General Rule: one is subject to liability for a private nuisance if, but only if, his conduct is a legal cause of an invasion of anothers interest in the private use and enjoyment of land, and the invasion is either: Intentional and Unreasonable; OR Unintentional but negligent or reckless Type of Conduct Essential to Liability: (a) an act; or (b) a failure to act under circumstances where there is a duty to prevent interference with others ->Intentional Invasion: purpose or knowledge w/substantial certainty ->Unreasonable: IF: gravity of harm outweighs the utility of actors conduct; OR harm caused is serious and financial burden of compensating for the harm would not stop conduct Gravity of Harm: Extent of harm involved; Character of harm involved; Social value that the law attaches to type of use or enjoyment invaded; Suitability of the particular use or enjoyment invaded to the character of the locality; The burden on the person harmed/avoiding harm Utility of Conduct: Social value that the law attaches to it; Suitability of the conduct to the character of the locality; Impracticability of preventing or avoiding the invasion Surface Water:Common Enemy Doctrine each LO is privileged to divert, repulse/retain H2O even if cause injury to near LOs Majority now: Reasonable Use Doctrine each possessor is legally privileged to make a reasonable use of his land, even though the flow of surface waters is altered and causes some harm to others, but incurs liability when his harmful interferences with the flow of surface water is unreasonable Nuisance per se- always a nuisance no matter where it is (crackhouses, casinos, prohibited by law)Nuisance per accidens- only a nuisance b/c of where it is located/circumstances (a pig in a parlor) Defenses:->Coming to the Nuisance at CL no cause of action; today, just a factor in balancing competing intsts (no bar) P can acquire prescriptive easement for the conduct if it has continued for a sufficiently long period, complete defense Defense of laches may be available if the P seeks equitable relief. Acquiescence or consent to nuisance bars recovery. Most Am. Cts hold no right to a view/ access to sunlight unless express agreement (not a nuisance or prescriptive right) Mitigation: if could, by reasonable expenditure, remedied condition to protect his property from further/damage interferenceCANNOT hold liable for subsequent damage; BUT efforts must be reasonable under circumstances, not substantial in relation to damages sustained Remedies ->Injunctionhistorically, injunction was remedy against nuisance ->Modern Approach: Balance of Equities Test; [socially valuable conduct that causes injury damages are more appropriate remedy] -Injunction is reasonable only if Ps resulting benefit > Resulting damage to D (and public interest on either side, usually) -If no injunction P receives compensatory damages; OR injunction can be ordered until D pays P permanent damages(Atlantic Cement) Alternative ApproachCompensated injunction: order injunction (in pub inst), but have P compensate (might be Ps fault) D for costs of compliance Damagestwo types: Permanent Nuisance: P gets all in one shot (for both past and

future harm) measured by the propertys diminished value- Temporary or Continuing Nuisance: P only gets recovery for past harm (but can keep bringing suit if harm continues) measured by diminished rental or use value of property SUBJACENT/LATERAL SUPPORT support the land itselfnot the buildings; at CL: Strict Liability if violation Subjacent Support the support that one property owner has duty to provide for owner above him (Min. rights v. surface right) Lateral Support the support one piece of land receives from the adjacent land (if D digs too close to/ too near Ps land) - If P developed land, too, he needs to prove that his actions were not a substantial factor EMINENT DOMAIN: inherent power of Govt to take private property; but under 5th Amend. Takings clause and to the states through the 14th two restrictions, (1) it must be for Public Use and (2) the Government must pay Just Compensation. Public Use ->Originally, defined as something physically used or occupied by members of the public: Public park, Library Hawaii Housing v. Midkiff 1984 (problem is it was a private to private land transfer by the govt.) 1: Redefined Public Use to mean Public Purpose Test= purpose underlying the govt action, for the PUBLIC BENEFIT, not physical use 2: condemnation decisions are judicially reviewed under the rational basis stdup to Cong. to decide pub. benefit; Court still contends that a Purely Private Taking would still violate. Kelo: 3 situs that constitute public use: 1. transfer privatepublic (rd, hosp., military base) 2. privateprivate (often common carriers) who make prop available for public use (RR, pub utility, stadium) 3. serve a pub purpose even if destined for private use (econ. Dvlpmt) unsettled. Just Compensation-SC Defines Just Compensation as the Fair Market Value (FMV-amount willing buyer would pay in cash to willing seller) of the undivided fee of the property when the taking occurs. [NOT sentimental value-AND defined by body doing the taking] All interest holders get a share equal to their % of interest owned BUT sum of separate cant exceed FMV of whole Future Land use: General Rule is that property must be valued at the highest and best use for which it could be adapted; important factors when deciding future use: The physical condition of the land (including location, topography, etc), The current and reasonably probable future zoning of the parcel, and, The market demand for the particular future use-> Govt. must compensate if they buy property that has a possible lease extension b/c that would be something valuable to a potential buyer. ->Good will: Generally the Govt. does not have to compensate you for loss of good will b/c you business has to move INVERSE CONDEMNATION no condemnation proceedingcause of action brought by prop owner against govt; Remedy: diminution in value test Taking by Trespass->When you invite the public onto private property you CANNOT restrict their peaceful actions UNLESS it reasonably affects economics of your business; CAN restrict time, place, manner but not content: freedom of speech, political leaning, etc. Ex. students can solicit signatures for a petition in a Easton like mall and cannot be excluded by owners; infringement on right to exclude others doesnt automatically=taking [Important factor is if its permanent or not] BUT Most states say free speech no further than fed const Taking by Regulation: restrictions such that it constitutes a taking; or some other project i.e. highway, interferes w/ prop or its value Penn Coal: regulation could be taking if it went TOO FAR no real definition; law took support estate away=taking Penn Central- Factors to determine if it was a taking:1) The economic impact of the regulation on the claimant: (diminution in prop value?) 2)The extent to which the regulation interferes with the claimants distinct investment-backed expectations (If you have invested a tonlooks more like taking. ASK: reasonable expectations for property based on existing/maybe future uses?) 3) Character of the governmental action (physical interference with property, trespasses, licenses) reasonably related to public health, safety, welfare Not=taking Current Test for evaluating Takings: If Government authorizes a permanent physical occupation of land Lucas: If regulation causes the loss of ALL economically beneficial or productive use of land categorical taking, unless justified by background principles of property or nuisance law. BUT note: in most cases, any residual value left, even if 5% not a taking-> If government demands an exaction that either lacks an essential nexus with legitimate state interest or lacks rough proportionality to the impacts of the proposed project. REAL ESTATE TRANSACTIONS SP is normal remedy in sale of land rather than damages K FOR LAND SALE: must meet S of F at time of making S of F: memorandum/writing MUST 1) ID buyer and seller 2) words showing intent to buy/sell 3) adequately describe property (includes anything affixed to the land-ceiling, lights unless otherwise stated) 4) price: must be definite; appraised value not enough-not ascertainable unless ID the appraiser and 5) signature of person to be charged =enforceable Equitable exceptions to SOF-Part Performancecourts consider three potential actions by buyer in determining whether the part performance exception is satisfied: Taking possession of the property, Paying all or part of the purchase price; and Making improvements. Majority of states: all/part of purchase price not enough alone, must have another one from above Several states: possession + improvements; a few states: possession alone is enough-> If established (part perf.), either buyer or seller may seek SP Equitable Estoppelapplicable where: One party has been induced by the other to substantially change position in justifiable reliance on an oral K; and, Serious or irreparable injury would result from refusing SP of the K

Financing Conditions: Buyers usu. insert a financing condition into the sales K to ensure that he is not obligated to purchase if he cannot obtain loan- Often are also made contingent on Buyers selling of first home RULE: financing condition imposes a good faith and diligent effort to obtain financing on buyer. (Objective std) Ex: 1 lender: decisions vary widely on whether an app. to only one lender is sufficient. Cts have found that this is NOT reasonable, 2 or more lenders: buyer who diligently, but unsuccessfully applies to two or more lenders has probably met the burden. Liquidated Damages Clauses: generally enforceable if: actual damages are difficult to measure AND amount of liquidated damages is not disproportionate to the amount of actual harm.- Modern trend: consider reasonableness of the estimate compared to the actual damages incurred. S and B enter into K for whiteacre for $200K. B pays $10K deposit. K provides If the buyer fails to perform his obligations hereunder, the seller shall retain the buyers deposit as liquidated damages. The liquidated damages are probably reasonable, because they are a reasonable estimate of future damages.However, if S immediately sells for $250K to B2, then S has suffered no loss from Bs breach, and in fact has made a $50K profit. Even if $10K was reasonable some courts will refuse to enforce the LDC here because it has no relationship to the sellers actual damages and thus constitutes a penalty. Marketabilitywhen K is silent about the quality of title that the seller must deliver, the law fills in the gap by requiring marketable title. (sellers obligation is both an implied condition and an implied covenantTitle is to be w/out defect and w/out encumbrance) RULE: a purchaser is not required to accept title which might reasonably be expected to involve litigation Basic Idea: free from reasonable doubt, but not from every doubt: Marketable Title Acts may redefine the root of title by certain # of yrsrequires you to search back that # of yrs, find the next recorded transfer before that date; that is the root and every interest before then is extinguished Defects in the Title: On date of closing must convey marketable title; unmarketable if the seller clearly does not own the estate he or she purports to be selling; unless quitclaim deed no warranties - Vince Ked to sell his land to Patty and to convey marketable title to her on the closing date. During the escrow period, Patty discovered that there was a mortgage on the property. Patty may NOT withdraw from the K b/c of the mortgage. Defects on the Land: title is unmarketable if the sellers title is subject to any encumbrance that is not patent or excepted in the sales K. Encumbrance is a right or interest in landother than a present freehold estate or future interest thereinthat reduces the value or restricts the use of land (mortgages, easements, covenants, leases, tax liens, encroachments, options, judgment liens, mechanics liens, and water rights) Land use regulations typically do not make title unmarketable But, violation of a zoning ordinance does render title unmarketable; as does violation of restrictive covenant or encroachment on neighbors property (all these situations create a likelihood of litigation) Visible easements (roads, power lines, sewer pipes, or other utilities) dont affect marketability b/c buyer knew or reasonably should have know that an easement exists and if enters into K that fails to mention easement, he has presumably agreed to accept title subject to easement. Equitable Conversion Doctrine: origin of SP remedy for breach of land sale K; once offer is accepted, K represents equitable ownership of real property buyer has interest in the real property and seller now only has interest in the personal property (purchase price) Remedies for Breach: Rescission of K: if title is found to be unmarketable; i.e. if seller misrepresents boundaries intentionally or innocently SP for Buyerbuyer is entitled to SP to any extent possibleto the extent that seller can perform; but only appropriate when is legally capable of performing (i.e. might be a situation where have to go to damages) Exceptions: laches, unclean hands, and other usual equitable defenses. Sanders v. Knapp: Seller cannot defend an action for SP on the ground that his title is not as complete as the one he agreed would be conveyedbuyer here enforced SP to extent possible, S had intst, and got abatement of purchase price in proportion SP for Seller: 2 options: (1) Mutuality Rule (old common law rule): if buyer can get SP, the seller is entitled to it as well. (2) If damages are measurablethen remedy at law is adequate so no SP unless unable to sell at reasonable price after a reasonable effort Centex Homes: P and D executed K for purchase of condo for $73K. D deposited $525 (earnest money) and then delivered check for $6800 to complete deposit. D learns his job moved to Chicago. D cancelled check and wanted rescission. Held: No SP for seller (P). Unless P could show unusual circumstances or a change in position (such as D moving in), Ps remedy at law is adequate. Measure of Damages: General Rule: entitled to all expectation damages including out of pocket costs and loss of bargain -Loss of Bargain Damages: Basic measure of damages for breach of a real property sales K is the difference b/t the K price and the fair market value of the property at time of breach. If not available, buyer may recover incidentals and consequentials from foreseeable losses - B enters into a K to purchase Blackacre from S for $500K, and then breaches 2 months later when the value of the property has fallen to $460K. Under general rule, B is liable to S for $40K. Conversely, if Blackacre is worth > $500K, S is not entitled to damages. Exception: 1. English Rule: Flureau exception (1/2 of the states): if breach was caused by a good faith inability to convey marketable title, the seller is not liable for loss of bargain damages; rather, buyer only recovers payments made to seller

and incidental damages. (seller who knows or reasonably should know about the title defect at the time he enters into the K is deemed to act in bad faith an receives no protection under this rule)2. American Rule: allows buyer to recover full loss of bargain damages regardless of sellers good faith. 3. Restitution damages Risk of Loss: who carries the loss when K is signed and there is later injury/destruction to the subject of the K? ( In absence of an agreement in K) (Majority) On Buyer[Rationale comes from the Doctrine of Equitable Conversion]CL doctrine whereby the buyer is deemed the equitable owner of the land until the close of escrow UNLESS the K specifies otherwise (even though title has not been conveyed yet) Seller/ Vendor retains right to purchase price. Once Buyer signs sales K = owner in equity, and thus can specifically enforce the K and thus, should bear the loss] - The later injury or destruction of property by fire, flood, hurricane, earthquake or other disaster after the K date was irrelevant to the parties obligations.-Criticism: seller usually retains possession until the close of escrow; he is better situated to protect the property. And seller still has casualty insurance on the property until the close of escrow, and thus may not need the protection that the rule affords, while the buyer rarely insures before he closing. However: Virtually all sales Ks contain a risk of loss clause, which expressly assigns the risk of loss on the event the property is damaged or destroyed before the close of escrow. ->Courts have often mitigated the harshness of the rule in the standard situation where only the seller has insured the property. In theory, EC would allow the seller to receive both the purchase price and the insurance proceeds, a double recoverymost courts that follow the traditional rule (EC) will impose a constructive trust on the policy proceeds, requiring the seller to apply them for the benefit of the buyer. -Skelly Oil: MA rule: limited to bldgs: if bldgs on land constituted a very significant part of the K and fire destroys K annulled, Buyer entitled to reimbursement of any pymt. If the bldg was NOT such a material part of the K or if the change in the value to the estate is not so great, SP may be decreed w/any compensation for any breach in K or other relief in damages. Insurance proceeds to buyers benefitabatement in that amount. Main views for Risk of Loss Allocation- Most widely accepted: risk of loss on buyer from time of K of sale even though seller retains possession Strong Minority: risk of loss on vendor UNTIL legal title is conveyed, even though purchaser may be in possession.Considered by some cts: Loss is on party in possession : Generally on buyer but sellers insurance proceeds may be ordered to benefit buyer (like Skelly limited to bldgsK void if material part, if not-insurance proceeds cover loss on value/abate purchase price) Uniform Vendor & Purchaser Risk Act (12 states): the risk of loss due to physical destruction or eminent domain remains with the Vendor until either possession or title is transferred to the buyer. Doctrine of Merger: the sellers covenants in the sales K are merged into the deed and thereby extinguished unless they are expressly reserved in the deed. On the other hand, K promises that would not normally be contained in the deed, i.e. quality assurances, are collateral and continue on ->Exception: Collateral Matters: quality assurancesK provisions which are NOT fulfilled by delivery of the deed, the K is not merged i.e. sellers warranty that home is in good condition or other similar promises -If the buyer discovers title defects after the purchase is consummated, he must rely on covenants of title in deed or other title assurance -NOT COLLATERAL COVENANTS (WILL MERGE): (seller shall furnish marketable title; seller represents that the property can be used for commercial purposes; seller agrees that all kitchen appliances and window treatments shall be considered fixtures; seller warrants that the home mechanicals will be inspected and, if needed will be repaired to the buyers satisfaction) Mallin v. Goodin this case, the sales K language was changed from to buyers satisfaction(subj) to in a good and workmanlike manner(obj) and therefore, acceptance of the deed does not implicitly or explicitly merge and say that the buyer was satisfiedthus held collateral agreement separate from deed.For buyer to protect from merging: set up escrow account to w/hold part of purchase price=cost of repairs NOTE: a freestanding promise: I will repair the roof-will survive, obj std; if conditions, pre-passing of deedusu. will merge Implied Warranties of habitability exist from builder-vendors to subsequent purchasers when there are latent defects which manifest themselves within a reasonable amount of time (1-1.5 yrs) after the purchase of the house (protects buyers when there is quick turn over which destroys privity)Hypo: seller promises in the K that the plumbing works just fine. Deed fails to include this promise. Its collateral and it doesnt merge MortgageA mortgage is the conveyance of an interest in real property as security for performance of an obligation (almost always a loan of money evidenced by a promissory note). Foreclosure: the process by which a lender may cause the secured property to be sold and apply the sales proceeds to satisfy the unpaid debt if the borrower fails to make the payments required by the note or otherwise defaults on the obligation; Theories concerning a mortgage: (Default theory: in practice, many states use this: equitable rights vest at the time of default on mortgage pymts) Lien Theory: the mortgage is seen merely as a lien on the secured propertymortgagee (lender) merely holds a security interest, not title; the mortgagee is entitled to foreclose on the property if a default occurs, but is not entitled to possession before foreclosure (2/3 states) Title Theory: CL concept that the mortgage is the transfer of title to the mortgagee until the debt is repaidthe mortgagee has the theoretical right to take possession of the secured propertyand thus obtain its rents and profits without foreclosure.

Deed of Trust almost like a mortgage-Borrower gives deed to trustee who holds until lender tells him one of two conditions are met: (1) full satisfaction of debt; or (2) defaultforeclosure Installment Sale K buyer pays purchase price to seller in installments set out in Konce buyer fulfills payments, seller hands over deed Seller retains legal title until K is fulfilled; buyer defaultsforefeiture DEEDSthe deed is a basic document used to transfer an estate or other interest in land during the owners lifetime. Document Formalities: Premisesnames of Gor & Gee, recitation of consideration (if any), and operative words of conveyance (grant, give, convey, etc)Habendum or tenendumdescript. of kind estate granted and any conditions imposed (e.g. to have and to hold for the Gees natural life) Executionsignature of the Gor and signature(s) of witnesses (if required), and seal (if required) Acknowledgmentsignature and seal of notary public attesting to the authenticity of the Gor and witness signatures. Statute of Frauds Requirements (Modern Requirements)writing (can be letter, no particular form)must contain: (1) ID of the parties (Gor & Gee) names not necessary but adequate description to allow ID of specific Gee (2) Words of Conveyance must manifest a PRESENT intent of the Gor to convey an interest usually grant, give, -Can use series of writingslook at writings (letters) together, they are operative words of conveyance (Metzger v. Miller) (3) Type of estate granted (if less than a FSA)(4) Description of the land anything adequate to identify the size, shape, and location of the parcel being conveyed. - Metes & Bounds by monuments, course (statement of direction in degrees), and distances. Gen begins at identifiable monument then describes its boundaries-Government Survey rectangular system-6x6; reference to base/meridian lines, range/township lines, and sections ex: Q: in the Cty of Contra Costa, State of CA, being the NE one quarter of the SE one quarter of section 16, T3N, R2E, Mount Diablo Base and Meridian, being 40 acres-Plat maps reference to lots & blocks within a subdivision; each individual lot assigned a #; recorded (If there are inconsistent metes and bounds due to human error, or multiple methods and they contradict, then use hierarchy of descriptors)Natural Monuments, Artificial Monuments, Reference to Adjacent Tracts, Courses/Directions, distance, Areas/Quantities, Place names/Addresses -Outside evidence (parol evidence) is admissible to establish the existence of monuments, explain ambiguities, but not to contradict a boundary description contained within a deed (limited to an action to reform a deed where accident, mistake, or fraud is shown)(5) Signature of the Gor->**Non-essential elements of deed: Gees signature, witness/notary, type of estate granted (unless less than FSA b/c FSA is presumed), recording, consideration (deed is not necessarily a K), seal Delivery Requirements deed is ineffective until delivered proof of intent - Delivery = the manifestation by words or act that the Gor has the present intent to vest title in the Gee (typically it involves the Gor physically handing it over to the Gee, with words indicating the Gors intent to transfer the interest immediately) Valid deliveries to Gee: Manual Delivery without words: O agrees to sell land to B. On the day selected for the transfer of title, B hands O a cashiers check for $500,000 and O silently hands B the deed to the land.Delivery by words alone: O executes a deed conveying land to B, but learns that B is on vacation in Alaska when he attempts to hand over the deed to B. O reaches B by telephone, saying, Congratulations! Youre the new owner of Blueacre. I just conveyed it to you! (1) Recordation or (2) Gees possession of the deed creates a rebuttable presumption of delivery This can only be overcome with affirmative evidence to the contrary demonstrating lack of delivery (deed was stolen, etc) -Delivery to 1 of several Gees operates as delivery to all -> Delivery + intent to operate in future delivery (Deed in a box) O executes a deed conveying Brownacre to B, and places it in a safe deposit box (or other locked box) where it is discovered after Os death. All courts agree that O has not manifested the requisite intent for delivery. However, uncertainty arises when the facts are changed slightly: O gives B a key to the safe deposit box. This could be seen as a symbolic act that gives B control and dominion over the deed. Also, courts are more likely to find delivery where the Gee is a close relative, on the theory that the conveyance is consistent w/ prudent estate planning. Conditional delivery to Gee: Majority: ignore condition and vest absolute title-> If Gor is careful can use language to grant a present interest that merely becomes possessory in the future = delivery ->Some cts: any condition prevents a valid delivery b/c delivery requires immediate transfer of titleContinued possession of the deed by the Gor creates a rebuttable presumption of nondelivery ->Once the deed is done, there is no turning back Revocable Deeds (3 approaches) deeds which contain language entitling Gor to revoke at future time; intervivos transfer, Gee has title good against all the word except the Gor.1)Majority: both the grant and the reservation of the power to revoke are valid ->2)Some Cts: deed cannot be delivered, because there is no manifested intention by the Gor to part with dominion and control OR such deeds are in fact testamentary and are invalid unless they meet the legal prerequisites for wills.->3) Some Cts: the grant is validassuming proper manifestation of delivery but the revoking provision is void Delivery to Escrow Gor may deliver to 3rd party who is instructed to deliver to Gee only upon some condition or at some future date Agent v. Escrow Escrow agent is dual agent of buyer and seller until the performance of the conditions of the escrow agreement. When conditions specified in the escrow agreement have been fully performed, the title of the premises passes to the purchaser and title to the purchase money passes to the seller. An agent of the Gor is not sufficient for deliveryb/c not neutral agent Sale/Commercial Escrow: in many transactions, the deed is conditionally delivered to an escrow agent with instructions that it be delivered to the Gee when the K conditions are met (a deed cannot be conditionally delivered directly to the Gee, but it may be conditionally delivered to a third partyescrow agent is essentially a neutral third party who is retained to facilitate the transaction)A valid escrow agreement is triangular: first, K b/n S and B agreeing to conditions of

deposit; then, delivery of items on deposit to escrow agentand escrow must agree to perform the functions of receiving the items and disperse when all conditions met. Will relate back to original date of delivery to escrow Death Escrow: Cts disfavor this methodfunctions as a will w/out the formalities and thus leaves it open to fraud. General Rule: The delivery of a deed conditioned on the Gors death to a 3rd party, where the Gor can recover the deed from the 3rd party at any time prior to his death (i.e. is an agent of the Gor), is insufficient to constitute legal delivery An elderly, childless couple executed a deed conveying their family farm to a nephew and announced that they wanted him to have the place. The Gor couple asked the nephew to leave the deed at their bank until they died; the banker assured the nephew that he would put the deed in an envelope and keep it in the vault until the nephew called for it. Couple died and the deed was discovered in the bank vault inside an envelope that a bank employeew/o knowledge of the partieshad written the names of both the Gor and Gee. B/c the banks standard practice would have allowed the Gors to retrieve such an envelope and thus revoke the deedeven though the Gors were apparently unaware of this the court found no delivery had occurred (Rosengrant) Gor could have avoided by transferring property title to a revocable trust and naming the nephew as its sole beneficiary. Irrevocable Death Escrow is usually held valid. In most states, although the deed appears on its face to convey FSA, it is construed to immediately convey a future interest to the Gee, which becomes possessory when the Gor dies. Thus, conveys a remainder interest in fee simple w/ a life estate reserved in the Gor.Relation Back Doctrine if Gor dies, escrow agents delivery to the Gee on the closing day relates back to the Gors delivery to the escrow agent provided that the Gee has performed his part of the K Ferguson v. Caspar: When there is a subsequent condition (withholding money until housing code violations are fixed) after the transfer of the deeds, if buyer wants to withhold purchase price until condition is met, seller has to agree as well. Acceptance technically required but presumed when grant is beneficial ->Does not have to be immediate if Gee is unaware; will relate back to time of recordation by the Gors intention that title pass then Types of Deeds and warranties: Quitclaim no implied covenants: Merely conveys whatever right, title, or interest the Gor may have in the property (used to release a doubtful title claim)General Warranty Deed provides the most title protection. Contains the CL deed covenants (1-3 breached if at all, at time of conveyance (present covenants); and 4-6 breached when Gee suffers interference at some future time-when the encumbrance surfaces for example (future covenants)): 1.seisen covenant that Gor is in fact seised (in peaceable possession under a freehold title) of the interest the deed purports to convey (Gor owns estate) Present covenant so only one who receives deed can recover from direct Gor 2.right to convey Gor promises that he has legal right to convey/transfer title 3.no encumbrances Gor promises that property is not subject to any interests in third parties (mortgages, interests, liens) other than those explicitly excepted in the deed (as of the date of delivery) If obvious/visible: Majority: still breached; Minority: not breached Except these categories: openly visible physical encumbrances such as easements that are existing (roads, rr, power lines, sewer pipes) 4.quiet enjoyment promises that conveyed title is equal to that which deed describes and that Gee will not be ousted or be subject to a successful claim at some future time (protects the Gee against lawful claims for the land; guarantee against actual or constructive eviction or ejectment) 5.warranty similar to quiet enjoymentsubstantively the same reallyGor promises to defend Gee and compensate him if he loses 6.further assurances Gors promise to do anything necessary to perfect the title which the deed purports to convey Special warranty, bargain & sale, statutory, or grant only warrants against acts of immediate Gor, not 3rd parties individualized covenants; Usually contains the same six title covenants found in the general warranty, but applies them only to defects caused by the acts or omissions of the specific Gor. Deed Covenants for Title ->CL/traditional rule: purchaser entitled to rely on covenants in deedeven if encumbrance is visible and obvious and buyer had actual or constructive knowledge->Usual exception to this rule: open, notorious, and visible physical encumbrance on the estate and known to the purchaser prior to executing the K, it does not render title unmarketable or the Gor in violation of selling the land free of encumbrances (i.e. RRs, public highways, power lines)BUTLeach v. Gunnarson: an irrevocable license to a 3rd pty to use a spring on the Gees land was a breach against the Gors covenant against encumbrances even though it was open, notorious, visible, and physical. (Probably not majority rule here though) -Thus, deed must specifically except encumbrances, even obvious ones, b/c Gor is in best position to know. ESTOPPEL BY DEED or Doctrine of After-Acquired Title 2 situations When Gor conveys, by proper instrument, title to real property in fee simple, and subsequently acquires rights or title to that property, such rights/title pass to the Gee or his successors by law. Schwenn: Even though Gor previously deeded the rights of the gas and oil royalties away; when she conveyed her property to the Kayes by general warranty deed, it was presumed in FSA (b/c it did not state a lesser estate) and once she subsequently re-acquired those gas and oil rights, they automatically passed to the Kayes. They shot through to Gees. Gors intent is irrelevant here. RECORDING SYSTEMS and TITLE ASSURANCE Title Assurancea prospective purchaser can obtain assurance of good titleor, by alternatively, protection from the consequences of having a bad titlein 3 ways:-Buyer can obtain a promise from the immediate seller that title is good warranty in deed (See deed warranties above) Title Searchcan help purchaser evaluate the risk himself-Traditionally,

title search plus sellers warranties were the only available methods of title assurance Title insuranceprovides for protection/compensation if title ends up being bad Priority Disputesproblems with mult. conveyances of same property by same Gor-problem b/n competing Gees CL Rule - title assurance: prior in tempore, portior in iure = First/earlier in time, is stronger in right ->Applied to both real and personal property Exception: a later legal interest will prevail over an earlier grant of an equitable interest if the owner of the legal interest was a bona fide purchaser who took w/out notice of the equitable interest and paid value.But if purchaser of legal inst had knowledge of equitable intst or deed to him was gratuitous, then the earlier equitable inst would prevail Recording Systems modification of CL doctrine through state recording acts Recordable documents any document affecting title, BUT note: Undocumented claims adverse possession, prescriptive easement - Short term leases i.e. 1-3 years: in most Jx dont need to be recorded unless they exceed this Indexes & Title Searching- Gee-Gor & Gor-Gee searches-Gor index alphabetically by year, also Gee index in same way Recording Acts only relate to priority of claims, do not operate to affect validity of title as b/t Gor and Gee Recordation not required for deed to pass title (only delivery required); Only necessary to protect the interest against other competing claims Shelter Rule Gee from a BFP is protected as a BFP, even though the Gee wouldnt otherwise qualify for his status - BFP wont be negatively impacted if his Gor was not a BFP wont hurt, only to help - O first conveys a FSA in Greenacre to A, and later conveys the same estate to B, a BFP for value who records first. In all Jxs, B owns Greenacre. When B lists Greenacre for sale ten years later, A stands outside waiving a huge banner that reads: I obtained title to Greenacre before B did. I am the real owner! Prospective buyer C sees As banner, and thereby obtains actual notice of As prior interest. In a notice or race-notice Jx, C and other potential buyers who see As banner cannot qualify for BFP status. As conduct might prevent B from selling Greenacreand thus recovering his economic interest in the propertyunless B can pass on his protected status to his ultimate buyer. The shelter rule allows B to transfer his BFP protection to later Gees. Types of Jxs: applies to all interests in land, i.e. easements, not just sales of full title Race Acts (2 states-NC and LA) unrecorded deed void against a subsequent purchaser who records first A BFP is the first purchaser to record, whether or not he has notice Notice Acts (about states) unrecorded deed void against a subsequent purchaser for value who takes w/o notice (BFP) BFP: a subsequent purchaser (someone who acquires any interestFSA, easement), for value (not donees, devisees, heirs), without notice of prior interest (caveat: make sure to interpret statute to figure what is meant by notice of prior interest: 1) is it interest in any prior interest; or 2) the interest held by the opposing/competing party?) Ra ce-Notice Acts (about states) unrecorded deed void against a subsequent purchaser or value who takes w/o notice and records first. BFP: (1) a subsequent purchaser, for value, without notice of prior interest (2) who records first Subsequent Purchaseralmost anyone who acquires any interest in land->Encompasses any person who acquires an easement, lease, lien, mineral interest, mortgage, restrictive covenant, or other possessory non-possessory interest. For Valuemust make economic investment in good faith reliance on the state of record title (NOT: donee, unsecured creditor, judgment creditor, promissor, devisee, heir)-Purchase price-Negotiated note- Cancellation of prior debtMortgages-Part pymt- NOTICEwhen the deed is delivered (not later) Actual Noticecan be obtained through any method of written, oral, or non-verbal communication, or by personal observation. Record Notice (Constructive Notice)charged w/ knowledge b/c of a recorded document--means notice of any prior interest that would be revealed by an appropriate search of the public records affecting land title But NOTE: purchaser is not ordinarily reqd to search outside of direct chain of title (deed conveyed by common Gor to dominant LO does NOT form part of the chain of title to the servient land retained by Gor thus restrictions only apply if included in 1s direct chain of title) Constructive Notice if: Its recorded in the chain of title and indexed properly -It has no technical defects - Notary public acknowledgment No constructive notice if: Incorrect name, description - Mis-indexed documents some states require taker to make sure deed is properly indexed to be considered to have recorded, Wild documents considered unrecorded - Late recordation Gor records her deed after her Gee records his Gees deed is considered recorded - Early recordation Gee conveys mortgage which is recorded before Gee obtains title = not recorded - Deeds out O conveys interest in another parcel in deed-subsequent taker of other parcel deed to have notice of prior encumbrance if that deed was recorded Inquiry Noticepurchaser has a duty to investigate suspicious circumstances (if a reasonable person would inquire further based on the facts known to purchaser, hes deemed to know the additional facts that inquiry would uncover whether he inquired or not)-Defective or un-recordable instruments ->No signature, no notary, no acknowledgment from notary public - References to other instruments: Guerin: found constructive notice, although the mineral lease was not recorded itself, b/c it was referred to in the recorded option given to Rock and in the subsequent assignments. Even despite warranty deed still had notice -Possession even where consistent with record title or- > Traditionally, also from quitclaim deed Imputed Noticearises from a special relationship b/t two personsif one knows, the other knows (agent, general partners, etc.)