PROPERTY EXAM REVIEW

I have some suggestions set forth below that will allow you to review the exam on your own. After you have reviewed the answers, you are welcome to come to see me. If you do, I expect to you to come prepared to discuss the issues set forth below.

Law school exams measure two factors: how many issues do you spot and how well do you develop them. The adverse possession question is the easier of the essays to use for self-diagnosis. Everyone in the class understood that the central issue was adverse possession, and everyone at least mentioned the elements of adverse possession. So the things to look for go beyond that. To review: 1. Reread the question and my answer. 2. Use my answer to identify the issues in the question. 3. Review your answer, and see if you discuss the issues in the outline. In particular, look for: a. Did you discuss the characterization of the deed? It might be a fee simple determinable, a fee simply subject to a condition subsequent or both. I thought it was both, and that would then set up discussion of whether or not there was a violation. b. Did you discuss whether the lot was one lot or two? Since there was no issue of color of title, possession of the lot as a whole if there was only one lot is pretty straightforward. If there were two lots, however, whether there was sufficient possession of the second lot to establish possession of the whole was a significant issue. c. Did you consider each element for the two lots separately? Whether possession of the second lot was open and notorious, for example, required discussion. d. Did you discuss estoppel and balance of the hardships? And did you discuss them separately for the two possible lots? Overall, with respect to issue spotting, the big differences in the class were between those who recognized that the characterization of the deed, the existence of one or two lots, and estoppel and balance of the hardships were worth discussing and those who did not. 4. After you have identified the issues you missed, think about why you missed them. The estoppel and balance of the hardships issues are largely the product of having a good outline. They are part of the outline I presented in class, and they come up frequently on my exams. The issues are relatively weak in this question, but worth raising in the alternative. If you missed them, try to remember whether you had them in your outline, and whether you thought about discussing them during the exam. An important part of law school exams involves looking for alternative causes of action, and comparing them. The characterization of the deed is a different kind of issue. Your adverse possession outline would not include this issue. Instead, it should come from training yourself to think like a property lawyer. You can see from the way the question is worded that the condition is likely to be an issue. Without ever having studied Property, a good lawyer would know that the condition is going to be an issue. You should then think about alternative constructions of the language, and arguments on both sides with respect to whether it has been violated. In the process, you should recognize that the conditions take the form of interests you have studied (and which have been combined with adverse possession issues on past exams). On this exam, the formal parts of estates (the rule against perpetuities, etc.) are not at issue, but the form of the interests may affect their construction (e.g., is the requirement of maintenance separate from the requirement of residence?). 5. After you have reviewed the issues identified, consider whether you are getting maximum credit for each. I recommend circling the one sentence for each issue that you believe is most critical to your answer. Many students spend a long time describing the law, or the facts without getting around to the analysis that gets the most credit. The best students go immediately to the heart of the issues. E.g., many students noted that the statutes apply claim of title to a single lot. The best students then argued that the lot might be characterized as either a single lot or two separate lots. On what basis? The analysis that set up an answer to this question was worth a fair amount of credit. See if you can figure out what part of your answer to each issue was worth the most points. 6. My comments: I wrote on the exams if I thought your answer was characterized by a consistent pattern. If I mentioned a systematic presentation of the issues, you are probably doing a good job at issue spotting. If I mentioned development, then you might need more analysis of the issues you spot. Issue spotting and development are related, however. You are unlikely to develop the distinction between one lot or two unless you see that it is important to the answer. 7. Appointments: if you want to discuss the exam with me, I expect you to come prepared to identify what adverse possession issues you missed, which sentences of each issue you believe got the most credit, what part of the exam you believe was the strongest part for you, and why you were more successful on that part of the exam. (Don’t just tell me that you got a higher grade on that part of the exam; identify the part of your approach that was the most successful.)

QUESTION II. A

I. Nature of the deed The deed is ambiguous, and there are three possible interpretations: A. Fee simple determinable (the deed clearly uses the language “so long as”) and the Marenholz case treated similar language as a fsd B. Fee simple subject to condition subsequent, which is preferred in some jurisdictions C. Both. There could be a fee simple determinable, conditioned on a residence on the property, and a fee simple subject to a condition subsequent, conditioned on maintenance of the property, whether or not there is a residence. D. Has the deed condition been violated? This one was open to argument and it was important to develop the answer. II. Adverse Possession Adverse possession arises only if the deed is invalid. It could be invalid either with respect to CDGH only, or entirely invalid. If the deed is valid, no adverse possession issue arises; A and P are the owners. If the deed is invalid, the Association would still be said to have conveyed any interest they possess via the deed. So the adverse possession claim is necessary to assert a claim against the true owners, not the Association. A. One lot or two? A and P clearly have color of title. The statute limits the constructive possession to a single lot. The deed describes a single lot (ABGH), but the original neighborhood plat, which should be a matter of record, describes two separate lots. The key issue here, aside from the question of statutory construction, is notice to the true owners. If there were originally two lots, and the true owner owns only CDGH, possession of ABCD would not necessarily put the true owner on notice of a claim against CDGH. [The facts say two lots, and suggested that CD, the site of the old fence, was the most likely dividing line. Actual use then distinguishes between CDEF and EFGH, but does not suggest that there were treated as separate lots.] B. Actual or Constructive: Since entry is under color of title, A and P have constructive possession of the relevant lot in its entirety. [Note again: constructive possession is important only if the deed is invalid. If the deed is valid, they own the property and don’t need possession. If they lack title, then the fact that they entered into possession in accordance with a defective deed indicates an intent to possess (and constructive possession of) the entire area described in their deed.] They clearly possess all of ABCD anyway; the issue is if there are two lots, do they have possession of any of CDGH? They clear away the remains of the fence and the old boundary line, and the facts suggest murkily that they may have cleared some of the area that extends over the CD border. Is this enough for constructive possession of all of CDGH? Quite possibly not if it must be cultivation or improvement; merely clearing a small area is unlikely to be enough. The construction of the garage is substantially more of an improvement, but the garage construction doesn’t begin until much later and can’t meet the five years test. So it’s not clear that they have enough possession of any portion of CDGH to give them constructive possession of the whole for five years. C. Open and Notorious: This builds on B. Possession of ABCD is clearly open and notorious; clearing the area around the CD border probably isn’t open and notorious possession of CDGH. D. Exclusive/Continuous: many students correctly noted that the trespasser does not have title or a claim to title through adverse possession. He does, however, interfere with a claim of exclusivity or continuity. The two are not the same. If a trespasser with no right to be there has possession of the property, then the adverse possessor cannot be said to be in possession of the same part of the property, breaking the run of exclusive possession. So the issues are: i. Does his possession affect just EFGH or all of CDGH? Arguably, the lack of exclusivity is only re: that portion of the land actually used by the trespasser since he doesn’t have color of title. ii. Can A and P’s action in having him arrested be considered the actions of true owners asserting title? Yes, but this still raises the issue of the split in the authorities about whether it still constitutes a break in possession. iii. Is he actually in possession or he is littering? He doesn’t have to live on the premises to possess them in a way that interferes with exclusivity. But putting debris on an empty lot is not enough to interrupt A and P’s possession. The characterization of his actions as trespass is probably sufficient, however, to establish them as possession and not merely littering. [The criminal action is not, however, res judicata since the true owner was presumably not a party, and did not have an opportunity to contest the characterization of the actions.] E. Hostile and Adverse: Not an issue because under color of title. III. Estoppel Note: the issue is estoppel against the true owner, not the Association. The Association is clearly estopped by issuance of the deed. If the deed turns out to be invalid, then it must be because someone other than the association had title. Two issues for estoppel: A. Reliance: Can A and P reasonably rely on the true owner’s inaction? Possibly. They have a strong claim that with respect to ABCD; they have built a house. Surely, the true owner should have said something. With respect to CDGH, they have begun construction of a garage. That may have been enough to compel a response, but it raises the issue of whether there is still time to stop construction without too much of a loss. B. Detriment: Again, strong argument with respect to the house and ABCD; less so re: the garage and CDGH. C. Remedy: the true owner would be estopped from claiming the property while the house lasts, but it’s not clear the garage can be completed, which would make the estoppel action pointless. IV. Balance of the Hardships A. Reliance not needed here. Instead, assuming an injunction requiring removal of the house, there could be a balance of the hardships defense. House stays; A and P damages equal to the value of ABCD. They have a claim for unjust enrichment against the Association, but they do have to pay damages to the true owners. B. The argument for the garage is a little stronger here than the estoppel issue. If the true owners isn’t using the land, and the garage encroachment does not substantially affect the value of the remaining portion of the lot, then a court may limit the remedy to damages even if the garage is not completed or even substantially under way. The emphasis here is on the balance between A and P, not the extent of the reliance on the true owner’s actions. Comment: The secret to this question as with prior AP questions was to divide the lot into pieces, ABCD, CDEF, EFGH, and consider whether the elements were met for each section separately as well as as part of a single lot.

QUESTION B I. Lease A. Offer to enter into new lease Accepted? B. Holdover: new year term or month-to-month? There are really two issues here. First is a contract question. A offers to enter into a new one year lease. LL says if you don’t hear from me in a couple of weeks assume it’s okay. Does this become an acceptance creating a new one year contract when the time passes and nothing happens or do the parties anticipate that no deal will be final until they sign a new written agreement? It may not matter because even if they entered into a new agreement, that agreement too has expired. So A clearly became a holdover and the LL clearly accepted rent from here. The only question then becomes whether the default term is a new lease on the same terms as the last lease (i.e., one year) or the creation of a month-to-month tenancy. Note that a year-to-year tenancy is not an option. The common law rule would have created a new lease on the same terms as the old one, and the newer rule favoring month-to-month tenancies does so to shorten the period in which the parties may be involuntarily committed to a new lease; no jurisdiction would extend the period of the existing lease. A number of students argued that the landlord could choose the holdover term. This is incorrect; the period is a default term supplied by law. The better argument is that both parties may have thought they were simply continuing the lease on the same terms as before. This is probably not enough to create a new lease as a matter of contract, however; instead, it is a good reason for the jurisdiction to favor the old common law rule: holdovers should be on the same terms as the previous lease. II. Grounds to Terminate Lease A. CQE – probably not 1. Substantial Interference? Possibly 2. Due to landlord – unlikely 3. Constructive eviction – if she actually leaves A wishes to leave. If she does so, can she claim constructive eviction and terminate the lease? The LL would argue that he is not responsible for criminal activity taking place off the premises in places he cannot control. A would respond that the LL has the obligation to do what he can to secure the premises. He is responsible for the common areas, and security measures appropriate to the circumstances in the neighborhood. The LL has refused to do anything; but what more should he have done? The facts are sketchy enough to set up any number of possibilities. A’s scary encounter occurs when the vendor follows her through the locked front door of the building. The door is locked, and there is no description of a problem with lighting. Given the circumstances of the neighborhood, should the landlord has hired a doorman? a security guard? Under what circumstances are such measures compelled? The fact that A had a scary experience in the building may suggest that the LL should take greater precautions unless there is a reason to believe that this is an isolated incident. But the facts aren’t clear enough to indicate that the LL’s failure to do so before the incident breached the covenant of quiet enjoyment. A would have to leave to claim constructive eviction. Note: The issue of building safety could also have been raised as part of the discussion of IWH. I gave it equal credit however labeled. Noting the need to leave to claim constructive eviction, however, garnered additional credt. B. IWH – broken lock on door, broken window – enough? Validity of repair clause – shift of responsibility for IWH? LL’s responsibility? An argument for breach of the IWH might also allow A to terminate the lease, or to stay and withhold rent. Breach of the IWH might stem from the failure to take the security measures described above, but it may also follow the state of the apartment with a broken front door latch and broken window. The broken latch is clearly more critical. The issue arose in the Hilder case in the text, and it goes to a basic issue of security. The broken window might be a serious issue in a cold climate in December or January, but both ultimately turn on who has the duty of repair. The more significant issue is who has the duty of repair? The clause in the lease clearly says the tenant does unless the landlord is responsible. This leads to a series of issues: 1. Some students argued that the landlord is responsible if his failure to provide adequate security measures can be said to have caused the damage. 2. Many argued that it was invalid as a waiver of the IWH. The jx has not actually adopted the IWH, but presumably it will. There is no indication whether it would permit waivers. This isn’t a classic waiver, though; instead, it is an agreement that tenant will assume responsibility for repairs. The issue then become one of interpretation. Taken to its logical conclusion, it means that the tenant would be responsible for a furnace that broke down, damage from a hurricane etc. Such a clause would clearly be invalid. So a court is likely to either strike this clause, or interpret it narrowly to preserve its validity. If the latter, the court might distinguish between minor, everyday repairs, and major structural damage. Fixing a broken window, however, might easily qualify as an everyday repair; fixing the front door latch might or might not. 3. If the court interpreted it narrowly to uphold its validity, but nonetheless concluded that windows and door latches are everyday repairs, is this the end of the matter? Not necessarily. If the result is that the tenant cannot deal with a breach of the IWH, the landlord might still be responsible. If he fixed the problems, and tried to withhold the tenant’s security deposit, could he do so? 4. Maybe. This is a new jx with no security deposit statutes. If the lease provides that it’s the tenant’s responsibility, and if the LL had to step in to avoid building code or other violations, then presumably he can take the money out of the security deposit. The CA statute might arguably be interpreted as precluding this result, but applying it here requires discussion of whether the courts are likely to limit the landlord’s ability to enforce such lease provisions.

III. Proposed Transfer to Peter A. Are the statutes applicable? B. Validity of clause on assignment and subleasing C. Sublease rather than assignment As many students noted, the statutes are only applicable to commercial leases. These statutory provisions are the California ones we discussed in class, and they were designed to prompt the issues of statutory construction we mentioned. In CA, the statute applies only to commercial realty because the legislation was prompted by the desire to limit Kendall’s retroactive effect, and Kendall only addressed commercial realty. What would you conclude from a new jurisdiction adopting such legislation? If they are simply copying California, then they might not want to reach a legislative judgment on residential leases. Alternatively, the legislature may be intentionally indicating that it views the residential market differently. If so, how? If the provisions apply, what then? The provisions embrace freedom of contract, and permit blanket prohibitions on transfer. So the statute is likely not to interfere with the enforceability of the provision anyway. Many students argued that the statute indicates such clauses will only be upheld where they provide a standard for exercise of the LL’s discretion to refuse consent, and this clause provides no standard. Others argue that saying the LL can withhold consent for any reason whatsoever is a standard. I graded the discussion based on presentation of both sides and persuasiveness. If the statute doesn’t apply, the courts are very likely to uphold the clause given that it is the majority rule for commercial leases, and the close to universal rule for residential leases. A, however, has a clear out. The clause in the lease only refers to assignments. The clause will be strictly construed against the drafter. So all A has to do is change the proposed transfer to a sublease, and she doesn’t need the LL’s consent. How does she do so? She has not actually transferred anything at the time of the problem. She had wanted to transfer her entire interest, but that would be an assignment. Peter wishes to hedge his obligations until he clears up his immigration status, but what does that mean? It could be a condition, or it could be an offer to enter into a lease determinable. The latter is probably a sublease since A retains a possibility of reverter, but then the common law mind did not view a possibility of reverter as a substantial interest Is it? How would you advise A to draft the terms of the agreement to give her some security and to insure it’s a sublease and not an assignment. D. Discrimination 1. Accent discrimination 2. Prima facie case 3. Good reason? The LL may not have had to state a reason for his refusal consent, but he did. Is it valid? This raises two separate issues. First, is it illegal discrimination? This is actually a difficult question. Several cases have raised the issue of whether accent discrimination in the selection of applicants to be TV weather announcers or DMV employees is discrimination. The standard is whether accent serves as a proxy for ethnicity, with some arguing, for example, that British accents are viewed as cultured while Spanish accents may be viewed less favorably. In this case, the LL is saying that he has trouble understanding Peter, not all Russians or all people with accents, and he has rented to A, an immigrant from Eastern Europe. The employment cases did not find accent discrimination in itself to be a violation of Title VII, and the statement here about accent in itself is unlikely to be actionable. Peter could also argue that the statement about his accent cloaks animus for more general discrimination in the selection of tenants. The problem is that to do so he must be able to establish a prima facie case. Arguably, the statement itself creates an inference of discrimination. Who would Peter then compare himself to? The landlord rejects him in favor of keeping A on the hook. Their circumstances are quite distinct, however. If A leaves, Peter applies, is rejected again, and a non-accented, non-Russian is selected, Peter’s chances would be greater. The landlord, however, could give other reasons at that point for the selection. Finally, note that the LL might also have to give good reasons to satisfy the common law rule applied in Kendall if the jurisdiction were to adopt such a rule. The discussion would be the same, but the legal standard would be different. Kendall required commercially reasonably reasons, but it’s not clear what such a standard would mean in the residential context. The LL may be within his rights selecting a tenant with whom he feels better able to communicate. E. Mitigation of damages: If A were to leave, and the LL kept the place empty and then sought back rent, the duty to mitigate would arise. Note that jx are split over whether to impose such a duty. If they do, and the LL had rejected Peter, he might be said to have failed to mitigate the loss of rent. [If he were seeking future rent, mitigation would be built into the formula for calculating damages, and accepting or rejecting Peter would be irrelevant.]