Real Propery: Final Exam Ventura Spring 2014 (80%) Professor: Kaur Question # I Blackacre and Whiteacre are adjoining tracts of land. In 1950, Abel, the owner of Blackacre, deeded Baker, the owner of Whiteacre, a 40-foot-wide easement of way across Blackacre for the benefit of Whiteacre. The deed was properly recorded. Baker promptly paved the easement and began using the easement to access Whiteacre. He and later owners of Whiteacre also maintained the easement as necessary. In 1965, Whiteacre was conveyed to Charlie. In 1967, Charlie subdivided Whiteacre into a planned, gated community. Before selling the individual lots, he recorded Covenants, Conditions, and Restrictions ("CC&R's") that stated: (l) "These CC&R's are intended to run with the land and bind all parties and their heirs, successors, and assigns": (2) "Owners may not park pick-up trucks, RV's, trucks with camper Shell, or off-road vehicles in the street, or on their property in such a way that they are visible from the street"; and (3) "ln order to insure the safety and security of the homes in the development, each lot is assessed $350 per year to pay a private security service to provide security." Charlie quickly sold all of the lots in the development. Each deed out from Charlie explicitly refened to and incorporated the recorded CCR's, and was properly recorded. The development is patrolled by a private security firm paid at least in part by the assessment. The development is govemed by the Whiteacre Homeowners' Association (HOA), which is made up of all the homeowners in the development. In 1960, the residents of Whiteacre stopped using the easement across Blackacre, and the HOA goveming board did not keep the road maintained. It is now in some state of disrepair. but still usable. In 1995, Abel conveyed Blackacre to Davis. The deed did not mention the easement. This year, Edward bought a lot in Whiteacre. His deed did not reference the CC&R's. Edward owns a Hummer SUV that can be driven off road, although he does not use it for that purpose. He parks it in his open carport. which is visible from the street. He also has a large gun collection, which he feels provides adequate security for his home; he therefore refuses to pay the $350 security charge, which he says he did not know about when he bought his property. Describe and explain the theories under which the HOA may require Edward to 1. stop parking his Hummer in such a way as to be visible from the street; 2. pay the security fee? **+*Do not discuss any issues related to easement***+ Real Propery Final Exam Ventura Spring 2014 (80%) Professor: Kaur Question # 2 Owen owned Blackacre. ln 2002, he drew up a will in which he left all of his prope(y, including Blackacre, to Alice. In 2005, he drew up a deed in proper form transferring Blackacre to his best friend Bob. The deed was signed and notarized. Owen handed the deed to Bob's business associate Ezra, telling him, "l'm giving Blackacre to Bob, but I want to live there until I die. Hold on to this deed and give it to Bob after I die." After Owen died in January 2006. Ezra gave the deed to Bob, who did not immediately record it. After his death, Owen's estate, including Blackacre, was distributed to Alice. Alice recorded her deed from Owen's estate in June 2006. ln 2007 , Alice sold Blackacre to Debra for $ I 50,000.00. Alice gave Debra a general warranty deed. Debra did not immediately record her deed. Before selling the property to Debra, Alice had been renting it to Rick by a month-to-month lease that provided that Rick had to vacate if Alice sold the property. Debra moved on to Blackacre and built a house. In June 2008, Debra sold Blackacre to Frank for $200,000 via a special warranty deed. Frank recorded his deed from Debra the next day, and immediately moved on to the property. Bob recorded his deed from Owen that Ezra had previously delivered to him in august 2008. In September 2008, Frank leamed that the Alice+o-Debra deed had never been recorded: he obtained that dead and recorded it in October 2008. Bob and Frank now each claim ownership of Blackacre. L Does Bob or Frank have the better claim to Blackacre? Discuss 2. Presuming Bob prevails, does Frank have any claim against either Debra or Alice under the warranty deeds? Discuss ANSWER ISSI.JE OUTLINE OUESTIONONE HOA v. Edward A. Requirements l. In order for the HOA to enforce the restrictions against Edward, there must either be a real covenant or an equitable servitude that runs with the land. a. Since Edward is not original promissor, burden must run with his parcel. b. Since HOA is not original promissee, benefit must run to it. 2. Both equitable servitudes and real covenants are interests in land. B. Is there a real covenant that runs with the land? l. Does the burden run with Edward's parcel? a, Writing (l) Since real covenant is an interest in land, it must satisfy Statute of Frauds-i.e., be in a writing signed by party to be charged. (2) Real covenant cannot be created by estoppel, prescription. or implication. (3) Here, the restriction is in the original CC&R's, which are referenced in the original deed. (4) Not necessary that original grantee sign deed, since his acceptance binds him. b. Intent (1) Original promissor and original promissee must intend that burden run. i. Ascertained from word in grant. ii. Here. states that CC&R's intended to run with land and bind successors, heirs, and assigns ofall pa(ies. iii. This is sufficient to indicate intent. c. Privity (1) Horizontal i. Relationship between original promissee (Charlie) and original promissor. ii. Courts require either grantor-grantee relationship or lessor-lessee. iii. Promise must be in deed/lease. iv. Here, promise in CC&R's, which were incorporated into original deeds. v. Therefore, horizontal privity exists. (2\ Vertical i. Relationship between original promissor (person who first bought lot) and person to be bound @dward). ii. Person to be bound must succeed to same estate as original promissor through sale or cift. iii. Here, presumably both original promissor and Edward have fee simple absolute. iv. Edward "Bought" property, so this is voluntary transfer. v. Therefore, vertical privity exists. d, Touch and concern burdened property (l) Negative covenant re cars i. Since this prevents E from using his property in a certain way, it is a negative covenant. ii. Negative covenant always touches and concems burdened property, since it makes it less valuable. (2) Covenant to pay for security. i. This is an affrmative covenant, since it requires E to do something. ii. Performance takes place off land (paying $ for security is equivalent to actually patrolling property oneself) iii. Will touch and concem if it both burdens ProPerty and makes it more valuable. iv. Arguably, having private security will benefit burdened property, since it makes it safer. v. Therefore. this covenant touches and concems. e. Notice ofcovenant. (l) E will contend that he has no notice because covenants were not in his deed. (2) But notice may be either actual, constructive (from public records), or inquiry. (3) Actual i. Covenants weren't in E's deed, and there's no indication that he otherwise actually knew of covenants. ii. Therefore no actual notice. (4) Inquiry i. Cars i) E may have noticed that there were no pickup trucks, etc. visible fiom street iD Arguably should have asked why iiD But it'siffy. ii. Security fee i) E may have noticed thal development had security patrol. ii) But no indication that he should have noticed that he had to pay for it. iiD On fte other hand, ifhe'd asked, he may have been told. (5) Constructive from Record. i. Original CC&R's recorded. ii. Original deeds (including one in E's direct chain of title recorded. iii. Therefore, E is on record notice. 2. Does the benefit run to HOA? a. As explained above, the covenant is in writing. b. Intent--as explained above, CCTR's state all parties and heirs, etc. to be bound. c. Privity a. Horizontal privity not required (but is present as explained above) b. Vertical privity: person enforcing covenant must have some interest in benefitted estate. c. Here HOA does not own any property. But other owners whose lots benefitted enforcine covenant. d. Touch and Concem: a. Must make benefifted parcel more valuable. b. Must analyze each promise separately. i. Cars: 1. Makes neighborhood seem tonier not to have pickups and RV's visible. 2. Might increase value to have neighborhood look nice. ii. Security payment: l' Homes more secure 2. People probably willing to pay more for secure homes. e. Notice not required. C. Is there an equitable servitude that runs with the land? (l ) Does the burden run? i. Writing satisSing SOF-yes as explained above ii. lntent- yes as explained above iii. Privity-neither horizontal nor vertical required for servitude to run iv. Touch and concem-see discussion above v. Notice-see discussion above (2) Does the benefit run? i. Intent- yes as explained above ii. No Privity required iii. Touch and concem-see discussion above iv. NO notice required. D. Which would HOA prefer? l. Violation of real covenant allows promissee to recover damages, and some courts allow injunctions. 2. Violation of equitable servitude allows injunction, which is usually preferable.