The Origins of American Real Property Law

Transcription

1 Preface to the Fourth Edition ix Preface to the Third Edition xiii Preface to the Second Edition xvii Preface to the First Edition xix About the Author xxi Summary of Contents xxiii 1 The Origins of American Real Property Law Introduction Early Grants of Land: Origins of the Indenture Deed Use of the Words And His Heirs : The Fee Simple Interest in Land The Feudal Tax System Reliefs, Escheat Feudal Services The Feudal Tax Dodger Subinfeudation to Children with Reservation of Puny Services The Statute Quia Emptores: The Feudal System Shoots Itself in the Foot Avoidance Through a Conveyance To A for Life, Then to A s Heirs : The Rule in Shelley s Case The Rule in Shelley s Case Survives into the Twentieth Century The Policy that Led to the Rule No Longer Applies Why Did the Rule Survive for So Long? Title to Real Estate is Derivative: It is Traced Back Historically Is There Perhaps a Modern Argument in Favor of the Rule in Shelley s Case? xxv

2 1-7 Origins of a Modern Deed The Granting Clause The Bargain and Sale: Recitation of Consideration Description of the Property in the Deed Notes on Deed Descriptions and ALTA/ACSM Land Title Surveys Contents of a Modern Deed Date Names of the Grantor and Grantee; Parcel Identifier Number Description of the Property Conveyed Words of Grant Consideration Seal as Consideration The Habendum Clause Signature of the Grantor, Seal, and Acknowledgment Warranty of Title Recital, Encumbrance Clause, Appurtenance Clause The Extent of Ownership of Land; Vertical and Horizontal Division; Coal and Mineral Estates; Air Rights; Riparian Rights Coal and Mineral Rights; Oil and Gas Natural Gas; Hydraulic Fracturing and Trespass Marcellus Shale and the Dunham Rule Air Rights Riparian Rights Riparian Rights on the Delaware and Schuylkill Rivers in Philadelphia Fixtures Required Disclosures in a Deed The Development of Property Remedies and the Origins of Equity Introduction Modern Codes of Civil Procedure xxvi

3 2-3 Forms of Action Affecting Land At Early Common Law ( At Law ) The Writ of Right The Assize of Novel Disseisin Ejectment Property Remedies Developed in the Court of Chancery ( In Equity ) Introduction The Office of the Chancellor The Origins of the Court of Chancery Procedure in Chancery Deficiencies in the Common Law Remedy of Ejectment No Protection Against Repeated Actions in Ejectment No Remedy Against Repeated Interferences with Enjoyment No Remedy to Try Title if the Claimant is in Possession The Chancellor s Remedies For Threatened or Repeated Action: The Injunction Bills of Peace The Bill Quia Timet (Quiet Title) Modern Developments in the Action to Quiet Title Must the Plaintiff be in Possession of the Land in Question? If the Adverse Claim is Frivolous, Should the Court Dismiss the Case? Is There a Right to a Jury Trial in a Quiet Title Action? Declaratory Judgments Other Equitable Remedies and Doctrines Affecting Real Property Specific Performance Lis Pendens The Equitable Charge Equitable Subordination xxvii

4 3 The Real Property Title System, the Recording Acts, and the Role of Adverse Possession Introduction The Recording Acts: Basic Elements of the System The Subsequent Taker Must Be a Purchaser for Value Actual Notice Constructive Notice Inspection Notice Record Notice Effect of Failure to Record Mechanics of Recording The Chain of Title Records in the Chain of Title Probate Records Mortgages Liens Recorded Plats How Far Back Does the Title Search Have to Go? How is a Title Search Conducted; What Documents are Considered Within the Chain of Title? Matters Recorded After the Date When (According to the Record) Grantor No Longer Had Title Matters Recorded in Deeds to Adjacent or Nearby Land Once Owned by a Common Grantor Search of Surface Estate Where Title to Subsurface Estate is Being Examined Other Quirky Interests That May Affect Title Search Dower and Curtesy Community Property Law Indexing The Role of Title Insurance The Doctrine of Adverse Possession Statutes of Limitations xxviii

5 3-12 The Required Posture of the Adverse Possessor Actual Possession Under a Claim of Right The Idea that the Possession Must Be Hostile, Under a Claim of Right, Open and Notorious The Adverse Possession Must Be Continuous Tacking Adverse Possession The Idea of Privity Constructive Possession Under Color of Title Exceptions: When the Statute of Limitations Does Not Run Entry by True Owner Bankruptcy of the True Owner Is There a Basis for Showalter in Bankruptcy Law? Future Interests Disabilities Adverse Possession By and Against Public Authorities and Public Utilities Position of the Person Who Has Completed the Period of Adverse Possession Will Equity Aid an Adverse Possessor? What if the Adverse Possessor Does Not Know Who the True Owners Are? Boundary Disputes Buildings and Fences Encroaching Tree Branches and Roots Fallen Trees or Limbs Water Runoff The Fee Simple, the Fee Subject to Condition Subsequent, Determinable Fees, and Mortgages The Fee Simple Absolute The Fee Simple Determinable and the Fee Simple Subject to a Condition Subsequent Does the Concept of a Defeasible Fee Serve Any Purpose in Modern Real Estate Law? A Discriminatory Purpose Adverse Possession (A Nonsensical Distinction) Condemnation and Idiosyncratic Restrictions The Rule Against Perpetuities xxix

6 4-4 The Mortgage The Old Common-Law Mortgage: A Conveyance of Land in Fee Simple Determinable There Must Be a Debt or Other Monetary Obligation The Equity of Redemption: Foreclosure Strict Foreclosure Foreclosure by Judicial Sale No Clogging of the Equity of Redemption Deeds in Lieu of Foreclosure The Mortgage Modern Developments Title Theory versus Lien Theory States Deeds of Trust and Powers of Sale The Difference Between Foreclosing on the Mortgage and Suing on the Note Deficiency Judgments Anti-deficiency Legislation Concurrent Ownership The Idea of Co-ownership Partition in Kind Partition by Judicial Sale Tenancy in Common as a Financing Device The Joint Tenancy Creation of the Joint Tenancy The Statutory Provisions The Effects of the Unities Severance (Termination of Survivorship in a Joint Tenancy) Severance by Conveyance Severance by Agreement to Convey Severance by Mortgage The Rights of Judgment Lien Holders A Will Cannot Operate to Sever Survivorship: The Poor Man s Will Tenancies by the Entireties: Characteristics Creation Rights of Individual Creditors of Either Spouse Federal Tax Lien: Different Rule? Treatment in Bankruptcy When Only One Spouse Files xxx

7 6 Landlord and Tenant The Estate Concept of the Lease Some Consequences of the Estate Concept of a Lease Statute of Frauds Term (Duration) of the Lease Termination of the Leasehold Estate Upon Default by the Tenant A Claim for Rent versus a Claim for Damages Tenant s Abandonment of the Premises: Application of the Above Doctrines Landlord s Obligations to Tenant: The Old Common-Law View Warranty of Quiet Enjoyment Constructive Eviction Landlord s Obligation to Deliver Vacant Possession of the Premises The New Wave: The Lease as a Contract Warranty of Habitability Dependence of Obligations Retaliatory Eviction Confession of Judgment Further Consequences of the Estate Concept of the Lease Damage or Destruction by Fire or Other Casualty Assignment and Sublease Consequences of an Assignment as Compared to a Sublease Obligations that Run with the Lease: The Running of the Burden of the Tenant s Obligations to the Landlord Distinguishing an Assignment from a Sublease The Leasehold Mortgage: Assignment or Sublease? How Do Those Who Are Bound as Tenants on the Lease Become Released? Covenants Against Assignment and Sublease Tenant s Bankruptcy Effect on Landlord s Right to Terminate Lease Assumption or Rejection of the Lease by Tenant s Trustee xxxi

8 6-8.3 Limitation on Recovery in Damages After Termination Assignment of the Lease by the Tenant s Trustee Shopping Center Amendments to the Bankruptcy Code Bankruptcy Reform Legislation, Transfer and Assignment of the Landlord s Interest Relationship of the Mortgage on the Property (on the Landlord s Interest) to the Lease Subordination, Non-disturbance, and Attornment Agreements The Running of the Benefit of the Tenant s Obligations to the Landlord Particularly, the Landlord s Right to Rent The Mortgagee s Right to Rent After Default But Prior to Foreclosure Landlord s Bankruptcy Trustee s Power to Assume or Reject the Lease: Effect on Tenant Effect on the Landlord s Mortgage Lender s Right to Collect the Rents Sale of the Leased Real Estate by Landlord s Trustee in Bankruptcy: Can It Terminate the Lease? Easements Introduction What Kind of Rights are Easements? Conservation Easements The Restatement (Third) of Property: Servitudes (2000) The Distinction Between Easements and Licenses Licenses that Become Irrevocable Profits à Prendre How Easements Are Created The Title of the Document and the Language Used Easements by Express Grant or Reservation Reservations in Favor of Third Parties xxxii

9 7-3 Easements Appurtenant and Easements in Gross Easements Appurtenant Easements Are Appurtenant to Every Portion of the Dominant Property Easements in Gross Easements by Implied Grant and Implied Reservation Implied Easements in General Easements Implied from Necessity Easements Implied from Visible Physical Conditions Existing at the Time of Conveyance Easements Implied from What is Shown on a Recorded Subdivision or Land Development Plan: Introductory Dedication of Streets and Other Common Areas to the Public Dedication by Recording a Plat Acceptance of Dedicated Streets and Other Common Areas by the Public Type of Interest Held by the Public Title of Abutters When a Property is Dedicated and Accepted for a Specific Public Purpose, Can the Municipality Use the Property for Some Other Purpose, or Sell or Vacate the Property? When a Street is Vacated, Who Has Title? Implied Easements by Reference to Recorded Plans Easements by Long-Term Use (by Prescription ): Estoppel If the Period is the Same as for Adverse Possession, Why is it Called Prescription? The Rules are the Same as for Adverse Possession Easements by Estoppel Use of Easements Drafting and Interpretation of Easements Party Walls The Doctrine of Technological Advances xxxiii

10 7-7.4 Pole Attachments ; Use of Streets and Railroad Rights-of-Way Maintenance Obligation Termination of Easements Relinquishment Abandonment Prescription: Estoppel Loss of Easement Through Its Abuse Extinction by Merger Modification of Easements by the Courts Agreements Affecting Land Use Introduction The Requirement of Notice Duty to Search Title to Surrounding Lots Notice Implied from the Existence of a Common Scheme The Idea of Privity and Touching and Concerning the Land Privity ( Horizontal and Vertical ) Touching and Concerning the Land Restrictive Covenants No Horizontal Privity, But the Enforcer Must Have Land Intended to be Benefited by the Restriction No Vertical Privity, But Some Nexus Must Exist The Requirement that the Covenant Touch and Concern the Land Restatement (Third) of Property: Servitudes (2000) The Role of a Declaration of Covenants Termination of Covenants by Merger Termination or Modification Because of Change in the Condition of the Neighborhood Relationship of Land-Use Covenants to Zoning and Other Statutory or Constitutional Limitations Relationship to Zoning Constitutional and Statutory Limitations xxxiv

11 8-10 Restraints on Alienation and the Rule Against Perpetuities First Refusal Options and Options to Purchase: As Restraints on Alienation or as Perpetuities Options to Purchase and First Refusal Options: Drafting Considerations Residential Communities with Common Areas and Facilities Maintained Through Mandatory Assessments Against the Membership Properties Created Under Common Law, Without the Help of Statute Recommendations of the Homes Association Handbook Early Condominiums Development of a Common-Law-Based Association by Phases The Pennsylvania Uniform Planned Community Act and the Uniform Condominium Act Cutoff for Expansion After Seven Years Form of Organization; Can the Organization Be a Trust? Some Constitutional Issues Planned Communities, Condominiums, and Subdivision and Land Development Review Site Condominiums and the Subdivision Issue Tax Aspects of Planned Communities and Condominiums Shared-Amenities Housing: Some Interrelationship Issues Zoning and Other Governmental Intervention in Real Estate Development Introduction The Constitutional Backdrop Police Power Eminent Domain Regulatory Police Power The Origins of Zoning xxxv

12 9-5 The Standard State Zoning Enabling Act (SZEA) and the Municipalities Planning Code (MPC) Basic Theory of Zoning Separation of Uses: Robinson Township, a New Constitutional Principle? Preemption Release of Land into Development Through Zoning Amendment Spot Zoning The Floating Zone The Role of the Comprehensive Plan Contract Zoning Settlement of Litigation Release of Land into Development by Special Exception or Conditional Use Release of Land into Development Through the Planned Unit Development Device Origins of the Planned Unit Approach (Model Planned Residential Development Statute) Pennsylvania Version of the Model Planned Residential Development Statute Traditional Neighborhood Development Release of Land into Development by Variance The Variance Concept A Variance Application and Challenge to the Validity of an Ordinance May Be Combined in a Single Proceeding Before the Board The Requirement that the Hardship Arise Out of the Unique Physical Characteristics of the Property and Not Be Due to the Peculiar Personal Circumstances of the Owner and the Self-inflicted Hardship Idea Procedure Before the Zoning Hearing Board Under the MPC (Board of Adjustment Under the SZEA) Subdivision and Land Development Control Subdivision Exactions xxxvi

13 9-15 The Takings Issues, Particularly the Temporary Taking Puzzle The First English Case Appears to Hold that a Deprivation of All Viable Economic Use, However Temporary, is a Per Se, Categorical Taking For Purposes of Deciding Whether There Has Been Complete Deprivation of All Viable Economic Use, Property is an Indivisible Bundle of Rights In Applying the Balancing Test Has the Court Abandoned the View that the Specific Investment-Backed Expectations of the Owner are Important? Are Temporary Deprivations of All Viable Economic Use of the Property Per Se, Categorical Takings? Regulations That Require the Owner to Devote a Portion of His or Her Property to Public Use (Regulatory Exactions ) Procedures Under the Pennsylvania Municipalities Planning Code Challenge by the Landowner to the Validity of an Ordinance on Substantive Grounds Standing Where to File When to File Definitive Relief for the Landowner The Pending Ordinance Rule New Developments in Definitive Relief; the Pending Ordinance Doctrine and Piper Group Challenge to an Ordinance on Procedural Grounds by the Landowner Where to File and When to File Standing Landowner Challenges: Beating the Municipality to the Punch Challenges to the Validity of an Ordinance by Neighboring Property Owners ( Persons Aggrieved ) Standing Where to File Time for Filing xxxvii

14 Appeals Where to File Time to File; Appeal from Decisions Time to File; Appeal from Determinations Standing of Appellants from Decisions Frivolous Appeals from Decisions or Determinations Approving a Development Eminent Domain Origins of Power Enabling Legislation Scope of Delegated Power Procedures and Defenses Substantive Defenses to Eminent Domain Public Use; Good Faith; Abuse of Discretion Condemnation Merely to Preserve Land for Passive Open Space Public Purpose and the Pennsylvania Private Road Act Act 13 Eminent Domain Grant to Natural Gas Companies Agreements with the Condemnee or with the Private Redeveloper: Improper Delegation of Power? Two Standard Procedures Compared Maryland Pennsylvania Quick-Take by the United States Due Process and the Right to a Pre-deprivation Hearing Quick-Take Pre-deprivation Hearing About What? Quick-Take The Pennsylvania Procedure Inverse Eminent Domain Proceedings The Pennsylvania Inverse Eminent Domain Procedure Statutes of Limitations Introductory Pennsylvania Statutes of Limitations xxxviii

15 Inverse Eminent Domain: Some Procedural Issues In Asserting Inverse Condemnation, How Can the Owner Avoid Conceding that the Condemnor Had Authority to Condemn or that the Taking Was Valid? After a Declaration of Taking Has Been Filed by the Condemnor, How Can the Condemnee Claim that the Condemnation De Facto Occurred Earlier? Regulatory Takings Issue Revisited Valuation Phase The Unit Valuation Doctrine Valuation of a Property in Which a Business Has Been Conducted Valuation of Larger Land Areas that Have Been or Can Be Subdivided into Lots for Development The Concept of Floating Value The Effect of the Announcement of Condemnation on the Interim Use and on the Value of the Property at Condemnation Valuation of Interests that are Appurtenant to Adjacent or Nearby Property The Question Is What Has the Owner Lost, Not What Has the Taker Gained Betterments; Severance Damages; Partial Takings The Pennsylvania Approach to Valuation Landlord and Tenant Total Taking Partial Takings: Landlord and Tenant Drafting the Condemnation Clauses in the Lease Total Taking Partial Taking Possessory Takings Mortgagor, Mortgagee Total Taking Partial Taking xxxix

16 10-11 Condominiums; Common-Interest (Planned) Communities Taking of a Unit Taking of the Common Elements Agreements for the Sale of Real Estate Statute of Frauds Letters of Intent Terms of the Formal Agreement Identification of the Parties Description of the Property Purchase Price: Deposits Settlement Date; Due Diligence; Mortgage Contingency Clauses; Inspections Description of the Title to be Conveyed at Closing: Type of Deed to be Used Exceptions to the Title to be Conveyed at Closing Buyer s Remedies When the Seller Does Not Provide the Title Agreed To Seller s Obligations as to Quality Disclosure Laws for Existing Home Sales The Interstate Land Sales Full Disclosure Act Environmental Problems and Liabilities Risk of Loss Between Contract and Closing Representations and Warranties Prorations Seller s Remedies for Breach of the Agreement Title Insurance The Role of Title Insurance ALTA 2006 Owner s Policy Coverage That Was Only Implicit in the Wording of the Coverage Offered Under the Old Policies is Made Explicit Coverage That Was Implicit in the Wording of the Exclusions From Coverage Under the Older Policies is Made Explicit (New Covered Risks 5 through 10) xl

17 ALTA 2006 Homeowner s Policy (One- to Four-Family Residence) ALTA 2006 Loan Policy State of the Borrower s Title Validity and Priority of the Mortgage Lien Exclusions from Coverage (2006 Owner s and Loan Policies) Additional Exclusions from Coverage (ALTA 2006 Loan Policy) Schedule B Exceptions Endorsements Mechanics Liens: Recent Changes in Pennsylvania Law Pennsylvania s Mechanics Lien Law: Prior to Act Act 52 and Subsequent Changes in the Mechanics Lien Law (Including House Bill 1602) House Bill Mortgage Financing Issues Mortgage Securing Future Advances Formalities Obligatory versus Voluntary Advances; Effect on Priorities Statutory Changes Affecting Priority of Future Advances Title Company Problems in Insuring the Priority of a Mortgage for Construction Advances The Doctrine of Equitable Subordination The Mortgage Lender and Bankruptcy of the Borrower The Mortgage Lender That Completes Foreclosure Before the Borrower Files: The Durrett Case Delays in Recording a Mortgage After the Loan is Made: Bankruptcy Trustee s Avoidance Powers xli

18 Defective Acknowledgments; Bankruptcy Trustee s Avoidance Powers Defective Acknowledgment: The Bankruptcy Cases Effect of Bankruptcy Avoidance of the Mortgage on the Liability Under the Note Effect of the Interpretation of 21 P.S. 444 in Fisher and Batipps on the Secondary Mortgage Market The Mortgage Lender That is Caught in the Borrower s Bankruptcy Chapter 7 Bankruptcy Chapter 13 Bankruptcy Motion for Relief from Stay Single-Asset Real Estate Debtors: The 1994 and 2005 Changes Relief from Stay: Demonstrating That There is a Viable Plan of Reorganization Treatment of Mortgage Lender, in Chapter 11, That is Unable to Obtain Relief from Stay The Secondary Mortgage Market FNMA, FHLMC, and GNMA are Created to Facilitate a Secondary Mortgage Market for Residential Mortgages The Residential Mortgage-Backed Securities Program Mortgage-Backed Securities Program Extends to Commercial Real Estate: REMICS The Secondary Mortgage Market and the Peculiar Relationship of the Mortgage to the Note Article 9 of the UCC Before Revision in Structure of the Mortgage-Backed Securities Offerings Bankruptcy of the Record Mortgagee; The Kennedy Mortgage Case; Former Article 9 of the UCC (Revised) Article 9, Uniform Commercial Code xlii

19 Bailee Letters Mortgage Electronic Registration System (MERS) Transfers of Mortgaged Property Buyer Assumes the Mortgage Sale Subject to a Mortgage Sale Subject to the Mortgage with Purchase-Money Second Mortgage to Seller Sale Subject to the Mortgage with Wrap Mortgage Back to Seller Sale of Mortgaged Property Under an Installment Contract Tax Consequences of the Wrap and the Installment Sale Bankruptcy of the Buyer in a Wrap Transaction Lender Liability Tort Liability of Lender Fiduciary Liability of Lender to the Borrower and Its Guarantors Environmental Liability of Lender as Owner or Operator of the Site or as Successor to Such Owner Deepening Insolvency Index of Cases Subject Index xliii