GEORGIA REAL PROPERTY DISTINCTIONS PROFESSOR SAMUEL A. DONALDSON GEORGIA STATE UNIVERSITY COLLEGE OF LAW

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1 GEORGIA REAL PROPERTY DISTINCTIONS PROFESSOR SAMUEL A. DONALDSON GEORGIA STATE UNIVERSITY COLLEGE OF LAW CHAPTER 1: PRESENT INTERESTS AND CONCURRENT OWNERSHIP A. Present Estates in Land 1. Fee Simple (Abslute) "O t A and A's heirs" r "O t A" This is a frm f wnership Des nt terminate unless the wner dies withut heirs 2. Fee Simple Determinable "O t A s lng as the prperty is used as a church" r "O t A until A is married" Lk fr wrds f Freely and descendible, but always subject t the stated cnditin Upn the happening f the cnditin, terminates 3. Free Simple Subject t Cnditin Subsequent "O t A but if A ever marries, then t O" r "O t A prvided that if the prperty is ever develped, then back t O" Lk fr wrds f specific Freely and descendible, but always subject t the stated cnditin Des nt terminate autmatically upn the happening f the cnditin O has a right f reentry, but must exercise it 4. Fee Simple Subject t Executry Interest "O t A until A is married, then t B" r "O t A but if A ever marries, then t B" Lk fr either wrds f r wrds f specific, fllwed by title passing t a upn happening f the cnditin. 5. Fee Tail "O t A and the heirs f A's bdy" Lk fr wrds limiting descent thrugh grantee's bld line Gergia: Ablished (grantee has a fee simple abslute)

2 6. Life Estate "O t A fr the life f A" r "O t A fr life, remainder t B" r "O t A fr O's life" Lk fr wrds limiting pssessin, enjyment, r incme fr the life r fr the life f anther (pur autre vie) Freely during the grantee's life Life tenant duties: bligated t pay and maintenance expenses; duty nt t cmmit Gergia: failure t meet duties results in f the life estate B. Cncurrent Estates Title vests in the remainder beneficiary 1. Tenancy in Cmmn Any cnveyance t tw r mre grantees that is neither a nr a Each c-tenant can his r her share t anyne Each tenant has equal right t Each tenant has the right t the prperty Gergia: A c-tenant has n duty t pay ther wners fr use f prperty, EXCEPT: Acrnym: ( twerp ) 1) Waste; 2) use f the prperty; 3) received frm leasing; and 4) Precluding thers frm use 2. Jint Tenancy (With Right f Survivrship) Cnveyance t tw r mre peple specifically cntaining wrds f survivrship r t A and B as jint tenants Fur Unities (PITT): Pssessin (equal right t use) Interest (equal share) Time (acquired simultaneusly) Title (same instrument) Upn the death f a jint tenant, the interest terminates and passes autmatically t the tenants Each tenant has the right t the prperty Themis Bar Review, LLC GA Real Prperty Distinctins

3 A cnveyance frm a jint tenant t a nn-tenant will cnvert the jint tenancy t a tenancy in cmmn Example 1: A and B hld prperty as jint tenants. If A cnveys her interest t C, C and B n lnger hld as jint tenants. The cnveyance severs the jint tenancy and C and B are tenants in cmmn. Gergia: If a jint tenant becmes incapacitated r a jint tenant mrtgages the prperty, there is n ; the jint tenancy cntinues 3. Tenancy by the Entirety Basically a jint tenancy between married persns Neither party can unilaterally sever the tenancy by cnveying their interest t a third party Gergia: des nt recgnize tenancy by the entirety Nte 1: In Gergia, married persns wn prperty tgether either as tenants in cmmn r as jint tenants with right f survivrship. CHAPTER 2: FUTURE INTERESTS A. Future Interests Held by the Grantr 1. Reversin "O t A fr life" (O has a reversin) Held by wh cnveys nly a t anther Nt subject t the rule against perpetuities Freely alienable 2. Pssibility f Reverter "O t A s lng as the prperty is used as a church" A has a fee simple Upn the expiratin f the fee simple determinable, the grantr has the pssibility f reverter 3. Right f Reentry "O t A prvided that if the prperty is ever develped, then back t O" A has a fee simple O has a right f reentry, als called a pwer f terminatin This right is nt autmatic, the hlder f the interest must act GA Real Prperty Distinctins 2018 Themis Bar Review, LLC 3

4 B. Vested Remainders 1. Vested Remainder "O t A fr life, then t B and B's heirs" A has a Remainder interest nt subject t that is created in an grantee A vested remainder is freely alienable 2. Vested Remainder Subject t Open "O t A fr life, then t the children f A that have attained the age f 18" (A has a child, B, wh is nw age 20) A has a B has a An ascertainable beneficiary has a vested interest in the prperty. Hwever, his interest culd be diluted thrugh additinal class members (A culd have mre children wh attain the age f 18) 3. Vested Remainder Subject t Divestment "O t A fr life, then t B; but if B has n children then living, then t C r C's estate" (B has a child) B has a vested remainder. Hwever, B s child might predecease A and B might nt have any mre children. B s vested remainder culd be lst. Remainder interest that can be lst upn ccurrence f a C. Cntingent Remainders 1. Cntingent Remainder "O t A fr life, remainder t B if B is then living; if B is nt then living, then t C r C's estate" r "O t A fr life, remainder t the living heirs f B" (B is still alive, s heirs are unknwn) Remainder that is either subject t a r cnferred t an beneficiary 2. Shifting Executry Interest "O t A and A's heirs, but if Gergia legalizes pt, then t B and B's heirs" A has a fee simple subject t cnditin subsequent, but because it ges t a third party instead f the riginal grantr, O, A has a fee simple subject t The future interest that fllws is the executry interest Shifting: interest that cuts ff a prir estate upn the ccurrence f a Themis Bar Review, LLC GA Real Prperty Distinctins

5 3. Springing Executry Interest "O t A fr life, then, ne year after A's death, t B and B's heirs" A has a life estate O has this temprary reversin Springing: interest that arises t cut ff a D. The Rule Against Perpetuities Cmmn Law: sme future interests are valid nly if they must vest r fail t vest by the end f a life in being plus 21 years. 1. Future Interests Subject t the RAP ( CORPSE ) Cntingent remainders Optins Rights f first refusal Pwers f appintment Subject t pen (vested remainder) Executry interests 2. Gergia's "Wait and See" Apprach Unifrm Statutry Rule Against Perpetuities An therwise invalid transfer will be valid if it actually vests within 90 years f its creatin. If an interest des nt actually vest during this perid, an interested party can petitin a curt t the cnveyance in a way that best effect's the grantr's but still cmplies with the statutry time frame. CHAPTER 3: LEASEHOLD ESTATES (LANDLORD/TENANT) A. Overview f Leasehld Estates 1. USUFRUCT Any time perid nt exceeding Creatin: Created by between landlrd and tenant Parties can create a USUFRUCT with a lnger term by Statute f Frauds requires a writing if term exceeds Terminatin: Occurs at end f term Ntice f terminatin is nt required A tenant may terminate befre the end f the term by. Either party may terminate if the ther has made a material breach. GA Real Prperty Distinctins 2018 Themis Bar Review, LLC 5

6 2. Tenancy fr Years Any time perid in excess f Created by a written between landlrd and tenant Terminatin Occurs at end f term Ntice f terminatin nt required A tenant may terminate befre the end f the term by. Either party may terminate if the ther has made a material breach. 3. Peridic Tenancy estate measured by a set perid f time but withut a set terminatin date Creatin: By between landlrd and tenant; By (n terminatin date in lease); r By f law Terminatin: Renews autmatically at end f the perid absent valid terminatin ntice T terminate, must give ntice at least ne full perid in advance Ntice nt required where tenant r where landlrd breaches material cvenant 4. Tenancy at Will Estate that cntinues until terminatin by landlrd r tenant Typically arises after the expiratin f a tenancy fr years r a USUFRUCT but the tenant remains in pssessin with the landlrd s permissin Creatin: By lease agreement between landlrd and tenant; r By (landlrd permits tenant ccupancy) Gergia: Landlrd must give ntice t terminate Tenant must give ntice t terminate 5. Tenancy at Sufferance Estate that begins upn expiratin f a lease Created by actin f tenant remaining n premises Terminatin: Themis Bar Review, LLC GA Real Prperty Distinctins

7 By tenant's departure; By landlrd's evictin; r By lease renewal Gergia: A landlrd's cnsent t a tenant's remaining n the prperty cnverts a tenancy at sufferance t a B. Tenant Duties 1. Tenants have three duties: a. Pay Rent Unless premises is r landlrd is in f lease agreement b. D Nt Cmmit Waste c. D Nt Unjustifiably the premises In the event f unjust abandnment, landlrd may chse t: the lease; Re-lease the premises; r Let the prperty remain while cllecting the agreed rent 2. True/False Quiz n Gergia Law Regarding Waste: 1. A tenant may nt cut dwn grwing trees n the land absent the landlrd's cnsent. 2. A tenant may nt remve permanent fixtures n the land absent the landlrd's cnsent. 3. A tenant may nt use dead timber fr firewd absent the landlrd's cnsent. 4. A tenant may nt let cattle graze n the land absent the landlrd's cnsent. 3. Gergia Law n Security Depsits When the landlrd requires a security depsit Must be placed in an escrw accunt, r Landlrd must keep a with the superir curt clerk in the cunty where the prperty is lcated At the end f the lease term, the landlrd must give the tenant a list f damages within after the tenant vacates. GA Real Prperty Distinctins 2018 Themis Bar Review, LLC 7

8 The tenant then has t inspect the premises and dispute any f the claimed damages. The landlrd may NOT keep the depsit t cver wear and tear, but the landlrd can keep the depsit when there has been: ; Failure t ; r Actual damages frm the tenant's f the lease agreement If the landlrd unintentinally retains the depsit as a result f a bna fide errr, the landlrd is liable t the tenant nly fr the amunt f the depsit. If the landlrd intentinally retained the depsit wrngfully, the landlrd is liable fr the amunt f the depsit, plus. C. Landlrd Duties Landlrds have fur basic duties Mnemnic: "When she's pssessed, a quiet nun is in need f a habit repair a. Pssessin Must deliver pssessin t the tenant b. Quiet Enjyment N ne will disrupt the tenant's f the prperty c. Warranty f Habitability Prperty must be reasnably fr ccupancy d. Repair Must keep the premises in perating cnditin Gergia: tenant can make repairs and seek either:, r the cst frm rent CHAPTER 4: ADVERSE POSSESSION AND CONVEYANCES A. Adverse Pssessin (Title by Prescriptin) 1. Elements ("Ex Cn Nt Hst") a. Exclusive Pssessin is nt with the true wner Themis Bar Review, LLC GA Real Prperty Distinctins

9 b. Cntinuus Uninterrupted pssessin fr years The perid is when pssessin is under written evidence f When pssessin is acquired by fraud the clck des nt begin until discvery f the fraud The clck des nt run while the true wner is disabled c. Open & Ntrius A true wner wuld be aware f the claim Payment f des nt by itself establish adverse pssessin d. Hstile Pssessin withut frm the true wner and with the intent t Gergia: requires a f legal right t pssessin B. Real Estate Cnveyances 1. Implied Warranty f Fitness r Suitability Applies in the cnstructin f a new hme Rule: Seller makes an implied warranty f cnstructin Gergia: As a caveat emptr (buyer beware) state, Gergia generally des nt imply a warranty as t the cnditin f a new hme Seller has a duty t disclse cnstructin defects f which the seller has when the seller knws the buyer is acting under a Thus, a buyer can nly recver fr latent defects abut which the buyer did nt knw and culd nt reasnably have knwn but which the seller did knw r reasnably culd have knwn 2. Liquidated Damages Rule: If a buyer breaches the cntract, the seller can cllect liquidated damages unless the seller suffered n lss frm the breach Gergia: The seller cannt cllect liquidated damages unless: 1) The injury caused by the breach is r t estimate; GA Real Prperty Distinctins 2018 Themis Bar Review, LLC 9

10 2) The parties intend the damages t be and nt punitive; and 3) The amunt f liquidated damages is 3. Mrtgages Rule: Generally, the mrtgagr-brrwer is the wner, the mrtgagee-bank has a n the prperty (lien thery) Gergia: Lien thery state except: If the hmewner grants a instead f a mrtgage, the mrtgagee-bank wns The bank must re-cnvey the prperty when the debt is satisfied Generally, title t the prperty reverts back autmatically seven years after the debt matures 4. Redemptin f Freclsed Prperty Rule: fllwing the sale f freclsed prperty, the mrtgagr has a fixed perid f time t reclaim the prperty by paying the party wh bught it at the freclsure sale Gergia: There is n statutry right f redemptin after a freclsure sale 5. Deficiency Example 2: The amunt n the mrtgage is $300,000. At the freclsure sale, the prperty sells fr $200,000. Rule: If the sale f freclsed prperty yields less than the amunt due under the lan, the mrtgagee-bank may bring a deficiency actin fr the amunt wed Gergia: The mrtgagee-bank cannt bring a deficiency actin unless the sale is reprted t the f the cunty in which the land is lcated within f the sale. 6. Executin f Deed (Witnesses) Rule: The grantr's signature n the deed need nt be witnessed r ntarized Gergia: Editr's Nte 1: The law was amended after the recrding f this lecture. Gergia n lnger requires tw witnesses. Under the current law, Gergia requires all deeds that are nt filed electrnically t be attested and acknwledged by a ntary public (r a judge r magistrate, r a clerk r deputy clerk f a superir curt r f a city curt created by special act f the general assembly) and at least ne ther witness. Acknwledgment by the grantr in the presence f any f these curt fficers will als allw a deed t be recrdable. If the grantr des nt acknwledge the deed and n curt fficer attests t it, then it can still be recrded upn the affidavit f a subscribing witness made befre ne f the abve-listed curt fficers Themis Bar Review, LLC GA Real Prperty Distinctins

11 7. Fixtures Rule: Tangible persnal prperty must be attached t the real prperty in rder fr the persnal prperty t becme a fixture Gergia: all that is required is that the tangible persnal prperty remain permanently with the prperty 8. Ademptin Rule: If a decedent n lnger wns real prperty devised in a will, the gift will adeem Gergia: If the decedent exchanged the devised prperty fr prperty that is in its character and use, there is a presumptin that the decedent intended fr the beneficiary t take the new prperty. Example 3: Cndminium in Buckhead is left t A under decedent s will. Prir t death, decedent sells the cnd and uses the prceeds t purchase a residence in Savannah. 9. Exneratin f Mrtgaged Prperty Rule: When a decedent dies wning prperty subject t a mrtgage, the recipient takes bth the and the. Gergia: The mrtgage is and the recipient takes the unencumbered prperty. Unless therwise prvided under the will CHAPTER 5: EASEMENTS, COVENANTS, AND LAND USE RESTRICTIONS A. Easements 1. Easement Vcabulary An easement is a right t anther's prperty. Often given fr purpses f ingress and egress The prperty burdened by the easement is the estate. The prperty benefited by the easement is the estate. An easement appurtenant is ne that is tied t the. An easement in grss is ne that benefits the hlder. 2. Types f Easements a. Express Easement Affirmatively created Mst ften cnveyed by deed GA Real Prperty Distinctins 2018 Themis Bar Review, LLC 11

12 b. Easement by Necessity A parcel is severed, leaving ne tract landlcked Gergia: easement by necessity is nt available when the grantr cnveyed the lt prviding access Example 4: A grantr gives the recipient the prperty lcated next t the rad and keeps the (nw) landlcked parcel. The grantr cannt claim an easement by necessity because the grantr shuld have reserved an easement when he made the cnveyance. Gergia: prvides a prceeding t btain a private right f way that is n wider than c. Easement by Implicatin Implied frm prir use d. Easement by Prescriptin An easement by adverse pssessin Gergia: the perid is fr an easement in imprved land and fr an easement in undevelped real prperty e. Easement by Estppel Based n reasnable detrimental reliance n permissin frm the servient estate Example 5: The wner f the landlcked estate appraches the wner f the neighbring estate with access t the rad. The landlcked wner asks fr permissin t use his prperty t access the rad. The accessible wner grants permissin t crss the land. Suddenly, the accessible wner stps the easement and erects a fence blcking the easement. The landlcked wner culd have sught a different type f easement but instead, relied n the ther wner s permissin t his detriment. B. Cvenants 1. Cvenant Vcabulary A cvenant is a regarding the use f real prperty. Private, mutual agreements; ften in newly develped neighbrhds A cvenant enfrceable by damages is a. A cvenant enfrceable by injunctin is an Themis Bar Review, LLC GA Real Prperty Distinctins

13 2. Expiratin f cvenants Gergia: cvenants expire after if the prperty sits in any municipality r cunty area that has zning laws Unless the cvenants were created the zning laws were enacted. 3. Creating a Cvenant r Servitude that Runs with the Land ("TWIN") Tuch and Cncern Writing Intent Ntice Editr's Nte 2: In the case f a real cvenant, Gergia als requires vertical privity and, fr the burden t run, hrizntal privity. In case f an equitable servitude, Gergia des nt require privity. C. Public Land Use Restrictins 1. Water Rights Gergia is a riparian rights state Water belngs t thse wh wn the land that abuts the water A Gergia landwner cannt water frm its nrmal curse where ding s wuld interfere with anther wner's. Water rights extend t nn-navigable waterways and 2. Zning A Gergia landwner may nt alter the rate r flw f surface water in a way that interferes with anther wner's. State and lcal gvernments may regulate land use thrugh zning laws, subject t the and Amendments f the U.S. Cnstitutin. Sme wners can be frm a zning rdinance, and thers can seek if a particular rdinance impses unique. Where a zning rdinance and a private cvenant cntradict, remember that a private cvenant can be restrictive than a zning rdinance, but cannt be restrictive. Example 6: A zning rdinance requires a 50-ft setback frm the rad. A private cvenant requiring a 100-ft setback is. A private cvenant requiring a 25-ft setback is. GA Real Prperty Distinctins 2018 Themis Bar Review, LLC 13

14 3. Eminent Dmain (Takings) Refer t Cnstitutinal Law materials 4. Nuisance Refer t Trts materials GOOD LUCK! [END OF HANDOUT] Themis Bar Review, LLC GA Real Prperty Distinctins