Ten Common Mistakes in Applying Property Law - dummies

Ten Common Mistakes in Applying Property Law

By Alan R. Romero

Everyone makes mistakes. In fact, people often make the same mistakes. Here are ten common mistakes property law students make in applying property law. Now, there is no hard evidence that these are the most common mistakes, but they are certainly seen a lot in. Not only can this list help you avoid making these mistakes yourself, but it can help you better understand what’s right.

Misapplying the rule against perpetuities

There are so many ways to mess up in applying the rule against perpetuities that half this list of ten just listing rule-against-perpetuities mistakes. The rule against perpetuities says that no interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest.

Mislabeling present and future estates

Law students often mislabel estates. Mislabeling sometimes isn’t a big deal, as long as you understand who has the right of possession and in which circumstances. But it’s still important to correctly describe to others who owns what kind of estate, and sometimes labeling mistakes lead to substantive mistakes, too.

One common labeling mistake is to conclude that an estate is determinable or on condition subsequent when really it’s subject to an executory limitation. The mistake results from the difference in how the condition of defeasibility is expressed when the estate is determinable rather than on condition.

Misunderstanding hostility

Hostility or adversity is one element of claims for title by adverse possession as well as claims for prescriptive easements. A common mistake is to reason that use isn’t hostile or adverse because the record owner has acquiesced or agreed to the use or possession. But the record owner’s acquiescence or agreement doesn’t necessarily mean the use or possession isn’t hostile in the way these rules require.

Use or possession is hostile or adverse if it’s objectively inconsistent with the record owner’s title. It doesn’t have to be inconsistent with the record owner’s desires. If someone uses or possesses the property simply because the record owner gave permission — that is, she has a license — then that use or possession is consistent with the record owner’s title.

But if someone uses or possesses the property because the record owner agreed to give her an easement or to give her ownership (or if the record owner assented to her assertion of an easement or ownership), that use is hostile or adverse because it conflicts with the record owner’s title, even though the record owner agrees and even welcomes the use or possession.

Considering the intent to create a covenant rather than intent to run

A covenant is said to run with the land when successive owners of the relevant lands are bound or benefitted by the covenant. One requirement for a covenant to bind a successor to the original covenantor is that the original parties intended successive owners of the burdened land to be bound.

Likewise, one requirement for a covenant to benefit a successor to the original covenantee is that the original parties intended successive owners of the benefitted land to have the right to enforce the covenant.

A common mistake is to talk about the original parties’ intent to create a covenant rather than their intent to bind or benefit successors. This mistake seems to happen especially when talking about implied covenants. It isn’t enough to observe that the original parties intended to create a covenant; you must consider whether the original parties intended for the covenant to run with the relevant property interest.

Considering only notice of a covenant’s burden

To enforce a covenant in equity, the burdened party must have had notice of the benefitted party’s covenant right. Often law students talk only about the burdened party’s notice that the land was burdened by a covenant, but that doesn’t satisfy the notice requirement.

Applying estoppel or part performance without evidence of an agreement

The statute of frauds generally makes an easement agreement unenforceable if it’s not evidenced in writing. But there are two relevant exceptions to the statute of frauds that allow an easement agreement to be enforced without a writing: estoppel and part performance.

Deciding a joint tenancy exists without the four unities and express intent

A joint tenancy can exist only when all the joint tenants have unity of time, title, interest, and possession. But when a grant expressly says that someone’s a joint tenant, it’s easy to conclude that she’s a joint tenant without considering whether she’s eligible to be a joint tenant.

For example, if the grant says “1/3 to A and 2/3 to B as joint tenants with right of survivorship and not as tenants in common,” A and B can’t be joint tenants; their different fractional interests mean that they don’t have unity of interest. So before concluding that a joint tenancy exists, you must consider both whether the grant expressly indicates the intention to create a joint tenancy and whether the four unities are present.

You can make a mistake the other direction, too. Sometimes students argue that because the four unities are present, the co-owners are joint tenants. That’s not enough, either. The grant creating the co-ownership must expressly say it creates a joint tenancy to overcome the presumption of a tenancy in common.

Applying the equitable conversion doctrine where it doesn’t apply

The equitable conversion doctrine says that if a buyer has an enforceable contract to buy land, equitably she is already the owner of the land, even though she hasn’t completed the purchase and received a deed yet.

A common mistake is to apply the doctrine of equitable conversion where it doesn’t belong. As the equitable owner, the buyer bears the risk of damage to the land and must go forward with the purchase even if the property is physically damaged before closing. But the equitable conversion doctrine doesn’t apply to other types of risks and doesn’t trump other covenants and conditions of the contract.

Failing to identify the landlord’s wrongful act in a constructive eviction

A landlord may breach the covenant of quiet enjoyment by constructively evicting the tenant. A constructive eviction requires proof of all three of the following:

  • The landlord commits a wrongful act.

  • The act substantially interferes with the tenant’s enjoyment of the leased premises.

  • The substantial interference causes the tenant to abandon the premises.

Applying purchase agreements after closing and deeds before closing

A purchase agreement generally isn’t enforceable after closing, when the seller gives a deed to the buyer and the buyer gives the purchase money to the seller. The deed effectively takes the place of the purchase agreement, and the parties indicate by going forward with closing that the other party’s performance is acceptable and that they waive any unfulfilled conditions to their obligation to perform.