Business Law (Property)

Three factors determine fixtures

(1) Attachment (2) Adaptation (3) Intent

Documents of Title

(1) Document of title refers to the document that identifies ownership of property (2) A common carrier (bailee) contracts to store or transport containers of goods and deliver the containers to the owner or owner's designee (3) Each container will have a related document of title

Ownership of personal property may be acquired by:

(1) Production (2) Purchase (3) Leasing (4) Gift (5) Will or inheritance (6) Confusion (7) Accession (8) Taking possession of unowned property

The person who finds lost property...

... does not acquire ownership of it, but acquires better rights to the lost property than anyone other than the true owner

Finder of mislaid property...

... must return the property when real owner asks for the property

Property is mislaid when...

.... owner voluntarily leaves the property, but forgets to retake possession.

Property is lost when...

.... the owner did not intend to part with possession of the property

Finder must return the property...

....when real owner asks for the property

If Bailee Fails to Satisfy Duty

A bailee is obligated to return property to the bailor in the same or similar condition as when bailed, subject to the degree of care Thus, if a bailee with an ordinary or high duty of care damages or fails to return the property, bailee may be liable to the bailor for compensation or conversion

Involuntary bailee or Constructive bailee

A person who finds lost or misplaced property may be considered the involuntary bailee or constructive bailee of the property

Profit

A profit is a right to enter another's land and remove some product or part of land

Quitclaim Deed

A quitclaim deed conveys whatever title the grantor has at the time he executes the deed - Contains no warranty of title

The Deed

A valid conveyance of real property occurs through execution and delivery of a deed

A Warranty Deed

A warranty deed contains covenants of warranty about the title -- Two types: general and special

Abstract of Title

Abstract of title: history of what public records show about the passage of title to, and other interests in, a parcel of real property • Not a guarantee of good title

Accession

Accession means increasing property value by adding materials, labor, or both. In general, owner of original property is owner of improvements, but person(s) adding value may claim an ownership interest until paid

Adverse Possession

Adverse possession occurs when person wrongfully occupies land and acts in open and hostile manner as if he were the owner True owner must take steps within a statutory time limit to eject possessor from the land or forever lose the right to eject the possessor

Easement

An easement is the right to make certain use of another person's property (affirmative easement) or to prevent another from making certain uses of his own property (negative easement) Easements may be acquired by grant, reservation, prescription, or implication An express grant of an easement normally is subject to the statute of frauds and must be in writing to be enforceable Other types of easements are enforceable despite the lack of a writing

Trade Fixtures

An exception to the usual fixture rules involve trade fixtures, which are personal property attached to leased premises by a tenant for the purpose of carrying on the trade or business Trade fixtures remain tenant's personal property and may be removed at lease end

Assignment

Assignment: landlord or tenant transfers all rights under the lease to another person

Compensation

Bailee may have right to compensation, but it depends on the bailment agreement

Bailments

Bailment occurs when a bailor who owns personal property (or someone holding the right to possess it) delivers it to another (the bailee) who accepts it and is under an express or implied agreement to return it to the bailor or someone designated by the bailor

Estate Classification

Classified as freehold or non-freehold

Estate

Estate is used to describe a person's ownership interest in real property

Race Statue

First grantee who records a deed to a tract of land has superior title

Intent

Judged by what the circumstances indicate as intended not person's subjective intent

Landlords may be liable for..

Landlords may be liable for injuries sustained by persons who were criminally attacked on landlord's property if the attack was aided by landlord's failure to comply with housing codes or maintain reasonable security

Lease assignment

Like other contracts, rights and duties may be assigned unless otherwise prohibited in the lease contract

Marketable Title

Marketable title: title free from defects or reasonable doubt about its validity

A person who finds abandoned, mislaid, or lost property...

May - or may not - be the owner

Negligence

Negligence: failure to exercise reasonable care to keep the property reasonably safe

Special Bailments

Some types of bailees are held to a higher level of responsibility than normally required by bailees, making these bailees almost an insurer of the bailed goods: (1) Common carriers (2) Innkeepers (3) Safe-deposit boxes

Subleasing

Subleasing: tenant transfers some (not all) rights to possess the property to another -- Relationship of tenant to sublessee becomes one of landlord and tenant

Possession of wild animals...

The first person to take possession of a wild animal normally becomes the owner. If a captured wild animal escapes and is caught by another person, that person becomes the owner unless s/he knew the animal had escaped from the first person

Real Property

The law of real property concerns the ownership, acquisition, and use of land.

Adaptation

When an item would be of little value except for use with real property, item likely to be a fixture

Embedded property...

refers to property found underwater or in the ground

Landlord Rights

(1) Landlord entitled to receive agreed rent for the term of the lease and upon termination (2) landlord has the right to the return of property in as good a condition as it was when leased, except for normal wear and tear (3) Landlord may demand security or other deposits

Tenant's Duties and Rights

(1) Primary duty of tenant is to pay rent (2) Tenant also has duty not to commit waste on the property (i.e., duty not to destroy premises) and to return the property to the landlord at lease termination (3) Tenant has rights to exclusive possession and quiet enjoyment of the property during the lease term

Property can be classified as...

(1) Real Property or (2) Personal

A Bailee has two basic duties

(1) To take care of the entrusted property (2) To return property at the bailment's termination

A person who finds mislaid property...

...acquires no rights to the property, but has the right to hold property for the true owner and has better rights to the property than anyone other than the true owner

Stray Statutes...

...allow finders of property to clear their title to the property through court action after giving public notice

Deed of Bargain and Sale

A deed of bargain and sale (grant deeds) grantor makes no covenants about the title

Fixture

A fixture is personal property that has become attached to or connected to real property in such a way that it ceases being personal property and becomes part of the real property Fixtures belong to real property owner.

Gift

A gift is a voluntary transfer of property to the donee (the person who receives a gift), for which the donor (the person who gives the gift) gets no consideration in return.

Notice Statue

A later grantee of property has superior title if his interest acquired without notice of earlier grantee's claim to the property under an unrecorded deed

Lease

A lease of personal property is not a transfer of ownership, but a transfer of the right to possess and use personal property belonging to another; common in business settings.

License

A license is a temporary right to enter another's land for a specific purpose

Life Estate

A life estate gives a person the right to possess and use property for a time measured by his or another person's lifetime

Co-Ownership

Co-ownership of real property exists when two or more persons share the same ownership interest in property

Bailee's Duty of Care

Degree of care required of bailee to protect the property depends on the type of bailment: (1) Bailment for the benefit of the bailor - Only minimal, or slight, degree of care (2) Bailment for mutual benefit - Ordinary or reasonable care (3) Bailment for the benefit of the bailee - High degree of care

Constructive Eviction

Doctrine of constructive eviction aids a tenant when property becomes unsuitable for the rental purposes Applies to residential and commercial property - Tenant may terminate the lease because s/he has effectively been evicted No further rent obligation if tenant vacates promptly after giving the landlord reasonable notice and opportunity to correct problem

Landlord duties federal law

Fair Housing Act prohibits discriminatory practices in transactions affecting housing, including the rental of dwellings

Fee simple absolute

Fee simple absolute is the normal concept of "full ownership" of land

Freehold Estates

Freehold estates are ownership interests of uncertain duration. Most common forms of freehold estates (rights to exclusive possession) are fee simple absolute and life estate

Landlords Tort Liability

General rule: landlord has no tort liability Current trend: landlords will be held liable for injuries for breach of the following duties: - Duty to maintain common areas - Duty to disclose hidden defects - Duty to use reasonable care in performing repairs - Duty to maintain property leased for public admission - Duty to maintain furnished dwellings

Premises Liability generally includes...

Generally includes duty to take reasonable security precautions to protect persons lawfully on premises from foreseeable wrongful (including criminal) acts by third parties

Conditional Gift

If a person conditions a gift by requiring that the donee comply with certain rules or perform certain actions, the conditional gift is not a completed gift.

Attachment

If firmly attached to real property so it cannot be removed without damaging property, the item is likely to be a fixture

Implied warrant of habitability

Implied warranty of habitability: like the one implied for sale of real property, landlord-grantor must deliver a habitable dwelling at the beginning of lease

Implied warranty of possession

Implied warranty of possession guarantees tenant's right to possess the property for the term of the lease

Implied warranty of quiet enjoyment

Implied warranty of quiet enjoyment guarantees that a landlord's act or omission will not interfere with tenant's possession. Landlord may not enter leased property during the lease term except for purposes of inspection or repair as stated in the lease agreement

Title Opinion

In a title opinion, an attorney examines the abstract of title and gives an opinion whether grantor has marketable title

Intangible Property

Intangible -- has no physical existence Examples: intellectual property (patent, copyright, trademark), stocks, and bonds

Non freehold

Nonfreehold (or leasehold) estates are those held by persons who lease real property

Nuisance

Nuisance refers to the lawsuit that may be filed if a property use unreasonably interferes with another person's ability to use or enjoy her own property

Implied warranty of habitability

Over the last century, an implied warranty of habitability developed that guarantees the house is free of hidden defects rendering it unsafe or unsuitable for human habitation

Confusion

Ownership of personal property may be acquired by confusion, or the intermixing of different owners' goods in such a way that they cannot later be separated.

Inheritance

Ownership of personal property may transfer through inheritance upon the death of the former owner. Property passes by terms of a will or state law.

Periodic Tenancy

Periodic Tenancy: Landlord and tenant agree that tenant will pay rent at regular, successive intervals (e.g. month to month).

Security Interest in Fixtures

Personal property may be subject to a lien or security interest at the time it is attached to real property Example: appliance store takes a security interest in dishwasher installed in home and perfects the interest by filing a financing statement in the appropriate real estate records office

Premises Liability

Premises liability refers to negligence cases in which property owners or possessors (such as business operators leasing commercial real estate) are held liable to persons injured while on the property

Abandoned Property

Property is considered abandoned if owner intentionally placed property out of his/her possession with intent to give up ownership

Property Ownership is...

Property ownership is a bundle of rights that the law recognizes and enforces, including the rights to use, transfer, or destroy the property

Property refers to...

Property refers to (a) something that may be owned, or (b) a right or interest that allows a person to exercise dominion over a thing that may be owned or possessed

Race Notice Statue

Race-notice statute: the grantee with priority is the one who both takes his interest without notice of any prior unrecorded claim and records first

Restrictive Covenants

Real estate owners may create agreements that restrict use of real property called restrictive covenants Covenants "run with the land" and bind subsequent owners of the property Enforceability of covenants depends on purpose, nature, scope of restrictions

Real Property includes...

Real property includes not only land but also things firmly attached to or embedded in land: (1) Buildings (2) Trees, crops, and other vegetation (3) Water and groundwater (4) Minerals (5) Airspace above

Assignment V. Sublease

Significance of distinction is that an assignee acquires rights and duties under the lease between landlord and original tenant, but a sublessee does not - Assignee steps into shoes of original tenant and acquires any rights original tenant had by lease Under assignment or sublease, original tenant remains liable to landlord for commitments made in the lease

Tangible Property

Tangible - has a physical existence Examples: cars, clothing, animals, furniture

Personal property can be classified as...

Tangible property or Intangible property

Tenancy at Sufferance

Tenancy at Sufferance: Tenant remains in possession after the termination of one of the leaseholds described above, until landlord brings ejectment action against tenant or collects rent from him.

Tenancy at Will

Tenancy at Will: Landlord and tenant agree that tenant may possess property for an indefinite amount of time, with no agreement to pay rent at regular, successive intervals.

Tenancy for a Term

Tenancy for a Term: Landlord and tenant agree on a specific duration of the lease and fix the date on which the tenancy will end.

Tenant's Liabilities

Tenant's Liabilities (1) Tenant normally liable to persons who suffer harm while on the portion of the property over which tenant has control, if injuries resulted from tenant's negligence (2) If a tenant breaches the lease, landlord may take action to evict the tenant (3) State law generally allows for speedy eviction procedure

Eminent Domain

The Fifth Amendment to the Constitution guarantees that private property shall not be taken for public use without "just compensation". This implies the government's power of eminent domain to effect the taking. The key is "just compensation"

Negotiability

The warehouse receipt or the bill of lading may be either negotiable or non-negotiable A person who acquires a negotiable document of title generally acquires both title to the document and title to the goods To be negotiable, a warehouse receipt, bill of lading, or other document of title must provide that the goods are to be delivered to the bearer or to the order of a named person

Acquisition of Real Property

Title to real property may be acquired by purchase, gift, will or inheritance, tax sale, and adverse possession

Leases Today

Typical lease today is for commercial or residential purposes Primarily a contractual relationship Bargaining position generally favors landlord Duration of tenant's possessory right depends upon type of tenancy: tenancy for a term, periodic tenancy, tenancy at will, or tenancy at sufferance

Americans with Disabilities Act

o Enacted to eliminate long-standing patterns of discrimination against disabled persons in employment, access to public services, and access to business establishments and similar facilities open to the public, ADA's Title III focuses on places of public accommodation