Business Law II Midterm Chp 32-35 48-49

• Nonpossessory interests include:

- Easements - Profits - Licenses

Personal Property Requirements

- Only personal property can be bailed, not realty or persons - Intangible personal property, like shares of stock, can be bailed

4 types of leasehold estates

- Tenancy for years - Periodic tenancy - Tenancy at will - Tenancy at sufferance

Bailment for the mutual benefit of the bailee and bailor

- most common type. involves some form of payment in exchange for storing items or holding property. - It is a contractual bailment often called a bailment for hire • Bailee is liable for ORDINARY negligence, or the failure to use ordinary car

Termination of Bailments

- mutual agreement of both parties - a demand by either party - completion of the purpose of the bailment - an act by the bailee that is inconsis tent with the terms of the bailment - the operation of law

Confusion

- occurs when commingling of goods makes it impossible to distinguish one party's personal goods from another's

Duties of the Bailee

1.Duty to exercise reasonable care 2. Duty to return bailed property

Leasehold Estates

A leasehold estate is created when a real property owner (lessor) agrees to convey the right to possess and use the property to a lessee (tenant) for a certain period of time.

profits

A profit is the right to go onto the land of another and take away some part of the land itself or some product of the land Ex: Someone may have the right to enter the land of another and take away all the cement needed for their cement business. That person has a profit.

Easements

An easement is the right of a person to make limited use of another person's real property without taking anything from the property Ex: an easement can be the right to walk across the property of another

Creation of the L-T Relationship

An intent to create a L-T relationship • Provide for transfer of possession to tenant at beginning of lease term • Provide for reversion of possession to landlord at conclusion of lease term • Describe the property (address, etc.) • Indicate length of the term, amount of rent, and how and when it is to be paid

Physical vs. Constructive Delivery

Both forms of delivery acceptable

Termination of Tenancy by the entirety

Can be terminated by a divorce, a spouse's death, or mutual agreement

Tenancy at sufferance

Created when a tenant wrongfully retains possession of property • Ex: When a tenancy for years ends, and the tenant continues to retain possession of the property without the owner's consent, a tenancy at sufferance is created

Donative Intent

Donor must intent to make a gift • Intent scrutinized if donor is giving a gift to an enemy, for example

Periodic tenancy

Lease does not specify a length of time, but does specify intervals at which payments are to be made • This type of tenancy is automatically renewed for another rental period unless properly terminated

The Bailment Agreement

May be expressed or implied - No written contract required for bailments lasting less than one year, but it is a good idea to have a written agreement for valuable property - Agreement presupposes that bailee will return identical goods • With bailments of fungible (substitutable) goods, bailee does not have to return identical property, just equivalent property

Community Property

Only exists in a few states - mostly in the western United States - All property acquired during marriage is owned equally between husband and wife and is divided equally upon dissolution of the marriage - Does not apply to property acquired before the marriage, or property received by gift or inheritance during the marriage

Fee Simple Absolute (FSA)

Owner has the most amount of power possible

How does a periodic tenancy arise

Periodic tenancies sometimes arise when a tenancy for years expires, and the landlord and tenant agree to continue "month-to-month"

Elements of a Bailments

Personal Property Delivery of Possession Agreement that the property will be returned to the bailor or otherwise disposed of according to its owner's directions

Tenancy for years

Property is leased for a specified period of time (ex: one year lease) • At the end of the lease, possession of the property returns to the lessor • Leases often contain renewal or extension provisions

Mislaid property

Property that has been voluntarily placed somewhere by the owner and then inadvertently forgotten is mislaid property

Lost property

Property that is involuntarily left is lost property A finder of lost property can claim title to the property against the whole world, except the true owner • If the true owner demands that the lost property be returned, the finder must return it •If a 3rd party attempts to take possession of lost property from a finder, the 3rdparty cannot assert a better title than the finder

Real Property Ownership

Real property (land) owners possess rights in the property - including the right to possess the property and to dispose of it - by sale, gift, lease, and other means

• Rights of the Bailee

Right of Possession - bailee has the right to control and possess the property temporarily

Nonpossessory Interests

Some interests in land do not include any rights of possession.

Tenancy at will

Tenancy that persists for as long as the landlord and tenant agree • Either party can terminate without notice • Often arises when a landlord remains in possession after a tenancy for years expires with the landlord's consent. Before the tenancy is converted into a periodic tenancy, it is a tenancy at will

On the death of a tenant in common,

That tenant's interest in the property passes to her heirs

2 requirements for delivery of possession to occur:

The bailee must be given exclusive possession and control over the property, AND • The bailee must knowingly accept the personal property (bailee must intend to exercise control over the bailed property)

What is the life tenant expected to do

The life tenant must keep the property in repair and pay property taxes he or she must maintain the value of the property during the life tenancy, less the decrease in value resulting from normal use of the property

Bailment for the sole benefit of the bailor

This is a type of gratuitous bailment (bailee receives no payment) for the convenience and benefit of the bailor - The bailee is only liable for gross negligence • In this case, the bailee would have to be VERY negligent to be held liable if there is damage or theft of the property

Tenants in common can buy out other tenants in common to get their shares true or false

True

The life tenant has the right to use the land, but may not create waste, or cause injury to the land True or False

True

when third parties cause damage to the bailed property, the bailee will be compensated True or False

True

What happens when a joint tenant transfers her interest in the joint tenancy to a third party

When a joint tenant transfers her interest to a third party by sale, will, or otherwise, the joint tenancy is severed and is replaced by a tenancy in common

Testmentary gift

a gift made in a will.

Licenses

a license is the revocable right of a person to come onto another person's land. It is a personal privilege that arises from the consent of the owner of the land and can be revoked, or taken away, by the owner

How can ownership of personal property be acquired

acquired through purchase, possession, production, gift, will or inheritance, accession, and confusion

Different types of delivery

actual and constructive - Delivery can be accomplished by a 3rd party acting asan agent for either the donor or done

Life Estates

an estate that lasts for the life of some specified individual

Gift

common means of obtaining ownership. A gift is a voluntary transfer of ownership

Joint tenancy

each of two or more persons owns an undivided interest in the property, and a deceased joint tenant's interest passes to the surviving joint tenant or tenants

Tenancy in common

form of co-ownership in which each of two or more people own an undivided interest in the property. Interest is undivided because each tenant has rights in the whole property

Bailments

formed by the delivery of personal property, without transfer of title, by one person(called a bailor) to another (called a bailee),usually under an agreement for a particular purpose - for example, to loan, lease, store, repair, or transport the property.

Gift inter vivos

gift made during life of donor

Gift causa mortis

gift made in contemplation of imminent death requires delivery, donative intent and acceptance • also requires death of donor - if donor does not die, the gift is automatically revoked

Lessee's right

has a qualified right to exclusive possession, subject to the lessor's right to enter property to ensure that waste isvnot being committed

Wrongful accession

if the accession is done in bad faith, the courts will usually favor the owner over the improve

Termination of a Joint Tenancy

joint tenant may terminate the joint tenancy by transferring her interest to a third party.

Purchase

most common form of acquiring personal property

Finder of mislaid property does not

obtain title to the goods finder becomes a caretaker of the property because the true owner will likely return

Assignment

occurs when a tenant assigns all rights to a new tenant. • Assigning tenant still responsible for rent if assignee defaults • Landlord's consent often required

Sublease

occurs when a tenant transfers rights to all or part of the property for a period less than the term of the lease Original tenant still responsile for obligations under lease • Landlord's consent often required

Accession

occurs when someone adds value to a piece of personal property by use of either labor or materials

Actual delivery

physical delivery of gift

Abandoned property -

property that has been discarded by the true owner, who has no intention of claiming title to it Finder of abandoned property holds title to the found property that is good against the world, including the original owner - The owner of lost property who eventually gives up looking for it is frequently deemed to have abandoned the property

Right to Use Bailed Property

right to use the property is limited by the bailment contract. • Storage of a car does not allow bailee to go for a joyride, but does allow use of the car if necessary to protect it

Estray statutes

some states provide an incentive for finders to report their discoveries by making it possible for them, after a specified period of time, to acquire legal title to the property they have found if the property remains unclaimed

Involuntary Bailment

sometimes a bailment arises in voluntarily, as when someone finds lost or mislaid property. In this case, a constructive or involuntary bailment is formed, even though the bailor did not voluntarily deliver the property to the bailee

Tenancy by the entirety

tenancy between husband and wife. Neither party can transfer the property during their lifetimes without the consent of the spouse

4 types of concurrent ownership

tenancy in common joint tenancy tenancy by the entirety community property

The rights to tenants in common

tenants in common can sell the property and divide the proceeds in proportion to their interest in the property tenant in common can file a partition action in court to have the court either divide the property between the owners (partition in kind) or to have the court force a sale of the property (partition by sale

In regards to a bailment, upon completion of the purpose,

the bailee is obligated to return the bailed property in the same or better condition to the bailor or a 3rd person, or to dispose of it as required

If confusion occurs in bad faith, and the wrongdoer cannot prove what percentage belongs to her,

the innocent party will take title to the whole

To terminate a periodic tenancy,

the landlord or tenant must give one period's notice

When does the life tenant's ownership cease to exist

the life tenant's ownership rights cease to exist on the life tenant's death

If confusion occurs in good faith,

then all owners share as tenants in common

Bailment for the sole benefit of the bailee

this is typically a loan of an item to a person (bailee) solely for that person's benefit - The bailee is liable for SLIGHT negligence • In this case, even a small amount of damage to the property will make the bailee liable to the owner (bailor

Concurrent Ownership

when 2 or more people have an interest in a property, they are considered concurrent owners

Conversion of lost property

when a finder of lost property knows the true owner and fails to return the property to the owner, the finder is guilty of the tort of conversion

constructive delivery

when the physical object itself cannot be delivered, a symbolic delivery, or constructive delivery, is sufficient

production

writers, inventors, manufacturers and others who produce personal property may acquire title to it, unless it is being produced for the benefit of another

3 requirements for a gift to be made

• Delivery • Donative intent on the part of the donor (one making the gift) • Acceptance on the part of the donee (one receiving the gift

FSA power includes

• Owner can give away the property, sell it for money, or transfer it by will • The FSA is assigned to a person and his or her heirs without limitation • FSA owner has right to exclusive possession • FSA is potentially infinite in duration • FSA owner can use the land for any purpose he or she sees fit, subject only to laws protecting others from unreasonable interference on their land, and zoning laws

Accession in good faith

• When value increases substantially, it is likely that the courts will favor the improver, who will have to compensate he owner for the original value of the property before it was improved • If there was not sufficient value added by the improvement, ownership will usually remain with the original owner, who will have to compensate the improver for the added value to the property

Whats creates a life estate

•A conveyance, or transfer of real property "to A for life" creates a life estate