74.

REAL PROPERTY

G. PARTY WALLS AND COMMON DRIVEWAYS

Often, a single wall or driveway will be built partly on the property of each of two
adjoining landowners. Absent an agreement between the owners to the contrary,
courts will treat the wall as belonging to each owner to the extent that it rests
upon her land. Courts will also imply mutual cross-easements of support, with the
result that each party has the right to use the wall or driveway, and neither party
can unilaterally destroy it.

1. Creation
While a written agreement is required by the Statute of Frauds for the
express creation of a party wall or common driveway agreement, an “irrevo-
cable license” can arise if there has been detrimental reliance on a parol
agreement. Party walls and common driveways can also result from implica-
tion or prescription.

2. Running of Covenants
If party wall or common driveway owners agree to be mutually respon-
sible for maintaining the wall or driveway, the burdens and benefits of
these covenants will run to successive owners of each parcel. The cross-
easements for support satisfy the requirement of horizontal privity because
they are mutual interests in the same property. Each promise touches and
concerns the adjoining parcels, and the grantee will be charged with notice
of the covenant because of the visibility of the common wall or driveway.

V. ADVERSE POSSESSION

A. IN GENERAL
Title to real property may be acquired by adverse possession. (Easements may
also be acquired by prescription.) Gaining title by adverse possession results
from the operation of the statute of limitations for ejectment, or recovery of real
property. If an owner does not, within the statutory period, take legal action to
eject a possessor who claims adversely to the owner, the owner is thereafter
barred from bringing suit for ejectment. Moreover, title to the property vests in the
possessor.

B. REQUIREMENTS
To establish title by adverse possession, the possessor must show (1) an actual
entry giving exclusive possession that is (2) open and notorious, (3) adverse
(hostile), and (4) continuous throughout the statutory period.

1. Running of Statute
The statute of limitations begins to run when the claimant goes adversely
into possession of the true owner’s land (i.e., the point at which the true
owner could first bring suit). The filing of suit by the true owner is not suffi-
cient to stop the period from running; the suit must be pursued to judgment.
 REAL PROPERTY 75.

However, if the true owner files suit before the statutory period (e.g., 20
years) runs out and the judgment is rendered after the statutory period, the
judgment will relate back to the time that the complaint was filed.

2. Actual and Exclusive Possession

a. Actual Possession Gives Notice

The requirement of actual possession is designed to give the true
owner notice that a trespass is occurring. It is also designed to give her
notice of the extent of the adverse possessor’s claim. As a general rule,
the adverse possessor will gain title only to the land that she actually
occupies.

1) Constructive Possession of Part

Actual possession of a portion of a unitary tract of land is suffi-
cient adverse possession as to give title to the whole of the tract
of land after the statutory period, as long as there is a reason-
able proportion between the portion actually possessed and the
whole of the unitary tract, and the possessor has color of title to
the whole tract. Color of title is a document that purports to give
title, but for reasons not apparent from its face does not. Usually,
the proportion will be held reasonable if possession of the portion
was sufficient to put the owner or community on notice of the fact
of possession.

b. Exclusive Possession—No Sharing with Owner

“Exclusive” merely means that the possessor is not sharing with the true
owner or the public at large. This requirement does not prevent two
or more individuals from working together to obtain title by adverse
possession. If they do so, they will obtain the title as tenants in common.

EXAMPLE
A and B are next door neighbors. They decide to plant a vegetable
garden on the vacant lot behind both of their homes. A and B share
expenses and profits from the garden. If all other elements for adverse
possession are present, at the end of the statutory period, A and B will
own the lot as tenants in common.

3. Open and Notorious Possession

Possession is open and notorious when it is the kind of use the usual owner
would make of the land. The adverse possessor’s occupation must be suffi-
ciently apparent to put the true owner on notice that a trespass is occurring.

EXAMPLES
1) Water Company runs a pipe under Owner’s land, and there is no indication
76. REAL PROPERTY

of the pipe’s existence from the surface of the land. Water Company cannot
gain title by adverse possession because there is nothing to put Owner on
notice of the trespass.

2) A’s use of B’s farmland for an occasional family picnic will not satisfy the
open and notorious requirement because picnicking is not necessarily an act
consistent with the ownership of farmland.

4. Hostile
The possessor’s occupation of the property must be hostile (adverse). This
means merely that the possessor does not have the true owner’s permis-
sion to be on the land. It does not mean anger or animosity. The state of mind
of the adverse possessor is irrelevant. By the large majority view, it does not
matter whether the possessor believes she is on her own land, knows she is
trespassing on someone else’s land, or has no idea who owns the land.

a. If Possession Starts Permissively—Must Communicate Hostility

If the possessor enters with permission of the true owner (e.g., under
a lease or license), the possession does not become adverse until the
possessor makes clear to the true owner the fact that she is claiming
“hostilely.” This can be done by explicit notification, by refusing to permit
the true owner to come onto the land, or by other acts inconsistent with
the original permission.

b. Co-Tenants—Ouster Required
Possession by one co-tenant is not ordinarily adverse to her co-tenants
because each co-tenant has a right to the possession of all the property.
Thus, sole possession or use by one co-tenant is not adverse, unless
there is a clear repudiation of the co-tenancy; e.g., one co-tenant ousts
the others or makes an explicit declaration that he is claiming exclusive
dominion over the property.

c. If Grantor Stays in Possession—Permission Presumed

If a grantor remains in possession of land after her conveyance, she
is presumed to be there with the permission of her grantee. Only the
grantor’s open repudiation of the conveyance will start the limitation
period running against the grantee. Likewise, if the tenant remains in
possession after the expiration of her lease, she is presumed to have
the permission of the landlord.

d. Compare—Boundary Line Agreements

There is a separate but related doctrine that may be helpful here. It
operates where a boundary line (usually a fence) is fixed by agreement
of the adjoining landowners, but later turns out not to be the “true” line.
Most courts will fix ownership as per the agreed line, provided it is
 REAL PROPERTY 77.

shown that: (1) there was original uncertainty as to the true line; (2) the
agreed line was established (i.e., agreed upon); and (3) there has been
lengthy acquiescence in the agreed line by the adjoining owners and/or
their successors.

1) Establishment Requirement
The establishment requirement can be implied by acquiescence.
A past dispute is not necessary to show uncertainty, although it
can be good evidence of it. But a showing of original uncertainty is
required; otherwise, in a court’s view, a parol transfer of land would
result.

e. Claim of Right
A claim of right means the possessor has a reasonable basis for the
belief that the property belongs to them. Possession without consent of
the owner simply means that the possessor’s possession is not subordi-
nate to the owner’s possession. So, an invalid deed given by the owner
is not the same as when the owner gives someone permission to use
the land. Anytime someone goes into possession with what they mistak-
enly believe is valid title, the possession is hostile and adverse. Most
states use “claim of right” instead of or interchangeably with “hostile.”

5. Continuous Possession
The adverse claimant’s possession must be continuous throughout the statu-
tory period. Continuous possession requires only the degree of occupancy
and use that the average owner would make of the property.

a. Intermittent Periods of Occupancy Not Sufficient

Intermittent periods of occupancy generally are not sufficient. However,
constant use by the claimant is not required so long as the possession
is of the type that the usual owner would make of the property. For
example, the fact that the adverse possessor is using the land for the
intermittent grazing of cattle will probably not defeat continuity if the
land is normally used in this manner.

b. Tacking Permitted
There need not be continuous possession by the same person.
Ordinarily, an adverse possessor can take advantage of the periods of
adverse possession by her predecessor. Separate periods of adverse
possession may be “tacked” together to make up the full statu-
tory period with the result that the final adverse possessor gets title,
provided there is privity between the successive adverse holders.

1) “Privity”
Privity is satisfied if the subsequent possessor takes by descent,
by devise, or by deed purporting to convey title. Tacking is not
78. REAL PROPERTY

permitted where one adverse claimant ousts a preceding adverse

claimant or where one adverse claimant abandons and a new
adverse claimant then goes into possession.

2) Formalities on Transfer
Even an oral transfer of possession is sufficient to satisfy the privity
requirement.

EXAMPLE
A received a deed describing Blackacre, but by mistake built a
house on an adjacent parcel, Whiteacre. A, after pointing the house
out to B and orally agreeing to sell the house and land to her,
conveyed to B, by a deed copied from her own deed, describing
the property as Blackacre. The true owner of Whiteacre argues that
there was no privity between A and B because the deed made no
reference to Whiteacre, the land actually possessed. Nonetheless,
the agreed oral transfer of actual possession is sufficient to permit
tacking.

6. Payment of Property Taxes Generally Not Required

Only a minority of states require the adverse possessor to pay taxes on the
property. However, in all states, payment of property taxes is good evidence
of a claim of right.

C. DISABILITY

1. Effect of Disabilities—Statute Does Not Begin to Run

The statute of limitations does not begin to run for adverse possession (or
easements by prescription) if the true owner was under some disability to
sue when the cause of action first accrued (i.e., the inception of the adverse
possession). Typical disabilities are: minority, imprisonment, and insanity.

EXAMPLE
O, the true owner, is five years old when A goes into adverse possession. The
statute will not begin to run until O reaches the age of majority.

COMPARE
O, the true owner, is declared insane six months after A begins using a path-
way adversely. The statute has begun to run because O’s disability arose
after A’s adverse use began.

2. No Tacking of Disabilities
Only a disability of the owner existing at the time the cause of action arose
is considered. Thus, disabilities of successors in interest or subsequent
additional disabilities of the owner have no effect on the statute.
 REAL PROPERTY 79.

EXAMPLES
1) O is a minor at the time A goes into adverse possession of O’s land. One
year before O reaches the age of majority, O is declared insane (a subsequent
disability). The statute begins to run from the date O reaches the age of major-
ity, whether she is then sane or insane.

2) O, the true owner, is insane when A begins an adverse use. Ten years later,
O dies intestate and the land goes to her heir, H, who is then 10 years old. The
statute of limitations begins to run upon O’s death despite H’s minority. H’s
minority is a “supervening” disability and cannot be tacked to O’s.

3. Maximum Tolling Periods

In some states, the maximum tolling period is 20 years; thus, the maximum
period of the statute of limitations would be the regular statute of limitations
period plus the maximum 20-year tolling period.

D. ADVERSE POSSESSION AND FUTURE INTERESTS

The statute of limitations does not run against the holder of a future interest (e.g.,
a remainder) until that interest becomes possessory. Until the prior present estate
terminates, the holder of the future interest has no right to possession, and thus no
cause of action against a wrongful possessor.

EXAMPLES
1) O devises Blackacre to A for life and then to B. Thereafter, X goes into posses-
sion and possesses adversely for the statutory period. X has acquired A’s life estate
by adverse possession, but has not acquired any interests against B. Of course, if
following A’s death, X or her successor stays in possession for the statutory period,
X will have acquired B’s rights also.

2) X enters into adverse possession of Blackacre. Four years later, O devises Black-
acre to A for life and then to B. X continues her adverse possession for seven more
years. The statute of limitations is 10 years. In this case, X has acquired the whole
title by adverse possession. An adverse possession begun against the owner of the
fee simple absolute cannot be interrupted by a subsequent division of the estate.

1. Possibility of Reverter—Statute of Limitations Runs on Happening of

Event
In a conveyance “to A for so long as” some event occurs or fails to occur, on
the happening of the event the fee simple determinable automatically comes
to an end and the grantor (or his successors) is entitled to present posses-
sion. At that point, the grantor has a cause of action to recover possession of
the property. If he does not bring the action within the period specified by the
applicable statute of limitations (and if A or her successors have the requisite
open, notorious, continuous, and adverse possession), his action will be barred.
80. REAL PROPERTY

2. Right of Entry—Happening of Event Does Not Trigger Statute of

Limitations
In the case of a right of entry, on the happening of the stated event the
grantor (or his successors) has only a right to reenter the property, a power
to terminate the grantee’s estate. Until the grantor asserts his right of entry,
no cause of action arises because the grantee’s continued possession of the
land is proper: her fee simple estate has not been terminated. Thus (in most
states), the statute of limitations does not operate to bar assertion of a right
of entry even though the condition triggering the right of entry has been
breached.

a. Grantor Must Act Within Reasonable Time to Avoid Laches

However, to avoid the title problems that might otherwise be presented,
most courts hold that the holder of the right of entry must bring his
action within a reasonable time after the event occurs. If he fails to do
so, his action is barred by laches. As for what constitutes a reasonable
time, many courts look to the statute of limitations governing actions for
possession of real property.

E. EFFECT OF COVENANTS IN TRUE OWNER’S DEED

The exact nature of the title obtained depends on the possessor’s activities on the
land. For example, assume there is a recorded restrictive covenant limiting use
of the land to a single-family residence. If the possessor uses the land in viola-
tion of that covenant for the limitations period, she takes title free of the covenant.
But if she complies with the covenant, she takes title subject to it, and it remains
enforceable against her (at least in an equitable action).

F. LAND THAT CANNOT BE ADVERSELY POSSESSED

The statute of limitations does not run against government-owned land (federal,
state, or local) or land registered under a Torrens system.

VI. CONVEYANCING

A. LAND SALE CONTRACTS

Most transfers of land are preceded by contracts of sale. These normally contem-
plate escrows (delivery of deed to a third person to be held until purchase price is
paid) before closing (exchange of purchase price and deed).

1. Statute of Frauds Applicable

To be enforceable, a land contract must be memorialized in a writing that is
signed by the party to be charged. The writing need not be a formal contract;
a memorandum suffices—e.g., escrow instructions or e-mails can be contracts
of sale. The Statute of Frauds requires that the writing contain all “essential
terms” of the contract. These are: (1) a description of the property (see B.3.,
infra), (2) identification of the parties to the contract, and (3) the price and
 REAL PROPERTY 81.

manner of payment (if agreed upon). Incidental matters (e.g., prorating of taxes,
furnishing of deeds, title insurance, etc.) can be determined by custom; they
need not appear in the writing nor even have been agreed upon.

a. Doctrine of Part Performance

A court may give specific performance of a contract (though not
damages) despite the absence of a writing if additional facts are
present.

1) Theories to Support the Doctrine

a) Evidentiary Theory
Courts state that if acts done by a party can be explained
only by reference to an agreement, these acts unequivocally
establish the existence of an oral contract.

b) Hardship or Estoppel Theory

If acts done by a party in reliance on the contract would result
in hardship to such an extent that it would be a fraud on that
party were the contract not specifically enforced, the other
party will be estopped from asserting the Statute of Frauds as
a defense.

2) Acts of Part Performance

In most states, two of the following are required:

a) Possession of the land by the purchaser;

b) Making of substantial improvements; and/or

c) Payment of all or part of the purchase price by the purchaser.

Some state courts will go beyond this list and will accept as “part
performance” other types of detrimental reliance by the purchaser,
such as performance of services or sale of other land.

3) Can Seller Obtain Specific Performance Based on Buyer’s

Acts?

a) Evidentiary Theory
Under the evidentiary theory, it is immaterial who performed
the acts constituting the part performance. Because they
refer unequivocally to a contract, the seller may obtain
specific performance based on the buyer’s acts.

b) Hardship or Estoppel Theory

Under the hardship or estoppel theory, however, the plaintiff
82. REAL PROPERTY

must be the one whose action would result in hardship if the

Statute of Frauds were invoked. Consequently, the seller
normally cannot rely on the buyer’s acts. Even so, make sure
that you ascertain whether the seller has done anything that
would cause him a hardship if the Statute of Frauds were
successfully asserted by the buyer.

2. Doctrine of Equitable Conversion

Under the doctrine of equitable conversion, once a contract is signed and
each party is entitled to specific performance, equity regards the purchaser
as the owner of the real property. The seller’s interest, which consists of the
right to the proceeds of sale, is considered to be personal property. The bare
legal title that remains in the seller is considered to be held in trust for the
purchaser as security for the debt owed the seller. But note that possession
follows the legal title; so even though the buyer is regarded as owning the
property, the seller is entitled to possession until the closing.

a. Risk of Loss
If the property is destroyed (without fault of either party) before the date
set for closing, the majority rule is that, because the buyer is deemed
the owner of the property, the risk of loss is on the buyer. Thus, the
buyer must pay the contract price despite a loss due to fire or other
casualty, unless the contract provides otherwise. Some states, however,
have adopted the Uniform Vendor and Purchaser Risk Act, which places
the risk on the seller unless the buyer has either legal title or posses-
sion of the property at the time of the loss.

1) Casualty Insurance
Suppose the buyer has the risk of loss, as is true under the
majority view, but the seller has fire or casualty insurance that
covers the loss. In the event of loss, allowing the seller to recover
the full purchase price on the contract and to collect the insurance
proceeds would be unjust enrichment. Hence, the courts require
the seller to give the buyer credit, against the purchase price, in
the amount of the insurance proceeds.

b. Passage of Title on Death

The doctrine of equitable conversion also affects the passage of title
when a party to a contract of sale dies before the contract has been
completed. In general, it holds that a deceased seller’s interest passes
as personal property and a deceased buyer’s interest as real property.

1) Death of Seller
If the seller dies, the bare legal title passes to the takers of his
real property, but they must give up the title to the buyer when
 REAL PROPERTY 83.

the contract closes. When the purchase price is paid, the money
passes as personal property to those who take the seller’s
personal property. Note that if the property is specifically devised,
the specific devisee may take the proceeds of the sale. (See F.1.b.,
infra.)

2) Death of Buyer
If the buyer dies, the takers of his real property can demand a
conveyance of the land at the closing of the contract. Moreover,
under the traditional common law rule, they are entitled to exoner-
ation out of the personal property estate (see F.2., infra). Thus,
the takers of his personal property will have to pay the purchase
price out of their share of the buyer’s estate. However, a majority
of states have enacted statutes abolishing the doctrine of exonera-
tion, and in those states the takers of the real property will take it
subject to the vendor’s lien for the purchase price. In those states,
as a practical matter, the takers of the real property will have to pay
the price unless the testator specifically provided to the contrary.

3. Marketable Title
There is an implied covenant in every land sale contract that at closing the
seller will provide the buyer with a title that is “marketable.”

a. “Marketability” Defined—Title Reasonably Free from Doubt

Marketable title is title reasonably free from doubt, i.e., title that a
reasonably prudent buyer would be willing to accept. It need not be
a “perfect” title, but the title must be free from questions that might
present an unreasonable risk of litigation. Generally, this means an
unencumbered fee simple with good record title.

1) Defects in Record Chain of Title

Title may be unmarketable because of a defect in the chain of
title. Examples include: a significant variation in the description of
the land from one deed to the next, a deed in the chain that was
defectively executed and thus fails to meet the requirements for
recordation, and evidence that a prior grantor lacked capacity
to convey the property. Many courts hold that an ancient lien or
mortgage on the record will not render title unmarketable if the
seller has proof of its satisfaction or the statute of limitations on the
claim would have run under any possible circumstance, including
tolling for disabilities.

a) Adverse Possession
Historically, a title acquired by adverse possession was not
considered marketable because the purchaser might be
84. REAL PROPERTY

later forced to defend in court the facts that gave rise to the
adverse possession against the record owner. On the bar
exam, title acquired by adverse possession is unmarketable,
despite the fact that most modern cases are contra. Most
of the modern cases hold adverse possession titles to be
marketable if: (1) the possession has been for a very lengthy
period; (2) the risk that the record owner will sue appears to
be very remote; and (3) the probability of the record owner’s
success in such a suit appears to be minimal. Because the
bar examiners have yet to recognize this line of cases, the
modern view should be considered only as a fallback position
on the bar exam.

b) Future Interest Held by Unborn or Unascertained Parties

Even though most states consider all types of future interests
to be transferable, it is often impossible for the owners of
the present and future interests, acting together, to transfer
a marketable fee simple absolute title. This is because the
future interests are often held by persons who are unborn or
unascertainable.

EXAMPLE
“To A for life, and upon A’s death to A’s eldest surviving
daughter.” Assume that at the time of this conveyance A has
one daughter, B. State of title: A has a life estate, and B has a
contingent remainder. A and B together can transfer the land
to a purchaser, such as C, but the title is not marketable. It may
turn out that, upon A’s death, B will have predeceased A, and
some other daughter (perhaps not even yet born when A and
B transferred to C) will be “A’s eldest surviving daughter.” Be-
cause that daughter did not join in the conveyance to C, she is
not bound by it, and she owns the land. On the other hand, if
B does turn out to be A’s eldest surviving daughter (which can-
not be determined until A’s death), then C’s title will become a
marketable fee simple at that time.

While most courts will appoint a guardian ad litem to repre-

sent unborn or unascertained persons in litigation, the
majority will not appoint such a guardian for purposes of
conveying the land.

2) Encumbrances
Generally, mortgages, liens, easements, and covenants render title
unmarketable unless the buyer waives them.