Novemeber 5th Notes

Fundamentals of Legal Practice
November 5, 2009

Midterm will be an old exam
    -Prior to Section 7.3 (page 218)
    -After that section will be on final
    -Will go over exam on Tuesday night
    -Always an intentional tort essay, negligence essay, ethics essay
    -Dozen or so, multiple choice, T/F, fill-in blank
    -You need to think through the exam
    -find the torts and name them, all 7 primary, the ones that were talked about in class
    -No outlines, Only essay
    -double spaced work (even handwritten)
    -black or blue pen only, no pencils
    -Can bring paper, and Blue Book

Panther Memos are not good. 

Start looking at your Pleading Assignment


Real Property (Not Real Estate)

Land (dirt, empty lot)
+     -also includes erections (buildings, sheds, structures)
Structures on the Land
+    -also includes personal property that has become closely associated with the property (some lamps, carpet)
Fixtures

Private Property:   
When you say "fixture", you have concluded it is land.  Once something is called a fixture, it presumably stays with the property.

So when does personal property turn into real property?
   -These are the three things the law will look at, they don't need all three.
    -Attached/Affixed  (Method? Permanency?)
        -Carpet v. Rugs
    -Intent (of parties)
        -What people assume stays with the property
    -Adaptation (unique or custom for the structure?)
        -Unique fish tank for wall

Commercial Property
-Trade Fixtures
    -Once something is called a fixture, it presumably goes with the tenant.
Why?
1. Presumed useless to new tenant who has a different business purpose
2. Trade fixtures are generally expensive

The tenant must:
1. Repair any removal damage, restore to prior condition
    -removal of pizza oven and accessories must be clean
2. Promptly
    -you must claim the fixtures promptly or they can stay for the next tenant


Mortgages
1. Promissory Note (used to be Mortgage Notes)
    -Promise to pay (IOU)   

2. Trust Deed (used to be Mortgage Deed)
    -Security for the Promissory Note (IOU) in case you don't pay
    -Lien, or Encumbrance on the property
    -You own the house/car until procedure to foreclose start
        -The bank does not own the house, merely a security interest

Residential
-Use Trust Deeds (TD)
    -Why is it no longer Mortgage Deed?
    1. No deficiency judgment
        (If the bank sells for less they can not come after you for the balance, but if they sell for more, they return the extra money.)
    2. "Power of Sale"
        -if you default, they can directly go to sell the property
        -Used to be Judicial Foreclosure (very expensive to conduct)

$1,000,000 piece of property
    $600,000 1st TD from Bank #1  5 1/4 %
    $150,000 2nd TD from Bank #2  11%  (junior lien holder)
    $50,000   3rd TD from Bank #3   22%  (junior lien holder)

Subsequent Mortgage  (Junior Lien Holder)
-Bank #2 needs to sell for $750,000
    -first money goes to first lien holder
    -means they have higher interest rates
-Bank #3 has very high rate

How Banks categorize:
High Risk Borrower
    -Default rate at 19%

Low Risk Borrower
    -Default rate at 2/10th%

-Mortgages usually have a due on sale clause
    -You pay off the mortgage before you sell the house
    -You keep the extra money
    -Risks are different to each person buying
        -"Assumption" of mortgage: original borrower is liable too

Purchase Money Mortgages
    Also called (Installment contract, Owner financed)
    -Property sold with no bank involved
    -Includes the right of Strict Foreclosure
        -the prior owner can take the house back
        -you lose the house and the payment

Balloon Mortgages
    (Adjustable Rate Mortgage, Teaser Rates, Creative Loan)
    -Smaller payments then sudden higher payments
    -Artificial low rate then high rate spike
    -Higher interest rates

Amortization
    -most mortgages have this
    -Initial payment is interest and only some is principal (99% interest, 1% principal)
    -Interest is tax deductible and payment never changes
    -Later on it is the opposite, mostly paying principal

Satisfaction of Mortgage
    -Notarized statement from lender that a mortgage is paid off
   
Easements
    -Right to use property that belongs to another
    -Usually  a particular purpose
    -Very hard to break

1. Appurtenant Easements
    -Dominant tenement can use a servient tenement
    -designed for the benefit of a particular piece of property
    -Servient serves the dominant (they have the easement)
    -The Dominant tenement is benefited
    -Dominant care access to Servient highway road

2. Easement in Gross
    -Do not benefit a particular piece of property
    -Benefits the owner of the easement
    - Dominant cattle to Servient pasture

3 ways to make an Easement
1. In writing
    -draft up document, how much, how long, how much
    -filed publicly (of record)

2. By Implication
    -Easement by necessity
    -You get minimal use of easement
    -You pay for that easement
    -Example of property being blocked off, need egress
        -hard to refuse the easement, can fight cost of it or making it more minimal
        -can not increase the usage

3. By Prescriptive Right
    -Easement by starting to use it, over a period of time without protest
    -Usually 7-15 years, done openly
    -Must be done with hostility (without permission)
    -Reason "No Trespassing" signs on it

Licenses
    -Temporary Easement in Gross
    -to use property with time limit, with limit in usage
    -Example: Parking, Amusement Park, Pick-your-own patches

Co-Ownership
    -Property ownership can share property
    -Unlimited number can co-own

1. Tenancy In Common (TIC)
    -2 or more owning in common tenancy
    1. Undivided
        -Each has an undivided interest in it all
        -Each person owns it all, not pieces of it
    2. Unlimited number of owners
    3. Don't need to have equal ownership
        -You can have different % of ownership
    4. Sell your % "alienable"
    -If they die, their heirs take their share

2. Joint Tenancy with Right of Survivorship
    -when one dies, the dead's interest transfers to the others automatically
    -the shares must be equal
        -if they are eschewed intent is strained
    -can not be willed, because it is automatic