Four Principles of Real Property Law That Have Evolved Over Time
By Norman Chernin
I have been practicing law for more than 50 years. For almost all of that time, my focus has been on real property law. Recently I have been musing about how things that I thought were immutable have been altered.
As we all learned in law school, there is a good deal of formality associated with interests in real property, especially with aspects of holding title to real property. The integrity of our system of landholding would seem to require adherence to recognizable rules that apply to owning, transferring, and encumbering of real property. However, just like constitutional law, which is based on a single document drafted at a particular time in history, adjustments are necessary in order to deal with changes in circumstances that could not have been envisioned by the original drafters of the Constitution or by the creators of the rules affecting real property.
II. RULE AGAINST PERPETUITIES
One of the hoariest of these long-standing governing doctrines is the Rule Against Perpetuities. To refresh your memory, this doctrine states simply that an interest in real property must vest, if at all, within 21 years from the death of a life-in-being at the time it was created. But as we all know, there is nothing simple about applying this rule. For instance, whose life?—e.g., the last surviving child of a specified person. In fact, interpreting and applying the rule to specific circumstances can be so difficult that a California court held a number of years ago that it did not constitute legal malpractice to fail to properly apply it.
To overcome the difficulties in trying to comply with the rule, there is now available for enactment by states a Uniform Act to establish a 90-year safe harbor. California already has a statute creating a 60-year period. The most frequent application of this protection is to leases or contracts of sale which state that the term does not commence until completion of improvements.
Another evolving area has occurred with respect to easements. We all learned that the creation of an easement requires a grantor, a grantee, a description of the location and purpose of the easement, and a term.
Determining location is straightforward if it consists of a legal description. But often, it is not possible to create a precise delineation of the portion of the property to be covered by the easement. Over time changes to topography or use of the affected property may occur that make the encumbered area more difficult to ascertain. I recall an instance where I needed to create an easement for out-of-bounds areas along a golf course. Adjacent residential lots with views from above the course had not yet been graded. It could be expected that actual grading would deviate from the grading plan for civil engineering reasons. My solution was to create an easement on the abutting residential lots extending a specified width from the plotted golf course lot rather than using the measurements of the residential lot itself and also to provide a similar encroachment easement for the residential lots onto the golf course lots where the actual slope extended beyond the boundaries of the residential lots.
Even the purpose of the easement could be problematic as technology opened up new interpretations of what constituted access or similar activities to those delineated in the document. One example is an easement for utility purposes granted many years ago in which the installation of fiber-optic cable is now proposed.
Lastly, a specified duration of the easement was often ignored so that easements appear to last potentially forever. As part of the Marketable Record Title Act in California, dormant easements can be extinguished after a specified time. Quiet title actions and declaratory relief actions can likewise be brought to assert that the purpose for which the easement was granted has terminated.
Of course, courts have long recognized that a person can claim a prescriptive easement if the elements of adverse possession without payment of real property taxes can be proved. I recall some years ago participating in a hike led by a Sierra Club member who was asked whether we had a right to be on the private property that we were crossing. His blithe response was that there was a prescriptive right to do so. However, as lawyers know, only a court decree can create such an easement.
But sometimes, a situation may arise where all the elements of a prescriptive easement cannot be established, especially the five years of required occupancy of the property. There have been several recent cases (arising primarily out of Ventura County) in which the court has crafted what is referred to as an equitable easement. Some have viewed this process as the exercise of a private right of eminent domain. Applying long-recognized principles of equity, the court considers the relative harm to the fee owner caused by the encroachment against the harm to the encroacher if the trespass were to be compelled to be removed. Typically the permitted use is limited to the existing encroachment for a designated period of time and compensation may be required to be paid to the fee owner.
Another evolution in the development of creative easements is occurring to accommodate concerns about climate change and environmental protections. In order to effectively utilize solar energy, the sun must be able to reach solar panels, located typically on roofs of buildings. View easements have not been well-received in the past generally, but in essence, what is required here is a view of the sun from a property.
Efforts to preserve open space have also led to some interesting developments in easement law. Quite some time ago, a couple of appellate courts created a concept since referred to as a “Gion-Dietz easement”. Essentially this doctrine created a right in the public to use private property over which the public had satisfied the elements for a prescriptive easement—i.e. continuous, hostile, etc. occupancy. To avoid such loss of use by court judgment, some landowners were willing to permit the use of their property for recreational purposes, subject to their future right to rescind such use. Of course, inevitably, issues arose over liability for injury to persons so using the property; and a whole area of premises liability law related to such use has been the result.
Conservation easements are also gaining popularity. We are anticipating an article in a later issue this year of the Real Property Journal dealing with the features and issues related to such easements.
IV. JOINT TENANCY
We are all familiar with the four unities required to create a joint tenancy interest in real property—time, title, interest, and possession. And we, likewise, are all aware that a joint tenancy can be severed by either joint tenant unilaterally and without the consent, or even knowledge, of the other joint tenant by conveying his/her interest to a third party. However, once again, in appropriate circumstances, courts will overlook what was considered to be an automatic severance. I found this quotation in a law review article: "California has in practice ignored in varying degrees the ‘four unities test,’ while constantly paying it lip service. The courts have ignored it in favor of what is felt is a much more desirable formula, which is to follow the intent of the parties wherever possible, and to preserve the joint tenancy so long as the essential characteristic thereof, survivorship, has not been fatally interfered with.”
When recently presented with the circumstance where a husband and wife holding title as joint tenants conveyed title to themselves as joint tenants as to a one-half interest and to a third party as a tenant in common as to the other half interest, I concluded that a court might uphold this title based on the above quotation.
Until relatively recently, spouses could choose to hold title as either joint tenants or as community property, depending upon which benefit of so holding title they preferred. Now they can choose the best of both worlds by choosing to hold title as community property with right of survivorship.
V. COVENANTS, CONDITIONS, AND RESTRICTIONS
For a very long time, courts had repeatedly held that failure to recite a Declaration of Covenants, Conditions, and Restrictions (CC&Rs) in a deed resulted in the grantee acquiring title free and clear of the restrictions contained in such declaration. Recently, with respect to lots in a residential subdivision, a court held that the grantee was nevertheless bound by such omitted restrictions because the Public Report issued by the California Department of Real Estate and the title report and policy provided actual knowledge of the restrictions. Since no prudent buyer or lender would complete the acquisition or encumbrance of commercial real estate without obtaining a title report and policy, I would expect the same result in a similar situation involving commercial real property.
Norman Chernin is a former member of and advisor to California Lawyers Association's Real Property Law Executive Committee. He has been a practicing lawyer for more than half a century focusing on real property law as litigator, transactional lawyer, and title company underwriter. He now acts as a consultant to lawyers and an expert witness on title-related matters.