Property - Professor Whitman - Winter 2005

Examination Essay Questions

Essay Question 1 (45 minutes estimated time): [See map above]  In 1980 Amy purchased both Lot 9 and Lot 10 in the Green Valley subdivision in the State of Confusion. She rented out the house on Lot 10 to Tom, and lived in the house on Lot 9. A 15-foot-wide dirt driveway, which was present when Amy bought the two lots, ran over the rear (North) 15 feet of Lot 9 and provided access to the garage located on the rear of Lot 10 from the street west of Lot 9. The driveway was not shown on the recorded subdivision plat. There was also a paved footpath, 5 feet wide, running from the rear door of Amy’s house on Lot 9 to the street. Amy occasionally used this path, which crossed over the west end of the driveway, during the entire time she owned Lot 9.

             Tom used the driveway to get to the garage on Lot 10 “off and on” between 1980 and 1990, when Tom’s lease terminated and he moved out of the house. His use was sporadic; during the Winter he used the driveway nearly every day, while in the Summer he used it only once every week or two, parking his car on the street in front of Lot 10 most of the time. When Tom moved out in 1990, the tire tracks on the driveway were quite rutted and noticeable.

             In 1990, Amy sold Lot 10 to Bill. The deed she executed made no reference to the driveway. When Bill asked her if he would be allowed to use the driveway, she replied, “Oh, sure, I’ll give you permission to use it.” Bill did so, using the driveway nearly every day. In fact, he often parked his car on the portion of the driveway on Lot 9 when the weather was nice, since the garage was too close to the lot boundary to allow parking on Bill’s side of the boundary. In 1991 he hired a paving company at a cost of $500 to put a 2-inch layer of gravel on the driveway, although he made no mention of this to Amy.

             In 2001, Amy sold Lot 9 to Charlie. Again, no reference was made in the deed, or in their oral conversation, to the driveway. Bill continued to use the driveway as before. By this time, however, most of the gravel had worn away or disappeared, and grass and weeds had grown up on the driveway, leaving it barely visible.

             Last month, Charlie constructed a large tool shed with a concrete foundation on the rear of Lot 9. The shed blocked off the driveway, preventing Bill from using it to get to his garage. Bill has consulted you, asking whether he has a legal right to continue use of the driveway and to park his car on it. Please answer his question, discussing fully all relevant legal issues. The statute of limitations for adverse possession in the State of Confusion is 10 years.

             Essay Question 2 (45 minutes estimated time). Lisa Larson owned a small office building at 304 Main Street in the city of Columbia, State of Bliss, containing four office suites. In 1999 one of them was vacant, and she was approached by Trent Tennant, who expressed an interest in leasing it. Tennant operated a business called "Trent's Floor Care Products," which manufactured and sold floor cleaning and waxing agents. Tennant offered to enter into a ten-year lease of the office suite, but he suggested that, since Lisa was responsible for maintaining the building, she should promise to use Tennant's products in the future. Lisa readily agreed. The two parties signed a ten-year lease on January 1, 2000, which contained the following clauses:

“(1) Lessor agrees that during the term of this lease she will use only materials and supplies manufactured by Trent's Floor Care Products in the maintenance of the floors of the office building in which the leased premises are located. (2) Lessee has given a security deposit of $10,000 to Lessor, which shall be refunded to Lessee upon termination of this lease if Lessee has paid all rent and has not damaged the premises. (3) All covenants in this lease shall bind and benefit the heirs, successors, and assigns of the parties.”

             Lisa Larson complied with clause (1), using only Tennant's floor products in the building during the entire remaining time that she owned it. However, several months ago she decided to sell the building to Willy Gates, a wealthy computer software entrepreneur. During their negotiations, Gates was aware that all four office suites were occupied by lessees. He asked Lisa Larson about the rents and the lease terms, and expressed his satisfaction that they were desirable leases that made the building an attractive buy. However, he did not ask to see the leases or make any contact with the lessees before buying the building. He was entirely unaware of the clause in Trent Tennant's lease quoted above.

             The closing of the sale to Gates occurred on April 15, 2005. Because Lisa knew that she would remain liable to the lessees in the building after the sale, she insisted in including the following clause in the deed to Gates:

“If Grantee should perform all obligations of Grantor to lessees under existing leases in the premises, and if Grantee fails to do so, Grantor may reenter and retake title to the premises.”

             In late April 2005, after the closing of the sale, Gates read the lease to Tennant and learned for the first time about the clauses quoted above. He was extremely irritated by the clauses, feeling that the floor products agreement had no place in a lease of office space and that he should not be liable for refunding Tennant’s security deposit (which, regrettably, was not transferred to him at the closing).

             Gates has now contacted you, asking (1) if he is obligated to use Trent Tennant's floor care products in the building, and (2) if he will be obligated to refund Tennant’s security deposit when Tennant’s lease expires. Please answer his questions, discussing fully all relevant legal issues.