PROPERTY I
FINALEXAMINATION
FALL 1988

ONE QUESTION (75 minutes)

In 1970 Loretta built and was the owner of Meadowbrook, a SO-unit stucco apartment complex in Big City, a suburb of Bigger City in the state of Columbia. Meadowbrook (which had neither meadow nor brook) was composed of two types of apartments : (1) one bedroom, one bath, unfurnished, with white stucco walls, allelectric kitchens, concrete patio and covered off-street parking (utilities included); (2) two bedroom, one bath, unfurnished, with white stucco walls, all-electric kitchens, concrete patio and covered off-street parking (utilities included). Except for the differences noted above, the apartments in Meadowbrook were virtually identical.

In January of 1975, Loretta entered into a fifteen year lease of a two bedroom unit, apartment 26, with Raider Corporation. The lease specified a monthly rental of $500.00 with an escalation clause increasing the rent by S% per year after the first five years. Raider Corporation leased #26, furnished, for use by visiting executives from the main office in Orange County, California. Once, shortly after the start of the lease, one executive vice-president did stay at the Meadowbrook apartment. Since that time, however, no one from Raider Corporation has ever even visited Meadowbrook, although the company has always paid the agreed rent promptly and directly to Loretta. (The lease is a tax write-off under the Columbia tax code.)

In January of 1976 Annabelle moved into apartment 26 after having learned that unit 26 was vacant, furnished and fully paid for. She only used the apartment Monday through Thursday nights after work. On the week-ends she returned to the property she owned in Small Town, some 100 miles away. Annabelle had mail delivered to #26 and arranged for cable television service (she was a rabid professional wrestling fan). She generally got along well with Loretta (with whom she had a nodding acquaintance) and her neighbors at Meadowbrook. The sole exception was Mr. Youngman, the 86 year old man who had the parking space next to Annabelle and who often opened the door of his car into hers causing minor, but annoying, damage to her automobile. In January 1982, Annabelle, tired of Big City, entered into an agreement, called a "sublease", whereby Annabelle transferred all her interest in apartment 26 (including the parking place) to Buster. Annabelle introduced Buster to Loretta and the neighbors (except Mr. Youngman) and Buster moved into apartment 26. He has remained there ever since.

In June 1983, Loretta leased apartment 47 (a one bedroom unit) to Clarence for five years at a monthly rental of $500.00. The lease contained a covenant giving Loretta the right to refuse any assignment or sublease. In June 1985, Clarence wrote to Loretta stating, "I am moving out today. Here are the keys (enclosed) -- You cats keep the cleaning deposit." Loretta responded by registered mail: "You may move nut. However, your lease is not terminated. You are still responsible for full rent. I am keeping your keys for you in the manager's office." In January 1986 Debbi contacted Loretta about renting apartment 47 (Clarence had sent her to Loretta) for $500.00 per month (the fair market value) until June 1988. Since Loretta had three other one bedroom apartments vacant at Meadowbrook, Loretta refused to rent #47 to Debbi.

In June 1986, Elwin called Loretta and asked to rent a one bedroom apartment. Elwin was willing to pay $600.00 per month for two years. Loretta arranged to lease apartment #47 to Elwin on those terms. Loretta immediately wrote to Clarence: "I accept your surrender of the lease." In April 1987 Elwin stopped paying rent and in June 1987 Elwin moved out of #47. Loretta immediately wrote Clarence demanding rent from April 1987 on.

It is now December 1988. Loretta has come to your office because you are a graduate of a fine law school and an expert in residential real estate law. Loretta wants to collect the greatest amount of rent legally possible from Clarence due under the 1983 lease which Loretta says is still valid. She is also interested in any back-up positions, defenses and defendants available in order to collect all the rent owed for unit 47.

On Loretta's recommendation, the president of Raider Corporation has come to you because one of the vice-presidents from the main office showed up at the Meadowbrook unit the week before Thanksgiving 1988 and found Buster occupying apartment 26. Buster claims the unit is owned in fee simple by him. Loretta and Raider Corporation both want your advice on the state of the title to #26.

You know that Columbia is a jurisdiction which follows modern majority law. All common law technical rules are in effect and all interests in land are inheritable, devisable and alienable. The statute of limitations for an action in ejectment or trespass is :10 years. Decide this matter giving a complete examination of all the legal issues involved regarding apartments 26 and 47 and your conclusions as to those issues.