Proprietary estoppel is a legal concept that prevents a claim or denial if it is unfair to the party making the claim. It applies to the right to own or use land and depends on the surrounding facts. Requirements for it to apply include an actual mistake and reliance on that mistake to the detriment of the claimant. In some jurisdictions, there is a difference between proprietary and promissory estoppel, but in others, they are used interchangeably. An example of proprietary estoppel is when a landowner promises ownership to their eldest son, who then spends money on improving the land, but the land is left to the owner’s daughter in the will.
Estoppel is a fair legal concept that arises when a particular claim or denial cannot be made as it would be unfair to the party making the claim. The concept of property foreclosure arises when a legal action can be brought in relation to the right to own or fairly use land. Whether or not proprietary foreclosure applies to a given situation largely depends on the surrounding facts, so there is no one standard that applies in every case. While some jurisdictions recognize a difference between proprietary and promissory foreclosure, many legal systems use the terms interchangeably.
There are, however, several general requirements that determine whether or not proprietary estoppel will apply. The person claiming foreclosure of the property must have made an actual mistake regarding his legal rights to the property in question and must have acted to his detriment in reliance on that mistake. Furthermore, the person against whom foreclosure of the property is being claimed must have known of the claimant’s error and have acted in some way to encourage that belief, whether willfully or mistakenly.
Take, for example, a landowner who has several children but tells his eldest son that he will take full ownership of the land upon the owner’s death. As a result, the son takes up residence on the land and spends all of his expendable income on improvements to the land in preparation for his eventual takeover. However, upon the landowner’s death, it is revealed through his will that he left the land to his only daughter. Since the son has spent all of his money on improving the land with the reasonable expectation that he would take ownership of the land upon his father’s death, he can enforce landlord foreclosure against his sister and take equitable ownership of the land.
In many jurisdictions the concept of proprietary foreclosure and promissory foreclosure are different based on the subject of the foreclosure. In these jurisdictions, proprietary estoppel is a term referring to estoppel involving land, and promissary estoppel governs all other matters. In many other jurisdictions, however, there is no different term for estoppel involving land, and promissary estoppel applies as a term to every type of object.
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