Property – Overton – Spring 2011

Theoretical Justifications for Property

I. What is Property? a. A set of limited legal rights and entitlements that a property owner has, with respect to

somethingII. Property Law

a. Gives owners the power to control things by placing duties on non-ownersIII. Property Rights

a. Definitioni. A legal entitlement to an individual or an entity, but the extent of the legal right is

partly determined by rules designed to ensure that the property system functions fairly and effectively

b. Not absolute/limitlessi. Limited to ensure that property use and ownership do NOT unreasonably harm the

legitimate, legally protected personal interests/property interests of othersc. Owners have OBLIGATIONS as well as RIGHTSd. Ultimately an owner relies on the state to enforce their property rightse. Emergencies/Necessities are exceptions

i. Can infringe on someone else’s propertyf. Property Rights end where someone else’s beging. Point is for Efficiency and Fairness

IV. Bundle of Entitlements – (Possessed by Property Owners)a. Privilege to use propertyb. To alter/change the propertyc. Right to exclude othersd. Power to transfer title to the property (CONVEY)e. Immunity from having the Property taken or damages/destroyed without consent

V. Theories of Property - Theories are tools to decide what the rules will be, sometimes rules and theories overlap and sometimes they conflicta. Traditional Native American Conceptions of Property

i. To Natives, it is NOT possible to own the land1. The reason for this is that many Native Nations developed systems that were

far more oriented to sharingii. Property Rights were NOT exclusive and the use of property would overlap

b. Positivism and Legal Realismi. Rules are promulgated for reasons of public policy

ii. Rules are intended to protect individual rights, promote the general welfare, increase social wealth, and maximize social utility

1. Therefore, judges should follow rules and should exercise discretion when filling gaps and ambiguities

a. Want consistency in judgmentsiii. Law and morals are separate, although moral judgments may underlie the law, they

are not fully enforcedc. Justice and Fairness

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i. Gaps in law SHOULD be interpreted in a manner that protects individual rights, promote fairness, or ensures justice

ii. Certain individual rights CANNOT be sacrificed for the good of the communityd. Lockean Theory

i. Labor is the foundation of property1. If you work on land, you may establish ownership

ii. Encourages productivity and stimulates commerceiii. Promotes positivismiv. Owning one’s own labor (Right to control fruits of your labor)v. Good for society

e. Utilitarianism, Social Welfare, and Efficiencyi. Focuses on the consequences of alternative legal rules

ii. Compare the costs and benefits of alternative property rules with the goal of adopting rules that will maximize social utility or welfare

VI. Competing Claims to Original Acquisitiona. Johnson v. M’Intosh – SCOTUS

i. Facts1. Native Americans sold the land to a group of people including Thomas

Johnson, however, the U.S. had given the land grant to M’Intosha. Π claim came from buying the land from the Indians, but the U.S.

conveyed the land to the Δii. Claims

1. Π Native Possess right to Sell because they had a natural right to the land (Natural Rights Theory – Naturalism)

2. Δ Natives were merely inhabitants of the land (Positivist Theory – Rights Through Law)

a. Π did NOT obtain title from someone who could convey itb. Lockeian Notion of Labor/Possession

i. Natives did not use the land in a protective way like the Europeans used it

c. Conquest/Power Notioni. Discovery gave government full right to extinguish the

Indian right of occupancyiii. Issue

1. Who has the better claim to the title? (Δ)2. Could the Indians convey the property? (NO)

iv. Holding1. Judgment for M’Intosh

v. Reasoning1. Natives were not actually able to convey the land because they never

“owned it” in the traditional sense of the wordvi. ***RULE***

1. Native Americans were granted Right of Occupancya. However, they were NOT granted a Right to Transfer

Limitations on the Right to Exclude

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I. Common Law Public Policy Limits a. Right to Exclude

i. Owners can exclude non-owners from their property, without this, it may be difficult to put land to its best use.

ii. Why is it important?1. Creates some sense of security2. Efficiency Argument

a. If person CANNOT exclude others from their property, then the owner will be worried and not produce to the best of their ability

iii. NOT ABSOLUTE (There are Limitations)1. Limited by necessity

a. Can’t use property in a way that injures others2. Limited by extent to which property owner has opened up land to the public3. Right to use my fist ends at your nose

iv. The Right to Exclude may NOT be used to harm others1. Trespass

a. An unprivileged intentional intrusion on property possessed by another (criminal act)

i. It is fine to trespass if there is an emergency2. Privilege Trespass (Not Wrongful)

a. It is done with the consent of the ownerb. The entry is justified by the necessity to prevent a more serious

harm to persons or propertyc. The entry is otherwise encouraged by public policy

3. State v, Shack – NJa. Facts

i. Δ (attorney and social worker) pursuant to their jobs entered upon private property to aid migrant farm-workers. When Δ’s refused to leave at owner’s request, they were charged with trespass under NJ Criminal Statute.

b. Issuei. Does the owner of the property have the absolute right to

exclude all others from the property? (NO)c. Holding

i. Criminal Judgment against Δ is overturned and case remanded

d. Reasoningi. Property Rights serve Human Values

1. In this case there was a concern for farm-workers’ human rights

ii. Court looks as State Common Law stating that he ownership of real property does NOT include the right to bar access to governmental services available to migrant workers

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iii. Title to real property CANNOT include dominion over the destiny of persons that the owner permits to come upon the premises

iv. Relies on Marsh v. Alabama1. There is a Constitutional difference between

ownership of public and private propertya. Public land must abide by the

Constitution, Private land the owner can do whatever they want

v. The right to exclude in this case would violate a Federal Statute that was created for migrant farm-workers

1. Due to the Supremacy Clause, the National provision is uphold

vi. Tedesco’s right as an owner1. Security to enforce on his property for himself and

for his employees2. Ability to farm and be productive

vii. Rights of Migrant Farm Workers1. Fundamental Rights

a. Rights not to be isolated, receive aid from government/charities, right to be able to receive visitors, right to live with dignity and enjoy customary rights among citizens, and right to privacy.

viii. Familiar Tension throughout the law1. Balance property rights with free access

e. `***RULE***i. Real property rights are NOT absolute, and necessity may

justify entry upon private landb. Right of Reasonable Access to Property Open to the Public

i. Uston v. Resorts International Hotel – NJ1. Facts

a. Π was excluded from the Δ’s casino because he was counting cardsi. Π sued in order to get access to the Casino

b. There was NO statute in NJ against card counting2. Issue

a. Can owner of property that is open to the public unreasonably or arbitrarily exclude members of the public? (NO)

3. Holding + Reasoninga. Judgment in favor of the Π because he does NOT threaten the

security or functioning of the casino operationsb. Holding is the Minority View in NJ

i. ALL property owners, not just common carriers and innkeepers, who open their business to the general public in pursuit of their own property interest MUST have reasonableness when limiting access.

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1. Must do reasonableness test in order to excludec. Majority View (Rejected in this Case)

i. Businesses open to the public have an unrestricted right to exclude (even unreasonably), except common carriers and innkeepers or violations of civil rights.

1. They can exclude whoever they want!4. ***RULE***

a. Property owners who open their property to the public in pursuit of their own interests have NO right to exclude people unreasonably

5. Notesa. Casino owner Compared to the Farm owner in Shack

i. Same Both owners are trying to maximize economic return, both cases involve the right to exclude

ii. Different Casino is more public than a farm

c. Trespass Remediesi. Glavin v. Eckman

1. Factsa. Δ had a place in Martha’s Vineyard and Oak Trees from Π

obstructed their viewi. They had asked Π if they could cut down the trees but he

had deniedb. Π then proceeded to cut down the trees

2. Holding + Reasoninga. Restoration Costs to restore the treesb. Statute language did not limit the damages due to restoration costs

i. Restoration Costs are reasonable because the value of the timber does NOT account for the value of the trees and because Π did NOT intend to sell the property

ii. Jaque v. Steenberg 1. Facts

a. Δ were delivering a mobile home to the Π’s neighbors and they determined that the best way of delivering was to go through the Π’s property without his permission

2. Issue

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***EXAM***In a question like this, 2 steps:

1. What is the rule? Minority or Majority?

2. Under each rule, analyze the problem – is the exclusion unreasonable?

3. Make policy arguments when an open question of law to state why one rule should be adopted over another.

Think about how open to public it is, and whether owner is trying to maximize economic return

a. Are the punitive damages awarded ($100K) reasonable and could they have been awarded? (YES)

3. Holding + Reasoninga. Affirmed the damagesb. Individual Landowner’s interest in protecting land from trespass

i. Right to exclude is one of the most essential sticks in the bundle

c. Society’s Interests in protecting private propertyi. Interest in punishing and deterring, preserving the integrity

of the legal system1. If there were NO punitive damages there would be

NOTHING holding back the Δ from doing something like this again

d. Speech Rights of Access to Private Propetyi. Lloyd Corp. v. Tanner – SCOTUS

1. Factsa. Δ handed out protest flyers in a mall owned by Π. They were asked

to leave by security.i. Δ then sued for injunctive relief and a declaratory judgment

stating that they were able to go distribute flyers in the mall2. Issue

a. Does the mall have a right to exclude people from distributing protest flyers when it is unrelated to the shipping center’s operations/activities? (YES)

3. Holding + Reasoninga. The Mall has a right to excludeb. Private property does NOT lose its private character merely because

the public is invited to use it for designated purposesc. Free speech was completely unrelated to the mall, so people’s free

speech rights were NOT protectedd. Constitution generally restricts ONLY government actions, not

actions by private personse. Free speech does NOT interfere with the mall’s bottom line and in

Uson it did.4. Dissent

a. Speech rights should be guarded more than property rights (based on hierarchy of rights)

5. ***RULE***a. A privately owned mall is NOT so dedicated to public use as to

allow people to exercise their First Amendment Rights. Δ has right to exclude

ii. NJ Coalition Against War v. JMB Realty – NJ1. Facts

a. Π passed out flyers protesting the Gulf War.b. Δ was the owner of the mall and he prohibited the Π from passing

out flyers

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2. Issuea. Does the Δ as an owner of the mall, have the right to deny Π of his

constitutional rights in the mall?3. Holding + Reasoning

a. Leafleting Should be Allowedb. Three Pronged Test

i. Nature, Purpose, and Primary Use of Property1. Malls are all-inclusive

a. People engage in activities such as leafleting because it is a gathering place and they can just hand them out

ii. Extent and Nature of the Public Invitation to Use the Property

1. Malls make all-embracing invitation to the public and have significant non-retailers uses (socialize, exercise, etc)

a. Implied invitation, normal use is all-inclusive

iii. Purpose of the Speech/Expressional Activity in Relation to the Private and Public Use of the Property

1. Not as private as it once had beenc. There is a burden on retail locations, but is also too expensive for

the protestors to get their message out on TVd. The mall is functioning like a public actor, so the Court will treat

them as suche. This may possibly be an issue better dealt with in the legislature and

not the Courtsf. Opposing Argument

i. Primary users of malls are shoppers, and mall owners are in a business to sell goods

g. The Constitution defines the minimum level of protection for property rights that the states may NOT infringe upon.

h. The State Constitutions are NOT entitled to provide less protection for free speech than that mandated by the Federal Constitution

i. They may, however, provide more protection for free speech rights than that which is mandated by the Constitution. (Up to States)

4. ***RULE***a. Δ does NOT have the right to exclude Π from distributing flyers

because of the 3-pronged test.i. Three Pronged Test

1. Nature and Purpose of the Primary Use of Property2. Extent and Nature of the Public Invitation to Use

the Property

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3. Purpose of the Speech/Expressional Activity in Relation to the Private and Public Use of the Property

iii. Majority v. Minority Rule 1. Majority

a. Shopping Centers and Owners have the right to exclude people handing out leaflets or others seeking to engage in similar activities

2. Minoritya. Large shopping centers are the functional equivalent of public

business districts and therefore, the public should be allowed to engage in Speech related activities

iv. Robins v. Pruneyard 1. Facts

a. Students were trying to hand out leaflets and were told to leavei. They claimed that they had the right to freedom of speech

2. Holdinga. No Constitutional protected property rights were violated when it

was held that the students could hand out leaflets

e. Three Possible Outcomes in Mall Free-Speech Casesi. First Amendment granted citizens the right of access to malls for free speech

purposes. (Rejected in Lloyd)ii. Not only is NO right of access created by the Constitution, but any right of access

created by state law would represent a taking without just compensation, and would thus violate the owner’s property rights protected by the 5th and 14th Amendment (Rejected in Pruneyard)

iii. Free speech is neither required by the First Amendment (Lloyd), not prohibited by the 14th Amendment (Pruneyard); rather, the states are free to choose between protecting the rights of mall owners and protecting the right of access for free speech purposes

Adverse Possession

I. Doctrine that transforms trespassers into owners

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EXAM TIP !!!!1. Ask what is the RELEVANT LAW?

Will help to untangle possible confusion

2. Then go on to do the APPROPRIATE ANALYSIS

Test will help implement a broad legal provision

3. APPLY THE FACTS

Analyze facts in context with legal test

II. ***TIPS FOR EXAM***a. Bad actors CAN get Adverse Possession

i. Don’t fall for the sympathetic partyb. NO Adverse Possession for ouster or abandonment

For Adverse Possession Against Adverse Possession1. Utility, Efficiency, Productive Use of Land

might generally support it2. Adverse possession eliminates state claim,

clears title3. Discourages the concentration of wealth4. Reliance by taking roots/settled expectations

and stability (fairness)5. Incentives to look after property – Property

should serve human values and obviously the real owner is not using the property to know there is Adverse Possession on it

1. If the Adverse Possessor values the property then he should pay for it

2. Not fair to the original owner3. Title should have meaning to avoid lawsuits4. There might be a personal attachment to the

land5. Inefficient – Risk/Cost of Adverse

Possession putting labor into the land, the owner ships up and the labor was for nothing

II. Elements of Adverse Possession (Transfer title from title holder to AP)a. Actual Possessionb. Exclusivec. Visible, Open, and Notoriousd. Continuouse. Without the owner’s possession (Adverse or Hostile)f. For a Period Defined by State Statute

III. Analyzing the Elementsa. Elements have overlap and they do NOT have to be mutually exclusiveb. EVERY Adverse Possession claim depends upon the character or nature of the landc. Actual Possession

i. Adverse Possessor must physically occupy the property in some manner (May be shown by a fence)

1. In the absence of a fence, possession may be shown by engaging in significant activities in the land (farming, clearing, planting shrubs), used for enjoyment, residence, or improvements.

ii. Watch for weak elements of “actual possession” and “exclusive possession” on exam1. This may mean that it is not Adverse Possession, but simply a prescriptive

easement to just continue the useiii. Ask Does the possessor treat the land as the “average owner” would?

d. Exclusivei. The adverse possessor must be in exclusive control of the property

1. He must not be sharing property with the true owner/others2. This does NOT mean that no one else is allowed to step onto the property,

just that the AP is doing what is expected from a true owner. (Look for Conduct)

3. **NOTE**a. Sometimes when exclusivity is NOT met for adverse possession,

one can get a prescriptive easementii. Ask Is the use of a type that would be expected of a true owner of the land in

question? And, can the adverse claimant’s possession be shared with the true owner?

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e. Visible, Open, and Notoriousi. Owner of real property could have been expected to know that another person had

entered land and was asserting a claim to it (possession = notice)1. Must be sufficiently visible, obvious to others.

ii. To Meet Requirement1. Did the possessor put owner on notice that he would be asserting a claim to

the property? (Yes Requirement is met)2. Where notice is NOT found, the requirement is met if the possessor’s use of

the property is similar to that which a typical owner of similar property would make of it.

a. Factors to Consideri. Nature of Land, Presence of Fence or Other Enclosure,

Possessor’s Conduct Toward Outside Worldb. Acts Recognized as sufficiently open and notorious by the Courts

i. Building a Structure, Clearing the Land, Laying Down a Driveway, Moving Grass, Using the Strip for Parking Storage, Garbage Removal, Planting and Harvesting Crops

iii. ASK Would a reasonable inspection of the land disclose the possessor’s presence?

f. Continuousi. Does NOT mean that the adverse possessor must be on the property 24 hours a day,

or that the original owner CANNOT ever leave the property.ii. This requirement simply means that the adverse possessor must exercise control over

the property in the ways customarily pursued by owners of that type of property1. ASK Is the adverse possessor’s use of the property the type customarily

pursued by owners of that type of property?iii. Tacking

1. Succeeding period of possession by different people may be added together.a. This is good for when the various people have ALL possessed the

land for less than the Statute of Limitations2. Privity Requirement

a. Successors can add the original adverse possessor’s holding period only if the adverse possessor purported to transfer title to the property to the successor

3. Policy Arguments for Taking a. Fairness, efficiency

g. Adverse or Hostilei. Possessor’s use must be non-permissive

1. As showing that the true owner has permitted the use, the claim will be defeated.

ii. Two Requirements1. Lack of Permission2. Act like an Owner

iii. True owner’s State of Mind Non-permissive (Courts will generally infer this)iv. Possessor’s State of Mind

1. Three tests for Different Jurisdictions

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a. Objective/Lack of Permission Test (MAJORITY)i. Adverse Possessor’s state of mind is irrelevant

1. All that matters is that possessor lacked permission from the true owner

b. Intentional Dispossession (MINORITY)i. Adverse possessor must be aware that he is occupying

property owned by someone else and must intend to oust the true owner

1. Rewards Intentional Trespassersc. Good Faith Occupation

i. ONLY innocent possessors who mistakenly occupy property owned by someone else can acquire ownership by adverse possession

d. Claim of Right Testi. The Adverse Possessor acted toward land as average owner

would1. Can be implied by conduct, may deny if claim

mistake or no intention (No intent requirement)h. For a Period Defined by State Statute

i. Color of Title1. Some states lower the number of years required to obtain Adverse

Possession when the owner has color of titlea. This means that a written conveyance appears to pass the title, but

fails to actually do so2. Usually a title is defective when it lacks a signature, contains a mistaken or

ambiguous description of the land, or was procured through a faculty procedure

IV. Border Disputesa. Brown v. Gobble – (WV)

i. Facts1. 1937 Blevins purchased the property and put a fence around the land,

planted crops, etca. They sold the property to the Fletchers in 1978 and these family

continued to exercise dominion of the land by planting and taking care of it

2. Δ purchased property by deed in 1885a. There was a fence in place which ran along the rear boundary

i. Two-feet wide tract was enclosed by the fence3. Π purchased the property in 1989 and they had a survey done stating that the

fenced tract of land belonged to thema. 1994 the Π’s attempted to build a road along the land, but Δ

prevented them from doing so by stating they owned the landii. Issue

1. Is Adverse Possession satisfied by tacking? (YES)iii. ***RULE***

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1. Tacking allows different Adverse Possessions to make up the requisite time as defined by state statute for holding such possessions, so long as they are connected by privity of title or claim and all the owners satisfied all the elements.

2. Case also established the standard of proof for Adverse Possession Claimsa. Adverse possession bust be proved by clear and convincing

evidence (Higher than Preponderance of the Evidence)V. Vacant Land

a. Nome 2000 v. Fagerstrom – (Alaska)i. Facts

1. Δ used Π’s land for various purposes from 1944 until 1987, but did not build a house on that land until 1978.

a. Π said that this was not long enough to establish Adverse Possession because the statute required use of property for ten years. (They passed suit in 1987)

ii. Issue1. Is there sufficient evidence to prove Adverse Possession?2. If so, to how much of the disputed parcel?

iii. Holding + Reasoning1. Δ’s show all the elements of Adverse Possession

a. Various structures were erected that gave Adverse Possession to the Δ’s in the Northern Area

i. There was not enough activity to gain Adverse Possession of the Southern Area

ii. There was a feeling from the community, that the Δ were the true owners of the land

2. Rural land has lower requirement of usea. Seasonal use is permitted for Adverse Possession if that was the

norm in the area

Prescriptive Easements

I. Definitiona. An interest in land/real property (One of the Sticks)

i. Easement = Right to Useii. Adverse Possession = Ownership

b. Easements show that land is interconnected and the use on one parcel can interfere with the use on another parcel

II. Prescriptive Easementa. Acquired through long-standing use (for a particular period of time)

i. **All elements are the same as in Adverse Possession EXCEPT exclusivity element1. Since the easement is a use, rather than a possession, the use does NOT have

to be exclusive

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EXAM TIP!!!On an adverse possession question, if all of the elements for adverse possession are not there, maybe there is a prescriptive easement. Problems are usually exclusivity and actual possession.

a. ***NOTE***i. Exclusivity Element will probably be gray

1. If found, say “exclusivity element was met, so we have adverse possession, In the event that it was NOT met, we have a prescriptive easement”

a. ARGUET BOTH SIDES!!ii. Continuous Element Still Important

b. Community Feed Store Inc v. NE Culvert Corp (Vermont)i. Facts

1. Π claimed a prescriptive easement over a portion of gravel area used by its business vehicles to load and unload, but actually owned by the Δ

a. Δ had built a barrier in the area to prevent Π from using the areaii. Issue

1. What kind of use is sufficient to establish a prescriptive easement?iii. Holding + Reasoning

1. Prescriptive Easement made in favor of the Π2. Tacking is allowed for prescriptive easements3. Acquiescence

a. Many states require the easement claimant to prove acquiescence by the true owner

i. Seems to conflict with permissive, so how can an owner acquiescence in the use, but not permit it?

1. Some Courtsa. It means that owner did NOT assert his

right to exclude by bringing a trespass action

2. Other Courtsa. Land owner must have known about the

use, and passively allowed it to continue without formally granting permission

iv. ***RULE***1. General consistent use is sufficient to establish a prescriptive easement

a. Do not need to prove with absolute precision, but MUST show general outlines consistent with pattern of use throughout prescriptive period with reasonable certainty.

c. How is Scope different in adverse possession than in prescriptive easement?i. In easements we are talking about only “one” kind of use, while when it comes to

adverse possession you can use the property as you like because it will be yoursd. No Negative Prescriptive Easements

i. Negative Easements CANNOT be acquired by prescription in the U.S.1. Interferes too much with the free development of land

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Limits on the Right of Use

I. Solutions to Land Use Conflicts Between Neighbors a. Non-Trespass

i. Interference with another’s property rights by the use of your own property harming the property interest of neighbors

1. Privilege to use one’s property is limited by legal rights of other owners to be protected from unreasonable harm to their use or enjoyment of their own property

II. Entitlements a. Δ Privilege

i. Courts hold that Δ is at liberty to engage in activity on her property, even though it harms property interest of Π

1. This type of conduct which Π complains of DOES NOT violate any legal duties owed by Δ to Π

ii. Δ is free to inflict this type of injury (Freedom to Act Despite the Harm)b. Π Security

i. Π has absolute right NOT to suffer a particular sort of harm cause by Δ’s activity1. If Π can prove Δ engaged in prohibited conduct that caused harm to the Π,

he is entitled to damages.ii. Δ is NOT free to engage in activity without liability

c. Reasonableness Test – Middle Groundi. Δ may engage in harmful activity if it is deemed to be reasonable BUT NOT if the

conduct and/or harm caused by it is deemed unreasonable.ii. Factors to Consider

1. Extent of harm to the Π and social utility of Π’s activity2. Social benefits of Δ’s activity, measured by what society would lose by

preventing Δ from freely engaging in harmful activity3. Overall relative social costs and benefits of Π and Δ’s land use4. Availability of alternative means to mitigate or avoid harm5. Δ’s Motive6. Which use was established first

a. Entitlement is awarded to the person who established the first useIII. Remedies

a. Dismissal of the Complainti. If solution to conflict is Δ’s privilege, court WILL grant motion to dismiss the

complaintb. Damages

i. Π’s Security Can ask for Damages1. Most Common

a. Restoration

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i. Cost of repairing the damage and bringing the property back to its prior condition

b. Diminution in the Market Value of Propertyc. Injunction

i. Π’s Securityd. Purchase Injunction

i. Use when the social benefits of Δ’s activity are outweighed by its social costs, but an injunction stopping Δ’s activity would place an unfair financial burden on Δ

1. Activity will be stopped on the condition that Δ reimburse Π for the opportunity loss occasioned by ceasing the activity.

a. May occur if the Δ’s activity was established first and Π settle near the Δ’s land knowing what the Δ was doing

e. Coase Theory i. Central Question Which activity causes more harm? (Cost/Benefit Analysis)

1. Important Magnitude of the harms on both sides, and not their character (avoid the more serious harm)

a. Morality is NOT a factor at all2. Need to know the value of what is obtained as well as the value of what is

sacrificed to obtain itIV. Water Rights Must Argue for a Standard or a Rule

a. Three Possible Rules i. Common Enemy Rule

1. Property owners have the absolute freedom to develop their property without liability for any resulting damage to neighbors caused by increased runoff of surface water (No Liability)

a. Policy Fori. Δ should have freedom to use the land, otherwise why own

it? (Rights/Fairness Argument)ii. Promotes development (Social Utility Argument)

ii. Natural Flow Rule/Civil Law1. Injured property owner has absolute security against injury from flooding

caused by a neighboring property owner’s development of her property. However, this may discourage development! (Strict Liability)

a. Policy Fori. Freedom to enjoy your land/protect your investment,

otherwise why own it? (Right/Fairness Argument)ii. If the developer does NOT internalize the cost then that

could lead to overdevelopment (Social Utility)1. Δ is in a better position to pay and should bear the

burdeniii. Reasonableness Standard (Reasonable Use Test) – MAJORITY!

1. Did Δ’s conduct cause unreasonable interference with the neighbor’s use of their land?

2. Factors to Considera. Amount of Harm Causeb. Foreseeability of Harm

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c. Purpose or Motive of Property Ownerd. Utility of Possessor Balanced against gravity of harme. All other Relevant Matters – Totality of Circumstances

3. Policy Fora. Flexibility (Allows us to be more fair on a case by case basis

because it is NOT always clear which side should bear the cost)4. Policy Against

a. Potential Judge’s Biasb. Possible chilling effect on development because no way to know

what is reasonableiv. POLICY ARGUMENTS ARE CRITICAL IN DETERMINING WHICH RULE

WE SELECT HERE!1. Do NOT select law based on current particular party

a. Each party is different, and you need to generalize in order to apply selected law in the future.

2. Keep policy in mind for reasons that transcend the current party, but that would benefit decisions in the future

b. Armstrong v. Francis Corporation – NJv. Facts

1. Δ (Upstream Party) drained off excess water from its land to develop a subdivision, thereby causing severe injury to its downstream neighbor the Π

a. The harm is NOT disputed, but the dispute is who is responsible for it

vi. Claim1. Δ “Common Enemy Rule”

a. Everyone should look out for themselves!i. This rule ahs more social utility because it is not efficient to

have to think about what will happen to every single landowner downstream

2. Π Natural Flow Argumenta. Upstream owners should be responsible and should bear the costs of

what their land does to downstream owners.i. Π CANNOT use their property as they used to (No

Enjoyment, Erosion)vii. Issue

1. Does a landowner have an absolute right to rid his property of excess water as he wishes? (Common Enemy Rule) – (NO!)

2. Is a rule standard more appropriate?viii. ***RULE***

1. Court used Reasonableness Test and considered the amount of the harm, the foreseeability of the harm, and the purpose of the Δ

a. Look to see if utility of the possessor’s use of land outweighs the gravity of the harm

V. Nuisance – A General Protective Doctrine (Applicable to a Type of Interference NOT covered by a specific Rule)

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a. These cases can be brought by either owner because their uses are incompatible and the main question is who should bear the burden?

b. No environmental/zoning laws as means to deal with these new harms or problemsi. It is a filled to help us resolve conflicts that aren’t clearly resolved by doctrine on the

book as either Common Law or in Statutesc. Nuisance Law

i. A substantial and unreasonable interference with the use or enjoyment of landii. The gravity of the harm outweighs the utility of the conduct

iii. Focus on the result and not on the conduct1. Conduct that is NOT negligent may still be a nuisance

iv. Substantial Whether a person of normal selectivity would objectv. Only deals with injury of legal right to another

vi. The fact that it complies with zoning does NOT prevent it from being a nuisanced. Nuisance v. Trespass

i. Nuisance1. Use of one’s OWN land that interferes with a neighbor’s use and enjoyment

of propertyii. Trespass

1. Physical intrusion onto another’s landa. Goes to the right to excludeb. Intentional (invasion of Π’s interest in exclusive possession of

property)e. Things to Consider

i. Nature of the Neighborhood/Zoning1. Suitability of each party’s activity to the location

ii. Whether the person came to the nuisance or not1. Person Coming to Nuisance Not an Absolute Defense

iii. What has either party done to avoid the nuisance?iv. What is the social value of Π and Δ activities?v. Who has the burden to avoid the conflict?

f. Page County Appliance Center, Inc v. Honeywell, Inc – Iowai. Facts

1. Δ gave a travel agent a computer that interfered with Π’s long-time TV business

a. The problem relating to the TVs in the ship was that the computer was leaking radiation

ii. Issue1. Was this a nuisance or was the Π unusually sensitive?

iii. ***RULE***1. Lawful activity constitutes a nuisance if it unreasonably interferes with

another’s enjoyment of his/her property2. Determine nuisance by looking at:

a. Character and Gravity of resulting injury balanced against utility and merit of Δ’s conduct

b. Who was at the place first?c. Manner of Intrusion – social value to what has been invaded?

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d. Character of Location – Suitability to the Areag. Fontainbleau Hotel v. 4525 Eden Roc

i. Facts1. 4525 sought to enjoin Fountainbleau’s construction of an addition that

would block all sunshine from their hotel’s pool and beachii. Claim

1. 4525 There is an implied easement of light and air enjoyed by them and its predecessors for more than 20 years

iii. Holding + Reasoning1. Fountainebleu’s actions do NOT constitute a nuisance because Eden

Roc had NO legal right to light and aira. Court not willing to create a new property right, as it would be

tantamount to judicial legislationi. Creating a new property right is the job of the legislature

2. Whether the harm is done in spite or in good faith is irrelevant3. Proper remedy would have been to have gotten the area re-zoned4. Court has NEVER found a legal right to light and air5. Rule is that one must use property so as to NOT injure the lawful rights of

another!

Two Part Analysis for a Nuisance Question (Use Every Word and Fact in the Problem to Promote a Particular Doctrine)

- Liability Determination Figure out who is Liable by Considering ALL of the important factorso Nature of the Neighborhood/Zoning – Suitability of each party’s activity to the locationo Coming to the nuisance? – Did the person come to the nuisance? (Not an absolute defense)o Avoidance – What has either party done to avoid the nuisanceo Social Value -. What is the social value of the Π and Δ activitieso Burden – Which party has the burden to avoid the nuisance?

- Remedy Determinationo Injunction – When Δ’s conduct is unreasonable and causes substantial harm to Πo Damages (Not Injunction) – If Δ’s conduct is reasonable, but he harm to Π is substantial so

that it is unfair to burden Π with the costs of the Δ’s socially useful conducto No Remedy – If (1) harm to Π is not substantial, (2) Δ’s conduct causes more social good

than harm and it is not unfair to impose the costs of Δ’s activity on Π, or (3) the imposition of damages would put Δ out of business and avoiding this result is more important than preventing harm to the Π

o Purchase Injunction – Δ’s conduct causes more harm than good, but it is fair to impose the cost of shutting down Δ’s activity on the Π (Ex Coming to the Nuisance)

h. Law and Economicsi. Two Types of Analysis

1. Descriptive Analysisa. Explaining the existing pattern of legal doctrines as a set of rules

that promote efficiency2. Normative Analysis

a. Using the criterion of economic efficiency to help determine what the legal rules should be

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ii. Law should seek to identify and establish he most efficient rules possible1. Promotes adopting laws with efficiency

a. Different Views of Efficiencyi. Pareto Superiority

1. When both people gain and nobody losesii. Pareto Optimality

1. If no further exchanges can be made that won’t make anyone worse off

iii. Wealth maximization1. Gain to the winner exceeds the loss to the loser

iii. Negatives about Law and Economics System 1. Co-Modification

a. Purpose of law is to address values that markets cannot and some things cannot have a value market-wise such as human life (better discussed in terms of fairness, justice, and rights)

2. Coercion a. Unequal bargaining of power in some cases

3. Bias to the Wealthya. Markets are imperfect

i. Don’t take into account pre-existing distribution of power and resources

4. Offer-Asking Problema. Prediction that whoever values an entitlement more will either keep

that entitlement or buy iti. In reality that depends on the assumption that the offer and

asking prices are the same (Offers much lower than asking prices in reality)

5. Transaction Costs Difficulty in assessing alliv. Pros about Law and Economic System

1. Predictability/Stability2. Rules help markets by promoting transactions because people know what the

rules are3. Must protect property rights or people will NOT invest in it

v. Fountainbleu could have said that Eden Roc was “free riding” by having this lawsuit in the first place

1. Instead of buying the surrounding land in order to prevent constructions, they were having a lawsuit and thereby “externalizing” or putting the costs onto Fountainbleu

vi. Coase Theorem1. If there are NO TRANSACTION COSTS then it doesn’t matter to whom the

Court gives the entitlement because the efficient result will prevail2. The rule of law dictates who bears the cost, but if the most efficient thing is

that the tower should be built, then it will be builta. Transaction costs and imperfect information are an impediment to

efficiency

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i. The theory is flawed because there are transaction cists in all negotiations

i. Prah v. Maretti (WI)i. Facts

1. Π had a house with solar panels and he sues to prevent the Δ from building a house that will block the sun

a. When Π went and asked Δ to move his house several feet so his access t sunlight was not interrupted, Δ denied and began construction

ii. Issue1. Is there a cause of action for interference of access to sunlight used for solar

heat? (YES!)iii. Holding + Reasoning

1. Through development of technology solar paneling has become more practical and therefore, thus Π’s use of this property is reasonable

2. This is a Minority Rule a. Provides no notice to the Δ and the only thing like this that has been

regulated are spite fences3. Law must keep up with the changing times and since solar energy had new

significance it should be protecteda. Decision was judicial activism

i. Better for Legislature to Decide because the court had NO way of knowing the capacity/future of solar power

4. We are increasingly regulating how property owners use their land even without physical damage to the neighbors

5. Π with solar panels was externalizing cost on his neighbora. He could have built the house in a different area of his plot to avoid

this problem, bought the neighboring lot, or purchased an easement

Servitudes

I. Definitiona. A legal device that creates a right or an obligation that “runs with the land” or with an interest

in the land.i. “Runs with the Land” If it passes automatically to successive owners or occupiers

of the land or the interest in land with which the right or obligation runsii. A variety of legal mechanisms to control the use and access to real property

II. Allows for sticks regarding the use and control of land to be divided among peoplea. One person gets certain sticks even though the owner controls the bundle as a whole

III. License a. NOT CLASSIFIED AS SERVITUDESb. Temporary permission to use/enter/control property.

i. NOT transferable (Person to the license-holder)c. Usually for a short-time, generally revocable at the will of the property owner, and informal

i. Ex Invitation to one’s home for a BBQ, Grocery Store Open to PublicIV. Easement

a. Permission to enter or control another’s property that is permanent and irrevocable

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b. Affirmative v. Negative Easementsi. Affirmative Easement

1. Give easement holder the right to use or access another’s land (Ex Cable Cord for TV)

ii. Negative Easement1. Gives easement holder the right to restrict the use of owner’s land

a. Owner is NOT allowed to do certain things on his own land because of the easement holder.

2. Generally frowned upon3. ***NOTE***

a. Negative Easements and Real Covenants can overlap even though they are not the same thing

i. Restatement treats them as the same, but the distinction is usually the form in which each is created

c. Four Ways to Create an Easementi. Express Grant (Only Type that Must be in Writing)

ii. Implied By Prior Useiii. Implied by Necessity (Landlocked)iv. Prescription (Similar to Adverse Possession)

d. Implied Easements i. Implied by Prior Use

1. Granite Properties v. Manns - Illinoisa. Facts

i. Two Claimed Easements1. Driveway providing ingress to and egress from a

shopping center and an apartment complexii. Ever since Shopping Center was opened, they had been

delivering goods through the means of the easement1. Trucks delivering goods several times a day and Δ

had seen them deliveringb. Issue

i. When Π conveyed the property to Δ, did he retain an easement implied from the prior use over the driveways?

c. Holdingi. Π retained easements from the implied use

d. ***RULE***i. Three Elements for Easement from Implied Use

1. Common Ownership of the claimed dominant and servient parcels, and a subsequent conveyance (2 parcels owned by the same person)

2. Before the conveyance or transfer that severed title, the common owner used the parcel in the way that the easement is claimed (Use was apparent, obvious, continuous, and permanent)

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3. Claimed easement is reasonably necessary and beneficial to enjoyment of land to the Dominant Party (Usually the point in contention)

ii. Implied by Necessity (Landlocked)1. The claimed easement must be absolutely necessary for the claimant’s

enjoyment of the parcela. Usually ONLY in cases of landlocked land

2. Finn v. Williams – (Illinois)a. Facts

i. Δ refuses to permit the Π to travel through their land as they had been doing in the past because the Π’s land was landlocked

b. Issuei. Do the Π’s have a right to use the Δ’s land as a right of way

in order to be able to get to a highway without walking?c. Holding + Reasoning

i. Court grants an easement by necessityii. An implied easement by necessity may lie dormant if it is

written down or intended to be given when the land first changed owners

iii. Do not want land to become useless even though the costs are on the Δ

1. Possibly better for the legislature to require the land-locked owner to apply to a public entity and pay for the easement

a. However, unfair bargaining can occur because the Π really needs the easement and Δ can charge whatever he wants

iv. Easement by necessity does NOT require that there have been an actual prior use before severance

v. Intent of the Grantor (****IMPORTANT****)1. Most courts agree that no easement of necessity

will be recognized if it is clear that the grantor intended to sell, and the grantee knew she was buying a landlocked parcel.

2. Other courts disregard the intent of the grantor and will allow for an easement by necessity even if the buyer knew his parcel was landlocked, in order to promote the development of property

d. ***RULES***i. Where an owner conveys a portion of his land which had

no outlet except over the land of grantor or strangers, an easement by necessity exists over the retained land of the grantor.

iii. Implied Easements DO NOT have to be in writing1. Will either be implied from prior use or necessity

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iv. Implied by Prior Use v. Implied by Necessity1. By Necessity

a. Must be One tract/piece of land before conveyanceb. You MUST really need the easement

i. Not given if it would simply make your life easierc. No prior use necessary

2. By Prior Usea. Must be One tract/piece of land before conveyanceb. Use had to have been continuous, apparent, permanentc. Must be reasonably necessary to the use of the land!

e. Easements Running with the Land & Easements in Gross i. Main Question Does Benefit of the Easement Run with the Land

1. Is the easement owned by the person to whom it was originally granted or by whoever happens to own the parcel of land it was intended to benefit

2. Any easement that runs with the land is treated as if it were attached to that parcel, so that any future owner of the parcel is benefited or burdened by the easement

a. If the easement runs with the land, then it is transferable3. Courts are more willing to find easements to run with the land it they are

commercial4. ***NOTE***

a. It is impossible that burden can run with the land while the benefit does not!

ii. Types of Estates1. Servient Estate

a. The land which the easement holder has the right to restrict (burden); the estate that services, and that the dominant has the right to use

2. Dominant Estatea. Land that is benefited by the easement (benefit)

i. Usually, but NOT always, the two estate are attached to a particular parcel

ii. TV cable example, there is only a servient estate and No dominant one

iii. Test for BURDEN running with the land1. Easement created by implication, necessity, and estoppels are generally held

to run with the land IFa. They are intended to do so AND are reasonably necessary for the

enjoyment of the dominant estate2. Other easements run with the land to burden future owners of burdened

estate only IFa. Easement is in writing!b. Original grantor who created the easement intended it to run with

the landc. Subsequent owners of burdened estate had notice of easement at

purchase

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iv. Two Important Distinctions1. Appurtenant

a. When the benefit runs with the land, it is treated as if it were attached to that particular piece of land!

2. In Grossa. When the benefit DOES NOT run with the land

i. It is NOT attached to a particular parcel of land, and there is NO Dominant Estate

v. Test for Distinguishing Appurtenant v. In Gross1. INTENT of the Grantor

a. Usually language will be clear to indicate intent of the grantorb. If unclear, court will look to surrounding circumstances and

policy considerationsvi. Green v. Lupo (Washington)

1. Factsa. Π were once owners of the entire land

i. They sold property North of them to Δ by a real estate contract

1. While still paying for the contract Δ requested a deed release to a small section of the North tract to construct a home

a. Π agreed if they received in return an easement along the property upon payment of the contract

b. Δ did NOT convey the easement once they paid the entire contract due to the fact that the Π had instituted a mobile home park and the residents were racing motorcycles in the easement

2. Issuea. Is this easement in gross or appurtenant?

3. Holding + Reasoninga. Court states that the easement was NOT personal and it was

appurtenanti. Easement is appurtenant because it will be useful to

anyone who owns the parcel of the landb. Although the easement began with the plaintiff’s name, it was

granted for ingress to and egress from the land (road and utility purposes)

c. ***NOTE***i. A servient owner is entitled to impose reasonable restraints

on the right of way to avoid a greater burden on his estate than was originally contemplated in the easement grant, so long as such restraints DO NOT unreasonable interfere with the Dominant owner’s use

4. ***RULE***

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a. An easement is NOT personal if there is ANYTHING in the grant to suggest that it was intended to be tied to the land retained or conveyed

vii. Extension of the Use1. You CANNOT extend the use of an easement to another property that was

NOT intended in the first granta. The owner of an easement is the only one responsible for

maintaining the easement if the party is the only one using itviii. Cox v. Glenbrook Co.

1. Factsa. Π (developer) buys land and wants to pave and expand a road that is

owned by Δ (Golf Resorts) for the purpose making an entrance and exit to their subdivision

i. When it came to the easement, it simply guaranteed general access to the land

2. Issuea. Can the road be widened to accommodate the new development or

must it remain a rural road?3. Holding + Reasoning

a. The road CANNOT be widenb. Court found that the easement was being utilized for the exact intent

the grantors granted it. i. Intentions of parties at the time of the grant is controlling

c. Π could not claim necessity because it was a one way road and there was no necessity to widen it

4. ***RULE***a. Owner of the easement CANNOT cause undue burden on the

servient state5. ***NOTE***

a. EXAM TIP Can make up facts if there are NOT enough provided

i. Depends of the context of the environment: if x, y, z then it might be this, but if a, b, c it might be that.

ix. THERE IS A PRESUMPTION IN FAVOR OF APPURTENANT EASEMENTS

x. Henley v. Continental Cablevision 1. Facts

a. Π predecessors were expressly granted the right to construct and maintain electric telephone and telegraphic services on or over the rear of the five lots of the subdivision

b. Property was granted by the trust that received the easement, to the defendant

i. Defendant erected cables, wireless, and conduits for the purpose of transmitting TV programs

2. Holding + Reasoninga. The easements were appurtenant

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b. The easements could be apportioned to the cable companyi. The type of use proposed by the cable company is similar

to the original intent of the grantor1. Phone lines were for communication as is sable

c. It would also NOT be an undue burden on Π to let the cable company on the land

d. If servient owner retains privilege of sharing benefit conferred by easements it’s common or non-exclusive and NOT apportionable. If exclusive, then presume apportionability because the grantor suffers NO LOSS

e. ***NOTE***i. If explicit in the grant then it’s a straight forward analysis,

if Not explicit then we make a presumption1. Exclusive Apportionable2. Non-Exclusive Not Apportionable

xi. Ways of Terminating Easements1. Agreement in Writing2. Own Terms – Time Limit

a. Deed states that it is to last for a certain amount of time3. Merger

a. When the holder of the servient estate becomes the owner of the dominant estate

4. Abandonmenta. When an affirmative act shows the intent to abandon or relinquish

the easement5. Adverse Possession or Prescription by owner of servient estate or third party6. Frustration of Purpose

V. Covenants and Equitable Servitudes a. A promise connected to the use and enjoyment of real property (using land in a certain

manner)i. These agreements are not simply personal to the original promisor, but enforceable

when the land is conveyed or people dieb. Private agreement for land to be used in a particular manner over timec. UNLIKE AN EASEMENT

i. Does NOT give holder any right to go on servient estateii. Gives owner of Dominant estate the right to prevent owner of servient etstae from

using property in a certain way or insist on a particular use on the servient estate1. EX Servient Estate cannot build a discount store on the land

d. Real Covenants v. Equitable Servitudesi. Difference Enforcement!

1. Real Covenant Determines whether party can get damagesa. Must satisfy ALL elements below

2. Equitable Servitude Determines whether party can get an injunctiona. Does NOT require privity of estate

e. Elements to determine if covenant runs with the land (Apply the Facts)i. One owner had to have originally owned both plots of land

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ii. Writingiii. Noticeiv. Intent to Burden and Benefitv. Touch and Concern

vi. Privity of Estate1. ***EXAM TIP***

a. Two hardest elements to prove are privity and touch and concerni. Will require more discussion (worth more points)

f. Analyzing the Elementsi. Writing

1. Requires Actual Writingii. Notice

1. Actuala. Actual knowledge (Did buyer know or was he told about covenant?)

2. Inquirya. If any condition of the premises indicated that the property was

burdened by the covenanti. EX Observation of the land puts reasonable parties on

notice3. Constructive

a. If the covenant was recorded in the registry of deeds or titlei. Majority Need to do a FULL title search

ii. Minority Only need to look at direct chain of needsb. Owners and renters both have a responsibility to engage in a title

searchiii. Intent to Burden and Benefit

1. Look to the intent of the original grant.a. Does it explicitly say that the covenant was intended to run with the

land?b. Can you infer intent from the facts or the relationship?

iv. Touch and Concern1. Must be connected to the ownership. There must be an increase in value to

the benefited land, and a decrease in value to the burdened land.2. Both the benefit and the burden of a real covenant must touch and concern

the affected parcels of land before it will be considered to run with the landa. Burden Estate

i. An obligation touches and concerns a burdened state IF1. It relates to the use of the use of the land AND2. It is intended to benefit current and future owners

of the Dominant Estatesb. Benefit Estate

i. An obligation touches and concerns the benefited state IF1. It improves the enjoyment of the land OR2. Increases market value

v. Privity

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1. Need horizontal privity (between original parties) and vertical privity in order to get damages

a. Horizontal Privityi. Relationship between the original promisor and promisee

(relationship between original convening parties)ii. Requires that they both have interest in the land

1. Can get around horizontal privity by using straw2. If NOT horizontal privity it is NOT a Real

Covenantiii. Excludes

1. Agreements between neighbors (No Conveyance)2. Agreements not made at the same time of

conveyanceiv. Mutual

1. Both parties have a mutual/simultaneous interest in land (landlord/tenant)

v. Instantaneous (Only in U.S.)1. Fleeting moment in time where both parties have

mutual interest2. The burden attaches to one property for the benefit

of the other at the moment of saleb. Vertical Privity

i. Relationship between original promisor and his successors/subsequent owners (relationship between the original covenanting parties and the subsequent parties of each parcel)

1. Available when the original owner sells the land BUT NOT when he leases it

ii. Strict Vertical Privity 1. Grantor does NOT retain any future interest in the

land (outright sale)iii. Relaxed Vertical Privity

1. The covenanting party still has interest and will get something back (lease)

c. Exceptionsi. Some jurisdictions do NOT require horizontal privity for

the BENEFIT to run with the land (Only required for BURDEN to run)

1. Without horizontal privity the BENEFIT can still run with the land

ii. Some jurisdictions allow for relaxed vertical privity on the BENEFIT side.

1. Still require strict vertical privity for the BURDEN side

g. ***EXAM TIP***i. Don’t get hung up on instantaneous horizontal privity!

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1. A sale satisfies the requirement between two initial parties!2. Be wary of finding horizontal privity if there was NOT a sale

a. When the property was bought from someone else and then entered into an agreement or

b. When there was a sale and later the agreement was createdi. Sale and agreement must be created together

h. Whitinsville Plaza v. Kotseas i. Facts

1. 1968 Kotseas sold the land to 122 Trust with a restrictive covenanta. Kotseas promised NOT to use the land in competition with the

discount storei. The use allowed a Drug Store to be built there

2. 1975 Trust conveyed the parcel to Whitinsville Plaza and shortly after Kotseas gave part of his land to CVS

a. CVS was going to use the land as a discount department store and pharmacy

3. Whitinsville passed suit against both partiesii. Holding + Reasoning

1. Plaza was able to receive damages and an injunction to stop CVS from constructing the discount store

2. Touch and Concerna. Anticompetitive Covenants do touch and concern the burdened land

because they limit land use and the benefited land because they enhance its market value

3. Writinga. Conveyance from Kotseas to Trust was in writing

4. Noticea. CVS was on constructive notice because they would have found out

of the covenant by looking at the registry of deeds5. Intent

a. There is intent here to bind future owners based on the title itself6. Privity

a. Π can only get injunctive relief against CVSi. No damages because there is no vertical privity between

Kotseas and CVS (land is leased)i. Implied Reciprocal Negative Servitudes

i. Facts/Context Specific Analysisii. These run with the land

iii. Used when Equitable Servitude’s elements are NOT all present (often writing)iv. Must start with a common owner AND originate for a mutual benefitv. Elements

1. There must be a common plan in the area2. There must be notice of common plan to buyer of restricted lot

vi. Evans v. Pollack 1. Facts

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a. Subdivisions had restrictive covenants prohibiting business or commercial use on lakeside lots but NOT on hillside lots

i. Provision that to change covenant ¾ of the owners would have to agree

1. One of the grantors tried to sell some of the hillside lots to a company that wanted to develop a marina, but the other owners sued to stop him

2. Holding + Reasoninga. Owners were allowed to stop the grantor from sellingb. A general plan of subdivision restriction does NOT need to apply to

ALL tracts in a subdivision for the doctrine of implied reciprocal negative easement to apply

i. It can be implied because there was an obvious general development scheme

1. All lake-front plots were intended to be restricted, NOT just the center

vii. Sanborn v. McLean 1. Facts

a. Δ wanted to build a gas station on the rear of their housei. 53 or 91 of the lots in the neighborhood had restrictive

covenants limiting them to residential purposes2. Holding + Reasoning

a. Π granted injunction relief against Δ to prevent them from building the gas station

b. There was a uniform residential character to the propertiesi. Since the majority of the lots had restrictive covenants, the

court inferred a common planc. Notice

i. Δ had constructive and inquiry notice1. Inquiry Looked around and notice it was a

neighborhood2. Constructive Could have searched the deeds for

restrictionsii. The mere presence of a common plan DOES NOT

constitute notice because a plan can exist without being apparent in any way

d. One bad apple can ruin a WHOLE blockviii. Factors to Determine Common Plan

1. Presence of Restrictions2. Recorder Plat Showing Restrictions3. Presence of Restrictions in the last deed4. Observance of restrictions by owners in a similar development5. Conformity to the written restrictions6. Language stating covenants are to run with the land7. Recording of a declaration

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ix. Evidence tending to show the absence of a common plan is that some deeds are unrestricted and that the restrictions are NON-uniform

x. Riley v. Bear Creek Planning Committee (California)1. Facts

a. Riley and his wife built a snow tunnel on their premise without obtaining an approval of regular land use in the area

i. They had purchased the first lot in the residential subdivision, but the declaration containing restrictions was NOT recorded until after they had purchased their lot

2. Holding + Reasoninga. Riley was not subject to the restrictions because they were

written after they had purchased the lotb. The restrictions CANNOT be applied because there is no writing in

their deed limiting the use of their landc. The intent of the owner to impose the restrictions is NOT binding

on them3. ***RULE***

a. Restrictive covenants are NOT enforceable when the restriction is NOT contained in the original deed and filed after the conveyance

j. Terminating Covenants i. Changed Conditions

1. Focus on whether covenant still benefits dominant estatea. El Di, Inc v. Town of Bethany Beach

i. Facts1. Community founded as quiet, residential, Christian

neighborhood with a No Sale of Alcohol and restriction of business buildings

2. The zone was apportioned as a commercial area in 1952 and in 1981 Π applied for a liquor license

ii. Holding + Reasoning1. Change in conditions and there was brown

bagging anyways, Π allowed a liquor license2. Times had changed and the location was now

being used for commercial purposesa. They provided NO substantial benefit to

the dominant estate (town)3. However, a mere change in economic conditions

that renders it unprofitable to continue enforcing the covenant is NOT enough to terminate it

2. Factors to Consider in Changed Conditionsa. Character of Changeb. Property at Play (Undue Hardship to the Property?)c. Does change result in NO substantial benefit to the dominant

party?d. Is there a zoning change?

ii. Relative Hardship

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1. If hardship to servient estate is considerably greater than the benefit to Dominant Estate

iii. Acquiescence1. If Π has tolerated previous violations of the covenant by the owner of the

servient estate, the covenant may be terminated because of tolerance to violations

iv. Unclean Hands1. If Π has violated the covenant himself

v. Abandonment1. If Π has tolerated violations in the covenant by owners of other restrictive

parcels in the neighborhood covered by the covenantvi. Estoppel

1. If Dominant owners promises NOT to enforce the covenant and the Servient Owner relies on this promise

vii. Laches1. If the covenant is ignored for a long time, but NOT long enough to make it a

prescriptive easementviii. Marketable Title Acts

1. Many states have statutes that terminate restrictive covenants if they are not re-recorded after a specific period of time

ix. Language in Instrument1. Language in deed says covenant will end after a certain period of time

x. Merger1. If the burdened and benefited estates come under the ownership of the same

personxi. Release

1. All parties agree to end the covenantxii. Prescription

1. Open and notorious violation of the covenant for the statutory timeVI. Restraints on Alienation

a. Purposesi. Prevent Dynasties

ii. Allow for Distribution of Ownershipiii. Promote the Autonomy of current ownersiv. Note Efficient Uses and Transfers of Land

b. Generally, restraints upon the alienation of a fee simple are voidi. Horse Pond Fish & Game Club v. Cormier

1. Factsa. Club had land free of restrictions, however, they conveyed to two

owners who conveyed it back to the Π with a restriction that the land could NOT be alienated UNLESS there was a `100% vote from the members of the club AND the club was dissolved.

i. Π then tried conveying a part of the land to swap in order to better the club, but Δ refused to cast his vote so Π sued

2. Holding + Reasoning

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a. A restraint of alienations if valid ONLY if it is reasonable in light of the justifiable interests of the parties

b. Courts frown on covenants in gross where there is NOT a dominant estate as is the case here

i. Δ is benefited by the restriction that was not intended to benefit him

c. TEST A restraint is valid if reasonablec. Grantor Consent Clauses

i. NW Real Estate Co. v. Serio 1. Facts

a. Π sold land to 3rd party with restriction that stated the fee simple could NOT be conveyed without consent from them until 1932.

i. 3rd Party consents to sell the land in 1928 to the Δ, but the Π won’t give consent to this.

2. Issuea. Is the restraint sought to be imposed upon alienation of the property

void as repugnant?3. Holding + Reasoning

a. Restraint is Repugnantb. The object of the restriction was to deprive the grantees of the

unrestrained power of alienation incident to the absolute ownership which the granting clause created

ii. Riste v. E. Washington Bible Camp 1. Facts

a. E. Washington Bible Camp wanted the lot to be sold only to people who agreed to subscribe to the tenets of the Assembly of God

i. Δ sold land to Π’s parents with restriction that they could only sell to people consisted with their religion and approved by them.

b. Π after being conveyed the land, wants to sell the land to someone else not bound by restrictions

2. Issuea. Are the restrictions upon alienation valid?

3. Holding + Reasoninga. Invalidated because it was repugnant to the fee simpleb. If you want to protect property rights a negative easement should be

purchasedc. A person CANNOT discriminate when selling in the public market

4. ***RULE***a. A restrictive restraint on the sale of a fee simple title is a violation

of public policyi. The restriction in the deed prevents from selling land which

goes in contradiction of what a fee simple gives a person the right to do

b. Under State law ANY restriction on the transfer of property based on race, creed, color, or national origin violates public policy!

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d. Racially Discriminatory Covenantsi. Under State law, ANY restriction on the transfer of property based on race, creed,

color, or national origin violates Public Policyii. Shelley v. Kramer

1. Factsa. Π’s bought parcel in an area where many of the homes contained a

racially restrictive covenant although the parcel they bought did not contain one.

i. Δs wanted the sale to be rescinded in order to uphold their covenant because the Π were Black

2. Issuea. Does this restrictive covenant violate Constitutional Rights even

when they are between private individuals?3. Holding + Reasoning

a. Racially restrictive covenants are unconstitutionalb. Covenant alone does NOT violate the 14th Amendment, but the

purpose of the covenants was secured only by judicial enforcement in state courts

i. The enforcement by a Court is what triggers the state action1. In other words, a State action is needed for there to

be a Constitutional violation (14th Amendment regulates states and NOT private parties)

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The Right to Transfer

I. Present Estates and Future Interests a. Context-Specific Analysis

i. If the conveyance is ambiguous then the Court uses the facts to the parties’ intentb. Covenants are preferred over Future Interestsc. Life Estates and Fee Interests can be determinable and subject to limitationsd. Rule-Based, but Policy also matters

i. Efficiency in Using Property1. Balance of present and future owners, concerned with the level of control

past owners have on future owners (Dead Hand Control, Social Hierarchy)ii. Distribution/Hierarchy

1. Property should serve human values because humans need property to work/live

2. Incentive to work so that property can be affordede. Similar to the law of Servitudes in which this is a way that the state regulates private

agreementsi. When an owner voluntarily sub-divides interests among different people over time

f. Owners may share property by dividing up ownership rights over time, with one owning the present right to possess the property and the other owning a future power to take possession from the present owner in specified circumstances

i. Present Estate Holder Right to possess the property while his/her property right lasts

ii. Future Estate Holder Will obtain the right to possess the property when and IF the present interest terminates

g. Definition of Feei. A fee is any estate which is potentially infinite in time

h. Types of Conveyances i. Fee Simple Absolute (Common Property Ownership)

1. Property ownership without an associated future interesta. Owner of a Fee Simple Absolute has the present right to possess

and use the property, right to sell or give it away, and the right to devise it by will or leave it to her heirs

i. However, can still be subject to Other Restrictions (Covenants, Easements, Etc)

ii. Defeasible Fees

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1. Present Interests that Terminate at the Happening of a Specified event, OTHER than the death of the current owner

2. Types of Defeasible Fees a. Automatic transfer to the Grantor upon the happening of the stated

eventi. Present Interest Fee Simple Determinable

1. Grantee has this before the event occursii. Future Interest Possibility of Reverter

1. Grantor has this before the event occursb. Transfer upon Grantor’s Assertion of Property Rights

i. When the Grantor chooses to retain for himself or heirs the right to decide, at the time the condition is violated, whether to retake the property

1. Present Interest Fee Simple Subject to a Condition Subsequent

2. Future Interest Right of Entrya. ***A future owner has to assert his rights

when the condition is violated or the stated event occurs. If he doesn’t the ownership stays with the current owner. (NOT Automatic)***

c. Transfer to a Third Partyi. Present Interest Fee Simple Subject to Executory

Limitationii. Future Interest Executory Interest

iii. Life Estates1. Not Infinite in Time (Lasts ONLY as long as the owner/measuring life is

alive)2. Conveyance of O to A for life creates a life estate interest and A owns the

property during his lifetime. When A dies, he loses control and:

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Fee Simple Absolute: the most unrestricted estate, of the longest duration; infinite; no condition attached Words: “and his heirs”

Fee Simple Defeasible: same, but must use it subject to a restriction. 3 categories:

1) Fee Simple Determinable – automatically comes to an end when a stated event occurs. Usually used to prevent the property from being put to a certain use. Creator is left with the possibility of reverter if the stated event occurs. Words: “so long as” “until” “automatically”

2) Fee Simple Subject to a Condition Subsequent – not automatic. When the event occurs, grantor has the right to take back property but only if he affirmatively exercised the right. Grantor has right of entry for condition broken. Must be a provision that if the event occurs, grantor may re-enter property. Words: “upon express condition that” “upon condition that” “provided that”

3) Fee Simple Subject to Executory Limitation – upon the happening of a stated event, the estate passes

to a third party, rather than back to the grantor. The third party has an executory interest in the estate. Words: “until…then to…” “but if…then to…”

a. Reversioni. If property reverts to the grantor when A dies, the future

interest is called a REVERSIONb. Remainder

i. If the grantor designates a third party to obtain ownership when A dies, the future interest in the third party is a REMAINDER

ii. Contingent Remainder1. Contingent if 1 of 2 possible conditions are met

a. Condition Precedenti. If the Remainder will take effect

ONLY upon the happening of an event that is NOT certain to happen OR

b. Unascertained Personi. If the Remainder will go to a

person who CANNOT be ascertained at the time of the initial conveyance

2. Contingent Remainders under Common Law are destroyed if

a. They Do Not vest before the preceding life estate ended

i. EX Conveyance of O to A for life, then to B if he is elected President of the U.S.

b. There is a Merger3. Modern Approach

a. Holds Contingent Remainders UNDESTRUCTIBLE

iii. Vested Remainders1. Given to an ascertained person and NOT subject to

any conditions other than the expiration of the present estate

2. Absolute Vested Remaindersa. No Subject to Change

3. Vested Remainders Subject to Opena. A Remainder that may be divided among

persons who will be born in the future4. Vested Remainders Subject to Divestment

a. A Remainder that may be destroyed by an event that occurs after original conveyance

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Three Questions to Ask:

1. What kind of interest is this? Fee or Life Estate

2. If Fee, who will this property go to in terms of the future interest? (Grantor or third party) Third Party = Executory Interest

3. If Fee is going to grantor, then what kind of future interest will the grantor have? Look to the language Is it fee simple determinable or fee simple subject to condition subsequent.

PRESENT INTEREST WORDS used to Create Interest

Future Interest (In Grantor)

Future Interest (In Grantor)

Fee simple absolute “to E”

“to E and her heirs”

Fee Simple Determinable

“so long as”

“while”

“during”

“until”

“unless”

Possibility of Reverter

(automatic)

Fee simple - Subject to Condition Subsequent

“provided that”

“on condition”

“but if”

Right of entry (for condition broken )or power of termination

Fee simple - Subject to Executory Limitation

“Until (or unless) . . . then to . . .”

“but if . . ., then to . . “

Executory Interest

(automatic)

Life estate “for life” Reversion (automatic) Remainder (automatic)

Vested

Contingent

i. Hyposi. Gurtie conveys to Bob for life remainder to the children of Mary. Mary has 1 child

(Barbara) at the time of the conveyance1. Bob has a life estate2. Barbara has a Vested Remainder Subject to Open

ii. Gurtie conveys to Bob for life, remainder to Barbara IF she survives Bob1. Bob has a life estate2. Barbara has a Contingent Remainder

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Three Questions to Ask:

1. What kind of interest is this? Fee or Life Estate

2. If Fee, who will this property go to in terms of the future interest? (Grantor or third party) Third Party = Executory Interest

3. If Fee is going to grantor, then what kind of future interest will the grantor have? Look to the language Is it fee simple determinable or fee simple subject to condition subsequent.

a. Not certain that this will happeniii. Gurtie conveys to Bob for life, remainder to Barbara

1. What would happen if Barbara died?a. It would go to Barbara’s heirs

i. You don’t have to survive the life estate and the property will go to your heirs, UNLESS there is specific language stating this

iv. Gurtie conveys to Bob provided that Bob does not go to work for Microsoft1. Bob has a Fee Simple Subject to Condition Subsequent2. Gurtie has a right of entry

v. Gurtie conveys to Bob as long as it only used for school purposes1. Bob has a Fee Simple Determinable2. Gurtie has a Possibility of Reverter

vi. Gurtie conveys to Bob so long as no liquor is sold on the premises then to Carol1. Bob has a Fee Simple Subject to Executory Limitation2. Carol has an Executory Interest

vii. Gurtie conveys to Bob for life OR until he does to work for Microsoft1. Bob has Fee Simple Determinable2. Gurtie has BOTH a possibility of reverter and a reversion

j. Interpreting Ambiguous Conveyances i. Always look to the language of the deed to determine intent

ii. Order of Preference (Pg 589 Last ¶)1. Choice between future interest and mere precatory language the presumption

is to recognize a Fee Simple Absolute with No Future Interest2. Choice between a covenant or a future interest, the presumption is against

the future interest and in favor of the enforceable covenant3. Choice between Fee Simple Determinative and Fee Simple Subject to

Condition Subsequent, the Fee Simple Subject to Condition Subsequent is preferred

4. Choice between the Life Estate and a Fee Simple (Defeasible or Absolute), a Fee Simple Interest is preferred (BUT EDWARDS v. BRADLEY)

iii. Wood v. Board of County Commissioners 1. Facts

a. Appellants conveyed the land with the purpose of building a hospital

i. ”For the Purpose of constructing and maintaining thereon a County Hospital in memorial to the gallant men of the Armed Forces of the U.S. Freemont County”

b. Appellee constructed a hospital and operated until 1983, then they sold the land to a private company who relocated the Hospital

i. Then they put the premises up for sale2. Issue

a. Is this a Fee Simple or a Defeasible Fee?3. Holding + Reasoning

a. Appellate retained NO interest in the land surrounding the Hospital.

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b. **A grant of fee simple determinable must CLEARLY state that the estate will terminate if not used in accordance with the grant**

i. A language must be CLEAR in order to convey a Future Interest

k. RULE Presumption Against Forfeituresi. Conditions tending to destroy estates are NOT favored

1. No provision will be interpreted to create such a condition if the language will bear any other reasonable interpretation (Look at Intent of the Grantors)

ii. Cathedral v. Garden City Company 1. Facts

a. Stewart conveyed premises to the Cathedral and successors “without any power, right, or authority to grant, convey, or mortgage the same or any part of the property”

i. Cathedral filed for bankruptcy in 1993 and filed the suit so that they could sell the property

1. Stewart conveyed future interest to Δ and he tried asserting ownership when Cathedral tried selling

2. Issuea. Are the restrictions controlling such that Δ can assert ownership?

3. Holding + Reasoninga. A restriction in a deed may be modified or extinguished if the

existence of the restriction substantially impedes the owner of the property in the furtherance of the purpose for which land was held

b. Right was not assignable at the time it was created and the Stewart hairs never had entitlement in the first place to convey it to Δ

4. ***RULE***a. Without any language stating otherwise, courts WILL INTERPRET

conveyances in favor of reentry over possibility of reverteriii. Edwards v. Bradley

1. Factsa. Woman got farm from her mother with conditions that (1) she could

not sell the land and (2) if creditors decided to take the land it would pass to the woman’s children.

i. Woman decided to sell the land and ask permission of children and spouses, Δ refuses to sign the consent agreement

b. Woman then dies and leaves Δ with $1 and other children with the rest

2. Issuea. Was it a Fee or a Life Estate?

3. Holding + Reasoninga. This was a life estate because a condition prohibiting alienation

of vested fee simple estates is repugnanti. EXCEPTION to the general rule that a fee simple is

preferable to life estate!

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b. Fee Simples do NOT have restraints on alienation and the mother would have done whatever she wanted with the property

i. Restrictions on alienation for life estates are valid!c. Tension between grantor’s intent and presumption against

forfeituresi. The will showed the requisite intent that it was meant to be

a life estate and not a fee1. Courts should uphold the intention of the testatrix

if the Will can be reasonable construed to effectuate such intent AND it is not inconsistent with the law

l. RULE Against Creation of New Estatesi. Courts generally follow a rule against the creation of a new estate.

1. Therefore, a conveyance that does not fit in with any of the established categories must be interpreted to create the most closely analogous estate

ii. Formal Meaning of Rule1. Grantors must put their conveyances in a recognizable form if they want

courts to recognize the package of rights they intend to createiii. Substantive Meaning of Rule

1. Certain Packages of Rights Will Not be Recognizediv. Johnson v. Whitton (MA)

1. Factsa. Δ passed the land in question to 5 grandchildren

i. A deed executed by the grandchildren was tendered to the Π, but was refused on the ground that one of the grandchildren could NOT convey a fee simple absolute

2. Holdinga. Court construed this conveyance as a fee simple absolute because it

did not fall into a recognized category thereby posing a restraint on alienability

i. Granchild tried to create a New Estate, but the Court struck it down

m. Rule Against Perpetuitiesi. No Interest is Good

1. Unless it must vest, if at all2. No later than 21 years after the death3. Of some life in being at the creation of the interest

a. Life in Being People involved in conveyance as well as intervening generations

ii. RULE1. A future interest is NOT valid unless at the time of its creation, we are

SURE that it will vest within 21 years after the death of ANY person alive at the time of the creation

a. ***If there is ANY remote possibility that it will vest later than 21 years after the death of any person alive at the time of creation, it is INVALID!

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2. Technically the Rule is 21 years, 9 monthsiii. Policy Decisions

1. Limit Dead-Hand Control, Promote Marketability of Property, Keep Property Responsive to Today’s Society

iv. Interests to Which Rules Applies1. Contingent Remainders2. Executory Interests3. Vested Remainders Subject to Open

v. Interests to Which Rule does NOT apply1. Absolutely Vested Remainders2. Vested Remainders Subject to Divestment3. Future Interests in the Grantor

a. Reversions, Possibility of Reverter, Right of Entryvi. ***HOW TO APPLY THE RULE***

1. Identify the Future Interest2. Apply the Rule

a. Is there any way that the future interest can vest 21 years after the death of any people referred to in the conveyance?

i. ANY HYPOTHETICAL at all vesting outside the period renders the interest invalid

3. If Violation, Strike Offending Languagea. Often it will leave the Court with a Fee Simple Determinative or a

Fee Simple Absolutevii. Identifying when the Creation Takes Place

1. Conveyance At the moment it takes place2. Will At the moment the testator dies3. Irrevocable Trust At the moment the trust document is signed4. Revocable Trust At the moment the trust becomes irrevocable

viii. Identifying when the Vesting is Created1. Vesting Generally the moment when the contingency occurs that renders

the interest CERTAIN to come into possessiona. Executory Interest

i. The moment the CONTINGENCY occursb. Contingent Remainder

i. When the condition that makes a contingent remainder disappears

ix. RULE OF CONEVENIENCE (IMPORTANT)1. Under a Vested Remainder Subject to Open

a. O to A for life, then to children of B (B already has 1 child)i. Under Rule of Convenience the Court will Close the Class

when A dies1. So that the children of B at the time A dies do not

have to share the property with any other children of B born after A’s death

x. Hypos

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1. D to A for life, then to first child of A to make American Idol. Valid or Invalid?

a. Invalid because the child could appear on American Idol after both D and A, and any other children die

i. For all we know the Child may not be born yet2. O by will to A property near Russian River, areas with frequent floods. If

property ever floods, then to Ba. Invalid because flooding could occur after O,A and B die (Property

would go to B’s heirs)i. After striking offensive language A has fee simple absolute

b. B executory interestc. A Fee simple subject to executor limitation

3. Same conveyance, except the will says O to A until the property floods, then to B

a. Changesi. A now has a fee simple determinable after the “then to B”

offensive language is strikenii. Goes back to O if condition occurs

4. O conveys a deed to A for life, then to O’s grandchildren who reach 21. Olivia has no grandchildren who have reached 21 at the time

a. Invalid because both A and O can die when there is only 1 grandchild and the grandchild can die before reaching 21

b. The interest is created at the time of conveyancei. Could have kids or grandkids after the interest is made

5. O bequeaths by will to A for life, then to O’s grandchildren who reach 21. O has no grandchildren who have reached 21 at the time

a. Valid because the class is closed and one of her grandchildren will reach 21

i. O’s child is a life in being at the time1. Only concern is the interested vesting outside the

period, not the interest never vestingb. Interest created when O dies

6. O to A for life so long as acre used for residential purposes, then to B and his heirs lifetime

a. Valid because either A will die or it will be used for residential purposes within A’s lifetime

b. A Life estate subject to executor limitationi. Executory limitation does not go back to the grantor, but

instead goes back to the third partyc. B Executory interest (if used for nonresidential purposes) and

vested remainder (when A dies)7. O conveys back acre to A and heirs, so long as the acre is used for

residential purposes, then to B for his life.a. Valid because if the interests vests, it will have to vest during B’s

lifetimeb. B Executory Interest for life

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c. O Reverter if B dies and the acre is NOT used for residential purposes

d. NOTEi. If B dies tomorrow that does not necessarily mean that A

can use the property for something other than residential purposes

8. O conveys black acre to A and heirs, but if the black acre is used for non-residential purposes to B and his heirs

a. Invalid because the acre can be used for nonresidential purposes 500 years from

9. O conveys black acre to A and heirs, so long as the Detroit Tigers remain in the AL, then to B and his heirs

a. Invalid because 500 years from now the Tigers can move to another MLB league

10. O conveys black acre to A and heirs, so long as Susan Taylor remains the senior vice president of X magazine, then to B and his heirs

a. Valid because the event has to happen within the life in being of Susan Taylor

i. If Susan Taylor dies then the vested interest will happen within 21 years

11. O conveys black acre to A and heirs, so long as the Detroit Tigers remain in the AL. In a separate conveyance “O conveys all the black acre interest to B”

a. Valid because this is a possibility of reverter. This will go back to the grantor and the rule does not apply

12. O conveys black acre to A for life, then to the child for A “who first graduates from law school.”

a. Two months later O conveys to B all of the interest in acreb. A is alive but has no children who have graduated from law schoolc. Does the children interest violate rules against perpetuities?

i. Invalid because A can have a child tomorrow who could graduate law school 72 years

d. Does B’s interest violate rule against perpetuities?i. No because the language violating interest is struck down

13. O conveys black acre to A for 5 years, then to B for 5 years, then to C for 5 years, all the way through the alphabet, then to Z and his heirs

a. At the time of the conveyance all 26 grantees are alivei. This would be remainders in leasehold states (not for life,

but years)b. Z Vested Remainder in a Fee Simple Absolute (not in terms of

years)c. RULE DOES NOT INVALIDATE BECAUSE ALL ARE

ALREADY VESTED14. O conveys Blackacre to A and heirs but it blackacre is ever used for

commercial purposes to B and heirs.a. 2 months later, B conveys to O “all of interests in the blackacre”

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i. Invalid1. Executory Interest is invalid under the rule of

perpetuities and we are left with a fee simple absolute

n. RULE Wastei. Life Tenant can use property, but waste implies neglect or misconduct resulting in

material damage to or loss of property1. Does NOT include ordinary depreciation of property due to age OR normal

use over a comparatively short period of timeii. Any Future Interest Holder can bring waste claims

1. Most common ones are leashold and life estate because the owners of those interests know they will come to an end

a. The more tenuous the future interest, the less likely waste claims can be brought

iii. Three Types of Waste 1. Voluntary

a. Deliberate/Destructive2. Permissive

a. Failure to use ordinary care of prudent person for preservation/protection of property resulting in waste (Failure to Act)

3. Amelioratinga. Actions that increase value/utility of property.

i. A special type of waste because an owner CANNOT always engage in this kind of waste just because it increases the property value

b. Melms v. Pabst Brewing Co. i. Facts

1. Buyer demolished house on property and built a factory because the neighborhood had change from a residential to an industrial one

ii. Holding1. Although waste was ameliorating, the holder was

entitled to receive the property in the same condition in which the life tenant before him received it.

iii. **RULE**1. Life Tenant is entitled to make fundamental

changes to the property if “a complete and permanent change of surrounding conditions... has deprived the property of its value and usefulness as previously used”

c. Why should the life estate holder pay costs of what the future interest wants?

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iv. Moore v. Phillips 1. Facts

a. Claim of Waste by Remainderman of the Property2. Holding

a. Is the duty of a life tenant to preserve the property and prevent decay or waste!

Common Ownership

I. Tenancy in Common a. Each tenant in common, no matter how small her fractional interest, has the right to possess

the entire parcel UNLESS all the co-tenants agree otherwise in the contracti. Fractional Amount of the Interest will ONLY be important when selling in order to

decide how the purchase price will be dividedb. Right of Survivorship

i. When a tenant in Common Dies, his interest goes to his devisees under his will OR his heirs

c. May be Transferredi. O to A and B as tenants in common

d. ***NOTE***i. Tenants in Common are preferred over other forms of co-ownership and will be

given if there is an ambiguous conveyancee. Carr v. Deking

i. Facts1. Dad and Son were Tenants in Common and the dad leased his interest to Δ

in return for crops.a. Son did not consent to the dad’s lease and wanted rent money

ii. Issue1. Is the lease from dad to Δ valid or must a co-tenant get permission from the

other co-tenant before a lease?iii. Holding + Reasoning

1. The lease is valid and the dad did not need the consent of the son to lease

2. If the son did not like the agreement he would either accept it or file for a partition

3. Policya. Both co-tenants have possession of the property at the same time

and the nature of co-ownership is to use property freely in a way that one wants to

i. However, at the same time this holding infringes on the son’s ability to use the property as he wants

iv. ***RULE***1. Generally a co-tenant can lease his land without permission from other co-

tenantsII. Joint Tenancy

a. Each tenant has the right to possess the entire parcel

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i. Unlike tenants in common, joint tenants have been required to possess equal fractional interests in property

b. Right of Survivorshipi. When a joint tenant dies, the property interest is immediately transferred to the

remaining joint tenants in equal sharesc. Formalities of Creation (If ONE of the formalities is missing, there will be a Tenancy in

Common)i. Unity of Time

1. The interest of each joint tenant must be created at the same moment in timeii. Unity of Title

1. All joint tenants must acquire title by the same instrumentiii. Unity of Interest

1. All joint tenants must possess equal fractional undivided interest in the property, and their interest must last the same amount of time

iv. Unity of Possession1. All joint tenants must have the right to possess/enjoy the entire parcel

d. Severancei. If A and B own the property as joint tenants, each owner has the right to obtain full

ownership of the property when the other dies.1. If A sells her one-half of the divided interest to C then the joint ownership is

severeda. This means that B’s right of survivorship is destroyed!

i. The result is that B and C are tenants in common!ii. Jurisdiction Specific

1. Some jurisdictions have Permanent and Temporary severancesa. Permanent Selling the Interestb. Temporary Lease and then dies when the lease is in place

iii. ***NOTE*** Only occurs between the selling owner and the remaining owners!1. It does NOT change the relations of the remaining owners among

themselves because they are still joint tenantse. Tenhet v. Boswell

i. Facts1. Tenhet is in a joint ownership with Johnson who leaves his interest for a

term of years to Boswell before Johnson dies.ii. Issue

1. Was the Joint Tenancy severed when the lease was created? Does Δ lease survive?

iii. Holding + Reasoning1. The joint tenancy was not severed and the Δ’s lease does NOT survive2. A lease of the property does NOT sever Joint Tenancy

a. The Δ does not have the right to the land because in a joint tenancy the surviving joint tenant has the right of survivorship

i. Π gets all of the land because Johnson does3. Some jurisdictions would have said that the Joint Tenancy was severed and

thus the interest did not remain with the Π but it would have passed to Johnson’s sons

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f. Kresha v. Kresha i. Facts

1. Husband and Wife had joint ownership in property and husband had leased the property to their son.

a. There was a divorce (ownership became tenancy in common) which awarded the leased land to the wife, who in turned tried terminating the son’s lease of the property.

ii. Issue1. Could the father lease this interest as a tenancy in common to a 3rd party?

Does the lease survive the dissolution of the property through divorce?iii. Holding + Reasoning

1. The father had right to lease the property and the lease survives the divorce.

2. Husband has the right to burden the estate so the lease survivesIII. Tranferability

a. In both types of common ownership, the owners are free to transfer interests without the consent of their co-tenants

i. Tenants in Common May leave their interest to devisees by willii. Joint Tenants May NOT leave interest to devisees by will because when they die

their interests will automatically go to the other ownersIV. Partition

a. Both types of common ownership have the power to have commonly held property judicially partitioned

i. Co-Owners may agree among themselves to have the property partitioned (Voluntary Partition)

b. ***NOTE***i. YOU CANNOT BEQUEATH YOUR JOINT TENANCY IN A WILL!

1. It will not have effectV. Fiduciary Obligations of Cotenants or Joint Tenants to Share the Benefits and Burdens of

Ownership!a. Sharing the Benefits

i. Each co-owner has the right to possess the entire parcel1. If one chooses to live on the property and the other one chooses not to, the

co-owner in possession has no duty to pay rent to the non-possessing tenant

a. EXCEPTIONi. Ouster (Co-Owner will have a duty to pay rent)

1. An affirmative act by which one co-owner wrongfully excludes others from the jointly owned property (Ex: Change Locks, Threaten with Gun)

ii. Constructive Ouster1. Takes place without physical act or any fault and

happens when the character of property changes to make joint occupancy impossible or impracticable/unbearable. (Ex: Property too Small, Divorce)

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a. In Divorce Cases the party has entitlement to ½ the reasonable rental value of the home from the time of initial separation

2. Olivas v. Olivas a. Facts

i. Husband argued constructive ouster and wanted rent money after their separation

b. Holdingi. Husband not entitled to rent

because he departed the home for another woman and not due to hostility

ii. Each Co-owner has the right to share any rents paid by third parties who are possessing the property

b. Sharing the Burdens i. Co-owners have a duty to share basic expenses to keep the property including

mortgage, taxes, and insurance.1. There is NO duty to share the costs of major improvements unless they agree

to do soVI. One Co-Tenant CANNOT obtain adverse possession again another!VII. Marital Property

a. Tenancy by the Entiretyi. Only available to married couple in 20 states

ii. Similar to Joint Tenancy Except1. Co-owners must be legally married2. Property can only be partitioned through a divorce proceeding3. The individual interest of one spouse cannot be sold without consent!4. Creditors CANNOT attach property held through tenancy by the entirety to

satisfy the debts of one spouse (Sawada v. Endo)iii. Leases are NOT broken upon divorce

b. Community Propertyi. Only available in about 9 states (California)

ii. Property acquired during marriage rests in a single entity (“Community”)1. Spouses can manage the property without the consent of the other, but they

have to act in the best interest of the Community as a wholeiii. Each spouse can dispose of his/her half of the community property through a will

1. If there is no will, then the property goes to the survivoriv. No Partition, but division of community when divorce

c. No Special RulesVIII. Problems when Co-Owners Disagree

a. Problem of Resolving Rights of Co-Ownersi. Often neither choice will make either party happy and this can affect the

relationships (although there is a partition option)b. Problem of Resolving Rights of Third Parties

i. There is an innocent party involved (although purchasers are expected to check title)

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Landlord – Tenant Law

I. Leaseholds A Way of Dividing Property interests over timea. Lease

i. Landlord transfers possession of property to a tenant for a specified period in return for periodic rental payments, however, he retains the right to regain property back at the end of the rental period

b. Residential v. Commercial i. Courts are more likely to adopt Common Law rules to residential leases because

commercial tenants are assumed to have sufficient bargaining power and expertisec. Four Types of Tenancies

i. Term of Years1. Lasts for a specified time determined by parties and ends automatically at

the agree timea. It may be terminated before on the happening of some event or

condition stated in the leaseii. Period Tenancy

1. Renews automatically at end of specified time, unless party chooses to end it2. NOTICE REQUIRED to end tenancy3. Death of either landlord or tenant does NOT terminate tenancy

iii. Tenancy at Will1. Similar to periodic, except NO NOTICE REQUIRED to end tenancy2. Death of either landlord or tenant WILL terminate tenancy

iv. Tenancy at Sufferance1. A tenant who wrongfully stays when the lease is over, is a holdover tenant2. If the Landlord accepts rent checks from a holdover tenant, he may be held

to have agreed to a new tenancy calculated by rent payment scheduled. Self-Help v. Judicial Process

i. Landlord normally must provide notice and use eviction proceedings because most jurisdictions do NOT allow self-help (physical eject, changing locks, etc)

ii. In the absence of a judicial eviction, tenants have the right to retain possessione. Vasquez v. Glassboro Service Association

i. Facts1. Vasquez was a migrant farm worker from P.R. who was fired and

subsequently not allowed to stay overnight in the barracks until he found alternative housing.

a. Glassboro kicked him out even though there were vacant spaces and Vasquez did not speak English

ii. Issue1. Is Vasquez a tenant? Is he entitled to notice before dispossession?

iii. Holding + Reasoning1. Vasquez is NOT a tenant but when a migrant farm worker is fired he is

entitled to a judicial proceeding and SHOULD NOT use self-help2. There was unequal bargain in power and it was unconscionable to hold the

migrant worker without a home simply because of being fired3. Furthermore, it is not in the public interest to use self-help4. Schwartz Article

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a. Pre-Freedom of Contract and people are better off when contracts are enforced (Efficient)

b. Competition in markets prevents exploitation and if the market is not working you fix it

c. Contract is the wrong vehicle for improving equities in wealthi. By giving a poor person fewer options it makes them

poorer5. Robert Hale Article

a. Focuses on equal bargaining poweri. The state plays a role in enforcing contracts which requires

it to make judgments about when coercive enforcement promotes or limits personal autonomy

b. Legislatures have a real role in making the bargaining power more even and the courts could be empowered to do the same

i. State must play a role in this because they define property and enforce property rights.

II. Conflicts about Renta. Landlords Rights

i. Right to receive the agreed-upon rentii. Right to have the premises intact and not damaged

iii. Landlord Reversion Right to regain possession at the end of the leaseb. Landlords Remedies when Tenant Breaches and Refuses to Leave

i. Possession and Back Rent1. If tenant breaches and express or implied term of the lease

a. Landlord can Evict2. If tenant wrongfully holds after lease period and continues to pay

a. Landlord may choose to accept new tenancy relationship or sue for possession

i. If landlord wants to evict he must sue for possession immediately and either:

1. Refuse to accept rental checks or return them2. Cash the checks while writing on the back of each

check that the landlord is NOT agreeing to renew the tenancy, but is merely using the check to cover the rental value of the property

ii. Self-Help Not really allowed in most jurisdictionsiii. Summary Process

1. Quick Judicial proceeding for Landlords to regain possessionc. Landlords Remedies when Tenant Breaches and Leaves

i. Duty to Mitigate Damages1. Accept the Tenant’s Surrender

a. Landlord can agree that tenant is not obligated to pay future rent OR may sue for damages for breach of lease

i. Damages

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1. Different from the amount of the future rent because it is the difference between he agreed upon price and the fair market value.

a. Add to this advertising costs of finding replacement

2. Re-Let on the Tenant’s Accounta. Landlord may refuse to accept the surrender and find a new tenant

after giving notice to the old onei. When he finds a new tenant, the landlord may sue the old

tenant for the difference between the rent he was supposed to get and what he is now getting from new tenant

1. Landlord MUST BE CLEAR that he is refusing to accept the tenant’s proffered surrender of the lease

a. Some Statesi. Very act of re-letting the

apartment is evidence that the landlord has accepted the surrender

b. Other Statesi. Act of re-letting does not

preclude the landlord from asserting that he did not accept the surrender

c. Some Other Statesi. Landlord must notify the tenant

that he is letting on the tenant’s account and is refusing to accept the surrender in order to hold the tenant to the rent later

3. Sommer v. Kridel a. Facts

i. Sommer did not mitigate damages even though there was another person who wanted to move in after Kridel told him he was surrendering the contract

b. Issuei. Was Sommers required to mitigate?

c. Holding + Reasoningi. Sommers was required to mitigate damages

ii. The landlord must use reasonable diligence in his attempts to re-rent the apartment

d. Assignment v. Sublease i. Assignment

1. Tenant assigns all remaining interesta. VERTICAL PRIVITY (Covenant RUNS with the land)

i. Landlord can go after the tenant or assignee in an Assignment for damages and an injunction

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ii. Sublease1. Tenant retains some future interest, or the right to control the property in the

futurea. NO VERTICAL PRIVITY (Covenant does Not run with the land)

2. Landlord can only go after original tenant (not subleasor) in a SUBLEASE for damages (Can go for subleasor for injunction)

iii. Three Situations to see if the tenant or the landlord may transfer the property interest1. Lease is Silent

a. Sublease is possiblei. Courts want to promote the policy of alienability

2. Can sublet or assign but only with Landlord’s Consent”a. Question of whether a criterion of “reasonableness” should be

implied in the phrase “no subletting without landlord’s consent”3. Prohibit Subletting all Together

a. Would be considered in breach of contractiv. Kendall v. Ernest Pestana, Inc

1. Factsa. Commercial lease over hangar space in which the lease included a

covenant stating “no assignment without consent of the landlord”i. The party wants to assign the contract, but the landlord

does not consent to the transfer2. Issue

a. Can the landlord arbitrarily/unreasonably withhold consent in a commercial lease?

3. Holding + Reasoninga. Consent may be withheld only if there is a commercially

reasonable reason for doing so (Minority Rule)b. This rule applies only to the commercial context, but what is a

commercially reasonable reason?i. Financial responsibility of assignee

ii. Suitability of use of particular propertyiii. Legality of proposed useiv. Need for alteration of the premisesv. Nature of the Occupancy

c. Landlord cannot refuse assignment just because the market improved and he wants more money

v. Slavin v. Rent Control 1. Facts

a. Residential lease for a rent-controlled apartment and the tenant assigned his lease without landlord’s consent going against the provision in the contract.

i. Landlord categorically refused to allow the new tenant to move in

2. Issue

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a. Does a lease provision requiring the landlord’s consent to an assignment or sublease permit the landlord from refusing arbitrarily or unreasonably?

3. Holding + Reasoninga. Landlord may refuse arbitrarily or unreasonably to give

consent. (Majority Rule)b. This is an issue for the legislature to decidec. Residential leases are considered different than commercial leases

i. Likely to be less sophisticated than commercial tenants and may not have a commercial background or attorney, thus making them more likely to misinterpret contract

ii. Residential landlords may have closer ties to their propertyiii. Tenants can pull down the value of an apartment complex

vi. Recap1. Landlord does not have a duty to deliver premises2. When the landlord sells the apartment building to a new owner, the owner

gets exactly what the landlord hade. Rights to Habitable Premises

i. Constructive Eviction1. Takes place when landlord interferes with tenant’s quiet enjoyment so much

that tenant can justifiably stop paying rent and move out before the end of the lease

a. This is a physical eviction and the interference with the quiet enjoyment must be the landlords fault

2. Minjak v. Randolph (NY)a. Facts

i. Δ (tenants) withheld rent due to the disastrous conditions of the loft space they were leasing and the landlord brought an action for non-payment.

ii. Δ then sought reduction of back rent because their right to quiet enjoyment of the premises was violated by the landlord in many ways (constructively evicted from 2/3 of the apartment)

b. ***RULE*** Partial Constructive Evictioni. Constructive eviction is a defense to nonpayment even

when there is only a partial abandonment of the premises1. Traditionally, tenants had to move out for

constructive eviction (black letter rule)c. Policy

i. It is not easy for the tenant to just pick up and leave due to the tough rental market and because it is a hassle to move

ii. Tenants that have contracted for a certain period of time should be allowed to stay

iii. Gamble if they move out because what if they lose constructive eviction?

3. Blackett v. Olanoff (MA) – Third Party Disturbance

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a. Factsi. Group of tenants alleged that the landlord had breached his

covenant for quiet enjoyment as a defense to an action for rent.

1. The noise was coming from a bar next door to their property and the bar owners were paying rent to the landlord

ii. Landlord had tried to quiet the music several times but was unsuccessful

b. Issuei. Can a tenant bring a constructive eviction claim when the

noise is coming from a third party and not the landlord himself?

c. Holding + Reasoningi. The tenants could use the constructive eviction defense

because the landlord had permitted the third party conduct to continue.

ii. The disturbing condition was a natural and probable consequence of the landlord permitting the lounge to operate where it did and because the landlord could control their actions

iii. Policy1. Does not focus on Landlords INTENT and instead

focuses on the landlord’s ACTIONS!iv. Modern Trend of moving away from behavior limiting the

landlord’s duty to control and holding the landlord liable because he has a legal duty to the tenants

d. ***RULE***i. Expansion of the Doctrine of Constructive Eviction to

incorporate actions what is within the landlord’s control, including the actions of others.

4. Three Approaches when Landlord deals with a Noisy Tenanta. Traditional Approach

i. Landlord is NOT responsible for the actions of third parties even when there is an express provision in the contract

b. Middle Groundi. No implied duty UNLESS there is a provision in the

contract.1. Absent such a provision, there is no ability of the

landlord to control or evict a noisy tenantc. No Provision in the Lease

i. Implied duty NOT to interfere with the quiet enjoyment that tenant has and CANNOT violate the provision of other tenants. If the tenant breaches this implied duty, the landlord can evict the noisy tenant

ii. Implied Warranty of Habitability

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1. Traditional Rulea. There was no duty to deliver and maintain a particular habitability

UNLESS expressly in the leaseb. Contractual obligations of the landlord and tenant were independent

2. Judiciaries are becoming more Pro-Tenant3. Javins v. First National Realty Corp. (DC)

a. Factsi. Tenants sued for defaulting payment during the month of

April, but tenants reported the landlord had violated 1500 provisions of the Housing Code and thus breached the implied warranty of habitability

b. Issuei. Can Housing Violations justify a non-paying tenant

c. Holding + Reasoningi. Breach of the landlords in this case allowed the tenants

to withhold rentii. Tenant’s obligation to pay rent is dependent upon the

landlord’s performance of his obligation which includes an implied warranty of habitability

iii. Housing Code simply applies to the minimum level of safety and typically only residential

iv. Three Reasons to Change Old Rule1. Old rule based on Factual Assumptions that are

NO longer truea. Today tenants are interested in simply

renting and then leavingb. Tenants today have singer particular skills

unrelated to the maintenance of premises2. Consumer protection cases required old rule to be

abandoned for harmony3. Nature of urban housing market today

d. ***RULE***i. There is an implied warranty of habitability in a contract

for rent4. Remedies for Breach of Implied Warranty

a. Abatement of Rent (Rent Reduction)b. Rescission of Contract (Terminate Lease and Move Out)c. Rent Withholdingd. Repair and Deduct

5. With the implied warranty of habitability, does constructive eviction disappear?

a. NO! Constructive Eviction covers disturbances other than physical conditions of the building and it appeals to more than simply residential context

6. Arguments & Counters – Pg 826-833f. Retaliatory Eviction

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i. The removal of a tenant from possession of property due to the tenant’s complaints or other conduct which the landlord opposes

ii. Hillview Associates v. Bloomquist (Iowa)1. Facts

a. Following a physical altercation between a tenant and a manager at a tenant’s meeting, the tenants involved in the meeting received eviction notices.

i. The tenants refused to leave and Hillview sued to assume control

1. Tenants refuse for retaliatory eviction2. Issue

a. Can the landlord evict the tenants or is the defense justified?3. Holding + Reasoning

a. Defense is justified and retaliatory eviction can be used as a defense

b. Tenants may organize and join a tenant association and may participate in activities designed to legitimately coerce a landlord into taking action to improve the conditions without fear of retaliation.

i. ***NOTE***1. Engaging in physical threats or violence is NOT a

legitimate method of coercion and termination based on this will not be viewed as retaliatory

c. Angry words are not enough to justify evictiond. Other improper retaliatory actions that Landlords CANNOT take

i. Decrease Services, Threaten Eviction, Fail to Renew Rental Agreements, Increase Rent

4. ***RULE***a. Retaliatory eviction protects tenants that abide by the law to discuss

the nature of their living situationi. Burden of Proof is always on the tenant to show retaliation

iii. Imperial Colliery v. Fout 1. Facts

a. Π instituted an eviction proceeding against Δ who claimed the eviction was in retaliation with a participation with a labor strike at his coal mining job

i. This was a month to month tenancy and the trailer company was inter-related to the coal company

2. Issuea. Can Δ assert retaliatory eviction for causes not relating to living

situation?3. Holding

a. Tenant could not assert the defense of retaliatory eviction4. ***RULE***

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a. Retaliation may be asserted as a defense to an eviction proceeding ONLY IF the landlord’s conduct is in retaliation for the tenant’s exercise of a right incidental to the tenancy!

Recording Acts

I. Intended to provide buyers with the security of knowing that they will really own the property interests they are buying

II. DO NOT require that a deed be recorded for a conveyance to be legally valid (deed is valid without recording)

III. Recording Acts define prioritiesa. Whose interest will prevail in different kinds of disputesb. Recording acts alter our basic first-in-time rule under certain circumstances

IV. Every state has passed a recording actV. How to Conduct a Title Search

a. Grantor-Grantee Index (Will NOT show a wild deed)i. Grantor Index

1. All instruments are listed both alphabetically and chronologically by the grantor’s last name

ii. Grantee Index1. All instruments are listed both alphabetically and chronologically by the

grantee’s last name.b. Index describes the bare outlines of each transaction

i. Grantor and Granteeii. Description of The Land

iii. Type of Interest Conveyediv. Date Recordedv. Book and Page Numbers where a Copy of the Document can be Found

VI. Types of Recording Acts a. Race Statutes

i. The person who records first will prevail (He has won the race to the registry)1. It does not matter if the prevailing party knew about the prior conveyance or

notii. Not used very often

iii. Pros and Cons1. Pros Protects from Subsequent sales by the grantor, Provides Huge

Incentive to Record First2. Cons Questions about ownership (Who knew What When?), Potential for

Sleazy Dealing3. Example: O conveys to A, who does not record. O subsequently conveys the

property a second time to B. B knows of the earlier conveyance to A. B records the deed from O to B.

a. In a lawsuit, between A and B, B prevails.b. Notice Statutes

i. A purchaser without notice of an earlier transaction prevails, even if she does NOT record first

ii. Used in about ½ of the states

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iii. Pros and Cons1. Pros Gets around the fraud of subsequent purchaser getting the property,

adds fairness, still an incentive to record2. Con Some reduction in certainty3. Example: O conveys to A, who does not record. O then conveys to B. B has

NO knowledge of the earlier conveyance from O to A. a. B prevails over A even though B does not record the deed from O to

B. b. B also prevails over A even if A later records her deed from O to A

before B records her deed from O to B. c. Race-Notice Statutes

i. A second purchaser wins ONLY IF1. She DID NOT have notice of the previous deed at the time she acquired

AND2. She reports first

ii. Used in about ½ of the statesiii. Example: O conveys to A, who does not record. O then conveys to B. B has no

knowledge of the earlier conveyance from O to A. A records; then B records. 1. A prevails over B because, even though B had no notice of A’s deed, A

recorded first. VII. Sabo v. Horvath (ALASKA)

a. Factsi. Horvath recorded his deed prior to a patent being granted to the seller so that the

recorded deed was outside of the chain of title (wild deed).1. After the owner was issued a patent, he conveyed to another person (Sabo)

who conducted a title search and then recordedb. Issue

i. Which recorded interest is valid?c. Holding + Reasoning

i. Race-Notice Statute therefore, Sabo is the correct owner of the landii. Requiring title checks beyond the chain of title would add significant burden as well

as uncertainty to real estate purchasersd. ***RULE***

i. A deed outside of the chain of title is NOT constructive notice and a subsequent recorded deed will take priority, if recorded without actual or constructive knowledge

VIII. Quitclaim and Wild Deeds a. Quitclaim Deed

i. Very unusual and it involves giving whatever the owner has but not including warranty

1. Might put the grantee on constructive notice because there is a possibility it could be a wild deed. Reasonable person would figure this out and investigate

b. Wild Deedi. A deed outside the chain of title

1. It is impractical to require all buyers to search every one of the many deeds in the entire recording index

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a. Does NOT provide adequate noticeIX. Gift

a. If the same piece of property is given to two people, the first one to receive it wins (First in Time, First in Right)

X. Hypos Pg 886a. Question 1

i. Race Jurisdiction B Wins (recorded first)ii. Notice A Wins (B has notice of earlier conveyance)

iii. Race-Notice A Wins (B had notice regardless if he recorded first)b. Question 2

i. Race B Wins (recorded first)ii. Notice B Wins (He doesn’t have actual notice)

iii. Race-Notice B Wins (No actual notice and records first)c. Question 3

i. Race A wins (recorded first)ii. Notice B Wins (He doesn’t have actual notice)

iii. Race-Notice A Wins (Even though B had notice A recorded first)d. Question 4

i. Race Z Wins (recorded the initial conveyance first)1. Even in a race jurisdiction, notice counts in a Wild Deed Issue2. You have to record a document that leads your title to a searchable

conveyanceii. Notice Z Wins (he did not have notice)

iii. Race-Notice Z wins (No notice and recorded first)e. Question 5

i. Race Z Wins (X recorded first)ii. Notice Z Wins (He had no notice about the deed)

iii. Race-Notice Z Wins (Both recorded first and had no notice)f. Question 6

i. Race A Wins (recorded first)ii. Notice A Wins (Z would have been in constructive notice)

1. Z will look to grantee index and see the conveyance to A and to Xa. Then will look at the grantor index to find the conveyance to O and

then find out that it was conveyed to Aiii. Race-Notice A Wins

g. Question 7i. Race C Wins (X recorded first)

ii. Notice C Wins1. Shelter notice kicks in

Takings

I. Regulatory Takingsa. 5th Amendment - Prohibits the Federal Government from “taking” private property “for

public use without just compensation”i. Requires determining that the proposed use is public and determining what

constitutes just compensation

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ii. Applies to the States through the 14th Amendment, which prohibits the state from “depriving” the citizens of property “without due process of law”

b. Police Power of the Statesi. Originally power of state governments to pass legislation regulating private conduct

to protect the public health, welfare, and safety.c. Miller v. Schoene (SC)

i. Facts1. Π were ordered to cut down their ornamental cedar tree because it was

infected with a rust disease which violated a VA statute (if within two miles of an apple orchard the infected cedar tree must be cut down)

ii. Holding + Reasoning1. The state did not exceed its constitutional powers when it ordered the

destruction of the cedar trees (No a taking, thus no compensation req)2. The state simply made a value judgment on what each of the two (orchard

and cedar tree) represented the statea. A value judgment of the economic interest of the apple economy

over the ornamental value of the cedar treeb. Apple industry is more important so there is a public policy reason

to decide to cut down the cedar trees instead3. Property Rights have to be limited to protect the rights of others

a. Some regulations are necessary and the state cannot compensate for everything

4. The main question then becomes whether the owner should bear the cost for the community OR if the whole community should bear the cost

d. Eminent Domain Power of the Statesi. Power to take or “condemn” private property, pay just compensation to the owner,

and transfer the property to some use designed to further the public welfaree. Regulatory Takings involve determining the circumstances under which government

acts or regulations require compensation to property holders whose interests are negatively affected by government regulation

f. KEY QUESTION ACCORDING TO OVERTON*****i. Has the Government Gone TOO FAR in terms of regulation?*******

II. ANALYSIS OF TAKINGS QUESTIONS IN EXAMa. Is this a Per Se Taking? (3 types)

i. Forced Physical Invasion?1. Loretto v. Teleprompter (SC)

a. Factsi. Cable company required the landlord to callow cable

equipment to be laid across the apartment building. The wire took up very little space and actually increased the value of the property

b. ***RULE***i. Permanent, forced, physical invasion is ALWAYS a

taking that requires just compensation, no matter how slightly the injury or how minimal the invasion

c. Reasoning

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i. Power to exclude is a treasured core property right1. Power to control use of occupied property

completely denied to landlordii. Owners have special injury when a stranger is allowed on

property or invades and occupiesiii. Manageability argument of applying a bright-line rule

1. A Per Se Rule avoids line-drawing problemsd. Dissent The reasoning is too formalistic, this case is

indistinguishable from landlord-tenant cases where landlord accepts the statutory responsibilities of the rental business

2. Yee v. City of Escondido a. Facts

i. State enacted a law limiting the bases upon which a park owner could terminate a mobile home owner’s tenancy

ii. Park owners claimed it was a physical invasion of their land and required compensation

1. Could result in perpetual tenants (right to occupy indefinitely) and shifting from landlord to tenant the benefit of money earned on increased rent on the property

b. Holding + Reasoningi. Not a forced physical invasion, just a mere regulation

ii. Two Categories of Takings Clauses1. Physical Occupation Clear Rule, Requires

Compensation2. Government Regulation of Property

Compensation required only if that regulation has unfairly singled out the property owner to bear a burden that should be borne by the public as a whole

iii. There was a voluntary opening of the property o the trailersii. Taking of Core Property Rights?

1. ***Right to Exclude and Right to Convey Property After Death are CORE PROPERTY RIGHTS***

2. Pruneyard Shopping v. Robins a. Facts

i. Robins and other students were protesting the UN Resolution against ”Zionism” at the private mall open to the public, but the Mall told the students to leave

ii. Cal Supreme Court said that under State Laws, a right to distribute literature in the private mall existed, but the mall argues it violates 5th Amendment right to exclude.

b. Holding + Reasoningi. Not a taking!

ii. Although the right to exclude is a core property right, the value of the mall is not diminished by requiring it to allow

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access to the protestors, and therefore, it is not an unconstitutional infringement of rights.

c. Dissenti. Concerned about the state changing the definition of

property and taking whatever it wants to controld. BIG ISSUE Who determines the definition of property? State or

Federal Government?3. Babbitt v. Youpee

a. Factsi. Congress passed Act to ameliorate the fractionation

problem that was happening with Indian land.1. Congress’ solution was that property would

automatically go to the tribe rather than Indian heirs without compensation

ii. Heirs claimed it was a taking of their property because they could not receive their fee simple interests after death

b. Holding + Reasoningi. This is a takings because the Act infringes on a core

property right to devise the property after death.ii. The legislation cannot completely shut down a right to

convey the landiii. Does Regulation Result in Total Economic Deprivation?

1. Lucas v. South Carolina Coastal Council a. Facts

i. State Beachfront Management Act sought to counteract coastal erosion and barred Lucas from erecting homes on two parcels of land near the ocean which Lucas had bought to develop for single family homes.

1. Luca bought the homes before the Act was passedb. Holding + Reasoning

i. This is a Taking because the state must compensate a landowner when a regulation denies him ALL ECONOMICALLY VIABLE USE OF THIS LAND.

ii. This Act evolves into COMPLETE DEPRIVATION for Lucas’ plan to build single family homes and is thus a takings

1. However, compensation is NOT requires when the prohibited activity will constitute a nuisance under State Property Law

iii. There is a right to protect reasonable expectation interests of property owners.

c. Blackmun J. Dissent Land may have some value in its natural state, therefore is economically viable

d. Stevens J. Dissent This holding gives legislature less power to revise an existing law

2. Tahoe Sierra v. Tahoe Regional Planning Agency

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a. Factsi. Two “Temporary” moratoria were placed on owner’s land

so impact development on the environment could be examined

1. This moratorium prevented the owner from building for 32 months and he claimed 6 years due to court injunction

b. Holding + Reasoningi. This is NOT a taking because the moratoria were

temporary and the property recovered its value as soon as they were lifted

ii. If this is ruled a taking then any governmental delay on building could become one

c. Dissent This scenario would not be a taking if brief, but the owner could not build for 6 years

3. Extraordinary Situations of Complete and Total Loss fall under this category, if NOT use the 3-Prong Test Below

b. If NOT a Per Se Taking, then look at the Three Factor Test!i. Character of Government Action

1. Is the regulation (1) a physical invasion, (2) the seizure of a core property right, or (3) a general regulatory program affecting numerous parcels and designed to protect the public from harm by adjusting the benefits and burdens of economic life to promote the common good?

2. Regulation MORE LIKELY to Be a Taking if government action is:a. Forced physical invasion of propertyb. Extraction of a benefit for the good of the community rather than

prevention of harm by the property ownerc. Forced redistribution of bargained-for contractual rights from one

party to the other rather than a general regulation program designed to respond to externalities caused by the property use

3. Regulation is LESS LIKELY to be a Taking if government action is:a. Regulation of property use , rather than a force physical invasionb. Activity considered to be a nuisance at common lawc. Property Owners somehow still receiving benefitd. Choice between incompatible property interestse. Enforcement of implied obligations of good faith in the contractual

relationshipii. Diminution in Value

1. Regulation MORE LIKELY to be a Taking if diminution of value is SUBSTANTIAL, with the extent measured in the following way:

a. Looking at what is taken (large % of market value property is destroyed)

b. Looking at what is left after the regulation is in place2. Regulation is LESS LIKELY to be a Taking if

a. Diminution in Value is MINIMAL according toi. Looking at what is taken

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ii. Looking at what is left b. Diminution in Value is SUBSTANTIAL, but it is justified by a

strong public interestiii. Interference with Reasonable Investment Backed Expectations

1. More likely to be a taking if citizen has already invested substantially in reasonable reliance on an existing statutory or regulatory scheme AND less likely to be a taking if the regulation prevents the owner form realizing an expected benefit in the future.

2. MORE likely to be a Taking ifa. Interferes with vested rightsb. Interferes with an existing present use of property

3. LESS likely to be a taking ifa. Imposes an opportunity lossb. The change is the law is one that the owner should have anticipated

such that the owner’s reliance was unreasonablec. If there is a Taking, Ask Is it for the Public Use?

i. Private Property CANNOT be taken by the government for private use!!1. Even if just compensation is made the property MUST BE FOR PUBLIC

USEii. Hawaii Housing Authority v. Midkiff

1. Factsa. State passed Act that sought to redistribute land from a few families

to the population in general for an oligopoly redistribution schemei. There was an argument that the redistribution was

unconstitutional because it benefited private individuals1. Not for a public purpose and no public use

2. Holding + Reasoninga. Court completely defers to the legislature

i. Purpose of statute was to allow for more widespread ownership and clearly related to a government interest

b. Sees the Court’s role in determining public use very narrow with much deference to the legislature

iii. Poletown Neighborhood Council v. Detroit 1. Facts

a. City statute sought to condemn land to sell it to GM for the purpose of promoting industry and stability AND alleviating widespread unemployment problem

2. Π Argumenta. Transfer from several owners to one!

3. Δ Argumenta. Transfer from few to many

4. Holding + Reasoninga. Even though the land was going to a private actor, the us here is

public in its purpose because it would increase employment and provide a tax base

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b. Courts must give great deference to the legislature, except when there is specific identifiable private uses

i. Then there is strict scrutiny and the power of Eminent Domain is NOT to be exercised w/o substantial proof that the public is primarily to be benefited

c. Public use CANNOT be speculative or marginald. Looking at what is taken (large % of market value property is

destroyed)e. Looking at what is left after the regulation is in place

iv. ***RULE FOR PUBLIC USE***1. Court should completely defer to the legislature if purpose of the statute is

rationally related to a conceivable public interesta. If statute is reasonable, it is OK, even if going to a private

beneficiary (Midkiff)2. When there is specific and identifiable private use, the court needs to use a

stricter scrutiny.a. It should ONLY defer to the legislature if there is substantial proof

(clear and significant) that the public is primarily to be benefited. (Poletown)

III. REITERATION OF HOW TO DO A TAKINGS PROBLEMa. Is this a Per Se Taking?

i. Physical Invasionii. Core Property Right

iii. Total and Permanent Deprivation of Economic Viable Useb. If Not Per Se Taking Is it a Taking Under 3 Factor Test?

i. Character of Government Actionii. Diminution in Value

iii. Interference with Reasonable Investment Backed Expectationsc. Is the Property being Taken for PUBLIC USE?

i. YES Just Compensation is Requiredii. If regulation is related to a legitimate state interest (Police Power) and the statute is

reasonable, then it is ok to go to a private party1. Then See if Compensation is Required

a. Argue Both SidesIV. IN A TAKINGS QUESTION ARGUE EVERYTHING!

a. Examplei. The Case Falls under the X category of the Per Se taking because _______. In the

event that the Court decides it does not fall into that category then we apply the 3-Factor Test _________. Finally the Court has to establish whether the Property is being taken for public use, in which case _____________.

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