Chapter 21Real Property and Environmental Law

Chapter 21Real Property and Environmental Law

What can a person who holds property in fee simple absolute with the property? Can a person who holds a life estate do the same?

How can ownership rights in real property be transferred?

What are the respective duties of the landlord and tenant concerning the use and maintenance of leased property?

What major federal statutes regulate environmental pollution?

What is Superfund? To what categories of persons does liability under Superfund extend?

What can a person who holds property in fee simple absolute with the property? Can a person who holds a life estate do the same?

How can ownership rights in real property be transferred?

What are the respective duties of the landlord and tenant concerning the use and maintenance of leased property?

What major federal statutes regulate environmental pollution?

What is Superfund? To what categories of persons does liability under Superfund extend?

Learning ObjectivesLearning ObjectivesLearning ObjectivesLearning Objectives

Nature of Real PropertyNature of Real Property

Real property is immovable and includes: Land.Buildings.Plant Life and Vegetation.Airspace.Subsurface (mineral) rights.Fixtures

Real property is immovable and includes: Land.Buildings.Plant Life and Vegetation.Airspace.Subsurface (mineral) rights.Fixtures

FixturesFixtures

A fixture is personal property that becomes permanently affixed to real property.Intent that it become a fixture is necessary.Intent is determined by:

• The fact that the property cannot be removed without causing damage to the realty.

• The fact that the property is so adapted to the realty that it has become part of the realty.

FixturesFixtures

Trade fixtures: installed for commercial purposes by a tenant.

They remain the property of the tenant and can be removed when tenant leaves, repairing any damage caused by removal.

Ownership of Real Property

Ownership of Real Property

Ownership interests are classified as either Possessory or Non-Possessory:

•A Possessory interest such as a fee simple, life or leasehold estate, gives the owner a right to possess the land. •A Nonpossessory interest such as an easement, profit or license, does not give the owner a right to possess the land.

Ownership in Fee SimpleOwnership in Fee Simple The Fee Simple (sometimes called fee simple

absolute) gives the owner the greatest aggregation of rights, powers and privileges possible under American law and can assigned to heirs. A “conveyance” (transfer of real estate) “from A to

B” creates a fee simple. A is the Grantor and B is the Grantee.

Fee Simple Defeasible: grants conditional ownership to Grantee as long as he complies with condition. “A to B as long as ….”

The Fee Simple (sometimes called fee simple absolute) gives the owner the greatest aggregation of rights, powers and privileges possible under American law and can assigned to heirs. A “conveyance” (transfer of real estate) “from A to

B” creates a fee simple. A is the Grantor and B is the Grantee.

Fee Simple Defeasible: grants conditional ownership to Grantee as long as he complies with condition. “A to B as long as ….”

Life EstatesLife EstatesEstate that lasts for the life of some specified

individual. “A grants Blackacre to B for B’s life” grants B a life estate in Blackacre.

When B dies, Blackacre returns to A or his heirs or assigns, or a third party in the same condition, normal wear and tear excepted.

Grantor A retains a “future interest” in the property. During B’s life, she can possess, use, and take the

fruits of the estate, but not take from the property itself.

Reversionary Interest: Grantor retains ownership interest in land. Land reverts back to Grantor if condition fails or when life tenant dies.

Reversionary Interest: Grantor retains ownership interest in land. Land reverts back to Grantor if condition fails or when life tenant dies.

Future Interests Future Interests

Life EstateGrantor Grantee

Reversionary Interest

Future InterestsFuture InterestsRemainder Interest: Grantor assigns/transfers/sells her future interest to a 3P who now has a remainder. When Grantee dies, interest passes to 3rd Party.

Remainder Interest: Grantor assigns/transfers/sells her future interest to a 3P who now has a remainder. When Grantee dies, interest passes to 3rd Party.

3PRemainder

Life EstateGrantor Grantee

Non-Possessory InterestsNon-Possessory Interests

An easement is a right of a person to make limited use of another person's real property without taking anything from the property.

A profit is the right to go onto land in possession of another and take away some part of the land itself or some product of the land.

Property that is benefited by easement/profit carries the the interest with the sale of land.

Non-Possessory InterestsNon-Possessory Interests

Easements or profits can be created by:Deed (physical delivery is sufficient).Will (at Grantor’s death).Contract between Grantor and Grantee.Implication: circumstances surrounding

creation of easement imply its creation.Necessity.Prescription: easement by adverse possession.

Easements or profits can be created by:Deed (physical delivery is sufficient).Will (at Grantor’s death).Contract between Grantor and Grantee.Implication: circumstances surrounding

creation of easement imply its creation.Necessity.Prescription: easement by adverse possession.

Termination of an Easement or ProfitTermination of an Easement or Profit

By deed back to owner of the land burdened by it.

Owner of easement or profit becomes owner of the land burdened with it.

Abandonment by the owner of the right.

LicensesLicenses

Revocable right of a person to come unto another’s land without removing anything from the land.

Personal privilege that arises from the consent of the owner of the land that can be revoked.

Revocable right of a person to come unto another’s land without removing anything from the land.

Personal privilege that arises from the consent of the owner of the land that can be revoked.

Transfer of OwnershipTransfer of Ownership Ownership in real property can be

transferred by: A written Deed.A Gift.A Sale.An Inheritance.Adverse Possession.Eminent Domain.

DeedsDeeds

A Deed is the instrument setting forth the interests in real property being transferred.

Necessary components of a Deed:Names of Grantor and Grantee.Words evidencing intent to convey.Legally sufficient description of the land.Grantor’s signature.Delivery of the Deed.

Types of DeedsTypes of Deeds

Warranty Deed.Special Warranty Deed.

Quitclaim Deed.Grant Deed.Sheriff’s Deed.

Period of redemption.

Recording StatutesRecording StatutesRecording a deed (or any interest in real

property) puts the public on notice of the new owner’s interest in the land and prevents the previous owner from fraudulently conveying the same interest to another buyer.

Race statute.Pure notice statute.Notice-race statute.

Transfer By InheritanceTransfer By Inheritance

Owner of real property dies, his property is transferred by:Will (testate).Without Will (intestate).

Title is transferred at the time state law so provides in its testate and intestate laws.

Transfer By Adverse Possession

Transfer By Adverse Possession

One person possesses the property of another for a certain statutory period of time, that person automatically acquires title to the land, just as if there had been a conveyance by deed. Must be:

• Actual and exclusive.• Open, visible and notorious.• Continuous and peaceable.• Hostile and adverse.

Eminent DomainEminent Domain

Rights in property are not absolute. They are constrained by federal and state laws, e.g., nuisance, tax and environmental.

A “Taking” By Eminent Domain: The 5th amendment gives the government the right to “take” private land for public use with just compensation.

Leasehold Estates Leasehold Estates

Anyone who rents housing to the public for commercial purposes subjects herself to various state and federal Landlord-Tenant laws.

Owner of the property is the LESSOR and Tenant is LESSEE; the contract is called the LEASE. The property interest is called a leasehold estate.

Anyone who rents housing to the public for commercial purposes subjects herself to various state and federal Landlord-Tenant laws.

Owner of the property is the LESSOR and Tenant is LESSEE; the contract is called the LEASE. The property interest is called a leasehold estate.

Tenancy InterestsTenancy Interests Tenancy for Years

Created by an express contractProperty is leased for a specified period of time

Periodic TenancyDoes not specify how long lease lastsBut rent paid at certain intervals

Tenancy at WillFor as long as both agree.

Tenancy at SufferanceWrongful possession without the right to possess

Tenancy for YearsCreated by an express contractProperty is leased for a specified period of time

Periodic TenancyDoes not specify how long lease lastsBut rent paid at certain intervals

Tenancy at WillFor as long as both agree.

Tenancy at SufferanceWrongful possession without the right to possess

Landlord-Tenant Relationships

Landlord-Tenant Relationships

Lease Agreement can be oral or written (oral may not be enforceable). Lease gives Tenant the temporary right to exclusively possess the property.

Sources of Law:Common Law.State and Local Statutes, andThe Uniform Residential Landlord and Tenant Act

(URLTA) which has been adopted by 1/4 of the states.

Lease AgreementLease Agreement Form of the Lease:

Must express intent to establish the lease.Provide for transfer of possession to the

Tenant.Provide for the Landlord’s “reversionary”

interest.Describe the property. Indicate length of the term, amount of rent,

when and where rent paid.

Rights and DutiesRights and Duties

Trend in the law is to curtail, by contract and real estate law, the immense freedom that Landlords had in the past.Possession.Using the Premises.Maintaining the Premises.Rent.

Rights and DutiesRights and Duties

Landlord has a duty to deliver actual physical possession under URLTA or legal right to possession (“American” rule).

Tenant’s right to exclusive possession is only subject to Landlord’s limited right to come unto the property.

Tenant has a “covenant of quiet enjoyment” by which Landlord promises Tenant’s peace and enjoyment of the property.

Rights and DutiesRights and DutiesEviction occurs when Landlord:

Deprives Tenant of possession of the leased property; or

Interferes with this use or enjoyment of the property to the extent that Tenant cannot use or enjoy.

Constructive eviction occurs when Landlord: Breaches lease or covenant or quiet enjoyment; and Makes it impossible for the Tenant to use and enjoy

the property.

Rights and DutiesRights and DutiesTenant’s Duty Not To Commit Waste:

Tenant is liable for destruction or abuse of the property.

Tenant not liable for normal wear and tear or depreciation in value over time.

Altering the Premises:Tenant needs Landlord’s consent to make

material alterations.Installation of fixtures become the property of

the Landlord. Whether Tenant can remove depends on state law and consent of Landlord.

Rights and DutiesRights and Duties

Residential property -- Landlord must furnish premises in habitable condition.

Landlord is responsible for maintaining common areas such as stairs, parking lots, elevators and swimming pools.

Commercial property -- may still require Tenant to maintain depending on the lease.

Rights and DutiesRights and DutiesImplied Warranty of Habitability applies

to major (substantial) defects if Landlord knew or should have known about & he had a reasonable time to repair.

To determine breach, Courts consider:Whether Tenant caused damage.How long defect existed and age of building.Defects impact on Tenant’s safety and health.Whether defect contravenes relevant statutes.

Implied Warranty of Habitability applies to major (substantial) defects if Landlord knew or should have known about & he had a reasonable time to repair.

To determine breach, Courts consider:Whether Tenant caused damage.How long defect existed and age of building.Defects impact on Tenant’s safety and health.Whether defect contravenes relevant statutes.

RentRent Rent is Tenant’s payment to the

Landlord for the Tenant’s occupancy or use of the Landlord’s real property.Payment based on agreement, custom, state

statute, waiver. Security Deposits.

A deposit by Tenant which Landlord may retain for non-payment of rent or damage to premises.

URLTA has specific provisions as to when it may be kept and when it must be returned.

Tenant’s RemediesTenant’s RemediesIf Landlord breaches the warranty of

habitability, depending on state law, Tenant may:Withhold rent -- put in escrow.Repair and Deduct -- notify, repair, and deduct

repair from rent.Cancel the Lease -- must be constructive

eviction or breach of habitability.Sue for Damages -- difference between what

paid for and what received.

Landlord’s RemediesLandlord’s Remedies

Landlord’s Lien on all Tenant’s personal property.

Lawsuit to Recover Possession -- ejectment or unlawful detainer.

Landlord’s Duty to Mitigate Damages.Must make reasonable efforts to re-rent the

premises.

Rights and Duties: Liability

Rights and Duties: Liability

Landlord is liable to Tenants and Licensees (Tenant’s guests) based on who has the right to controls the area where the injury occurred.

Landlord is liable for injuries caused by defects in common areas. “Attractive nuisance” doctrine for children and an unfenced swimming pool.

If Landlord makes any repairs, they must be done with reasonable care.

LL may be liable for injuries caused by crimes or third persons when reasonably foreseeable.

Exculpatory clauses may be unenforceable if injury results from violation of statutory duty.

If Landlord makes any repairs, they must be done with reasonable care.

LL may be liable for injuries caused by crimes or third persons when reasonably foreseeable.

Exculpatory clauses may be unenforceable if injury results from violation of statutory duty.

Rights and Duties: Liability

Rights and Duties: Liability

Tenant’s Liability?Tenant has a duty to maintain safe

conditions in those areas under her control.

In commercial leases, both Landlord and Tenant may be responsible and liable for same area.

Rights and Duties: Liability

Rights and Duties: Liability

Transferring Rights to Leased PropertyTransferring Rights to Leased Property

Transferring Landlord's Interest.Landlord may sell any and all of his rights in

the real property.New owner buys “subject to the lease,” if

lease is recorded. Transferring Tenant’s Interest.

Landlord’s consent may or may not be required by statute or the lease itself.

Transferring RightsTransferring Rights Transferring the Tenant’s Interest

(cont’d)Assignments: Tenant transfers his entire

interest in the lease to a third person. Original Tenant is not released from liability under the lease.

Subleases: Tenant transfers all or part of his interest in the lease for a shorter period of time than the lease. Original Tenant is not relieved of liability under the lease.

Environmental LawEnvironmental Law

The principal sources of environmental law are:Common Law Actions.State and Local Regulation. Federal Regulation.

Common Law ActionsCommon Law ActionsNuisance.

Person liable if they use their property in a manner that unreasonably interferes with others’ rights to use or enjoy their own property.

Negligence and Strict Liability.Business or person alleged failure to use

reasonable care toward a party whose injury was foreseeable and, or course, caused by the lack of reasonable care.

State and Local Regulation

State and Local Regulation

States regulate the degree to which the environment may be polluted.

City, county, and other local governments control some aspects of the environment.

• Local zoning laws.• Methods of waste and garbage removal. • Location and conditions of parks, streets and other

public areas.

States regulate the degree to which the environment may be polluted.

City, county, and other local governments control some aspects of the environment.

• Local zoning laws.• Methods of waste and garbage removal. • Location and conditions of parks, streets and other

public areas.

Federal RegulationFederal Regulation

Federal environmental policy is achieved through federal agencies: Example: Environmental Protection

Agency [http://www.epa.gov] (EPA).Regulatory agencies must take

environmental factors into consideration when making significant decisions.

Federal RegulationFederal Regulation

National Environmental Policy Act (NEPA).Does not directly deal with pollution control.Require preparation of an environmental impact

statement (EIS) when major federal action in the environment is to be undertaken.

Media Specific Pollution Control Legislation.

National Environmental Policy Act (NEPA).Does not directly deal with pollution control.Require preparation of an environmental impact

statement (EIS) when major federal action in the environment is to be undertaken.

Media Specific Pollution Control Legislation.

Environmental Impact Statement

Environmental Impact Statement

An EIS must analyze:The impact of the proposed action on the

environment.Any adverse effects of the action and

alternatives to the action.Any irreversible effects the action might

generate.

Air PollutionAir Pollution Clean Air Act.

This act provides the basis for issuing regulations to control pollution coming primarily from stationary (factories) and mobile (cars) sources of air pollution.

It prescribes the use of pollution control equipment that represents the maximum achievable control technology.

Violations: civil penalties up to $25,000/day. Willful violations carry criminal penalties and fines.

Water PollutionWater Pollution

Clean Water Act’s goals:Safe swimming and drinking water.Protection of fish and wildlife (wetlands).Elimination of the discharge of pollutants into

waterways (navigable waterways).

Pollution control is largely achieved through the use of the best available control technology.

Noise PollutionNoise Pollution

Noise Control Act.Establishes noise emissions standards

(maximum noise levels below which no harmful effects occur from interference with speech or other activity).

Prohibits distributing products manufactured in violation of the noise emission standards.

Noise Control Act.Establishes noise emissions standards

(maximum noise levels below which no harmful effects occur from interference with speech or other activity).

Prohibits distributing products manufactured in violation of the noise emission standards.

Toxic ChemicalsToxic ChemicalsFederal Insecticide, Fungicide, and Rodenticide Act

(FIFRA).Regulates the use of pest control chemicals in the

process of food growth to food packaging, to minimize their presence in foods consumed.

Toxic Substances Control Act.Requires anyone planning to use chemicals first

determine their effect on human health and the environment.

Require special labeling, limit the use of substance, set production quotas, or prohibit the use of a substance altogether.

Hazardous Waste Disposal

Resource Conservation and Recovery Act.Authorizes the EPA to issue regulations for the

monitoring, transporting, storage, treatment, and disposal of hazardous substances.

CERCLA.Designed to ensure the clean-up of hazardous waste

sites and to assign liability for the costs of the cleanup operations.

Joint and Several Liability for cleanup costs can be assigned to any potentially responsible party (PRP).