PROPERTY LAW

I. INTRODUCTIONa. Legal Positivism: property only exists to the extent that it is recognized by governmentb. Theories/Justifications

1. Protect first impression2. Encourage labor

-personal labor + un-owned resources = created value -assumes unlimited supply

3. Maximize social happiness -promotes social welfare not just for the property ownerownership provides security/incentive for owner to use property for best-use economic efficiency 4. Ensure democracy -right to own property has an important effect on citizen’s relation with the state

5. Facilitate personal development (personhood) -each person has a close emotional connection to certain tangible things

II. PROPERTY RIGHTS (Bundle of Sticks) a. Generally -property rights are defined by government (legal positivism) -property rights are not absolute (one is not free to do absolutely ANYTHING with his property) -“bundle of rights” – property consists of rights rather than things -property rights evolve as law changes b. Right to Transfer (Alienability) (1) TEST: generally, any owner may freely transfer or alienate her property to anyone BUT the law can restrict who, what, and how based on public policy (2) alienability vital to efficiency allows property to flow to its best-use (3) chain of title: succession of ownership over time (4) Johnson v. M’Intosh (1823) p. 29 — cannot transfer w/o title to property -FACTS: P claimed title to property conveyed to them by the Native Americans D contends land grant came directly from the U.S. government -HOLDING: Native Americans did not have title to land; they only have possession. Since they do not have title, they cannot convey title to others. -First Impression: U.S. has exclusive title to land b/c of the discovery and conquest of America by Europeans (discovery gave exclusive title to those who made it) -for all parcels of land in America, the chain of title begins with the U.S. government. -Policy: “to leave and in possession of Indians, is to leave this country a wilderness” wasting assets (5) Moore v. Regents of U.C. (1991) p. 36 — Presumption against taking away right to transfer -FACTS: D used P’s cells in potentially lucrative medical research w/o P’s permission (conversion: strict liability tort that protects against interference w/ ownership interest in personal property) -HOLDING: conversion should not extended in re human cells -Policy: should not threaten innocent parties engaged in socially useful activities (strict liability subjects innocent third parties to liability for acts which may not be under their direction and control) -problems in this area better suited for legislation -conversion not necessary to protect patient’s rights (can opt for breach of fiduciary duty claim) -CONCUR: effects of recognizing property interest in body tissue is unknown (slippery slope) -DISSENT: there is a policy against unjust enrichment at the expense of another -at the very least P had had the "right to do with his own tissue what the D did with it" That is, as soon as the tissue was removed Moore at least had the right to choose to sell it to a laboratory or have it destroyed (right to exclude/right to destroy) -can remove sticks in bundle and still recognize property b/c each stick in and of itself is an entitlement

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C. Right to Exclude (1) TEST: each owner has a broad right to exclude any other person from his property, even if trespassor is not causing any harm; but this right is limited by consent (invitation) or necessity (2) typically, implemented through the tort doctrine of “Trespass” - R.2d§158: one is subject to liability for trespass, irrespective of whether he thereby causes any harm to any legally protected interest of the other, if he intentionally…enters land in the possession of the other or causes

a thing or a third person to do so (trespass is like strict liability) - no trespass if there is a privilege (ex. consent, necessity) -ex. in many states, owners of rural/undeveloped land must post “no trespassing” signs otherwise hunters have an implied right to enter the land (3) changing economic/social landscape increased importance of excluding others from using one’s land b/c trespassers may interfere with the efficient use of land (4) Jacque v. Steenberg Homes, Inc. (1997) p. 50 — General right to exclude rule (No Invitation) -FACTS: Despite protests by owners, trespasser intentionally plowed a path through their snow-covered field and delivered a mobile home to the neighbor w/o damaging P’s land P awarded $ 1.00 in nominal

damages and $100,000 in punitive damages. -HOLDING: Each owner has a broad right to exclude any other person from his property regardless of harm -the actual harm of trespass is not the damage done to the land (nominal damages) but in the loss of the individual’s rights to exclude others from his property (punitive damages) -Policy: both the individual and society have significant interests in deterring intentional trespass of land -court doesn’t want parties to resort to “Self-help” want them to believe in legal system -maliciousness/disrespectfulness of company strikes the court as more important than efficiency -a right would be worthless if the legal system provides insufficient means to protect it -repeated intentional trespass could lead to adverse possession (5) State v. Shack (1971) p. 58 — Limitation of right to exclude (Invitation/Necessity) -FACTS: an attorney and health service worker (D), entered on private property to aid a migrant farmworker housed there. Employer (P) refused. -HOLDING: man’s right to his property is not absolute necessity may give 3rd party right to enter property -under state law, the ownership of real property does not include the right to exclude governmental services available to migrant workers -employer may not deny the worker his privacy or interfere with his opportunity to live as normal citizens -when bought land, didn’t buy stick to exclude people from coming on (property invited people to work on his landcannot isolate them from help/necessities of life -Policy: these rights are too fundamental to take a back seat to an interest in property -court does not want to open up employer’s land to ALL parties, just those that are justifiable -NOTE: owner is angered b/c normal people just don’t let random people wander in his home D. Right to Use (1) TEST: Owner has the right to use his property in any way he desired so long as he did not harm the rights of others (nuisance/spite fence) b/c owner knows best how to use land productively for the benefit of all (2) private nuisance: (1) an intentional (2) non-trespass (3) ***unreasonable and (4) substantial interference with (5) the use and enjoyment of plaintiff’s property ***unreasonable test = gravity of tortfeasor’s harm outweighs the utility of tortfeasors’s conduct (3) Hardest reasoning is in the remedy stage; 4 options: i. no nuisance, no compensation ii. enjoin party from nuisance iii. enjoin unless X amount paid iv. not enjoined but X price paid (4) Person that owns injunction can sell it to other owner/if there is no injunctions parties can negotiate outcome -court can step in when they see transaction costs barriers that would prevent negotiated outcome (ex. you are

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enjoined unless you pay X amount) -coase theorem: initial allocation of resources is irrelevant because parties with bargain for an efficient allocation (in reality, there are transaction costs that prevent this) (5) Sundowner, Inc. v. King (1973) p. 69 — Modern American Rule: spite fence doctrine limitation -FACTS: P sold motel to D but then built another motel on property adjacent to property sold D built a large sign (85 ft. x 18 ft.) 16 inches from the boundary line between the parties' properties. -HOLDING: useless sign (no advertising value)malice = spite fenceno rights per Modern American Rule -Modern American Rule: landowner cannot erect an unusually high fence along his property for the sole

purpose of annoying his neighbor (remedy = injunctive relief + damages) -likely 16 in. b/c if other party reaches across to pull off a board = intentional trespass (strict liability) -“Set back” rules create greater buffer space between two parties (the closer, the more friction) -sign was abnormally large and expensive inference is that irrational spending is only rational if made out of spite -sign vs. fence (taken down by 6 feet implies fence; if a sign, whole thing would have to be taken down) -NOTES: -is it trespass OR not trespass (nuisance)? Can you bend the facts to argue the other? -whenever you buy property, you take the risk that the person next to you might use his property in a way that may impair the value of your property (compensation is that you may also use your property

as you wish) -per state law, problem could be easily solved by chopping fence down to 6 feet. The question here is why majority went into malice analysis. In general where there is a spite based claim, if we do not entertain these claims, we retain the status quo and we don’t want to reinforce spiteful behavior (6) Prah v. Maretti (1982) p. 73 — Private nuisance limitation to right to use -FACTS: P’s house uses solar energy. The owner of adjacent property attempts to build a structure that would

block the sunlight from the house -HOLDING: When a landowner uses solar energy, and a new structure will unreasonably interfere with his use and enjoyment of his solar-powered property, the construction of the new structure can be enjoined under the theory of private nuisance -state law does not grant landowner absolute right to use; rights of neighboring landowners is relative -historically, right to sunlight limited by three policy concerns (now outdated): 1. Right of landowners to use their property as they wished, as long as they did not cause physical damage to a neighbor -counter: society has increasingly regulated the use of land for general welfare 2. Sunlight had minimal value (just aesthetic) and could be replaced by artificial light -counter: sunlight has new values (source of alternative energy) 3. Public has an interest in not impeding land development -counter: value of sunlight increased while need for easy development decreased -law of private nuisance can be used to protect both a landowner’s right of access to sunlight and another landowner’s rights to develop land because it recognizes changing social values and conditions -although obstruction of access to light might be found to constitute a nuisance in certain circumstances, this does not mean that it must be found to constitute nuisance under all circumstances. The result in each

case depends on whether the conduct complained of is unreasonable. -DISSENT: A nuisance is an invasion of another’s use or enjoyment of land. Blocking sunlight is not an invasion, since the building satisfies all zoning ordinances. P’s solar energy system is an unusually sensitive use, and those uses are not protected by nuisance law E. Right to Destroy (1) Scope is unclear (in practice, the law rarely intervenes to prevent destruction) difficulty arises when an owner seeks to destroy property that retains substantial value to society

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(2) Destruction of Animals – many courts have refused to enforce provisions in wills that direct the killing of animals (ex. Kneller : public policy forbids living owner from right to destroy her own healthy dog) (3) Eyerman v. Mercantile Trust Co. (1975) p. 82 — Limitations despite very clear intent to destroy -FACTS: Neighboring property owners seek injunction to stop demolition of house in wealthy community (deceased will called for demolition and sale of land) -HOLDING: The taking of property by inheritance/will is not an absolute right the state may foreclose the right absolutely and may say what becomes of the property of a person, when death forecloses the deceased’s right to control it. A testator may not impose conditions that are uncertain, unlawful, or opposed to public policy

-40k property $650 after demolition and sale (loss for the estate of deceased – destroying value) -neighboring property will depreciate by 10k (loss to the community) -historical value to neighborhood/community -vacant lot would likely give rise to uses that are detrimental to the neighborhood -there was an increased need for housing units (housing decline by 14% in area) -no reason given in the will destruction useless and wasteful -DISSENT: majority assumes deceased’s reasons are senseless/capricious majority lets sympathies interfere with recognized legal right to destroy -NOTES: -living person may “dispose of his money/property with fewer restraints than a decedent by will” -we don’t know the scope of the holding. (This is an unusual fact pattern) -decedent most likely got advice when drafting will (inference is the clause was not immaterial) -perhaps, you can destroy property when you are still alive because you live with consequences but you cannot destroy property when you die b/c you don’t have to live with consequences (timeline argument) -problem is no intent was given (counter: you shouldn’t have to explain yourself when your will is clear explaining yourself implies you have a limited right) (4) The Right to Destroy (Prof. Strahilevitz) -preventing destruction can create waste as well (ex. lock inefficient land uses into place) -rational people usually do not destroy valuable propertycourt should presume that if the person is rational than there is an underlying meaning for destruction (this forces the opponent of destruction to provide evidence to the contrary) (5) eminent domain: government has the power to take private property for public use upon just compensation -tool government can use to prevent right of owner to destroy -drawback = expensive

III. ADVERSE POSSESSION (Real Property) (1) Definition – if A occupies B’s land for a long enough period while meeting certain conditions, A acquires title to the land w/o B’s consent (2) Theories – adverse possessor has earned right + owner did not act reasonably by not kicking A.P. off land despite having ample time to do so (3) Elements of Adverse Possession – an occupant obtains title to land through A.P. if her possession is: 1. Actual – must physically use the land in the same manner that a reasonable owner would, given the land’s character, location, and owner 2. Exclusive – possession cannot be shared with the owner/public 3. Open & Notorious – obvious enough where if an owner made a reasonable inspection, he would be aware of the adverse claim (don’t have to necessarily see the adverse possessor) 4. Adverse & Hostile – possession authorized by owner does not qualify -View #1: met only if claimant believes in good faith he owned land -View #2: claimant must intend to take land/act in bad faith (rare) -View #3: state of mind is irrelevant (majority view/modern trend) element satisfied as long as owner

has not authorized the occupancy

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5. Continuous 6. For statutory period (established by statute whereas other elements arise from CL) ***all elements must be met (can’t balance the elements) ***key is to present the facts in an economical way that satisfies all the elements (4) Justifications 1. Prevent frivolous claims

-statute of limitations for recovering possession of land bars lawsuits on stale, unreliable evidence -provides occupant with security of title fosters productive use

2. Correcting title defects -technical mistakes often occur in process of conveying land AP solves such problems by protecting the title of the person who actually occupies the land (lengthy possession = proof of title) 3. Encouraging economic development -reallocates title from the idle owner to the industrious squatter 4. Protecting personhood -squatters develop personhood w. items they enjoyed and used for a long time (4) Tacking -tacking: adverse possession periods of two or more successive occupants may be added together to meet the statutory period required for A.P. (Occupier 1 must convey title to Occupier 2 and both occupants must satisfy elements) -Ex. if statute is 10 years and AP1 has maintained for 5 years, AP2 has 5 more years to go -requires privity (standard is different in different jurisdictions) -2 trespassers < grey area < obtaining deed (5) Extending Statutory Period (Disabilities) — period for A.P. may be extended for those owners who have a disability (imprisonment, minority, lack of mental capacity, military service, resides out of state, underage) -death ends all disabilities; disabilities cannot be tacked; and a disability NEVER shortens the standard period (if disability statute would suggest shorter period we revert back to the standard A.P. period) -it doesn’t matter if adverse possessor has a disability (we only consider the owner)

-we analyze adverse possessor in terms of the owner/facts AT TIME A.P. began (regardless of successive adverse

possessors) -AP’s actually entry point is when elements are at maximum strength -if owner has multiple disabilities, we use the longest running disability covered by the statute -disability create uncertainty discounts market price of blackacre (6) NOTES: -when given an A.P. problem, look at statute carefully cause they are different in each jurisdiction -in contrast to a trespasser, Adverse Possessor uses the land -adverse possession “runs outside the record” because adverse possessors do not need to “quiet title” -most of the time, when people are adverse possessors they are not aware that they are adverse possessors (adverse possession is a doctrine that allows them to cure the deal organically requiring them to “quiet title” would be problematic if they are unaware) -judicial action is not needed for an adverse possessor to obtain title -to ensure that public record shows that adverse possessor claimed title, it is common for claimant to bring a quiet title action (the court’s judgment recognizing title can be entered in the public record) -if the previous owner wants to avoid litigation, simply give deed to adverse possessor -the key when you are given minimal facts is to find where the ambiguity will change the outcome -policy counters: if court allows “De minis” acts to override A.P. they are essentially overriding the entire AP doctrine -AP not available against land owned by government (some jurisdictions allow it for land that has nonpublic use) (7) Gurwit v.Kannatzer (1990) p. 99— General application of Adverse Possession -FACTS: Previous owners took Gurwitz around and showed where boundaries are Gurwit took possession of property and held it for 20 years neighbor wanted it back

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-HOLDING: Gurwitz possessed and exercised dominion over the land as much as the character of that uncultivated tract allowed.

(1) actual – not necessary to occupy/use every foot of land at every minute (2) exclusive – they posted “no trespassing” and “no hunting signs” which indicated intent (3) open and notorious – Gurwit cut firewood, picked up trash, etc. in the sight of passerby (low standard) (4) adverse and hostile – they posted “no trespassing” and “no hunting signs” which indicated intent (5) continuous for a required period – as continuous as nature of property would admit (does not require continuous occupation/use 24/7) (8) Van Valkenburgh v. Lutz (1952) p. 105 Minority Approach A.P. (statute specific) -FACTS: For several years Lutz had traveled over land they did not own adjacent to their lot. Several years later, V.V. purchased that land through a foreclosure sale that Lutz was not aware of Lutz won suit for easement to cross the land V.V. sued Lutz to obtain possession TC found for Lutz (A.P.) -HOLDING: no clear and convincing proof reverse adverse possession judgment -the essential elements of proof are that the premises are 1. Protected by a substantial enclosure (here there is no proof) or 2. Usually cultivated or improved -proof fails to show that cultivation of the garden utilized the whole of the premises claimed -proof fails to show premises were improved -no “claim of title” (hostile possession) -Lutz prior easement suit implies he conceded that V.V.’s legal title conferred actual ownership -DISSENT: there are significant facts that the majority ignores -there is no requirement in either statute that proof of A.P. depends upon cultivation of the whole plot -cultivated nearly all the wild and overgrown lots (planted fruits/crops, cut timber, built one-room dwelling) ***not mentioned in case but NY requires the traditional CL elements be proven as well as statutory requirements ***color of title: deed, judgment, or another written document that is invalid (9) Fulkerson v. Van Buren (1998) p. 114 — A.P. w. intent requirement

-FACTS: Landowner of record sought ejectment of church congregation from church building located on his property church claimed it owned the property by A.P.

-HOLDING: congregation did not possess land adversely with requisite intent for seven years-testimony showed that the church congregation was unsure of the precise nature of its interest in the land and, moreover, recognized that the landowner owned the land

-NOTE: mindset requirement can be expanded/narrowed to increase/decrease adverse possession (10) Tioga Coal Co. v. Supermarkets General Corp. (1988) p. 120 — Modern trend to override intent requirement -FACTS: P controlled gate to private street that belonged to D TC found that P’s possession did not meet A.P. requirements b/c possession was not hostile/adverse to the true owner (P believed City owned the street when, in fact, D did) -HOLDING: if true owner has not ejected the interloper within the time allotted for an action, and all other elements of A.P. are met, hostility will be implied w/o analysis of intent (modern trend) -one reason courts reluctant to award A.P. w/o intent is that they are reluctant to award title to a known trespasser (“land pirate”) -but there are sound reasons not to consider intent -determining intent = guesswork at best -objective tests promote use of land against abandonment -Holmes: trespasser has put down roots we should not disturb (personhood theory) -NOTE: the effect is that more people can now quiet title (11) Howard v. Kunto (1970) p. 126 — Tacking & Continuity -FACTS: D’s house stood upon on an adjacent lot to the one his deed described P, whose deed dictated they owned the land upon which D’s house stood, commenced an action to quiet title TC denied D’s A.P. claim b/c failed show continuity of possession to permit tacking from predecessors -HOLDING: if person who is trying to seek A.P. can show privity (a close connection with previous owners in the transfer of the land) tacking is permitted to show possession of the land for the statutory period

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-Continuity: summer possession does not destroy continuous element we have to examine this element in terms of the nature of the property/surrounding owners (property was a beach home) -Tacking: successive purchasers who receive record title to tract A under the mistaken belief that they were acquiring tract B and where possession of tract B is transferred and occupied in a continuous manner for more than 10 years by successive occupants, have established sufficient privity of estate to permit taking and thus establish adverse possession (showed a close enough relationship). -privity req. was satisfied b/c D's claim of right as the last of successive purchasers who received title under the mistaken belief they acquired a contiguous track was sufficiently above that of a trespasser -in other words, court will allow them to tack if they believe they acted in good faith; if no good faith = trespass (here, it was good faith b/c they purchased deed; land was previously surveyed)

IV. ADVERSE POSSESSION OF CHATTEL (tangible movable property) (1) Common Law Rule: statute of limitations begins running at point of theft, as long as there is no concealment -like A.P. in re real property, focus is on whether the adverse possessor earned the property -concealment is introduced in re chattels b/c real property cannot be hidden/moved -Bryant’s problem with CL rule: thieves can acquire title through A.P. -counter: thief earns property through A.P. elements NOT from theft (where ownership would be automatic) -policy: eliminate stale claims (court more sensitive to market certainty than to owner’s rights) (2) Discovery Rule (Modern Trend): limitations period begins to run when reasonably owner should have discovered where the chattel is (requires owner to exercise due diligence) -no clear standard for diligence/no clear definition of who/what a reasonable owner will do -if owner stops being diligent then statute begins to run (b/c reasonable owner would have continued) (3) Demand and Refuse Rule: S of L is stalled until the owner demands the return of her property from a good faith purchaser and purchaser refuses -possible good faith purchaser exception: one who gives valuable consideration for an item w/o knowledge of adverse claims (beg the court to apply civ pro doctrine of laches b/c of unfairness) -law typically provides added protection for good faith purchasers (4) Other Rules A. NY rule demand and refuse, BUT… -excuses owners from being diligent (the rationale is that they are innocent and shouldn’t be burdened) -issue rises as to which owners we are protecting (good faith downstream owners are also harmed) -ex. Guggenheim art stolen art serendipitously found after many years w/o exercise of due diligence Lubel, however, was a good faith purchaser that purchased item through reputable dealer advice: standard

is demand and refuse but there is a compelling equitable reason to use discovery rule b/c they were so unreasonable about their diligence that it would substantially harm me/gross unfairness (civ pro doctrine of laches) B. UCC §2-403 rule -narrower than demand and refuse -usually between innocent owner and innocent purchaser -“void title” = no rights -“voidable title” = people that did nothing wrong but rights are limited (if someone with superior title comes along the title could be voided) (5) NOTES

-statutory period for chattel typically shorter than land (typically 2-6 years) -typically, tacking is still permitted in re chattel as long as there is privity between possessors -some courts argue it isn’t b/c: (1) each transfer w/o title constitutes a separate conversion or (2) increases the difficulty that the owner has in finding her property -thief cannot transfer valid title to a good faith purchaser unless the thief gains a new title by A.P. -A.P. can apply to intangible property

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(6) Reynolds v. Bagwell (1948) p.196 — Traditional CL approach to A.P. of chattels -FACTS: Violin stolen purchased by established dealer purchased by D for daughter -HOLDING: Adverse possession is legitimate b/c statutory period exhausted + no fraud/concealment -claim brought after 2 year statutory period -D bought violin from public dealer, kept it in plain sight, and daughter traveled with it -D removed the distinct varnish but after 3-4 years when statutory period already expired (7) O’Keefe v. Snyder (1980) p. 199 — Discovery rule -FACTS: P filed a complaint alleging she was the owner of 3 paintings that had been stolen from an art gallery; D

asserted he was a purchaser for value, had title by A.P. and P’s action was barred by a statutory period -HOLDING: SofL will begin when the owner should have through due diligence discovered facts that form the basis for a cause of action -the focus of analysis will shift from whether the possessor has met the element of A.P. whether the owner has acted with due diligence in pursuing the personal property -shifts burden of proof from possessor to prove A.P. elements owner who has to establish due diligence -effectif artist diligently seeks the recovery but cannot find it/discover possessor’s identity period does not begin to run -the meaning of “due diligence” depends on the value of the personal property and the nature of the circumstances -in determining whether P is entitled to the discovery rule the trial court should determine: (1) whether the P used due diligence at the time of theft (2) whether there was an effective method of for the P to alert the art world of the theft (3) whether registering the painting with an art organization would have put a reasonably prudent purchaser of art on constructive notice that someone other the possessor was the true owner

V. ESTATES AND FUTURE INTERESTS (1) Modern Freehold Estates (distinguished by how long each lasts) a. fee simple absolute + no future interest b. life estate + reversion (grantor) OR remainder (3rd party) c. fee tail + reversion in a fee simple absolute (grantor) d. fee simple defeasible -determinable + “possibility of reverter” -subject to a condition subsequent + “right of entry” (grantor) -subject to an executory interest + executory interest holder (third party) (2) Vocabulary: -intestate succession (no valid will): if a person dies intestate, his estate is distributed among the surviving spouse, parents, ancestors, and collaterals; if he has no living relatives, it escheats to the state -alienable: sold/given away during owners lifetime -devisable: transferred by will at death -descendible: intestate succession if owner dies w/o will distributed to heirs -pecking order: issue (children, grandchildren, etc.) + surviving spouse parent and their issue ancestors

+ collaterals (all other persons related by blood) escheat (state government) -disabling restraint: prevents the transferee from transferring her interest (automatically void but keep property) -forfeiture restraint: leads to a forfeiture of title if the transferee attempts to transfer her interest -jurisdiction favors this b/c of creditor’s interests (creditors won’t accept estate that has possibility of transferring to another party as collateral for loans) -promissory restraint: transferee promises not to transfer her interest -“provided that B agrees not to sell” (deed language) vs. “to B for her life as long as she doesn’t transfer and

if she does, then reversion” (grant language)

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-benefit of putting language in k (Deed) than grant is that deed allows for damages -waste doctrine: imposes duty on the life tenant to use the property in a manner that does not significantly injure the rights of the future interest holders -voluntary waste: affirmative act that significantly reduces value of property -permissive waste: failure to take reasonable care to protect estate -ameliorative waste: affirmative act that leads to a substantial change in the property and increases value (3) Fee Simple Absolute (“fee simple”) a. scope/duration: all rights (alienable, devisable, descendible) / infinite duration -a provision in a deed or will that expressly or effectively prohibits a future transfer of a fee simple is an invalid restraint on alienation b. language -“O grants…to B and his heirs” (NOTE: heirs do not actually receive an interest) -“O grants…to X its successor and assigns” (for corporations) c. modern rule: “…and his heirs” is no longer necessary presumption is that grantor intends to convey fee simple unless he uses words of limitations (this is the most marketable approach) d. Cole v. Steinlauf (1957) p. 312 — Common law rule: need “and his heirs” (no longer good law in CT) -FACTS: title search found a defect in title (found that deed stated “and assigns forever.” No mention of “heirs”) P refused to buy the property -HOLDING: P had grounds for refusing to accept deed b/c it was not clear whether D had authority to transfer the deed (P should not have been forced to take the risk of defending title later) -“and his assigns forever” vests only a life estate in the grantee -Per CT law it is necessary to include the word “heirs” -exception to the common law: the deed can be reformed to vest a fee simple where the intent of the parties can be conclusively established as intending to create a fee simple (4) Life Estate a. scope/duration: alienable only /duration exists for the life of the life tenant -cannot grant life estates to corporations (unless pur autre vie) b. pur autre vie: duration can be measured by the life of someone other than grantee (“to B, for the life of C”) c. tension between one who owns life estate and one who owns future interest (future interest holder is scared that property will be worthless in future) d. White v. Brown (1977) p.317 – Presumption of FSA is strong (holds up even when alienability is restricted) -FACTS: P alleged that P had a fee simple in testatrix’s house by terms of the will will stated that P was to have the home to live in and “not be sold” D claims that the P was merely given a life estate leaving the remainder to go to them TC found the will created only a life estate -HOLDING: presumption of FSA over life estate during ambiguous situations -we determine intent of testator via language of will in light of surrounding circumstances -presumption of FSA: unless the words and context clearly show intent to convey a life estate, the will should be read to assume a fee simple -COUNTER: “not to be sold” limits free alienability (basic characteristic of FSA) -NOTE: absolute restraints on alienability of fee simples is void b/c of public policy (partial restraints okay) -very powerful even implicit effects that have the same effect of restraints not allowed -partial restraints will be okay if for reasonable length AND reasonable purpose -court not as bothered as restraint on life estate (during lifetime) as they are with fee simple (forever) -blackacre will revert back to commerce e. Woodrick v. Wood (1994) p. 324 – Future interest holders cannot enjoin rights if results in ameliorative waste -FACTS: Will: Wife (Catherine) = life estate + future interest to Sheridan + Patricia Catherine + Sheridan

sought to raze the rotting barn but Patricia sued to enjoin them on the theory that it would amount to waste TC rejected Patricia’s argument, but awarded her the value of the barn, $3200 -HOLDING: acts that constitute waste under CL would not be enjoined if they improved property -at CL, anything that altered property = waste, regardless if it hurt or benefitted remainder interest -evidence that removal of barn would actually ENHANCE property value

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-TC awarded Patricia $3200 not to justify waste but to protect the rights of both parties -we usually don’t allowed life tenants/or tenants to capture this sentimental value (personhood) -generally rule is you get no damages unless you’ve been harmed -NOTE: grantor could put property in a trust to ensure all the future interest holder’s interests are sought after (otherwise we don’t usually have ability to protect future interest holders) (5) Fee Tail a. scope/duration: limited right of alienability (ex. B transfers to C. Once B dies, C’s interest still transfers to B’s bloodline) duration determined by the lives of the lineal descendants of a particular person (reversion to grantor when blood line runs out) b. language -“and the heirs of his body” -“the heirs of her body by X” Special fee tail restrict fee tail to only the descendants of the transferee who are parented by a particular person c. notes -rare—not valid in most jurisdiction (only available in DE, MA, ME, and RI) concerned that it would undercut democracy and impair freedom of alienation -disentailing the tail: holder converts estate into fee simple by an inter vivos transfer (gift) to another person -if fee tail created in a state in which it is not permitted, court assumes fee simple -“C and her children” = FSA not substitute for “C and the heirs of her body” (6) Fee Simple Defeasible a. Generally—estate that may end upon the occurrence of some future event (allows owner to control future) b. Fee simple determinable: fee simple that automatically ends when a certain event or condition occurs -scope/duration: freely alienable, devisable, and descendible / duration automatically ends upon condition -consider A.P. element of “open and notorious” when it automatically reverts -possibility of reverter can only be retained by the transferor (or his heirs) today, it is freely alienable, etc. c. Fee simple subject to a condition subsequent: fee simple that may be terminated at the election of the transferor when a certain condition or event occurs -scope/duration: freely alienable, devisable, and descendible (any transferee will be bound by condition) / potentially infinite -right of entry is alienable, devisable, and descendible -transferor can physically re-enter (self -help), give notice, or filing a quiet title action

d. Fee simple subject to an executory limitation: fee simple created in a transferee that is followed by a future interest in a another transferee (3rd party) -scope/duration: duration ends upon condition -present interest is alienable, devisable, and descendible -future interest is alienable, devisable, and descendible e. Mahrenholz v. County Board of School Trustees (1981) p. 333 — F.S.D. v. F.S.S.C.S. -FACTS: “this land to be used for school purposes only; otherwise to revert to Grantors herein” used for storage space grantor transferred reversionary interest to Jacqmains which transferred to P Grantor also transferred overlapping interest to School Board TC = F.S.S.C.S. (right of re-entry) -HOLDING: Use of the word “only” in granting clause regarding a condition establishes that a grantor intended to create a fee simple determinable rather than a fee simple subject to condition -if grantor had only a right of reentry for condition broken, then Grantor could not own the property until he had legally re-entered the land. -if the possibility of reverter existed, then he owned the land as soon as it ceased to be used for school purposes. -INTENT: The grantor used the word “only” indicates that the grantor wanted the land to be used for school purposes only for as long as it was needed and no longer. It suggests a limited grant, rather than a full grant subject to condition subsequent -NOTE: when language ambiguous, courts usually adopt fee simple subject to a condition subsequent b/c policy dislikes forfeitures of estates (affects marketability)

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f. Metropolitan Park v. Unknown Heirs of Rigney (1965) p. 340 — Adverse possession issues in re F.S.D. -FACTS: Rigney conveyed property to Tacoma Light Co. undisputed fee simple subject to a condition subsequent Tacoma Co. conveyed property to city which discontinued use as intended by deed Rigney failed to re-enter and claim property for several decades -HOLDING: -can the grantee acquire title by A.P. after breach of condition but before claim of forfeiture? NO -grantee remaining on land after breach of condition does not become adverse to possessory interest of the grantor until the grantor declares a forfeiture -NOTE: A.P. SofL would begin to run in a fee simple determinable as soon as condition breached -if not, does the lapse of an extensive period of time between breach of condition and claim of forfeiture waive the condition? YES, waiver doctrine -not economically efficient discourage productive use of land -unreasonable delay in owner leads possessor to detrimentally rely -NOTE: -there are 3 civ pro remedies (waiver, laches, estoppel) when black letter law is not fair -doctrine of waste does not apply to fee simple defeasible g. Modern Future Interests (future interests may not become possessory many are contingent or uncertain)

Future Interests (Transferor) Future Interest (Transferee)Reversion Indefeasibly vested remainder

Possibility of reverter Vested remainder subject to divestment

Right of Entry Vested remainder subject to open

Contingent remainder

Executory interest (spring/shifting)

(1) Future interests retained by transferor transferor conveys an estate to a 3rd party which is smaller than the estate transferor holds a. Reversion: transferor retains reversion when she conveys a smaller estate than the one she has -reversion is freely alienable, devisable, and descendible b. Possibility of Reverter: future interest retained by the transferor who holds a FSA, but conveys a fee simple determinable (automatic conversion) c. Right of Entry: future interest retained by transferor who holds a FSA, but conveys a fee simple subject to a condition subsequent -NOTE: right of re-entry does not become possessory until the holder takes affirmative steps (2) Future interest in a transferee -TIP: future interests have to be either a remainder OR an executory interest A. Remainder: future interest in a transferee that is: i. Capable of becoming possessory immediately upon the expiration of the prior estate; and ii. Does not divest (cut short) any interest in a prior transferee 1. indefeasibly vested remainder: a remainder is indefeasibly vested if: i. It is created in an ascertainable person (alive + identifiable at time of transfer); and ii. It is not subject to a condition precedent other than the natural termination of prior estate

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2. vested remainder subject to divestment (complete divestment): remainder that is vested but subject to a condition subsequent (interest has potential to be terminated) 3. vested remainder subject to open (partial divestment): vested remainder held by one or more living members of a group/class that may be enlarged in the future 4. contingent remainder: given to an unascertainable person OR subject to condition precedent -vested remainder subject to open AND contingent remainders can trigger RAP

B. Executory interest: future interest in a transferee that must divest another estate or interest to become possessory

1. springing executory interest: divests the transferor 2. shifting executory interest: divests the transferee (3) Note on Future Interests -can be used for personal property (ex. stocks and bonds)

-vested vs. contingent: in general, vested remainders treated as more substantial interest -executory interests are alienable, devisable, and descendible -future interests have relatively little value

VI. RULE AGAINST PERPETUITIES (1) Test – no future interest is good unless it must vest, if at all, no later than 21 years after some life in being at the creation of the interest -present possessory interests are already vested -vesting: point in which the title uncertainty is removed (vesting legal interest NOT vesting possession) (2) Purpose – increase the marketability of title by removing uncertainty in re future interests (3) Analysis of Rule – p. 365 a. “…unless it must vest, if at all”: interest must vest or forever fail to vest within the perpetuities period b. “…not later than 21 years after the life in being”: perpetuities period measured by adding 21 years to the date of the death of the last individual who was alive when the interest was created -don’t need to know who specifically will vest interest; we just need to know that we will know someone will vest interest -relevant lives: courts determined that any number of lives which were reasonably capable of being tracked could be used as lives under the rule -does not include corporations, partnerships or government entities c. “…at the creation of the interest”: -if it is inter vivos, the time = when the deed/grant is delivered + accepted (time when it is irretrievable by O) -if by will or death, the time = death of testator

d. rule proof: if there is any possibility that the interest might vest more than 21 years from the death of the relevant lives in being, the future interest is void when created (4) Application of Rule

-only applies to three types of interests: contingent remainders, executory interests, and vested remainders subject to open (even though the vested remainder subject to open is a type of vested remainder, it is considered contingent under the rule b/c individuals might be added to the class in the future) -use imagination if we can conceive any situation where the interest vests outside the perpetuities period, then the interest is void 1. Identify the contingent interest 2. List the lives in being

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3. Consider whether anyone can be born who might affect your vesting 4. Kill off the lives in being at some future date and add 21 years 5. Is there any possibility that the contingent interest will vest after this point?

6. Repeat for each interest (5) Jee v. Audley (1787) p. 366 — General Application of the rules against perpetuities

-FACTS: will left the interest to wife for use during her life and upon the wife’s death the interest to niece. If the niece were to die w/o children, the interest was to go to the daughters of the Jee’s P (daughters of Jee) filed an action to secure their benefit TC found P’s interest was too remote, as the interest was not confined to daughters living at the death of the testator and could extend to after-born daughters-HOLDING: early version of the rule the limitations of a personal estate are void, unless they vest, if at all, within a life or lives in being and 21 years and 10 months -the interest is void as it was not certain to vest within 21 years after the death of some life at the creation of the interest. -class gifts: class gifts are not valid to ANY members, unless it is valid to ALL members -here, gift invalid to the four living daughters b/c possibility that other class members (unborn daughters) might vest after 21 years -rule of convenience: a class closes when the prior estate ends and identified class members are entitled to possession

(6) R of P Reform: a. Wait and See – interest is void if it does not actually vest within “a life in being plus 21 years” (wait to see if the event actually happens) b. Uniform Statutory Rule Against Perpetuities (USRAP) – interest is valid if it satisfies the common law rule OR if it actually vests within 90 years after its creation c. Cy Pres – court re-writes the language of the conveyance so that the future interest no longer violates the common law rule in order to honor the transferor’s presumed original intent d. Future of the Rule some states have abolished the common law rule (7) Notes a. Savings Clause: prevents any potential violation of the rule by requiring that every interest must vest before the end of the applicable perpetuities period simple way to avoid RAP problems

b. unborn widow (spouse): widow has child with another man this child’s interest vests when new man dies possibility of vesting outside of the periodc. slothful executor: wills can be probated after the perpetuities period thus, voidd. fertile octogenarian: owner that conveys to his own children then to grandchildren, bears possibility that owner

may have additional children, which in turn would have grandchildren after period

VII. CONCURRENT OWNERSHIP AND MARITAL PROPERTY (1) Modern concurrent ownerships (each co-tenant has the right to use and possess the entire property): 1. Tenancy in Common 2. Joint Tenants 3. Tenants by the Entirety (2) Tenancy in Common: each tenant has an undivided, fractional interest in the property + right to use and possess the whole parcel a. scope: alienable, devisable, descendible b. “to A and B as tenants in common”

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(3) Joint Tenancy: each tenant has an undivided right to use and possess the whole property but each joint tenant also has the right of survivorship a. scope: alienable (however severs joint tenancy b/c breaks unities of time and title) -ex. A, B, and C = joint tenants. A transfers title to D. D has 1/3 interest as tenant in common with B + C. B + C, however, retain a joint tenancy with one another. D dies tenancy in common rights goes to D’s heirs. B dies interest transferred to C via right of survivorship (C has 2/3 interest) -ex. A + B = joint tenants. A transfers title to C B + C are tenants in common -any joint tenant can sever the joint tenancy destroying the right of survivorship and converting his interest into a tenancy in common b. right of survivorship: removes one parties interest upon death and transfers interest to remaining survivor c. “to A and B as joint tenants with right of survivorship and not tenants in common” d. CL requires all four unities otherwise, presumption is ‘tenancy in common’: 1. time: both joint tenants must acquire interest at the same time 2. title: both must acquire title by the same instrument 3. interest: both must have the same shares in the estate, equal in size and duration 4. possession: both must have equal right to possess use, and enjoy the whole property e. joint tenancy sometime used as a cheap substitute for drafting will f. secret severance – A secretly conveys his interest to himself, thereby severing the joint tenancy a few states require that deeds effecting severance be recorded in order to prevent the severing joint tenant from trying to claim sole title if he outlives the other joint tenant g. NOTE: owner cannot create a joint tenancy between himself and another b/c he already owns title (no unity of time/title) loophole is to use “straw person”: O conveys blackacre to C C conveys blackacre to O and B as joint tenants (courts are beginning to allow an O to convey joint tenancy w/o straw person) (4) Tenancy by the entirety: only married couples (held as one) each tenant has an undivided right to use and possess the whole property + right of survivorship + tax benefits a. scope: NOT alienable, devisable, or descendible b. adds an additional 5th unity of marriage c. unlike joint tenants, tenancy can only be ended upon death, divorce, or agreement between both parties d. allows couples to partially shield their assets from creditors (5) Creating the Tenancy -traditionally, the landlord is permitted to refuse to rent to anyone for any reason -modern statutes have limited this rule (ex. race, gender, or national origin) -Federal Fair Housing Act regulate the landlord’s right to exclude -it is unlawful to: a. Refuse to sell/rent on the basis of race, color, religion, sex, familial status, or national origin b. To discriminate against any person in the terms, conditions, or privileges of sale/rental on the basis of the above classes c. To make, print, or publish any statement/advertisement with respect to the sale/rental that indicates preference/discrimination based on above classes + handicap status f (1). To discriminate in the sale/rental based on handicap f (2). To discriminate against handicapped persons in the terms, conditions, or privileges of sale/rent f (3). Discrimination includes: A. refusal to permit reasonable accommodations at the expense of handicapped persons or B. refusal to make reasonable in rules, polices, practices or services when needed to afford such person equal opportunity to use and enjoy a dwelling

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(6) James v. Taylor (1998) p. 378 – Presumption of tenancy in common (presumption > grantor’s apparent intent) -FACTS: “jointly and severally, and unto their heirs, assigns and successors forever” the surviving grantee sought a declaration claiming grantor intended to convey joint tenancy descendants of the two deceased grantees argued that the deed created a tenancy in common -HOLDING: unless explicitly stated (or survivorship can be shown), presumption = tenancy in common -proof of right of survivorship can show joint tenancy -the court found that the use of the words "jointly and severally" did not create a joint tenancy -there was no mention in the deed of "survivorship." -NOTE: modern trend is to focus more on the grantor’s intent and less on formulaic language (7) Tenhet v. Boswell (1976) p. 382 – leases do not sever joint tenancy w/o explicit intent; upon death, leases invalid -FACTS: P and Johnson owned land as joint tenants Johnson leased the property to D Johnson died after the execution of the lease to D P sought her right of survivorship + demanded D vacate the property -HOLDING: joint tenancy will not be severed by a lease to a 3rd party w/o clear intent to sever -b/c joint tenancy created through explicit intent/language, a court will refuse to sever joint tenancy unless it is explicit that either tenant wanted to terminate the estate (don’t need the others consent to sever) -P and Johnson could have converted it to a tenancy in common by written agreement; jointly conveyed the property to a third person and divided the proceeds; or one of them could have conveyed his entire interest, which would have clearly indicated intent to terminate. -sole ownership of the property vests in P b/c of her right of survivorship. -in a joint tenancy, the interest of the deceased joint tenant ends at his death, so the lease of the joint tenancy property ends when the lessor dies. -during a joint tenant’s life, he may grant rights in the property without severing the tenancy, but when he dies, his interest dies with him, so any encumbrances he placed on the property becomes unenforceable against the surviving joint tenant. Otherwise, the benefits of the right of survivorship would be nullified. -NOTE: in re mortgages, joint tenancy depends on title theory or lien theory under title theory, mortgage severs

joint tenancy b/c it destroys the unities of time and title; under lien theory, joint tenancy is preserved (8) partition: judgment that ends co-tenancy and distributes assets (applies to tenancy in common AND joint tenancy) a. division of land held in co-tenancy into the cotenants’ respective fractional shares if land cannot be fairly divided (partition in kind), then the entire estate may be sold and the proceeds are appropriately divided (partition by sale) b. today, most courts allow agreements NOT to partition if it is reasonable in duration and purpose c. Ark Land Co. v. Harper (2004) p. 387 – Presumption is partition in-kind over partition by sale -FACTS: Harper owned land that was passed through the family over 1100 yearsArk Land, started buying up the property from each tenant and obtained 68% share of propertyArk sued for partition -HOLDING: court holds and makes a new rule that emotional attachment to a piece of property is a factor in deciding whether to force a sale for partition -fact that the corporation's proposed use of the property caused it to be worth more money did not control when deciding partitioned in kind vs. partitioned by a sale. -rather, the long ownership/emotional attachment should control when it is shown that there can be a partition in kind, regardless if there is some economic inconvenience to the party seeking sale -partition in sale can be extremely harsh for the party that doesn’t want to sell there is generally a presumption that the court should partition in kind

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-here, it would have cost millions for the coal company to partition in kind as they couldn’t mine However, economic interests are not the exclusive test and must be balanced with evidence of longstanding ownership/ emotional interests

-Ark took a gamble expecting them all to sell, and lost. -DISSENT: agrees that emotional interests should be a fact, but doesn’t believe they outweigh the economic interest present in these facts (family only used the land a couple times a year this was not enough to put many mine workers out of work and cost the company millions) -NOTE: partition in kind tends to fragment property rights could lead to the under-utilization of land (9) Esteves v. Esteves (2001) p. 394 – Each jurisdiction will supply default rules when parties do not have an agreement in re rights/duties -FACTS: Parents and son owned a house together and parents lived in the house, paying the mortgage and upkeep, but paid no rent to son for their occupancy. The parties sold the house and parents brought an action for the equitable division of the proceeds of the house TC held that parents were entitled to reimbursement from son for ½ of the sums they had paid, w/o any offset for the value of their occupancy. Son appealed -HOLDING: son is obligated to contribute ½ of the mortgage expended by parents. However, against that obligation, son was offset a credit for the reasonable value of the occupancy enjoyed by parents while they, and not their son, occupied the property the obligation to present evidence of that

value (normally represented by rental value of the property) rested on son. -Baird Principles: 1. In re sale of a commonly owned property, a cotenant that has paid less than his pro-rata share of operating/maintenance expenses must account to cotenant who has contributed more than his pro rata share (even if one was in possession and the other wasn’t) 2. All tenants in common have the right to occupy all of the property and if one chooses not to do so, that does not give him the right to impose an “occupancy” charge on the other 3. Fairness dictates that one seeking contribution (for mortgage/upkeep) allow a corresponding credit

for the value of his sole occupancy of the premises -NOTE: in re ousters (cotenant in possession refuses to allow other cotenant to occupy), ousting party is liable to the ousted party for the pro rata share of the rental value of the ousting party’s occupancy following ouster, ousting party becomes adverse possessor and statutory period beings to run (9) (10) Rent 1. Generally not owed to non-occupying co-tenant from occupying co-tenant -exception: ouster demand rent; partition; do nothing (AP clock runs) 2. Rent from 3rd parties is generally shared (11) Types of Improvements: 1. “Invisible” Improvement (owner believes it should increase value; purchasers think they should come standard) 2. High-end Upgrades -NOTE: purchasers might not like improvements + improvements can highlight non-improved areas 3. Expensive Landscaping (improvement depends on specific purchasers and circumstances) 4. Swimming Pools (beneficial to property in the right neighborhood but generally it decreases value) 5. Overbuilding for Neighborhood (people will not pay for a property that is substantially more expensive than the

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average home price of the surrounding market) 6. Wall-to-wall Carpeting (12) HYPO: A adds swimming pool for 25k -three jurisdictions: 1. no credit/no penalty everyone shares profit/losses 2. A increased value by 50k; house nets 150k but would have sold for 100k w/o pool -A gets 50k (for increased value) + 50k (half value of house w/o pool) = 100k -B gets 50k -downside risk example: decreased value by 50k (would have been 200k) A gets 50k; B gets 100k 3. Hybrid (a) increase value: A must share A and B get 75k (b) decrease value: A bears whole risk (13) NOTES: A.P. typically not available b/c both parties have right to the property (need clear exclusion)

VIII. TITLE OPINION BASED ON SEARCH OF PUBLIC RECORDS (1) Recording System -seeks to protect the subsequent bona fide purchaser and thereby create a reliable property market -anyone holding an estate or interest may record instruments to give notice to the public -common law principle of first-in-time controls unless the subsequent purchaser qualifies for protection under the state’s recording statute -presumption #1: buyer should now look at records before purchase buyer will be charged with “notice of the recorded deed” -NOTE: Adverse Possession will not be found in records b/c runs outside of title -presumption #2: subsequent bona fide purchasers (have no reason to know of an unrecorded title) are given preference if they record their title before unrecorded title holder comes forward -Drawbacks: 1. Do not conclusively establish title 2. Even purchasers who diligently search the record may lose title due to unrecorded interests (2) How to Search Title A. Locate the recorded documents that affect title -grantor/grantee index: organized by names of the parties 1. Establish chain of title 2. Work backwards using grantee index to find previous grantees 3. Loop back using grantor index to see if they are consistent -tract index: organized by parcel involved B. Evaluate their legal significance (3) Luthi v. Evans (1978) p.607 – even if document is recorded, it may not give constructive notice to a searcher -FACTS: Owens executed an assignment of interest to International Tours assignment was recorded as Mother

Hubbard clause (too general) 4 years later, Owens executed 2nd assignment to Burris Neither Burris’ personal inspection nor title reflected the first assignment Tours contends the general clause of his assignment conveyed every lease in Owen’s possession; Burris claims that although it may have been a valid transfer between 2 of them, it failed to give constructive notice to subsequent purchasers -HOLDING: an innocent subsequent purchaser w/o constructive notice as to the rights of an initial purchaser will have rights to the land superior to those of the initial purchaser.

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-the subsequent purchaser did not receive constructive notice -to give the subsequent purchaser constructive notice, the instrument needs to describe the land with sufficient specificity so that the land can be identified. -NOTE: “Mother Hubbard” clause is a clause, which intends to convey specific tracts of land, but does so using very general language (usually in the interest of time when grantor is at death bed). court ruled that it would recognize this clause if the grantee takes steps to properly record using additional documents if necessary so that other subsequent purchasers will have notice.

(4) Recording Acts—only applies to subsequent purchasers 1. first in time rule: the person whose interest was created first prevails (CL default standard) -bona fide purchaser exception: special protection for bona fide purchaser -policy: efficient property market demands buyers have confidence they receive good title 2. Race: subsequent purchaser who records first has priority over previously-created interest if records first -this applies even if subsequent purchaser has knowledge of previous interest (inherently unfair) 3. Notice: subsequent bona fide purchaser has priority if he takes w/o notice of prior interest 4. Race-Notice: the subsequent bona fide purchaser who records first and takes w/o notice has priority -in notice and race-notice states, the purchaser must have no actual, record, or inquiry notice of the prior interest **note: recording act statutes protects purchasers for value, NOT donees (gift recipients) purchasers for value need to offer proportional consideration for property (ex. $1 for $500k property is not proportional) (5) Messersmith v. Smith (1953) p. 617 – No constructive notice b/c deed was improperly recorded -FACTS: C conveys quitclaim deed to F C conveys mineral deed to Smith Smith conveys to Seale Smith records his deed but this deed was not properly acknowledged Seale records his deed from Smith F records his deed from CF filed suit to quiet title to the land -HOLDING: the recording of an instrument affecting the title to real estate that does not meet the statutory requirements of the recording laws, does not give constructive notice. -the deed that Seale relied upon was defective and thus could not give notice and is invalid -a deed must be acknowledged to constitute acknowledgment, the grantor must appear before the officer for

the purpose of acknowledging the instrument and make an admission to the officer of the fact that he had executed such instrument -NOTES: -forged deeds are void (even subsequent bona fide purchasers receive no interest) -deed induced by fraud is voidable by the grantor; but if the grantee proceeds to convey title to a bona fide purchaser, the subsequent purchaser prevails -shelter rule: bona fide purchaser is allowed to transfer his protection to a later grantee even if later grantee is

not a bona fide purchaser (will not work in a malevolent way) (6) Title Registration (Alternative Approach) -government assumes the role of title assurer by maintaining an authoritative registry of title purchaser simply examines the registered title -ex. Torrens System -initially ownership of each parcel would be litigatedowners granted certificates -owner can transfer interest only by registering title to recipient -unregistered interests are invalid -Failed for 3 reasons:

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1. Not mandatory 2. Initial judicial determination of title was expensive 3. Undercut by statutory and judicial exceptions (7) Chain of Title Problems -the following do not provide notice in jurisdictions that require a normal title search: a. Wild Deed – not in the chain -ex. S to B (does not record) B to C (wild deed) C records S to D D records -result: D will not discover C’s interest w/o unreasonable burden; B—C deed improperly recorded does not provide notice D owns property b. Deed Recorded Too Late -- in the chain -ex. S to B (does not record) S to C (who has actual knowledge of B) C records B recordsC conveys to D D records -result: D will not discover B’s recordation b/c it occurs later than in the chain that he is reasonably expected to look (just needs to look up to S—C recording) thus does not provide notice D owns property -NOTE: some jurisdictions require a more extensive search (require to D to look under each grantor’s name from the time grantor received title until present; here D would find S—B deed) c. Deed Recorded Too Early -- in the chain -ex. S owns greenacre B conveys to C C records S conveys to B B recordsB conveys to DD records -result: D will not discover C’s interest b/c he will look at recorded S—B, then will check under B’s name

from the time B received title (C’s interest occurs before this) D owns property -NOTE: some jurisdictions require searcher to each grantor’s name for every year the grantor is alive (D would look at B’s chain not just when B received title but for whole life and would find B—C deed) d. Deed From A Common Grantor -ex. S owns greenacre and forestacre S conveys greenacre to B, granting and easement to cross forestacre to access greenacre B records S conveys forestacre to C (unaware of easement) C records -result: C will look at S’s chain from time S received title until present but b/c C is only purchasing forestacre, he will only look at those conveyances C would not discover B’s easement C owns easement -NOTE: some jurisdictions require C to inspect all of common grantor’s properties that are deeded out (8) Board of Ed. Of Minneapolis v. Hughes (1912) p. 629 – wild deed -FACTS: The Hoergers first owned the property in question. D sent a check for the price of land to the Hoergers along with a deed to be signed by them with the name of the grantee left blank. The Hoergers signed the

deed w/o filling in the grantee name and sent it back to D via mail. D recorded 12/11/1910 prior to D’s recording, real estate brokers approached the Hoergers and obtained a warranty deed to the same land and recorded their interest 12/21/1910 Real estate brokers conveyed interest to P who recorded real estate broker’s deed to P (1/27/1910) P filed suit TC found for the P

-HOLDING: It was necessary not only that Broker–P deed be recorded, but that the deed to Hoergers—Broker should first be recorded (race-notice jurisdiction) -Did the deed from the Hoergers to D become operative?

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-deed that does not name a grantee is a nullity and wholly inoperative until the name of the grantee is legally inserted D’s deed became operative when he inserted his name -D was the subsequent purchaser in good faith and is protected by the recording of his deed before the prior deed was recorded (became a purchaser when he inserted his name) -the deed of the first grantee must be recorded before the deed to a subsequent grantee is recorded real estate brokers should have recorded their deed to the lot before conveying the lot to P. B/c they failed to do this, the chain of title was flawed and although D had purchased the land first, under the recording laws, D became the subsequent purchaser for value and was protected by the recording laws -Although P recorded before D, the recorded Broker–P deed was a wild deed -NOTE: if a deed is not properly recorded, it is considered not recorded therefore, does not provide notice and does not count as being “recorded” before subsequent proper recordings -Zimmer rule: a subsequent purchaser is deemed to have ‘recorded’ his conveyance only if all prior conveyances

in his chain of title are properly recorded (no wild deeds) -the bona fide subsequent purchaser only needs to 'close the chain' -so he should make sure the person he bought from should record

(9) Notice a. actual notice: knowledge of a prior interest b. record notice: notice of prior interest that would be discovered by a search of the public land records c. inquiry notice: notice of prior interest that would have been found by investigating suspicious circumstances -NOTE: potentially expands buyer’s search to “off-record” matters which increases costs, imposes delays, and increases litigation d. record notice and inquiry notice are considered “constructive notice” e. when “good faith” is mentioned in the statute, takes cares of all three types of notice 10 Raub v. General Income (1970) p. 634 -FACTS: Both P and D were victims of fraud by General Income (GI convinced P to execute and deliver to the company a warranty deed to her home in return for company stock. P would remain on the property as a

tenant paying rent. D’s took mortgages on this property from GI) -HOLDING: the mortgagees were entitled to enforce their mortgage liens b/c they were bona fide purchasers -a bona fide purchaser was one who took a conveyance of real estate in good faith from the legal title holder, paying a valuable consideration for it without notice of outstanding equities -both mortgages were taken from the legal title holder, and each mortgagee paid valuable consideration for its

mortgage + there was nothing about the mortgage transactions to arouse the mortgagees' suspicions as to the conditions under which the mortgagor's title had been obtained. -P's possession of the property did not impart notice to the mortgagees of her claim b/c possession here was by the grantor of a recorded deed (even if D’s investigated, they would have found GI had proper title and P was simply a tenant w/o possession) -NOTE: expansive inquiry notice that may have given D’s notice of fraud is extremely expensive creates risk in the market

IX. PRIVATE LAND USE PLANNING (1) Generally – land use was primarily a private matter and landowners were free to use their property as they wished

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at times this caused conflict with “encouraging the productive use of land” (2) Solutions a. Easements: provide nonpossessory right to use the land of another person b. Land Use Restrictions -real covenants: promise concerning the use of land that benefits and burdens the original parties to the promise and their successors (remedy is damages) -equitable servitude: also a promise concerning the use of land that benefits and burdens the original parties to

the promise and their successors (remedy is injunction) c. Nuisance Law: resolves the rare situation where one owner’s use seriously interferes w/ another owner’s use (3) Easements a. Generally -dominant tenement/land: the land benefited by easement -servient tenement/land: the property burdened by easement -appurtenant easements: benefits the dominant estate (benefit runs with land) -b/c appurtenant easements are attached to land, the transfer of dominant land automatically transfers the benefit of the easement to the grantee -easement in gross: benefit is connected to owner rather than estate -not transferrable generally, ends when owner ends

-some jurisdictions, it is only transferrable if it serves commercial purposes -modern trend is to allow the transfer unless the parties had a contrary intent -NOTE: appurtenant easements are favored b/c it is hard to decipher who is the heir in interest to easement in gross -affirmative easement: allows holder to perform an act on the servient land -negative easement: allows holder to prevent servient owner from performing an act on servient land -ex. conservation easement (cheaper than fee simple title) -when land is transferred, easement remains attached to land unless the grantee is a bona fide purchaser -NOTE: distinguishable from real covenants (real covenant = k that runs with land binds landholders either to do something/refrain from something) b. Types of Easements i. express easement -express easement by grant: arises when the servient owner grants an easement to the dominant owner -express easement by reservation: arises when the dominant owner grants the servient land to the servient owner, but owner (or 3rd party) reserves easement over land ii. implied easement by prior existing use iii. easement by necessity iv. prescriptive easement v. easement by estoppel (irrevocable easement) ***the express easement arises only with the agreement of the owner; the other four are imposed as a matter of law w/o owner’s agreement c. Creating Easements -an express easement may be created only in writing and satisfies the statute of frauds 1. Identify the parties 2. Describe the servient land and the dominant land (if any) 3. Describe the exact location of the easement on the servient land

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4. State the purposes for which the easement may be used -easements may also be created from prior use, necessity, prescription, and estoppel d. Modifying Easements 1. In general, the scope of an express easement depends on the intention of the parties. The manner, frequency, and intensity of the use of an easement may change over time as technology evolves 2. Intensifying a permitted use Restatement allows intensity of easement to change overtime to accommodate the normal development of the dominant estate 3. Relocating an easement CL approach allows relocation only if both parties agree; Restatement allows servient owner to relocate easement as long as it does not largely increase the burden to easement holder or frustrate easement’s purpose 4. Using and easement to benefit other land No, unless servient owner agrees e. Millbrook Hunt v. Smith (1998) p. 655 – Express Easements vs. Licenses (easement irrevocable license revocable license) -FACTS: landowner's predecessor entered into agreement with hunters that allowed them to use the land to hunt. Current landowner ejected hunters from the property hunters argue it had easement; Smith argued that agreement was a revocable license which he revoked -HOLDING: agreement was an easement 1. must look at nature of agreement and not title -easement implies an interest in land ordinarily created by a grant and is permanent -license does not imply interest in land, rather it is an informal permission to use land 2. b/c of intent, the agreement was not a revocable lease, as claimed by the landowner -hunters leased land for a period of 75 years and clearly reserved an absolute right to hunt -an essential feature of the type of easement involved, which distinguishes it from a license, is that the

interest is for some definite period -Thus, the hunters had an easement in the land, and the landowner did not have the right to completely exclude it from the property 3. the landowner had both actual and constructive notice of the easement before he bought the land and was estopped from denying its existence Smith not a bona fide purchaser -NOTE: we might view agreement not as an easement but as a profit (right to enter land of another to remove

minerals, gravel, timber, game, or other natural resources) f. Van Sandt v. Royster (1938) p. 658 – Easement implied by prior use -FACTS: P and D own adjacent lots Both lots were part of the adjacent estate which was owned by Bailey and is now owned by Gray. Bailey constructed the pipe for the common benefit of all three lots problem arose when sewage backed up into P’s basement; D refused to cease draining sewage across P’s land P: no easement was ever created, and if one was created, he took the land as bona

fide purchaser; D: easement created by implied prior use -HOLDING: easement is implied to protect the probable expectations of grantor/grantee that a prior existing use will continue after the transfer where the grantee is aware of a reasonably necessary use for the comfortable enjoyment of the grantor’s property an easement by implication is created. 1. An easement by implication was created -when an owner utilized part of his land for the benefit of another part, a quasi easement existed if owner then conveys the quasi dominant tenement, an easement corresponding to the quasi

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easement is vested in the grantee, provided that it was of an apparent continuous and necessary character *cannot create an easement on your own property *termination doctrine: if you own dominant tenement and then you purchase servient tenement the easement goes away (termination by merger) -easement was necessary for the comfortable enjoyment of the property (the common owner, installed the plumbing for the benefit of all three lots). If land cannot be used w/o disproportionate effort/expense, easement may still be implied on the basis of necessity 2. P purchased property upon careful inspection and knowledge that the property had modern plumbing P was charged with notice of the sewermodern trend is to charge subsequent buyers notice of underground utilities *this is a very expansive version of inquiry notice (assume you would have asked the right questions and would have found the right answers)

-NOTE: 3 elements required for an implied easement by prior existing use 1. Severance of title to land held in common ownership 2. An existing, apparent, and continuous use of one parcel for the benefit of another at the time of severance 3. Reasonable necessity for that use (easement must be beneficial or convenient for the use of the dominant tenement, but need not be essential) -NOTE: R.3d Approach 1. Severance of title 2. Existing use of one parcel for the benefit of another 3. Reasonable grounds to expect that the conveyance would not terminate the right to continue the prior use g. Berge v. State of Vermont (2006) p. 665 –Easement by necessity (landlocked) -FACTS: owner conveyed land to VE but reserved a lotdeed reserved no express easement for access to the

excluded area across the land that was conveyedowner later conveyed the excluded area to developers (deed again contained no reference to any easement)buyer purchased two lots in the excluded area. He accessed his property by car over a gravel road that crossed the wildlife area (he owned a boat but did not use it to access property)State placed a gate across the access road and deprived buyer of overland access to his propertylandlocked: no legal right to access property from a public roadTC rejects easement-by-necessity claim -HOLDING: TC’s holding was based on the erroneous conclusion that water access defeated the buyer's easement-by-necessity claim Thus, TC erred in awarding summary judgment to the State w/o addressing additional elements of the easement-by-necessity claim. -CL: when, as a result of the division and sale of commonly owned land, one parcel is left w/o access to a public road, the grantee of the landlocked parcel is entitled to a way of necessity over the land easement remains in effect as long as the necessity exists -court defines “necessity” as “lack of reasonably practical access” -since easement by necessity is based on encouraging land use, its scope ought to be sufficient for the dominant owner to have the reasonable enjoyment of his land for all lawful purposes. -w/o use of the road, landowner would have no reasonably consistent, practical means of access for the reasonable enjoyment of his land. -access by water, while adequate at one time, is generally not sufficient to make reasonably effective use

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of property, and land access will almost always be necessary, even though water access is available -DISSENT: doesn’t believe there is a bright line between water and road accesspublic’s interest in access to

landlocked property must be balanced against granting landowner an uncompensated interest in his neighbor’s property -NOTE: A Closer Look at Easements by Necessity a. justifications for easements by necessity 1. implied intent of parties 2. policy favoring land use b. easement by necessity requirements 1. severance of title to land held in common ownership; and 2. strict necessity for the easement at the time of severance (strict necessity found only when the owner has no legal right of access to her land); OR 3. minority of courts require reasonable necessity (easement must be beneficial or convenient for the

use of the dominant parcel but not necessary) c. scope and duration easement by necessity only applies in one situation: road access to a landlocked parcel + lasts only as long as necessity continues d. location of easement owner of the servient land is entitled to select route for an easement by necessity as long as it is reasonable h. O’Dell v. Stegall (2010) p. 671 – Prescriptive Easement (obtain easement through continuous use) -FACTS: this case concerned a private, 25-foot-wide gravel lane that bordered on the northern edges of both D's property and P's property. D did not own the gravel lane, but it was their only access to a public highway P claims it has a prescriptive easement; D contends this and argues it will diminish value of property that it has to maintain TC found for P -HOLDING: No prescriptive easement b/c P failed to prove adverse use 1. Adverse Possession vs. Prescriptive Easement -adverse possession claimant possess the disputed land, whereas one seeking a prescriptive easement makes some limited use of the disputed land 2. Elements of Prescriptive Easements a. open & notorious b. adverse and hostile c. continuous d. for the statutory period -NOTE: does not have exclusion criteria like adverse possession 3. Adverse Use: the use of property as the owner himself would exercise, entirely disregarding the claims of others (no permission) must prove that owner could have prevented use 4. Burden is on party seeking prescriptive easement to prove adverse use -here, church evidence was not effective b/c did not show use was adverse (failed to show D owned the land) -further, no evidence that churchgoer use was w/o permission 5. Easements by prescription are not favored b/c they reward trespassers -NOTE: most commentators believe prescriptive easements promote efficient use of land -tacking may be used to satisfy prescriptive period if there is privity between successive users i. Kienzle v. Myers (2006) p. 679 – Easement by Estoppel

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-FACTS: adjoining property owners were required by law to connect to the public sewer systemAppellants'

predecessor installed her sewer through a connection to appellee's predecessor's property, based on an agreement between the owners appellee informed appellants that he was terminating the "revocable license" Appellee sued to quiet title with respect to the "encroachment" TC granted

summary judgment to appellee, rejected appellants' assertion of an easement, and granted damages to appellee for the "cost of capping the sewer line." -HOLDING: TC erred in finding that an easement by estoppel did not exist -easement by estoppel created when an owner misleads/causes another to change the other’s position to his or her prejudice -as appellants' predecessor had changed her position in reliance on the sewer pipe arrangement, any change would disadvantage appellants -easement by estoppel required elements: 1. A landowner allows another to use his land, thus creating a license (can arise by implication) 2. The licensee relies in good faith on the license, usually by making physical improvements or incurring significant costs; and 3. The licensor knows or reasonably should expect such reliance will occur -NOTE: in most jurisdictions, easements by estoppel = irrevocable license j. Marcus Cable v. Krohn (2002) p. 685 – Interpreting easement language -FACTS: property owners brought action against cable company for trespass and negligence (the owners' predecessors granted to an easement that allowed the cable company to use the property to maintain

an “electric transmission or distribution line” -HOLDING: if a use does not serve the easement's express purpose, it becomes an unauthorized presence on the land whether or not it results in any noticeable burden to the servient estate. -express easement encompasses only those technological developments that further the particular purpose

for which the easement was granted -a potential purchaser must be able to rely on the granting language/those who grant easements should be assured that their conveyances will not be construed to undermine private property rights -the manner, frequency, and intensity of an easement's use may change over time to accommodate technological development, but such changes must fall within the purposes for which the easement was created, as determined by the grant's terms (Restatement) -DISSENT: cable television falls within literal meaning of the easement -NOTE: court considers who gets to capture the value added? (easement holder or the servient land owner) k. Terminating Easements 1. Abandonment: easement ends if nonuse + present intent of dominant owner to relinquish OR purpose inconsistent w/ its future existence (need to take clear affirmative steps or use dominant land that indicates intent to abandon) 2. Prescription: servient owner blocks use of easement in open and notorious, adverse & hostile, and continuous many for prescriptive period 3. Condemnation: condemnation of servient land terminates easement holder entitled to compensation 4. Estoppel: easement ends when servient owner substantially changes his position in reasonable reliance on the holder’s statement that the easement will not be used in the future

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5. Merger: easement ends if one person obtains title to both the easement and the servient land 6. Misuse: if holder seriously misuses easement, it may be ended via forfeiture 7. Release: easement holder may release easement by writing that conforms to Statute of Frauds l. Preseault v. U.S. (1996) p. 693 –Terminating Easements -FACTS: Railroad Co. opened its line but stopped service Congress enacted Act which converted unused rails into recreation trails portion of the old line was converted 2 servient owners claimed that the railroad’s easement had been abandoned and sued for damages on takings theory -HOLDING: recreational trail was not within the scope of an existing easement for railroad purposes thus, the conversion was a taking of a new easement for a new purpose, for which the landowners are entitled compensation In addition, since the easement was abandoned, the opening of the public recreational trails was also a physical taking of the P’s property rights 1. Did the Railroad acquire only an easement or a fee simple? Just easement -if FSA, then state could do as it wanted with the property -if easementwithin the scope? Yes (State wins) abandoned? Yes (P wins); No (State wins) No (P wins) prescription? Yes (State wins); No ill (P wins)

2. Was the easement limited to railroad purposes only or was it broad enough to encompass future use as public recreational trails? Limited to railroad purposes -while a recreational trail can be described as a “roadway for the transportation of persons,” the nature

and usage of recreational trail is clearly different than commercial railroad 3. Had the easements terminated by abandonment prior to the ‘taking’ for public recreational trail use?

-if abandoned, state could not resurrect easement w/o just compensation -under abandonment, owner of the servient estate is relieved of burden -abandonment = nonuse + present intent of dominant owner to relinquish OR purpose inconsistent w/ its future existence -removal of the tracks was inconsistent with future existence and no attempts made to reconstruct -NOTE: the scope issue is very ambiguous and could just as easily been argued the opposite way (see Chevy Chase, p. 698) -can use prescriptions to create, expand, and terminate property rights -RR Co. could avoid abandonment by continuing to maintain tracks (this would be costly advice: if RR Co.

unsure they want to maintain rails, they should at least try to make some money by selling the property) -to protect against prescription, you must monitor the area (this will also incur costs) -some jurisdictions allow you to put up clear signs to defeat abandonment

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(4) Land Use Restrictions

Real Covenant Equitable Servitude

Burden to run

Benefit to run Burden to run Benefit to run

Statute of Frauds O O O (or implied from a common plan)

O (or common plan)

Intent to bind O O O O

Touch and Concern O O O O

Notice O X O X

Horizontal Privity O X X X

Vertical Privity O O X X

A. Real Covenant: a promise (k) concerning the use of land that (1) benefits and burdens both the original parties to the promise and their successors (“runs with the land”); and (2) is enforceable in an action for damages a. Generally -a real covenant seeks monetary damages (w/o monetary damages = equitable servitudes) -an easement is a right to go on someone else’s land; a real covenant is a promise concerning use of own land -could be characterized as negative easement of four traditional channels of air/light/water/subsidence -damages and equitable relief possible b. elements of real covenants: 1. Compliance with statute of frauds – put key features in writing (including property description) 2. Intent to bind successors – can be explicit (“successors and assigns”; “runs with the land”) or inferred

(see Deep Water) 3. Touch & Concern – must relate to the enjoyment, occupation, or use of the property. If not T&C, never ran in the first place. Reasonableness of intent to bind successors i. Burden -use restrictions, K not to compete, payment to HOA satisfy T&C ii. Benefit -right of developers to build on land is a benefit in gross. Does not T&C any property retained by the developer, only a commercial advantage in operation of his business (ex. construction, management k’s) -water supply k may T&C if water was to come solely from identified land Now, moved away from literal meaning; Payment of money to create something that T&C R3d: T&C if not violative of public policy. Violates public policy if:

(1) arbitrary, spiteful, or capricious (2) unreasonably burdens a fundamental constitutional right (3) imposes an unreasonable restraint on alienation (4) imposes an unreasonable restraint on trade or competition OR (5) is unconscionable.

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Even if no T&C, can run for a while at the beginning, but may become against policy (burden > benefit), e.g. Eagle Enterprises: at CL, water supply never T&C (but if water supply still had

benefit, e.g. brought suit the next day, may have said T&C). R3d: won’t shut off the water supply if there is still utility. More realistic decision. 4. Notice – required only for BURDEN to run, not benefit. Assume original party will inform successor of benefit (seller feature) -actual, record, inquiry notice -BUT one who acquires interest by gift is not a bona fide purchaser, so bound even w/o notice

5. Horizontal Privity – concerns relationship between original parties to the promise -mutual interests, ex. landlord-tenant, cotenant, common grantor -successive interests, ex. grantor-grantee, conveying fee simple , lease, or easement -no requirement, easily circumvented by a “straw” transaction; some states have abolished HP requirement -not a requirement for equitable servitude 6. Vertical Privity – successor succeeds the ENTIRE estate (ex. FSA FSA, even if partitioned) -in some jurisidictions, strict VP is required only for BURDEN to run (unlike Deep Water) -for BENEFIT to run, only need possessory interest (physical use, possession) -R.3d: if occupier must trim trees, shouldn’t the tenant be answerable? Look below the surface -no privity of any kind of AP

c. Deep Water Brewing v. Fairway Resources (2009) p. 705 (this case is an outlier) -FACTS: owners' predecessor granted the developer a right-of-way in exchange for money and the promise to restrict the height of houses so as not to impair the view of a lakeTC concluded that the developer breached agreement -HOLDING: owners were entitled to enforce the height restriction covenant as one that ran with the land -SOF: in writing but no legal description of property. Homeowners took w/o notice, so must sue Developer, who doesn’t own the land (still owns some). Switch to monetary damages claim.

-Intent to bind successors: hard to read b/c Alquists thought Developer was going to build, so didn’t try to bind successors. But Kenagys probably paid for benefit. Also T&C implies intent. -T&C: satisfied. What you can actually do on the property -Notice: not required b/c directly suing Developer -HP: successive interest, easement was given in exchange. -VP: added Kenagys to suit. Would not have satisfied if only Deep Water. -NOTE: if homeowners had notice, could have suied for injunction on an equitable argument court would likely force transaction by ordering injunction (lower height) d. open ended covenant to pay money i. Neponsit -FACTS: Neponsit Realty developed a common interest community with covenant to pay dues (for roads, sewers, etc) to a HOA to be formed later. Bank foreclosed D’s home, refused to pay D’s unpaid dues. -HOLDING: HOA can enforce covenant against D -VP: HOA is made up of property owners, even though HOA itself doesn’t own land. HOA meets

VP req (otherwise HOA would have had to keep small land for itself).

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-T&C: paying money to HOA so that it can hire people to maintain land this is the same as HOA doing the actual maintenance. ii. Eagle Enterprises – moving in the direction of R3d (unconscionability, arbitrariness)

-FACTS: Covenant that Orchard Hill would supply water to Baum, and Baum would pay $35/year. Orchard HillEagle Enterprises; BaumGross. Gross builds his own well and doesn’t want to pay for the water.

-HOLDING: Water supply agreement does NOT T&C land. -land will not be waterless just because EE doesn’t supply. Other homeowners won’t be harmed. -EE argument: we spread out the infra development costs over time. -Ct: There is no end to agreement, goes on in perpetuity. Undue burden, less marketable. -this is a benefit in gross. Can dig own well

-NOTE: EE argument could have been that if supplying water was seen as a burden, court would not have let EE stop. Asymmetry in T&C argument. e. covenant not to sue i. Lakeview Blvd -FACTS: city conveyed to developer, allowed to build on land with landslide risk, provided developer would not to sue. P took with notice. -HOLDING: T&C met b/c covenant was specifically about landslide risk and P was an informed downstream purchaser with full notice. -NOTE: court not convinced by public policy args. Formal T&C (building), buyer beware. f. covenant not to compete i. Davidson -FACTS: P sold property to merchant with covenant not to operate supermarket. Merchant sold to City, which had notice but leased to a supermarket.

-HOLDING: covenant did not run as it adversely impacts public interest (not violative on its face) -hardships on citizens who lost opportunity to purchase food at close location -court points to NJ Urban Enterprise Zone Act (poverty) as basis for public policy claim -this is an odd result, context based (these specific factors, although rejected this approach in Nahrstedt)

-impacts people’s trust in City. Should have paid P. (Remember Palm Springs) -NOTE: public policy arguments need some basis in the law. • E.g. State v. Shack – migrant worker statute; Nahrstedt had no basis so lost -P realized hardship argument, so switched from equitable relief to monetary damages claim. -Economic loss measured by (1) decrease in sales income (2) cost of K to P

. B. Equitable Servitude: a promise concerning the use of land that (1) benefits and burdens both the original parties to the promise and their successors and (2) is enforceable in equity (injunction) a. Generally -compared to real covenants – easier to meet requirements, more defenses, injunctions not damages -differences between real covenants and equitable servitudes 1. Remedies (RC = damages; ES = injunction) modern courts blur these 2. Standard equitable defenses available for ES claims -NOTE: strict vertical privity is not required but there needs to be some relationship to land (relaxed VP) b. Tulk v. Moxhay (1848) p. 711 – Notice is key -FACTS: P sold property w/ restriction that it be maintained as a garden person who originally purchased property had notice of the covenant contained in the deed years later D acquired

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title with actual notice and sought to build upon the land on the squareP seeks injunction -HOLDING: since a covenant is a k between the vendor and the vendee, it may be enforced against a subsequent purchaser who has notice of the contractual obligation of his vendor, even though it does not run with the land (no HP b/c LL-T only) -an equitable servitude is enforceable by injunction with no regard to privity as long as the promise is intended to run and the subsequent purchaser has actual or constructive knowledge of the covenant -in future, original purchaser could buy for lower price then sell for higher to D (pure equitable reasons) -benefit runs b/c P owns lands around park, and his land value goes up -also may be public policy: building on park burdens P more than it benefits D -NOTE: horizontal/vertical privity not needed for equitable servitudes -common plan exception: where a developer has manifested a common plan to impose uniform restrictions on a subdivision, all lots are burdened and benefited by the restrictions even if they do not appear in the chain of title to every lot (use sales literature, statements

by the developer, and percentage of deeds containing restrictions to determine whether common plan exists) C. Restatement Approach: combines the real covenant and the equitable servitude into 1 doctrine. A servitude arises when (1) intent to create servitude (2) SofF (3) not arbitrary, unconstitutional,

unconscionable, or violative of public policy -NOTE: abandons “touch and concern” and horizontal privity D. Common Interest Communities: planned residential development (1) where all properties are subject to comprehensive private land use restrictions and (2) which is regulated by a homeowners association (created by a declaration) -CC&R’s may be enforced as real covenants or equitable servitudes -3 key defenses to enforcement are unreasonableness, abandonment, and changed conditions -the powers of the homeowners association are exercised by an elected board of directors most courts use a

standard of reasonableness in reviewing board decisions; some courts apply the more deferential business judgment rule a. Elements of Declaration 1. Homeowner’s Association – establishes the association that will administer CIC, specifies association’s power, and provides for an elected board of directors 2. CC&R’s – imposes restrictions on all land within the CIC (either as RC or ES) -key defenses to enforcement: unreasonableness, abandonment, and changed conditions 3. Assessments – requires all unit owners to pay monetary assessments which finance the operations 4. Ownership Rights – generally provides that each unit owner holds FSA in his particular unit, an undivided interest in the common areas, and a membership interest in the association (alternatively, title to the common area may be held by the HOA on behalf of the unit owners) b. Traditional Approach a restriction is valid unless it violates public policy or is arbitrary and bears no relationship to the protection of the land c. Restatement Approach a restriction is valid unless: 1. Arbitrary, spiteful, or capricious

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2. Unreasonably burdens a fundamental constitutional right 3. Imposes an unreasonable restraint on alienation 4. Imposes an unreasonable restraint on trade or competition 5. Is unconscionable d. Validity of Specific Restrictions 1. Discrimination: violates EPC and Fair Housing Act (Shelley v. Kraemer) -Fed Fair Housing Act protects race, color, religion, family status (protects people with children), sex,

national origin, disability -easy for landlords to reject people by getting around category (ex. refused black single woman w. children b/c she as a lawyer and landlord was scared of being sued) 2. Sex Offenders: upheld amendment that restricted sex offenders to join community court however fears that could lead to all sex offenders being cornered in one location which would increase danger (Mulligan) 3. Leases and Sales: courts generally enforce CC&Rs that restrict/prohibit leasing units 4. Americans With Disabilities Act allows and individual to have a service animal if they need it for their disabilities (ex. walking dog for blind person) e. Nahrstedt v. Lakeside Condominium (1994) p. 717 – Restrictions not valid if violates policy or arbitrary -FACTS: CC&R’s were included in the recorded declaration: “no animals (which shall mean dogs and cats), livestock, reptiles or poultry shall be kept in any unit”P moved in with 3 cats and claimed restriction was unreasonable b/c she kept her cats indoors and they were noiseless T C dismissed P’s complaint AC reversed (individual standard) -HOLDING: agreed-to use restrictions will be enforced unless it is shown that they are unreasonable (wholly arbitrary, violate public policy, or impose burden to land that outweighs benefit) -entire condominium standard: enforcement of restriction does not depend upon the conduct of a particular condominium owner, rather the restriction must be uniformly enforced in the entire development UNLESS P can show that the burden it imposes on affected properties substantially outweigh the benefits of the restriction that it should not be enforced against any owner -condos have “common interest”: individual owners enjoys many benefits of traditional individual ownership but also acquires an interest in common with others in the amenities and facilities: 1. Subordination of individual property rights to the collective judgment of the owners association 2. Restrictions on the use of real property -equity will not enforce any restriction that violates public policy or arbitrary restrictions (bear no rational relationship to the protection of the land) -presumption: uphold recorded use restrictions (provides assurance to prospective buyers that they may rely on the promises recorded on the CC&Rs AND protects all owners against unexpected increases in association fees) -DISSENT: cherished benefits derived from pet ownership, would have found the restriction arbitrary and

unreasonable; analysis should focus on the burden on the use of land (and on the objecting owner) and not the “health and happiness” of the development -NOTE: on its face, drawing impermissible distinctions between different types of animals and the owners that would own these different animals is arbitrary b/c they cause the same nuisance -condominium committees tend to f(x) like petty governments who are accountable to noone (make

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decisions w/o regard to what is best/fair) Narhstedt takes away some of their deference f. Fink v. Miller (1995) p. 727 – Restrictions can be voided if abandoned -FACTS: covenant “wood shingles shall be required” 23/81 homes have shingles of other materialsMillers requested to use fiberglass shingles and were denied used fiberglass anyway committee sought injunctive relief to stop installation of D’s fiberglassTC denied -HOLDING: committee may lose their right to enforce restrictions if they have been abandoned -abandonment test: party opposing enforcement of restriction must prove that existing violations are so great as to lead the average person to reasonably conclude that the restriction has been abandoned (party must be aware of restriction and inspect property) -Step 1: analyze violations as to their number, nature, and severity; if abandonment still in question, then… -Step 2: consider prior enforcement efforts and possible realization of the restriction’s benefits -here 23 houses is a substantial number for a subdivision, property owners record of enforcement is erratic -abandonment of the covenant does not suggest abandonment of other similar covenants in the agreement -NOTE: tension between number of violations and severity of violation (ex. only one violation but it is a 50-foot tall brigfound ht yellow duck is this obvious enough for abandonment?) most courts

hold a single violation would not constitute abandonment -Travasos: no abandonment b/c restriction couldn’t be seen from the front of the building -Also, if committees continually make exceptions for individual home owners, they run the risk of abandonment -Fink Test: equivocal number (23/81) + poor enforcement + no real benefit = abandonment g. Vernon Township v. Connor (2004) p. 732 – Changing conditions can void restrictions -FACTS: restriction prohibits sale of alcohol on land VT purchased land to build a social hall that would sell alcohol VT tried to obtain a Limited Release of Restrictions from all owners68/77 owners signedVT brings action to quiet title based on changed conditionsTC ruled for D AC reversed b/c conditions changed so that restriction no longer had significant value to appellants -HOLDING: community intended to protect themselves and their heirs from the vices of alcohol consumption community will continue to benefit from restriction as long as alcohol is not sold within restricted tract -changed conditions test: burden of proof is on party opposing restriction to show that the original purpose of the restriction has been materially altered/destroyed by conditions and that substantial benefit no longer extends to other party -policy: land should not be burdened by restrictions that are no longer beneficial to anyone -when evaluating changed conditions, one should only consider the immediate location (“neighborhood”);

this includes restricted tract as well as adjoining tracts -DISSENT: 3 alcohol serving establishments that cropped up + 71/77 unopposed members is proof that that restrictive covenant outlived its usefulness -NOTE: VT could have compensated landowners to lift restriction

h. Schaefer v. Eastman Community Association (2003) p. 740 – Beware of declarations that give broad power to

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home owners association (reliance issue) -FACTS: declaration reserved to its board the authority to (1) take steps necessary to protect the association's assets and insure its financial stability, (2) buy and sell property when deemed in the best interest of

the association, and (3) take actions deemed necessary to further the declaration's purposes or to be in the best interests of the association closed ski area (core component of property) TC found closing was beyond its authority b/c its declaration did not provide for the closing of an amenity -HOLDING: association's board of directors' decision did not violate an express provision of the declaration, nor was it a decision reserved to the association members -board's action was valid and within the scope of the board's authority -homeowners may have relied on assertions in the community's promotional materials that it had a downhill ski area, and on the overall general purposes of the association when they bought their homes, but neither limited the broad authority granted to the association in the declaration i. Fountain Valley Association v. Dep. of Veterans Affairs (1998) p. 746 – restrictions cannot substantially infringe right to privacy

-FACTS: Petition horded items P association sued claiming that the condition of petitioner's property constituted a fire hazard (authorities deemed there was no fire hazard); Petitioner filed a cross- complaint for invasion of the right to privacy and breach of the association covenants -HOLDING: association’s micromanagement was unreasonable -no legitimate police concern (no safety hazard) -association essentially telling owner how to live his personal life -NOTE: compare this to the pet situation in Nahrstedt -modern view is that CC&R provisions should be interpreted to give effect to the intention of the parties ascertained from the language or the circumstances surrounding the creation of the servitude and to carry out the purpose for which it was intended(6) Transferring the Tenant’s Interest (landlord tenant section is an application of real covenants) a. Generally -both tenant and landlord are entitled to transfer their interest to 3rd parties -tenant may transfer interest via either an assignment or a sublease (assignment is a full substitution) -assignment: the transfer of a tenant’s entire remaining lease term -sublease: the transfer of less than the entire term is a sublease -modern trend: if the lease requires the landlord’s consent, landlord may without consent only if he has a

commercially reasonable objection -typical commercial lease = base rent (total yearly rent) + x% gross receipts -novation: replacing an obligation to perform with a new obligation; or replacing a party to an agreement with a new party (release of liable from privity of k) -privity of contract and privity of estate are standing requirements needed to bring party to court

-privity of contract: gives someone the legal right to bring legal action to party even if that person is not the person responsible for violation -privity of estate: privity of estate can be created with less than a full assignment -NOTE: there can be multiple privity of k relationships, but privity of estate can only occur once -“reversionary interest” is an umbrella term for time remaining on lease, obligations, etc. -parties can contract not to allow transfer, or transfer only via consent 1. Sole discretion clause: original grantor may refuse consent for any reason

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2. Reasonableness clause: original grantor may refuse consent only on a commercially reasonable basis 3. No standard clause: lease may require consent, but provides no standard guide for consent decision (“silent consent clause”) b. Ernst v. Conditt (1964) p. 483 – Assignment vs. Sublease determined by the parties’ INTENT not lease language -FACTS: Complainants leased land to Rogers. Lease contained provisions prohibiting subletting, assignment and a duty to clear any construction/improvements at the end of lease Rogers sold his business to D and a new lease was created with an accepted sublease agreement D ceased paying rent and the Complainants brought suit. P argues lease was an assignmentthus, D liable; D argues lease was a subleasethus, Rogers liable (b/c no privity of estate) -HOLDING: the words used in an instrument are not conclusive; rather, it is the intentions of the parties that govern whether the instrument is a sublease or assignment -general rule in re distinction between assignment and sublease is that an assignment conveys the whole term, leaving no interest nor reversionary interest in the grantor/assignor whereas a sublease is a transaction where

a tenant grants an interest in the leased premises less than his, or reserves a reversionary interest -CL rule is if the instrument purports to transfer the lessee’s estate for the entire remainder of his term, it is an

assignment, regardless of its form or the parties’ intentions. -NOTE: majority adopts an objective test that simply looks at whether the tenant transfers the lease for the entire remainder (time length) other jurisdictions have adopted a subjective approach that looks at intent -D could have entered into K directly with P to be liable this negates the assignment/sublease question and also

protects further downstream assignees (creates privity of k with multiple parties and landlord has flexibility in re who to sue. This gives the landlord leverage) -3rd party beneficiary theory: if A makes a k promise w/ B in order to benefit , then C may enforce against A -many jurisdictions say in regards to rent money, lessee 2 regardless of whether he is a sublessee or assignee, is liable to original landlord for rent b/c the landlord needs the rent to operate the property c. Kendall v. Ernest Pestana, Inc. (1985) p. 492 – Silent Consent Clause -FACTS: lease stated that before the lessee could assign his interest, he had to obtain written consent from the lessor, otherwise the lease could be voidable Bixler wanted to sell his business to Kendall (P) and requested consent from D, who refused to give it, claiming it had the right to arbitrarily refuse -HOLDING: in re commercial lease, landlord can withhold his consent to assignment by the tenant only if the landlord has a commercially reasonable objection to the assignment (minority view) -some of the factors that the trier of fact may consider in re commercial reasonableness are: 1. financial responsibility of the proposed assignee 2. suitability of the use for the particular property 3. legality of the proposed use 4. need for alteration of the premises 5. nature of the occupancy -denying consent solely on the basis of personal taste or convenience is not commercially reasonable -court rebuts arguments in favor of majority view 1. Majority argues that lessee could have bargained for reasonableness clause modern trend is that approval clauses are not clear and ambiguous 2. Tradition and sound public policy dictate lessor has the right to capitalize on increased value of his property lessor is trying to get more than he bargained for in the lease (law in place when we entered

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into k was #2) -NOTE: Four options to deal with people not paying 1. Tenant has no right to substitute for herself/ landlord has no duty to mitigate damage (no longer viable option b/c it allows property to be wasted) most landlord friendly 2. Tenant has no right to substitute for herself/ landlord has duty to mitigate (seems like a good option b/c landlords are in the business of being landlords-easier for them to mitigate than place the duty on the tenant)majority rule 3. Tenant has duty to substitute for herself/ landlord has no duty to mitigate (tenant is the one causing the problem so let the tenant replace herselfthis type of deal is not void for public policy but has to be in clear language and landlord must be reasonable in re substitution) 4. Tenant has duty to substitute for herself/ if she doesn’t, landlord has the duty to mitigate most tenant friendly -Kendall resolves around shift from #2 to #4 (this is problematicforces attorney to research what is going on in other states and best-guess which minority view will be adoptedcreates risk) -had right to rely on law as it was and should not have burden of predicting some other minority rule would be adopted -only time we have seen restraint on alienation is for unreasonable period of time or for bad reasons this creates a lot of litigation in re what is reasonable

-Reasons why Kendall decision has no pragmatic effect: 1. several bases for landlord to claim rejection of tenants 2. majority of leases put in sole discretion clauses 3. Ttenant bears the responsibility for proving unreasonability -generally landowner can pick and choose tenants based on personal preferences when a landlord has to replace

a current tenant in trouble (mitigation), then landowner needs a commercially reasonable standard to object to replacements (look at the jurisdiction)(7) Nuisance (1) Generally a. private nuisance: an intentional, nontrespassory, unreasonable, and substantial interference with the use and enjoyment of land

b. public nuisance: improper interference with a right common the publicc. remedies for nuisance: -the traditional remedy for nuisance is an injunction

-today, courts usually balance the equities to determine if the appropriate remedy is an injunction or damages(2) Private Nuisance Elements: 1. Intentional – act is intentional if D acts for the purpose of causing harm or D knows harm is substantially certain to result from his conduct 2. Nontrespassory – interference must not involve physical entry into land (ex. noise, vibration, light, odor, etc.)

3. Unreasonable -gravity of harm test: conduct is unreasonable if it causes substantial harm, regardless of its social utility -restatement test: conduct is unreasonable if the gravity of harm outweighs its utility 4. Substantial interference – “real and appreciable invasion of P’s interests” 5. Use and enjoyment of land – conduct must interfere with use and enjoyment of land

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(3) Boomer v. Atlantic Cement Co. (1970) p. 753— Gravity of harm standard -FACTS: D operated a large cement plant. P’s, neighboring property owners, filed suit seeking an injunction and damages for injury to property from smoke, dirt and vibrations from the plant. Lower courts ruled that there was a nuisance, but found that the value of D’s operation outweighed the consequences of the injunction; injunction denied. Plaintiffs appealed. -HOLDING: Issue injunction which can be vacated if D makes permanent payments to P’s -court used version of “substantial harm” that was satisfied if P showed quantitatively that damages over $100 -NY’s decision framework: -substantial harm no no nuisance yes nuisance remedies injunctive relief (old approach) social utility analysis damages/injunction or both -remedy options: 1. Grant injunction but enforce at a future date to allow D to eliminate nuisance 2. Grant injunction until D makes payment of permanent damages to P’s which would compensate them for the total economic loss to their property court chooses this one -no assurance technological improvements will occur -rate of technology research is beyond D; it is an industry wide problem -parties could settle this if D paid enough money injunction would pressure D to do so -payment would be incentive for D to spur research -when a nuisance is of such a permanent and unabatable nature that a single recovery can be had, there should be only one recovery -DISSENT: agreed with the reversal, but disagreed with the award of damages in lieu of a permanent injunction where substantial property rights have been impaired believes this allows parties to get away with “wrongs” as long as they pay -once permanent damages have been paid, there is not incentive for D to alleviate pollution -NOTE: Types of Remedies 1. A pays for injunction 2. H pays for injunction 3. A continues (no legally cognizable problem; but there may be a politically cognizable problem that legislature can address) 4. A pays H to continue

-COUNTER: homeowners priced in the nuisance before they purchased the property -rebuttals: cement company increased output after purchase/ new research developments show greater harm (5) Thomas v. Greve (1996) p.759 — Restatement Approach -FACTS: P’s brought nuisance action to enjoin D from using a wood-burning stove and for damages from smoke originating from the stove TC found smoke to be nuisance and ordered D to raise chimney 3 ft. and only burn “clean dry wood;” P failed to prove with specificity damages TC awarded no damages -HOLDING: D created a nuisance ordered to abate nuisance and pay damages -adopts restatement approach: “an intentional invasion of another’s interest is unreasonable if the gravity of harm outweighs its utility” -gravity of harm factors: 1. Extent of the harm involved 2. Character of the harm involved 3. Social value that the law attaches to the type of use or enjoyment invaded 4. Suitability of the particular use or enjoyment invaded to the character of the location

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5. The burden on the person harmed of avoiding the harm -gravity of utility factors: 1. Social value that the law attaches to the purpose of D’s conduct 2. Suitability of the conduct to the character of the location 3. impracticability of preventing or avoiding the invasion -application: P has strong interest in enjoyment and use of their land; in contrast, D has hard to identify social value (other alternatives to wood-stove burning for heat) (6) Other Nuisance Examples a. Windmill: noise caused neighbors to suffer nervousness, dizziness, loss of sleep, fatigue > saving energy and reducing electricity bills b. Radiation: radiation that affected TV reception in appliance store could be a nuisance b/c it affects sale

X. EMINENT DOMAIN (Condemnation w./ just compensation) a. Generally -allows government to take property from a private owner who refuses to sell voluntarily -5th Amendment limitations on ED: 1. Taking must be for public use; -public use req. is clearly satisfied when the government takes land so that it may be physically used for the public or by government employees (ex. railroad) -pubic use is satisfied if a taking serves a public purpose -taking private property for the primary purpose of economic redevelopment pursuant to a comprehensive plan satisfies the public use req. -a state may require more narrow definition of public use than is used to interpret the federal Taking Clause (ex. some states do not allow the condemnation of private land for economic redevelopment; state

may enact legislation that provides property owners with more protection against condemnation) 2. Just compensation must be paid to the owner -generally defined to mean fair market value (the amount that a willing buyer would pay a willing seller on the open market) -problem arises when a government seeks to buy from an unwilling seller b. Professor Merrill Approach (p. 907): better approach is to ask whether ED is an appropriate means to achieve a particular end (means approach demands a more narrowly focused and judicially manageable inquiry than the ends approach b/c ends analysis requires a high political theory) c. Berman: radical shift from traditional ED view now can take property when there is economic/blight conditions and transfer to a private owner (here, P’s property was doing fine unlike surrounding properties) for long term economic health, effective markets, respect for private property d. Hawaii Housing Authority v. Midkiff (1984) p.891 – ED must be rationally related to a conceivable purpose -FACTS: concentrated land ownership was responsible for skewing the state’s residential fee simple market, inflating land prices and injuring the public welfare; current federal tax laws hindered landowners from selling land (leased instead) Act condemned property and transferred ownership to existing lessees (lessened tax burden) allows lessees to petition for ED lessors filed suit -HOLDING: ED power for “public use” will be constitutional so long as it is rationally related to a conceivable public purpose. The Government itself does not have to use the property. Only the purpose, not the mechanics will be relevant to the takings’ constitutionality

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-legitimate police power interest: reduce the perceived social and economic evils of land oligopoly -act doesn’t have to actually achieve its proffered purpose; legislature simply must believe that it will e. Kelo v. City of New London (2005) p. 898 – Limitations on Hawaii Housing -FACTS: City approved a development plan to revitalize an economically distressed city purchased property and seeks to enforce ED to acquire the remaining parcels from unwilling owners city did not plan to open the condemned land to the general public, nor were the private lessees of the land required to operate like common carriers -HOLDING: Hawaii Housing held that economic development qualified as a valid public use must meet two burdens for ED: (1) the takings of the properties were “reasonably necessary” to achieve the intended public use and (2) the takings were for “reasonably foreseeable needs” -public use in this case was broadly interpreted to mean “public purpose” -in Berman, P argues his individual property was not blighted court ruled must defer to legislature/agencies

to create entire plan (can’t review by individual parcels) -determination that city is economically distressed is entitled to deference -given comprehensive plan, thorough deliberation that proceeded its adoption, and limited scope of our reviewmust resolve issue in re entire plan (not re individual properties) -plan unquestionably serves a public purpose -long tradition of justifying economic development -no way to distinguish economic development from other recognized public purposes -CONCUR: adding that even with a deferential standard of review, a taking should not survive the public use test if there is a clear showing that its purpose is “to favor a particular private party, with only incidental or pre-textual public benefits (not present in this case)

-NOTE: state can impose more restrictive requirements to constitute public use 1.define ‘public use’ as a possession or enjoyment of the property by the public 2. Restrict ED to blighted properties that harm the public health 3. Require compensation greater than fair market value for condemnation of a primary residence 4. Place a moratorium on the use of ED for economic development -Horney: court held (1) ED requires heightened scrutiny standard and (2) economic or financial benefit, alone, is not sufficient to satisfy public use f. Poletown v. City of Detroit – Broad definition of ‘public use’ (aka public purpose) -FACTS: Detroit planned to acquire site for GM under Economic Development Act (use of condemnation to acquire property) P argues transferring land to private company is a private not public use; D contends that the purpose behind the taking is to alleviate unemployment (serves public welfare) -HOLDING: condemnation for the public welfare cannot be forbidden, even if there is incidental private gain -alleviate unemployment and revitalize economic base of community is a public purpose -benefit to private company is “merely incidental” -DISSENT: right to own and occupy land must not be subordinated to private corporate interests unless the use of the land condemned for the corporation is invested with sufficient public attributes -public will retain no control over business operations; GM will remain liable to its stockholders, not public -those with control have conflicting interests (profit v. unemployment) -eminent domain and taxes are fundamentally different -while both include financial losses, eminent domain also attaches intangible losses (personhood) -NOTE: government can pay above market value to “first takers” to leave earlier to break spirit of the tougher ones (can also take away public services to make living unpleasant)

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g. County of Wayne v. Hathcock – Departure from Poletown; three public use situations -FACTS: County used federal grant money to purchase properties through voluntary sales (condition of thefederal

grant money that was properties acquired with the funds had to be put to commercial usecounty planned to build a technology and business park expected to create 30,000 jobs and generate $350 M in tax revenue. After purchasing 1000 acres, the county began condemnation proceedings to purchase 19 additional lots so that it would have contiguous property for development (as opposed to having “checkered” lots Holdover owners contested the condemnations as not being for a “public purpose” -HOLDING: unconstitutional b/c it is not a public use -transfer of condemned property is a public use when: 1. Extreme Necessity; OR -inability of market to operate on its own depends on the use of land that only government can assemble 2. Private entity remains accountable to the public in its use of that; OR -public retains some control 3. Selection of land is based on public concern -underlying purpose of condemnation, rather than the subsequent use of condemned land must satisfy public use requirement (public benefit cannot come solely from the private enterprise, benefit must come from condemnation itself) -ex. unfit housing -Poletown is a departure from ED understanding (overrules Poletown but does not establish new law revitalizes law before Poletown)

XI. LAND USE REGULATIONS (Inverse Condemnation w/o just compensation) A. Zoning (1) Generally -reformers argued that government had the inherent police power to protect the public health, safety, morals and welfare through zoning laws -each city would be divided into geographic zones where different uses were permitted, with limits on the size and location of buildings in each zone -Standard State Zoning Enabling Act was a model law that states could adopt if it wished a. empowered local governments to adopt zoning ordinances and b. specified the key provisions for an effective ordinance -courts generally uphold zoning ordinances which provide that only members of a “family” may occupy a single- family residence; however, a zoning ordinance that prevents related family members from living together is subject to a more searching scope of review than RB (2) Constitutionality of Zoning a. Village of Euclid v. Amber Realty (1926) p. 772 – Established zoning as proper -FACTS: landowner challenged the zoning ordinance as an unconstitutional taking b/c it devalued his land D enacted a zoning ordinance which divided the land into 6 classes of use districts The uses of P’s first 620 ft. of land do not include apartment houses, hotels, churches, schools or other public buildings. The use of the next 130 ft. of land includes all the uses excluded in the first 620 feet, but excludes industries, theatres, banks and shops -HOLDING: zoning is valid unless it is arbitrary and unreasonable; that is, having no substantial relationship

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to the public health, safety, morals, or welfare (deference to legislature) -ordinances must find their justification in police power for the public welfare this is analyzed on a cases-by-case basis; ordinances that are okay in some regions may be overly oppressive in others -law of nuisance helpful b/c of its analogies in ascertaining the scope of the power -ex. in zone 1, only single-family residences are allowed. In order for the zoning ordinance to be valid, a non-single family house must be a nuisance, which the appellant is attempting to exclude

from zone 1 -Euclid is a separate political entity and has the right to govern itself as it sees fit, so long as it does so

within the Constitution as long as the zones of exclusion excluded a nuisance from the other zones,

the ordinance was proper (deference) -since the apartment houses are parasitic in nature, Euclid was within its rights to exclude them from residential, single-family homes. The desirability of a neighborhood is greatly diminished by apartment houses -NOTE: Euclid’s rigid zoning is dying a slow death as local governments are moving toward more flexible forms of land use regulation; while this increased flexibility should improve the quality of land use decisions, it necessarily vests more discretion in local officials, which creates an increased risk of improper influence b. Euclid Takeaways: 1. Rational Basis Test—zoning is constitutional unless it is “clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare” -consider if either statute is irrational or relation of means to ends is irrational 2. Two scenarios i. If nuisance prevention police power no just compensation owed -government isn’t taking something you had, b/c you did not have that right to begin with -should find nuisance exist in common law to show you aren’t just making up nuisance law but rather

just codifying what was already existing ii. If public good just compensation required -harm done to P (decreased land value) you decrease value if you decrease the market of available customers (3) Family Zoning a. Belle Terre: upheld family zoning and applied RB to prevent college kids form living together b. Moore v. City of East Cleveland (1977) p. 822 -FACTS: housing ordinance limits occupancy to members of a single family Moore, lived w/ her son and two grandsons. The two grandsons were first cousins rather than brothers. Appellant’s family did not meet the definition required for a single family -HOLDING: right to live as a family unit is protected under the Due Process Clause of the 14th A.

-Belle Terre’s ordinance affected only unrelated individuals; it allowed all who were related by blood, adoption, or marriage to live together (distinguishable facts) -here, ordinance slices deeply into family; on its face it selects certain categories of relatives who may

live together and declares that others may not

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-proffered ends are legitimate (prevent overcrowding, minimizing traffic and parking congestion, and avoiding an undue financial burden on school system) -while these are legitimate ends, the ordinance serves them marginally at best -ex. no distinction between members driving and public transit -NOTE: -ordinance would be permissible under Euclid (nuisance) and Belle Terre (general interpretation of ordinance) -Bryant thinks this is not a good case to cite for which level of review to use c. Ames Rental Property Association v. City of Ames (2007) p. 825 – stereotypes okay if they are a reasonable attempt under RB -FACTS: University ordinance only permits single-family dwellings in certain areas of the city; defined “family” as any number of related persons or up to 3 unrelated persons -HOLDING: Family regulation that does not involve suspect classes are analyzed under RB (is the ordinance rationally related to any legitimate government interest?) -US Supreme Court upheld a more restrictive ordinance (Belle Terre) Thus, university ordinance was good under the Constitution -But, also must evaluate under State Constitution -classes: related people v. unrelated people -since these are not suspect classes apply rational basis (whether ordinance is rationally related to any legitimate government interest; upheld unless relationship is so weak it is arbitrary and capricious) -proffered ends: promoting sense of community, sanctity of the family, quiet and peaceful neighborhoods, low population, limited congestion of motor vehicles and controlled transiency -it is legitimate interest to promote neighborhoods that are conducive to families -quiet neighborhoods with stable population and low traffic are “laudable goals” -there was a rational relationship -college town that experiences typical secondary effects of mass student congestion -unrelated individuals tend to have different living styles vs. related family members -related people are more invested in the community -young people attract friends creates more noise -DISSENT: relationship of individuals living together has no relationship to their character or behavior should focus on conduct not relationship -disadvantages those most likely to live with roommates (poor and elderly) -Belle Terre no longer appropriate because of modern demographic changes B. Takings a. Generally -while government may regulate an owner’s use of her property under the police power, a regulation that goes

too far is an unconstitutional taking. -takings clause is designed to prevent government from forcing certain owners to bear public burdens which in fairness and justice should be shared by the public as a whole -when doing a takings analysis, the property is defined as a the whole parcel and not just the portion that is affected by the regulation -appropriate remedy for a taking is compensatory damages, not invalidating the regulation b. Takings Test (General)

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-historical approach: regulations through police power have limits and will be considered a taking when the diminution in value of the property reaches a certain magnitude, which depends upon the particular facts (Penn Coal) -modern day standard: Balancing Test (Penn Central) 1. Economic impact of the regulation on the landowner -court suggests that “diminution in property value” caused by regulation that is “reasonably related to the general welfare” is not a taking 2. Extent to which the regulation has interfered with distinct investment-backed expectations -consider the landowner’s reasonable expectations when he invested in the property 3. Character of the government action -a taking is more readily found when the government has physically invaded the property than when interference arises from some public program adjusting the benefits and burdens of economic life to promote the common good 4. Average Reciprocity of Advantage (guarantee not be singled out) -all property in the area is subject to the same burden, so no individual property owner is at an unique disadvantage (zoning justification) -idea is that landowner actually benefits from the regulation b/c it is applied to all other owners c. Situation-Specific Taking Tests (Categorical Rules) -a taking will be found under these tests if government entity: 1. Authorizes a permanent physical occupation of land; or -a permanent physical occupation authorized by government is a taking regardless of the reason for the government’s action -Step-by-Step: 1. Physical use 2. That constitutes occupations (allowing 3rd parties to enter is more intrusive than telling landowner to do something) 3. Which is permanent (for practical purposes, it is b/c owner would have to change nature of the use of the property) 4. If there is any ambiguity in these factors then we have to do a Penn Central analysis 2. Adopts a regulation that causes the loss of all economically beneficial or productive use of land, unless

justified by background principles of property or nuisance law (5th A. claim); or -if regulation eliminates all economically beneficial or productive use of land (requires 100% value taken), a taking will be found unless the regulation is justified by background principles of state property or nuisance law -background principles = reasonable expectations of uses of land (ex. can’t use ponds to flood)

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3. Demands an exaction that has no essential nexus to a legitimate state interest or lacks rough proportionality to the impacts of the particular project -exaction: government requires developer to provide land or fees to offset the impacts of the project in order to approve land use -an exaction is a taking if either (1) there is not an essential nexus between the exaction and a legitimate state interest or (2) the exaction is not roughly proportional to the impact to the project d. Judicial Takings (did not cover in class) -hypo: A satisfies all of State B’s adverse possession requirements to obtain C’s landsupreme court of State

B changes the AP law so that A’s interest is invalid SC “took” A’s land and gave it to C -law is unclear on judicial takings e. Nuisance Exception: a regulation enacted to prevent a nuisance or other harm to the public was not a taking

f. Pennsylvania Coal Co. v. Mahon (1922) p. 914 – Diminution in value test (standard unclear) -FACTS: Act prohibited mining that would cause subsidence of homes near residential properties Penn. Coal had relied in K and deeds to retain the valuable estate in the land beneath the surface. Property owners sought to enjoin the Penn. Co. from mining beneath their homes TC sought prevention by

injunction b/c the subsurface estate could not be valuably mined for profit and still support the safety of surface abovelandowner had consented to the deed with the express reservation of the coal rights. This, deed gave Penn. Co. both k and property rights which the Act rendered useless -HOLDING: limitations on the use of land through police power have limits and will be considered a taking when the diminution in value of the property reaches a certain magnitude, which depends upon the particular facts

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Is there 100% Loss?

No Yes

Penn Central Nuisance(grounded in common law)

Not Nuisance(grounded in common law)

No Taking (no compensation)

This is a taking (compensation needed)

If facts are not as strong as Lucas (which will likely be

the case) apply Penn Central

-in order to protect themselves, P’s should have contracted to acquire more than the surface rights. -Act could not have been used to terminate the valid k rights D received, nor could the Act be used to take

D's k rights without adequate compensation. -general rule is that property may be regulated to a certain extent, but if regulation goes too far it will be considered a taking -DISSENT: legislature should have the power to prohibit use of land that seriously threatens public welfare w/o any just compensation; restriction upon a particular use does not become inappropriate whenever it is not compensated, even though it could alternatively be prevented through such compensation (Nuisance Exception) g. Penn Central Transportation Co. v. NY (1978) p. 926 – Basic standard used in regulatory takings cases today -FACTS: P owned the Grand Central Terminal, which was designated as a “landmark” and owners of property designated as landmarks are given transferrable development rights. P entered into a lease

to construct a multi-story office building on top of the terminal. The plans were submitted for approval and were in conformity with existing zoning regulation, but the Commission denied the applications P filed suit seeking damages for the temporary “taking” -HOLDING: P could not establish a "taking" simply by showing that they had been denied the ability to exploit a property interest that they had believed was available for development

-Balancing Test: 1. Economic impact of the regulation on the landowner -court suggests that “diminution in property value” caused by regulation that is “reasonably related to the general welfare” is not a taking 2. Extent to which the regulation has interfered with distinct investment-backed expectations -consider the landowner’s reasonable expectations when he invested in the property -may be relevant how long P has held the property -consider whether government takes property right after purchase (unfair) vs. landowner has had time to accrue value on his investment -applies to sale of property as well 3. Character of the government action -a taking is more readily found when the government has physically invaded the property than when interference arises from some public program adjusting the benefits and burdens of economic life to promote the common good 1. Is government physically intruding? -consider how long and how intrusive (Causby: military planes flying over chicken farm was permanent intrusion b/c of their frequency) 2. Does the government authorize 3rd parties to come onto your property -Kaiser-Aetna: nullifying ‘right to exclude’ is a significant taking -lagoon shallow pond neighbors contacted by group that wants to clean it out if cleaned, pond becomes navigable, thus giving public has access to neighbors sue as a taking -Pruneyard Shopping Center: however, ‘right to exclude’ is not decisive -private owner has business with a shopping center on itlaw prohibits owner from excluding pamphleteers court held owner’s rights are not as severely infringed

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still has right to regulate time, place, and manner of who enters his private property -Application:

-did not interfere in any way with the terminal's present uses and P's primary expectation concerning the use of the parcel (direct investment) -shifted airspace above Penn Central to other locations via transferrable development rights, thus they

did not take them (character of government action) -dissent argues this just gives owner right to sell property (not real property rights) and TDR means taking has occurred and TDR is just compensation -restrictions imposed did not prevent Penn Central from ever constructing above the terminal in the future NY's objection was to the nature of the proposed construction and not to construction in general implemented to "enhance" the Terminal (character of government action) -preventing the construction of a 50-plus story addition above the station was a reasonable restriction substantially related to the general welfare of the city (preserving landmarks) -precedent holds that diminished value as the result of rezoning did not amount to a taking -DISSENT: does not equate the Landmarks Law with a zoning regulation. The dissent argues the effect of

the Landmarks Law is to place an affirmative duty on the owner of a designated property to maintain the property as a landmark at his own expense h. Loretto v. Teleprompter Manhattan CATV Corp. (1982) p. 941 – Permanent Physical Occupation -FACTS: NY law provides that landlord must permit a cable company to install its cable facilities upon his property Appellant did not discover the existence of cable until after she had purchased the building. She brought an action against Teleprompter, alleging that the installation was a taking w/o just compensation AC decided this was not a taking SC reversed -HOLDING: a permanent physical occupation authorized by government is a taking without regard to the public interests it may serve -the historical rule that a permanent physical occupation of another’s property is a taking has more than tradition to commend it. Such an appropriation is a serious invasion of a property owner’s interest: -owner has no right to possess the occupied space to himself -no right to exclude others -forever denies the owner any power to control the use of the property -the size of the area occupied under the taking is not important in this context -DISSENT: there has not been a taking b/c the invasion is slight and does not amount to a large intrusion -NOTE: Loretto decision can extend to the taking of personal property too i. Lucas v. South Carolina Coastal Council (1922) p. 950 – Regulation erodes all economically beneficial uses -FACTS: Petitioner purchased 2 beachfront lots. He intended to build single-family homes on each lot but the

legislature passed an act that barred it and rendered property valueless. The Act’s stated purpose was to protect property from storms, tides and beach erosion and as an environmental protection Petitioner did not challenge the state’s right to pass the Act or its justifications Petitioner just claims that the Act resulted in a taking b/c he cannot use it for the intended purpose -HOLDING: if a regulation prohibits all economically beneficial use of land and the proscribed use could not have been prohibited under a given state’s nuisance law, the regulation is a “taking” which requires “just compensation” to be paid to the landowner -it is unreasonable for a state to prohibit the owner from using the land as he originally intended, unless it

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can be shown that this use results in a nuisance or that general property law prohibits such a use -mandated preservation of private land looks like a conversion of private property to public (a classic taking) -regulation of land use must account for owners’ traditional understanding as to the states power over their property rights. -ex. the owner of a lake bed is always aware that he may be stopped by law from flooding adjacent property. However, here, since a state’s common law principles would not prohibit one from building on the land, a taking has occurred

-DISSENT (Blackmun): the majority has created a new rule and exception that are not based on precedent and would apply in a very situation that does not exist in this case (100% valueless cannot be defined objectively) -DISSENT (Stevens): majority’s rule is arbitrary b/c 95% diminution in value receives nothing while 100% recover the land’s full value + two practical effects: (1) courts will alter the definition of the “denominator” to render the categorical rule meaningless OR (2) investors will manipulate the relevant property interests giving the categorical rule sweeping effect -NOTE: court does not define “economically beneficial use”is there a difference between “economically beneficial use” and “economic value”? -Palazzolo p. 963 -removing 100% economically beneficially uses only temporarily does not constitute taking away all economically beneficial uses -landowners who obtain property after regulations are already in place can still bring a claim to challenge regulation -reinforced zero-value requirement (rejected P’s claim when there was a 94% reduction)

Miscellaneous Exam Tips:-Bryant is less keen on IRAC method (emphasis on factual analysis)-Bryant reviews exams 1 question at a time; if you need to refer to another section of the exam say “see question x” so Bryant knows to go back and look.-Not expected to know jurisdictional-specific rules-novation: explicit/clear release of liability by the landlord freeing tenant from landlord-tenant k (must be explicit cannot presume it)-promissory restraint on alien is a real covenant-tenants by entirety do not have a right to partition unless they agree-tenants in common/joint tenants have an absolute right to partition-color of title still has the same AP requireents, but if you enter under color of title you get to claim up to the boundaries described in the document even if you only adversely possessed less land than that; if you AP w/o color of title you just

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get the area you AP-publicity rights cases falls under right to exclude

What should Seale (the grantee from Smith) have done to make sure his deed was validly recorded? He should have recorded the Smith to Seale conveyance before recording his own, or he should have had Seale record first before he took the property from Seale. Did he have the responsibility to discover the hidden defect in the deed from Caroline Messersmith to Smith? No, he just needed to connect the dots. Wouldn't that have been a huge burden? Yes, it would have. But, had the correct links in the chain been recorded, his deed would not have been “wild” (outside the chain of title).

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