BASIC THEORIES

I. What is property?a. Property is whatever interest in a thing—whether tangible or intangible—that is protected against

invasion by others by the legal system of the society. That means that the study of property is not the study of the relationship of a person to a thing called property, but is the study of the relationship between people with respect to things we call property.

b. Bundle of Rights – the right to possess, the right to use, the right to exclude, and the right to transfer c. Three core elements:

i. The right to exclusive possessionii. The right to exclusive use

iii. The right to dispose or transfer II. Blackstone – Occupancy Theory/Principle of First in Time

a. Originally, property rights were transient i. Pick up a bunch of apples, as soon as you put them down and walk away, others can pick them up

b. But because avarice eventually led to scarcity, the institution of private property became necessary to preserve peace.

c. Taking possession of an unknown thing is the only way to acquire ownership of it d. “The notion that being there first somehow justifies ownership rights is a venerable and persistent one.” e. Whatever a person has taken possession of is that person’s property

i. Institution of property was an agreement among men legalizing what each had already grabbed, without any right to do so, and granting for the future, a formal right of ownership to the first grabber

ii. In fact, the “own” which property laws protect is whatever an individual has managed to get a hold of, and equality of right, applied to property, means only that every man has an equal right to grab.

iii. As a result of this agreement, which, by a remarkable oversight, puts no limit on the amount of property any one person may occupy, everything would soon pass into private ownership, and the equal right to grab would cease to have any practical value.

f. Leads to productivity because creates scarcity of resources g. [Note: This line of thought runs through the Acquisition by Capture]h. Challenge:

i. Not many things left to grab—no longer an equal right to possess them III. Locke –Labor Theory

a. So what if someone possesses something first; why should else be obliged to respect that claim of the first possessor?

i. Locke reasoned that the obligation “was imposed by the law of nature, and bound all men fast long before mere human conventions had been thought of.”

b. We have no inherent right in land. All we own is our bodies. Mixing labor with something unowned makes it yours and establishes your right to it.

c. If you take your labor and mix that with some common property, your right to that property must be greater than anyone else’s right to that property.

d. Law of Accession – when one person adds to the property of another: by labor alonee. Challenges:

i. Multiple people can contribute laborii. Law of Accession

IV. Benthem – Utilitarianism a. Property is a human construction that depends solely on societal needs *

i. BY CONTRAST: Natural rights theory insists that property is independent of any of society’s declarations.

b. The greatest good for the greatest number (in the aggregate)

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c. We protect other’s possessions because we desire the same protection of our own possessions i. Result of scarcity; must protect what we possess

d. Property law is a social construct—people create property law in order to arrange their affairs—we should judge property rights by happiness/utility (social effects)

e. Majority *V. Demsetz - Economic Efficiency

a. Property is economically efficient (efficient response to scarcity)i. Efficiency is utilitarian

ii. Externalities are internalized1. This makes production more efficient

b. If everything is unowned, or owned communally, under conditions of scarcity people will unduly deplete the resource because the individual gain from depletion is greater than the individual cost. Yet, from society’s perspective, the aggregate gains from depletion are less than the total cost. To an individual, these additional costs are external. Property helps to internalize these costs so that individuals make economically efficient judgments.

c. Externalities : costs that are produced by an activity but not borne by the person reaping the benefits of the activity. Internalized when property rights are created.

i. Externalities are reciprocal; they arise from interactions or conflicts among people in the use of resources.

d. Tragedy of the Commons : dilemma arising from situation in which multiple individuals, acting independently, and solely and rationally consulting their own self-interest, will ultimately deplete a share limited resource even when it is clear that it is not in anyone’s long term interest for this to happen.

e. Tragedy of the Anti-Commons : people cannot use a resource, so it is wasted i. Problem aggregating all of the rights to get things done (transaction costs)

ii. An anti-commons refers to property which a number of people control, and thus many people have the right to exclude others or to veto a transfer.

iii. The antithesis of a commons, which is property for which on one has the right to exclude *iv. An unanimous consent requirement in a common interest community illustrates property whose

use and transfer is subject to approval by multiple parties f. Free Rider : one that takes advantage of something in common that he doesn’t have to pay for g. Private Property : right to exclude others, internalizes cost

i. The owner enjoys both the benefits and the costs—they have to account for costs (make better/more efficient decisions)

ii. Transaction costs reduced—will not need to negotiateVI. Coase – Transaction Costs

a. In a world without transaction costs, it does not matter to whom you assign property rights. Resources will be put to an efficient use in any event.

b. The person that values the resources most will automatically acquire it

POLICY CONCERNS

I. Reward productivity and foster efficiency II. Create simple, easily enforceable rulesIII. Create property rules that are consistent with societal habits and customsIV. Produce fairness in terms of prevailing cultural expectations of fairness V. Private property is essential to political freedom (alienability)

POSESSION

I. First Possession

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a. The common law gives preference to those who convince the world that they can catch the fish and hold it fast. This may be a reward to useful labor; but it is more precisely the articulation of a specific vocabulary within a structure of symbols understood by a commercial people. It is this commonly understood and shared set of symbols that gives significance and form to what might seem the quintessentially individualistic act: the claim that one has, by “possession,” separated for one’s self property from the great commons of unowned things.

b. Acquisition by Capture i. Unowned property that is captured becomes the property of the capturer through actual

possession ii. Wild Animals (farae naturae) – usual method of acquiring property in an animal is to actually

capture it (dead or alive) 1. Pierson v. Post – P pursued a fox on an unowned beach. During his pursuit, D (knowing

that P was in pursuit) intercepted the fox, killed it and carried it off. Court held that pursuit is not enough to show possession must have actual possession of the animal.

a. The pursuer:i. Manifests an unequivocal intention of appropriating the animal to his

individual useii. Has deprived him of his natural liberty

iii. Brought him within his certain control iii. Constructive Possession

1. Things on your land are yours because you have an interest in them. A trespasser, who captures a wild animal on the land of another, has no rights against the owner, even though landowner never had possession or control.

iv. Oil/Gas –Usually Treated The Same As Wild Animals 1. Classified as wild animal because it has the power and tendency to escape without the

volition of the owner. a. The resources have a fugitive character because they wander from place to place.

i. Oil and gas once under the land of A might migrate to space under the land of B as the result of natural circumstances or because B drops a well and mines a common pool beneath A’s and B’s land. The oil or gas mined by B may even have been placed in the pool by A (gas and oil extracted elsewhere are often reinjected for storage or secondary recovery).

b. The resources:i. “Belong to the owner of the land, and are part of it, so long as they are on

or in it, and are subject to his control; but when they escape, and go into other land, or come under another’s control, the title of the former owner is gone. Possession of the land is therefore not necessarily possession of the gas. If an adjoining, or even a distance, owner drills his own land, and taps your gas, so that it comes into his well under his control, it is no longer yours, but his.”

ii. When they escape or are restored to their wild and free state, the dominion and individual proprietorship of any person over them is at an end and they resume their status as common property.

c. Policy Concern:i. Denies society at large the benefits of economical underground storage.

v. Escapees and Domesticated Animals1. When a wild animal escapes—it is unowned. It belongs to the next first possessor. 2. Domesticated animals are not wild, so they continue to belong to their prior possessor

when they wander off.

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a. A wild animal becomes domesticated when it demonstrates a propensity to return home.

vi. [You cannot acquire possession to a federally protected animal] c. Acquisition by Creation

i. A person acquires right to something by creating it1. In accordance with Locke’s Labor Theory, if you create something then it is yours to

exploit because the foundation of proprietary rights is the expenditure of labor and money.

2. The assertion that if you create something—if in that sense you are first in time—then that something is most certainly yours to explit.

ii. Intellectual Property 1. Exclusivity: key issue because some argue that information can be used by many people

at once, thus the owner should not be able to insist on exclusive possessiona. Many people can use the same piece of information *b. Granting exclusive rights to information does not necessarily promote a market

economy. Competition depends on imitation. i. The public as a whole may be better off, as long as this freedom to

imitate does not destroy the incentive for people to come up with new devices.

2. Monopolya. The point of monopolies is to promote creative activity; the point of the limits is

to advance competition (which in turn facilitates consumption by holding down prices).

3. Law of misappropriation – the branch of unfair competition law that protects new ideas—tries to answer the question of when imitation is permissible and when it is not because it will destroy the incentive to create

4. International News Service v. Associated Press – P claimed that D was pirating its news. Court held that there is no property right in the news itself, but there is a property right in the literary form because of the labor put into it. Exception to normal rule that property can be imitated.

a. There is quasi-property in the news that survives publication as between competitors appropriating it for profit, not to the public at large

b. Publici juris – public domain/of public right c. Information – multiple people can use it at the same time, no worry of overusing

the information (won’t deplete) 5. Absent Statute – No Intellectual Property, imitation is fine

a. Cheney Brothers v. Doris Silk – P copied popular designs of D. P asked for protection only during the season in which it debuted. Court held that a man’s property is limited to the chattels, which embody his invention; others may imitate these at their pleasure. (Ok to copy and undercut price)

6. Smith v. Chanel – P copied D’s perfume and used their name to advertise that its price was lower, but the product was equivalent to the un-patented item. Court held that they were allowed to copy product and claim that it was cheaper because this stimulates the economy.

iii. Copyright 1. Applies to:

a. Original works of authorship b. Fixed in tangible medium of expression

2. Expression of ideas in books, articles, music, or artistic works 3. Protected as soon as set down in tangible medium 4. Generally lasts 70 years after death of creator

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5. Subject to “fair use” (e.g. can quote something that is copyrighted) 6. Fact/Expression Dichotomy

a. Feist v. Rural – Feist did not copy anything “original” by taking 1,309 names, towns and telephone numbers from Rural’s white pages. To qualify for copyright, information must be original to the author, and meet a minimum standard of creativity. Facts are not copyrightable, but assortments of facts are so long as they are compiled or arranged in an original or creative manner. The court held that Rural’s white pages did not meet the minimum standard of creativity.

7. Idea/Expression Dichotomy a. Baker v. Seldon – Seldon featured a condensed ledger in his books. Baker sells

the ledger from Seldon’s books. The court held that the description of the art in the book lays no foundation for an exclusive claim to the art itself (ideas cannot be copyrighted).

8. Merger or Idea/Expression Inseparability a. Morrissey v. Proctor & Gamble – P alleged that D copied their sweepstakes

entry. The court held that where there is only one or but a few ways of expressing an idea, courts may find that the idea behind the work merges with its expression with the result that the work is not copyrightable.

9. Conceptual Separability a. Brandir v. Cascade Pacific Lumber Co. – The court held that the P’s ribbon bike

rack is not copyrightable because the utilitarian function cannot be separated from the aesthetic value of the rack.

i. Denicola Test :1. If design elements reflect a merger of aesthetic and functional

consideration, the artistic aspects of a work cannot be said to be conceptually separable. Conversely, where design elements can be identified as reflecting the designer’s artistic judgment exercised independently of functional influences, conceptual separability exists.

ii. Policy:1. Court concerned with copyright capturing functional things

10. Infringement a. Elements

i. Copyrightable subject matterii. Copying

1. Literal, or2. Access and substantial similarity

iii. And improper appropriation 1. Are the works “substantially similar” – with respect to the

protected expression – in the eyes of an ordinary or reasonable observer? Did the accused infringer substantially appropriate the protected expression?

2. Nichols v. Universal Pictures – P sued D for copyright infringement of her story. However, the court held there was no copyright infringement because the stories are different, and the only commonality is that both are marriage comedies about conflicts between Irish and Jews. Copyright of a literary work is not limited to the text, but centers on the substance of the characters and sequences of events.

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a. 1) Identify the protectable expression by separating out the unprotectable: ideas, stock characters, facts, themes

b. 2) Articulate what is specific and original, and present this to the factfinder

b. [Scope limited by copying element, people that independently create works are NOT liable for copyright infringement]

11. Fair Use a. Limits exclusive rights by allowing others to use copyrighted material “fairly” b. Factors:

i. The purpose and character of the use, including whether such use is of commercial nature or is for nonprofit or education purposes

ii. The nature of the copyrighted work iii. The amount and substantiality of the portion used in relation to the

copyrighted work as a whole; andiv. The effect of the use upon the potential market for or value of the

copyrighted work c. Policy:

i. Life + 70ii. Advances knowledge

iii. Enriches public while protecting authoriv. Prevents excessive litigation

d. Harper & Row v. Nation Enterprises – Court evaluated the “fair use” factors and held that the Nation’s use of Ford’s manuscript did not constitute “fair use.” (1) It was for profit, (2) the manuscript had not been published, (3) the appropriated text was focused on the most interesting sections of the article, (4) there was an actual effect on the market (Time did not pay its second installment).

iv. Patents1. Elements:

a. Patentable subject matterb. Noveltyc. Utilityd. Non-obvious

2. Cannot patent: laws of nature, physical phenomena, or abstract ideas3. Lasts for 20 years from the date of original application; not renewable 4. 101 - Inventions Patentable:

a. Whoever invents, discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions of this title.

5. Policy:a. Incentive to invent, encourages people to come up with new useful ideas and

information b. Incentive to innovate

i. Refers to the act of perfecting something for commercialization c. Encourages the disclosure of reporting technological advancesd. Encourages investment in research and developmente. Once expires, in the public domain

6. Living Things a. Diamond v. Chakrabarty – Living things are patentable if they are the result

of human innovation (bacteria that breaks down crude oil). The court interpreted the patent statute broadly.

7. Purified Substance

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a. Parke David v. H.K. Mulford – A purified substance is patentable if it is novel, non-obvious and has utility.

8. Processes a. Diamond v. Diehr – Taking a law of nature, and applying it to a useful

process such as curing rubber is patentable. Process of curing rubber uses a computer and equation as part of the process. Simply because non-patentable material (equation) is used as part of the process does not necessarily mean the process as a whole cannot be patented. Patent laws are read broadly.

9. Experimental Use Doctrine a. Madey v. Duke – Duke infringed on Madey’s patent, and the experimental use

doctrine did not apply because Duke received commercial benefit from the infringement.

10. Human Body Parts a. Moore v. Regents of University of California – Moore consented to having his

spleen removed. However, his doctors did not tell him that his cells were unique and would be of great scientific value. The doctors created a new cell lines from his spleen tissue. The court held that a claim for conversion does not lie for the use of Moore’s body tissue.

i. Policy:1. Court does not want to disincentive medical research

II. Subsequent Possession: Finders, Adverse Possession & Gifts a. Acquisition by Find

i. Policy Objectives:1. To restore the property to the true owner2. Reward honest finders3. Deliver the reasonable expectations of landowners4. Discourage trespassers and other wrongdoers5. Encourage the productive use of found property

ii. General Rules1. True owner of property does not lose title by losing property. Owner’s rights persist even

though the article has been lost or mislaid (true owner’s rights always trump)2. A finder does not have absolute rights, but the first finder has greater rights than all other

subsequent finders. A finder’s title is good against the whole world except the true owner, prior finders, and (sometimes) the owner of land where an object is found.

a. Even when property is stolen, the thief has possessory interest over subsequent finder

b. Armory v. Delamirie – Chimney sweep found a gem and took it to a jeweler for appraisal. Jeweler’s apprentice removed gem and refused to return it (offered money in return, which Sweep did not accept). Court awarded damages, measured by the finest stone that would fit the setting, unless the original stone could be produced, saying that the finder had a property interest above all other except the true owner. Prior possessor has the superior right.

i. Replevin: Cause of action to obtain the return of the actual good, not for damages.

ii. Trover: Cause of action for damages resulting from D’s conversion of chattel. The plaintiff waives his right to obtain the return of the chattel and insists that the defendant be subjected to a forced purchase of the chattel from him. If the defendant loses, he must pay money damages to the plaintiff. The measure of damages is the value of the chattel at the time the conversion occurs or the value of the plaintiff’s interest.

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1. Problem of Double Payment: D will pay P for chattel, but if the true owner comes back to claim it, will have to give it up.

iii. The meaning of true owner depends upon who the other claimants are. Title, or ownership, is relative: B can have title as against C but not as against A.

iii. Abandoned Property1. Property to which the true owner has voluntarily given up any claim of ownership2. Generally, a finder of abandoned property acquires title

a. Exception: when found by a trespasser, owner of land may have a better claim 3. Bridges v. Hawkesworth – Someone found a parcel in a shop, court decided finder of the

parcel (not the shop owner) should be entitled to it because the parcel was abandoned not mislaid.

iv. Lost Property1. Property that the owner accidentally lost2. Generally finder acquires possession

v. Mislaid Property1. Property which the owner placed somewhere with intention of returning for it, but cannot

now locate2. Mislaid property generally goes to the owner of the land on which it was found over the

finder3. McAvoy v. Medina – A pocketbook was mislaid in the shop, which was found by a patron

of the store. Court held that property left accidentally in a shop is mislaid, and therefore the owner of the premises has a right in the property.

a. From the point of view of social policy the shopkeeper ought to be preferred to the customer, as in that event the article would be more likely to get back into the possession of the real owner.

vi. Lost/Abandoned/Mislaid: 1. General Rule: A finder of property acquires no right in mislaid property, is entitled to

possession of the lost property against everyone except the true owner, and is entitled to keep abandoned property.

a. HOWEVER, exceptions consider the location of the property. i. Embedded in the soil or not?

ii. Found in a public place, or a private one?vii. Finder vs. Landowner (owner of the locus in quo) - Lost/Mislaid

1. Trespassing finders of lost property lose against property owner2. Agents/Employees – older cases tend to find that employee finders must surrender the

find to their employera. Stafford v. Water – D, an employee found rings while cleaning P’s pool. Court

held that employer was entitled to what the employee found in the pool. 3. Invited Guests – usually must surrender found property4. Private Home – finder does not have possessory rights

a. Exception: i. Absentee Owner – not in possession of the home

1. Whether the homeowner was in constructive possession of the home

a. Hannah v. Peel – Hannah finds brooch in Peel’s home. Court found that Hannah is entitled to the brooch because Hannah was not in possession of the home at the time of the find.

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5. Embedded Objects – when property is embedded is or under the soil, it is awarded to the landowner, on the rationale that the landowner’s expectations of owning things in the dirt itself are especially strong

a. Constructive possession * b. Elwes v. Briggs Gas – Boat is found under the mines and minerals, lessors have

rights of ancient boat instead of finders. 6. Public Places

a. Lost property found in public goes to the finderb. Mislaid property found in public places goes to the landowner

i. See McAvoy v. Medina above b. Adverse Possession

i. Limit on the right to excludeii. Cannot AP the government

iii. Policy1. Possibility of old claims2. Encourages people to make investment in productive use of real property3. Reward-we want to encourage people to put wild resources to productive use4. Punish-sleeping on rights/ignoring real property—obligation to be attentive/supervise5. Moral – relationship to objects in the real world helps define our autonomy/personhood—

develop with a resource/connection becomes important in understanding an individual iv. Elements – if all 4 satisfied + expiration of SOL, automatically becomes owner

1. Actual Entry a. AP depends on the SOL running against a cause of action, and the entry creates

the cause of action for trespass and thereby triggers the statuteb. Also, helps to stake out what the AP might end up claiming c. Possessor must actually, physically take possession of owner’s land, excluding

both the public and the owneri. If sharing, the owner might not realize that AP was claiming ownership

against him d. Van Valkenburgh v. Lutz – D built path to travel across lot behind his house. Had

also built a shed and small residence on lot, and had a vegetable garden. P bought property 25 years later, and tried to kick D off. NY law required that without a color of title, there must be proof of actual occupation including cultivating or improving the land, or protecting land by a substantial enclosure.

2. Open & Notorious a. Entry sufficiently open and notorious so that a reasonably attentive property

owner would be put on notice that someone is on their property. i. Reflects the sleeping principle underlying AP to penalize the

negligent and dormant owner for sleeping upon his rightsb. Readily visible to any inspector of the property

i. The true owner would know of the occupation if he visited his property ii. Open and notorious occupation constitutes notice to the owner that his

rights are being violated iii. Aimed at constructive not actual notice; the test of notoriety is objective

if an ordinary person would have notice, then the owner is regard as knowing what should have been known

c. There has to be a chance for the owner to know the adverse possession is happening (don’t need actual notice)

i. Boundary Disputes:1. Some jdxs hold that encroachment by one neighbor onto the land

of another are not open and notorious if the encroachment is of a

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small area and is not clearly an encroachment. Statute of limitations does not begin to run until owner has actual knowledge.

2. Manillo v. Gorski – D, in process of doing construction on his home, created a staircase that went over onto neighbor’s property. Claimed adverse possession because had been on the land for over 20 years. Court found that when the encroachment of an adjoining owner is of a small area and the fact of an intrusion is not clearly and self-evidently apparent to the naked eye, the encroachment is not open and notorious. owner needs actual knowledge.

3. Continuous a. Continuous but not literally constant –permitted to come and go in the ordinary

course, given the nature of the property in question (being on a farm most of the time; using the summer fishing camp for regular summer fishing trips)

b. Adverse possessor must occupy without interruptionc. General Rule : The sort of entry and possession that will ripen into title by AP is

use of the property in the manner that an average true owner would use it under the circumstances, such that neighbors and other observers would regard the occupant as a person exercising exclusive dominion.

d. To determine what is continuous, look to how the land is customarily usedi. Howard v. Kunto – D’s house was situated on a lot not described in the

deed. Deed referred to a different lot directly west. Lot was used only as a summer home, but that was the customary use of the land. Court said possessor could tack onto possession of previous adverse possessors.

e. Tacking: i. Suppose, for example, that X buys certain property described in a deed

from the seller, who as it happens had also (but unknowingly) adversely possessed a strip adjacent to the described land. If the evidence shows that the deed to X was intended by the parties to convey not only the described land, but also the adversely possessed strip, is X allowed to “tack” that strip onto the land described in the deed?

1. Yes. Howard v. Kunto – relying on the intentions of the parties in privity with one another, extends this to situation where the deed describes none of the land in question, such that there is nothing onto which the adversely possessed land can be tacked.

ii. Another tacking issue arises when land is adversely possessed by a series of people, no one of whom occupies the land for the statutory period, though all of them taken together do. May the bits of time of each possessor be tacked together? Is privity required?

1. Adding the time period of possession of the previous possessor to your own possession; only allowed when there is privity

2. If you leave under duress, and return, then full period is the statutory period plus the amount of time that you were involuntary gone from the property.

f. Privity: voluntary transfer from first possessor to the second possessor g. Ouster: if an AP is ousted from possession by a 3rd party, 3rd party may not tack

because there is no privity i. The ousted possessor can tack her new possession onto her old

possession but cannot take credit for occupation by the third party. For the duration of that third party’s occupation, the limitations period is

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tolled, or suspended. The effect is that for the possessor to acquire title, she must occupy for the limitations period plus the period of third-party occupation.

h. Taxes: most western states require adverse possessors to prove that they have paid the property taxes on the occupied property for the duration of the limitations period.

i. Statutory period – the period of time beyond which the owner of land can no longer bring an action for trespass (usually between 6-10 years). Once statute is up, adverse possessor automatically has right of title.

j. [NOTE: If the AP abandons the property—leaves with no intention to return—before the statute has run, the statute stops, a new entry is required, and the whole process must begin anew.]

k. ALSO, interruption by the true owner before the statute has run—say by bringing a successful ejection action against the AP, or by re-entering the property. In the case of successful ejectment action, the lawsuit interrupts the period of possession even if the owner does not thereafter actually oust the AP, who must start all over.

4. Adverse/Hostile/Claim of title/Claim of righta. Claim of Title – treating the land as your own

i. Three states of mind:1. Good Faith – requires that the adverse possessor think that the

land is his/her own 2. Hostile – requires that adverse possessor knows the land does not

belong to him/her, and tries to adversely possess it to make the land his/hers

3. Objective – state of mind does not mattera. What did the possessor do? b. Courts examine:

i. Lack of permission (occupation is not subordinate to the owner’s title)

ii. Occupier’s acts and statements objectively appear to be claims of ownership

b. Adverse and Hostile to true owner’s interesti. If they admit to the owner that they know it belongs to the owner, then

there is no AP because the owner does not know to eject the trespasser. c. Maine Doctrine to Boundary Disputes (minority approach):

i. Occupier is not possessing adversely if she occupied under a good faith, but mistaken, belief that the land is hers, but she would not have occupied if she had known the true facts

d. Connecticut Doctrine – Mistake does not matter; only the assertion of the actv. Under Color of Title

1. Claim founded on a written instrument (a deed, a will) or a judgment or decree that is for some reason effective and invalid

2. Some faulty document giving title to land is involved 3. Advantages:

a. Constructive possession – Actual possession under color of title of only a part of the land covered by the defective writing is constructive possession of all that the writing describes.

i. Amount that you are taking isn’t determined by how much you use, but by what the written document says that you own.

ii. Exceptions:

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1. If two people have deed to property and both are using a portion of it, adverse possessor only gets what he is using

2. If adverse possessor has a faulty deed that covers 2 plots owned by 2 different people, but is only using one of them, will only get the plot he is using, because the other guy does not have notice (not open/notorious)

b. Might have a shorter statute of limitations or less elements to prove, or more ways to prove those elements

i. Van Valkenburgh v. Lutz – required to show that they had substantially enclosed or cultivated/improved the property which they wouldn’t have had to show if it was under color of title

vi. Doctrine of Agreed Upon Boundaries 1. If neighbors come to an agreement in a dispute over where the boundary is, if one party

relies on it the court will hold them to that agreement2. If one owner acquiesces in a known encroachment for an indefinite but long time, the

acquiescence is evidence of an agreed boundary 3. Equitable Estoppel: If one neighbor does or says something that causes the other

neighbor substantially to rely on the first neighbor’s action, the first neighbor is estopped from denying his statements/actions

vii. Defense of Disability1. Minor, imprisoned, of unsound mind2. The disability has to exist at the time the adverse possessor enter the property; it is

immaterial otherwise. 3. If there is a disability at the time of entrance, it extends the statute of limitations 4. Cannot tack disabilities

viii. Adverse Possession of Chattels 1. Possession must be hostile, actual, visible, exclusive and continuous2. Usually a shorter statute of limitations 3. O’Keefe v. Snyder – O’Keefe had a painting stolen. Years later, it appeared for sale in an

art gallery. Gallery owner argued that previous owner had acquired title by adverse possession. Hinged on whether the possession was open and notorious.

a. Four Potential Rules:i. Strict Application of SOL of 6 Years

ii. Adverse possession – open and notoriousiii. Discovery Rule (majority rule): statute of limitations does not begin to

run on the owner of stolen goods as long as the owner continues to use due diligence in looking for them. Cause of action accrues when owner first knows or reasonably should know through exercise of due diligence where the stolen goods are.

iv. NY Rule (Traditional Rule): statute of limitations does not begin to run on the owner of stolen goods until the true owner knows who has the goods and makes a demand for return of the goods is rejected.

c. Acquisition by Gift i. Voluntary transfer of property (no consideration, no K)

ii. Elements:1. Intent to presently transfer property interest

a. Gruen v. Gruen – P’s father gifted a painting to him for his birthday in a letter, but only transferred title to him. Father wanted to retain possession until his death. Test: whether the maker intended the gift to have no effect until after maker’s death, or whether he intended to transfer some present interest.

b. May be shown by oral evidence

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c. Keep in mind: The death of a donor cannot be a precondition to the validity of a causa mortis gift because such a condition indicates a lack of a present intent to give the gift. *

2. Delivery of gift from donor to donee a. Traditional Rule: If an object can be handed over, it must be. b. Requires objective actsc. Methods of delivery

i. Actual: physically handing over giftii. Constructive: handing over something which is representative of or gives

access to the gift if the property is immovable (keys) iii. Symbolic: give symbol of the gift (usually a writing)

d. Function of Delivery:i. Evidence of intent to make gift

ii. Evidence of acceptanceiii. Protects people from saying things they do not mean

1. A donor will part with possession of an object only if she truly wishes to give it

e. Inter Vivos Gift – gift made during the life of the donor, when donor is not under any threat of impending death. Once made irrevocable

f. Causa Mortis Gift – made in expectation of impending death i. Substitute for a will

ii. Elements of Gift are more strictly enforced1. More careful because by passing the statute of frauds/wills

iii. Revocable if the person does not die1. Some jdxs require asking for it back, others just get it back

g. Newman v. Bost – Housekeeper claimed she was entitled to bedroom furniture, piano and bureau, which held an insurance policy. Court held that handing key to bureau was constructive delivery to the bureau itself, but not to the insurance policy because it could have been practically handed to the housekeeper. If something can be physically delivered—it must be.

h. Gruen v. Gruen – see facts above. Upon father’s death, wife claimed that no delivery of painting had been made to son, therefore no valid gift. Court held that valid gift had been made because right to title (non-possessory legal interest) was given, but possession was retained (in a life estate). No delivery was required.

3. Acceptance a. Seldom at issue b. Courts presume acceptance upon delivery, unless a donee expressly refuses a gift c. When the gift is of value to the donee, the law will presume an acceptance on his

part

POSESSORY ESTATES & FUTURE INTERESTS

I. Basicsa. Definition: legal right to occupy the land immediately (in contrast to future interest where your present

right to possess is sometime in the future) b. Land can be passed by intestacy statutes, will, will substitutes, trustsc. Vocabulary

i. Heirs – people who receive property under state intestacy statutes (when there is no will); can’t have heirs until you die

ii. Issue – lineal descendantsiii. Ancestors – by statute, parents usually take as heirs if decedent leaves no issue

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iv. Collateral – blood relatives who are neither issues nor ancestors v. Escheat – when there is nobody to receive the property, it goes to the state

vi. Words of purchase – words describing the person or persons who are the takers of the estatevii. Words of limitation – words limiting the duration of the estate

viii. Alienation – owner can convey the entire fee simple to another person d. Rules of Construction

i. Try to convey the largest estate unless a contrary intention appears (presume fee simple)ii. Try to determine testator’s intent

1. White v. Brown – Jessie Lide’s handwritten will stated: “I wish Evelyn White to have my home to live in and not to be sold.” The court relief on three statutes to presume that Jessie meant to give Evelyn a fee simple absolute, there being no “clear evidence” to the contrary. One statute stated a common presumption that every grant or devise of real estate shall pass the entire interest of the grantor or testator unless there is clear evidence to the contrary. The second statute stated a presumption that a will conveys the entire interest of the testator in the testator’s real property unless there is a contrary intention in the will. The third statute created a presumption against partial intestacy, which is what would happen if Jessie Lide’s will were read as creating a life estate in Evelyn White, because Lide did not devise the remainder that would then exist; such remainder would pass to her heirs in intestacy. The court treated the “no sale” restriction as an invalid attempt to restrain alienation of a fee simple absolute rather than clear evidence of a life estate.

a. GIVE EFFECT TO THE GRANTOR! i. Look at the language (number one priority)

ii. Look at the surrounding circumstances iii. Disabling restraint – usually invalid

II. Fee Simple Absolute – estate of potentially infinite duration a. Creation

i. Modern Rule: not necessary to use words “and his heirs”1. The grandest estate possible, most complete property, goes on forever2. Theoretically lasts forever

a. To A and his heirsb. To Ac. To A in fee simpled. To A forevere. All to Af. [To A and the heirs of her body]

i. Fee tail language interpreted as fee simple 3. Presumption of a fee simple over other estates without something to indicate that another

estate is being createda. Easier to administer, marketability, efficiency

4. Creates a perpetual estatea. Estate continues after death original owner (fee simple held by A until conveyed,

and if not conveyed, held by devisees or heirs)b. Potentially infinite durationc. No limits on inheritabilityd. Cannot be divested

b. Conveyability i. Transfer- owner can transfer interest to another person and fee simple continues with new owner

ii. Devise – under modern rule, owner can devise his fee simple to anybody he wants or split it up with parts adding up to a fee simple

iii. Inheritance – when owner of a fee simple dies intestate, heirs inherit it through intestacy statutes

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1. Usually part is reserved for surviving spouse, and the rest is distributed between the children (with parents as heirs absent spouse/children, or collateral kin if no parents)

III. The Finite Estates a. Life Estate

i. Definition 1. A possessory estate that expires upon the death of a specified person 2. Always followed by some future interest (either a reversion or a remainder)

ii. Creation 1. To Andrew for life2. To Andrew for the life of Beta

iii. Types1. For Life of Grantee

a. Expires upon death of life estate holderb. This is the usual life estate

2. Pur Autre Viea. Measured by the life of someone other than the owner of the life estateb. Expires upon the death of somebody besides the estate holderc. Created either by measuring it by a third party’s life OR when life estate is

conveyed (then it is measured by original grantee’s life) iv. White v. Brown –

1. Three types of disabling restraints: a. Disabling restraint – withholds from the grantee the power of transferring his

interests b. Forfeiture restraint – provides that if the grantee attempts to transfer his interest,

it is forfeited to another person c. Promissory restraint – provides that the grantee promises not to transfer his

interest v. Conveyability

1. Transfer ONLY b. Term of Years

i. Creation1. To Andrew for 50 years2. To Andrew from Sept. 1, 2007 to Aug. 31, 2057

ii. Conveyability1. Transfer2. Devise3. Inherit

IV. Fee Simple Defeasibles a. Fee Simple Determinable

i. Automatically ends at the happening or non-happening of an eventii. Created by:

1. The language of a fee simple2. Limited by language that shows intent to terminate automatically:

a. So long asb. Whilec. Untild. Duringe. Unless

iii. Future Interest1. Possibility of reverter held by the grantor (or his successors)

iv. Conveyability

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1. Transfer2. Devise3. Inherit (subject to conditions)

b. Fee Simple Subject to Condition Subsequenti. May end at grantor’s election on happening/non-happening of event

ii. Created by:1. The language of a fee simple2. Limited by language that shows intent not to terminate automatically:

a. But ifb. Provided thatc. Provided howeverd. On the condition that

iii. Future Interest:1. Right of reentry/power of termination held by the grantor (or his successors)

iv. Conveyability:1. Transfer2. Devise3. Inherit (subject to conditions)

c. Fee Simple Subject to Executory Limitation i. Looks like either a FSD or FSSCS except that the future interest is NOT in the grantor

ii. Future Interest1. Executory Interest

a. Springingb. Shifting

2. Conveyability:a. Transferb. Devisec. Inherit

V. Future Interestsa. Who holds the interest:

i. Grantor1. Reversion 2. Possibility of reverter3. Right of reentry

ii. Transferee 1. Remainder2. Executory Interest

b. By what possessory estate they follow:i. Fee simple absolute

1. NO future interestii. Finite Estates

1. Reversion (grantor) 2. Remainder (transferee)

c. Fee Simple Defeasibles:i. FSD possibility of reverter

ii. FSSCS right of reentry/power of terminationiii. FSSEL executory interest

d. Remainderi. Vested

1. Born2. Ascertainable

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3. There is no express condition precedent in (a) the clause creating the remainder or (b) the preceding clause

ii. Contingent 1. Any other kind of remainder

VI. Rule Against Perpetuities a. Purpose: trying to keep control from reaching too far in the future (dead hand control)b. No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the

creation of the interestc. Applies to:

i. Contingent Remainders – may vest yet still not become possessory until a future dateii. Vested Remainders subject to partial divestment/subject to open – class gifts

1. The class must close or completely vestiii. Executory interests – must become possessory

d. Steps:i. Determine if RAP applies

1. Is it a contingent remainder, vested remainder subject to partial divestment or executory interest?

2. If yes, then can the given interest vest at some time after the “lives in being plus 21 years”?

3. If yes, then the remainder is invalid, it is crossed out and interests are reclassified without the remainder included

ii. RAP Reform: many states have mediated RAP by:1. Cy Pres: Reformation- changes the will to give effect to what the grantor wanted2. USRAP – wait and see approach – see if it might vest anyway within the 21 years of life

in being a. Or, some states just give a 90 year vesting period, void if not vested by then

CO-OWNERSHIP & CONCURRENT INTERESTS POST MIDTERM

I. How do you divide up ownership of property at the same time? II. Partition – serves to sever co-tenancies so as to move in the direction of individualized ownership

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III. Concurrent Interests:a. Tenancy in common – separate, undivided shares of property where each owner has a distinct share and

the right to possess the entire propertyi. Conveyable through all 3 methods (by will or deed)

ii. Majority rule is that when ambiguous, the court will favor a tenancy in common over a joint tenancy

iii. No survivorship rights iv. Ex: T devises Blackacre to A and B. A and B are tenants in common. If A conveys his interest to

C, B and C are tenants in common. If B then dies intestate, B’s heir is a tenant is in a tenant in common with C. Each tenant in common owns an undivided share of the whole.

b. Joint Tenants – each owner has a distinct share but also owns an undivided whole and has right to possess the entire property

i. By a legal fiction, joint tenants together are regarded as a single owner; each tenant is seised per my et per tout (by the share or moiety of the whole). In theory then, each owns the undivided whole of the property; this being so, when one joint tenant dies nothing passes to the surviving joint tenant or tenants. Rather, the estate simply continues in survivors freed from the participation of the decedent, whose interest is extinguished.

ii. MODERN RULE: You can create joint tenancies in unequal shares if you want—give effect to the grantor (ex: 75%, 25%)

1. Cases of ambiguity presume tenancy in commoniii. Right of survivorship – avoid probate

1. Probate = the judicial supervision of the administration of the decedent’s property that passes to others at the decedent’s death. The probate court appoints an administrator or executor who collects the decedent’s assets, pays debts and taxes, and distributes or changes title to the property to the beneficiaries. A joint tenancy passes probate because no interest passes on the joint tenant’s death.

2. One’s interest is terminate upon death – cannot pass interest in a joint tenancy by will c. 4 unities

i. Time – acquired or vest at the same timeii. Title – by the same instrument or by a joint adverse possession

iii. Interest – equal undivided sharesiv. Possession – must have right of possession of the whole

d. Joint tenants can be created even if the unity of “interest” is not met and property will be divided according to the allocated share if it requires judicial partition

e. Creation of Joint Tenancy i. Today, a tenancy in common is presumed if there is a conveyance or devise to two or more

persons. Today, however, husbands and wives are presumed to take either as tenants by the entirety or joint tenants.

ii. Evidence Sufficient to create joint tenancy:1. The modern presumption of tenancy in common can be overcome only by a clearly

expressed intention in the grant itself. f. Severability of Joint Tenancy

i. Any of the unities can be broken unilaterally and that, then, creates a tenancy in common with the remaining joint tenants

1. Straw man, Trust Method, joint tenants agree to sever, declaration of election to sever2. UNILATERAL SEVERENCE:

a. Riddle v. Harmon – Common law regarded a conveyance of an interest held by a person to himself as an empty act, devoid of legal effect. Thus, to convert a joint tenancy into a tenancy in common, the joint tenant would have to employ a straw man, to whom the severing conveyance would be made and from whom a reconveyance would be made. Here, the court held that Frances Riddle could

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validly sever the joint tenancy with her husband by a voluntary conveyance from herself as joint tenant to herself as tenant in common with her husband. Frances’s deed made plain that her intent was to sever the joint tenancy; the reasons for refusal to recognize a conveyance from self to self were archaic and rooted in livery of seisin.

i. Joint tenant can unilaterally convert a joint tenancy to a tenancy in common by conveying to one’s self.

ii. Removes antiquated, symbolic procedure of using straw man toward Intent Test.

iii. COMPARE : Tenancy in common cannot be severed by unilateral action of one spouse. Joint tenancy gives the spouses assurance that the survivor will take the property, unless both spouses act to destroy the survivorship rights.

iv. Potential Problems :1. The husband never knew that the joint tenancy was severed; as a

result, his interest would pass at his death through intestacy or residual clause of his will

2. An unscrupulous hypothetical Frances could sever the joint tenancy by executing a deed, not recording it, and telling a trust, but equally unscrupulous, beneficiary of her will of the deed’s existence, but then wait to see whether her husband dies first, at which point the severing deed would secretly be destroyed; if Frances were to die first, her devisee would produce the deed.

3. MORTGAGE:a. Harms v. Sprague – John and William Harms owned a farm as joint tenants. John

mortgaged his interest to Carl and Mary Simmons in order to secure a loan made by them to John’s friend, Charles Sprague. Later, John died while the loan was unpaid. The court held that (1) there was no severance, and (2) William oened the farm in entirely free of mortgage to Carl and Mary Simmons. The court reasoned that the mortgage burdened only John’s interest and that because John’s interest died with him, leaving only the previously unencumbered interest of Willaim and the surviving title, the mortgage died with John. Mortgage does not destroy the joint tenancy – lien disappears with the death of the joint tenant. Court takes a very formalistic approach to the traditional question whether a mortgage severs a joint tenancy, with much turning on the difference between the title theory and lien theory of mortgages. A more functional approach considers the likely intent of the party giving the mortgage. Since a mortgage, as opposed to a conveyance, is an ambiguous sort of conveyance in this respect, it would seem to follow that a mortgage, absent any other evidence of intent, should not work a severance. Does the mortgage survive since it did not sever the joint tenancy?

i. Even though there was a default, because brother died, his interest in the property extinguished and so lien did not hold

ii. There must be an actual severance of joint tenancy, not the potential for severance—a lien does not transfer title to the lien holder but merely gives the potential for such transfer

iii. Lien theory – in putting a lien on a property, a future interest is created but that future interest will not vest until death. At death, however, the interest is extinguished and so there is no lien on the property b/c the future interest does not hold. [MAJORITY]

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1. When giving a lien, you are not divested of title but only give someone the right to divest you of title upon the happening of some future event, default.

iv. Title theory – by giving over a mortgage, you’re giving over a legal title – voluntary conveyance.

1. Therefore, joint tenancy is severed, becomes a tenancy in common and lien remains attached to the share of the tenancy in common.

v. Criticism:1. Penalizes the unsophisticated lender (because a savvy lender will

never lend to a single joint tenant on the strength of the joint tenancy interest as security for payment of the loan) and delivers a windfall to the surviving joint tenant.

g. Sharing Benefits/Ouster – Relations Among Concurrent Owners i. “Two men cannot plow the same furrow” –So how should the inherent conflict of reciprocal

rights be resolved? ii. Partition

1. Concurrent owners might decide for any number of reasons to terminate a co-tenancy. If they can agree on a division of the property or the proceeds from its sale, no problem arises; the termination can be accomplished through a voluntary agreement.

2. But in the not unlikely event that such an arrangement is impossible, recourse to the equitable action of partition is necessary. The action is available to any joint tenant or tenant in common.

3. The court will order either:a. Physical division of the property

i. Partition in Kind the preferred method 1. Courts will order unless the party can prove either:

a. That physical partition is impossible or extremely impractical

b. That physical partition is not in the best interest of all the parties

i. Economic costs (or gain) involved in physical partition, but also the more subjective costs imposed on a tenant in possession by ordering partition by sale.

b. Sale and division of the land and proceedsi. Partition by Sale not favored by courts

1. Rural undeveloped land is the most likely candidate for physical division

2. After the sale, the net proceeds are divided among the co-owners in proportion to their ownership interests

3. In the absence of express evidence in title of unequal shares, courts employ a rebuttable presumption that each co-owner is entitled to an equal share of the proceeds.

c. Delfino v. Vealencis - Helen Vealencis owned 20.5 acres in CT, as a tenant in common with the Delfinos. Helen lived on a portion of the property and operated a garbage-hauling business from there. The Delfinos wished to develop the property into single-family residences and so demanded partition by sale even though the property was capable of partition in kind. Although the evidence suggested that the total value of the property would be maximized by sale and development, the court held that it was not in the best interest of all parties

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(including Helen) to sell the entire property. The value to Helen of continued possession (secured by physical partition) was sufficient to convince the court that partition in kind should be ordered.

i. Courts favor partition in kind over by sale. 1. By Sale provides for an emergency, when a decision cannot

be well made, in any other way. a. Only when two conditions are satisfied:

i. The physical attributes of the land are such that a partition in kind is impracticable or inequitable

ii. The interests of the owners would better be promoted by a partition by sale

b. The burden is on the party requesting a partition by sale to demonstrate that such a sale would better promote the owners’ interests.

iii. Rents, Profits & Possession 1. Each co-owner has the right to possess the entire property, and no co-owner may exclude

his fellow co-owners. a. Exclusive possession by one co-owner – because each co-owner has a right to

possess all of the property, exclusive possession by one co-owner is presumptively valid. If it is pursuant to an agreement of all co-owners it is conclusively valid. If not by agreement, the cotenant in exclusion possession has the following obligations to his cotenants:

i. Rental value of exclusive possession :1. Two views:

a. No liability absent ouster or special duty – the majority rule is that a cotenant in exclusive possession has no liability for her share of the rental value of possession unless [MAJORITY]:

i. The other cotenants have been oustedii. The cotenant in possession owes a fiduciary

duty to the other cotenants iii. The cotenant in possession has agreed to pay

rentb. The cotenant in exclusive possession is liable to

cotenants out of possession for their share of the fair rental value of the occupied premises, unless there has been an agreement among the parties to excuse the tenant in possession from this obligation [MINORITY]

2. Ouster: a. Occurs if the tenant in exclusive possession either:

i. Actually prevents or bars physical entry by a cotenant

ii. Denies the cotenants claim to title b. Two Circumstances:

i. AP – asserts complete ownership and deny the co-tenancy relationship

ii. Co-tenant responsible for rent, refusing a demand of other co-tenant for use and enjoyment of land.

3. Spiller v. Mackereth – Spiller and Mackereth owned a commercial building as tenants in common. Spiller took

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possession of the entire building and used it as a warehouse. Mackereth demanded that he vacate half the building or pay rent. Spiller did nothing, and Mackereth sued for the rental value of half the building. The court reversed an award of rent, reasoning that Spiller had neither denied that Mackereth was an owner of the building nor prevented Mackereth from actually moving in and taking possession. Mackereth’s demand that Spiller vacate or pay rent was insufficient to trigger ouster, she needed to prove that she “actually sought to occupy the building but was prevented from moving in by Spiller.”

a. No evidence to show that Spiller refused entry to Mackereth. He had the right to use of the whole property so long as it didn’t prevent others from use. The locks were not an indication because used to protect what was inside the building.

b. Majority/Minority i. Majority – encourages partition, moving

ownership back into the hands of individual owners and moving away from fractional ownership

ii. Minority – discourages partition and maintains split ownership leading to the tragedy of the commons

c. RULE: When a cotenant is in sole possession of concurrently owned property, the majority holds that, unless there has been an ouster, the cotenant in possession does not have to pay a proportionate share of the rental value to the cotenants out of possession.

ii. Rents From Third Parties 1. A cotenant who receives rents on the property from a third party

is obligated to account to his cotenants for those rents. If the rents or other income received by a cotenant are greater than the cotenant’s share, he is obligated to pay the excess to the other cotenants.

2. Swartzbaugh – John and Lola Swartzbaugh owned in joint tenancy a 60-acre walnut orchard. John leased four acres to Sam Sampson, a boxing promoter, who constructed a boxing pavilion on the site. Lola did not join in the lease; indeed, she objected vehemently to the boxing pavilion. Lola sought to cancel the lease made by John, and the court denied her claim, reasoning that a lease by a single joint tenant to a third-party “is not a nullity but is valid...contract in so far as the interest of the lessor in the joint property is concerned.”

a. Non-lessor joint tenants do not have an action to cancel the leases made by the lessor joint tenant.

b. Lease does not destroy a joint tenancy – there’s always a way out—action for partition.

c. The joint tenant has the right to lease or mortgage interest in property even if the other tenant objects. Other joint tenants are entitled to a portion of the rent. If

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other joint tenant ousted, then can get fair market value for his share of the rent.

d. Remedies Available to Ms. Swartzbaugh: i. Partition – she could bring an action to partition

the entire 60 acres or to partition the fraction leased to Sampson for the duration of the lease. If she brought an action to partition the fraction leased for a five-year term, with an option to renew for an additional five year, and the court ordered sale of the leasehold term, how would the court divide up the proceeds of the sale?

ii. Ouster —Another remedy would be to enter, or try to enter, into possession with the lessee. If the lessee resists, the remedies of an ousted cotenant are then available. She could recover from the lessee one-half the reasonable rental value of the leased land. [Only if the lessor co-tenant was renting out for BELOW the fair market value*]

iii. Accounting – She could sue her husband for an accounting of the rents received by him.

iv. Death - Lola could hope for her husband’s death, which would terminate Sam’s leasehold because Sam had only leased John’s interest, and John’s interest would expire at his death.

TITLE ASSURANCE

I. How current owners can obtain assurance that they actually have good title to the land they purchaseII. 3 Types of recording acts:

a. Race – give priority to the title claimant who first records his deedi. As between two grantees to the same property, the earliest to record prevails. Hence there is a

race to record first. It does not matter that the first person to record had notice of a prior unrecorded conveyance.

ii. The reason for ignoring such notice is that making the record dispositive obviates the need to rely on extrinsic evidence about notice, which may be unreliable. Most jdxs regard the equitable cost of the race statute as too high, because it permits a later grantee to prevail over a known earlier grantee so long as the later grantee is quicker to record.

b. Notice – give priority to the bona fide purchaser who lacks notice of a prior unrecorded deedi. Address the inequity in permitting a later purchaser to prevail over an earlier purchaser when the

later purchaser knows of the prior purchase. They do so by providing that a subsequent bona fide purchaser without notice of a prior unrecorded transfer prevails over the prior purchaser who has failed to record. And this is true even if the subsequent purchaser has failed to record.

1. Ex: “No conveyance is valid against any subsequent bona fide purchaser who has no notice of the conveyance, unless the conveyance is recorded.”

c. Race-Notice – give priority to the bona fide purchaser who lacks notice of a prior unrecorded claim only if the bona fide purchaser records first

i. Protects a more limited class of subsequent bona fide purchasers who lack notice of the prior conveyance: It protects only those subsequent bona fide purchasers who lack notice and who record before the prior purchaser.

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1. Ex: “ No conveyance is valid against a subsequent bona fide purchaser who has no notice of the conveyance and who has recorded his conveyance first.”

ii. Virtues: 1. Encourages recording2. Eliminates disputes over which of two conveyances was first delivered

d. NOTE: Sometimes a straight application of recording acts WILL NOT decide who gets title to the property. At that point, employ the judge-made law (see below).

III. Recording a. Creates a system for placing conveyances in a public record, and then stipulates who has priority in the

event of a conflict. b. A deed is valid without a recording, but an unrecorded deed is likely to lose out to a recorded deed if both

deeds are from the same grantor to the same property. c. Grantor-Grantee Index

i. An alphabetical record of all grantors and all grantees, by surname, is maintained in separate volumes. The typical entry will contain the date, the name of the grantor (or grantee, as appropriate), the other party to the transaction, a brief description of the property and the instrument, and a citation to the precise location in the public records of a complete copy of the instrument.

ii. Title Searching1. The searcher begins by looking back in time through the grantee index to find the

transaction by which the present owner acquired title, then searches the grantee index further back to find the transaction by which the present owner’s grantor acquired title. This process continues until an adequate root of title has been found (usually a title transaction far enough back in time to cut off any prior claims by a statute of limitations). Then the searcher will turn to the grantor index and search forward in time, beginning with the initial grantor, to see if any owner ever conveyed her interest prior to the grant that appears to make up the chain of title traced backward in time.

d. Tract Index i. Every transaction pertaining to a particular parcel is entered in one location, instead of

chronologically by grantor and grantee. Tract indexes are most common where property has been platted by map into various blocks and lots within blocks.

e. Consequences of Recording:i. Provides constructive notice to the world of a conveyance

ii. Even if a later purchaser fails to consult the record, he is charged with knowledge of its contentsiii. Race-Notice recordation cuts off the possibility that either a prior unrecorded purchaser or a

later purchaser would prevail. iv. Notice recordation provides constructive notice, thus preventing later purchasers from

prevailing f. When is an instrument recorded?

i. Mother Hubbard1. A variation on the improperly indexed instrument is an instrument that accurately

describes one parcel, Blackacre, and also includes “all other land owned by the grantor in the county.” The recorder can only record this instrument by reference to Blackacre, because it is an unreasonable burden on the recorder to search the records to identify all of the other property owned by the grantor. These clauses are void against later purchasers of the grantor’s property (other than Blackacre) because a diligent searcher of the index (with respect to a parcel other than Blackacre) will never locate any reference to the mother hubbard clause.

2. Luthi v. Evans – The court held that the omnibus clause in the Owens-to-Tours assignment did not give constructive notice to later purchasers of Owen’s interest in the Kufahl lease. It was not reasonable to expect a title search to locate and read every other

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conveyance ever made to Owens at any time conferring an interest in oil and gas lease in Coffey County, Kansas. That would be a monumental task, greatly increasing the time and expense of title searches, which Kansas’s recording act did not contemplate.

g. Scope of Protection i. Invalid Conveyance – although recordation creates a presumption of validity, if in fact the

instrument was invalid (forged or never delivered), recordation does not make it validii. Interest in land created by operation of law – only apply to conveyances (deeds, mortgages,

grants, contracts) and liens created by operation of law (judgments). They DO NOT apply to interests created by the operation of law, such as adverse possession, prescriptive easements, or implied easements. Even though such interests are not of record, they are still valid and enforceable against subsequent purchasers.

iii. Bona Fide Purchasers – one who gives valuable consideration to purchase the property and is without notice of a prior unrecorded deed or conveyance.

1. Race acts protect BFPs only to the extent that they record first2. A donee does NOT receive protection because he has not given value 3. Shelter Rule – the protection given to a BFP extends to all takers from the BFP, even if

such a taker knows of a prior unrecorded conveyance. This rule is necessary to give BFP the full value of his purchase in reliance on the records. Part of that value is the ability to transfer good title to others.

IV. Notice a. To be protected under a notice or race-notice statute, a purchaser must be without actual notice or

constructive notice of any prior unrecorded interests at the time the purchaser pays the consideration i. Actual – real, actual knowledge of the prior unrecorded transaction. Evidence beyond the record

is necessary to prove actual notice. ii. Constructive – there are two forms:

1. Record notice – the entire world, specifically including a subsequent grantee, is charged with constructive notice of the contents of the record. If an instrument is validly recorded, every subsequent grantee has constructive notice of it, and so cannot be a BFP.

a. Wild Deeds – Outside the chain of title i. If a complete stranger to the record chain of title records a conveyance,

the conveyance does not give constructive notice, because it is not within the chain of title.

ii. Board of Education of Minneapolis v. Hughes – In Minnesota, a race-notice state, Hoerger conveyed a lot to D&W, who did not record. D&W then conveyed the lot to Board of Education, who did record, after which Hoerger conveyed the same lots to Hughes, who lacked notice of the conveyance from Hoerger to D&W. Hughes recorded. The court held that Hughes prevailed over the Board of Education because the conveyance from D&W to the Board was outside the chain of title and did not impart constructive notice. At the time Hughes purchased from Hoerger, a diligent title search would reveal Hoerger to be the record owner. Even though the deed from D&W to the Board was recorded first, it would appear to be a deed made by a complete stranger to the chain of title. A diligent searcher would have never found the D&W-Board conveyance.

b. Deeds from common grantor – Reciprocal implied covenants restricting land use may be implied by a developer’s conveyance of property subject to express covenants burdening the developer’s retained land, but such a covenant does not appear in the chain of title of the retained land, if it is conveyed without the implied covenant being made express.

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i. Guillette v. Daly Dry Wall – Gilmore, a developer and subdivider, conveyed a lot to Guillette under a recorded deed that restricted the lot’s use to a single-family residence, and recited that “the same restrictions are hereby imposed on each of [the] lots now owned by seller.” This was effective to impose the single-family residence use restriction on all of Gilmore’s remaining lots. Later, Gimore conveyed a restricted lot to Daly under a recorded deed that made no mention of any restrictions. Daly obtained a building permit to construct 36 apartment units on the lot. Other owners of the lots in the development sought to enjoin Daly from violating the single-family residence use restriction. The court held that Daly had acquired the lot with constructive notice of the restriction even though the restriction was not in the chain of title from Gilmore to Daly.

1. The Guillette rule requires a purchaser to expand his search of title to include all conveyances made by the grantor of other adjacent property he owned, in order to be certain that the grantor did not burden his remaining property with a use restriction contained in a deed to a third party.

c. After-acquired titlei. Suppose that the grantor conveys title twice, once before acquiring it and

once afterward to a person without actual notice of the prior conveyance, and both conveyances are immediately recorded.

1. The majority rule is that the first conveyance does not impart constructive notice because it is not reasonably to expect title searchers to search the records for the time period prior to the grantor’s acquisition of title on the off chance that the grantor might have conveyed his title before he received title

2. Inquiry notice – in most jdxs, a subsequent purchaser has an obligation to make reasonable inquiries and is charged with knowledge of what those inquiries would reveal.

a. Record reference to an unrecorded instrument – if a recorded instrument refers expressly to an unrecorded instrument, a purchaser is under obligation in many states to inquire about the substance of the unrecorded instrument to which the record refers

i. Harper v. Paradise – Susan Harper conveyed her Georgia farm to Maude Harper for life, remainder to Maude’s children. The deed was mislaid and thus not recorded. In 1928, Susan having died, Susan’s children executed and delivered a quitclaim deed to Maude by which they conveyed any interest they might have in the farm to Maude. The 1928 deed, which contained a recital that it was “to take the place of the deed made and executed by Mrs. Susan Harper during her lifetime,” was duly recorded. Through a succession of recorded conveyances, title to the farm was vested in the Paradises. Upon Maude’s death, her children sued to recover possession. The court held that the Paradises could not rely on a Georgia statute protecting the title of innocent purchasers from heirs or apparent heirs who lack actual notice of prior claims, because the recitals in the 1928 deed made specific reference to an unrecorded deed. Georgia is a race-notice state, and the court concluded that the recitals to the 1928 deed placed a duty upon subsequent purchasers to inquire of Maude to determine the details of the unrecorded deed referred to in the 1928 deed. Thus, the paradises had constructive notice of the prior claim when they acquired title and so lost.

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b. Possession – most states impose a duty to inquire of whoever is in possession of the subject property

i. Waldorff Insurance & Bonding – Choctaw Partnership, a developer, built a condo complex secured by a recorded mortgage, later assigned to Eglin National Bank. Then Choctaw sold Unite 111 to Waldorff but the sale was not recorded. Waldorff moved in, then moved out but kept furnishings in the unit and asserted exclusive possessory rights to the unit. Choctaw then executed and delivered a deed Waldorff, who recorded. Eglin later sought to foreclose on Unit 111. The court held that because Waldorff was in possession, Eglin was on inquiry notice that Waldorff might have a prior unrecorded claim.

c. Character of Neighborhood i. Sanborn v. McLean – see below

d. Immediate grantee of a quitclaim deed

PRIVATE CONTROL OF LAND USE

I. Easements – allow a person to use the land of another (distinct from a freehold estate which gives its owner the right to exclusive possession of one’s own land)

a. Ambiguous Grants i. Most courts employ a rebuttable presumption that an ambiguous grant conveys an easement

ii. This is supported by economic reasoning—it minimizes the transaction costs of uniting ownership of efficiently usable parcels

iii. Presault v. US – the court of appeals affirmed a trial court’s determination that the original interest was an easement because Vermont law stipulated that railroads acquiring rights of way acquired only the smallest interest in land necessary to accommodate their limited interest in creating a rail transport corridor. The difference between an easement and a fee simple was significant: A fee simple in the railroad would mean that the abandoned rail corridor remained the railroad’s property and that it was validly conveyed to Vermont; an easement raised issues of whether it was abandoned (and thus title reverted entirely to the owner of the fee) or, if not, whether the public trail use was consistent with the scope of the easement for rail transport.

b. Policy in favor:i. Contractual aspects – burdened land is sold for less

ii. Certainty in purchasing – want to be sure court will enforce if you buy iii. Encourage productive use of land

c. Four types:i. Appurtenant – RUNS WITH THE LAND.

1. Benefits the owner of another parcel of land. The benefited parcel is called the dominant estate (or the dominant tenement), and the burdened parcel is called the servient estate (or servient tenement). An easement appurtenant passes with the dominant estate whenever the dominant estate is transferred to a new owner. The easement right is incidental to, or appurtenant to, the dominant estate.

2. Courts generally will identify an ambiguous easement as appurtenant3. Encourages efficient use of the land

ii. In Gross – RUNS WITH THE PERSON. 1. An easement that is designed to deliver a personal benefit, rather than to benefit the

landowner, is an easement in gross. They are not attached to, or appurtenant to, any

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parcel of land. They create a personal right to use the servient estate, but that right may be assigned if the parties so intended.

iii. Positive vs. Negative1. Affirmative – an easement granted by the servient owner giving the easement holder the

right to enter or perform an act on the servient land 2. Negative – confers only the right to prevent specified uses of the servient estate

a. Blocking lightb. Blocking air flowc. Removing supportsd. Blocking water

d. Profits a prende – the right to take a natural resource or crop from the land of another i. Common law courts preferred to construe profits as in gross because the right conveyed has

substantial economic value by itself and thus is most efficiently utilized if it is easily transferrable by itself, rather than as an adjunct to some unrelated property

e. Licenses i. Permission to enter the licensor’s land

ii. May be oral or writteniii. Revocable at any time unless the licensor makes it irrevocable (expressly or by his conduct) iv. License vs. In gross?

1. The difference is that an easement may NOT be revoked and continues to bind successors to the servient estate who have notice of it, while a license is revocable and binds only the licensor so long as it remains alive

2. Courts prefer to construe ambiguous cases as licenses f. Irrevocable Licenses

i. 3 ways:1. Intention – if the licensor expressly makes the license irrevocable 2. Equitable estoppel – if a licensor grants a license on which the licensee reasonably relies

to make substantial improvements to property, equity requires that the licensor be estopped from revoking the license.

a. Holbrook v. Taylor – Holbrook permitted Taylor to use a roadway across his property in order for Taylor to reach his own property. With Holbrook’s knowledge, and without any objection, Taylor used the access road to construct a substantial single-family residence. Holbrook later blocked the road with a steel cable strung taut across it. The Kentucky Supreme Court held that Holbrook was equitably estopped from revoking the license.

3. Duration – a license made irrevocable through equitable estoppel continues to exist as is needed to prevent unjust enrichment, which generally meant that the license exists until the value of the reliance expenditures has been exhausted. Where valuable improvements have been made, this might well be at least as long as the useful life of the improvements, and some courts have hinted that such a license must last forever.

ii. Easement Compared:1. As easement is of indefinite duration and can continue forever. An irrevocable license

may last for a shorter period, but an irrevocable license might last as long as an easement. iii. Policy:

1. In favor?a. It is unfair for the licensor to stand by and watch the licensee expend

considerable money and effort in reliance on the license, then to rescind the license. The licensor is in the best position to prevent these reliance expenditures.

2. Against?a. Estoppel penalizes the “good neighbor” who fails to say no until the

improvement is completed. The landowner who freely gives permission and is

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loathe to be a “bad guy” is the one who bears the cost of an irrevocable license imposed on his land. On this theory, the licensee should pay to the licensor the value of the irrevocable license (measured by the damage to the licensor’s land resulting from irrevocability).

iv. License “coupled with an interest”1. When a license is tied together with some other legally recognized interest, the license is

irrevocable until the other interest is vindicated. g. Creation

i. Grant/Express – in writing, must satisfy the requirements of the SOF1. Deed or grant 2. Signed by the grantor 3. Life estate or fee simple 4. Reservation – grantors sometimes convey land and, in the same deed, purport to

“reserve” an easement in favor of the grantor or a third party a. In favor of grantor

i. Common law judges invented the fiction that the grantee, by accepting the deed, had granted an easement back to the grantor.

b. Grant to a third-party (modern rule) i. This rule is especially peculiar because a real covenant can be created in

favor of a third party. A minority of modern courts have ruled that easements reserved in favor of a third party are valid.

ii. Willard v. First Church of Christ Scientist 1. McGuigan owned lots 19 and 20, was a member of the church

across the street. Permitted the church to use lot 20 for parking. She then sold lot 19 and 20 to Peterson, who subsequently sold them to Willard. However, the deed from Peterson to Willard did not contain notice of the church parking, although the deed from McGuigan Peterson did. The court held that the primary objective in construing a conveyance is to give effect to the intent of the grantor (McGuigan).

iii. GIVE EFFECT TO THE GRANTOR’S INTENT . ii. Estoppel

1. An irrevocable license, the functional equivalent of an easement, can be created by estoppel

iii. Implication 1. Two circumstances:

a. Implied from Prior Use. Where property has been divided by a common owner, and, prior to the division, one portion of the property has been used in an easement-like fashion for the benefit of another party of the property.

i. Common Owner – prior to the division, the quasi-servient state and the quasi-dominant estate must be owned by the same person

1. When the common owner divides the property by selling one part to another person, an easement from prior use may be created.

2. If the owner and grantor retains the quasi-servient estate (the burdened part), the implied easement is by implied grant.

3. If the owner and grantor retains the quasi-dominant estate (the benefited part), the implied easement is by implied reservation.

ii. Reasonable Necessity – the prior use must be reasonably necessary for the use and enjoyment of the “quasi-dominant estate”

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1. The easement must be reasonably necessary for the owner of the dominant estate to use and enjoy her property. It ensures that the easement was likely intended to continue after division.

2. One corollary implication is that an easement implied from prior use can only be appurtenant. Courts tend to find reasonable necessity if it would be costly or difficult to use the dominant estate without an easement, or if the price for either the dominant or servient estate reflects the existence of an easement.

3. Most courts today require reasonable necessity for easements implied by grant and for easements implied by reservation.

a. Van Sandt v. Royster – Bailey owned three adjoining lots. She built a house on one of the lots and ran an underground sewer line across the other two lots to a municipal sewer. Later, she sold all three lots to separate owners under deeds making no mention of the sewer line. The new owners connected their homes to the sewer line. Van Sandt, the downstream owner, sued to enjoin Royster from continuing to use the Bailey sewer after it flooded his basement. The court held that an easement by reservation implied from prior use had been validly created by Bailey when she conveyed title to each of the two downstream lots.

iii. Continuous Use – the prior use must be continuous, not sporadic 1. The use must be such that both parties intended for it to

continue. Continuous use does not mean that it must be used constantly; rather it means that the easement must be embodied in some permanent physical alteration.

a. Ex: an outdoor concrete staircase serving Parcel A, but located entirely on Parcel B, is permanent (and thus continuous) even though it is not in constant use.

iv. Intended continuation – the parties must intend, at the time of division, to continue the prior use

1. Many of the other elements are proxies for this element because parties rarely provide express evidence of their intentions. The price paid is helpful to this issue because parties who intend for a quasi-easement to continue are likely to settle on a price that reflects the value (And detriment) of the easement.

v. Existing Use At Division – the prior use must be existing at the time of division, a requirement implied by the element of intended continuation

vi. Apparent – the prior use must be apparent, which does not necessarily mean that it is visible

1. Van Sandt v. Royster – Although Bailey’s private sewer line, crossing the two lots she sold without reference to any easement, was underground, the court held that the sewer line was apparent because later buyers should have inferred the existence of some sewer by noting the existence and operation of plumbing fixtures, and could have employed a skilled plumber to detect the actual location of the sewer.

vii. [Scope] – the scope of the implied easement includes not only uses known or discoverable at the time of severance but also those uses that a

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party might reasonably have foreseen that the other party would have expected to be included in the implied easement.

b. Implied from Necessity. Where property has been divided by a common owner in such a manner that an easement for access is necessary.

i. Only when a common owner divides his property in such a way that one of the resulting parcels is left without access to a public roadway. An easement for right of way between the landlocked parcel and the public road across the owner’s remaining parcel is then implied, either because the parties must have intended this result or because it is economically efficient and socially beneficial to create an easement for access.

ii. ONLY permitted for right of way –ingress and egress between the landlocked parcel and a public road.

1. Elementsa. Common Owner – can only be created over property

owned by the person who also owned the landlocked parcel and who divided the property to create the access problem.

i. In cases of multiple division, an easement by necessity is created at the moment a parcel is landlocked, and thus the easement burdens the last parcel split off by the common owner—the parcel that completed the landlocking.

ii. Othen v. Rosier – Hill owned a large parcel of land in Texas, which he sold in bits and piece over time. One of those parcels was landlocked, and title to that parcel was eventually acquired by Othen, who habitually used a roadway crossing Rosier’s land to reach a public road. To prevent erosion, Rosier built a levee that impounded water, making the roadway impassable at times. Othen sued Rosier to enjoin further interference with his right of way, which Othen contended was implied by necessity. The court upheld the determination that no easement by necessity had been proven across Rosier’s land because there was no proof that when Hill, the common owner, had conveyed the Rosier property to Rosier’s predecessor in interest it was that conveyance that landlocked the Othen parcel. Rather, it appeared that at the time Hill had conveyed the Rosier parcel, Hill owned other land (never identified by Othen) that was contiguous to both the Othen parcel and a public roadway. Othen had an easement implied by necessity across some property, but it wasn’t across Rosier’s property.

b. Necessity at severance – NOT prior use – must exist at the moment that the property is divided. No prior use is needed to establish an easement by necessity. The necessity of access is present the moment the parcel is

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landlocked, though the practical need may lie dormant for years.

c. Duration – An easement by necessity lasts as long as the necessity exists. If the necessity is removed (perhaps by creation of a new public road that provides access), the easement is terminated.

d. Location – Once the servient estate is identified, the owner of the servient estate is permitted to select a reasonably convenient location for the easement, on the theory that the servient estate owner can best minimize the damage to the servient estate.

c. Prescription i. Analogous to adverse possession. Easements are not possessory interests,

so an easement cannot be acquired by adverse possession, but adverse use for a sufficient period of time can ripen into an easement by prescription.

ii. May be appurtenant (as when one homeowner acquires a driveway easement over his neighbor’s land) or in gross (as when repeated hunting or fishing create a prescriptive easement in gross in favor of the hunter or fisher).

iii. Elements1. Prescriptive Period – the same as the limitations period

applicable for adverse possession 2. Adverse use under a claim of right – The use of another’s land

must be adverse and not with permission of the owner. a. If a use is permissive, it can never ripen into a

prescriptive right, no matter how long the use goes on. However, a permissive use can become adverse if the user does things that are inconsistent with mere permission and that give the owner notice of the user’s claim of right.

b. Similarly, an adverse use can be rendered non-adverse if the owner of the burdened estate grants permission for the use.

c. Use of easement by necessity after it has terminated is likely adverse and may ripen into an easement by prescription. Use of an easement by necessity is by right, and thus not prescriptive, but if the necessity ends, the easement by necessity terminates. Further, use of the terminated easement is adverse, unless permission for the continued use is granted.

3. Open and Notorious Use – the adverse use must be conducted so that the use may be discovered by any reasonable inspection. It may not be carried on in secret or carefully concealed.

4. Continuous Use – Satisfied if the adverse user continually asserts her claim of right by making whatever use is consistent with the nature of the claimed easement, even if that use is periodic or episodic. It does not mean that the adverse user must use the property constantly.

a. If the adverse use is interrupted, the prescriptive period starts over (lawsuit, notice).

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5. Exclusive Use – Shown simply by claiming an easement from one’s own use, and not in common with the public or somebody else. Thus, even in the case of the common driveway, each neighbor’s use is “exclusive” in this sense.

a. Othen v. Rosier – The court rejected Othen’s claim for an easement by prescription because Othen used the roadway in common with Rosier.

h. Scope of Easements i. How extensively and intensively may the easement holder use the easement?

1. Manner + Frequency:a. May be adjusted with time to account for original purpose

i. Change is consistent with original grantii. Follows from natural development of dominant estate (foreseeable at

time of grant)iii. Does not do unreasonable damage to the servient estate

ii. To what degree may the owner of the servient estate use or interfere with the easement? iii. Parties intentions control – Identify and uphold the parties’ intentions

1. How the easement was created a. Grant

i. The express language of the grant control insofar as it may be dispositive, but extrinsic circumstances often must be consulted

b. Implication i. The scope depends on the reason for the implication

1. Prior use – construed the same way as easements by grant 2. Necessity – exactly congruent with the necessity: no more, no

less c. Prescription

i. Because they come about by a particular long-standing adverse use by one party alone, there is no reason to assume that any greater or different use was intended by the parties.

2. How conditions have changed to affected the originally intended use 3. What changes in use were reasonably foreseeable by the parties4. What changes are necessary to achieve the intended purpose of the easement5. Whether a change use imposes an unreasonable burden on the servient estate

iv. Change in location of easement 1. If an easement specifies a specific location, or one has been agreed to by the parties’

conduct, the location is permanently fixed unless the parties agree to a change. a. This rule does not prevent some modification to the easement that impose no

additional burden on the servient estate. v. Enlargement of the Dominant Estate – an easement cannot be used for the benefit of land that

is not the dominant estate 1. Brown v. Voss – The court held that although the appeals court was correct to conclude

that any physical enlargement of the dominant estate is wrongful, an injunction should not issue because there was no evidence of irreparable harm to Voss from the enlargement. There was no increase in the volume or type of traffic or other increase in the burden placed on Voss’s servient estate. Accordingly, the court sustained the trial court’s award of $1 in damages to Voss. The usual remedy for an easement for the benefit of a non-dominant estate is an injunction to prevent the use, which leaves the parties free to reverse this outcome, if they wish, by private bargain. This approach drags into court the private bargaining that otherwise would occur post-injunction in the form

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of argument over the amount of damages and also over the relative equities of an injunction.

i. Termination i. Expiration – an easement created by grant may expire by its terms

ii. Merger – If the easement holder also acquires title to the servient estate, the easement is extinguished because an easement exists only in land owned by somebody else

1. The easement holder must acquire the entire servient estate for merger to extinguish the easement. If only part of the servient estate is acquired, and use of the easement still burdens the other party, the easement is not extinguished.

iii. Actions of the easement holder1. Release – generally, must be written because it affects an interest in real property and so

is within the scope of the SOF a. An oral release is valid, through equitable estoppel, when the servient estate

owner relies on it to his substantial detriment 2. Abandonment – if the easement holder manifests a clear and unequivocal intention to

abandon the easement. Mere nonuse will not suffice. a. Established by acts of the easement holder that clearly and unequivocally

establish either a present intent to relinquish the easement or a purpose inconsistent with its future existence.

b. Presault v. US – The Railway had removed all of the tracks, switches, and other railroad equipment from the section in dispute. The court ruled that the Railway had abandoned its easement. The easement holder’s conduct manifesting an intent to abandon can be affirmative or negative.

3. Alteration of the dominant estate a. If the dominant estate owner alters the dominant estate so that the easement may

no longer be used, the easement is extinguished iv. Cessation of Purpose – if the purpose of the easement has completely ceased, the easement is

extinguished 1. Easements by necessity – terminates when the necessity is eliminated because its purpose

has ceased 2. Easements by estoppel – terminates when the licensee has reaped the full value of the

expenditures made in reliance upon the license. At that point, its purpose has ceased to exist.

3. Extrinsic changes that vitiate purpose – if acts of third parties completely vitiate the easement’s purpose, the easement is extinguished

4. Accidental destruction of the servient estate – if the servient estate is accidentally destroyed, the easement is extinguished

v. Actions of the servient estate holder 1. Intentional destruction of servient estate 2. Prescription

II. Real Covenants a. A promise about land usage that runs with an estate in land, meaning that it binds or benefits subsequent

owners of the estate . A promise to use land in a specified fashion is affirmative; a promise not to use land in a specified fashion is negative.

i. If one party breaches a covenant made with another person—even if it concerns land usage—the issues presented are purely a matter of contract law. Property law becomes involved only when a covenant about land use is sought to be enforced wither by or against a successor to the estate in the land benefited or burdened by the covenant.

ii. There are two principal remedies for breach of a promise:1. Damages – legal remedy 2. Injunction –equitable remedy

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iii. If your client wants damages for breach of a covenant about land usage, she must prove that the covenant is an enforceable real covenant. If she cannot do that, the same promise might still be enforceable as an equitable servitude, but the only remedy then available for breach will be an injunction.

iv. Compared to easements1. Affirmative easements confer rights to use another’s land; real covenants do not. Real

covenants are not promises that land will be used, or not used, in specified ways. Negative easements, however, are very much like real covenants. A right to an unobstructed view over your neighbor’s land (a negative easement) is functionally identical to a promise by your neighbor not to obstruct your view (a real covenant).

v. Compared to equitable servitudes1. An equitable servitude about land use that is enforceable in equity against successors to

the benefited or burdened estate in land. b. Creation

i. Only by a written instrument ii. May NOT be created by implication or prescription

c. Enforceability by or against successorsi. The elements necessary to enforce the burden of a real covenant against a successor to the

burdened estate are more difficult to establish that the element needed to claim the benefit of a real covenant by a successor to the benefitted estate.

ii. Elements1. Intent – intent the burden (or benefit, both) to run.

a. Almost always satisfied by an explicit statement in the covenant that it binds “successors, heirs, and assigns.”

2. Horizontal privity – privity of estate between the original parties is required for the burden to run, but not for the benefit to run.

a. Only a few relationships satisfy this technical term and concept. 3. Vertical Privity – privity of estate between the original promisor and the successor to the

burdened estate is necessary for either the benefit or the burden to run, but the definition of vertical privity is more easily met for benefits to run than for burdens to run.

a. Harder to establish for the burden of a covenant than it is for the benefit of that covenant

i. Burden – it is necessary to prove that the successor acquired the exact same estate in land owned by the original contracting party. If something less than the original promisor’s estate is conveyed, the burden does not run.

ii. Benefit – will run to a successor of some interest in the benefited estate b. Adverse Possessors – benefits of affirmative covenants run to adverse possessors

who have acquired title, but adverse possessors who have not yet acquired title may only enforce affirmative covenants:

i. To repair, maintain, or render services to the benefited propertyii. That confer benefits that may be enjoyed by the possessor without

diminishing the value of the covenant to the true owner and without materially increasing the burden of performance on the burdened party.

c. Third-Party Beneficiaries – two parties may enter into a covenant about land use that imposes mutual benefits and burdens but also explicitly benefits a third party’s estate.

i. Neponsit v. Emigrant – the court held that an HOA that did not succeed to any estate of the benefited promisee was able to enforce the benefit of such a covenant on the theory that it was the corporate agent of the owners of benefited estate.

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1. Do you need privity on the benefitted side? a. Some courts say YES. Neponsit grapples with this issue.

4. Touch and Concern – the substance of the promise must touch and concern the burdened land and, in most states, the benefitted land as well. Courts look at the effect of the covenant.

a. Neponsit v. Emigrant – As part of a planned development, the developer sold lots subject to a covenant to pay money annually to a homeowners’ association for the purpose of maintaining private roads and sidewalks owned in common by all lot owners. In holding that the covenant touched and concerned the burdened estate, the court concluded that the covenant “affects the legal relations—the advantages and the burdens—of the parties to the covenant, as owners of particular parcels of land and not merely as members of the community in general.”

b. Negative Covenants – almost always touch and concern because their nature is to restrict land use.

c. Affirmative Covenants – courts are more reluctant to enforce because may require continuing judicial supervision and impose large (and sometimes crushing) obligations on successors to the covenant. An affirmative covenant that fails to address the economic external costs of land use is almost certainly one that does not touch and concern land.

i. Covenants to pay money:1. The most common is one requiring payment of fees to HOA for

the maintenance of common areas and facilities. These covenants are generally held to touch and concern land so long as the services produced by the payment enhance the value of the burdened land. This is virtually always the case when the payments maintain common streets, sidewalks, elevators, or other “essential” attributes of the development.

2. Neoponsit v. Emigrant – the court held that a covenant to pay a fee to maintain common facilities touched and concerned the burdened property because the effect of the covenant was to impose burdens and advantages on estate holders in their unique capacity as landowners rather than as members of the general public.

d. Termination i. Duration – endures for so long as the parties who created it intend it to endure

ii. Merger – if the same person acquires title to the burdened land and all of the benefited land the covenant—whether a real covenant or an equitable servitude—is extinguished by merger. It cannot be revived but must be created anew.

iii. Eminent Domain – the government takes the burdened land for a purpose inconsistent with the restrictive covenants.

iv. Express waiver or release – if all the holders of the benefit of a covenant expressly release the covenant, it is extinguished. If all the benefit holders expressly waive the covenant to permit a specific nonconforming use, the covenant remains alive to bar other nonconforming uses.

v. Expiration of the covenant – covenant sometimes have a defined life span, and when its defined life has expired, the covenant is extinguished.

III. Equitable Servitudes a. A covenant about land use that will be enforced in equity (by an injunction) against a successor to the

burdened estate who acquired it with notice of the covenant. A covenant need not meet all of the criteria of a real covenant to be enforceable as an equitable servitude. Covenants are more commonly enforced

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as an equitable servitude because they are easier to enforce by or against successors, and most people prefer enforcement of a covenant by an injunction than by damages for its breach.

b. Differences b/n Equitable Servitudes and Real Covenants:i. Remedy:

1. Real covenant = damages2. Equitable Servitude = injunction

ii. No privity needed:1. Neither horizontal nor vertical privity is needed for either the benefit or burden of an

equitable servitude to run to successors in the burdened or benefited estates. iii. Creation:

1. Equitable servitudes may be created by implication in many jdxs. A real covenant can only be created expressly in writing.

c. Origins:i. Tulk v. Moxhay – Tulk sold Leicester Square to Elms, who promised for himself and his asssigns

not to build on Leicester Square. With knowledge of the covenant, Moxhay purchased Leicester Square from Elms and then proposed to build on the Square. Under English law, the burden of the covenant would not run, because horizontal privity was lacking, so Tulk sought and obtained an injunction. The Chancellor reasoned that it was highly unfair for Moxhay to purchase Leicester Square knowing of the covenant (and probably paying less because of its existence), only to ignore it with impunity. Because the covenant was intended to bind successors, its substance touched and concerned the land, and Moxhay had notice of it, it was enforceable in equity against Moxhay.

d. Creation: i. SOF requires that they be created in a writing signed by the promisor

1. Major exception:a. Negative equitable servitudes can be created by implication when there is a

common scheme of residential development i. Where a real estate develop sells lots in a subdivision on the promise that

all the lots will be burdened with the same use restriction and later fails to carry through on the promise to burden all lots

ii. Sanborn v. McLean – McLaughlin subdivided a tract of land in Detroit along Collingwood Avenue into building lots and started to sell them under deeds that restricted use to single-family residences. Later, McLaughlin sold some lots without those restrictions, including Lot 86, which eventually was acquired in 1910 by McLean. In the 1920s, as autos became more commonplace, McLean started to construct a gasoline filling station on Lot 86. His neighbors sought to enjoin this use as a violation of an implied negative equitable servitude. The court agreed that an injunction was proper, reasoning that because the initial restrictions imposed by McLaughlin, the developer, were “for the benefit of the lands held by McLaughlin to carry out the scheme of a residential district,” an implied reciprocal servitude burdened McLaughlin to carry out the scheme of a residential district, and that servitude was equitably enforceable against McLean, who was on inquiry notice from the uniform residence character given the lots.

iii. As in Sanborn, courts sometimes call the covenant so implied a reciprocal negative easement, although the term implied reciprocal covenant is more accurate. Whatever the label, it is:

1. Reciprocal – the common scheme contemplates covenants burdening all lots for reciprocal benefit

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2. Negative – it restricts land use rather than requiring affirmative acts or use

iv. Elements1. Common scheme of development

a. The development must be uniform character and recognizable as such by purchasers.

b. When does the scheme begin? Four factors:i. Advertisements mentioning the reciprocal

covenantsii. Use of a map showing the entire development as

a sales aid in conjunction with sales of burdened lots

iii. Representation to buyers that all lots will be similarly burdened

iv. Sale of a significant number of lots with a common use restriction (Sanborn – 21 lots of the 98 were sold with single-family residential-use-only restrictions before the lot at issue in the case was sold without such a restriction, yet the court ruled that a common scheme had been created.

c. No covenants on lots before the common scheme begins i. If a developer conveys land without use

covenants before the common scheme begins, no reciprocal covenant will be implied. The land is simply not part of the common scheme, and so there is no basis for finding an implied reciprocal covenant.

b. Negative covenant –courts will imply reciprocal covenants only when the substance of the covenant is negative—limiting the use that may be made of the property rather than requiring some positive act on the part of the owner of the burdened land.

e. Enforceability by or against successors:i. Elements

1. Intent – if the parties expressly or impliedly intended for the covenant to run to benefit or burden successors, the equitable servitude created by the covenant will run

2. Privity not required – neither horizontal nor vertical privity of estate is required for either the burden or benefit of an equitable servitude to run

3. Notice – a purchaser who pays real value for an estate and has no notice of the servitude at the time is not bound by the servitude. Notice can be actual or constructive.

a. Constructive – most often comes through the record, but can also be the product of circumstances that should trigger inquiry on the part of the buyer, inquiry that would real servitude

i. Record Notice1. Guillette v. Daly Dry Wall – Gilmore subdivided a tract and

imposed single-family residential use restrictions on several lots. In a deed to Guillette, Gilmore recited that the servitude created was thereby imposed on Gilmore’s remaining lots. Later, Gilmore sold one of those lots to Daly without any servitude. Daly’s direct chain of title went from himself to Gilmore to Gilmore’s predecessor. No servitude was in any of those deeds.

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Nevertheless, the court held that Gilmore’s deed to Guillette was in Daly’s chain of title. The effect of this rule is to require purchasers of property to search the records for all possible grants of other property owned by each grantor in the chain of title, on the possibility that there might be some servitude created in a deed outside the direct line of ownership.

a. Most jdxs reject on the ground that it imposes “intolerable” burdens on title searchers.

b. Actual notice – actual knowledge of the servitude is actual notice. 4. Touch and concern

a. The substance of the covenant must touch and concern the benefited or burdened land.

f. Termination i. Because equitable servitudes are enforceable in equity, the following equitable defenses, if

proven, will effectively extinguish an equitable servitude by blocking its enforcement 1. Changed conditions within the affected area

a. A covenant will no longer be enforced in equity if conditions have so radically and thoroughly changed within the area affected by a covenant (usually a subdivision) that the covenant can no longer achieve its purpose

b. Courts are split on whether the changed circumstances operate to extinguish the covenant entirely or merely bar its enforcement in equity. The modern trend is to extinguish covenants entirely when changed circumstances have been proven.

2. Changed conditions within the surrounding areaa. The nature of the character of the surrounding area has so changed that it would

now be inequitable to enforce the servitude. It is necessary to establish that the extrinsic changes in the neighborhood have been so pervasive that all of the benefited lots have lost the benefit of the covenant at issue.

b. Western Land v. Truskolaski – Western Land subdivided 40 acres of rural land southwest of Reno, burdening all of the lots with restrictive covenants limiting use to single-family dwellings. By 1969, Reno had grown up around the subdivision, bracketing it with high-traffic volume boulevards. Western Land proposed to use 3.5 acre undeveloped site at one of those busy intersections for a shopping center, but the homeowners sought and obtained a trial court injunction preventing Western Land from violating the covenant. The court upheld the injunction because the covenant continued to be of a real and substantial value to the residents of the subdivision.

3. Abandonment 4. Equitable Estoppel – if the party trying to enforce a covenant has made knowingly false

representations to a defendant ignorant of the true facts, intending and inducing the defendant’s reliance on the misrepresentation, he will be estopped from enforcing the covenant.

5. Laches – the unreasonable failure to assert a known equitable right, coupled with some prejudice to the defendant—will bar enforcement of an equitable servitude.

6. Unclean Hands – the equitable notion that P must not be guilty of the conduct of which he complains may bar a person from enforcing a reciprocal servitude if guilty of the same violation.

7. Balance of Hardships – A court may deny injunctive relief if the hardship imposed by the injunction is very large in relation to the benefits produced.

IV. Common Interest Communities a. Condominiums

i. Owned individually

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ii. A condominium development will have a recorded master deed in which the use restrictions that pertain to each unit are recited; thus, any purchaser of the condo unit has constructive notice of the covenants.

1. Courts divide as to the degree of deference to be given to these covenants. 2. Nahrstedt v. Lakeside Village – The recorded master deed to Lakeside Village, a condo

development, recited that no animals shall be kept in any unit. P purchased a unit and moved in with her three cats. The HOA demanded their removal and assessed fines against P, who then sought to prevent the association from enforcing the covenant on the grounds that it was unreasonable. The court held that the restriction was reasonable because it did not violate a fundamental public policy and was not wholly arbitrary and did not impose a burden that far outweighs any benefit.

b. Cooperative Apartments i. Owned by a corporation

ii. The individual apartments are occupied under long-term leases by people who acquire ownership of shares of stock in the apartment corporation and thus, acquire the right to occupy the apartment. Because the nature of a cooperative apartment is that each owner-lessee is obligated for a portion of the entire cost of owning the building, and one owner’s financial failure imposes immediate burdens on the others, the financial fate of a cooperative apartment owners is far more interdependent than that of condo owners. Courts are willing to permit the directors to deny ownership to anyone for any reason except violation of civil rights laws.

PUBLIC CONTROL OF LAND USE: ZONING

I. Basicsa. Zoning is the use of governmental power to regulate land use.

i. Objectives: 1. To prevent incompatible uses from occurring

a. Reducing the need for nuisance law2. To increase property values generally by minimizing use conflicts

a. Increasing the property tax base 3. To channel development into patterns that may serve larger social goals

b. Zoning is the use of public power to impose uniform results that might otherwise be accomplished in more piecemeal and selective fashion by private bargains

c. Constitutional validity: i. Village of Euclid v. Ambler Realty Co. – Euclid, Ohio adopted a comprehensive zoning ordinance

that restricted the permissible uses of property, limited the height of structures, and imposed minimum lot-size requirements for certain types of structures. The court upheld the validity of the law against a due process and equal protection challenge. The law’s objective—minimizing land use conflicts to prevent nuisances from ever occurring—was a legitimate exercise of the state’s inherent police power because its content was neither unreasonable nor arbitrary.

1. Zoning is facially OK. 2. Essentially a nuisance, noxious use prevention for land use planning. *3. Separating different uses that might come into conflict is a legitimate reason for

exercising the police power. d. Statutory Schemes

i. The point of zoning is to separate land uses and regulate the density of use within use districts. This can be done by cumulative zoning or mutually exclusive zoning.

1. Cumulative a. Spectrum from “higher” to “lower”b. The least dense single-family residential use is the highest use, proceeding

downward to more dense residential, light commercial, heavy commercial, and

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industrial. The idea of cumulative zoning is that all uses at the level of the zoned district and higher will be permitted.

2. Mutually Exclusive a. Permits some uses and excludes all others within the zoned area b. Most often used with respect to industrial or heavy commercial districts.

Residential use is often barred in such districts, partly to dampen use conflicts, partly out of public health concerns, and partly to preserve space for industrial users.

c. Zoning laws may be partly mutually exclusive and partly cumulative. 3. Density Zoning

a. Zoning laws also seek to control the density of occupation within any given use district. This is usually done through a wide variety of limits on the size or height of structures, their location upon their site, and the functional uses created within the structure.

b. Supplement use controls; they are not generally considered an alternative to use controls

II. Authorization for Zoning a. Enabling Legislation

i. Usually, the power to adopt zoning laws is reserved to the state government. A state’s legislature must enact legislation authorizing local governments to adopt zoning laws. In general, a local zoning law is void unless it is in conformity with the state’s enabling act—the law authorizing localities to engage in zoning.

b. Comprehensive Plan i. The Standard Act (the common enabling act) requires that zoning decisions be made “in

accordance with” a comprehensive plan for land use in the locality, which is intended to be a general guide for overall development of a locality.

ii. Zoning laws are the specific means of implementing the vision of the comprehensive plan. III. Statutory Discretion and Restraint

a. Communities are dynamic. Appropriate land usage should change as the underlying economic and social conditions dictate. Zoning responds to this fact in several ways:

i. Tolerating the continued existence of land uses existing prior to adoption of the zoning lawii. Providing for amendment of the zoning law

iii. Conferring discretion on administrators in the applications of the zoning statuteb. Nonconforming Uses

i. When zoning is introduced, some existing land uses will not be in conformity with the uses permitted under the new zoning law. These nonconforming uses are permitted to exist because their immediate abatement would amount to either a taking of property without just compensation or an unreasonable exercise of the zoning power. However, nonconforming uses may be, and often are, eliminated gradually.

ii. Forced phase-out1. The zoning law may specify a period after which the nonconforming use must cease. This

so-called amortization period will vary, depending on the investment of the nonconforming use. The period must be long enough to avoid a successful charge that the forced phase-out amounts to an uncompensated taking or denial of substantive due process. Majority rule = valid if reasonable period.

a. Factors:i. Nature of the use

ii. Character of the structureiii. Locationiv. What portion of the user’s total business is affectedv. The salvage value

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vi. The extent of depreciation of the usevii. Any monopoly or other advantage conferred on the user by reason of the

foreclosure of similar and competing usesb. PA Northwestern v. Zoning Hearing Board – Moon Township, Pennsylvania

adopted a zoning ordinance extensively regulating the location of stores vending pornography, the effect of which was to make illegal the store operated by PA Northwestern. The ordinance permitted Northwestern 90 days in which to cease operations. The court held that the amortization and discontinuance of a lawful pre-existing nonconforming use is per se confiscatory and violative of the Pennsylvania Constitution. A concurring justice thought that the ordinance was void because the amortization period was unreasonable—it did not provide adequate time for elimination of the non-conforming use.

i. Could NOT amortize non-conforming use out of existence c. No expansion

i. Typically, zoning ordinances stipulate that the nonconforming use may not be expanded beyond the precise boundaries of the existing use. Thus, a successful and growing business located as a nonconforming use will be forced to move to expand. A new occupant will be required to conform to the zoning law.

d. Destruction or abandonmenti. If the nonconforming use is destroyed or abandoned, permission to

continue the nonconforming use terminates. Any replacement structure or new use must conform to the current zoning law.

ii. Abandonment usually requires proof that the user has voluntarily intended to abandon the nonconforming use, but some ordinances supplement abandonment with a bright-line rule that discontinuance of the nonconforming use for a specified period terminates permission for the use.

iii. Administrative discretion1. Variances

a. Every zoning law establishes a zoning appeals board of a board of adjustment, usually a group of people appointed by the local executives who are authorized to grant variances from the zoning law in the interest of alleviating practical difficulties or unnecessary hardships.

b. Two types:i. Area – those awarded to alleviate siting problems

1. Setback requirements 2. Minimum yard area

ii. Use –those permitting an otherwise prohibited use 1. Multiple-family residence in a single-family residential district

c. The theory is that they should be granted when compliance with the law would impose such extreme burdens on the owner that application of the law might be unconstitutional or otherwise invalid.

d. It is an administrative safety-valve to avoid judicial determinations that the zoning law is invalid as applied to the particular circumstances.

e. Standardi. Undue hardship – neither created by nor peculiar to the owner

2. Exceptional Usesa. Uses permitted by the zoning law but which might impose material external costs

on neighbors b. Standard

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i. Compatibility with existing usesii. In furtherance of public health, safety and general welfare

c. Cope v. Inhabitants of City of Brunswick – Brunswick zoning law permitted apartment houses in suburban residential zones only as an exception granted by the zoning board. The zoning board refused to grant an exception for a 48-unit apartment complex proposed to be located in a suburban residential zone. The law permitted exceptions that did not adversely affect the health, safety or general welfare of the public and would not alter the essential characteristics of the surrounding property, but the zoning board thought that the apartment complex would produce adverse effects and alter the essence of the surrounding property. The court held that the zoning law was an impermissible delegation of legislative authority to the zoning board because the quoted standards refer only to the same general considerations which the legislative body was required to address and resolve in enacting the ordinance. The court’s view was that the ordinance embodied a determination that an apartment building was generally suitable for location in a suburban residential zone and that the quoted standards gave the zoning board no lawful basis for determining that a particular location was unsuitable because of the existence of certain characteristics which rendered the general legislative determination inapplicable.

3. Spot Zoninga. A zoning amendment that delivers special private benefits (and no public

benefits) to a small, discrete parcel of land and is not in conformity with the comprehensive plan.

b. A zoning amendment that delivers special private benefits to a small, discrete panel, produces little or no public benefits, and is inconsistent with the comprehensive use plan is presumed to be invalid spot zoning. The burden then shifts to the government to prove that changes bear a substantial relationship to the general welfare of the affected community.

4. Floating Zonesa. A use designation not attached to any particular land until a landowner seeks to

have his land designated as the recipient of the floating classification. i. Ex: Because it desire to encourage the responsible disposal of toxic

waste, the city of Ford Cove creates a floating zone, designated TWC, dedicated to toxic waste collection and shipment to a disposal facility. The floating zone specifies the criteria that any land must meet to receive the TWC designation: a site of at least half an acre, no residence, schools, office buildings, churches or retail establishments within 1,000 yards, and drive-through vehicle access. The OBJECTION to floating zones is that they violate the comprehensive plan. The comprehensive plan is supposed to inform people about the future direction of land use, but a floating zone can conceivably land anywhere, thus undermining the predictive value of the plan.

5. Conditional Zoning a. Sometimes a developer wishes to use land in a fashion not permitted by the

zoning law, and requests rezoning in exchange for the creation of a servitude burdening the land that is intended to eliminate or dampen the negative externalities of the proposed use.

i. Ex: A developer wishes to build townhouses on land zoned for “fully detached single-family residences.” The developer offers to cluster the townhouses in a portion of the site shielded from view form neighbors, and covenant that the undeveloped portion of the site will remain

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undeveloped forever. Upon execution of the servitude, the land is rezoned. In essence, imposition of the servitude of the condition of rezoning.

b. Criticisms:i. Illegal spot zoning – some say it is illegal spot zoning, but the servitude

partially offsets the claim that an individual parcel is receiving a special benefit, thus suggesting that conditional zoning ought to be assessed by the same standards applicable to any zoning amendment.

ii. Invalid disposal of police power – this claim is that governments may not bargain away their legislative power, but the municipality is not precluded from changing the zoning use at some time in the future if public welfare so requires.

iii. Ultra vires –enabling acts typically do not expressly authorize the attachment of conditions to zoning amendments, but neither do they forbid the practice.

iv. Waiver of restrictions-some object that conditional zoning amounts to a waiver of governmental ability to restrict use of the affected land any further, an argument resting on the assumption that conditional zoning amounts to a binding K between the landowner and the city preventing future zoning restrictions. Most courts reject this claim, reasoning that the only bargain is imposition of a servitude in exchange for an immediate rezoning, thus leaving the government free to change the zoning classification in the future.

6. Cluster Zoning – to zone particular area for a particular use at a specific level of density and occupation, but confer upon zoning administrators discretion to decide exactly how that use and density will be achieved.

a. Usually not problematic so long as it is in conformity with the comprehensive plan

c. Limits on Zoningi. States possess an inherent police power

1. The power to achieve the people’s vision of public welfare, as communicated through government agents, but the power is limited.

a. Must conform:i. To the US Constitution

ii. To valid federal law preemptive of local zoning lawiii. To the relevant state constitution iv. To State law, particularly the state’s zoning enabling act and judicial

doctrines developed to curb unreasonable and arbitrary exercise of police power

ii. Zoning for Aesthetic Objectives1. Architectural Review

a. The conformity of the proposed structure to the existing character of the neighborhood

b. The likelihood that the proposed structure will not cause substantial depreciation of neighboring property values

c. Courts link aesthetics + property value + general welfare d. Stoyanoff v. Bekeley – The affluent St. Louis suburb of Ladue enacted an

architectural review ordinance designed to preserve property values and maintain Ladue’s conventional neo-colonial architectural aesthetic sensibilities. Stoyanoff proposed to build a pyramid, flat-topped residence. The proposal was rejected, and Stoyanoff attacked the validity of the entire scheme as unauthorized and a

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violation of due process if within the otherwise permissible scope of the police power. The court upheld the Ladue law, reasoning that architectural review is for the general welfare and thus authorized by the enabling act. The rejection of the design was reasonably related to preserving land values and the prevailing aesthetic sense of the community. The court emphasized the probable adverse effect of the design on property values, an effect that, if true, is merely the market’s expression of prevailing aesthetic sensibilities.

e. Anderson v. City of Issaquah – Anderson wished to construct a retail commercial building site, but under an Issaquah ordinance he needed the approval of his design by the Development Commission. The Commission was charged by the ordinance to approve designs compatible with neighboring structures, harmonious in texture, lines, and masses with building components of appropriate relationships using harmonious colors and lighting. Anderson proposed an off-white stucco structure with a blue metal roof. The Commission told Anderson the color was wrong and that the design was not compatible. Anderson then modified the design, but the Commission told him that the building did not deliver the right feeling, and that it was not in harmony with the certain feeling you get when you drive along the Boulevard. The court ruled that the denial had deprived Anderson of due process because the statute, both written and as applied, required persons of ordinary intelligence to guess at its meaning and differ as to its application.

2. Free Speech a. Zoning laws that regulate speech in a content-neutral fashion are invalid if they

are either:i. Broader than reasonably necessary to achiever a significant government

purpose other than speech regulation ii. So restrictive that they fail to leave open ample alternative channels of

communication b. City of Ladue v. Gilleo – In order to minimize visual clutter, Ladue banned all

signs except for sale signs, business or home identification signs, and a few other, but forbid Gilleo’s “For Peace in the Gulf” sign. Even though Ladue’s regulation was content-neutral, the court voided the Ladue’s ordinance because it near-total prohibition on signs failed to leave open enough alternative means of communication. A narrower prohibition of signs—one that left open ample alternative channels of communication—would likely have been valid.

iii. Exclusionary Zoning 1. All zoning is exclusionary in that it seeks to exclude unwanted uses, but sometimes

zoning is used to exclude unwanted people. a. A typical example is a zoning law that, in the interest of preserving open space,

aesthetics, and high property values (with its corollary high tax base), requires a minimum lot size of two acres. The result is a landscape of expensive homes occupied almost entirely by affluent owners. The poor (often disproportionately composed of racial minority) are excluded.

b. HOWEVER, excluding the poor, even if done unintentionally, does not trigger any presumption of invalidity under the federal Constitution.

i. The exclusion is rationally related to the legitimate objectives of preserving open space, aesthetic, and high property values, and is thus valid. States, however, remain free to interpret their own constitutions and enabling acts to ban actions permitted under the federal Constitution.

2. Southern Burlington County NAACP v. Mount Laurel –A zoning law in effect excluded all multi-family residential dwellings and mobile homes, and required minimum lot and

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dwelling sizes for single-family residences that were sufficiently large that low-income persons were effectively excluded from Mount Laurel. The court ruled that the New Jersey constitution and the state’s enabling act both required that local zoning further the “general welfare” and that Mount Laurel’s failure to accommodate the housing needs of poor people was contrary to the general welfare. The court’s opinion was that a developing community expanding in size and population could not adopted land use regulations that make it physically and economically impossible to provide low income housing in the municipality.

a. Remains a minority view—most states hold that so long as zoning law does not exclude people on a suspect basis (e.g., race), it need only be rationally related to the legitimate state interest to be valid. Thus, when minimum lot sizes are rationally related to legitimate local interests, they are upheld.

TAKINGS

1. Basicsa. The eminent domain power: All governments in the US have the power to take private property for public

purposes, but that power (the eminent domain power) is limited by the US Constitution, state constitutions, statutory law and judicial decisions. The US Constitution’s Fifth Amendment provides that “private property [shall not] be taken for public use without just compensation.” This is often called the “Takings Clause” or the “Eminent Domain Clause.”

b. All property protected: The Takings Clause protects all property, no matter whether it is tangible or intangible.

c. Applies to all governments: The Takings Clause applies to the states as well as the federal government. The substance of the Takings Clause is “incorporated” into the Fourteenth Amendment’s Due Process Clause, which is applicable to the states. The Clause surely applies to governmental action taken by the legislative or executive branches. There is more uncertainty about the degree to which judicial action might constitute a taking.

d. The purposes of the Takings Clause:i. Prevent forcible redistribution of property

1. Prevents forcible redistribution of property by stipulating, through just compensation requirement, that when governmental power is used to take private property, the public pays the property owner the value of the property taken.

ii. Takings permitted only for public benefit 1. The public use requirement of the Takings Clause was designed to prevent any taking,

whether or not compensated, that forces a transfer of property from one private person to another with no public benefit in the forced transfer. Governmental power to take property may only be exercised for public benefit.

e. The Principle Issues:i. Public Use

1. Is the governmental taking of property for public use? Governments sometimes take private property and convey it to another private person in order to reap some alleged collateral for public benefit.

ii. Regulatory Takings1. At what point does a governmental regulation of property (restricting its use, possession,

or disposition) become so burdensome that it is a de facto taking of property, which triggers the constitutional requirement of just compensation?

iii. Just Compensation 1. It is well settled that the private property owner is entitled to the fair market value of the

taken property—the price that a willing buyer and a willing seller would agree upon.

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2. Fair market value includes any reasonable expectations that a buyer may have about possible future uses. An owner is not entitled to additional value that is subjective and peculiar to the owner (e.g., sentimental value). If there is no practical market for the property, any fair valuation method can be used.

iv. Constitutionally Noncontroversial Takings1. Most governmental takings of property are not constitutionally controversial. When a

government condemns private property for a new public road, it is clearly doing so for public use and will admit that it is obligated to compensate the private landowners. The only issue is the amount of compensation. Constitutional issues arise if the government denies that it has taken the property or if the taking is arguably not for public use.

f. The Public Use Requirementi. Constitutional Text: “nor shall private property be taken for public use, without just

compensation.” 1. No governmental seizure of private property may occur, even if just compensation is

paid, unless it is for a public use. ii. Meaning of Public Use

1. Literal: limits government power to take private property to instances where the property will actually be used by the public

a. Park, school, road, military base, post office2. SC Interpretation = “Public Purpose”

a. So long as the taking is rationally related to any conceivable public purposeb. Reductive to whatever the legislative believes is conducive to the “public

welfare” c. Kelo v. City of New London – New London, CT decided to condemn a number of

private residential properties in the Fort Trumball area of the city in order to assemble a 90-acre tract for an integrated redevelopment plan. Significant portion of the property were to be conveyed to private developers to construct: (1) a small urban village, consisting of shops, restaurants, and a waterfront hotel, (2) 80 new residences, (3) office and retail space, and (4) a marina, parking, and water-dependent commercial uses. The court had ruled in Berman v. Parker that an “urban renewal” scheme in which blighted property was condemned and transferred to a private developer was a public use. In Hawaii Housing v. Midkiff, the Court had upheld as a public use the forced transfer of fee titles to long-term lessees of the ground on which their residences were located, given that only “22 landowners owned 72.5% of the fee simple titles” to land on Oahu, the most heavily populated Hawaiian island. Hawaii’s desire to eliminate “the perceived social and economic evils” of this “land oligarchy” was “rationally related to a conceivable public purpose.” Despite these precedents, the landowners contended that condemnation of non-blighted property for purely economic development purposes was not for a public purpose. The Court rejected that argument concluding that so long as the condemnation was part of a “comprehensive development plan” that had been subject to “thorough deliberation,” the Court would defer the to the judgment of government officials. In short, and with these additional caveats, the taking was rationally related to a conceivable public purpose.

i. Petherbridge : You CANNOT engage in private taking—clearly not literally correct because that is what occurred in Kelo. Court does not explain what a private-to-private taking is supposed to be. They have reserved the possibility that there could be such a thing and that would somehow not rise to the level of public use. Constitution bars this.

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ii. Kennedy concurred because there was no clear evidence that this taking was primarily to benefit a private party, with only “incidental or pretextual public benefits.”

1. Stricter standard of Rational Basis 2. “A court applying rational-basis review under the Public Use

Clause should strike down a taking that, by a clear showing is intended to favor a particular party, with only incidental or pretextual public benefits, just as a court applying rational basis review under the Equal Protection Clause must strike down a government classification that is clearly intended to injure a particular class of private parties, with only incidental or pretextual public justifications.”

iii. O’Connor Dissent:1. Noted that the Court had upheld taking for later transfer to

private persons only when the sexiure was to cure a public harm. By contrast, the taking in Kelo involved only incidental public benefits and raised the possibility that anyone’s property could be taken so long as the government could offer some plausible possibility that the new private user would make it more economically productive.

2. Points:a. The Sovereign may transfer private property to public

ownership—such as for a road, a hospital, or a military base.

b. The Sovereign may transfer private property to private parties, often common carriers, who make the property available for public use—such as with a railroad, a stadium, or a public utility.

c. Removing some affirmative public harm iv. Thomas Dissent:

1. Does not believe that the government should affirmatively remove public harms; however, agreed with the first two points in the O’Connor dissent.

g. Regulatory Takings: How Much Regulation of Property Is Too Much?i. At some point, government regulation of property becomes so extensive that it amounts to a de

facto taking, even though the government denies that it is taking the property. But WHEN? 1. Pennsylvania Coal – the Court declared that “while property may be regulated to a certain

extent, if regulation goes too far it will be recognized as a taking.” ii. The Per Se Rules:

1. Permanent Possession – when a government regulation permanently dispossesses an owner of her property, the regulation is a taking.

a. Real Property – as applied, a taking has occurred if a regulation produces a permanent physical occupation of all or part of the property. Temporary occupations are not per se takings.

i. Loretto v. Teleprompter – New York requires landlords to permit cable television operators to install cable facilities on their property. Loretto, a landlord, claimed that the forced cable installation was a taking of her property, even though the physical occupation consisted entirely of a half-inch-diameter coaxial cable along the roof and descending to the apartments within, together with associated small directional taps and junction boxes for the cable, most or all of which were on the roof of the

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building. The Court agreed, ruling that a “permanent physical occupation authorized by government is a taking without regard to the public interests that it may serve.” The Court reasoned that the permanent loss of ability to exclude others was especially destructive of property expectations—“the character of the invasion is qualitatively more intrusive than perhaps any other category of property regulation.”

b. Personal Property – a taking has occurred when governments, by regulation, confiscate personal property.

i. Ex: Florida law provided that the interest earned on private funds deposited into court in interpleader cases must be turned over to the state. The court held that a taking had occurred because the property owner had been permanently dispossessed.

c. Physical invasion distinguished: i. A physical invasion of property by government that is not permanent,

and that does not permanently deprive the landowner of the right to exclude others, is not a per se taking but must be assessed under the balancing process that applies to claims of regulatory takings that cannot be disposed of under the categorical rules. However, when government action strips all utility from an owner’s possession, the action may be treated as a government invasion of property that constructively dispossesses the owner.

1. Ex: Government aircraft continually flew over Causby’s land at low altitude, thus making his property virtually unusable. The Court held that a taking had occurred, because Causby’s loss was “as complete as if the US had entered upon the surface of the land and taken exclusive possession of it.”

2. Nuisance Abatement – if a government regulates property to abate activities that are common law nuisances, there is no taking, even though the regulations might bar all economically viable uses of the property.

a. Theory: Ownership of the property never included the right to inflict nuisances, so nothing has been taken by forbidding what was never lawful.

b. Origin:i. Originated in cases that sought to distinguish between regulations

designed to prevent harmful (or noxious) uses and those designed to reap a public benefit. Only the latter were said to be takings.

c. Hadacheck v. Sebastian – In the 1890s, Hadacheck acquired rural land outside of Los Angeles that was ideal for brick-making because of the extent and fine quality of the clay deposits. Hadacheck invested heavily in machinery and equipment and developed a thriving brick business. Eventually, the city grew out to his brickyard and kiln, and Los Angeles enacted an ordinance forbidding his continued operations, on the grounds that the continued activity was annoying and inconvenient to his newly arrived residential neighbors. Because the ordinance allowed Hadacheck to remove his clay (but not to make bricks), there was no taking, said the Court. The Court never expressly declared that Hadacheck’s brickyard was a nuisance, but was persuaded that Los Angeles was seeking to regulate a “noxious use,” even if it might be lawful.

d. Lucas v. Coastal Council – South Carolina prohibited any development of Lucas’s beachfront lots on the Isle of Palms in order to protect its ecologically fragile barrier islands. The South Caroline Supreme Court ruled that the legislation was not a taking, but the Supreme Court reversed and remanded the case to determine whether the law simply abated a common law nuisance.

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Regulation of private property is no taking if the regulations “do no more than duplicate the result [obtainable by private properties]...under the State’s law of private nuisance, or by the State under its complementary power to abate public nuisances.” Even if a regulation forbids the only economically viable use of the property, it does not “proscribe a productive use that was previously permissible under relevant property and nuisance principles.” A government desire to “prevent harm” is not, by itself, enough to trigger per se validity because “the distinction between ‘harm-preventing’ and ‘benefit-conferring’ is in the eye of the beholder. After Lucas, regulations that address “harms,” but which are not common law nuisances, are evaluated under the balancing tests. There is no per se insulation of such regulations from the Takings Clause.

3. Loss of All Economically Viable Use – if government regulation leaves the owner with no economically viable use of his property, and the regulation does not abate a common law nuisance, a taking has occurred.

a. Rationales: i. The severity of such regulations impeach the usual assumption that

government regulation of property if for the advantage of everyone, including affected property owners

ii. The effect of these regulations is to achieve public benefits by imposing the costs of such benefits entirely upon affected property owners.

b. Lucas v. South Carolina Coastal Council – South Carolina’s Beachfront Management Act forbade the construction of “any permanent habitable structures.” Assuming that this rendered the property “valueless,” as the trial court had concluded, the US Court held that a regulation that deprives a landowner of all economically viable use results entirely from abatement of a common law nuisance (which would make the regulation a per se non-taking). The Court justified the rule partly because “total deprivation of beneficial use is, from the landowner’s point of view, the equivalent of a physical appropriation,” and partly because such regulations “carry with them a heightened risk that private property is being pressed into some form of public service under the guise of mitigating serious public harm.”

c. Partial Destruction – “Conceptual Severance”i. The loss of all economically viable use rule applies only to a regulation

that strips the owner of all economically viable use of the entire property. If a regulation operates to deprive the owner of all economically viable use of only part of his property, the question of whether or not the regulation is a taking will be decided by the balancing tests.

1. Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency VS. Lucas

a. Tahoe recognizes time as yet another dimension by which you can define the scope of the property right. This is the DENOMINATOR problem what is your property? How do we define property?

i. Majority argues that time is part of property, it’s not just acreage. Fee simples can go on forever. So, if that’s true how can you ever have a TOTAL wipeout? There is no way to say that all of the economic value is gone, if we are going to consider the value of that land FOREVER.

ii. Counter (Lucas): For all practical purposes, it is not obvious or foreseeable when the owner

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will ever use this land again in his lifetime, whereas the moratorium will lift at some point.

b. Penn Coal – support estates taken because you cannot mine under the houses. Majority ignored that 98% of the coal was still available.

i. Dissent argues for parcel as a whole. The ONLY coal the company could not mine was under the public buildings.

iii. Balancing Public Benefits and Private Costs1. If the per se rules do not resolve the issue of whether a regulation is a taking, courts

weigh the public benefits achieved by the regulation against the private costs imposed. A regulation is not a taking if it substantially advances a legitimate state objective. To determine whether this test has been met, at least the following conditions must be met:

a. Public benefits from the regulation must outweigh the private costs of the regulation

b. The regulation must not be arbitraryc. The property owner must be permitted to earn a reasonable return on investment

in the property 2. Origins:

a. Pennsylvania Coal Co. v. Mahon – Pennsylvania’s Kohler Act prohibited underground coal mining that would cause surface subsidence, but only where the surface and the underground coal were owned by two different people. Mahon, owner of the surface, had expressly assumed the risk of subsidence when he purchased his property, but he invoked the Kohler Act to restrain the owner of the underground coal, Pennsylvania Coal Company, from further underground mining. The Court recognized that “property may be regulated to a certain extent” but added that “if regulation goes too far it will recognized as a taking.” The Court voided the Kohler Act because it went “too far”—it destroyed the economic viability of Pennsylvania’s Coal property, the underground coal the Kohler Act required to be left in place. The law made “it commercially impracticable to mind...coal,” a result with “very nearly the same effect for constitutional purposes as appropriating or destroying” the right to mine coal. Brandeis dissented on the ground that the Kohler Act prohibited “noxious use” and that the diminution in value was not absolute—the appropriate measure should not be in the decline in value “of the coal alone, but the value of the whole property.”

i. Petherbridge: Seminal case for recognizing a possibility of a regulatory taking. Statute was unconstitutional and the government has NOT compensated.

b. Brandeis Dissent:i. Average Reciprocity of Advantage

1. Between the owner of the property restricted and the rest of the community in order to be valid without compensation

2. Suggests that a regulation must bestow some public benefits, some of which should be enjoyed by the affected landowner

c. Conceptual Severancei. How should the court measure the effect of the regulation?

1. On the parcel as a whole? 2. Or only on the portion of the property affected?

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ii. Parcel As A Whole - Brandeis argues that the appropriate measure was the effect the regulation had on the entire property interest held by Pennsylvania Coal.

iii. The problem of conceptual severance can occur in several different dimensions. Although it is usually thought of as a physical or geographic problem, it can also be a functional problem, or a temporal problem.

1. First English – compensation is required from the moment the regulation is first effective, even if it is later rescinded. Regulatory takings, however short their duration, require compensation, but the case did not decide whether a temporary loss of all economically viable uses constitutes a taking.

2. Tahoe-Sierra v. Tahoe Regional – An interstate regional agency controlling land use in the Lake Tahoe basin adopted a moratorium on any development of certain properties in the basin. The moratorium was intended to halt all development until a land-use plan could be put into effect that permitted development in a manner that would not contribute to the continued degradation of the water purity of Lake Tahoe. Affected property owners asserted that the moratorium denied them all economically viable use of their property and, under First English, they were entitled to compensation for the duration of the moratorium. Not so, said the US Court. The Court declared that the effect of the regulation on the value of the parcel must be considered with respect to the “parcel as a whole” and that it was improper to sever the time the fee simple absolute title was subject to a moratorium from its otherwise infinite duration. If the moratorium had been a permanent ban on development that resulted in loss of all economically viable use, it would have been a taking, but this ban was merely temporary. Left unanswered were such questions:

a. How long must a temporary moratorium last before it becomes “permanent”?

b. If conceptual severance is improper for temporal losses of all economically viable use, why is it proper for permanent losses of only one function, as in Loretto?

3. Contemporary Balancing Testa. Penn Central – The US Court upheld New York’s Landmarks Preservation Law.

As applied to Penn Central, the law prevented Penn Central from building an office tower over Grand Central Station but left Penn Central with the economic return from the terminal building and “transferable development rights” –the right to develop other properties in the vicinity owned by Penn Central more intensely than New York’s zoning law would otherwise allow. The Court admitted that the balancing test was an “essentially ad hoc, factual inquiry” that turned on a number of factors:

i. The economic impact of the regulation on the claimant ii. The extent to which the regulation has interfered with distinct

investment-based expectations1. Concept has proven enigmatic

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2. Might refer to an interest in a distinct property interest (e.g., Penn Coal’s interest in its support estate, a property interest totally wiped out by the Kohler Act)

3. OR it might mean a financial interest in a larger estate that is much diminished, though not totally eliminated

4. [Note: the phrase is suggestive of inherent limits –if either “investment” or reasonable “expectations” are lacking, there might be no protected interest at all]

5. Palazzolo v. Rhode Island – From 1959 to 1978, a Rhode Island corporation, owned a 20-acre parcel that was mostly a salt marsh wetland. During that period, various new regulations were adopted that effectively barred development of the wetland, but permitted construction of one large residence on an upland portion of the property. Upon dissolution of SGI in 1978, title to the parcel passed to Palazzolo, the sole shareholder of SGI, who sought approval to develop the parcel more intensively. Upon denial of his plan, Palazzolo brought suit, contending that Rhode Island had taken his property. The Rhode Island Supreme Court ruled that the use restrictions in place in 1978, when Palazzolo acquired title, were part of the “background title” he had acquired, and thus he could not assert that there was a taking. The US Court reversed that ruling, and reasoned that such a rule would immunize extreme and unreasonable regulations against future attack, would be capricious (e.g., older owners or those with the will and means to hold property for a long time could challenge regulations, but younger owners or those who have recently arrived in a locality and acquired property could not), and would deny to in-place owners the ability to transfer to other the same title they had. The Court also concluded that the regulation did not deny to Palazzolo all economically viable use of his property but remanded the case for a determination of whether, under the Penn Central test, the regulations constituted a taking.

a. Petherbridge: Addresses whether someone has a distinct investment-backed expectation based on how restricted when he/she came into ownership. Restrictions when you come into ownership DO NOT have a big impact on investment-backed expectations BECAUSE treats old and new owners differently, and affects the value an owner can sell her/her parcel for.

iii. The character of the government action 1. More easily found a taking when the interference with property

can be characterized as a physical invasion by government than when interference arises from some public program adjusting the benefits and burdens of economic life to promote the common good

SUMMARY OF TAKINGS FACTORS

More likely to be held to be a taking requiring compensation

More likely to be held a legitimate application of the police power NOT

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requiring compensationCharacter of Government Action - A forced permanent physical

invasion of property (Loretto; Causby)-Extraction of a benefit for the good of the community or forced transfer of property rights from A to B

-Regulation of property use in a manner that achieves an average reciprocity of advantage (Euclid).-A limitation on property use designed to protect the community from harm or to respond to negative externalities (Hadacheck)-A choice between incompatible property interests

Economic Impact -The regulation denies the owner any economically viable use of the land (Lucas)-The regulation destroys almost all the value of the property in a manner unjustified by a sufficient public interest

-The regulation leaves the owner with an economically viable use of the land or a “reasonable return on the owner’s investment” (Penn Central)-The diminution in value, even if great, is justified by a sufficiently strong public interest in protecting the public from harm (Hadacheck)

Interference with Reasonable Investment-Backed Expectations

-It infers with vested rights, such as investments based on reasonable reliance on prior regulatory approvals or laws unless those regulations can be justified as preventing a nuisance or other harm caused by the property use-It interferes with an existing present use of the property

- It imposes an opportunity loss—preventing the owner from realizing the benefits of the contemplated future use (Penn Central)-The change in the law is one that could or should have been anticipated such that the owner’s reliance on the continuation of prior law was unreasonable-The regulation of a contractual relationship rather than a forced transfer of property interests from one person to another

iv. Exactions: Conditional Burdens1. Governments frequently regulate land use by requiring landowners to obtain a permit for

use. A typical example is a building permit. a. The regulation requiring a building permit is not problematic, so long as the

condition of obtaining the permit is compliance with reasonable health and safety standards or the like.

b. Problems occur when the government imposes as a condition to the obtaining of a building or other use permit some condition that could not independently be imposed without compensating the landowner.

c. May the state condition the grant of a building permit on the landowner’s consent to what would otherwise be an uncompensated taking? There are two dimensions to this problem:

i. Essential Nexus : 1. Is a condition that, standing alone, is a taking rendered valid and

not a taking if it is substantially related to the purposes of a valid land-use regulation?

2. A condition that would be a taking, if imposed in isolation, is not a taking when attached as a condition of issuance of land use

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permit under an otherwise valid regulation only if the government can prove the condition is substantially related to the government’s valid regulatory objective.

3. Nollan v. California Coastal Commission – Nollan owned a beachfront lot along the Southern California coast on which was a dilapidated cottage. Nollan’s lot extended to the mean high-tide mark along the beach, a point some distance seaward of a concrete retaining wall on his lot. He sought approval from the California Coastal Commission for permission to demolish the structure and construct a new, somewhat larger, residence consistent in size and design with the neighboring houses. Pre-existing regulations of the Coastal Commission forbade construction on Nollan’s site if the structure would impede public access to the public portion of the beach (seaward of the mean high-tide mark) or would promote congestion on the beach. The Commission refused to grant Nollan a permit unless he consented to a recorded easement that would permit unrestricted public use of Nollan’s beachfront lying between his retaining wall and the mean high-tide mark. Nollan refused and brought suit, contending that the easement condition was a taking. The US Court agreed with Nollan. The Court assumed that the underlying regulation-prohibition of beachfront construction when it impedes public beach access or promotes beach congestion—was valid (although it did not so decide), but concluded that the condition imposed for a permit to build—Nollan’s grant of a permanent right to the public to use the private beach portion of his lot—“utterly failed to further the end advanced as the justification for the prohibition.” The Coastal Commission had failed to prove that the easement-for-public-access condition substantially advanced the purposes of the pre-existing regulations of coastal construction; thus the easement condition was simply “an out-and-out plan of extortion.”

ii. Rough Proportionality : 1. The second issue posed by the problem of exactions, or

conditional burdens, is whether the government can impose a condition to a land use permit that is disproportionate to the impact of the proposed use on the activity that the government sought to regulate in the first place.

2. Even if it satisfies the “essential nexus” text, it is a taking unless the government proves that the nature and scope of the condition are roughly proportional to the impact of the proposed development on matters that the underlying regulation addresses.

3. Dolan v. City of Tigard – Dolan wished to expand her plumbing and electrical supply store in a fashion that was consistent with the city’s zoning law. The site fronted a street and backed up against Fanno Creek. Although a portion of the site was within the 100-year flood plain of Fanno Creek, none of the proposed new construction was within that flood plain. The city conditioned a building permit upon Dolan’s agreement to dedicate to public use the entire portion of her lot within Fanno

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Creek’s flood plain and to dedicate an adjacent additional 15-foot strip as a pedestrian bike pathway. The US Court held that this constituted a taking. The Court concluded that the conditions satisfied the “essential nexus” test of Nollan because the prevention of flooding and the reduction of traffic congestion were legitimate public purposes of the underlying regulation and the required regulations were substantially related to those purposes. However, the city had failed to prove that either required dedication was even “roughly proportional” to the impact of Dolan’s development on the legitimate public purposes of preventing flooding and reducing traffic congestion. While a band on development in the flood plain was valid, the city was unable to prove why a public greenway, as opposed to a private one, was required in the interest of flood control.

iii. Essential Nexus & Rough Proportionality 1. The tests are cumulative, not alternatives *2. Each test must be satisfied for an exaction to be valid without

compensation. If a condition if a taking by itself, the condition cum regulation is a taking unless the government can prove:

a. The condition is substantially related to the government’s valid regulatory objective

b. The nature and scope of the condition are roughly proportional to the impact of the proposed development

3. Logical order first, establish that the condition would be a taking if imposed independently second, prove that such a condition satisfies the “essential nexus” text third, show that such a condition exacts concessions that are roughly proportional to the development’s impact.

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