ContentsI. General Themes/Basics:................................................................................................................................................1

II. Original Acquisition:.................................................................................................................................................1

a. Acquisition by Discovery:...........................................................................................................................................1

i. Johnson v. M’Intosh:................................................................................................................................................1

b. Acquisition by Capture................................................................................................................................................2

1. Pierson v. Post: ........................................................................................................................................................3

2. Ghen v. Rich:...........................................................................................................................................................3

3. Keeble v. Hickeringill:.............................................................................................................................................3

c. Acquisition by Creation...............................................................................................................................................4

1. Moore v. Regents of University of California:........................................................................................................4

d. Bundle of Rights Approach:........................................................................................................................................4

1. Jacque v. Steeberg:...................................................................................................................................................4

2. State v. Shack:..........................................................................................................................................................4

4. Ponoco Springs Civil Association Inc. v. MacKenzie:............................................................................................5

5. Hawkins v. Mahoney:..............................................................................................................................................5

6. Eyerman v. Mercantile Trust:..................................................................................................................................5

III. Subsequent Acquisition:.........................................................................................................................................5

a. Acquisition by Find......................................................................................................................................................5

1. Armory v. Delamirie:...............................................................................................................................................6

2. Hanna v. Peel:..........................................................................................................................................................6

3. McAvoy v. Medina: MA SC 1866...........................................................................................................................7

b. Acquisition by AP........................................................................................................................................................7

1. Van Valkenburgh v. Lutz:........................................................................................................................................9

2. Mannillo v. Gorski:..................................................................................................................................................9

3. Howard v. Kunto:.....................................................................................................................................................9

c. Acquisition by Gift.....................................................................................................................................................10

1. Newman v. Bost:....................................................................................................................................................10

2. Gruen v. Gruen:......................................................................................................................................................11

IV. Present Interests:...................................................................................................................................................11

1. White v. Brown:.....................................................................................................................................................14

2. Baker v. Weedon:...................................................................................................................................................14

3. Marenholtz v. County Board:.................................................................................................................................14

V. Future interests:........................................................................................................................................................15

1. Symphony Space v. Pergola Properties:................................................................................................................18

VI. Concurrent and Marital Interests:.......................................................................................................................18

PROPERTY OUTLINE

1. Riddle v. Harmon:..................................................................................................................................................20

2. Hams v. Sprague:...................................................................................................................................................20

3. Delfino v. Valeancias:............................................................................................................................................20

4. Spiller v. Machereth:..............................................................................................................................................21

5. Swartzbaugh v. Sampson:......................................................................................................................................21

a. Marital Property Interest............................................................................................................................................21

1. Swado v. Endo:......................................................................................................................................................23

2. Graham:..................................................................................................................................................................23

3. Elkus v. Elkus:.......................................................................................................................................................23

VII. Non-freeholds = Leaseholds..................................................................................................................................23

1. Hanna v. Dusch:.....................................................................................................................................................29

2. Ernst v. Conditt:.....................................................................................................................................................29

3. Sommer v. Kridel/ Riverview Realty v. Perosio:...................................................................................................29

4. Berg v. Wiley:........................................................................................................................................................29

5. Village Commons v. Marion County Prosecutor’s Office:....................................................................................29

6. Hilder v. Peter:.......................................................................................................................................................30

7. Jarvis v. First National Realty:...............................................................................................................................30

8. Chicago Board of Realtors, Inc. v. City of Chicago: p. 531..................................................................................30

VIII. NUISANCE........................................................................................................................................................30

1. Atlantic Cement v. Boomer:..................................................................................................................................31

2. Morgan v. High Penn Oil:......................................................................................................................................31

3. Eastancia Dallas Corp. v. Shultz:...........................................................................................................................31

4. Spur Industries:......................................................................................................................................................31

IX. EASEMENTS AND COVENANTS:....................................................................................................................31

1. Willard v. First Church of Christ:..........................................................................................................................36

2. Holbrook v. Taylor:................................................................................................................................................37

3. Miller v. Lutherans:................................................................................................................................................37

4. Brown v. Voss:.......................................................................................................................................................37

5. Persault: RR case...................................................................................................................................................38

6. Tulk v. Moxhay: ....................................................................................................................................................38

7. Sanbon v. McLean:................................................................................................................................................38

8. Shelley v. Kramer:.................................................................................................................................................38

9. Western Land Co: .................................................................................................................................................39

10. Narhstedt: cat lady case..........................................................................................................................................39

11. 40 West 67th Street:................................................................................................................................................39

PROPERTY OUTLINE

12. Mulligan v. Panther Valley Property Owners Association....................................................................................40

X. ZONING:...................................................................................................................................................................40

1. Village of Euclid:...................................................................................................................................................41

2. PA Northwestern Distributors................................................................................................................................42

3. Anderson v. City of Issiquah..................................................................................................................................42

4. State ex. Rel Stoyanoff v. Berkley:........................................................................................................................42

5. City of Ladue v. Gilleo:.........................................................................................................................................42

6. Guru Nanak Sikh Society v. County of Sutter:......................................................................................................43

7. Village of Belle Terre:...........................................................................................................................................43

8. Moore v. City of East Cleveland:...........................................................................................................................43

9. City of Edmonds v. Oxford:...................................................................................................................................43

XI. TAKINGS..............................................................................................................................................................43

1. Kelo v. City of New London:.................................................................................................................................45

2. Pennsylvania Coal:.................................................................................................................................................46

4. Penn Central Station:.............................................................................................................................................46

I. General Themes/Basics: a. Real property : land + improvements attached to the landb. Fixture: personal property that is permanently attached to the landc. Themes:

i. Variation by jurisdiction. Property as state law generallyii. Property defined as: owner to thing, others to thing, and owner to others

II. Original Acquisition:

a. Acquisition by Discovery: i. Ejectment : land/real property suit to recover possession

ii. Trespass : land/real property suit for damages iii. Possession : controlling/holding of personal property with or without a claim of ownership. Requires: 1)

Intent to possess AND 2) Actual control of propertyiv. Relativity of title : idea that a person can have a better title or right of possession than another, while

simultaneously having a right inferior to yet another person. v. Pre-emption : legal rule that NA could not sell land to anyone except the British government.

1. Declared in the Royal Proclamation of 1763: banned colonists from settling west of the Appalachians and announced the principle of preemption. Trade and Intercourse Act was the equivalent for the USA.

2. Between years 1607-1763 Native Americans could sell and did to colonists. vi. Rule of Discovery : among colonizing European powers, whoever finds it gets it.

1. DISCOVERY + POSSESSION= TITLE2. A coordinating rule to avoid Hobbesian rule or war. Discovery gives title, by whose subjects to the

land, to government and reduces it to possession. 3. Discovery gives 2 rights: Right to exclude all other Europeans AND right to acquire soil from

Native American4. Property as power, Cohen’s notion of property is power to include or exclude. 5. Related to first in time, first in right: priority via chronological claim.

vii. Fee simple absolute : full and outright ownership. Most comprehensive form of land ownership, maximum rights and privileges.

1. Right to sell and dispose to whoever you want (alternative view is that preemption is a limit on the buying power of the colonists)

viii. Conquest : taking possession of enemy territory through force, followed by formal annexation of the defeated territory by the conqueror.

b. Acquisition by Discovery: Cases i. Johnson v. M’Intosh : SCOTUS (Marshall) 1823

1. Action for ejectment in Illinois, P claims owns land as purchased from Indians, D claims owns land per land grant from US Gov’t. D ultimately wins. The tribes have the power to sell/transfer to US Gov’t but they don’t have the power to sell transfer to private individuals, Native Americans as occupants but not owners. So even though the grant of land was way later, it trumps the private sale. Importance: establishes bedrock rule of American property that government is at the root of land ownership as land was never owned by Native Americans but was first owned by the British and then the USA and then individuals.

2. 2 stands in the opinion: Preemption: legal rule that NA cannot sell land rights to anyone but government, no private buyers. Preemption was in effect at the time of purchases, rendering them null and void AND status of the Native American:

3. Theories:

PROPERTY OUTLINE

a. 1) Marshall was trying to shore up rights of western land settlers as post-revolution western lands are now available.

b. 2) Marshall was helping out his war buddies from the revolution on the VA line. Grants given to soldiers from VA, Va separated from Kentucky, which considered land grants invalid. Native Americans were still on the land until 1818 and then the VA/KY issue became important. This case gives Marshall the opportunity to help. If NA never owned the land, so that when VA gave grants, the veterans took ownership immediately, even though NA still occupy the lands, causes the VA/KY debate to become irrelevant.

c. 3)Marshal being Marshall: an ambitious judge who never decides anything on narrow grounds used same language from his book, he had already written in Washington’s biography

c. ACQUISITON BY CAPTUREi. Concepts:

1. Trespass on the Case : Indirect application2. Trespass : direct force on P or P’s property 3. Ferae Naturae : wild animals, land owners are the owners until the animal takes off per ratione soli.

Unless the animal has a habit of returning as was sufficiently domesticated (animus revertendi). 4. Rule of Capture : right to capture wild animal is established by capture which can include mortal

wounding, while still in pursuit. Established in Post. a. Rule of capture extends to natural resources, especially those with fugitive characters. Per

Hammonds case. Then became whoever just captured first. See page 39. 5. Tragedy of the Commons : Rule of capture has encouraged the private appropriation of resources.

Effect as desired in Ghen v. Rich as encourages fast/effective capture. Leads to too much appropriation- over-whaling, as tragedy of the commons.

6. Problem of Externalities : positive externalities versus negative acts, possible to make people internalize the externalities. Externalities of natural resources are hard to internalize. Sometimes property can deal with the tragedy of the commons if you divvy up to small private parcels, problem when you can’t parcel it out.

7. Policy orientation : Property does not turn on (working for it, inheriting it, etc) but depends on policy objective which can be changed with time by legislatures. Outcomes have less to do with factual circumstances- courts can have wrong policies and wrong rules

8. Constructive possession : denotes possession that has the same effect in law as actual possession although it is not actual possession in fact. Legal fiction mandating a legal conclusion or fact.

a. Ex: mortal woundingb. Ex: oil, gas, or other beneath surface minerals, whoever owns surface constructively owns

the depths. 9. Custom : use or practice long adopted by acquiescence, having force of law. Market or locale

specific. Per Ghen v. Rich custom is recognized when:a. 1) Application is limited to the industry and limited to those working in it, 2) recognized by

whole industry, 3) requires in the first taker the only act of appropriation that is possible, 4) necessary to survival of industry, AND 5) works well in practice.

b. Can lead to an overinvestment in technology. 10. Bar Review:

a. 1) In general ownership of wild animals or other natural resources is established by capture or mortally wounding with continued pursuit

b. 2) any wild animal caught or mortally wounded on privately owned land is the property of the land owner

PROPERTY OUTLINE

c. 3) Any wild animal that has been captured and then escapes is the property of whoever recaptures the wild animal unless the animal has an animus revertendi (tendency to return) then still belongs to whoever first captures.

ii. Cases:1. Pierson v. Post : SC of NY 1805

a. Fox hunting case. Action for trespass on the case. Plaintiff: Post hunting pursuing the fox with hounds AND Defendant: Pierson kills the fox and takes it, action of trespass on the case. Pierson wins. Post never had actual control over the fox. Example of first in time, first in right. Establishes rule of capture, doesn’t need to kill, enough to mortally wound if hunter is still in pursuit. Provides a bright-line ruling avoids confusion, there was a need for a coordinating rule (keeps peace, avoids litigation, and clear and easy to administer). Encourages fox hunting.

i. Mortal wounding: a wound that 1) on objective basis is likely to prove fatal to the animal- it will given time, deprive the fox of his natural liberty – and 2) shows subjectively a manifest intention to seize the animal- and that the purser intended to follow the hunt with a kill and is not there just for the enjoyment of the chase.

1. Form of constructive possession 2. Ghen v. Rich : Massachusetts District Court 1881

a. Whale hunting case, bomb lance, sinks the whale, resurfaces, found by Ellis. Defendant buys the whale from finder and sells the oil. P wins. Rule: right to the whale is established by killing the whale with a bomb lance. Court validates the trade usage, about killing the whale per industry standards in Cape Cod, must kill the whale according to custom, which addresses best way to kill a fin-back whale and in keeping with custom, validates industry as no one would take up the industry otherwise. Encourages whaling.

b. Per supplement: represents a triumph of common law over custom as circumscribed what is custom.

3. Keeble v. Hickeringill : ENG 1707 a. Decoy pond Case: P has a decoy pond which D goes near and scares away the ducks. P

wins. Rule: no right to prevent another from legitimately capturing wild animals by scaring animals away. Trespass on the Case. P never actually possesses anything. Given the right as if he did, possession as completely removed from actual possession, not doing the work. Encourages decoy duck hunting. General welfare is served best by promoting the social goal of providing ducks for dinner. Actionable interference: Keeble has ratione soli: owner of land has sufficient possession of the wild animals on the land to start a hunt for them, as well as the right to pursue them while on the land. Cosnructive possession.

Pierson v. Post Ghen v. Rich Keeble

Rule Right to wild animal established by capture/mortal wounding with pursuit

Right to whale is established by killing with a bomb lance

No right to prevent another from legitimately capturing wild animals other than by fair competition

Policy Basis Clear coordinating rule Encouragement of whaling

Encouragement of duck hunting

*Actual possession is required for Pierson v. Post. Constructive possession suffices for other two.

PROPERTY OUTLINE

d. ACQUISITION BY CREATION: ONE’S BODYi. Conversion : common law tort of using another’s property inconsistent with the true owner’s rights.

ii. Cases:1. Moore v. Regents of University of California: SC of CA 1990

a. D has cancer, receives a splenectomy in the course of his treatment. His cells are then patented and used in a profitable cell line. D sues for breach of duty, conversion, lack of informed consent, etc. D claims he was not informed of his cell’s appropriation, but did give consent for splenectomy. P wins on fiduciary claim and informed consent. D wins on conversion.

b. Conversion claim: Conversion: common law tort about wrongful interference with someone’s personal property. Elements: (1) P must have ownership or possession of item of personal property, (2) D must commit act that interferes with ownership or possession, (3) Intentional, and (4) D’s act must have caused the injury. Conversion argument: 1) whether the existing law gives cause of action AND 2)should existing law be extended to case

i. Per existing law: (1) no case law, (2) CA state law limits how your can dispose if excised cells- heavily influences court’s view, (3) Moore can’t have interest in cell line as patented by the D.

ii. Per extended law: (1) policy considerations are against Moore- Court doesn’t want to address ownership directly as doesn’t want to establish a market for organs- AND conversion is a strict liability tort, would affect all biomedical research, (2) Legislature should be the one to extend the law, not the courts, (3) No need to protect the patient’s interest.

c. Dissent: Bundle of rights analogy. Ownership of property consists of independent and separable rights. If law cuts back on/removes one attribute of ownership doesn’t mean cuts back on the other rights in the bundle. Buying or selling doesn’t determine ownership, for example look at the bar license.

e. BUNDLE OF RIGHTS APPROACH:i. Concepts:

1. Common Law Rules:a. Abandonment: Owner of personal property can abandon property by

1) Giving up possession AND2) Manifesting an intent to abandon *NEED BOTH.

b. Owner cannot abandon real property. This is a hand-me-down from feudalism and the middle ages.

c. Abandon property then becomes property of whoever next takes possession and manifests and intent to possess.

ii. Cases:1. Jacque v. Steeberg :

a. Mobile home delivery. Deliberate trespass. Right to exclude others from land. Ct. rules for intentional trespass with nominal damages of 1 dollar plus punitive damages of 100K, trial judge sets aside punitive as affirmed that nominal damages cannot uphold punitive damages. Right to exclude is one of the most essential sticks in the bundle of rights AND Right is hollow if legal system doesn’t protect.

2. State v. Shack :

PROPERTY OUTLINE

a. Don’t always have the right to exclude. 2 people accused of criminal trespass, field worker for healthcare for migrant workers and staff attorney who provides legal services for migrant. Enter farmers land after not able to negotiate entry with farmer- so they just enter = intentional trespass. SC of NJ: in NJ law ownership of property does not include right to bar access to governmental services, available to migrant workers a dis-serviced population, otherwise objective of congress would be thwarted

3. Jacques AND Shack Compareda. Both jurisdictions recognize the right to exclude… necessity may justify right to enter land

but rights are relative. Difference is the interest on the other side: right of party to make a delivery versus the right of a party to provide mandatory government services. Migrants have license (a revocable right to possess or use) to the property

4. Ponoco Springs Civil Association Inc. v. MacKenzie: a. D is trying to get rid of a parcel of land that cannot be developed as the land has inadequate

soil for sewage system. D can’t find a buyer and wants to cut losses (Dues + taxes > land’s value), try to turnover to association, stop paying taxes, places lien, government can then seize. But then the government can’t sell it either. M then sends out notarized letter disclaiming. However M has perfect title and can’t abandon.

5. Hawkins v. Mahoney :a. Man attempts to escape from prison and leaves behind his personal property. Issue: has his

property been abandoned. CL Rule: abandon property then becomes property of whoever next takes possession and manifests and intent to possess. Montana holds for Hawkins saying that he didn’t abandon it. Court says he didn’t manifest and intent to abandon. 1) He is only presumed to have intent but he renounced that intent once back. 2) Prison officials did not reduce his stuff to possession with intent to acquire. Prison’s standing policy.

6. Eyerman v. Mercantile Trust: a. Property to be torn down, per will. However, property is in trust indenture with acting

trustees to protect the neighborhood, who assert that if the property is destroyed 1) it will affect property value 2) it will be a private nuisance and 3) policy is against it (generally turn to policy when there is no other legal policy which addresses or prohibits). Trust indenture: contract doesn’t prohibit the tearing it down, not a nuisance either, already lots of vacant lost in the neighborhood. Thus court must rely on policy considerations: (1) Economic: destroys value, (2) owner is dead and executor in this case is not a beneficiary, (3) power to dispose is stronger before death than after death. After death must take into consideration the public good. House is not destroyed.

III. Subsequent Acquisition:

a. ACQUISITION BY FINDi. Concepts:

Recover possession Recover damages

Real Ejectment Trespass

Personal property Replevin Trover

1. Trover : CL action for $ damages2. Replevin : suit to recover possession for personal property3. Rule of finders :

PROPERTY OUTLINE

a. Lost property : someone who finds property that is lost, yet still owned, doesn’t acquire absolute ownership, but does acquire possession except to the true owner. Rightful owner: never gave it up, still lost, still her property. Don’t know who or where- retains superior property right

b. Finder : person who 1) takes control of the property and 2) intends to maintain possession4. Purposes of Rule of Finders:

a. Need for Coordinating rule: keeps people from grabbing items and concealing. Want to encourage disclosure.

b. Goal of returning lost property to true owner5. Buried Treasure :

a. British rule: Distinction between treasures hidden with the intention of returning to reclaim them (went to king) AND abandoned property (kept by finder). Issue of shipwrecks with salvage awards. Salvage = anyone reducing the ship or its cargo to possession.

6. Subrogation : is a succession to another’s claim or right. Puts one person in the place of the person originally holding the claim.

7. Lost property : property that the true owner unintentionally and unknowingly dropped or lost. Belongs to the finder, unless and until true owner is located.

8. Mislaid property : property true owner intentionally placed in a given location and then left intending to return for it later. Belongs to the owner of the locus in quo (location/premise). Owner of premise is in better position to five back to the true owner if/when comes looking for it.

9. Abandoned property : property that the true owner intentionally and voluntarily relinquished with intent to no longer own the object ad without transferring his rights to another person.

10. Bar Review:a. 1) Unowned property is owned by those who first discover it and take possessionb. 2) Abandoned property is then owned/belongs to whoever first takes possession with intent

to possessc. 3) Property owned but lost still belongs to the owner but first finder of property has right to

the property superior to anyone except the true ownerd. 4) Property is owned, but mislaid, belongs to owner of property where item was left has

right to property superior to everyone except the true owner. (not finder) ii. Cases:

1. Armory v. Delamirie :a. P = sweeper v. D = goldsmith. P finds jewelry, give to D for appraisal. D removes stone

and returns setting to P. Court finds for the sweeper and as it was an action of trover the court awarded money damages for the highest value a gem of that size could have been worth. Finder keeps as has property ownership against all but the rightful owner. Wins as pripr possession.

2. Hanna v. Peel :1. Peel owns house where brooch found but never lives there prior to the discovery of the

lost brooch. Hannah found it while being quartered in the house. Debate in case: D was never physically in possession as was never in occupancy of the house- brooch was lost by someone else. If want the true owner to find, return to the premise where lost. Is it better to have a clear coordinating rule OR rule that gets greatest likelihood of the property being rightfully reunited. How to incentivize.

2. Judge rules for Hannah (the finder) as 2 policy consideration support: (1) clear coordinating rule AND (2) Get it back to the original owner. Rationale that owner never used the house as a residence and the current tenant did not use the house as a residence either.

PROPERTY OUTLINE

3. McAvoy v. Medina : MA SC 1866a. Purse left in shop. Lawsuit between the owner of the shop and the person who finds it. P is

the finder, relies on Armory. b. Judge: this property wasn’t lost, as in Armory, it was just mislaid needs a separate rule.

Exception for mislaid versus lost threatens to swallow the entire rule. b. ACQUISITION BY ADVERSE POSSESSION

i. Concepts:1. Ejectment : legal action to remove a trespasser from property 2. Claim of title : I think it’s mine, I think I have ownership legally. Expressing the requirement of

hostility or claim of right on the part of the adverse possessor. 3. Color of title : faulty title. Documents that lead AP to think it is their land. Claim founded on a

written instrument that is for some reason defective and invalid. Can be an important advantage for the AP.

a. Can result in a shorter AP period. b. Facilitates Constructive adverse possession- where only truly owns part of the land

possessing but deed says owns whole. 4. Claim of right : means a reasonable basis for the belief that the property belongs to the adverse

possessor or property owner good faith5. Prescriptive right : same as AP but end up with right to use land, versus ownership of the land, as

granted by the AP. 6. Adverse Possession : Legal doctrine long recognized under which property that is undisputedly

owned can become the property of another simply by the other person occupying/possessing in derivation of the other’s right.

a. Combination of statutory and judicial rules, varies state to state. A method of transferring interests in land without consent of the prior owner, even in spite of the dissent of owners.”

b. Can apply to personal property as well. c. History: AP began in the 12th Century, the Romans also had it…AP rules came first and

then the rationalization of the rules. Rationales: d. Statute of limitations: most causes of action have limitation periods after which the party

loses the right to suee. Purposes:

i. Encouraging productive use of land: 1. On title holder’s side: discourages property owners from not paying attention

to land, show up at least every 15 years, punishes inattentive owners. Discourages sitting on rights for too long.

2. On AP’s side: if AP is better able to put to productive use, obviously cares more for the property, and society is better off. Rewards productive use of land.

ii. Evidentiary rules: evidence decays as time passes, confirms lost grants or otherwise correct conveyances, corrects mistakes and oversights.

iii. Protect expectations: This controls the expectation of AP to 3rd parties iv. Structural purpose: facilitates the efficient transfer of property

1. AP is just a coordinating rule, quiets titles, reinforces land records, allows transferability of land at lower cost.

7. Requirements of AP : Non-owner establishes possession, thereby ownership by:a. Actual possession/entry that is

i. Physical occupation: control as the owner would treat itii. Requires entry into the property. Start of AP period.

PROPERTY OUTLINE

iii. Provides notice to the true ownerb. Open and notorious

i. Doesn’t require actual knowledge by the true owner, unless claiming AP against a co-owner.

ii. Intended to put title owner on notice that someone is taking propertyiii. Burden is on the owner to make reasonable inspection of property, so long as other

party isn’t hiding presence. iv. Reason why some jurisdictions require cultivation/fences/etc.

c. Exclusive i. Not sharing the property: requires that occupying property not be shared with title

holder. ii. Can override constructive ownership via color of title rule if occupies even a part of

the propertyiii. Multiple APs: if one has superior legal right may oust the other AP and claim

exclusivity for the whole period on the propertyd. Continuous, and

i. Adverse possessor may however make use of property as an owner does, so allowed to go to work and on vacation. Summer home can be a summer home

ii. Cannot have substantial interruptions, as decided by court, or will start the clock all over again. Standard for interruption is measured against what a reasonable owner would do.

e. Hostile, and that i. Does not have the owner’s permission to be there, implicit permission is not enough to

satisfy. Permission after already AP, and declaration that intends to remain on property regardless of permission might count (according to supplement).

ii. 2 Strains of hostility with varying mental states. 1. Care about mental states:

a. Bad Faith rule: Maine rule: requires that the AP actually intend to displace the owner and must know that doesn’t have title…”Bad faith or aggressive adverse possession”i. Minority rule.

ii. Rationale: doesn’t tempt people to lie about possession, disfavors mistaken possession

b. Good faith rule: AP Must be acting in good faith and occupying by mistake

2. Doesn’t care about mental state: Majority rule! a. Doesn’t matter what the state of mind is modern trend

f. Lasts for the prescribed period. i. Little as 3 years in some states, as much as 30 in others, CL rule is 20 years, Virginia

is 15 yearsii. New title is vested after time period has run, and title relates back to the date of the

start of AP.g. ***Additional elements sometimes imposed by jurisdictions: claim of title or claim of

right, good faith or bad faith, improvement, cultivation or enclosure, payment of property taxes…

8. Tacking : adding together of different time periods where the land is owned either by different title owners or by different possessors. Goal is to string them together for claiming prescribed period for AP. Generally allowed. Howard v. Kunto.

PROPERTY OUTLINE

a. Requires privity: Privity of estate: both parties have interest in the same piece of property, simultaneously, or sequentially. Ex: Landlord and tenant and USA recognizes even when there’s a sale

9. Disability : allows legal disability of the true owner to toll the AP period, or alternatively allows a new AP period to begin once disability is over. In some jurisdictions the new AP period required after the end of the disability is shorter than otherwise required. Disability includes minor, incompetent, incarcerated, insane, etc. A disability is immaterial unless it existed at the time when the cause of action accrued.

10. AP has the burden of proof : regardless if the defendant or the plaintiff. The adverse possessor must prove all elements. Standard for AP is clear and convincing evidence (highest bar in civil cases)

11. At common law could not AP land owned by the government : this law has loosened up over time. Reason for rule =

a. Government is notoriously bad at monitoring. Not as good as private owner who have personal interest into own land

b. A lot of government land is hard to oversee (national forests and such)c. Lots of Gov’t land is common area and it is difficult to know if a party is using the land or

staying on the land 12. Future interests : AP protects, statute does not begin to run against a person having a future interest

until that interest becomes possessory. Unless the AP eters the property before the original owner makes the transfer to the remaindermen- then runs against both life tenant and future interest.

ii. Cases:1. Van Valkenburgh v. Lutz: NY Law

a. Facts: Lutz’s buy lots, occupy lots different than those bought. VV buy the actual lots and attempts to evict L. L claims AP. First there is a prescriptive right action, followed by AP action. NY requires that you think you claimed the land, in good faith via an assertion of right, “thought it was mine.” Therefore L can’t win because of what lawyer conceded in prescriptive right suit.

b. Holding: Case turns on actual possession. Court holds that land needed to be protected by enclosure or cultivated in its entirety. This land cultivation was not of the entire property.

c. Alternative argument: It doesn’t matter what they say in suit #1 as they were owners. What matters is the mental state during the prescribed period. Can’t give up land via statement, requires more. VV would then content that if L owned the land prior then didn’t pay taxes, that L lost the land as such, claimed by the government, and then VV bought via foreclosure. L would then say they were not given notice, as required by due process, invalidating the sale to the VV, would then be AP under color of title

2. Mannillo v. Gorski: a. Facts: minor encroachment of steps and concrete walk.b. 2 elements of AP in play: hostility and open/notorious

i. Small encroachment is not self-evident, so there is no presumption of notice for a minor error along a common boundary. Makes actual knowledge the standard. Contradiction that moving away from the state of mind in hostility but then introducing state of mind for open and notorious.

c. Pre-Manillo in NJ: Maine doctrine required subjective intent to invade and possess adversely. System abandoned for Connecticut doctrine in which intent is irrelevant. Alternative rule would be for a good faith mistake.

3. Howard v. Kunto :1. Facts: Deeds of several lakeside summer homes do not match the properties actually

owned. All owners are one plot over. 2 issues for AP. Howard owns the lot for Kuntos

PROPERTY OUTLINE

and want the lot as the Kuntos have improved it. Kuntos haven’t lived there for very long. Tacking issue, which requires privity. Can be established even with sale in the USA. Before this case tacking was only addressed in cases where only part of the land/parcel was not described on the deed (at least some property was deeded). This case however none of the land was described in the deed. Requires judicial recognition of some connection between the owner/prior owner to raise the status of the new owner

2. Elements of AP: Uninterrupted: summer house is seasonal, look to how a true owner would use- court says seasonal use is okay. AND statutory period requires is 10 years: needs tacking to reach period. Before this case tacking was only used to increase land.

3. Rule: Reasonable connection requirements between successive occupants of real property so as to raise their claim of right above the status of wrongdoer/trespasser.

c. ACQUISITION BY GIFTi. Gift : a voluntary and gratuitous transfer of property from 1 person, the donor, to another person, the done

without legal consideration. Two types of gifts:1. Inter Vivos gift : gift between living persons. Requires:

a. intent, delivery, AND acceptanceb. Donee bears the burden of proof to show the donative intent.

2. Gift causa mortis : gift between the living made in contemplation of death. Delivery of the chattel with the intention that possession over the subject of the gift takes effect immediately, but ownership only becomes absolute at donor’s death. Death must result from the same illness/disease/peril producing the donor’s initial expectation, not some other event.

a. Must intent to deliver absolute ownership; an attempt to reserve control over the property until death invalidates this type of gift.

b. Revocable: depending on jurisdiction it may be automatic or require an affirmative revocation.

c. Substitute for a will, if the doner lives then the gift is revoked. Susceptible to fraud. Cannot be used to escape creditors. Not favored by the courts. A high standard of proof- clear and convincing evidence – is required to uphold such gifts.

d. Requires: Donative intent, Delivery, Acceptance, AND Contemplation of death. 3. Transfer after death of property via will is a devise or bequest and not a gift.

ii. Delivery: necessary element of a gift, physical/manual delivery is preferable- but when impossible: 1. Constructive delivery: property itself is not transferred but something giving access to and control

over it is. Handing over a key or some object that will open up access to the subject matter of the gift. Ex: giving instructions to find hidden property.

2. Symbolic delivery: is handing over something symbolic of the gift, ex: written instrument declaring gift. Modern trend to allow. Stands in the places of the property.

a. Ex: delivery of one of the many items, representational or representative 3. Manual: if possible must be delivered manually 4. Delivery is important as was incorporated historically by the livery of seisin.

iii. Acceptance: 1. Assumed from the benefit received by the donee. Property may not be forced on unwilling.

iv. Newman v. Bost :1. Old man lives with housekeeper, wants to give property. Question of gift causa mort as such gifts

are susceptible to fraud. i. In NC: delivery is the same for causa mortis as for inter vivos. Court follows precedent, rejecting

symbolic delivery. Holds that if manual delivery is possible, then must do, but if not possible then constructive delivery is OK. Life insurance policy could have been manually delivered. Piano

PROPERTY OUTLINE

insurance money not discussed here, but requires proof of constructive or manual delivery on remand, furniture as accessed by keys = constructive delivery, property in bedroom goes to P as was made during lifetime, presumably delivered.

v. Gruen v. Gruen: 1. Facts: man gives his son a Gustav Klimt but wants to retain possession until his death. Receipt of

the gift = letter from his dad in 1963. Step mom refuses to give up the painting after dad’s death. Had to be an inter-vivos gift, but that is irrevocable. Delivery element not understood as rigid. Gift was not the painting but the future interest which was not to be delivered as it was an intangible thing. Acceptance is assumed as it was of value to the donee.

IV. Present Interests:

Concepts:1. Ownership :

a. Divided up over periods of time: present and future [over a single parcel of land. Possessory Estate / Present Estate / Current Interest

2. Decedent : either Testate or Intestate.a. Testate : dies with will, may devise real property, leave to the named devisee, may Bequeath

[or Legacy] personal property to the named legatee. b. Intestate : w/o Will, the Heirs take property; “Heir” determined via state law of descent. No

one has “Heirs,” while alive, only have “Heirs-apparent” in life. State laws usually put Spouse & Issue [direct lineal descendants]. If no “heirs,” then escheat to the State.

3. Seisin : possession of a particular kind, historical significance. Leasehold/non-freehold estates do not have seisin- merely possession.

4. Condition subsequent : occurence or non-occurrence of an event that can cut short an estate5. Words of purchase : critical language as to who owns the estate6. Words of limitation : remaining language that tell lawyers what was granted/type of estate7. Rules of Construction : how judges will read will/grant to dispose of property. Preference for

interpretation that gives away all property, and all interest in property.

Possessory

Freehold

Fee Simple Absolute Fee tail Life Estate Defeasible Fees

Fee Simple Determinable (ends automatically, when specified event

occurs --> requires expression of temporal limitation, while, during, etc.

Fee Simple Subject to Condition

subsequent

Fee Simple subject to executory limitation

Non-freehold

PROPERTY OUTLINE

8. Freehold v. Non-freehold (leases): a. Freehold :

i. Fee Simple Absolute (FSA): complete ownership 1. “And his heirs”2. Modern law: strongly favors fee simple absolute. No longer support

limitations around FSA. 3. CL bias against FSA reversed by modern law, change the default in instances

of confusion. If have/give FSA but make it complicated, assume it’s still a FSA unless states very clearly.

ii. Fee Tail: ownership until original grantee’s lineage dies out 1. “And the heirs of his body”2. Not inheritable or devisable3. Abolished in the USA:

a. Class divisions: locks up the property in one class, landed vs. un-landed. Interferes with choice of later generations.

b. Inhibits the development of land and efficient economic growth as the holder of the fee tail cannot mortgage or gather into FSA in order to be sold, developers/buyers want FSA only. FT could never combine the interests. Completely unsuited to development of market economy.

4. Gives life estate then remainder to A’s children. Represents a succession of life estates in the grantee’s linear descendants.

5. Never hold land in fee simple, can’t alienate anything but the life estate. 6. As means of furthering primogeniture as too many heirs can cause problems,

weaken the wealth. 7. Finite estate as eventually, one day the blood line would run out and then it

will revert. Can assert a remainder in fee simple absolute.8. Four states allow: but holder of FT can break the entail or disentail a property

by using a straw man to convert to FSA. iii. Life Estate : Estate for life of the grantee

1. “O to A for life”2. Use to be default in common law. England now doesn’t recognize legal life

estate. 3. Possessory estate lasting for the life of an individual/individuals (life tenants =

termers) entitles to land and limited by doctrine of waste (created to protect the future interest).

4. Life estate can only alienate life interest. More permissive than FT, more permissive of alienations then as in FSA, can alienate but not devise or set who will inherit.

5. If doesn’t stipulate who gets at the tenant’s death, the original grantor takes possession- reversion interest. If does stipulate the 3rd party has a remainder interest, as FI.

6. Creates problems of marketability and issues between life estate owner and remaindermen.

b. Restraints on Alienation: i. Disabling (withholds from grantee the power of transferring interest) is outright

prohibitedii. Forfeiture ( provides that if the grantee attempts to transfer the interest it is forfeited to

another person)

PROPERTY OUTLINE

iii. Promissory (grantee promises not to transfer his interest): not as important in freehold, promise by grantee as enforceable by contract law. Exception: if given to charity will respect disabling restraint. Ex: if you give to a foundation, they must use it for the intended purpose.

iv. Life estate allow forfeiture but not disabling restraintv. Reasons for discouraging restraints on alienation: makes property unmarketable,

perpetuates concentration of wealth, discourages improvement on land, prevent owner’s creditors from reaching the property.

9. Doctrine of Waste : purpose is to ensure that whoever has life estate preserves the property and the interest of the remainder-men. Can isolate the doctrine of waste however.

a. Permissive waste: arises from a failure to act. Essentially a question of negligence. b. Ameliorative waste: resulting from changes to the property that increase its value. c. Affirmative waster: arises from voluntary actsd. Economic waste: occurs when the income from the property is insufficient to pay the

expenses of the life tenant has a duty to pay- ordinary maintenance, real estate taxes, interest on mortgage, and sometimes insurance.

10. Condition subsequent: an event whose occurrence or non-occurrence will terminate the state. a. Courts may, in an effort to disfavor forfeiture, interpret as either a covenant or precatory

language (expresses a desire, suggestion, hope or expectation, but does not rise to level of CS or covenant).

11. Trusts : a trustee holds the legal fee simple absolute and as the manager of the property may be directed.

12. Defeasible Fees: a. Defeasible = means it will terminate prior to its natural endpoint, upon the occurrence of

some specified event in the future. b. Purpose = to control land use, alternatively used to control behavior not related to the land,c. Types:

i. Fee simple determinable : fee simple so limited that it will end automatically when a stated event. Accompanied by a possibility of reverter (future interest) happens. AKA fee simple on a special limitation.

1. Language = “so long as, while, during, until, unless” 2. AP starts running with FSD as soon as reverts3. Good for charitable purposes 4. Modern trend: alienable and devisable5. REVERSION INTEREST IN THE GRANTOR ONLY

ii. Fee simple subject to condition subsequent : does not automatically terminate but may be cut short or divested at the transferor’s election when a stated condition happens. Right to re-enter and re-take the premises. Future interest = right of entry/power of termination. Does not transfer back unless right is exercised.

1. Language = “provided however, on condition that, provided however, but if”2. FSSCS doesn’t start AP until affirmatively reclaims. 3. Transferability: FI or PI varies by jurisdiction, either both are transferable or

neither is.4. Judges prefer over FSD because judges disfavor forfeitures. 5. Reversion interest in grantor.

iii. Fee Simple subject to executory limitation : estate created when a grantor transfers a fee simple subject to condition subsequent, and in the same instrument creates a future interest in a third party rather than in himself.

PROPERTY OUTLINE

1. Future interest = executory interest. Forfeited immediately on breach of condition.

2. Same language as FSSCS. 3. Enabled via the statute of uses in 1536

ii. Cases: 1. White v. Brown :

a. Debate over life estate or FSA being devised in will. Heirs at law = nieces and nephews are opportunistic. TC: orders house to be sold, it’s a life estate, with 13 heirs makes it easier to just sell. CL in the old days: default to life estate. TN statute presumes that you give away everything you have, presumes alternatively giving a FSA. Holds: is FSA and the restraint on alienation is void

b. 2 kinds of restraints:i. Disabling restraint (fee tail)- can never sell

ii. Forfeiture restraint- if you try to alienate you forfeit your interestc. 3 options given will

i. FSA with restriction on alienationii. Life estate with reversion to the heirs

iii. FSA subject to a condition subsequent2. Baker v. Weedon :

a. Facts: 3 marriages, lots of heirs from the first marriage, third wife outlives him, Decedent doesn’t have a good relationship with his kids, leaves it all to Anna as life estate and then to her children if she has them, if she doesn’t then the remainder goes to his grandkids from the first marriage as a FSA. Anna (3rd wife) is now poor and old, land is now very valuable as the result of highway construction. GK involved- selling the land has been hindered by the development of the bypass, GK want to wait to sell until its 300+, Anna can’t afford to wait happy with 160K. Issue is the divergent valuation of the property by Anna and GK. Ultimately Anna wins, court says can either sell or hypothecate in a way to provide for Anna.

b. Legal standard: whatever is in the best interest of all the parties, which court says excludes the sale because it would unjustly hurt the GK OR could hypothecate and use proceeds to give additional income to Anna.

c. Doctrine of economic waste: only if insufficient to pay for the property is a sale mandated. 3. Marenholtz v. County Board :

a. Quiet title action (suing to figure out who owns an estate) P says he has interest in land and D claims an interest in the same land. Hutton convey 1.5 acres for school purposes only otherwise revert to heirs. Then die intestate. School district stops using acreage for school, use as storage. As this is a motion on the pleadings, don’t discuss the issue of if storage constitutes for school purposes. Hutton sold remaining 38.5 acres to J and sold future interest in the property. They then conveyed the property and the future interest to Ms in 1977. Theories of Future interest: (a) Marenholtz from J from Hutton; (b) Ms from Harry; (c) Trustees from Harry. Issue: who owns the FI. Both parties agree that was a defeasible FSA to the grantee and gives rise to future grantors: 2 types of (a) FSD with possibility of reverter OR (b) Fee simple subject to condition subsequent followed by right of reentry for condition broken.

b. Holds: Sale of future interest from Hutton to J is invalid per Illinois law as possibility of reverter and right to reenter cannot be sold (can be inherited however), therefore M did not buy such a right from J. Knocks out option 1. Possibility of reverter and right of entry can only be inherited. Went to Harry when Hutton died. Court holds: FSD used words of

PROPERTY OUTLINE

temporal limitation. Turns on the word “only” as a word of purpose in the granting clause which means it’s a FSD. Court is frustrated when decedents grant doesn’t easily go into a category. Some states have collapsed the two. Legislatures do so to give grantors better incentive to protect rights by being very specific.

V. Future interests:

a. FUTURE INTERESTS GENERALLY:i. Present interest : immediate right to possession

ii. Future interest : an interest in which the owner has a right of possession if at all, only in the future. Doesn’t have to be certain.

b. FUTURE INTEREST IN GRANTOR (reversion, possibility of reverter, right of entry)i. Reversion : the interest left in an owner when he carves out of his estate a lesser estate and does not provide

who is to take the property when the lesser estate expires. 1. “The interest remaining in the grantor, or in the successor in interest of a testator, who transfers a

vested estate of a lesser quantum.” 2. Occurs with all kinds of present estates, except FSA. 3. Reversion is alienable, devisable, and inheritable.

ii. Possibility of reverter : when an owner carves out of his estate a determinable estate of the same quantum. 1. Occurs with FSD and condition precedent.2. Some jurisdictions limit transferability

iii. Right of Entry : when an owner transfers an estate subject to condition subsequent and retains the power to cut short or terminate the estate.

1. Occurs with FSSCS. 2. Some jurisdictions limit transferability

iv. Modern trend is that all 3 are alienable, divisible, and inheritable. c. FUTURE INTERST IN TRANSFEREE (Vested remainder, contingent remainder, executory interest)

i. Future interest begins either immediately upon the natural termination (remainder) or by cutting off prior interest (executory):

Future interests

Grantor

reversion possibility of reverter

right of entry

Transferee

executory interest

Springing Shifting

remainder (only follows natural

termination)

Vested

indefeasibly vested

vested subject to complete

defeasence

vested subject to open

Contingent

PROPERTY OUTLINE

ii. Executory interest = future interest in third party, transferee, that become possessory by cutting off preceding estate. Generally a Fee Simple subject to an Executory Limitation

1. Validated by the Statute of Uses: Allow creation of a fee simple subject to an executory limitation. 2. Often treated as contingent interests, because they are subject to a condition precedent and do not

vest until they become possessory. Can only be created in transferee. 3. Shifting: if a third party transferee’s interest is divested4. Springing: if a grantor’s interest is divested5. Ex: O to A unless B graduates from law school, then to B: can cut off either 3rd party (shifting

executory interest) OR cut off grantor’s interest (springing executory interest)… Nothing turns on the distinction

iii. Remainder : Only follows the natural termination of an estate (otherwise us an executory interest)… waits patiently.

1. Continent :a. Owner of remainder is unknown OR Remainder depends on event that has yet to occur b. Ex: O to A for life then to A’s heirs (don’t know A’s heirs at time of conveyance)c. Ex: O to A for life, then B if B graduates from law schoold. CL contingent remainder = inalienable. Modern now allows alienability e. Follows only full life estate or a lease

2. Vested remainder : remainder at which at time of conveyance when 1) owner of remainder is known AND 2) does not depend on some event that has not occurred. 3 types of vested remainder:

a. Issue when ascertained but not identified: labeled but not named.b. Courts prefer to construe as vested versus contingent. c. Indefeasibly vested : certain to become possessory at natural termination of the preceding

estate. O to A for life then to B. No condition subsequent. d. Subject to complete defeasance : remainder vested at time of the conveyance but that can

become completely divested at occurrence of some event. Ex: O to a for life, then to B, but if B fails Con law then to C.

e. Subject to open/partial : class gifts (leaving to group), remainder to a class that is vested to at least one member of the class but will be partially lost if more kids are born/additional members of the class. Ex: O to A for life then to A’s child. B = A’s child.

i. = grants to more than one person where the recipients are identified by description rather than named and/or at times must satisfy a condition precedent.

ii. RAP holds that a class gift is not vested in any member of the class until the interests of all members have vested.

1. Either all must vest or be certain to fail to vest. iii. Similar to the “all or nothing rule” which says that a gift to once member of a class

might vest too remotely, then the whole class is void. iv. Rule of convenience may then be used: a class will close as soon as one member of

the class is entitled to immediate possession or enjoyment, closes before the natural end.

v. Can close psychologically or natural or via convenience. 3. Contingent remainder : permits the transformer to let future events determine this question. Occurs

if it is (1) given to an unascertained person or (2) it is made contingent upon some event occurring other than the natural termination of the preceding estates.

a. Differences from vested remainders:b. Vested remainders accelerate possession. c. Contingent remainders are not assignable during the remainderman’s life and was

unreachable by creditors (modern law is reachable by creditors and transferable).

PROPERTY OUTLINE

d. Contingent remainder was subject to the rule against perpetuities.e. Alternative contingent remainders : when the grantor provides that another person take if

the contingency fails. f. Rule of destructibility of contingent remainders : contingent remainder is destroyed if it has

not vested at or before termination of preceding life estate. g. Merger rule : if a person holding a vested life estate acquires the next vested estate in the

same property, the estates merge into one. iv. Condition Precedent : an event that must occur or fail to occur before an interest becomes vested or

possessory. v. Rule Against Perpetuities :

1. Applies to contingent remainders, executory interests, and class gifts. a. Does not apply to: future interests in the grantor, present interests, and future interests that

are vested immediately upon creation. 2. Gray formulation : “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 interest.” 3. Statutory Uniform Rule incorporated common law rule. Represents a compromise between the

aristocracy and the courts – long historical progression. 4. RAP is about the validity of interests. If invalid, stricken from grant and read without it. 5. Viewed from time interest created (from conveyance inter vivos) + validating life + must be vested

or lapse unvested in 21 years. a. Take into account what COULD happen, look at every unvested interest: 1) look to the

terms 2) facts in existence at the time, 3) all future possibilities. Defined period: moment interest created + life in being + 21 years (after the death of someone who was alive at the creation of the interest)

b. Wills = created for the purposes of RAP at the time the grantor dies, not on the day executed.

c. Focus on vesting not possessiond. Exception for charities: a gift of PI in one charity followed by contingent

remainder/executory interest in a second charity escapes the RAP- to encourage charitable giving.

6. Examples:a. Valid = O to A for life, then to each of A’s kids who reach the age of 18.b. Invalid = O to A for life, then to 1st of A’s kids to reach 30 years of agec. Bit of both, strike out C, which is invalid = O to A for life then to A’s oldest son for life,

then to B for as long as the land is farmed then to Cd. Valid = O to A for life, then to A’s oldest son for life, then to B, but if B stops farming

during B’s lifetime then to C. 7. Label problems:

a. Problem of the unborn widow. Person who was not a life in being at the creation of the interest can fit the description.

8. Purpose: judicially created to encourage alienability of property. Balances interest of landowners and future generations.

d. Uniform Statutory Rule Against Perpetuities: If fails CL RAP, but interest does not actually rest/lapse unvested in 90 years (similar to wait and see approach). CL rule validates interest right up front. 90 years only comes into play if fails CL RAP. Result of long-term reformi. Prior reform options: focus on actual rather than the possible, avoid technical problems, keep to intent as

closely as possible, and wait and see.

PROPERTY OUTLINE

e. Restatement 2 Generation approach : defines the perpetuity period as expiring at the death of the last living measure of life. Focuses on time of termination instead of time of vesting. Limits dead hand control more effectively.

f. Wait and See Doctrine: changes inquiry from what could happen to what did happen. Court waits until 21 years after validating life terminates to see if actually vested. 12 states apply.

g. Commercial Options and RAP : Some courts hold that option to purchase is akin to springing or shifting executory interest. i. Flat 21 years applies as no validating life, alternative give to one person to exercise option- not extending

to heirs, exercisable only by named persons, or subject to termination at regular intervals inside the 21 year period.

h. Symphony Space v. Pergola Properties: i. Facts: Theater space owner does a “sale lease-back” to get non-profit status for tax purposes. Symphony

gets space, Broad west gets to use building but doesn’t have to pay taxes. Exchange (title of the building, rent of $1 per year, $10 to purchase an option) for ($10,010 purchase price, lease-back office space, grant of repurchase option). Option may be exercised and closed only on certain years. Broad sells out to Pergola property- Pergola wants to operate the option. Symphony space says no as option is subject to RAP and it thus invalid. Pergola argues RAP should apply to commercial property, Ct disposes of this argument via precedent, says the rule exists to promote alienability of land, so not tied up for too long- option has exactly that effect. D could then claim the option was alienated and therefore didn’t frustrate the purpose of RAP.

ii. 3 things amiss: (1) Reversion, right of entry, possibility of reverter: exempt from RAP, as they are vested at the time they are created. (2) Number of options, actually 4 options, 3 of the 4 are valid. (3) This option is deeply discounted from fair market value: so the exercise of the option is certain.

VI. Concurrent and Marital Interests: a. 3 types of concurrent interests:

i. Tenancy in common : Most basic common form of joint tenancy: 2 or more people own property at the same time

1. Each co-owner has right to possess the whole property but with fractional interest in common. 2. Separate but undivided interests. 3. If sell or lease the land each has fractional interest in the proceeds. Does not need to be an equal

interest, co-tenant still has right to the whole. 4. Fully devisable, alienable, and inheritable.

ii. Joint tenancy : similar to tenancy in common but interest in joint tenancy cannot be divised or inherited. Can be alienated.

1. Includes right of survivorship. Popular as a means to avoid probate, necessitated the creation of Uniform Simultaneous Death Act. Survivorship doesn’t extend to when one JT murders the other JT.

2. Joint tenancy in CL required equal shares of interest, remains generally true. Joint tenants considered as single owner.

3. Favored by English common law. Modern law disfavors joint tenancy. Must be specific in deed about right of survivorship.

4. CL: must have been created by single instrument at 1 time with 4 unities: time, title, interest, and possession

a. Time: tenants receive interest at the same momentb. Title: receive interest from same sourcec. Interest: equal shares of the same estate. d. Possession: same right to possess the whole of the property

PROPERTY OUTLINE

5. CL easy to undo joint tenancy, modern trend is to make JT easy to create as well. Need clear intention and then can forgo the 4 unities. Joint interest cannot be devised or inherited.

6. Severance : JT can be alienated. If alienate it severs the joint tenancy while a tenancy in common continues on.

a. Ex: A, B, and C are all joint tenants, C sells to D. Only severs as to C & A and C & B. D becomes a tenant in common with B and A. If D dies then goes to D’s heirs. B & A remain joint tenants. If A dies, A’s interest disappears and assumed by B.

b. Leases do not sever. Lease terminated with death of the leasing co-tenant even if lease hasn’t run its course.

c. Mortgages : per lien theory title stays with the debtor, only when foreclosed is it severed. If JT dies with mortgage outstanding- per title theory the creditor owns title and it severs.

d. Judgment Liens : will sever after a levy and sale. e. Strawman transfers : secretly severs JT, opens up possibility of fraud- if survives other JT

will destroy documentation of the severance. 7. Similar to multi-party bank accounts: joint accounts, saving account trusts, or payable on death

accounts. Presumption favoring the joint tenant after death of other tenant, in proportion to the net contribution of each party.

iii. Tenancy by the entirety : Can only exist between married people. Neither tenant by the entirety can alienate the other tenant without consent. Essentially the same as joint tenancy, but with 5th unity of marriage. Exists in fewer than ½ of states.

1. Divorce terminates the tenancy by the entirety and a tenancy in common results . 2. Usually means that creditors can only foreclose on the property if both spouses are liable for the

debt or both executed the mortgage. (except in KT and TN). iv. Ouster: occurs when the occupying tenant acts to prevent the other co-tenants from using the property.

Changing locks or makes use of the property in a way that no other use can be made of any part of the property and refuses to make room for another’s use. Requires a demand for access and denial, prior to bringing an action for ouster.

1. If ousted, can demand rent. 2. AP : ouster is not enough- requires clear notice of claiming adversely.

v. Rules of Partition: Generally partition in kind (physical) is preferred. That the economic value of the property as a whole would be less if it were partitioned in kind is relevant, but not dispositive, especially as emotional ties to land may exist. See Delfino v. Vealencis.

1. Owelty : when after a partition the court goes and makes adjustments. Reflects is one tenant received more value, or one invested more in property, etc.

2. Partition in sale when: 1) partition in kind is impractical or wasteful AND 2) that sale would not protect the interests of all parties. Lots of judicial discretion as it is a matter of equity. Some states allow one co-tenant to purchase, others do not. Some jurisdictions allow parties to contract around partitions by sale.

3. MUST BE between possessory interests, not between future interests and possessoryvi. Accounting for benefits and recovering costs with multiple tenants:

1. Rents and profits: absent ouster, accounting is based on actual receipt and not fair market value. 2. Pay mortgage, taxes, and other carrying charge, per % of property interest. If one paying rent may

offset other’s share of carrying charges. Prepaying mortgage cannot seek contribution- wait until comes due.

3. Repairs and improvements: no affirmative right to contribution from the other cotenant in absence of an agreement. General rule: interests of the improver are to be protected if this can be accomplished without detriment to the interests of the other cotenants. Get more for improvements in partition, unless doesn’t increase total value, the improver bears the downside risk.

PROPERTY OUTLINE

4. Can get money via an accounting or final settlement on sale: 5. Tax and foreclosure sale: may have statutory right to redeem property as individual (minority) or as

co-tenant (majority). vii. General Rules:

1. Co-tenant in tenancy by entirety cannot sell, lease, or mortgage interest without consent of co-tenant.

2. Co-tenant in tenancy in common or JT CAN sell, lease, or mortgage without consent. If leases out land, other co-tenant has right to proportion of the rent. One co-tenant cannot adversely possess against another co-tenant unless co-tenant was ousted (effectively giving notice of AP) to the other co-tenant. When co-tenants cannot agree to possession or use the available remedy is partition which can be either voluntary or involuntary

3. Involuntary partition is either by sale or physical, starting point is party’s fractional interest4. For tenancy by the entirety there is no partition. Only remedy is divorce, neither party can terminate

without consent. 5. Tenancy (all 3) each co-tenant has = right to the management of the property6. Courts/states are divided over if co-tenants have a duty to contribute to the expenses of maintaining

the property7. By contrast the majority of improvements, courts agree one co-tenant cannot compel another co-

tenant to agree. However, when comes time to partition, if 1 party has born greater percentage of expense to improve then reflected in partition process.

8. Co-tenants do have a duty to share in the property taxes- per fractional interest. 9. Co-tenant in possession does not have duty to pay rent to co-tenant out of possession. 10. However, co-tenant in possession has duty to pay rent if co-tenant in possession has ousted the co-

tenant out of possession. Ouster here is conduct by 1 co-tenant that 1) excludes other AND 2) manifests an intent to exclude

11. Constructive ouster: occurs when number of co-tenant is so large that they can’t actually all co-possess/occupy. Not hostile.

b. Riddle v. Harmon: i. Joint Tenants. Frances doesn’t want Jack to inherit. JT can be severed by conveyance to 3rd party. Gives

over to straw-man then sold land. Creates a tenancy in common as a result. CA statute allowed creation of JT, small step to allow direct joint tenancy by transfer- common sense. Did not give notice to Jack, but not required to, as compared to tenants by the entirety. Notice and consent not required. This was clearly Frances’ intent.

c. Hams v. Sprague :i. JT between brothers. J. Harms used JT to secure a mortgage. J. Harms then dies and devises everything to

Sprague. Lots of reliance by Sprague and the Simons. ii. Holds: mortgage doesn’t sever JT per Illinoi law, a mortgage is a lien and a lien doesn’t sever JT. JT is in

effect when John dies, Will Harms get sole interest + mortgage dies with John harms, then Simmons no longer has security interest, so Sprague has no means to sell and pay off Simmons. Formalistic approach, functionalist approach would have looked at the intent of the parties.

1. Lien = security interest, allows holder of a lien to go after the property. Mortgage is a form of lien. Mortgage = security interest; person gives lender in exchange for a loan. Usually mortgage is on the property you’re buying. Provides security- mortgagee gets superior right to the property.

d. Delfino v. Valeancias :i. Facts: Helen has house and trash business. D wants to partition physically (in kind) and P wants to

partition by sale- want to develop into residential, presumably they intend to buy the property at the sale, but without having to meet D’s price at FMV.

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ii. Can’t agree as to how land is to be partitioned. Problem is ultimately price. If D gets a physical partition then P will have to meet her price or deal with her. D values at more than FMV because fo business. Court says physical partition is generally preferred. In CT partition by sale is only when 1) partition is kind is impracticable or inequitable AND 2) interests of parties better promoted by partition by sale. Court holds for D. 0 Sum game- someone has to win, someone has to lose. Means CT law protects D’s subjective valuation of the property. FMV will not work.

e. Spiller v. Machereth: i. Facts: 1 tenant uses as warehouse and non-possessing tenant requests that he either vacate of pay rent.

Loses request. ii. Majority view: Co-tenant in possession does not have duty to pay co-tenant out of possession unless CTIP

ousted CTOP. Each has an interest to the whole, demanding rent vs. ousting (exclusion with intent to occupy the whole). Consistent with the idea of right to possess the whole. Consistent with idea of right to possess the whole. Encourages parties to litigate, puts a lot of pressure on ouster. Requires a trial.

iii. Minority view: CTIP has to pay rent to CTOP even without ouster, encourages parties to bargain. f. Swartzbaugh v. Sampson :

i. Wife of P doesn’t sign lease- trying to sue hubby and Sampson and cancel the lease. Join Tenant with right of survivorship: each tenant can alienate his or her percentage without consent, as compared to tenancy by the entirety (so JT cannot declare a lease formed by another JT invalid). Mrs. S doesn’t want the land to be used for boxing. Court doesn’t care/doesn’t cancel the lease. Next step: Could get ½ interest of the fair rental value- Sampson would provide FMV. Ouster is obtainable, still hasn’t achieved the result- wants boxing to be canceled. To compensate Mrs. S would require more than FMV. Issue: Can one tenant maintain an action (when hasn’t joined the lease) to cancel the leases of her co-tenant NO.

g. MARITAL PROPERTY INTERESTSi. Putative spouses : think they are validly married when they are not. Few states recognize common law

marriages. Protected by estoppel in some states.ii. Common Law Property : Each spouse holds separate title to his or her property, includes both property they

bring into the marriage and the property they acquire during the marriage. Can hold property as JT or in entirety or in tenants in common, doesn’t shift to one form or another automatically with marriage.

1. History : Disabilities on married woman, no control over her own property, did protect some rights of survivorship (has a dower interest).

a. Dower : right of married woman had in hubby, FS or FT if he dies first would have 1/3 interest in life estate in hubs or FS or FT. Could not be reached by Hubs creditors OR alienated without wife’s consent. Elements: 1) valid marriage + sole and beneficial seisin (interest in property during the marriage). Can be contracted around via pre-nup.

b. Curtesy : Hubs right to life estate of all real property owned by wife, but interest extinguished unless they had kids together. Still have this then the cutesy and dower are equal.

i. Life estate in all property, right of use and occupation, with birth of kid = curtsey initiate. Curtsey consummate = owned at death of wife. Applies to legal and equitable estates.

c. Married woman’s property act : Mississippi in 1839: removed legal disabilities in the CL, now married women on equal footing as man and single women, wife could have separate property.

d. Election : some states retaining dower are forced to choose between dower and what is provided in will.

i. Elective share : generally 1/3 of estate if lineal descendants. Otherwise ½. e. Homestead exception: protects property from claims of creditors.

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2. Even though CL starting point is separate interest, CL compels striking amount of redistribution especially when comes to an end to create and equity and balance. Freely move property around. Pre-nuptial agreement can prevent.

3. In striving for redistribution the law runs over property rights of both spouses in effort to equalize, also runs over interest of 3rd parties, in lieu of creditors. Law wants equity.

4. Rules:a. Common Law States: each spouse owns his or her property separately, but can take title

together, both property they bring into the marriage and property they acquire in the marriage is separate.

b. At divorce property earned by one spouse can be transferred by the court to the other spouse through equitable distribution statute, alimony, which as equitable matter, reaches/applies ONLY to property earned during the marriage- subject to override by a pre-nup.

c. Because each spouse owns property separately each can devise and bequeath property as he/she chooses, BUT every CL state provides for an elective share, some states its 1/3 others 1/2. Purpose: keeps spouse from disinheriting surviving spouse. Can override elective share with pre-nup.

iii. Communal Property Interest: (AZ,CA, ID, LA, NM, TX, WI, WA, Alaska + some)1. After thought in American law. Husband and wife own property in community. 2. Usually means that property acquired during marriage through bequest, devise, gift, is not

communal. a. Investment earnings are communal property.

3. Generally beyond reach of creditors either spouse for pre-marriage debts (except for IRS). States vary whether creditors of separate spouses for debts incurred during the marriage can reach the communal property. Determines by domicile.

4. Divorce in theory, communal property is straight forward, each spouse gets ½ of communal property + separate property. Very different in CL with equitable distribution. Some states have abandoned the traditional communal property approach.

5. Death: each spouse can bequeath 100% of separate property and then can bequeath 50% of communal property. If intestate, give 100% or divide between spouse and kids. Generally, communal property states do not allow elective share.. Every communal property state allows hubs and wife to convert 1) separate to community and 2) community to separate.

6. States/jurisdictions diverge regarding:a. Creditors, interest earned by separate property, and move from CP to CL effect.b. Can transmute separate property to CP. Both spouses msut agree.

7. Issue when mixing community property with separate property: presumption toward CPa. Inception of right: character of the property is determined at time signed contractb. Time of vesting: when title passesc. Pro Rata Apportionment: how much each paid for it…

*** Community v. Common Law depends on domicile:

Old State ↓ (New state)

Florida CL New Mexico Communal Prop.

New York (CL) Problem: CL to CP for most part property will be treated as separate property in CP state, looks to law of where property was earned/acquired. May not have much, if any CP. Prob as CP states protect spouses

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by protecting CP. Can disinherit spouse at death, no elective share. Outcome is inconsistent with both policy goals.

California (CP) OK to move from CM to CL, FL will apply own laws, but CL rules are protective of both spouses

NM will look to law of CA to determine how much is separate versus communal

iv. Swado v. Endo: 1. Facts: vehicle accident between old man and two sisters, who are severely injured by the accident.

Sisters trying to get money to satisfy the judgment, suing to get the Endo’s land, which Endos had conveyed to their sons. If Endos owned and as tenants in common or as joint tenants then Swadas could set aside conveyance and get Mr. Endo’s interest. Hang up – Es were tenants by the entirety and in Hawaii has yet to decide if creditors of 1 spouse can reach the other spouse/tenancy in the entirety. At CL hubs creditors could reach the hub’s interest, subject only to wife’s right of survivorship. Since Mrs. E is dead would get FSA, would make conveyance fraudulent, and S could get a hold of. But married women’s property act changed that and superimposed a requirement that hubby and wife be treated equally, must apply rules equally. CL Tenancy by the entirety: 1) creditors of wife could not reach any interest OR 2) creditor of the husband could reach husbands interest, subject to wife’s right of survivorship. HOLDS: Beyond reach of creditors as part of property be the entirety.

2. Fraudulent conveyance: transfer of property without valuable consideration in an attempt/ with intent to put property out of reach of creditors. Tort had already occurred so Endo had notice. Test for fraudulent conveyance: if person still had the asset could it be reached by the creditors (ex: 401K can’t be fraudulently conveyed)

3. Rule: Creditors cannot reach TE. Ct decides to follow CL rules for wife, neither hubs or wife’s interest in the TE can be reached by creditors. MWPA must treat H & W equally.

h. Graham: i. Issue: is MBA marital property. Doesn’t ask court for alimony as she is capable of earing as airline

hostess. His degree and earning power are the only asset in dispute. Uniform dissolution of marriage act: equitable distribution statute.

ii. Marital property = all property acquired subsequent to the marriage. MBA is not property at all so therefore not subject to division, as no exchange value and personal to holder. Graham test = not transferable, no exchange value

i. Elkus v. Elkus :i. Opera singer divorce case. Lot of assets in dispute, focus on whether her celebrity status is property. NY

law: equitable distribution statute. Marital property = property acquired during the marriage (Same legal rule as in Graham). Husband wins: celebrity is property. Elkus test: contribution to celebrity and increase in values. Answer really depends on family law, not property law.

VII. Non-freeholds = Leaseholdsa. Lease: confers present interest on lessee (tenant) and reserves a future interest for lessor (typically landowner),

with reversion. Either grant or contract transferring the right to exclusive possession for an agreed, if indefinite period of time.

b. History/Progression: i. Originally viewed in terms of conveyance solely. Modern trend to view through the lens of contract law.

1. Contract vs. Conveyance: Conveyance = a lease transfers a possessory interest in land, so it’s a conveyance that creates property rights. Contract = leases usually contain a number of provisions. Statute of frauds comes into play with contracts.

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ii. 2nd half of 20th Century: period of dramatic change, creation of non-waive-able, non-disclaim-able duties toward landlord (especially with residential leases). New affirmative duties AND obligations are dependent upon one another. Lessee has right to withhold rent for breaking a condition.

c. License: authorization from an owner to enter premises without liability for trespass. d. Types of Leases:

i. Terms of years : Any lease the duration of which is marked off by specific term/period. Ends at specified time. Tenant has term of years and landlord has a reversion. If T overstays LL can get eviction proceeding. LL use to be able to get self-help (not allowed anymore) then when overstays becomes a tenant at sufferance (who wrongly holds over).

1. Terms of years is fully alienable, devisable, and inheritable. Same towards both tenant and landlord. Leases themselves often put restrictions, usually have to get landlord’s permission.

2. A term must be for a fixed period but it can be terminable earlier upon the happening of some event or condition

3. If no date of commencement given, assume date signed. 4. No notice required to vacate at the end of term. 5. If failing as term of years can become periodic tenancy of tenancy at will

ii. Periodic tenancy : lasts for an indefinite period up until point one gives notice to the other that going to come to an end. Advance notice. Interests are fully alienable, inheritable, etc.

1. CL advance notice requires was 1 period, at a max 6 months. Most states have statutory notice period. If renew after term of years becomes periodic tenancy.

iii. Tenancy at will : Indefinite duration, terminable by will of either party, either part can walk away at any time. Cannot be transferred to 3rd party by any means. Swept up in the reforms of the 20th C. Start to impose advanced notice. Generally informal. Oral elases are often presumed to be tenancies at will.

iv. Tenancy at sufferance : not true tenancy, just name given to one who wrongfully holds over from lease as distinguished from a trespasser. LL has choice of remedies.

1. Can holdover as trespasser, as renewing the lease, or after mortgage foreclosuree. Federal Statutes and Leaseholds :

i. Civil Rights Act of 1886 : interpreted by the Supreme Court to only restrict government discrimination. Reinterpreted in 1968 in Jonrd v. Alfred H. Mayer. The 1886 provision bars ALL racial discrimination, private and public, in the sale or rental of property. Narrower than FHA because it’s only about racial discrimination. Broader that FHA as isn’t limited to dwellings and doesn’t have nearly as many exceptions.

ii. ***Title VIII of 1968 Civil Rights act: Fair Housing Act: Outlawed discrimination on race, color, national origin, and religion. Extended to include familial status, sex, disability, etc. Many states have extended FHA. Exemptions:

1. 3602: Dwelling = building and portions of building used for occupancy (nursing homes, dorms, homeless shelters, etc. – NOT hotels, motels, rooms in houses, comm. Real estate)

2. 807(b): allows discrimination against families with children in places designed for older people3. 803(b): Mrs. Murphy exception: 804 doesn’t apply to a single-family houses/dwellings if owner

doesn’t own 3+ dwellings AND if sold without services of rental agent AND without publishing discriminatory ad notice. Can still violate the civil rights act which doesn’t have a Mrs. Murphy exception, can protect different groups.

f. Eviction/ejectment rules: i. English Rule : Landlord has burden of removing prior tenant/holdover. Required to provide actual

possession. Majority ruleii. American Rule : New tenant has burden of removing prior tenant/holdover. Landlord required to provide

only right of possession. iii. Both are default rules and can be contracted around !

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iv. Rationale for different rules: Move toward English rule1. What tenants expect2. LL has superior information regarding holdover new tenant has a lot less info3. Gap in time; new tenant can’t do anything during the gap4. Cost of eviction is generally less than cost of ejectment. Enactment of eviction statutes in recent

years, by states, streamlined, cheaper/faster process. And such proceedings are not available to tenants. Moreover LL are repeat players to the game

5. Benefit of American rule :a. Granting right of possession is all the LL promises to do. Every conveyance/contract can

involve a lawsuit, so burden isn’t that great. Tenant has duty to evict trespassers for everyday of the lease afterward, so why different the first day. No expertise in predicting who will holdover. Makes more sense for farmland and such.

English Rule American Rule

LL Costs of eviction + lost rent X possibility of holdover

Tenant [cost of ejectment + any lost profits] X probability of a holdover tenancy

g. Transfer of a Lease :i. Lease made by whoever owns land in FSA, carving out present interest and reversion (can be transferred,

but subject to the benefits and burdens of the lease). ii. Tenants can transfer interest in periodic OR term of years that are fully alienable- some states (a few)

require notice/permission. Many leases prohibit or make transfer subject to landlord. Residential leases- restrictions are considered valid, such restrictions could not survive a transfer of FSA.

iii. Commercial leases : many states hold that landlord cannot prohibit the transfer without reasonable reason to withhold consent

iv. 2 possibilities: Sublease (convey tenant’s interest for less than the remainder lease term) AND assignment (conveys tenant’s entire interest in the property).

h. Privity of Contract/ Privity of Estate: i. Privity of Contract = parties entered/signed contract with promises

1. Does not exist between landlord and tenant’s assignee or sublessee ii. Privity of Estate = both have interest in same parcel of property (mutual, immediate, simultaneous)

1. Applies to assignee (can sue for back-rent) but not sublesseeiii. If assigned then remains in privity of contract, but assignment ends privity of estate with Landlord,

consequently makes liable for any covenants that “run with the land.”i. Policies for consenting to subletting/assigning : May be restricted/contracted around- as reasonable protection

of LL’s interest and income. Restrictions on assignment/sublet is strictly construed against the LL. i. Otherwise must have commercially reasonable basis for withholding consent- Silent consent provision:

promotes free transferability/alienation of leases, arises from implied covenant of good faith and fair dealing, caries out reasonable expectations of the parties.

ii. If unreasonably refuses: suit for damages. Some jurisd. Allow abandonment after arbitrary refusal to consent. Sometimes contracting around seen as contract of adhesion.

iii. Once consents to first assignment, deemed to have waived the right to consent to further and future assignments.

j. Sublease : if the lessee transfers anything less than his entire interest. Lessee retains a reversion. Not bound by covenant to pay rent in the original lease- original or head tenant remains bound by it.

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i. LL Primary recourse is against original tenant. ii. Sublessor: No effect on original lease-

iii. Sublessee: NO privity of estate or privity of contract. k. Assignment : if lessee transfers his entire interest under a lease- when transfers the right of possession for the

duration of the term. i. LL primary recourse is against the assignee. Original tenant remains secondarily liable for surety

ii. Assignee : No privity of contract between LL and assignee, privity of Estate with LLiii. Assignor : No privity of estate anymore with LL, remains in privity of contract. iv. Rule of intent: Some jurisdictions give effect to parties’ intentions whether they created assignment or

sublease per Ernst v. Conditt. Brings into line with contract law, but provides less certainty. v. Assignment by original assignee: If assignee assigns to another- then original assignee thereafter has

neither privity of estate nor privity of contract with LL, therefore not liable except for anything occurred during his possession.

l. Duties of Landlord to Tenant: i. Sources: Substantive law and individual lease. Distinction blurred with increasingly sophisticated leases.

Movement in the 1970s and the implied warranty of inhabitability. ii. (1) Pay rent: derives from the lease. Possible to create lease that doesn’t require rent, where does provide

for rent it frames it as a covenant- allows promise to survive contract theory interpretation iii. (2) Occupy premise and/or operate a business there: in the lease. More closely related with businesses as

rent is usually flat fee + % of revenue so cares very much about occupation. iv. (3) Not to commit waste: tenant olds present right, LL = future interest. Law imposes duty not to hurt

future interest. m. Duties of Tenant to LL:

i. Wastes: See above- not to injure the value of the LL’s reversion. Can make reasonably necessary changes to the premise as contemplated by the party. Tenant is also not liable for wear and tear damages.

ii. Duty to repair: not in CL, resident responsible for minor repairs, 1. LL repairs: common areas, areas of exclusive control, latent defect. 2. Modern: no duty to repair as LL are in better position to repair, negated by IWH

iii. Destruction of premises: termination of the lease was unavailable at CL- also had duty to rebuild often. Modern: burden on LL, even if tenant brought around the destruction.

1. CL had to pay rent even if the building was destroyed- still rented landiv. Duty to occupy: duty is from lease, not the law

n. Implied Warranty of Inhabitability: i. Purpose: to improve the quality and the safety in residential housing

ii. Criticism: increased the cost of housing and pricing low/poor out of the housing market.iii. History : Result of 1970s movement.

1. CL = lease as conveyance of property. LL turns over property then just let the tenant be. Does not impose any duties regarding keeping in good repair (liable for all except wear and tear), protection from 3rd parties, rebuilding premise is destroyed (the tenant must rebuild). Only duties:

a. 1) deliver possession (eng = actual, AM = right to possess)b. 2) Allow tenant to have “quiet enjoyment” of the premise throughout the duration of the

lease: quiet enjoyment = obligation that only LL must let tenant be. Doesn’t apply to 3rd parties. No interference. Implied covenant of quiet enjoyment. Bare minimum that law could require. Implies covenant of quiet enjoyment led to the idea of actual eviction. Tenant could then sue via actual eviction if LL interfered. Can waive right of QE.

o. Mitigation doctrine : CL LL did not have duty to mitigate. Modern ruler per Sommer v. Kridel, duty to mitigate. Must treat surrendered/abandoned/vacant as part of “vacant stock” and rent out even if have other apartments vacant.

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i. Rationale:1. Court wants to shape legal duties to encourage loss management. Must take reasonable step to

avoid losses. Not in better interest to keep vacant house vacant = waste. Vandalism is a dead weight loss.

2. No mitigation norm puts full cost on lease, by switching to mitigation rule puts partial burden on landlord.

3. No mitigation norm allow shorter lease periods, landlords prefer longer leases longer leases are more likely to be broken puts cost of re-letting on tenant.

ii. No Self-Help allowed in modern law. See Berg v. Wiley, looking to avoid cost of violence. 1. Some allow self-help in commercial leases. 2. Differs for personal property than for residential leases.3. Increase in Summary Possession Statutes: summary eviction procedure. Tenants have 10 days to

cure generally, p. Bar Review for Leaseholds :

i. Tenant has duty to pay rent, to fulfill covenants, not to commit/permit waste and to give up/back possession

ii. If Tenant fails to pay rent or holds over, landlord can sue to evict the tenant. iii. Every state provides some kind go summary process allowing to get an eviction order (within days or

weeks). No process in CL. iv. Most states LL is forbidden to use self-help to evict. Some states allow self-help for commercial. Many

states won’t enforce lease provision that contracts to include self-help. v. LL can decide to hold the holdover to new tenancy.

vi. LL many be able to evict for breached covenant for something other than not paying rent, if lease gives landlord the right to retake possession

vii. Remedies for abandonment: 1. Accept tenants surrender, returns legal possession to LL and relieves tenant from responsibility to

pay future rent, LL re-let on LL account. 2. LL may re-let on the tenant’s account. Does not relieve the tenant of obligation to pay rent if LL

can’t find someone or leases at lower value. If someone pays more, then tenant gets the surplus.a. LL can still sue for damages/back rent. Usual damages remedies for contract law. b. Consistent with contract law and duty to mitigate. Encourages those who abandon to

inform LL: so can get apt. occupied quickly, and decrease likelihood of physical damage.c. Must treat apartment as part of vacant stock- must make reasonable efforts to mitigate.

3. LL can treat as anticipatory repudiation ans sue for either damages or unpaid future rent. (Only accepted in some jurisdictions)

q. Illegal lease doctrine : does not apply if the code violations develop after the making of the lease. Minor technical violations do not render a lease illegal, nor do violations of which the landlord had neither actual nor constructive notice. One under an illegal lease is a tenant at sufferance, with LL entitled to the reasonable rental value. i. Illegal because they offend some strongly held public policy

ii. Purpose : first-day rule, incentivizes LL to remedy code or statutory violations in existence on lease’s first day- then IWH applies to keep premises up to code

r. Actual eviction: LL excludes or locks the tenant out of premises.i. Partial actual eviction : LL takes part of the property and excludes tenant – even if just a portion, de

minimis amount. s. Constructive Eviction : when LL so substantially interferes with the tenant’s use and enjoyment, or causes or

allows inhospitable conditions to persist that the tenant is justified in vacating the premises even though the LL actions or inactions fall short of being actual eviction

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i. Elements :1. Intentional acts or failures to act by LL that breach duty owed to the tenant,2. Substantially interfere with tenant’s enjoyment of the premises or render premises unfit for

purposes leased, and3. Tenant vacates4. Within reasonable time after the LL actions.

t. Implied Warranty of Habitability :i. Rental of any residential dwelling unit, there exists an implied warranty exists in the lease, whether oral or

written, that the landlord will deliver over and maintain throughout the period of the tenancy, premises that are safe, clean, and fit for human habitation- objectively reasonable standard of habitability.

ii. Both implied and patent. Can’t be waived by prior knowledge. Residential not commercial (this does not apply to MPCO).

iii. Before IWH had to point to a specific act. LL’s obligation duties were defined by a lease. Duties depended on if covenanted in contract.

iv. Components of IWH claim: 1) notice to LL 2) substantially affecting health 3)LL must be given reasonable time to repair

v. Remedies: 1) sue LL 2) withhold rent 3)repair condition and deduct reasonable amount vi. Policy arguments :

1. IWH is Pro-tenant :a. No longer need to bargain for basics- desirable given unequal bargaining power of LL to Tb. Minimum threshold of living conditions- ameliorates slumsc. No longer need to move out to prove constructive eviction- able to garner repairs without-

removes risk that will move out and still be liable for rentd. Repairs will never be made without IWH: cycle through tenants until someone is willing to

put up with it.e. Response to Easterbrook/Posner: IWH just makes repairs explicit versus an implicit cost,

Economies of scale, cost to LL to repair will be smaller, also will be more willing to repair common areas, defeating the tragedy of the commons, do we want the poor to be able to waive basic liveable conditions?

2. IWH is Bad for tenant :a. Posner/Easterbrook: poorest will be priced out of the housing market. b. LL will pass on costs which will either price out of market or reduce ability of the poorest

to buy other necessitiesc. May cause LL to exit the business or gentrify the housing d. ***Rent control doesn’t work: does not bring rent down to affordable levels,

Constructive eviction I.W.H.Source of LL duties

Lease Law

Type of Lease Commercial, residential ONLY residentialElements Breach of LL duties

NoticeOpportunity to repairabandonment by tenant

1) breach of LL duties2)notice3)opportunity to repair

Remedies 1) Terminate the lease2)damages compensation*covers relations between tenants as well

1) terminate the lease2) damages3) injunction -staying put to get repairs made4)Permanent rent withholding5)temporary rent withholding- pay the LL nothing as

PROPERTY OUTLINE

means of leveraging- will pay in full including rent withheld if fixes premises6)punitive damages7)Repair and deduct cost of repair from rent

Waivable Yes Not Waivable

u. Hanna v. Dusch : i. Holdover tenant. Court holds, per American rule, that tenant had the responsibility to remove. Can contract

around however. v. Ernst v. Conditt:

i. E looking for rent. Ernst says R C was an assignment, so Conditt is directly liable to Ernst. Conditt says R C was a sublease so Rogers is primarily liable. Court holds assignment not a sublease. Looks to 1) general rule: assignment conveys the whole term, while sublease generally for less than the whole with some reserved to subletter. Modern approach: look to what the parties intended.

w. Sommer v. Kridel/ Riverview Realty v. Perosio: i. Kridel signs 2 year lease in NJ. LL never replies to a letter seeking to terminate the lease and turns down

new-renter for the space. Sues Kridel for 2 years waste. Q is whether a LL suing for unpaid rent has a duty to mitigate.

ii. CL rule: no duty on LL to mitigate, lease is a property transaction. Modern trend: view as contract and property and thus allow mitigation doctrine.

iii. Contract has duty to mitigate. Court says time to bring in line with. Introduces duty to mitigate as justified as a matter of basic fairness.

x. Berg v. Wiley: i. No self-help!

ii. Facts: Wiley leases building to Phil Berg, sister takes over. Lease says tenant won’t change the building and will keep up with health codes. Sister does neither, LL reserves the right to retake possession if tenant breached covenant. Berg puts sing on door that restaurant is closed for renovations. LL is trying to change the locks. Police restore order. Next Monday LL returns with police and locksmith, changes locks. Finds new tenant immediately. In LL mind the lease is over. Berg sues for wrongful eviction (lease runs through Dec). /Wiley counterclaims she breached AND that she abandoned. Wiley immediately loses on the abandonment claim as that is a dispute of fact. Remainder of opinion premised on the conclusion that she has not abandoned.

iii. LL relying on CL self-help provision: Can rightfully use self-help without liability if 1) landlord is legally entitled to possession AND 2) means of reentry are peaceful. Application: Court says wasn’t peaceable. Holds: No self-help is available any longer, only option is to resort to court and get a summary motion, only judicial option

iv. Comparing Sommer v. Kridel (avoid losses and minimize when occur, by LL taking care of outside of court) VERSUS Berg V. Wiley (now go to court in order to minimize the cost of violence over possession). Approaches seem consistent if attempting to minimize loss, but seem inconsistent if looking at encouragement of self-help.

y. Village Commons v. Marion County Prosecutor’s Office: i. Lease explicitly says LL has responsibility of keeping premises in good order and repair- otherwise MCPO

can sue- injunction or damages, but MPCO cannot terminate the lease or cut back on the rent. Leaks begin. Rooms/evidence destroyed. Mold enters the equation. Brings to the attention of the LL, willing to make repairs, but always on the cheap. 2002 LL sends letter to them telling them just not to use certain parts of the premise. MPCO moves out after becomes intolerable and stops paying rent, even though 3 more years on the lease. LL sues. MPCO claims constructive eviction. LL loses and court says MPCO was both actually and constructively evicted.

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ii. Actual: deprived1. If actually evicted not required to pay rent. TC found actual in October: when L said to stop using

parts where leaks were, deprived of part of possession. iii. Constructive: does some act by which tenant is deprived of enjoyment.

1. If constructive and tenant leaves relatively quickly, then relieved of obligation to pay rent. TC found this in Jan when the flooding was so bad they moved out.

z. Hilder v. Peter: i. Facts: apartment is shitty. P lives in horrible conditions.

ii. Holds: No actual eviction. Constructive eviction possible as deprived of enjoyment of property, yet constructive requires that P abandon the property, which P didn’t. Court holds regardless of CL (up to tenant to make repairs) there is an implied warranty of habitability. Implied warranty of habitability requires, whether oral contract or written lease, that the landlord will deliver over and maintain throughout the period of the tenancy, premises that are safe, clean, and fit for human habitation. Both implied and patent, can’t be waived by prior knowledge. Residential not commercial.

iii. Calculation of damages: difference between the value of the dwelling as warranted and the value of the dwelling as exists

aa. Jarvis v. First National Realty: i. Facts: Suit where LL sued tenants for rent, houses had 1000+ violations of housing code. Claims lease is

more contract than property law- implied warranty of fitness and merchantability- for goods and services as applied to leases = IWH.

ii. Part of larger movement of law to protect interest of the poor and disenfranchised. Criticized IWH claiming that increased cost of housing so some people will be priced out of the marked, or reduce peoples’ abilities to pay for other necessities or landlords might exit the business – gentrify the building as a result. LL just passes on cost to residents.

bb. Chicago Board of Realtors, Inc. v. City of Chicago: p. 531i. Facial challenge of a codified IWH

ii. Dissenting Opinion by Posner and Easterbrook: iii. LL will offset costs by charging higher rents, LL will screen applicants more carefully, this is just class

legislation and economic protectionism, ordinance is not in the interest of poor people,

VIII. NUISANCEa. Law of nuisance : adjudication of land uses, judicial attempt to coordinate inconsistent desires to use separate

land- neighbor issues, issue of externalities- forced conveyance from one party to another- if P sues for nuisance and lose D has then acquired/kept right to interfere with enjoyment, P forced to sell, alternatively get damages at price set by the court or P gets injection and then forces D to bargain or cease.

b. Public Nuisance: unreasonable interference with a right common to the general public. i. Spur was case of both public and private nuisance. Environmental can be public. Leads to regulation or

incentivizations. (pg. 808)c. Unintentional : Whenever conduct is negligent, ultra-hazardous, etc.d. Non-tresspassory : odor, light, vibration, dust, non-physical invasion

1. Traditional nuisances: freedom from trespass, water rights, and right to lateral and subjacent support (as would be given naturally, issue when land is excavated and subsides).

e. Intentional : Knew of nuisance and continued activity. Elements:1. Substantial and unreasonable interference with the use of another person’s property:2. Substantial: must be inconvenient and substantive to a person of ordinary sensibility

a. No such thing as aesthetic nuisance (unless driven by spite)3. Unreasonable:

f. Theories of Unreasonableness :

PROPERTY OUTLINE

i. Using land in manner that interferes with neighbor’s use of land: reflects CL maxim, ii. Doing more harm than good:

1. Weighs social benefit versus cost to burdened neighbor. Atlantic Cement. iii. Imposing externalities on neighbor without compensation:

1. When third party is forced to bear the cost, often able to get damages, not always an injunction. iv. Cost accounting:

1. Allows D to continue the nuisance is compensates the injured party, even if there is a greater social cost to the nuisance

v. First come first served: 1. Impedes development and is hard to determine.

g. Bar review i. General test: One person’s use of their property is an intentional nuisance if results in substantial and

unreasonable interference of another person’s use of the propertyii. Nuisance applies only to real property and not personal prop.

iii. Anyone without ownership or possessory interest in land can bring nuisance actioniv. To be substantial interference must be inconvenient and substantive to a person of ordinary sensibilityv. Public nuisance is use of land that violates or harms the interest of the public as a whole. Ex: illegal

activities vi. Unintentional nuisance are really just negligence actions. Most take care of via zoning.

h. Atlantic Cement v. Boomer :i. Intentional-unreasonable invasion: Action for injunction and damages by neighboring land owners. Issue

since cement is valuable industry, don’t want to use prior common action of issuing an injunction immediately, research incentives at concern- but would need to be conducted by an entire industry- plaintiffs’ property is small in comparison to nature of D’s operation. Goes through all the options: decides to grant permanent damages – one lump sum. Denied injunctive relief. Large # of P, so difficult to bargain, unlike Vealencias.

ii. Rule: if NY cost to P of N is $100+, then injunction automatically granted. iii. Dissent: gives no incentive to abate or ameliorate nuisance/pollution above a certain level.

i. Morgan v. High Penn Oil :i. Facts: P is a landowner of a trailer park. D is an oil refinery. P suing for damages and injunction. Factory

emits odors and smells. Intentional. Refinery knew- standard is thus unreasonableness. Liable because conduct is unreasonable- court doesn’t say what is unreasonable- legal conclusion doesn’t need to explain.

j. Estancia Dallas Corp. v. Shultz :i. Theory of remedies. 2 available 1)damages and 2)injunction

ii. Facts: air conditioning unit, makes a lot of noise and is super close to the property- P have suffered from sound and loss of value to their home. D contends lot of $$ went into the unit and to put in separate units would cost additionally 150K to 200K

iii. Rule: in TX the rule in order to issue an injunction for nuisance, must balance the equitiesk. Spur Industries:

i. Cattle feed lot, lawful but becomes a nuisance by addition of residential area. Brought people to the nuisance and must indemnify spur for a reasonable amount of cost of moving or shutting down. Relief limited to when developer has with foreseeability, brought into a previously agricultural or industrial area the population which makes necessary the granting of an injunction against a lawful business and for which the business has no adequate relief. Still grants permanent injunction, just gets damages.

IX. EASEMENTS AND COVENANTS:

PROPERTY OUTLINE

a. Law of Servitudes : inconsistent uses of land as initially coordinated by agreement. i. Individual’s Non-Possessory Interest in another’s land : easements, covenants (real covenants and equitable

servitudes), profits a prendre (right to enter another’s land without trespass liability and remove minerals/timber/natural resources), and license.

b. License : permission given from owner to non-owner for temporary use of occupation. Remains revocable at the owner’s will, while easement is not revocable.

c. Easement : right given to non-owner to use owner’s land in specified way (affirmative) or to prevent/forbid use of owner in specified way (negative). i. Benefited (grantee of easement) vs. Burdened (grantor of easement) Estates:

ii. Stranger to title rule : 1. Easement or interest in land may not be reserved in favor of a third person (neither grantor nor

grantee to the deed) vestige of feudalism. CL rule. Allow stability and settled use of precedent. reversed/ not-observed in Willard v. First Church. Varies by jurisdiction.

iii. Affirmative easement : give the holder the right to go onto the servient estate for a specific purposeiv. Negative easement : right to prevent an owner from using owner’s own land in a certain way. Restrictive

covenant is similar1. English courts recognized: 4 types: light, air, lateral support, and flow of artificial stream.

a. Reluctant to recognize other negative easements because they impinge on the free ownership of the servient estate and should be expressly bargained for in most precise terms in order to result in efficient use of both estates.

b. Negative easements are also harder to discover, can’t discern by viewing the land. 2. Modern trend: recognize other negative easements including historic or conservation or solar

a. Issue of sham easements- donor’s overvaluing for tax write off, v. Obtained via: Express grant (must be written and recorded), estoppel, implication, prescription

1. Express grant : issue of ambiguous languagea. Reservation and Exception :

i. Exception: merely a statement that the property might be subject to an easement ii. Reservation: was a grant of the property to a purchaser and a re-grant of the easement

back to the original grantor 2. Estoppel : recognized by courts to protect reliance interest

a. Owner of servient estate grants license allowing owner of dominant estate to use the servient estate and to make improvements to either dominant or servient

b. Owner of servient estate knows or should have known, owner of D estate will rely on license remaining to his or her detriment

c. Owner of D estate in fact reasonably relies and makes substantial improvement to either servient of dominant estate.

d. ***Lots of variation: courts more willing to enforce informal agreements as easements by estoppel if used for a long time and money spent to improve/repair/etc. – good faith actions

Servitude

License Easement

express estoppel

prescriptive implied

prior use necessity

Covenant

PROPERTY OUTLINE

e. **License made irrevocable via estoppel will last as long as necessary to prevent unjust enrichment by the licensor.

3. Implication : by prior use or by necessity a. By prior use : requires that:

i. Under common ownership at some timeii. Lot derived the benefit/advantage from other lot prior to the sale.

iii. Must be apparent 1. Or discoverable by reasonable inspection

iv. Continuation of the use must be necessary for the enjoyment of the property. 1. Grantee: Necessary usually means use of easements is convenient2. Grantor: necessity element may mean convenient or may mean strictly

necessary. Seeking grant, should have known when divided the property, stricter.

b. By necessity : if owner of the land sells off land locked parcel, then buyer can have an easement of necessity of seller’s land. Can only be implied to the seller, not to a third party. Must show necessity of crossing seller’s land was in place at the time of the sale or grant. And must prove that there’s not another way. Only asserted from/by/to person who sold the land by person who bought land. Elements:

i. Both lots previously under common ownershipii. Need to use servient estate by d. estate was present at the time of the sale.

iii. Crossing servient estate is strictly necessary, versus convenient. 4. Prescription : Using someone else’s property, not as broad of a scope as when by grant, implication,

or by necessity. a. Actual use: only affirmative easements can be enforced by prescriptionb. Use is open and notoriousc. Continuousd. Adverse: means no permission

i. Some states require claims of right e. Continuous for prescribed statutory period f. Variations in jurisdiction: some require exclusive use,

d. Easement Appurtenant : Runs with the land as if belongs not to the owner, but to the land itself. Both burden and benefits. So long as notice is given to buyer as easements are recorded (buyer of servient estate must have notice).i. Courts prefer easement appurtenant

ii. Transfers automatically with the land- no transfer required iii. Burden on the servient tenement is limited by the needs of the dominant tenement (unlike in gross).

e. Easement in Gross : Easement attached to the owner of the Easement personally. No dominant estate, just servient estate + benefit. Not transferable. Commercial easements generally. Difference turns on the intent of the parties. Courts prefer easements appurtenant.

1. Owner of the dominant estate is not entitles to sever the easement 2. Traditional rule: generally not transferable by the owner, unless the parties agreed 3. Modern trend: default rule allowing transferability in commercial, recreational easements are still

not transferable (for hunting, fishing, boating, etc.) as they are intended to be personal4. Can be apportioned if rights granted in E of gross are exclusive:

a. Exclusive: right to use that space is exclusive of the owners of the servient estate. Ex: power lines

f. Use/Misuse of Easement: i. Bar review:

PROPERTY OUTLINE

1. Owner of the dominant estate is entitle to reasonable use of the E. Not entitled to overburden by making greater use of the E then intended when created.

2. If D estate is subdivided, the owners of the subdivision each have a right to the easement unless 1) terms of the E provide otherwise or 1) use by all subdiv. owners would overburden the estate

3. General rule: owner of D estate is not entitled to extend/move the E to other land that D owns. 4. Owner of D estate if overburdened/widened/extended always possible to get E via prescription 5. Traditional owner of servient estate was not permitted to relocate the easement. Modern trend:

allow relocation if owner of the D estate is not overly prejudicedii. Location: not recorded by express grant, located by servient- once located forever stays, change = misuse

iii. Holder has default duty to maintain and repair the easement, including liability g. Terminating Easements :

i. (1) Abandonment (requires non-use of E + acts manifesting a present interest to relinquish the E or a purpose inconsistent with future existence); (2) Own terms; (3) By release; (4) By AP or prescription; (5) By merger: if single owner becomes owner of dominant and servient estate.

h. Real Covenants: promises/burdens/obligations that may be enforced against person who takes the promisor’s estate or interest in the leased premises. i. History: Result of English Court’s hostility to negative easements- landowners resort to covenants (mutual

promises- only allowed for light, air, lateral, support, and flow of steam). Makes sense when between 2 parties. More parties = more transaction costs. Spencer’s Case (1583) court held affirmative covenant by one tenant was binding to the new tenant when lease was assigned. Rationale: privity of estate. Narrow conception of privity. England doesn’t have law of real covenants. Creates law of equitable servitudes as a result. US = more expansive view, now has both systems.

ii. Real covenant: real promise that runs with the land- binding on successor. iii. Cannot be created by estoppel, implication, prescription (as an easement can). iv. Requires :

1. Covenant in writinga. Only needs to be signed by the grantor, and is enforceable against the grantee

2. Covenanting parties have to intend that benefit will run with the land3. Must touch and concern the land

a. Includes homeowner association fee, not to compete, presumed on intent of the parties, reasonable standard of connectedness. Payment of money does not touch the land. Insurance touches the land, legal relations test,

b. Difference in burdens versus benefits4. Originally contracting parties have to be in privity of estate: horizontal privity

a. 3rd Restatement got rid of: not all states follow restatement5. Successors have to be in privity: vertical privity

a. Traditionally required for both the burden and the benefit of a RC to run, as running with the estates in land, not the land itself.

b. Running of burden is more demanding (only enforceable against someone who has succeeded to the same estate as the promisor) than running of benefits (enforceable by a person who succeeds to the original promisee’s estate OR to a lesser interest carved out of that estate).

i. Ex: if burden: then if owned in FSA and taken via AP, doesn’t run as lesser estatev. Remedy: originally only damages x

i. Equitable Servitudes : Created in Tulk, no requirements of privity, burdens the land itself and not the estate- sinks tentacles into the soil

PROPERTY OUTLINE

i. Compared to covenants: ES is easier to get so much easier, but if want to limit/restrict not recognized by the 4 types of easements.

ii. England only applies to negative covenants (Haywood v. Brunswick)iii. Remedy: traditionally could get only an injunction iv. Elements:

1. Covenant in writing;2. Intend for benefit AND burden to run;3. Touch and concern the land; and 4. Successor must have notice of the covenant at time acquired the burdened estate:

a. Low threshold:b. Actual notice: buyer is aware c. Constructive notice: if covenant is part of recorded deed- notice via title searchd. Inquiry notice : look around and everything looks strangely the same. e. Notice requirement only applies to the burdens not to the benefits (due to fairness and

justice)v. Estoppel : will enforce if owner of benefiting estate has relied on covenant to her detriment

vi. Implied : where several parcels of land with prior common ownership with some bound by negative covenants.

j. Privity of Estate : established when 2 parties have interest in the land at the same timei. USA historically requires horizontal and vertical- English conveyance involves privity of estate

ii. Horizontal : privity between contracting parties (instantaneous or mutual)1. Traditional application of horizontal would not reach after sale. Privity existed only at time deed

was transferred. Leaves out agreements between neighbors where no land was transferred.2. Can change with benefited (no horizontal requires) vs. burdened (horizontal required)

iii. Vertical : privity of est. btn each of the originally contracting parties and subsequent transfers. 1. Traditional approach: not treat burden as running if transfer lesser estate.

k. Terminating Real Covenant OR Equitable Servitude :i. Direct ways : release all parties could agree to terminate and to release;

ii. Internal mechanisms: for own termination or provision for certain % of the vote;iii. Termination by merger : if benefit and burdened estate come under common ownership; iv. Prescription : if owner of burdened estate violates covenant openly and notoriously. v. Changed conditions and relative hardship :

1. Rarely used by the court2. Doctrine of changed conditions applies when the “objects and purposes” are thwarted OR ir

changed use has real and substantial value to homeowners. 3. Must show that not a single benefited estate, still benefits from ES/RC.

vi. Terminating Equitable Servitude Only:1. Estoppel claims : if owner of benefited estate leads owner of burden estate to believe and burdened

owner relies to their detriment, case for estoppel. 2. If owner fails to object/waits too long: acquiesced/waived covenant or is barred by laches (equitable

analogue to statute of limitations)3. Unclean hands : if mutual covenant and both violate, cannot get injunction.4. Abandonment : if entire neighborhood does it

l. Policy Arguments for Restrictive Covenants : i. Imposition of developer’s covenants? Stealth facism?

1. Developers impose restrictions that they think buyers will want, none they don’t want- ensures that later/earlier buyers are treated the same and will be equally bound. Promotes return on investment by allowing reliance/stability..

PROPERTY OUTLINE

2. Collective action only works on the small scale, issue as number increases. High transaction costs + inter-temporal issues (agreement at different times to different restrictions). Obvious alternative is restrictions.

m. Requirements of General Scheme/Plani. Sanborn v. McLean: implies negative restriction from a general plan- few jurisdictions are stricter towards

statute of frauds- ii. Plan: imposes uniform restrictions on all lots- but uniformity is not required (per 3rd restatements)

iii. VA approach: limits all E.S. to those that were expressly created via a general plan covenant- otherwise must meet real covenant requirements. Merges real covenant and E.S. in effect.

n. Ownership forms :i. Common interest communities : generally homeowner associations, condominiums, or cooperatives.

1. Increased recently as local governments use public powers to tilt the market for new housing construction in favor of CIC rather than other forms of housing. Do so because shifts costs from local authorities to CIC who own communal areas.

2. Common obligation that binds the owners of individual lots or units to contribute to the support of the common property or other facilities to supports the activities of the association- associations have power to raise funds to carry out its functions.

ii. Cooperatives : NYC only- title to the land and building is held by a corporation; the residents own all the shares of the stock in the corporation and control it through an elected board of directors. Investment of one person depends upon the financial stability of others.

iii. Condominium : each individual unit is owned in FSA by invid owners- the exterior walls and land beneath and common areas are owned by the unit owners as tenants in common. Each maintains separate mortgage on the individual unit. Real estate taxes assessed individually.

iv. Gated Communities : provide often what may be considered a municipal service, run the risk of being deemed state actions,

v. Restraints within communal interest communities :1. Presumption that a servitude is valid unless it is illegal, unconstitutional, or violates public policy.

Violating public policy = unreasonably burdening fundamental constitutional right and imposing an unreasonable restraint on alienation.

2. Indirect restraints : restrictions on use and restrictions that might limit the sales valie of the property but do not direcly interfere with the free functioning of the market in land. (ex: pets, paint colors, signs.) Only unreasonable if “lacks rational justification”.

3. Distinction between regulations included in deeds or declarations and subsequent regulations adopted by the property owner’s association.

o. Judicial review of condos/boards/etc .:i. Business judgment rule: Pullman- most deferential form of review

ii. Reasonableness standard: Nahrstedt- restrictions enforced unless they are wholly arbitrary, violate a fundamental public policy, or impose a burden on the affected land that far outweighs the benefit

iii. FL Ct view: most intrusive- “reasonableness test” with no strong presumption of validity; balancing of utility restrictions purpose versus harms resulting from tis enforcement.

EASEMENT AND COVENANTS CASES:

p. Willard v. First Church of Christ: i. Facts: M has 2 lots, allows 20 to be used for the church as a parking lot during service. M sells 19 to P. P

wants to sell to W. P buys 19, but W wants 20 too, but M only willing to sell 20 is the church can continue to use it. Puts provision in deed to P that 20 was subject to an easement that would run with the land so long as used for church purposed. Files record. P wells to W and doesn’t tell about the easement: TC: CL

PROPERTY OUTLINE

rule that one cannot reserve an interest in property to a stranger in the title. Stranger is not in privity, majority rule still.

ii. Equity: Not inequitable as no one was relying on the CL rule (not church or M or P). P knows about easement - thought was invalid - so gets property at a discount and sells for a profit - scam

iii. Some states follow Willard, most follow CL. q. Holbrook v. Taylor:

a. Facts: Holbrook buys land in 1942. 1944 gives permission for the haul road. 1947 H builds house and sues road. Then T buys neighboring land and T uses the road across H’s land. H says it is on for T to use the road. T uses road to construct house and repairs the road. In 1970: H asks T to sign easement forma and to pay 500. H then tries to close off the road and puts up signs. T sues for blocks to be removed. T has 2 theories: prescription and estoppel. Wins on theory of estoppel.

i. Prescription = AP of easements. Claim fails because use was permissive for so long ii. Estoppel: where a revocable license includes right to erect structures. License can become

easement if license makes improvement on the license. Spent 100 on the road.r. Miller v. Lutherans:

i. Two brothers dam river, buy land, create lake, and form company. Then company gives over to brothers. Timeline: 1899: Company to F- doesn’t include bathing rights. 1900: F to R (includes bathing rights, fish, boat, etc.). 1925: R dies- executors grant separate licenses, when previously F and R would work together to grant.

ii. Theories for injunction: By Frank against Lutherans1. Frank did not have an express grant for bathing so can’t give to the Lutherans. BC frank never has

right so F could not have given the right to R.2. Even if F did have the right to bathe from company he has as an easement in gross- not assignable

or devisable. 3. D says: F did have the right to swim, or even if didn’t get express right got right by prescription.

iii. Court holds: Company to F did not give bathing, didn’t have right to grant to R. Prescription occurs- get right to bathe via commercial enterprise for 29 years. Also sound similar to estoppel. Prescription is in gross- as not attached/associated with any particular land- Rights benefit F and R personally. Ct holds E in gross is assignable per intent per language of the grant.

s. Brown v. Voss: i. Scope of Easements, departure from traditional rule that E may not be used in connection with a non-

dominant estate- and that such use is subject to an injunction. ii. Timeline: 1973: W buys A (servient estate). Prior owner granted E to owners of parcel B. Browns buy B

and C which is not covered by the easement. 1977: Start construction on B + C then V figures out and says not allowed to use easements to get to C- obstructs. B sues V counterclaims.

iii. Issue: E by estoppel occurs when there is a license. Never a license/no permission from V to allow Brown to cross A to get to C. Court says easement appurtenant to 1 parcel of land may not be extended to other parcel of land owned by him- otherwise will be a misuse- regardless if build on B or C- amount easement will be used stays the same (thus nominal damages, but no injunction). Per traditional rule: V has right thus the nominal damages. Injunction is an equitable remedy that rests with discretion of trial court- look to actual and substance of injury. Affirm trial court- which did not abuse discretion.

iv. Dissent: it’s still a misuse, which is in turn a trespass, encroachment is significant, and Browns knew about rule-

t. Persault : RR casei. Timeline:

ii. Three Issues:1. Issue 1: Easement or FSA Look to documents:

RR Property Interest

FSA: P losesEasement. Scope of

easement

RR only. P winsRR use + other uses. Status of

the E now.

Abandons. P wins

Not abandoned. Gov't wins

PROPERTY OUTLINE

2. AB: commissioners award in taking assume estate is acquired no more than needed for the purpose for the RR means there is an easement- doesn’t matter what parties call it. Purpose of the rule: there to protect landowners, stop from giving up more rights than they have to – paternalistic. OR rule is there to protect the RR, makes transactions cheaper as E are cheaper than FSA OR rule there to protect the free alienability of property. If RR no longer needs, make be costly to get rid of FSA, conversely can abandon an E.

iii. Issue 2: Scope of the easement1. Looks to the intent of parties when granting E. Scope of E can change overtime to serve original

purpose so land as change is consistent with original terms of the E- must be reasonably foreseeable. P wins- taking by government court wants to be careful about review and continues on.

iv. Issue 3: abandoned: Yes E. was abandoned with easements if abandon it terminates, servient estate freed from burden. FSA cannot be abandoned. Takes more than non-use to abandon. Nonuse + act by E owner conclusively manifesting intent to relinquish OR manifest purpose that is inconsistent.

v. Sub-issue: ICC approval required for abandoning. Court says fed abandonment is different- abandoned in terms of the easement. ICC doesn’t deal with easement. Continued use by the ICC constitutes a taking.

u. Tulk v. Moxhay : creates law of equitable servitude:i. Facts: T owns leister square and housing around it in FSA 1888: sold square to elms in FSA includes

covenant: 1) keep and maintain the square = affirmative, 2) not to build buildings on the square itself = negative, 3) allow tenants of T to use the square. M’s deed contained no covenant. But M know of covenant from T to E. M wants to transgress 2nd part of covenant. E goes to chancery asking for injunction. T to E = grantor to grantee. No privity of T to E in England. Would have privity in America. Going to court for damages would be fruitless as no contract. Turn to equity:

1. Equity: court grants injunction as it would be inequitable not to enforce this promise. Inequitable because middleman gets for low price with covenant and sells for high price

2. Case creates equitable servitudes! 3. Am view: picked up rule of tulk/equitable servitudes + robust law of real covenants. General move

away from requirement of privity. v. Sanbon v. McLean:

i. If owner of parcel is so situated to bear the relation- servitude becomes mutual and buyer/owner cannot do anything forbidden.

ii. Express covenant on some parcels makes reciprocal which then binds owner of remaining parcels and then buyers of other parcels

iii. Implied reciprocal servitudes : when a common grantor sells a parcel from his remaining land, the prior purchaser is enforcing a reciprocal servitude that is implied from a common plan of development. Inapplicable in minority jurisdictions with strict adherence to the statute of frauds and where there’s no common plan/

w. Shelley v. Kramer: i. Shelley’s are black, homeowners; being sued by neighboring property owners for injunction, covenant

excluding blacks- restrictive covenant. Ownership v. occupancy. ii. Issue: state action: restriction by private agreement, as compared to zoning ordinance. High water mark for

state action. iii. Necessary to frame as 14th amendment issue as FFHA was not passed yet and civil rights act of 1866 was

interpreted differently. iv. After Shelley covenants are still valid, just not enforceable through legal process. No shield against merely

private conduct. Agreements standing alone do not violate the 14th amendment v. Underlying issue as to whether should have been enforceable at all: no horizontal privity as no sale, not

enforceable as real covenant- would have to do a straw man transaction. Could then use ES which doesn’t require privity. Shelley’s had no accrual notice, but had constructive notice

PROPERTY OUTLINE

x. Western Land Co: Terminating ES/RC via doctrine of changed condition, Reno Nevada i. Western Land Co: subdivision in the 1920s with restrictive conditions on the lots limiting to single family

homes. Traffic has changed substantially. Commercial development has increased significantly. West Land wants to take last parcel and make a shopping center. Landowners sue to stop from developing. Western argue that conditions have changed since restrictions so now inequitable to enforce. Doctrine of changed conditions applies when the “objects and purposes” are thwarted OR if has real and substantial value to homeowners.

ii. Court holds that subdivision have not changes and that is not an issue of individual lot value. About if the residents value throughout the subdivision.

y. Narhstedt: cat lady casei. Covenant against pets. Restrictions put in place by developer and binds everyone. Apt people are fining N,

accumulating AND rules say that if turns to legal action- she will have to pay the legal fees. Condo = common interest development. Separates out declaration (master deed- enforceable unless unreasonable) from later imposed restriction (not subject necessarily to enforceable unless unreasonable)

ii. Dispute: does reasonableness test apply to a particular owner OR as applies to the entire development. Ms. N could win per individual owner but not to entire complex.

iii. Legal test: must show burden imposed on affected properties is so substantially outweighed by the benefits of the restriction- thus is about the entire complex and any pet. Looking for if it is wholly arbitrary, violates fundamental public policy, or imposes a burden. High bar no way Ms. N. can meet. Standard is reasonableness, but legislature never says how to apply. Court is filing in the gap

z. 40 West 67 th Street: i. Cooperative: challenging the application of restriction, should be (decision to kick resident out) reviewable

by the courtii. Dispute: standard of review to be applies- how decision to remove tenant should be reviewed.

1. Board says: business judgment rule should apply per precedent- Defer to cooperative board’s determination so long as board acts for the 1)purposed of the cooperative 2)within the scope of authority and 3)in good faith, then they are not liable.

2. D want court to independently review/fresh look- looking for standard of reasonableness. Either way the board will win, because the D sucked. Board pushes the issue to establish a precedent

iii. RPAPL: real property and proceeding law of NY: Codified Cl of NY, anytime any LL wants to evict tenant on grounds of objectionable behavior LL must provide competent evidence to the satisfaction of the court- won factual determination.

iv. Court holds: not a conflict between RPAPL and Business rule/Levindusk precedent: the co-ops determination used via business rule stands as the necessary evidence, needed to satisfy 711(a). Completely guts RPAPL.

v. 3 reasons for result:1. Holding otherwise would make provision in lease meaningless.2. Court wants single standard of review for cooperative, otherwise will have business judgment rule

plus reasonableness3. Sufficiently distinct relationship

vi. Argument for D: Purpose of board is to hold, maintain, and operate property for benefit of shareholders. Business judgment derived from corporations. 711 derived from NY LL tenant law- shouldn’t this trump when the board is acting in the role of LL/ What role are they filling now? Board or LL

aa. Mulligan v. Panther Valley Property Owners Association i. Amended bylaws so that no registered Tier 3 sex offenders under Megan’s law could reside in Panther

Valley, court applied a reasonableness test instead of the business judgment rule as the changes were made by a vote of the members and not a vote of the board. Found insufficient record, burden was on P, so found for the association.

PROPERTY OUTLINE

X. ZONING: resolves issues of externalities in environment where bargaining (servitudes) or judicial determination (nuisance law is insufficient). Means to control land and affect pricing and scarcity,

a. History :i. Progressive Era in USA, adopted in NYC in 1916, quickly spreads, defining case of Euclid in 1926, solves

the constitutional concerns. Catalyzed by safety improvements in the elevator. ii. NY Charter: allows zoning for use, height, and lot size.

iii. Herbert Hoover: as secretary of commerce implements model statutes of zoning 1922/iv. Exercise of the police power: power of gov’t to protect health, safety, welfare, and moralsv. Policy/Constitutional concerns:

1. Overt licensing by class2. Due process/takings concerns

vi. 1950s: aesthetics become a legitimate reason to zone- accepted as part of the public welfare- b. Standard State Zoning Enabling Act (SZEA): intended to be enacted as state level, state has police power, and

state passes power to local to zone.i. §1: locales power to regulate: height, lot size, density, location of uses

ii. §2: power to create zone of any sizeiii. §3: must be per comprehensive planiv. §4 local leg. body must not adopt any zoning until gives notice and right to be heardv. §6: zoning commissioner to make recommendations- non-elected officials

vi. §7: zoning board of adjustment/appeals reviews challenged decisions. Also provides appeal decisions are subject to review by state courts

c. Comprehensive Plan : statement of the local governments objective and standards for development. Based on surveys and studies. Some view future as too unpredictable to allow for comprehensive long-term planning. i. USA emphasizes single family homes- mortgage policies, tax policies,

d. Prior non-conforming uses: i. Gradual phasing out of non-conforming uses is OK, via future use restrictions

ii. Amortization clause: not OK, as forces owner to conform on timetable not of their choosingiii. Problems:

1. Discrepancy between substantial investment and planned future investment. If party has not invested (as in Ambler) future use may be taken away without compensation.

2. Take into consideration cost of conformance. If no compensation, those that have invested would be worse off than those losing only future investment.

3. Additional input of monopolyiv. Majority Rule: grandfather in prior non-conforming uses- if big change to the use can take away

authorization. Majority require substantial investment. Some require less, like MA, just building permit. 1. Generally runs with the land- even in sale, so long as use remains consistent – vested right

v. Minority Rule: amortization approach1. Varies drastically in the amount of time specified for amoritization

vi. Abandonment/Destruction/Major change: gets rid of grandfather provision. e. Variance: asking permission from local authority to put something in that isn’t allowed- granted for size

generally, not for use. i. May be authorized by zoning board when variance from terms of the ordinance will not be contrary to the

public interest, were, owing to special conditions, a literal enforcement of the provisions of the ordinance will result in unnecessary hardship and so that the spirit of the ordinance will be observed and substantial justice done.

ii. Undue hardship (cannot be self-inflicted) + cannot substantially impinge on public good (or purpose of the ordinance)

PROPERTY OUTLINE

iii. Commons v. Westwood Zoning Board: lot size, looking to build long narrow house, versus standard size. iv. Personal hardships are generally irrelevant- as arising out of personal circumstances- don’t count.v. Most variances are easily approved.

f. Special Exception : conditionally permitted, but must go in and ask for permits, no building as a right. Might cause harm if not watched. Reduce discretion by listing it all. i. Requires:1) other req. of the ordinance are met, 2) use will not adversely affect the health/safety/or gen.

welfare of the public. 3) use will not tend to defeat the purpose of the ordinance/comprehensive plan, 4) Use will not tend to devalue or alter the essential characteristic of the surrounding property

ii. Cope v. Inhabitants of the Town of Brunswick : board went against permit- court held as the P were in compliance with all requirements of the ordinance, a permit for the exception should be granted.

g. History of Restrictions on Zoning :i. Oregon v. Smith: Peyote Case, fired from job, then cannot received federal unemployment benefits as was

fired for drug use- sues under 1st amendment, gov’t established:1. Law of General Applicability:

ii. Restoration of Religious Freedom act: in response to Oregon v. Smith, Congress statutorily mandates that anytime government burdens religious exercise strict scrutiny should be applied.

iii. City of Boerne v. Flores: Overturns restoration act holding that Congress cannot expand the first amendment.

iv. RLUIPA : Passed by Congress in response to City of Boerne v. Flores: RLUIPA: 1. Prohibits gov’t from imposition substantial burdens on religious exercise unless the Gov’t

demonstrates imposition of a burden furthers a compelling gov’t interest and is the least restrictive means of satisfying.

2. Applies IF: (1) If CG spends $$ on/contributes to funding of then can exercise the spending power to curb, (2) Via commerce power, FA, Indian commerce, and (3)If substantial burden is imposed via individual assessment (side-stepping issue of law of general applicability that was an issue in Oregon v. Smith)

v. Moore + Belle Terre = living with family members is Constitutional righth. Village of Euclid :

i. Facts: Euclid is currently unimproved farmland, suburb of Cleveland approaching, wary about encroaching industrial use. In 1922 pass zoning ordinance. Cumulative uses. Ambler realty: 68 acres, bordered by RR, avenue, etc. Currently undeveloped- claims want to have industrial use for the land. Residential use decreased the value of the land. Realty then sues to enjoin the enforcement. Argues as 1) a taking- due process of the 14th amendment and equal protection and 2) via state law of Ohio-collapses into constitutional argument.

ii. Facial attack on the zoning: about if village of Euclid has inherent power to do this at all- test case for USA- generally expected to go for Amber. Keeps door open for as applied challenges

iii. Court holds: Standard of review = reasonableness, will be considered in the entirety/facially. Arguing only about use, not worried about height and lot size restrictions. Look for analogy equates to nuisance law and suggests question should be considered in context. Reach outer limits of nuisance law/cannot validate the entire ordinance on nuisance theory. Gives local government some leeway: entitled to reasonable margin- validates up to U5/U6 via separation of industry, valid again because of nuisance. Issue: excluding apartments/retail/commercial from residential areas, as not going to fall under classic nuisance law. Court holds purpose of zoning is to increase safety and security, decrease traffic, and increase kid friendliness. Apartment buildings are parasites. Result in increased traffic and increased business- destroys residential character, come very near to being nuisance so regulates from other uses/regulate as nuisance- so is OK to separate U2 and U3

i. PA Northwestern Distributors

PROPERTY OUTLINE

i. Naughty bookstore: ordinance passed after purchased store so store is a prior non-conforming use. Gives 90 days to comply. 1st step: goes to the administrative body, challenges the amortization provision, not the entire ordinance. Per Euclid may be hard to challenge facially, ability of the town to separate land uses. Attacks as applied. Potential for great commercial advantage: will be only dirty bookstore in town- no competition, if underlying ordinance is void then competition will increase, best of all possible works (just invalidate the amortization clause).

ii. PH: lower court looks to Sullivan and the reasonableness test, same as used in Euclid. iii. SCOTUS: Sullivan is wrong standard, standard is not reasonableness, standard is amortization clause is

per se unconstitutional, unless a nuisance, abandoned, or taken via eminent domain.iv. Lawful non-conforming use: vest property right to non-conforming use that cannot be abrogated unless:

(1) Nuisance, abandoned, or extinguished by eminent domain AND (2) cannot be taken without just compensation

j. Anderson v. City of Issiquah i. Denied building permit repeatedly. Now in court arguing that provisions of code are unconstitutionally

vague via the due process clause. Wants to build commercial strip mall – must comply with law that allows board of commissioners to “encourage harmony, appropriate colors, avoid monotony, be interesting” – very subjective.

ii. Civil application of due process = notice + opportunity to be heard, if statute is vague then don’t know what you’re allowed to do.

k. State ex. Rel Stoyanoff v. Berkley :i. Facts: S wants to build pyramid shape residential home. Ladue is an affluent suburb. Architectural board

denies the permit- authorized by ordinance 281: sets up architectural board- can prohibit unsightly/grotesque to protect the general welfare and property values.

ii. 3 challenges by S:1. Ordinance creating board is beyond the state enabling statute

a. State has police power: unless enabling statute then local gov’t doesn’t have authority to zone.

2. Unconstitutional as arbitrary and exceeding police powera. Police power- narrows Euclid holding by saying this is based on aesthetic values, and that

aesthetic values are sufficient to warrant use of power as promoting aesthetics is within state police power to regulate/protect the general welfare- zoning for aesthetics falls under general welfare.

3. Unlawful delegation of power. a. Same argument as Anderson. Court says Ladue zoning ordinance is sufficient- really just

told to conform- weaker argument then Anderson to say that too discretionary/too subjective

l. City of Ladue v. Gilleo :i. Ordinance regarding signs: signs are generally forbidden with series of exceptions (house #, for sale, warn

of safety, signs on commercial/NP/church). Gilleo: resident asks for variance- denied. Sues everyone under 42 USC 1983: allows private parties to sue anyone under color of state law who deprives of fundamental/constitutional rights- gives cause of action.

ii. Government reason for forbidding signs: appearance concerns. Similar to Stoyanoff. Ordinance struck down: violates the 1st amendment City argues that ordinance is content neutral- prohibiting just because it is a sign. Court holds that as almost completely foreclose one medium of communication- can suppress too much. Unique virtues of house signs.

m. Guru Nanak Sikh Society v. County of Sutter: i. Sikh guru applying for conditional use permit to build a temple- applies both in (1) residential area and

then in (2) agricultural zone. Worried about noise and traffic in first instance. Worried about leap-frogging

PROPERTY OUTLINE

development and the right to farm in second instance. Sikh is very accommodating, but eventually fed up and denied permit.

ii. Sues under Religious Land Use and Institutional Persons Act of 2000: federal statute that prohibits any government from imposing substantial burden on exercise of religion.

1. Substantial burden is not allowed on exercise of religion UNLESS:a. Is in furtherance of compelling government interest, ANDb. The least restrictive means

iii. 3 points needed to win:1. Statute applies, (2) Substantial burden (oppressive or significantly great restriction or onus on

exercise), (3) Not in furtherance of governmental interest or not least restrictive meansiv. RLUIPA: restores strict scrutiny for land use and prisons IF:

1. If CG spends $$ on/contributes to funding of then can exercise the spending power to curb, (2) Via commerce power, (3) If substantial burden is imposed via individual assessment (side-stepping issue of law of general applicability that was an issue in Oregon v. Smith)

a. Part 3 applies here as zoning grant is an implementation- since no religious organization has right to build as matter of right. Requires individual assessment

v. Holds: 1) statute applies 2) substantial burden exists 3) city concedes no compelling purpose and that it isn’t narrowly tailored.

n. Village of Belle Terre :i. Entire village is zoned for 1 family dwellings. Defines family: (1) One or more persons related by blood,

adoption, or marriage (+ servants) AND (2) up to two not related persons. Intended to screen out student. Challenge brought by students, sue via USC 1983. Lots of precedent for striking down ordinances. Understood that must raise issue of fundamental right in order for strict scrutiny to apply, otherwise rational basis. P claims fundamental right (To travel and such), and court denies, saying just social and economic legislation so rational basis applied and the village wins.

o. Moore v. City of East Cleveland: i. Similar to Belle Terre except limits definition of family. Struck down as unconstitutional burden on

fundamental right to family (said cousins was too attenuated to count as family under one roof). p. City of Edmonds v. Oxford :

i. Oxford house: druggie rehab center for 10 to 12 adults- number is necessary to keep home going. House is in residential area. Family defined as: (1) Any individual, (2) Two or more persons related by genetics, adoption, or marriage, or (3) Group of 5 or fewer persons who are not related.

ii. Challenge under fed FHA, also includes discrimination based on disabilityiii. CT distinguishes between 2 kinds of restrictions: (1) Land use restriction: designates districts in which

compatible uses allowed. Euclid. Subject to fed FHA AND (2) Max occupancy restriction: caps number of occupants per unit- covered by exemption and not subject to FHA.

iv. CT says this is a classic land use restriction- operated to define family- exemption doesn’t apply. q. Southern Burlington County NAACP v. Township of Mt. Laurel (S.Ct. NJ 1975) exclusionary zoning

1. Facts: Mt. Laurel effectively “zoned out” its middle and lower income residents. Claimed it was based on property taxes.

2. Rule : General welfare includes general welfare of all, including low and middle income. Must provide some fair share of low/moderate housing.

XI.

PROPERTY OUTLINE

XII. TAKINGSa. Takings Clause : 5th amend binds federal gov’t, DPC of 14th binds state/local. “No private property shall be

taken for public use without just compensation” b. 3 Rules of Taking per SCOTUS

i. Gov’t may take private property for public useii. Government may not take private property for any other use

iii. Government must pay just compensation for any taking of private property for public usec. Eminent domain: the power of the gov’t to force transfers of property from owners to itself. 5th doesn’t create

the takings power, just confirms it. Considerations/Rationales: i. Sov. states had original and absolute ownership to all land, prior to possession by citizens

ii. Natural consequence of royal prerogative that result from feudalism – vestige of feudalismiii. Natural law: ED is an inherent attribute of sov. iv. Posner justification: anti-monopoly device, also fixes problem of hold-outs, ameliorating high transaction

costs for large projects like RR, makes for efficient use of land. Law reflects high-transaction-cost-settings versus low transaction (schools, post offices, gov’t buildings).

v. Duty to compensate: Concerns of 1) efficiency and 2) fairness. Compensation as inefficient: encourages landowners to overinvest in capitol on their land without regard to its value. Fairness or compensation? Debated.

d. Questions to distinguish a taking: i. Does government action amount to a taking at all?

1. Always a taking :a. Seizing a parcel of land = takingb. Government permanent physical occupation of land = taking

i. Ex: building sidewalk on property2. Sometimes a taking

a. Regulation of how land is used, zone it or pass ordinanceb. Hasn’t seized/occupied but decided what’s allowed/regulatedc. Look to purpose of (per PA Coal) of regulation

ii. Assume it is a taking, is it a permissible taking?1. ***Payment of just compensation does not automatically legitimize the taking- permissible only for

public use which triggers just compensatione. *Public Use Taking : Taking to provide a public good: is sufficient for public use

i. Public good = good that is non-exclusive that does not involve additional costs to produce additional units. Ex: self-defense, clean air, liberty, free just laws. Because of non-exclusivity private parties do not have increased incentive to provide- as everyone else free-rides.

ii. When takes prop. For public good then is automatically a public usef. *Provision of Publically Available Goods : To provide goods and services: although not public goods (as it is

possible to do it exclusively) but benefits/generally publically available to the public = public usei. Ex: highways, national parks, schools-ish

ii. Remains legitimate even if is privately owned or managed so long as available to the general public. EX: Railroads

g. Public use determined via ends/means : how to determine public use? i. If the ends are public in one sense of another, focuses on the objective of the taking

1. Kelo = ends test, applied in deferential manner. ii. Is the power of ED really necessary to accomplish whatever aim the Gov. has in mind – not as accepted of

an approachh. Hadacheck Rule : government action to control nuisance is not a taking

PROPERTY OUTLINE

i. Brick making banned in parts of LA- caused value of land to drop 90%. Tough darts, as government can control nuisance. Regulation/control of nuisance is NOT a taking.

i. Diminution of Value Standard : created in PA coal. General rule: while property may be regulated, if it goes too far it is a taking – question of degree via the diminution of value (does it take too much value).

j. Transferable development rights : Penn Central. Allowed owner of landmark to develop in other places where per an ordinance/code is not allowed. Can transfer extra floors to other parcels- take rights not able to use and take to nearby properties. Transferable from: (1) One parcel to another parcel under common ownership AND (2) Can sell development rights to other people, air rights. i. Severs development rights from other rights in land and treats as separate item.

ii. Undecided: if TDR can entirely compensate/be just compensation on its ownk. Kelo v. City of New London :

a. Precedents i. Berman : look to plan as a whole. Blight exception: urban re-development plan, government

through Congress was designating land as blighted- taking and providing new schools, new roads, - ok via public availability. Included plan to turn over some of the land to private developer to make homes. Challenge by department store owner: my property isn’t blighted, this is just a private to private transfer. SCOTUS upheld as improving blighted areas is OK as part of the police power, good/ok because is for public welfare. Public purpose

ii. Midkiff : government trying to reduce evils of land oligopoly in HI- enacted statutes that allow tenants to buy property from LL regardless if LL wants to sell. Background of intense concentration of land ownership in HI. Forced sale to private property regardless if wanted to sell. Court holds: breaking up a land oligopoly is a public good. Moves beyond core and next to core cases

b. Facts: New London is struggling economically, so gov’t looking to revitalize the area (increase business, tax base, etc.) Approved re-development plan by NL. Development Corporation. a non-profit created to develop the Trumball area. Starts approaching owners and buying up land- some don’t want to sell. Then start the condemnation proceedings- delegation of ED, in name of new London. 9 citizens resist takings (own 15 properties: 4 in parcel 3, and 11 in parcel 4a). 8 parcels:

i. Hotels, restaurants, shoppingii. 80 new residences

iii. Office spaceiv. A: parking for state park/retail/marina and B: renovated marinav. Office retail and parking

c. Holds: Stevens: purely private to private transfers is not allowed. But public use = PUBLIC PURPOSE. Issue: is this taking a public purpose? Purpose = promoting economic development, increasing new jobs, increasing tax basis. Indirect benefit: is what matters, benefit to the city, land is more valuable in hands of the developers, increased land values = increased tax.

d. Dissent: means that takings will always be allowed anytime transfer, regardless if from private to private, satisfies public use- Slippery slope.

i. Answer that S should have given: this ship sailed with Berman, once SCOTUS decided that private to private without gov’t general public availability- just some benefit then kelo was almost inevitable. No principled division.

e. Concerns with Kelo :i. Anything can satisfy public use requirement now- nullified 5th amendment and Rule 2,

ii. Could lead to inefficient takings: encourages gov’t to transfer property from private to private wherever has higher FMV with second owner, but subjective true value of the property by owner 1 may be greater than FMV. From perspective of municipality would make sense, regardless of the subjective value

PROPERTY OUTLINE

iii. Sale desirable from gov’t but will only occur if coerced. Forced sale will result in increased value, but is loser in terms of social welfare loss of 100K in value in forced transaction. Given subjective valuation is inefficient, end up in the hands of person who values it less

FMV Subjective value

Pre-takings owner 100 350

Post-takings owner 250 250

l. Pennsylvania Coal : i. government exercising regulatory power in some way other than controlling a nuisance

ii. Prior view: regulation was not a taking unless physically seized iii. Court analogizes regulatory action as taking that would entitle to just compensation – as compared to

challenge of police power.iv. Facts: Deeded surface of land to homeowner, but reserved right to take all coal out from under the surface.

Homeowner expressly assumes risk of subsidence/cave in and waives claims for damages. Kohler act: forbids mining of coal in a way that could cause destruction of houses/habitation- subsidence of the surface. Homeowner then sues for injunction of mining underneath property because of subsidence- coal company charges as a taking via the Kohler act.

v. PA recognizes 3 separate estates:1. Surface: homeowners2. Minerals: coal mine3. Right to support of the surface: coal mine

a. Kohler forbids from using- enough coal must remain to keep the surface upb. Coal company claims taking of this entire estate of the land

vi. Holmes holds: Effect of Kohler act is to abolish an entire estate 1. General rule: while property may be regulated, if it goes too far it is a taking – question of degree

via the diminution of value (does it take too much value). In this case it goes too far as entirely abolished an estate

vii. Brandeis dissent Kohler act is (1) Just controlling a nuisance which is within G’s scope of power. AND (2) Need to evaluate the extent of value by reference to the total value of what coal company owns.

1. How to apply the diminution test- how to consider the proportion of what is taken. a. Holmes 3/3 compared to an entire estate, one house is minimalb. Brandeis 3/5 negligent as a result

viii. Weighing/balancing gov’t interest against burden on landowner m. Penn Central Station:

i. Facts: NYC passed landmark preservation law. To make a change requires permission from the city (permission + affirmative duty to keep in good repair). In 1967 Penn Central is designated a landmark- owner of Penn Central then makes plan to develop office space above, as in conformity with zoning and ordinance. Skips middle adjudication. Proceeds quickly to court and files takings claim.

ii. Court holds: Not a taking, look to the parcel as a whole. Takings jurisprudence does not divide parcels into individual segments. Property right is not just an air right (otherwise the PC would win), but is entire building. Second: PC argues that per diminution of value that was a taking- still doesn’t work as prior cases, future interests were not compensated despite loss (Ambler, Hadacheck, etc.). Third: PC argues that PC received disparate treatment with a disproportionate burden- court disagrees. Distinguished from Causby precedent (where compensated for air rights after US military planes kept swooping over land and frightening the chickens to death) by holding that Causby was a physical occupation of the space. Moreover, Landmark designation allows continued use as RR + revenue from shops. Also not a complete taking, insufficient returns, because of the Transferable Development Rights.

PROPERTY OUTLINE

iii. 3 routes to get change approved:1. Certif. of no effect on architectural features- show that change won’t affect the aesthetic/historical

value2. Certif. of appropriateness if going to change the aesthetics- commission balances and says no going

to really hinder the landmark3. Certif. of appropriateness on grounds of insufficient returns: when landmark designation makes

economically non-viableiv. Distinct Investment Backed Expectations: calls for compensation when a claimant is deprived of sharply

crystalized- alternate approach – essentially read out of the taking law by holding that only frustrated when land-use regulation denies all economically viable use of land.

n. Comparison: Penn Central to PA Coal: i. Both turn on how you define property interest- particular estate in land recognized by the state

1. Coal: 3 estates, government confiscates 100% of an estate- depending on Holmes v. Brandeis view. 2. Pen Central: if consisted of separate air rights as an estate- then would be confiscatory like coal3. Brennan in Penn Central agrees with Brandeis

ii. TEST: per PA Coal so long as doesn’t go too far- cases turn on how to define- deep tension between 2 cases and 2 approaches

iii. How do developers/legislators know what to do- ambiguity costs.

Federal Fair Housing Act (Title 8 Civil Rights Act of 1968) – p. 453 Originally outlawed discrimination on the basis of race, religion, and natural origin. Has been amended to include sex, familial status, and disability.

o   Note: does not include age§804 = “core”   (A) Basic prohibition on discrimination is broad.

 Includes practice of “steering” (showing whites residences in certain parts of town)(B) Discrimination in terms, conditions, privileges.o   Means you cant charge different prices/rents to different people.·       (E) Unlawful for profit to induce any person to sell or rent.o   Referred to as “block busting” – real estate agent would go into white neighborhood and tell them black families were moving in so they should move out.Exemptions:·       §807(B)o   Allows discrimination against families with children in facilities that provide housing for older persons (retirement communities) ·       § 803 (B)o   Misses Murphy Exemption§  Nothing in §804 other than subsection (c) shall apply to any single family house sold or rented by an owner provided that…§  As long as you don’t put a discriminator ad or use services of broker/realtor or own more than 3 houses you’re exempt from§  Note: you can not violate the FFHA because of this exemption, but still be in violation of the civil rights act of 1866 (but remember, this only covers race). Dwelling is defined §802(B) as ANY building, structure, occupied as a residence by one or more families.·       Includes apartments, houses, has been applied to nursing homes, dorms, homeless shelters.·       Does not include hotels/motels (covered elsewhere) or commercial real estate. To claim FFHA, have two avenues for showing discrimination:o   Disparate treatment à testimony, written records, prima facie case (P was member of protected class, qualified for housing, and was rejected, housing remained available after rejection)o   Disparate impact à Once P establishes prima facie case by showing that some policy/practice had disproportionate effect, the burden shifts to D to prove that he had a legitimate reason for his action.[See p. 458 for applicability by situation]