1) Property Outine

2) Nuisance (Court Imposed Land Use Control)

3) Nuisance (v. Trespass)-Deals with non-physical invasions that cause substancial and unreasonable interference on land

i) Difference 1-Each person has right to use their land, so problem is reciprocal-so balancing test allows judge to determine what he thinks is reasonable (Utility Harm Test/Threshold Test)

ii) Difference 2-Negotiation Problem (Posner)-many people may be involved/holdout problem/1001 person/Bilateral Monopoly

(a) =requires liability ruleiii) Coase Theorum

(a) Property Rule-Negotiations possible, so issue injunction and allow parties to come to most efficient result (one with entitlement names price)

(b) Liability Rule- No negotiations possible=force sale at fair market valueiv) Bommer-Liability Rule because negotiations not possible, but court talked about not

being able to deal with larger societal issues, better left to legislature, but in effect only acknowledges that D serves valuable public interest=scale on side of D

v) Spur-added compensated injunction (on D-liability rule) to go along with Entitlement (Property Rule) to P/D, or Entitlement Liability rule to (D); here, public nuisance=automatic injunction, even though lawful business

(a) Note-“Coming to the Nuisance” only a factor to consider(b) Import of Foreseeability-If Spur would have foreseen incoming development,

no damages would have been awarded; Webb did foresee, so damages required

(c) Now-Certain Rule-Can apply Coasevi) Estancias-Utility/Harm test may not favor relief, if no societal interest on D’s side

(AC case) then no reason to deny injunction (said no shortage of housing)(a) Negotiations did not work, but property rule given=no societal interest; and

court not keen on allow Carolingian system of liability rule because like giving ED

4) Private Land Use Controls (Quasi-Contractual)

5) Easements i) Appurtenant-Necessary for use and enjoyment of land; Gives right to dominant

tenement (benefited) over servient tenement (burdened); runs with the land; favored by courts

ii) In Gross-Benefits an easement owner personally rather than in connection with use of land a person may own (no regard to property ownership); no benefit to land, so only a dominant tenement

iii) Express Grants(a) Reservations-provision in deed creating new servitude on the land that did not

exist before as independent (Willard-easement can be reserved in favor of third party)

(b) Exception-Provision in deed that excludes from grant a preexisting servitude on land (cannot except an easement in favor of a third party)

iv) By Implication (goal: protect intent of parties at time of sale)(a) Common Law-no implied easement; buyer only assume that details of sale

inside four corners of deed(b) Modern Restatement View-Focus is not on policy, is on the intentions of the

parties(c) Circumstances surrounding the initial conveyance/severance/subdivision show

that the easement was contemplated by the parties, because implied easement must occur at the time of the conveyance because required as such

(d) Easement Implied from a Prior Use1. Common Law-no easement by implication-here-Restatement carves

out exception for the retention of an easement were necessarily implied

2. Van Sandt v. Royster-Sewer easement was necessarily implied at time when servient parcel sold; circumstances of the sale made clear that she intended and expected to retain this easement when sold the servient parcel (Pipes and sewage are necessary in modern society)

(e) Easement Implied by Necessity1. Must arise at time of conveyance/severance of parcels2. Only endures as long as necessary; exists as a method of getting to the

intentions of parties-no policy question like AP; Estoppel; Prescription3. Othen v. Rosier-Strict necessity is required here, not mere

convenience, as they found the roadway to be at the time of deed; does not matter that land is completely surrounded

i. Requirements-unity of ownership of dominant and servient estates; roadway is necessity and not a mere convenience; necessity existed at the time of severance

v) Easement by Prescription(a) Requires: Open and Notorious; Continuous; Under Claim of Right(b) Can arise after conveyance(c) Most state-can acquire though easement also used by servient owner, so

exclusivity requirement different than AP (claimant need not be only one using, but their right to use land cannot depend upon a like right in others)

(d) Policy-Much the same as AP; Statute of Lims imposed in which previous owner must assert claim to repossess; Use of Land; Reward Reliance/Expectations

vi) Easement by Estoppel (equitable doctrine; many jx’s don’t recognize this doctrine - uncertainty)

(a) Diff’s with prescription: No Statute of Limitation – no set time period, may be established at any time; No requirement of Hostility

(b) Requires-Permission, acquiescence; Significant reliance in forming expectations a reasonable person in position of landowner would have formed

(c) Can arise after conveyance

(d) Basis-protection reliance expectations of dominant tenement where its stakes are extremely high, and servients extremely low; makes negotiations impossible

(e) Hollbrook v. Taylor-Roadway easement given by estoppels where, in reliance on tactic consent of owner in their allowing dominant tenement use of easement, the person acquired an interest (also took into account the construction and improvements made with considerable expense)

(f) Policy-Use of Land; no sitting on rights; protect expectations(g) Why no AP by Estoppel-because would not just be taking one stick out of

bundle like easement, would be taking whole titlevii)Public Trust Doctrine

(a) Matthews v. Bay Head-Fiction-dry sand always belonged to public, was never part of bundle of owner, always existed at common law (note-DIBE destroyed overnight, and right to exclude trumped

1. Narrow Reading-Dry sand is public land, so property owners must allow reasonable access (easement) to such

2. Broad Reading-Only applies to quasi public entitiesviii) Scope of Easements

(a) Brown v. Voss-(A,B,C parcels, B dominant, extending home to C, A is servient, blocked easement, dominant spent much money on improving land- if injunction granted to servient, C would become unusable; could not use the property in the way they anticipated at time they bought it)(stakes high to dominant, low to servient=balancing test)

1. Dominant was in violation of the easement, because only applied to B (Generally-an appurtenant easement to a particular parcel may not be extended to other parcels)-but court used it equitable powers (balanced the equities-particular facts, circumstances, equities, actual and substantial injury an injunction would eliminate) to deny injunction to A (no property rule to A, only liability rule-like Boomer, Estancias)

i. Note-use of liability rule-negotiations would not work (Guido, Economic Logic) so cannot negotiate most efficient outcome of injunction

2. So A-sat and watched B rely on easement, sink money into property; A has much leverage over B,C so no negotiations possible; no unreasonableness by B,C, no harm, no increased burden, intensity, use of easement for C same as that for B-singloe family home=liability rule to A ($1 paid by Plaintiff for trespass outside easement)

3. Policy-Use of land, expectations; emphasis not placed on right to exclude; Sanctity of the home perhaps

4. Note-Court recognized that Dominant entitled to use servient in reasonable manner necessary for convenient enjoyment of servitude, manner, frequency, and intensity may channge due to developments in tech and accommodations, normal development of dominant estate or enterprise benefited by it

(b) Dissent-Invoked idea of necessity of clean hands to invoke equity-Dominant should have attempted to negotiate first instead (Stemberg idea); not innocent,

and relative hardship test reserved for innocent defendant with no knowledge or warning that they are encroaching; should not be able to buy right to commit a tort, guilty=no invocation of balancing the equities; Browns created the situation; would be a continuing trespass, damages immeasurable, so property relief is injunction

ix) Termination of Easement(a) Presault v US-Railroad easement, must deconstruction, still paying taxes and

fees, wanted to turn it into a public trail; Presault prevailed1. Who owned the fee simple (Court-though deed said fee simple, when

it is forced, Government [or Railroad, p. 834] only takes enough title that is necessary to effect purposes, b/c forced sale, not negotiations) - Court concludes that railroad purchased easements, not fee simple title

2. What was the scope of the easement (only railroad tracks, more intense use when for public, not a natural development to replace rail with trail, not foreseeable so would not have been contemplated or reflected in price paid)

3. Was the Easement Abandoned (Court-yes, even though still paying taxes and fees, this is only due to lazy or overzealous bureaucrats (p. 838)-important things=tracks removed)

6) Covenants and Servitudesi) Three requirements: 1) intent that the benefit and/or burden of covenant run to

successors of original parties; 2) notice on the part of purchasers of the original promisor; 3) covenant touch and concern the land; (4) Some jurisdiction require vertical privity for the benefit to run with the land)

ii) Person placing voluntary restrictions on their property, along with neighbors, for reciprocal advantage of all; protects and increases value when all land is restricted

iii) Covenant runs with the land (Contracts do not)iv) Require assignee have notice (actual or constructive) before can be enforced against

that person (a) Note-Horizontal and Vertical Privity-Policy behind this requirement for

benefit and burden to run is notice, but Tulk overcame the problemv) Tulk v. Moxhay-Largely does away with horizontal and vertical privity requirement

for a equitable servitude (now covenant running with the land) to run (without horizontal privity, or vertical privity for burden to run; benefit runs to all assignees), as long as the purchaser had notice (actual or constructive) of it when he bought it (note-equity case, enforced with injunction)

vi) Creation of Covenant(a) Sanborn v. McLean-D sought to open gas station in neighborhood dominated

by residence, zoned for such, reciprocal negative easements imposed on 53 of 91 lots; D lot had no covenant in chain of title, court found that came from single common owner, and though D lot had no mention of it in their deeds, other that were executed did

1. So where common owner sells portion of land with restrictive covenant attached for benefit of retained, the servitude becomes mutual, as long as purchase was made with notice (actual or constructive)

2. So implied that other lots are restricted by negative reciprocal covenants if neighboring ones are sold with such; common owner required, not mere conformation with general place

3. Policy-unreasonable restraint on land to have one portion restricted, and other not, because nobody would want to buy knowing this (Restrictions on land only make sense if they are reciprocal)(Fairness-unfair to allow one to destroy character of entire neighborhood)

4. Noticei. Constructive (Inquiry) Notice-uniformity of the neighborhood;

gone to county clerk, seen that the neighbors were restricted and they were benefiting through it, they were also burdened (Problem-Topographical differences, etc-sometimes will not be able to have inquiry notice

7) Affirmative Covenantsi) Common Law-Affirmative covenants did not touch and concern land, so did not run

with land (fear of overburdened parcels, overburdened courts)ii) Neoponsit v. Emigrant Industrial-P sought to foreclose lien on D land that had

affirmative covenant attached to it=fixed sum for upkeep of roads, paths, parks, sewers;

(a) Touch and Concern-Any covenant imposed on a parcel that affects property values of that or related parcel touches and concerns land, so runs with the land(said that upkeep of property, commonly held by all through easement to beaches, equally benefited owners, comes with a burden that will run with land-avoid holdout=mandatory fees)

1. Pre-Neoposit-To touch and concern=covenant needed strong, tight connection with the land

2. Neoponsit-Any covenant that affects value of land=touch and concern3. Modern (restatement)-All negative and affirmative covenants assumed

valid unless they violation public policy, Constitution, or the Law (does away with T and C)

(b) Vertical Privity-Usually, only P’s that own property benefited by covenant may enforce covenant, but here found that the organization was “convenient instrument by which property owners may advance common interests (So neo. May maintain suit for enforcement of affirmative covenant)

1. Common Law-No privity of estate because association did not own any land/successor to land (pierced this fiction of corporation

2. Modern View-Vertical Privity is Standing to Sue Issue (person must be affected by covenant/have a property interest in it to sue (HOA clearly fall in this group today); Not required for the burden to run, one only needs V. P. if they seek to sue to enforce covenant (benefit)

8) Scope of Covenants (and Public Policy Issues See Pg 766 for Restatement)i) Hill v. Community of Damien of Molokai-AIDS home in neighborhood; sought to be

excluded by covenant because limited to “single family residence”; noticeable increase in traffic; Court was called upon basically to interpret the term family (policy kept in mind)

(a) Ambiguous “family”-included as land use or moral issue1. Two holdings-either covenant is consistent with Public Policy (ie-free

use of land, removing barriers for the disabled; FHA policy of using family to include group homes, deinstitutionalizing disabled and integrating them into mainstream), by saying “family” can be unrelated; or if family is ambiguous, and excludes disabled, then violates Pub. Policy, FHA, and struck down

2. Note-Traffic increase said not to be concern of covenant, only structural appearance-so this is no go

3. Note-Touch and Concern-violation of public policy, so would not touch and concern land, not valid, would not run with the land

ii) Shelley v. Kramer-Held that racially restrictive covenant=non-enforceable (Private individuals may create these, but a court will not enforce them

9) Termination of Covenants (See Restatement Pg. 791, see also 797)i) Western Land Co v. Truskolaski-Developer subjected lots to covenant restricting to

SFH, no biz; Developer sought to develop, said nature of neighborhood changed(a) Change of condition unimportant as long as original purpose of cov. can still

be accomplished, substantial benefit still inures to homeowners; zoning changes and greater value of other uses unimportant, distinct and sporadic violations will not constitute waiver or abandonment of RC (note-border lots, though supposed to be reciprocal, is where lin drawn)

(b) Policy-Expectationsii) Rick v. West-P owned land with Residential Use RC; D owned small parcel that

conveyed by P predecessor, objected to P’s attempt to put in hospital; P sought declatory that RC no longer enforceable, and that D limited to Pecuniary; Held that changes in subdivision where substantial enough to have RC deemed outmoded

(a) Where RC not outmoded, affords real benefit, and not released, court will not balance equities, quate advantages and effects, or award liability rule-will enforce

(b) Note-P elected to promote rez, impose restrictions, Defendant relied on them=Policy, protect expectation, intent of parties

(c) Note-Case was 7 yrs before Boomer; note that Boomer, Voss, would balance the equities here; and Economic logic would say negotiations impossible, so liability rule

iii) Pocono v. MacKenzie-Sought to abandon premise, so would not have to pay taxes-still owned in fee simple, recorded deed and perfect title=no abandonment (perhaps why common law disfavor affirmative covenants)

10) HOA’si) Owners of Fee Simple, Persuant to Law of Servitudes, Pay Corporation, to Maintain

Fee Simple (Common Law Doctrines-which governs what HOA’s can and cannot do, and Standard of Review)

ii) Note-Recall Neoponsit-HOA’s have standing to enforce covenants (Touch and Concern policy as well)

iii) Nahrestedt v Lakeside Village-RC against cats, dogs, etc in condo complex; court found that CC&R’s in recorded dec. HOA must be enforced unless unreasonable; Recorded restriction presumed valid and will be enforced uniformely against all

residents of HOA unless is arbitrary, imposes burdens on the use of land it affects that substantially outweigh restrictions benefits to development residents, violates public policy, or has no reational relationship to the purpose or function of the development. Inquiry done by reference to development as a whole, not facts specific to objective party (like Reciprocal covenants, no value unless uniformly applied-protects expectations, and give predictability

(a) Note-cats not having negative impact on anyone, but CC&R’s restrict(b) Dissent (Arabian)-Fee Simple Absolute outlook-Sanctity of Home takes

precedent over commonality (Delfino, Sawada); no concern with admin burdens, fairness more important, and should prevail over certainty to take account of human aspect

iv) Original Declarations v. Later Enacted Rules by Board of Dir.(a) Original-presumed valid unless unreasonable; have notice, so voluntarily

undertook covenant (Economic-Can walk away), makes many courts oppose any review of OG’s

1. Problems-costly to leave; interference with sanctity of home; contracting away right to change mind in future; may be impediment to optimal usage of land in future, courts want to ensure legitimate purpose (ie-restraints on alienation, Labor Theory; RAP; Ideological Commune concerns; Shelley rationale-against public policy-ie-Theosophists of US-Court said that spiritual restrictions to close to religious restrictions, struck down declaration as violation of PP)

i. But-Exclusionary (Shelly) make society absorb spillover; Inclusionary-anyone can join if conform to covenants

(b) Subsequently Enacted Rules-Burden placed on proponent to say why reasonable; higher level of scrutiny

11) Government Regulations/Land Use Controls

12) Generally-Exercise of police power to protect health, safety, welfare, and morals (Police power reside in state, but all states have Enabling Acts that delegate zoning authority to local governments)

13) Standard State Zoning Enabling Actsi) Delegate numerous power to regulate and restrict differentareasii) Requires-Planning or Zoning Commission (citizen appointed, recommends comp.

plan and zoning ordinance to City Council, who enacts, Commission can recommend amendments; Board of Adjustment-Zoning Appeals, make certain regulations do not operate inequitably on part. parcels, may grant variances, special exceptions

iii) Comprehensive Plan-Statement by local gov’t objectives and standards for development

iv) Zoning=advance over common law nuisance (Boomer-court not equipped to deal with overall public interest, too many people being affected in too many different ways); and Covenants-hold out problems

v) Euclid v. Ambler-Emphasis on rigid separation of uses; SFH trumps everything; Point-Zoning Enactments will be presumed valid unless clearly unreasonable or irrational (Elevation of Legislature, seen as more fit to deal with land use issues)

(a) Note-no unreasonable use of land, bought to profit from natural expansion, but comprehensive plan constitutional-municipality may govern as it sees fit

(b) Rationale behind case-Comprehensive Plan by Experts, not judges, so advance over common law; but, use Nuisance Law to give legitimacy, said have always separated inconsistent uses (gives validity to controversial subject)

(c) Note-Zoning-Protect property values=everyone restricted; people see this zoning as a right

14) Non-Conforming Usesi) Generally-Existing use not in compliance with zoning ordinanceii) Vested rights/Non-Conforming Uses and Competing Policy Interest involved-Owners

rights and expectations v. Public interest in uniformity of zoning, and ability to change zoning to reflect changing environment

(a) Vested Rights-Process of building (sufficient commitment may give protection-factors-how far developer gone in obtaining gov’t approvals; money spent in good faith; investment)=honor expectation, gives certainty-allows building/housing costs to remain low; con-locks zoning in place) (Estoppel-reliance on issuance of permit, make substantial expenditure after make reasonable inquireies into permit’s validity

iii) Problems-Zoning may cause expensive moves, and eliminate important uses; but non-conforming uses may give monopoly power

iv) PA Northwestern Distributors v. Zoning Hearing Brd.-Adult book store, enacted zoning ordinance to remove, gave 90 days to conform; held-amortization and discontinuance of lawful pre-existing non-conforming is per se confiscatory and violation of Penn. Constitution

(a) Majority-is vested right to continue, so amortization period is of no sign.(b) Concurrance-balancing test should be used; cannot lock uses into place

because of previous uses-would disallow uniformity(c) Policy (v. Euclid)-speculator v. party that labored; no reliance interest v.

reliance interest that would be able to continue use15) Flexibility and Zoning (Variances/Special Exceptions)

i) Everything cannot be anticipated in comprehensive plan; but returns to case by case, common law analysis, not centered on comp. plan; and not overseen by judges, instead local boards subject to cronism, political pressure

ii) Variance-Violation of a zoning ordinance that is allowed by zoning board of appeals because of hardship related to the property that will result without such (ie-property will become useless)(Board may exercise discretion when granting)

(a) Most litigation arises from granting variance-why-Wait and See zoning-Initially zone very tight, allows such to become a source of revenue (unconstitutional to raise property taxes in some areas); extract concessions from developers

(b) Common v. Westwood Zoning Board-P owned vacant lot, P homebuilder bought on condition that could construct SFH; minimum frontage requirement not met, sought variance, denied by Board of Adj.; Appellate court affirmed; Higher Court reversed

1. Positive Dimension of Granting Variance-Undue Hardship not of one’s own making must exist, and steps to mitigate must be taken

i. Undue Hardship-no effective use if denied (right not to have land zoned into inutility, but reasonable restrictions may be imposed, no right to put to most profitable use)

2. Negative Dimension of Granting Variance-Variance must not work to detriment of public good, or undermine spirit, purpose of comprehensive plan

3. Note-In case court noted Aesthetics/property values proper zoning purposes

iii) Special Exceptions-Use permitted by ordinance in a district where it is not necessarily incompatible, but where it may cause harm; authorized under conditions that insure their compatibility with surrounding uses

(a) Cope v. Inhabitants of Brunswick-Exception denied to P for apartment building construction; Constitutional challenge of absolute power ordinance gave to Board to determine if use would adversely affect health, safety, general welfare, and where use would alter characteristics of surrounding props.-Held-improper delegation of legislative authority to board, no sufficient guidance to ensure const. guided discretion of exception process-Delegation of authrotiy to a Board must be limited by leg. standard of what will not ordinarily be detrimental or injurious to neighborhood; because no inherient authority in Boards, like municipalities to regulate use of private land (enabling acts-Boards only to apply standards set by Leg.)

16) Zoning Amendments and Spot Zoning (LULU)i) Wait and See Zoning (Variances to be rare; SE’s are part of Leg. Plan; Amendments

are neither-just come to Leg. and ask to rezone, so undermines Comp. Plan)ii) Spot Zoning-Zoning Amendments invalidated as legislative acts unsupported by

rational basis related to promoting public welfare; applies to zoning changes limited generally to small plots, that establish an island of non-conforming use within larger zoned district that reduce value of conforming uses in rezoned or abutting plots (can lead to pol. Abuse; anti-comp.; monopoly power; does not serve Hold the line

iii) State v. Rodchester-Develop of condos applied for rezone, planning dep’t recommended against, but council passed it from SFH, low density, to high density rez.; Review sought because said to be quasi judicial act-rejected-court held that Muncipalities adoption or amendment of zoning ordinance act in legislative capacity under designated policy powers, and as legislative act, will be presumed valid unless show that no support relating to promotion of public health, safety, morals, or general welfare. Court also held that zoning ordinance does not have to be consistent with land use plan, just that land use plan be adopted before orig. ordinance

(a) Classic LULU-more traffic, kids in school, etc; but okayed because said similar uses nearby

(b) Fasano-view that rezoning of single tract was quasi judicial affecting rights of few ind. more than public generally, so burden placed on proponents to show zoning is reasonable-this was counter to belief here that Leg. best suited to determine what zoning class best serve PW; Fasano=reaction to move away

from comp. and towards discretion and flex., proponents of de novo review by courts of leg. decision (put Leg. run on platforms)

17) Aesthetic Regulationsi) Initially, Euclidian=protect health and P Safety; Aesthetic alone not enough; but

expanded=Regs. Not as conteversial, can say value of regulation=protect housing prices

ii) State ex rel. Stoyanoff v. Berkeley-building permit (no variance, SE or rezone needed) denied by architectural review board; held-City’s enactment of zoning ord. and procedures for determining if proposal complied, or offended, was to be presumed valid, only reviewed if oppressive, arbitrary, or unreasonable, or infringed on valid existing non-conforming use-modernistic residence in traditional area not arbitrarily or unreasonably exclude on basis of protective general welfare of community

(a) Court here recognizes that aesthetic consideration alone not sufficient to validate land use reg, because very subjective, but add property values gives objective-so valid

iii) Anderson v. City of Issaquah-“walk around the neighborhood”; P went for approval at dev’l commission, made numerous changes; subjective criteria used; denied because did not fit concept of surrounding area-no clarification given=code section gave no effective or meaningful guidance to applicants, design professionals, or officials responsible for enforcing the code=void for vaguenss and unconstitutional=common men had to guess at its meaning, so arbitrary discretion

(a) Note-unlike previous case, this court seems skeptical of subjective nature of aesthetics alone determining regulations (no objectivity)

18) Controls on Household Compositioni) Belle Terre v. Boraas-Oridinance restricted use to 1 fam. Dwelling-family meaning

one or more related persons; or number of persons not exceeding two that unrelated; D rented in violation of such; 1983 claim declaring unconstitutional; Held, not unconstitutional-said that police powers not confined to elimination of filth, stench, unhealthy places, but may zone where family values, quiet seclusion, clean air make sanctuary for people

(a) This case=first time SC spoke of zoning since Euclid-; at this time challenging separation, uniformity, suburb, SFH layout; this was reaction in updating and justifying Euclidean zoning-saying nothing wrong with completely planned lifestyle, where can chose neigbors

(b) Note-Case does away with fictions, and necessary link with property values; Aesthetics by themselves okay (policy powers-could regulate beauty, safety)

(c) This case differs in that, not that every use has place, but that entire uses can be excluded from town (excutionary zoning)-family unambiguous in relation, marriage, birth, adoption (State courts cut back, but still good law-cannot say socioeconomic/lifestyle promoted outright though

(d) Dissent-said is Moral Regulation, concern being stability to property values and lifestyle-because if was Land Use Ordinance, could have restricted numbers, not blood, so seemed to be aimed at excluding different lifestyles

19) Eminent Domain

i) Eminent domain is a taking of property that requires compensation. (Liability Rule-forced sale at fair market value); Zoning is different in that is the regulation of use of land, can regulate into worthlessness (generally) without compensation

(a) Cuts off negotiations; Violates right to excludeii) Legitimization (2 Views)

(a) Inherent in Sovereignty-Gov’t use of ED for the public good; Gov’t is able to think and develop a comprehensive plan while considering interaction between present/future uses, public interests, and public policy (Idea that CP>Common Law) Also, ED is the only way for Urban Areas to complete with Suburbs, allow the razing of large, already developed areas in order to further the public good (cannot use Wait and See)

(b) Posner Logic-Prevent holdouts and bilateral monopoly, so ED is appropriate in cases where this could be an issue (consistent with the application of liability rule); Not important if dealing with gov’t or private, because ED is outgrowth of common law (ie-Boomer=Private eminent domain)

iii) …and Public Use (and what limits on ED to regulate/take with Compensation)iv) Kelo v. City of New London-Development plan to revitalize downtown; Pziler come

in=hopes for new business; holdouts; Holds to Inherent in sovereignty, comprehensive planning aspect of takings. Public Use=Public purpose in ED cases, and the legislature will be given deference in determining such requirement=makes gov’t ability to take land almost limitless, even in cases where ED quickly followed by transfer to private party

(a) Note-court says that Legislature can undo what it has done (Cali only allows ED in blighted areas)

20) Takings (what limits are there on takings/regulations w/out compensation)i) …and Physical Occupation (Liability Rule) (Per Se Rule)

(a) Loretto v. Teleprompter Manhattan-(NY law requires cable line, given $1 for loss of value)-There is a per se rule that any permanent physical occupation of property imposed by government, no matter how small, constitutes a taking and requires just compensation.

1. Policy of Physical Occupation v. Reg=Right to Exclude most important because need such to plan, form expectations; (but in Causby, as here, this rationale hard to hold up because not going to use the airspace, small invasion)

2. Physical v. Non-Physical (Regulation)=Trespass v. Nuisance (metaphysical) (Causby case)

i. Posner logic-Treat this differently because 1) easier to id injured party; 2) lower administration costs=Right to exclude given no moral dimension, used, as is trespass, as a metric to decide who gets rights

ii) …and Nuisances Control Measures (Per Se Rule)(a) Hadacheck v. Sebastian (Brick making regulated out of existence) A nuisance

control measure will not be a taking, and will not require compensation (Note-at common law, bundle of sticks did not include prohibited activity=reference to something uncontroversial to legitimize Regulation in its early stage

21) Regulatory Takings

22) Generally-A land use regulation is not a taking if it substantially advances legitimate state interests and does not deny an owner of his LIBE or work a total economic wipeout on ones land

23) At what point does a regulation affect property values to the point when they should be considered a taking requiring just compensation? (keeping in mind that gov’t cannot pay for all regulations)

i) …and “Goes too Far”(a) Penn Coal v. Mahan-(underground coal estate which gov’t regulation

prevented from being mined) To determine if a regulation goes “too far,” and therefore is a taking requiring compensation, a court will balance several factors, including:

1. If a nuisance is being abated2. The relevant property interest, denominator being regulated3. The impact of the regulation on the private party4. The reciprocity of advantage involved (sharing of burden by

public/private)5. Public interest being served

(b) This is a balancing, case by case inquiry which roughly weighs public v. private interests

ii) ...and the Penn Central Balancing Test(a) Penn Central v. NY-In determining whether a taking which requires

compensation has occurred as a result of a regulation, the public interest involved in the regulation will be balanced against the private interest affected thereby. Where the regulation seeks to further a compelling state interest and does not overly interfere with a private parties expectations (DIBE), no taking has occurred.

1. Expectations are whole ball game for private party, but Legislature will always win unless is total wipeout (Presumption of Validity)

2. This is a case by case, ad hoc inquiry which limits ability of property owners to determine if they will satisfy the balancing test=uncertainty

3. Compelling State interest=any public purpose (aesthetic reg., etc, so puts the thumb on the scale for the Legislature because does not need to be super compelling to be valid)

4. Does away with regulatory need to abate nuisance, now can just confer benefits

5. No need for reciprocity of advantage-Regulation commonly burdens some more than others

6. Does away with conceptual severance-instead focuses on character of the action and the nature and extent of the interference with the parcel as a whole (expectations)

7. Note-TRD’s –can sell these or use to develop on other parcels; eases burden of land restrictions

iii) …and Denial of all Economically Beneficially or Productive Use (Per Se)(a) Lucas v. SC-Where a regulation deprives a landowner of all economically

beneficial use of their land, compensation must be given unless the use of the

land would be prohibited by BPOSL (ie-Nuisance control, public trust, common law, but not those solely prohibited by legislation)

1. Total Wipeout=functional equivalent to physical appropriation (cannot use)

2. Average Reciprocity of Advantage reintroduced-3. Acknowledges unfairness that 95% wipeout cannot recover, but lots of

all or nothing situations4. Reaffirms indistinction between mitigating harm/conferring benefit

from Penn, but relies on rationale that lack of distinction inurs from fact that either may constitute a taking (no need for this fiction created to justify regulation=Nuisance control cannot be used to determine what is a taking

i. (Penn=even if regulation not mitigating harm can be valid; Lucas=even if abating a nuisance, can be a taking)

5. Exception brings back Penn balancing test, only gives the court the power to weigh the public interest v. private interest (because common law determination)

i. Suggest step back from view in Boomer(b) Problems-what are background principles of state law; what is the

denominator of determine “total wipeout”iv) …and Limiting Lucas (BPOSL and the Denominator Problem)

(a) BPOSL(b) Palazzolo v. Rhode Island-State wetland regulation led council to deny permit

to build bulkhead to use land, but could use uphill portion, but still laid out test for BPOSL; The fact that legislation or regulation was past prior to the transfer of title does not automatically make such part of the BPOSL used to govern the inquiry of takings. Though common law doctrines will always be BPOSL, a balancing test, employed by the courts, not the legislature, will be employed to determine if a regulation constitutes a BPOSL.

1. “State may not put so potent a Hobbesian Stick into the Lockean Bundle”

2. Return to ad hoc inquiry3. Note-Though not a total wipeout, still must apply Penn Central test to

determine if a taking has occurred4. Court-Still believes that court is more trustworthy in considering all

common law principles to determine if regulatory stick is in bundle (leg. will always favor itself)

(c) The Denominator Problem(d) Tahoe Sierra Preservation Council v. Tahoe-3 yr moratorium on

development-To determine if a regulation has effected a total wipeout on property, temporal as well as the metes and bounds of the geographic dimension must be considered in order to view the property in its entirety. A fee simple estate cannot be rendered valueless, and therefore there has been no total wipeout, by a temporary prohibition on its use, because the property will recover value as soon as prohibition is lifted

1. Conceptual severance into time does not work here

2. Still must be followed by Penn Test if determine no total wipeout3. First English Church v. LA-compensation must be paid from the time

of imposition of a regulation that works a taking until its recission, or it changes as to not constitute a taking

v) …and the Problem of Extractions(a) Extractions will be legitimate when they are used to minimize the impact of

new development, but becomes problematic when there is no link between the development and the exaction

(b) Municipalities-One Big Power=Discretion over Land Use (overzone=leverage)+One Big Problem=No Money (Property tax problem)=Use Power to solve Problem

(c) PHASE I-ESSENTIAL NEXUS TEST(d) Nollan v. CCC-CCC wanted easement to beach in exchange for permit,

because wet sand was extent of PTD; did not want to pay for imminent domain to dedicate an easement;

1. Essential Nexus Test: An extraction will not be a valid regulation of land if there is no essential nexus between the permit condition and the impact of the development

2. Note-IF THE ESSENTIAL NEXUS TEST IS NOT MET, THEN UNDERMINES THE COMPREHENSIVE PLANNING ASPECT OF LAND USE

3. Note-CCC could just have denied permit using its discretion and no taking would have occurred under exactions jurisprudence, though perhaps under Penn (Dollan too)

4. Reciprocity of Advantage reintroduced-Loss of right to exclude cannot be born by the Nollan’s alone, though the public interest may be served by this easement

5. Policy behind Extractions-prevent agencies from engaging in extortion6. Note-Penn Central could not be used because the right to exlude is

infrindged upon, so would be a per se taking excepted under Loretto)7. …readings of Nollan

i. Broad-Essential Nexus Test only applies where owner being required to physically dedicate property

ii. Narrow-Essential Nexus Test applies to all exactions (including fees)=If Policy is to prevent extortion, then does not matter what form such takes)

iii. UNDER NARROW reading, reps another exception to Penn

(e) Dollan v. City of Tigard-case where hardware store wanted to be expanded, dedication of land for drainage, and also for use as public bike path; In addition to the Essential Nexus Test, a Rough Proportionality in nature and extent between the impact and the condition applied must be shown for an extraction to be valid and is not a taking

1. Note-City must make some kind of individualized determination that the required dedication is related in nature and extent to proposed development

i. Acknowledged by court that this reverses traditional presumption of legitimacy municipalities get when it comes to regulation, because the burden of proof is on the city

2. Here, was found that public green way not roughly proportional to condition, could have been a private greenway and been equally effective (see Nollan Broad v. Narrow reading, because is a physical occupation, affront to the right to exclude)

24) Transfers of Land

25) The Land Transaction i) Brokers

(a) Licari v. Balckwelder-Broker/Subagent with express permission of a broker who lists the property is a fiduciary to the principle and must act in good faith with regards to him. They are under a legal obligation to make a full/fair/prompt disclosure of all facts within their knowledge that may be material to matters in connection to and which may affect his prnicples rights and interests.

1. Brokers are fiduciary of seller, but in practice work for buyers, some states require brokers to disclose this to buyer

ii) Contracts of Sale(a) Executionary-title transfers some time after signing in order to give time for

inspections, financing, title searches. At the time of signing, earnest money must be put down by buyer and held in a suspence account

(b) Note-Fixtures, and other amenities, now in contract, and only are required to be in operative condition

(c) Contract-contingent on buyer obtaining financing/not on sale of buyers home(d) Good and Merchantable Title-Title may include covenants, conditions,

encumbrances as long as they do not interfere with use and enjoyment of land(e) Title Insurance-Provided by the seller

iii) Statute of Frauds(a) Evidenciary and admin rule (Policy-avoid courts involvement in sorting out

truth between parties regarding oral agreements)(b) Provisions of Importance to Real Estate: 1) Except for lease ofr less than three

years, no interest in land can be created or transferred except by an instrument signed by party to be bound; 2) No action shall be brought for a contract of sale of lands or interest in or concerning it unless unless there is an agreement upon which such action shall be brought or some memo or not thereof shall be in writing and signed by party to be charged

1. Note-at common law, selling of ones home was not unequivocally refereable to contract

(c) Exceptions1. Part Performance-Specific enforcement of oral agreements when

particular acts have been performed by one party (ie-possession by buyer; payment of all or part of price; valuable improvements) that unequivocally show that an agreement has been made

2. Estoppel-Where unconscionable injury would result from denying the enforcement of an oral contract after one party has been induced by other to seriously change their position in reliance on the agreement, or when unjust enrichment would result if statute was invoked, an oral agreement will be allowed

3. Hickey v. Green-Where the statute of frauds has not otherwise been satisfied but an oral agreement is admitted by the party attempting to invoke the statute of frauds, and where the promisee has acted in reasonable reliance on the promise before the repudiation, and the remedy of restitution of restitution is inadequate, an injured party may be entitled to specific performance though there is no showing of possession, payment of money, or improvements on a parcel of land.

iv) Marketable Title (is an implied condition of sale, buyer may rescind if seller cannot convey)

(a) A title not subject to such reasonable doubt as would create just apprehension of its validity in the mind of reasonable, prudent, and intelligent person, and one which such person, guided by competent legal council, would be willing to take and pay fair value

(b) Lohmeyer v. Bower-property subject to zoning and covenants that were made subject to contract, but housing in violation of both; A zoning restriction existing at time of contract for sale of real estate are not encumbrances or burdens rendering title unmerchantable. Covenants restricting land, or other private restrictions, in the absence of a specific clause to the contrary, are incumbrances that render the title to land unmerchantable. However, property in violation of either CC&R’s or zoning render title unmarketable

1. Covenants v. Zoning differences=Zoning is not part of Lockean Bundle; cannot figure out all zoning regulations, title search uncover covenants

2. Policy of violation=people don’t buy litigation; cannot fix because would be forcing someone to take what they did not bargain for

(c) v. Absolute Title1. Will never be an absolutely good title without defects, and policy is to

allow land marketable(d) v. Solely Title Insurance

1. Title remains unmarketable though Title Insurance covers one at time of buyer, and provides damages, so a buyer may not want to take title down the road

2. Note-lack of access to land, which should have been discovered during period between signing and closing, will not make land title unmarketable (esp. with notice )

v) Duty to Disclose Defects (Exceptions to Caveat Emptor)(a) Stambovsky v. Ackley (Poltrygeist case)-An exception to caveat emptor will

apply, and recission may be allowed on the basses of nondisclosure, where a condition created by the seller materially impair the value of a contract and such is peculiarly within the knowledge of the seller or it is unlikely a prudent

purchaser exercising due care with respect to the subject transaction would discover such condition.

(b) Johnnson v. Davis-Where the seller of a home knows of facts materially affecting the value of the property which are not readily observable and are not known to the buyer, the seller is under a duty to disclose them to the buyer, regardless if the property is new or used.

1. Note-What is a material conditions? Stambovsky=created condition presumed to be material

(c) Note-“as is” does not affect sellers obligation to disclose material info to buyer which he may not be aware of-because cannot inspect material latent defects upon opportunity to inspect)

(d) General Trend-Do away with caveat emptor and set for exactly what needs to be disclosed because of materiality (Brokers behind these in order to put burden to disclose on seller)

vi) Implied Warranty of Quality(a) Only becomes a cause of action after closing take place and plaintiff accepts

deed; usually only implied if merchant in trade-ie-builder, subdivider, commercial vender; Split in circuits if applies to commercial buildings

(b) Lempke v. Dagenais-(Q is if subsequent purchaser may sue builder for breach of implied warranty of workmanlike quality, when no privity existed with them) One need not be in privity of contract with a D in a case of a breach of the implied warranty of quality in order to recover for economic loss. There are limitations, however, including that: 1) Defects must be latent, because if they are not they should have been found on inspection; 2) life of action is limited to a reasonable time to give certainty to builder; 3) P must prove that defect was caused by D’s workmanship, and D may show defects were a result of wear and tear or that previous owner made substantial change

1. Hybrid of Contract and Torts-no privity needed and can recover for economic loss

i. Policy-Protect innocent buyers not in privity, changed society where people not jacks of all trades, builder should not be relieved because of sale, if not latent, not discoverable with due effort, certain defects take time to manifest themselves; no reason to separate economic loss from personal injury, one who is diligent in finding hazard should be no different than those that do not

(c) Uniform Land Transaction Act (not widely adopted)-two implied warranties against one in business of selling real estate-1)warranty of suitability for new and used buildings; 2) warranty of quality (applies only to new construction, and braoder than first in that defect may not be so serious as to make property unsuitable for its intended purpose and still be breached

1. No general disclaimer effective with respect to buyer of home where they intend to live (only specific disclaimers if part of basis of bargain)

2. Warranty of Quality runs with land to subsequent purchasers, with 6 yr statute of lims which begins to run when first buyer to whom warranty is first made enters possession (regardless sof knowledge of breach

vii)Remedies for Breach of Sales Contract(a) Damages

1. Jones v. Lee (Buyer backed out of purchase, signed, tender earnest money, backed out, rejected offer to void contract for earnest money, sold for loss of 70K) Where an executory real estate contract is breach by a buyer, damages are measured is the difference between purchase price and market value of the property at the time of the breach. Special damages may be awarded if damages are natural and probable consequences of the breach and the breaching party had reason to know they may be incurred at time of formation. Malicious, fraudulent, oppressive, or recless conduct that shows wanton disregard of other party’s rights may support punitive damages (cavalier attitude toward breach seen as outrageous)

(b) Retention1. Kutzin v. Pirnie-(should seller be able to retain deposit when buyer

breaches and no liquidated damages clause, or only actual damages) Where the vendee makes a deposit on real estate, then backs out, the vendor may keep the deposit, regardless of actual damages suffered by the seller or whether there is a forfeiture clause in the contract (Majority Rule seems to be this, as long as less than 10% or less of sale price; Generally, if a liquidated damages clause in contract, it must be reasonable ie-<10%)

i. Policy-may be hard to determine actual damages; down payments limited to 10% usually, so is a fair risk)

ii. NJ Rule-may only retain actual damages-easy in this case because jury figured these out already

iii. Why-encourage efficient breach-so unlike Jones, not treating promise as huge moral obligation

(c) Specific Performance1. Not disfavored in land contract because of unique nature of land;

Condo/Track home=split in circuits if unique enough2. Some case-SP denied to seller, because buyers are fungible

viii) The Deed(a) Turned over to buyer after closing; must be recorded with county recorder and

include encumbrances, property interest, HOA, covenants, easements-so they can be found; includes that has been consideration, will not specify amount; description of parcel; Formalistic seal requirement

(b) Types (3)1. General Warranty Deed-warrants title against all defects in title,

whether they arose before or after grantor took title2. Special Warranty Deed-contains warranties only against the grantor’s

own acts but not the acts of others; Warrants against AP most of the time-violation that seller caused condition by failing to assert title against APer

3. Quietclaim Deed-no warranties of any kind, only conveys whatever title grantor has, and if grantee of quitclaim deed takes nothing by deed the grantee cannot sue grantor

(c) Forgery=void, and grantor prevails over all persons, even subsequent bona fide purchasers who did not know of forgery

(d) Fraud-most courts say deed procured by fraud is voidable by grantor in action against grantee, but not subsequent BFP from grantee who is unaware of fraud

(e) …and General Warranty Covenants1. Present Covenants (breached at time of conveyance, and S of L begins

to run at date of delivery)i. Covenant of Seisen=Grantor warrants he owns estate and

purports to conveyii. Covenant of Right to Convey=Grantor warrants he has right to

convey propertyiii. Covenant against Encumbrances=Grantor warrants no

encumbrances on property (ie-mortgages, liens, easements, covenants)

2. Future Covenants (Breached if grantee or his successors evicted from property, buys up paramount claim, or otherwise damages-S of L begins to run at time of covenant breach)

i. Covenant of General Warranty=Grantor warrants he will defend against lawful claims and compensate therefore (not liable for legal fees incurred by grantee in successfully defending title, only where grantee loses to superior legal claim)

ii. Covenant of Quiet Enjoyment=Grantor warrants that grantee will not be disturbed in possession and enjoyment of property by assertion of superior title

iii. Covenant of Further Assurance=Grantor promises he will execute any other doc required to perfect title conveyed

3. Brown v. Lober-(bought with General Warranty; neither party knew previous owner reserved 2/3 mineral rights, neither searched record, by the time realized this, S of L on covenant of right to convey ran) The covenant of quiet enjoyment will not be breached until one with lawful title undertakes acts of disturbance that may amount to a constructive eviction.

i. No title search=not interested in the coal; No title insurance=did not exist at the time; Bank did title search but only interested in financing criteria, and no responsibility to convey this=shows that with title system, warranties, mistakes can happen, so shows that title insurance is important=would have reported the defect or been liable for it

4. Frimberger v. Anzellotti-(Warranty against Encumbrances)-Encumbrances are either: 1) Pecuniary charges against premises (morgages, judgment, leins); 2) estate or interest in property less than the fee (life estate); 3) easements or servitudes on the land (restrictive

covenants); the encumbrance must exist at the time of conveyance for this warranty to be breached. Deed free of encumbrances=marketable title that can be sold at fair price to reasonable purchaser or matgager. Encumbrances that will breach the covenant against encumbrance do not include latent conditions on property that are in violation of a statute or government restriction.

i. But Bianchi v. Lorenz-Septic System did not comply with building code at time of conveyance, on suing for breach of warranty against encumbrances, court said that any substantial violation of municipal ordinance is an encumbrance in violvation of deed if can determine that property was in violation at time of conveyance

(f) …and Delivery1. Delivery=no more than an act that evinces an intent to be immediately

bound by transfer (handing over, grantor’s declaration, express or implied, that he is bound by his deed

2. Legal Delivery is what counts (can be physical delivery, but no legal, and vice versa)

3. Legal Deliveryi. Grantor hands deed to grantee upon receipt of purchase

price=intention to make immediate transfer of titleii. Grantor puts deed in harnds of third party who hands over deed

upon closing transaction=intends to transfer when all conditions are met (cannot be revocable for it to be a valid delivery) (Note-this relieves the need for a will, by giving it to agent who dels deed to grantee, title relates back to date grantor handed deed to agent

4. Is a Physical Delivery a Legal Delivery?i. Sweeney v. Sweeney-(M deed prop to J, J recorded, then deeded

prop to M, did not record-last step was to protect himself, continued to use as life estate) Physical possession of properly executed deed is not conclusive proof that it was legally delivered, because it must be made with an intent to deliver. A conditional delivery can only be made by giving deed to a third person to be kept by him until the happening of some event, at which time it is to be handed over to the grantee.

ii. Court-only expression nmade at time of tranx was M’s wish to be protected, and the only way for this to happen is if was a delivery to him (intent argument rejected)

iii. Condition-oral conditions on delivery are only valid if given to third party (placing common law over intent)

iv. Policy-discouraging fabrication of evidence; if deliver to third party for later delivery is implied will be some instructions, so oral conditions allowed in such a case

v. Policy-Safety of Real Estate Title-want to make sure records can be searched and property not subject to untraceable oral conditions (note third party does not record deeds)

5. Delivery without Physical Deliveryi. Rosengrant v. Rosentgrant-Where a deed is delivered and

grantor reserves right of retrieval, attaches condition that will only become operative at time of death of grantor, and continues to use the property as if no transfer occurred, no legal delivery has occurred.

ii. Revocable Deed is not validiii. Note-clear that intent was that be transferred to Jay, only way

this could have occurred is if intended that the deed be non-revocable

(g) Revocable Trust (valid)1. Much like wills, but no probate; owner signs declaration of trust

providing they hold it in turst, retain right of possession, rents, profits for joint lives and survivors, and on death title passess to assignee

ix) The Mortgage(a) Loan secured by piece of property which can be foreclosed on in case of

default(b) Loan to Value=usually 80% of value of property(c) Constitutes an encumbrance on property, so must be recorded in same way to

put on notice potential buyers (record notice)-remains alienable-Property either subject to mortgage (sellers responsibility to pay it off); or buyer will assume the mortgage (with bank requiring original mortgagor continue to be responsible)

(d) Foreclosure (Mortgage=security; Note=Legally Binding Contract)1. Common Law-Bank held deed; in case of default-foreclose for full

value, including equity2. Modern:

i. But: Equity of Redemption-Value of the property above the loan, in cases of foreclosure, can be recovered by the mortgagor

ii. Bank must give time to buyer to make payments before foreclosure

3. Lien States-Lender gives buyer mortgage, buyer retains title, but lender has a lien

4. Title States (CA)-Bank gets deed, but buyer still retains equity in case of foreclosure

5. Deficiency Judgments-First mortgagee gets full amount, then seeks deficiency judgment to get shortfall (Anti-Deficiency Statutes enacted by Leg. to combat)

6. Murphy v. Fin. Dev. Corp.-(foreclosure sale, sunny day, only lender, attorney, at sale, bid by lenders agent, later that day sold for 38K with profits to the bank)-A lender has a fiduciary duty to act in good faith and exercise due diligence when conducting a foreclosure sale,

meaning that they must consider both their own and the borrowers interests.

i. Inadequacy of sale price alone will not show breach of duty, but must be accompanied by something more (ie-only agent showing for sale, quick turnaround, windfall, loss of equity, as well as inadequate price, and inadequacy of legal notice)

ii. Policy-keeps in tack Equity of Redemption to require this(e) Installment Land Contracts

1. Take loan from seller, who takes on risk of foreclosure, so contract usually provides buyer foreit land and payments on default

2. Bean v. Walker-A vendee in an installment land contract occupies the same position as a mortgagor at common law; both have equitable title only, while another has legal title; There is no reason why the vendee in such a situation should be treated differently than mortgagor at common law=no summary dispossession of equitable ownership-equity of redemption applies

(f) Recording1. Grantee/Grantor Indexes-not perfect2. Private system better, because every gov’t entity records differently3. Purpose of recording=not for such to be valid (deed valid on delivery), is to

put third party on notice of your interest, title (record notice)(a) Three types

1. Race Statute (2 States)-first to record wins2. Notice System-Subsequent purchaser who, without notice of prior,

unrecorded deed, wins against the holder of unrecorded deed even if he has not himself recorded

(b) Policy=protecte subsequent purchasers with no notice, but not htose with record or constructive notice

1. Race Notice (Cali)-Same as Notice, but subsequent purchaser also must record first

(c) If A wins the race it is over, but if B wins the race, A wins unless B had no notice

1. Policy-protect prior purchaser