Property Outline

Property’s Origins and Nature

Origins Property defined by:

1) Constitutions2) Statutes3) Court decisions

Two forms:1) Real property2) Personal property

Bentham – property is entirely the creation of law Bastiat – property is the necessary consequence of the nature of man

Job Stewart – property is something that you have a legitimate claim of entitlement to. Marshall – anything that’s important to a person should count as property

Board of Regents v. Roth – P was hired as an assistant professor for the term of one year and then dismissed at the end of the year without a hearing. Court held that his job was not property because he did not have a legitimate expectation of continued employment.

Degree/Career Graham jurisdiction – property is everything that has an exchangeable value or goes to make

up wealth or estate. Elkus jurisdiction – marital property is property acquired during the marriage regardless of

the form in which the title is held (economic partnership concept of marriage).

In re Graham – wife worked while husband got MBA. When they got divorced, she wanted part of his future earnings from the value of the MBA. Court holds that she is not entitled because an educational degree does not have an exchange value or any objective transferable value on the open market. Not inheritable, not acquired by the mere expenditure of money.

Elkus v. Elkus – husband wanted equitable distribution of the marital property of his wife’s career/celebrity status as an opera singer. Court held that he was entitled because an attempt to limit marital property to professions that are licensed would discriminate against the spouses of those engaged in other areas of employment.

Name/Appearance Right of publicity is a property right in one’s name or image, does not end with the person’s

death. Not infringement if the use can pass the transformative use test – ask whether the celebrity

image is one of the raw materials from which an original work is synthesized, or whether

the depiction or imitation of the celebrity is the very sum and substance of the work in question. (Person adds a significant creative component of his own). Consider whether the use will reduce the commercial value of the person’s likeness.

ETW v. Jireh Publishing – Artist depicts Tiger Woods in painting with other golf greats, P wants compensation. Court holds that P is not entitled because the painting passes the transformative use test.

Policy Seems morally right to own your own identity. People should have the right to reap the benefits of their own hard work – encourages

effort. Reputation could be diminished. Freedom of speech and expression should be protected. Fame belongs to the public. Might not want to encourage merchandising.

Body Parts Body parts are not property.

Moore v. Regents of the University of California – P had rare disease, doctors drew blood and removed P’s spleen for medical purposes, but knew that they were financially valuable. Doctors created a cell line, and P tried to sue for wrongful conversion and get some of the proceeds from the cell line. Court held that body parts aren’t property, and you can’t have a conversion action for something that’s not property.

Policy Your body, your property. Worry of theft because if it’s not property, it’s not illegal to take it. Cells no longer belong to you after they leave your body. Don’t want to deter research. Morally wrong to count body parts as property – slippery slope into slavery,

prostitution, and selling body parts.

Methods of Acquiring Property

CreationRight of Publicity Infringement established by:

1) D’s use of P’s identity (not confined to name or likeness)2) For D’s advantage, commercially or otherwise3) Lack of consent, AND4) Resulting injury

White v. Samsung – P Vanna White sues D Samsung for infringing right of publicity in their ad. Court holds in favor of P that the law protects the celebrity’s right to exploit the value of their identity.

Policy People should be entitled to the fruits of their labor It’s good to have a rich public domain.

Purchase Traditional rule of caveat emptor (let the buyer beware) – nondisclosure of a defect in the

property known to the seller and not the buyer never amounts to fraud. Exceptions to caveat emptor (5 possibilities)

1) Have to disclose if it’s a haunted house2) Have to disclose if there’s a seller-created reputational defect3) Have to disclose if there’s a nonphysical defect4) Have to disclose if there’s a condition created by the seller that materially impairs the

value of the contract and is known only to the seller5) Have to disclose if there’s anything a reasonably prudent purchaser exercising due care

wouldn’t discover

Stambovsky v. Ackley – P bought house not knowing that it had a reputation for being haunted and wanted to rescind sale. Court holds that rescission is appropriate.

FindTypes Lost property

1) Owner parted with the property unintentionally2) Finder has preference to possess the property over all others but the true owner3) If the finder was trespassing, the owner of the land has a higher right to the

property, but cases are split as to whether a trespassing finder has rights over subsequent possessors.

4) If the finder wasn’t trespassing, courts are divided as to whether a found object belongs to the finder or the landowner.

Mislaid property1) Property intentionally placed in a particular place and mistakenly left there.2) Property goes to the owner of the land rather than the finder to increase the

chances that an owner will recover his property. Embedded property

1) Generally awarded to the landowner rather than the finder because it is considered part of the real property.

2) Exception – treasure trove (gold, silver, or money intentionally buried in the earth for later recovery, hidden or concealed for such a length of time that the owner is probably dead or undiscoverable) – goes to finder as long as finder was not trespassing

Abandoned property

1) Owner intends to relinquish ownership and engages in some type of action to demonstrate that intent.

2) Finder becomes the true owner

Benjamin v. Lindner Aviation – P finds money in the wing of a plane he’s servicing and claims possession. Court holds that the property was mislaid, so it belongs to the owner of the premises where it was found. The premises was the airplane, not the hangar, because the true owner would initially look for the plane if he was trying to find his money.

Gift Transfer of property from one person to any without payment Inter vivos gifts – transfers from one living person to another Gift causa mortis – given when donor believes he is on the verge of dying, and intends to

transfer only if he actually dies (retains possession if he survives) Valid gift is irrevocable. Gifts can be subject to a condition subsequent as long as the condition isn’t the giver

changing his mind.

Elements Intent to transfer title (not just possession) Delivery of the property (either actual or constructive, may be accomplished by a

writing, distinguishes gifts from promises to give in the future) Acceptance by the donee (presumed when the gift is of value)

Gruen v. Gruen – P’s father gives him title to painting but retains a life estate and keeps it hanging in his home. D stepmother claims the gift is not valid because it was just a promise to give it to P when he dies. Court holds that letters show intent and constructive delivery (gift was a remainder, can’t be physically delivered).

Adverse PossessionReal Property Elements:

1) Actual possession – possessor has to actually be on the land during the time period

2) Exclusive possession – possession not shared with owner or the public as a whole3) Open and notorious – not in secret, would give a reasonably diligent owner notice

that someone’s there4) Hostile or adverse – possession is without the permission of the owner and

inconsistent with his rights as the ownera) Objective – possessor’s state of mind doesn’t matter, just actionsb) Subjective – possessor must have good faith belief that he has title (some

jurisdictions require color of title – paid property taxes or have an invalid document showing that you own the land)

5) Continuous – as continuous as the average user, consistent with the nature of the property (seasonal)

6) Statutory period – amount of time owner has to bring eviction suit (ex. 10 years)

Important Notes Abandonment – if a possessor intentionally relinquishes possession, adverse

possession comes to an end and statute of limitations must start up again if possessor renews possession.

Tacking – successive adverse possessors who are in privity of estate can add up their years (A possesses for 7 years, grants title to B who possesses for 3 years, total of 10)

Tolling – statute of limitations does not run while owner falls into certain categories (incarcerated, a child, insane).

Ineffective actions (told police people were trespassing) do not defeat an adverse possession claim

No adverse possession against the government

Nome 2000 v. Fagerstrom – Ds possessed P’s property during the summer months in Alaska. Court held that possession only had to be as continuous as is consistent with a true owner’s use. Only granted Ds part of the parcel because they did not actually possess the rest (stakes don’t count).

Policy Adverse possession seems like legalized theft – if you’re brazen enough to

occupy someone else’s property for a long time, you get to keep it. Protects justified expectations – over time sympathy for trespasser grows,

don’t want a 40th generation descendant of a landowner to be able to evict a 40th generation descendant of a trespasser.

Personal Property Same elements as adverse possession for land, except for “open and notorious.” Three options:

1) Conversion rule – clock starts running when property is wrongfully taken and the owner dispossessed.

2) Discovery rule – clock starts running when owner discovers or reasonably should have discovered that the property is missing; owner must establish that he used due diligence to discover the location of the property.

3) Demand-and-refusal rule – clock starts running when the owner demands the property back and the possessor refuses to return it. (More protective of property owners, but they may not delay unreasonably in bringing suit once refusal is communicated – defense of laches)

O’Keefe v. Snyder – P’s paintings went missing but she didn’t do anything about it. Years later, discovers where they are and brings suit for their return. Court institutes discovery rule.

Guggenheim Foundation v. Lubell – museum discovered painting was missing but didn’t look for it. Years later, discovers where it is and brings suit after D refuses

to return it. Court institutes demand-and-refusal rule, but defense of laches remains viable.

Policy Demand-and-refusal is more protective of property owners and discourages

theft. Discover rule is better because it protects good-faith possessors.

Shared Ownership

The System of EstatesEstates and Future Interests Fee simple absolute – right to possess property now and forever, can be inherited Life estate – right to possess the property for your lifetime

1) Reversion – After death, property reverts back to grantor.2) Remainder – After death, property goes to a third party.3) “O to A for life” or “O to A for life, then to B”

Fee simple determinable – right to possess property until some condition occurs.1) Possibility of reverter – if the condition occurs, the future interest automatically

vests in the grantor.2) Clock starts running immediately on adverse possession.3) “O to A as long as used for school purposes”

Fee simple subject to condition subsequent – right to possess property until some condition occurs.1) Right of entry – if the condition occurs, the future interest vests in the grantor

once he asserts it.2) Clock starts running on adverse possession once grantor asserts his claim.3) “O to A, but if the property is ever used for anything other than school purposes,

O shall have a right of entry” Fee simple subject to executory limitation – right to possess property until some

condition occurs.1) Executory interest – if the condition occurs, the future interest vests immediately

in a third party.2) “O to A, but if the property is not used for school purposes, then to B”

Leasehold – right to possess property for a certain period of time.1) Reversion – when the period is up, the property reverts to the grantor.2) Remainder – when the period is up, a third party has the right to possess it.3) “O to A for ten years”

Future Interests Reversion Executory interest Possibility of reverter Right of entry Remainder

1) Vested – belong to an ascertainable person and there are no conditions that must be satisfied before the remainder is certain to become possessory. “O to A for life, then to B” (B has vested remainder)a) Absolutely vested – will not changeb) Vested remainder subject to open – the remainder is to a class that can

increase. “O to A for life, then to B’s children” Class closed when any member becomes entitled to possession.

c) Vested remainder subject to divestment – can be divested by the happening of a later event. “O to A for life, then to B, but if B drops out of law school, then to C”

2) Contingent – belongs to an unascertained person or there is a condition that must be fulfilled before it can become possessory. “O to A for life, then to B if she has graduated from law school” (B has contingent remainder)

Rule Against Perpetuities Traditional rule – no future interest is good unless it must vest, if at all, within 21

years after the death of some life in being at the creation of the interest. Not concerned with when the person will actually possess the property, just when it

will vest. If the interest is in a will, the interest is created when then testator dies, not when the

will is written. Rule does not apply if both the present estate owner and the future interest owner are

charities. Only applies to contingent remainders, vested remainders subject to open, and

executory interests. (Future interests in the grantor or his heirs are exempt) Steps:

1) Look for one of the applicable future interests2) Identify the contingency (What’s the condition?)3) When will the contingency resolve itself? (When will we know for sure whether

the person will get the property?)4) Contingency has to be resolved within 21 years of the death of a person alive at

the creation of the interest, otherwise it’s void. Modern rules

1) Wait and see test – court will not hold that a future interest violates the rule until the perpetuities period passes and they are certain that the future interest has not vested within that period.

2) Wait and see period of 90 years after the date of the creation of the interest for all interests that would otherwise be void under the traditional rule.

3) Saving statute – any interest that would violate the rule shall be reformed to give effect to the intent of the creator when it can be ascertained.

Policy Compromise between the right of property owners to do what they want with

their property and the public interest of not having land tied up too far into the future.

Concurrent OwnershipCreation Three types of concurrent interests where each tenant has the right to possess the

whole property:1) Tenancy in common – each co-owner has a separate interest in the property, each

can do what he wants with his share, shares don’t have to be equal2) Joint tenancy

a) Like tenancy in common, but joint tenants have a right of survivorship (when one dies, his shares transfer to the other)

b) Doesn’t go into probate process, so saves on time and moneyc) Can sell their shares, but then it becomes tenancy in commond) Must have the four unities:

i) Time – each interest created at the same timeii) Title – each tenant acquired interest by the same instrumentiii) Interest – each tenant has equal shareiv) Possession – each tenant has the right to possess the whole property

3) Tenancy by the entirety – Like joint tenancy, but only available to married couples, and no tenant can sell interest unilaterally. Terminated by divorce.

Community property – property acquired during marriage is presumed to be owned together unless the parties specifically designate it as owned separately.

Kipp v. Chips Estate – one clause of deed calls them joint tenants, but another clause describes them as tenants in common. Court holds that you have to look at the totality of the document, and the clause calling them joint tenants is internally inconsistent because it refers to heir and assigns.

Policy Legislature favors tenancies in common because it promotes choice in who

you leave property to (can still leave it to the other tenant if you want to).

Partition A remedy for cotenants when they cannot agree on how the property is to be used. May voluntarily partition, but are also entitled to force the other owners to partition

by bringing a lawsuit (judicial or involuntary partition). Types of partition:

1) Physical partition (partition in-kind) – physical division of the property2) Partition by sale – property is sold and the proceeds are divided based on the

interest of each owner. Physical partition is favored over partition by sale because the sale of one’s property

without consent is an extreme exercise of power. To get a partition by sale, you need to show that:

1) The physical attributes of the land are such that a partition in-kind is impractical or inequitable (too many owners, gold mine in one place, hard to partition a house) AND

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

Delfino v. Vealencis – P wants to develop land so wants partition by sale, D wants physical partition because she wants to keep her trash hauling business. Court holds for physical partition because the property is easy to divide and physical partition is favored by the legislature.

Landlords and TenantsLeases Landowner transfers right of possession to a third party – landowner keeps a

reversion Types of leaseholds:

1) Term of years – lease lasts for a specific amount of time and automatically expires when the term is up.a) Both the tenant’s term of years and the landlord’s reversion are transferable,

but if the landlord transfers his reversion, the new owner has no power to terminate the lease unless the lease provides otherwise.

2) Periodic tenancy – lease lasts for a period of time that is renewed automatically unless either party terminates the arrangement.a) Transferable unless the lease provides otherwise.b) Requires notice to terminate, usually equal to one period or six months for a

year-to-year tenancy.c) If notice is not given at the end of a period, it may be invalid.

3) Tenancy at will – terminable at any time by either party.a) At least half the states have statutes that require noticeb) Most states have outlawed self-help evictions, requiring landlords to use court

proceedings to recover possession.c) Terminates at the death of either landlord or tenant, not transferable.

4) Tenancy at sufferance – tenant wrongfully holds over after the termination of a prior tenancy.a) Tenant liable to the owner for the fair rental value of the property during the

period of occupation

Common Law Rule of Self-Help A landlord has the right to retake possession of leased premises if two

conditions are met:1) Landlord is legally entitled to possession2) Landlord’s means of reentry are peaceable

Modern rule – the only lawful means to dispossess a tenant who has not abandoned or voluntarily surrendered the property is to resort to the judicial process.

Berg v. Wiley – D tries to retake possession of leased restaurant by changing the locks. Court holds that it would be illegal under the common law rule because the means were not peaceable (violence only failed to erupt because P was not present at the time), but they decide to adopt the modern rule anyway.

Policy A landlord might believe he is legally entitled to possession but be

wrong, and it would be harsh to evict a tenant over a mistake. There are fast-track procedures for landlord, so it shouldn’t be too big

of a burden to wait (but they’re still losing money) Keeps potential violent confrontations to a minimum. Hurts the poor because landlords will charge a risk premium for fear of

the inability to evict, and landlords will be less likely to rent to risky (poor) tenants.

Subleases and Assignments L leases to T, and T leases to T1. Assignment – T1 takes the balance of T’s term. Sublease – T1 takes less than the balance of T’s term. Transfer from T to T1 is not allowed if it is a tenancy at will or transfer is prohibited

by the lease. L can recover unpaid rent from anyone who he is in privity of contract (signed a

contract) or privity of estate (successive possessors) with.1) Under sublease, L can only recover from T

a) L has entered into privity of contract with Tb) L has never entered into privity of contract with T1c) Possession reverts back to T before reverting to L, so they are not successive

possessors and there is no privity of estate.2) Under assignment, L can recover from both T and T1

a) L has entered in privity of contract with Tb) L has never entered into privity of contract with T1c) Possession reverts back to L directly after the end of T1’s term, so they are

successive possessors and there is privity of estate.

Ernst v. Conditt – P landlord leased a Go-Cart track to T, who leased it to D T1, and P wanted to recover unpaid rent from T1. Court held that P could recover from T1 because even though the lease called it a sublease, it was actually an assignment because T1 took the balance of T’s term. Look at intent, not just the language.

Abandonment If a tenant stops paying rent and moves out before the end of the lease term

(abandonment), L has the right to sue to recover possession as well as back rent and the cost of finding a replacement. L can also:1) Accept T’s surrender of the lease2) Re-let the premises on T’s account – T liable if L can’t find anyone, the new T1

defaults, or L has to accept less rent3) Sue for damages

a) The difference between the reserved rent and the fair rental value of the premises

b) Acceleration clause – remaining rent for the rest of the term is due on default.4) Wait, allowing the rent to accrue, until the end of T’s term, and then sue for the

total.a) Modern rule is a duty to mitigate damages – L must make reasonable efforts

to find a new tenant. Consider whether L advertised the land, offered or showed it to prospective tenants, or rejected suitable tenants proffered by T.

b) No duty to mitigate for commercial property.

Sommer v. Kridel – T breaks lease and sends letter asking to be released. L doesn’t respond, doesn’t lease the apartment even though there was a willing tenant, and then sues T for back rent. Court holds that L is required to carry the burden of proving that he used reasonable diligence in attempting to re-let the premises.Stonehedge v. Movie Merchants – fundamental unfairness in allowing the breaching tenant to require the nonbreaching landlord to mitigate damages caused by the tenant.

Policy Duty to mitigate discourages apartments from sitting empty (encourages

efficient use of land). Unfair to landlord who didn’t do anything wrong. High turnover of tenants has costs. Rents may go up because L passes the risk premium to T, but they may go

down because it forces L to compete.

Implied Warranty of Habitability Nondisclaimable Generally does not apply to commercial leases Implied covenant of quiet enjoyment – implicit promise that L was conveying

property suitable for T’s intended use. If promise was breached, there was “constructive eviction” (T could leave and not have to pay rent). Precursor to implied warranty of habitability. Still governs commercial uses.

Standards Option 1 – warranty is breached when L fails to comply with applicable

building code provisions so as to materially impair health and safety – render the property truly unsafe, unsanitary, or uninhabitable.

Option 2 – L has an obligation to conform with general community standards of suitability for occupancy, measured independently of applicable housing codes.

T need not show that L did anything wrong, is at fault, or acted unreasonably to prove a violation of the warranty.

Notice T has a duty to provide notice of the problem to L. Option 1 – there is a violation the moment the condition occurs.

Option 2 – there is a violation once L is notified. Option 3 – there is a violation after L has had a reasonable time to fix the

problem and has not done so.

Available Remedies Termination of the tenancy (rescission of the contract) – T may stop paying

rent and abandon the premises. Rent withholding – T may withhold rent until L fixes the problem, allows T to

stay on the premises while the condition continues (unlike quiet enjoyment), some states require T to pay rent into an escrow account.

Rent abatement – rent is reduced from the actual rent to the fair rental value of the premises subject to the unlawful condition.

Damages – T may request that some amount of past rent be forfeited by L because of violations during the time for which those rental payments applied. If T suffered any real damages to person or property, he may get monetary damages for those injuries exceeding the rent. May get money for moving costs.

Injunction – T gets court order requiring L to fix the problem. Repair and deduct – T may make minor repairs and deduct the cost from the

rent. Housing code remedies – T may call on a local housing inspector to inspect

the premises and order L to fix the problem.

Green v. Superior Court – L sued to regain possession of the land. T admitted nonpayment of rent, but defended action because L had failed to maintain premises in a habitable condition. Court held L not entitled because T’s nonpayment was justified under implied warranty of habitability.

Policy Serves public health concern. L is in a better position to know of and fix defects (might require T to go into

parts of the building he doesn’t have authorization for). Should be treated as a contract where each party’s obligations are contingent

on the other party complying with his obligations because it’s more fair. Can lead to higher rent and more homelessness because poor people can’t

afford places without defects. Creates race to the bottom for landlords if Ts are allowed to waive.

Retaliatory Eviction Ls can generally evict for any reason or none at all, except:

1) In cities with rent control, Ls can’t evict without good cause.2) Ls can’t evict tenants for certain discriminatory reasons.3) Ls may not bring eviction proceedings against Ts if their motive is to retaliate

against T for asserting legal right protected by the implied warranty of habitability.

Ls can evade the doctrine by going out of the rental business and converting the property to other uses?

Restatement – retaliatory eviction is only illegal if:1) There is a protective housing statute2) L is in the business of renting residential property3) T is not materially in default in the performance of his obligations under the lease4) L is primarily motivated in so acting because T has complained about a violation

by L of a protective housing statute5) T’s complaint was made in good faith and with reasonable cause

L must wait to evict T until:1) L can show a legitimate, nonretaliatory business reason for the eviction (or maybe

T has prove that the eviction is retaliatory)2) Repairs have been made and T is given sufficient time to find other suitable

housing.3) A certain amount of time is up (such as 180 days).

Building Monitoring Systems v. Paxton – T complained to health department when condition of apartment remained unacceptable and L served T with eviction notice. Court held retaliatory eviction illegal.

Policy If Ls were entitled to evict Ts for reporting housing code violations, many Ts

would be deterred from reporting, and the legislature intended housing to be habitable.

We cannot saddle a landlord with a perpetual tenant – requiring L to show that his actions are not the result of retaliatory motives is a difficult burden for Ls to overcome.

Housing Discrimination Fair Housing Act bans intentional discrimination and facially neutral policies that

have a disparate impact on protected groups (discriminatory effect) – burden then shifts to D to prove a legitimate reason that’s not a pretext for discrimination.

FHA prohibits discrimination based on race, color, religion, sex, national origin, disability, and familial status (families with children).

Exemptions:1) Single family homes whose owners don’t own more than three homes, don’t use

sale or rental agencies, and don’t advertise.2) Rooms or units in dwellings containing living quarters intended to be occupied by

no more than four families, but only if owner actually maintains and occupies one of such living quarters as his residence.

3) Religious organizations or private clubs.

Mister v. A.R.K. Partnership – L won’t rent to unmarried, cohabiting couple, and they argue it’s discrimination on the basis of sex and marital status. Court holds that it’s not discrimination because L rents to both single and married people, and both

men and women. Discussion of original bill showed that legislators didn’t believe cohabitators would be protected.

Relations among Property Owners

Trespass and NuisanceTrespass Elements:

1) Unprivileged2) Physical invasion of3) Property possessed by another.

Do not need intent to trespass, just intent to enter the land – just prove voluntary entry without license.

License – permission to enter property possessed by another, generally revocable at will.

Remedies:1) Nominal damages – available without proof of harm to property2) Compensatory damages – remedy actual harm to the property or persons on it

resulting from the trespass.3) Permanent damages – measured by the diminution in the fair market value of the

land.4) Punitive damages – to deter trespasses from occurring.5) Injunction – orders the trespasser to cease the intrusion in the future or to remove

intruding structures or agents of the trespasser. Trespassing can be above or below the surface of the land (but doesn’t exclude

airplanes)

Trespass to Chattels Using someone else’s personal property. Must interfere with the possessor’s use or possession of, or any other legally

protected interest in, the property itself to be actionable.

Intel v. Hamidi – D sent P’s employees unwanted emails. Court holds that an electronic communication that neither damages the recipient computer system nor impairs its functioning is not a trespass to chattels. Consequential economic damage (lost productivity) is not an injury to the company’s interest in its computers. Policy issue: Intel was not objecting to the fact of the emails, it was objecting to the content – free speech issue.

Nuisance Elements of nuisance:

1) An activity that2) Unreasonably interferes with3) Another’s4) Enjoyment of his land

Limits one’s own property rights. Private nuisance – D is causing harm to a particular property owner or set of owners Public nuisance – D is causing harm to the public as a whole, suits sometimes brought

by the government. Liability will only be found if:

1) The harm is substantial2) The conduct creating the harm or the consequences of that conduct is

unreasonable: (factors to consider)a) Location (pig farm reasonable in rural area, but not Beverly Hills)b) Character or extent of D’s activity (burden of stopping the activity)c) Character or extent of P’s harm (burden of avoiding the harm)d) Priority (who was there first in time)e) Relative social value (courts have more sympathy for things that seem useful

or valuable) Defense if P is just overly sensitive (most people wouldn’t find it a nuisance) Spite fence cases – landowners are protected from malicious obstruction of access to

land by neighbors.

Prah v. Maretti – P uses sun as source or energy through solar panels, and D’s new house would block it. Court holds that despite a rejection of the doctrine of ancient lights (landowner entitled to continue receiving sunlight across property), this just means that it is not automatically a nuisance, but still can be found to be a nuisance. More social value today in alternative energy; unrestricted development seen as less of an intrinsic good.

People v. General Motors – car companies are causing pollution, which is unreasonable changing the climate.

Easements The right to use land owned by another. Not revocable at will, unlike a license. Absent any agreement, it’s the servient tenement’s responsibility to maintain the easement. For changes in the scope of easements, you use a reasonable foreseeability test (to the seller

of the easement).

Easements by Express GrantEasements Appurtenant Easement for property A (dominant tenement) to cross property B (servient

tenement) Benefits A and burdens B Runs with the land – if owner A sells to C, C gets the easement

Easements in Gross Easement for a particular person to cross property B No dominant tenement, just servient

Does not run with the land – if D has easement and sells real property to E, D still has the easement

Urbaitis v. Commonwealth Edison – Dodson owns a parcel of land, sells something (fee simple or easement) in 1909 to railroad. Railroad stopped using it in 1946 and sold it. P says they abandoned the easement by ripping up the track, D says they own it in fee simple. Court holds for D because the Conveyances Act said that it has to be clear that you’re creating an easement. The term “right-of-way” was a shorthand for the land itself.

Easements by Estoppel Licenses are generally created informally and run with the person. Becomes irrevocable if the licensee makes improvements at considerable expense

(substantial investment) in reasonable reliance on the license.

Policy For easement: Unjust to allow licensee to spend money and then take away

license. Against easement: Should discourage unreasonable reliances on licenses, it’s

bad to burden land with unwritten restrictions.

Holbrook v. Taylor – P starts building a house with a license to cross D’s property. Dispute arises later and D obstructs land. P seeks injunction to remove obstruction. Court holds that the license has become irrevocable because P made improvements while relying on it.

Kitchen v. Kitchen – Two brothers owned a farm and the land adjoining it. They farmed part of D brother’s adjoining land and put an irrigation system through it. P brother bought out the farm and tried to claim an easement by estoppel to continue farming D’s land and let the irrigation system cross it. Court holds that oral licenses are not valid because they create an “interest in land” which, under the statute of frauds, must be in writing.

Easements by PrescriptionElements: Actual – relaxed requirement (path doesn’t have to be exactly the same, just

the same substantial identity, allowed to consider vulnerability to forces of nature)

Open and Notorious Exclusive – relaxed requirement (can be shared with true owner, just not the

public, unless the public is claiming the easement) Adverse Continuous – owner has to block successfully, not just try (just has to be as

continuous as a true owner would use it) Statutory Period

Policy For easement: over time, sympathy for trespasser increases. Against easement: unjust taking, costly and ineffective to prevent all trespass,

harsh rule that ineffective attempts to defeat the continuous element work to establish adversity.

Concerned Citizens of Brunswick County v. Holden Beach Enterprises, Inc. – the public starts using a path to the beach, D buys the property and puts up barriers, but the public tears them down and continues to use the path. Problem with “actual” – the path changed due to shifting sands, and the new paved road isn’t exactly the same. Problem with “continuous” – the barriers were there sometimes.

Easements by ImplicationPrior Existing Use

Elements: Dominant and servient tracts originated from a common grantor The use was in existence at the time of the severance (quasi-easement) The use is apparent, continuous, and reasonably necessary for the

enjoyment of the dominant tract

Russakoff v. Scruggs – Realty company owned parcel of land with man-made lake, and subdivides the rest to make a neighborhood. D buys the lake and tries to charge neighbors for use. Court holds there is an easement because the realty company was the common grantor, at the time of the severance, the existence of the lake raised property values, it was apparent to D that the neighbors were using it, the use was continuous since they bought their homes, and it was reasonably necessary for enjoyment because they took it into account when they bought their houses.

Policy: For easement: want to protect people who are already using it. Against easement: Discourages alienability, upsets expectations of

servient estate.

NecessityElements: Dominant and servient tracts originated from a common grantor The use is necessary (not just reasonably necessary) Use was necessary at the time of severance

Schwab v. Timmons – U.S. government owned land, split it up and sold it off. Ps inherited land and sold off means of access to road. Ps are now trying to get an easement by necessity. Court says no. There was a common grantor, and necessity because the parcel is landlocked, but not

necessity at the time of the severance because they could get to a difficult road before they sold it off.

Policy For easement: public policy against landlocked parcels because we

want people to have access to roads (land more valuable). Logical because the original parties probably would have created an easement if they’d thought about it.

Against easement: People shouldn’t convey away their means of access.

Covenants Land use restrictions intended to run with the land.

CreationElements of a Covenant1) Intent – the original parties intend to bind their successors2) Touch and concern – the promise must actually concern the land, not just the

individuals3) Privity of estate

a) Horizontal privity – A and B have a mutual interest in the same land (not just neighbors)

b) Vertical privity – the successor takes the type of estate of land that the original landowner owned

c) For a burden to run to a successor, you need horizontal and vertical privity, but for a benefit to run, all you need is vertical.

Elements of an Equitable Servitude1) Intent2) Touch and concern3) Notice (actual or constructive) – knew of the restriction or reasonably should

have known

Implied Covenants The purchaser has constructive notice of a covenant based on the

common plan of the area

Runyon v. Paley – Ps said D couldn’t build condos because D’s property was subject to restrictive covenants, court said P1 could enjoin building but not P2 because P2 did not have vertical privity (no covenant) and there was no intent for them to get the benefit (no servitude) because P2 bought the land after the agreement was made.

Policy Allowing owners to enter agreements to restrict the use of land furthers

interests in contractual freedom.

Covenants grant owners the security of knowing that neighboring uses will be limited in predictable ways.

Enforcement of covenants restricts the freedom to use land, making it less adaptable to changes.

If many places have multiple restrictions on use, it may be difficult for someone looking for property in a particular place to find a bundle that suits her particular needs.

Termination Ways to terminate a covenant:

1) The land all comes into common ownership2) Everyone agrees to release each other3) Restricted duration – expiration of time limit written into the covenant4) Abandonment – widespread noncompliance and no objection5) Estoppel – substantial investments because of reliance on a promise not to

enforce, or if the other person is also breaking the covenant6) Changed conditions – circumstances have changed to the point that there is no

substantial benefit to the dominant estate if the servitude is perpetuated

El Di v. Bethany Beach – D restaurant wanted liquor license, but P town filed suit to enjoin. Court held covenant had terminated because of changed conditions because D’s patrons had been able to bring in their own alcohol for years and enforcement would subvert the public interest of regulating consumption.

Policy Permitting the enforcement of servitudes after they have lost their utility

reduces land values and turns the law into an instrument of extortion.

Condominiums and Private Subdivisions In a condo, each owner owns his unit in fee simple, but the common areas are owned

by everyone as tenants in common or a Homeowner’s Association where everyone is automatically a member.

Covenant is only enforceable if it has intent, touch and concern, notice, AND is reasonable:1) Can’t be arbitrary2) Can’t be contrary to public policy3) Can’t impose burdens that substantially outweigh the restriction’s benefit

Some states allow unreasonable restrictions if they were created by the original agreement

Nahrstedt v. Lakeside Village – P condo owner sued D homeowner’s association to keep it from enforcing a restriction against keeping her cats. Court says no because P must show that the burdens so substantially outweigh the benefits of the restriction that it should not be enforced against any owner (not case-by-case).

Policy Have to balance individual rights and group rights. In practice, condo owners don’t read all the rules and it would be a big burden

to make them move.

Relations between Property Owners and the Government

ZoningThe Planning Process State legislature passes a zoning enabling act – authorizes cities to zone and to create

local administrative agencies to administer zoning regulations. The cities enact zoning ordinances. Ordinance creates a planning commission. The planning commission zones the city – divides the jurisdiction into zones and

specifies what uses are permitted in each zone. (Typically permits lighter uses in each area than what it is zoned for). (Quasi-legislative)

The planning commission decides what complies with zoning regulations, and often has authority to promulgate regulations to fill in the gaps. (Quasi-judicial)

If an applicant is turned down, they can appeal to the Board of Appeals (if there is one) and then up to the trial court, etc.

Any local acts can be overridden by legislative statute.

Richardson v. Little Rock Planning Commission – D wants to build development but is turned down by the planning commission because of proximity of cul-de-sac and “marginal development potential.” Court holds that a planning commission doesn’t have the discretion to arbitrarily turn down plans that meet the minimum requirements; can’t use “marginal development potential” because it’s not authorized by the act.

Policy For zoning: After development, it’s hard to get everybody to agree to limit

themselves to certain uses, but it’s for the general welfare. Against zoning: restricts people’s property rights.

Nonconforming Uses Nonconforming uses are uses that are inconsistent with zoning limitations. Typically grandfathered in. Must have been lawful and in existence when the new zoning ordinance was passed. Cannot be extended or intensified in a way that constitutes a substantial change.

1) Does challenged use reflect current purpose?2) Is challenged use a different manner of original use?3) Substantially different impact on the neighborhood?

Ray’s Stateline Market v. Town of Pelham – P has nonconforming convenience store and wants to add a coffee counter and change the sign advertisements. Court holds that this does not constitute a substantial change

– it’s within the current structure, P is still using the store to sell goods, will not have an impact on traffic or the neighborhood.

Amortization Two jurisdictions: amortization is never lawful, and amortization is lawful as

long as it’s reasonable. Time limit on the continuation of a nonconforming use. In many jurisdictions, amortization is lawful as long as the provisions are

reasonable: (Sullivan factors)1) Nature of present use2) Length of amortization period3) Prospective development of vicinity4) Beneficial effect to community offsets losses of landowner

If there’s a transfer of title during the amortization period, the clock keeps running.

PA Northwestern v. Moon Township – P opens adult bookstore, town enacts zoning ordinance that prohibits it, and gives them 90-day amortization period. Court holds that any amortization is an unconstitutional taking of property. A lawful nonconforming use establishes a vested property right that can only be destroyed if it is abandoned, a nuisance, or extinguished by eminent domain.

Policy For amortization: not allowing it locks in communities with nonconforming

uses that are against their general welfare. Against amortization: could deter investment and economic development,

unfair because people are entitled to the fruits of their labor, hurts property rights.

Ironies: punishes people who don’t develop their land; nonconforming uses become monopolies, so have a large incentive to stay put and we don’t trend toward conformity.

Variances Permissions to depart from the zoning law when application of the ordinance to a

particular parcel would:1) Impose an unnecessary hardship,2) The proposed use would not be contrary to the public interest, and3) The proposed use would not substantially impair the purpose of the zoning plan

and ordinance. Generally granted to relax lot and building restrictions, but not use restrictions. Variances are routinely granted even absent a showing of hardship if it’s not a

dramatic change and no one objects.

Hardship A variance will not be granted where hardship is self-imposed.

Hardship doesn’t literally mean hardship, just the inability to do what you want with your lot.

No hardship unless there is no economically viable use of the property, or no reasonable return on the owner’s investment.

Many states require that the property be different in some unique way from the surrounding property, and that this deviation be the cause of the hardship.

Some states allow a showing of practical difficulties – owner must prove significant economic injury from enforcement of the zoning ordinance.

Lang v. Zoning Board of Adjustment – D wants to build backyard swimming pool and his neighbor doesn’t want him to. Pool does not conform to requirements because of exceptional narrowness of his lot. D does not have to prove personal hardship or that the property would be zoned into inutility – just needs to prove that the unique condition of the property is the primary reason for nonconformity. Courts will defer to local zoning boards – decisions only set aside when they’re arbitrary, capricious, or unreasonable.

Policy For variance: Gives flexibility; can’t predict the best outcomes in all

situations, so need some discretion; standards are more fair. Against variance: Rules are better because they’re clear classifications; easy to

predict and conform conduct; standards give too much discretion to decision-makers who may not apply them fairly or correctly.

Aesthetics A building permit may be denied on aesthetic grounds if the building:

1) Would be detrimental to neighboring property values2) Is not in conformity with the character of the community3) Does not serve the general welfare purpose of the ordinance

The decision cannot be arbitrary (unguided by the ordinance) or unreasonable

Stoyanoff v. Berkeley – Ps want to build an ultramodern pyramid home, and the city of Ladue won’t let them. Ps challenge ordinance as exceeding the power granted by the zoning enabling act and being unconstitutional. Court holds that the zoning board is allowed to make regulations for the “general welfare,” and this counts because of the issue of property values.

Policy For aesthetic zoning: It’s not arbitrary because there is a process where

everyone has input; preserves the value of other people’s homes. Against aesthetic zoning: Reduces innovation and treads on property rights.

Household Composition Restrictions regarding the maximum number of occupants permitted to occupy a

dwelling are exempt from the Fair Housing Act.

Towns don’t have to provide “reasonable accommodation” for the handicapped when the rule is about the maximum number of occupants and is designed to prevent overcrowding.

Towns do have to provide “reasonable accommodation” when the rule is designed to preserve the family character of the neighborhood.

Edmonds v. Oxford House – Town passes single family ordinance that limits maximum number of people permitted to occupy a dwelling to five, but only if they’re not related. Ps run group home for recovering drug addicts and alcoholics (handicapped), so they want “reasonable accommodation.” Court holds town has to give it.

Policy When text of a statute is ambiguous, look for precedent, and then look at the

legislative history. Look at the purpose of enacting the statute. Majority – exemption should be construed narrowly because the purpose of

the statute was to assure fair housing and prevent discrimination. Dissent – exemption should be construed broadly because the policy of the

FHA is to provide for fair housing while simultaneously allowing towns to zone.

Exclusionary Zoning Zoning has to be for the “general welfare,” which cannot be limited to current or

future residents of the town (has to be for the general welfare of the residents of the state because zoning is a police power of the state)

Applies to developing municipalities. Towns (at least developing ones) must affirmatively act to provide low income

housing.

NAACP v. Mount Laurel – Town zoned land so that it was full of large lots, commercial use, and no multifamily housing (apartments), which had the effect of excluding low and moderate income families. Court says the town can’t have these zoning ordinances, and later says the town must provide low income housing.

Policy If all towns zoned like this, low income people would have no place to live. Keeping taxes low is for the benefit of the residents of the town. Saving on property taxes is not a good enough reason because government has

a higher obligation than just making money. Problem with complying with the new rule because there’s no incentive for

developers to build when they can’t make much money, and they make a lot less building lower income housing.

The Takings Clause The government may only take private property if it is for a public use, and they give just

compensation. Process – the government condemns the land and brings a lawsuit against the landowner to

force a sale. Policy:

1) If the government had to negotiate with each owner, it would be extremely time-consuming and expensive because every owner would have the incentive to hold out.

2) If we required public ownership, how long would the government have to possess it before selling?

3) If we required actual public use, would it have to be free? Personal property – no regulatory per se takings, analyze under Penn Central.

Public Use Requirement If it is not for public use, the government may not take it at all. If the taking would arguably promote the general welfare, it satisfies the public use

requirement – deference to the government to decide what is public use. A taking must be rationally related to some conceivable public purpose.

Berman v. Parker – government took property in a blighted area and resold it to developers who would develop it consistent with the government’s plan. Court said it was legitimate because a taking is for public use if it effectuates a legitimate public purpose.

Hawai’i Housing Authority v. Midkiff – government authorized existing tenants to purchase their property from the landlords because it was concentrated in a few hands. Court said it was legitimate because the public purpose of creating a better-functioning real estate market promotes the general welfare.

Poletown Neighborhood Council v. City of Detroit – government took homes in order to construct a Cadillac plant for GM. Court said the retention or creation of jobs and/or economic development constitutes a legitimate public purpose even if the property is transferred from one private owner to another.

Kelo v. City of New London – government took P’s house for economic development, but the land was not blighted. Court said economic development was a legitimate public use.

Policy There is nothing to stop the government from making one private owner

transfer land to another private owner as long as the second owner would use the land in a way that was more beneficial to the public.

A bright line rule that a taking for economic development alone is not a public purpose would favor the middle class over the poor because the poor live in blighted areas and would be more likely to have their land taken.

Regulatory Takings A governmental regulation affects the value of property, and the landowner brings an

inverse condemnation suit to force the payment of just compensation. Balancing test factors:

1) The extent of the economic impact – reduction in value and/or interference with investment-backed expectations.a) Denominator problem – look at impact on owner’s current, whole property

2) Character of the governmental actiona) Not arbitrary – rational or comprehensive planb) Necessary to accomplish government’s goalc) More vs. less intrusive

3) The extent to which the regulation singles out a few property owners rather than burdening many people (but if P is disproportionately burdened, but P and everyone else also benefit, there may be average reciprocity of advantage)

Penn Central v. New York – government regulation did not allow changes to historical landmarks, and Grand Central Station wanted to build a skyscraper on top of the station. Court says P is not owed just compensation because their original investment-backed expectation was to have a railroad station, and P is not singled out because there are lots of landmarks, and average reciprocity of advantage because P is benefitted by the landmarks too.

Policy Property cannot be broken up into discrete segments, because then any of

them could be said to have been taken with a 100% wipeout.

Physical Takings A permanent government-authorized physical occupation of any amount of a person’s

property. A physical taking is a per se taking – automatically entitled to just compensation,

regardless of the public interest that it might serve. Exceptions:

1) The Fair Housing act requires landlords to rent property against their will if the landlord had refused to deal with a potential tenant because of his race.

2) Heart of Atlanta Motel v. U.S. – rejected motel’s argument that the government took its property rights by requiring it to rent rooms against its will to African-Americans.

3) PruneYard Shopping Center v. Robins – California Supreme Court interpreted state constitution to require private shopping centers to allow people to circulate petitions on their property because of free speech and it was a temporary physical invasion that didn’t interfere with the use of their land.

4) Block v. Hirsch – Anti-eviction laws where landlord can’t evict as long as tenant pays mandated rent and landlord does not want the property for occupation by himself or his spouse or children are not physical takings.

5) Yee v. City of Escondido – court upheld rent control law that prohibited eviction unless landlord wished to convert property to nonrental use.

Loretto v. Teleprompter Manhattan CATV – NY law provides that a landlord must permit a cable television company to install its cable facilities upon his property, and P wants just compensation. Court says any physical taking is a per se taking.

Kaiser Aetna – property owner invested in dredging a pond and building it into a marina community. Court held marina could not be compelled to allow free public access.

Policy Permanent physical invasions are the most intrusive. Right to exclude (especially strangers) is traditionally one of the most

important in the bundle. Permanent is hard to define – does it just mean without a foreseeable end?

Wipeouts A per se taking occurs when there is (two ways to read) a 100% diminution in value

or deprivation of all economically viable use of an owner’s property. 95% diminution is not enough. Exception if the property use was already illegal under nuisance law.

Lucas v. South Carolina Coastal Council – P bought beachfront property, planning to build houses, but government enacted law that disallowed building on the beach because of erosion. Court held that lots now had no economically viable use and P deserved just compensation.

Denominator Problem When asking whether it’s a 100% wipeout, what is the denominator?

Palm Beach Isles Associates v. U.S. – the proper denominator is the tract of land the owner currently holds, not the original purchase.

Purchase after Regulatory Laws are in Effect Some cases hold that deprivation of all economically viable use is not a per se

taking if the regulation was in effect before purchase, but other cases hold the opposite.

Good v. U.S. – Lucas did not dispense with the requirement that the owner have reasonable investment-backed expectations, and an owner who purchases after the regulation is in effect cannot reasonably expect to develop it in violation of the law.

Palazzolo v. State ex rel. Tavares – deprivation of all economically viable use should not be allowed even if an owner bought the property after enactment of the regulation unless it fits within the nuisance exception.

Law is not assumed valid when it would deprive property of so much of its value as to be unconstitutional.

Hunziker v. State – P prevented from building when excavators discovered Indian burial ground. Court held Lucas rule did not apply because the restriction on developing property where human beings are buried was part of the law at the time the owner purchased the land and thus “inhered in the title.”

Andrus v. Allard – government banned sale of eagle feathers, but court held not a taking because it is personal property and part of their value comes from possession, which was still allowed.

Policy Total deprivation of beneficial use is, from the landowner’s point of view, the

equivalent of physical appropriation. May freeze nuisance law because nuisance is supposed to be a use of land that

is unreasonable considering all the circumstances, and new considerations become important over the years.

Temporary Restrictions If a temporary restriction constitutes a taking, the government has to give just

compensation, but temporary restrictions are not always takings.

First English Evangelical Lutheran Church v. Los Angeles – if the government physically takes property for a limited time, they have to compensate for that period of time. If a regulation creates a taking, government has to compensate for the period of time it was taken even if it’s later repealed.

Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency – P landowners challenged moratorium on building while government was coming up with a comprehensive land-use plan. Court held that duration of the restriction is part of the Penn Central factors, different from Lucas because they still have an economically viable use of building after the ban ends.

Policy The ordinary process of government takes time, and we shouldn’t have to

compensate for short temporary restrictions (like not building until you get a permit).

Dissent: we wouldn’t have to compensate for ordinary delays because they’re inherent in the land itself – but hard to draw a line.

What constitutes permanent? (Lucas ban lasted two years, and Tahoe ban lasted a lot longer)

Just Compensation Measured by what the property owner loses, not what the government gains.

If there is no net loss to the owner, just compensation = 0.

Phillips v. Washington Legal Foundation – interest is the private property of the owner of the principal.

Brown v. Legal Foundation of Washington – IOLTA programs generated interest on money that would otherwise not have been able to generate interest. Court held it was a per se physical taking because of Phillips, but that just compensation was 0 because Ps’ net loss was 0 since they wouldn’t have been able to make any interest without the government program.

Policy Should be measured by the market value of the property. The government shouldn’t be allowed to take all property that wouldn’t exist

but-for a government program (like welfare benefits). The majority says that the government cannot take property that the owner has

a reasonable expectation of keeping. Should not be measure by subjective value people may subjectively value

their land to an extreme degree.