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WHAT IS PROPERTY?

Board of Regents v. Roth - Respondent’s “property” interest in employment at a public univ. was created and

defined by the terms of his appointment. He did not have a property interest sufficient to require a hearing

when they declined to rehire him.

In re Marriage of Graham - A graduate degree obtained after marriage does not fall under the definition of

“property” as intended by the legislature when it enacted the division statute. Except in NY!

Is it property? One helpful definition is that property has an exchangeable value or which goes to make

up wealth or estate. It is personal to the holder, terminates with death, not inheritable, and is cumulative product

of years of education.

Dissent: It is not the degree which constitutes the asset in question but the increase in earning power

connected to having the degree, partly a product of the other spouse’s efforts. In other contexts, future earning

capacity that has been wrongfully deprived, such as in torts, is compensable

Elkus v. Elkus – (NY) To the extent that D’s efforts and contributions led to an increase in the value of P’s

career, this appreciation was a product of marital partnership, and therefore, marital property subject to

equitable distribution. The DRL broadly defines marital prop. as property acquired during marriage

“regardless of the form in which title is held”

ETW Corp. v. Jireh Publishing Inc. – Right of Publicity – TEST: If a painting has substantial transformative

elements containing much more than a literal portrait of the celebrity, it is protected by the 1st Am. Where the

effect of limiting the celebrity’s right of publicity is negligible, society’s interest in the freedom of artistic

expression outweighs the celebrity’s property rights. *BALANCE: PERSON’S INTEREST V. SOCIETY’S

INTEREST WHY: (1) Painting DOES NOT REDUCE Woods’ economic interest in value of his likeness. (2)

Society’s interest in the freedom of artistic expression outweighs Woods’ property right – Woods engages in an

activity that creates a lot more money unrelated to his right of publicity – even without it, he would still earn a

lot of money

Moore v. Regents of University of California – Body Parts - Plaintiff did not have an ownership interest in the cells

after they left his body. WHY: (1) No precedent and only property can be converted (2) CA law limits property interest in

cells that have been removed (3) The “cell line” is not plaintiff’s (4) Extending theory would hinder medical research

*THE LEGISLATURE SHOULD DECIDE, NOT THE COURTS*

Comment [T1]: Justification for having rt of publicity: to stimulate athletic and artistic achievement; also to prevent unjust enrichment

(earning money at the expense of another)

Comment [T2]: Con: if the right to publicity is

strong enough that it trumps expression – it chills speech

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METHODS OF ACQUIRING PROPERTY

CREATION:

White v. Samsung Electronics America – D used robot as a proxy for Vanna White in Wheel-like circumstances

for a funny ad. H: D violated P’s right of publicity in using a robot that has characteristics that make it easily

recognizable as being about the plaintiff but without using her name or actual picture. WHY: Right of publicity is not

limited to using name or likeness. Because the most popular celebrities are also the easiest to evoke without using names,

likenesses, or voice, treating the means of appropriation as dispositive would effectively eviscerate the right of publicity

because they would not be protected. DISSENT: Overprotection of right of publicity stifles creativity. BALANCE: 1ST

Am. RIGHTS VS. RIGHT OF PUBLICITY

PURCHASE:

Stambovsky v. Ackley – haunted house case – RULE: When the seller deliberately created a condition [creates a

haunted reputation] that materially impairs the value of the contract and (1)is peculiarly within the knowledge of the seller

or (2) unlikely to be discovered by a prudent purchaser exercising due care, nondisclosure is a basis for rescission. WHY:

Caveat emptor is not unlimited. Existing cases involve physical condition but this is about ghosts! “As-is” clause in

contract fails because: (1) the facts are peculiarly within the knowledge of the party invoking it (defendant); (2) the

merger clause disclaims representations made with respect to the physical condition of the house – not extended to

paranormal phenomena; and (3) defendant cannot be said to deliver the house “vacant” because it has poltergeists.

FIND:

Benjamin v. Lindner Aviation – found money in plane wing – Court will follow common law distinctions for

found property. $18k in plane wing was mislaid property, meaning it goes to the bank (the owner of the

premises) for safekeeping so the person who lost it would go to the bank. Property not likely abandoned b/c of

high value, not likely lost b/c suggests that it was intentionally placed, not treasure trove because money was

printed only 35 yrs ago [remember policy is to reunite found property w/ true owner]

Finders statutes – place responsibility on the finder to follow rules to notify owner.

STATUS PARTY

Lost – unintentional parting True owner retains property right.

Prior finders have right of possession and first preference against all except

true owners. (Policy: Reunite lost property w/ true owners and prevent a

string of thefts if other finders exercise ownership over property lost by prior

finders).

Mislaid – voluntarily placed and true

owner forgets it

True owner retains property right.

Property/Land owner where property was found has the right to possess it

(Policy: Reunite mislaid property w/ true owner who will go to owner when

he remembers).

Abandoned – True owner clearly

intends to relinquish ownership

Finder has right of ownership.

Treasure Trove Same rules for lost property

GIFT:

Gruen v. Gruen – Father promises painting to son, father dies, son tries to take back painting from evil

stepmother – H: A valid inter vivos (between two living persons) may be made when the donor reserves a life

estate on the object and the donee after donor dies. RULE: An inter vivos transfer may be made while the

owner reserves a life estate and the elements gift are established: (1) donative intent, (2) delivery, (3)

acceptance. WHY: (1) Father wrote son letters showing intent, (2) delivery can be actual, constructive (f not

practical), or symbolic especially when donor retains a life estate, and (3) acceptance may be shown by

bragging to friends.

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Two types of gift:

1. Inter vivos – between 2 living persons

2. Testamentary transfers – transfer when one dies through a valid will or inheritance

Present intent by donor is required to transfer ownership rights, but actual possession does not have to

occur immediately. Owner can retain a life estate.

Life estate is the right to possess something until you die. The remainder is what is left after the life

estate. Remainders have present value (you can sell your remainder).

Wills need all sorts of formalities (witnesses, etc.) to make a valid will. The requirements prevent

disputes. They can be changed before the person dies. Wills only take affect after the person dies.

Promises are generally unenforceable. They are not contracts – which are two promises that are

exchanged + consideration.

ADVERSE POSSESSION – REAL PROPERTY:

Nome 2000 v. Fagerstrom – patch of land in AK – P held title to property. D have made seasonal use of the

disputed parcel for subsistence and recreation since 1966: 1970 – built stakes and picnic area; 1974 – trailer,

fishrack & outhouse; 1977 – reindeer shelter 1978 – cabin. H: Defendants met requirements for adverse

possession on a portion of the land. WHY?

1. ACTUAL – adverse possessor must actually be on the land; relative to character of the land

2. EXCLUSIVE – not shared with the true owner; kicked people off the property

3. OPEN & NOTORIOUS – not in secret, structures to give owner notice

4. ADVERSE/HOSTILE – without owner’s permission

5. CONTINUOUS – like an actual owner would use the land (could be seasonally e.g., only good for 1

mo. of grazing)

6. DURING THE STATUTORY PERIOD

7. Optional: “Color of Title” – adverse possessor has some document that says he’s the owner of the land

but is actually invalid

No adverse possession claims against the government

**A Hooker ON Every Corner – Actual, Hostile, Open & Notorious, Exclusive, Continuous +

Statutory Period

Policy: Property in question should belong to long-standing possessor – this protects justified

expectations. Also, decreases the waste of resources. Negative: rewards theft. Society’s sympathy for a

landowner who does not take care of land decreases over time and sympathy for squatters increases.

ADVERSE POSSESSION – PERSONAL PROPERTY:

O’Keeffe v. Snyder – O’Keeffe’s paintings went missing at a gallery in 1946, she did not inform anyone. In

1972, she reported it to Art Dealer’s Assoc. In 1975, she found that paintings were on consignment. D has had

possession for >30 yrs. H: The discovery rule says that the SOL starts to run after the title holder’s discovery

of the painting’s location or reasonably should have discovered its location. The owner must establish that she

used due diligence to discover location. WHY: Chattels are portable so there are problems with the traditional

requirements of open, visible, and notorious possession when it comes to things other than real property.

Discovery rule prevents the harsh results that come with strictly applying the elements of traditional adverse

possession. Under the rule, the burden is on the owner to establish facts that would justify delaying the

beginning of the statute of limitations (due diligence).

Guggenheim Foundation v. Lubell – expensive painting stolen from museum – this was discovered in mid- to

late-1960s but the museum did not inform authorities (rationale: didn’t want painting to go “underground”). D

bought painting in 1967 and exhibited it twice. In 1986, P demanded return of the painting. H: Demand-and-

Refuse Rule: Failure to exercise due diligence doesn’t matter for statute of limitations, the only relevant factors

Comment [T3]: The statute of limitations stimulates activity, punishes negligence, and promotes stability. To avoid harsh results from the strict application of the statute, courts have developed the discovery rule, where in the appropriate case the statute of limitations will not run until the injured party discovers or by reasonable due diligence, should have discovered, facts which form the basis of the claim.

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are: the timing of the true owner’s demand to return the painting and the possessor’s refusal to return it (i.e.,

SOL starts after refusal). WHY: (1) Rejects Discovery Rule (2) NY case law has protected true owner’s right

even when bona fide purchaser has property (3) placing burden on owner to locate artwork would encourage

theft, it is better to place burden on bona fide purchaser to make sure that he’s not buying something that’s

stolen. (4) no proof that public disclosure would’ve helped find the painting *Perverse outcome: For an outright

theft, SOL starts on day of theft. For bona fide purchaser, SOL starts when demand to return is refused. *Owner

should not delay bringing suit after demand is refused, because the suit may be estopped by the doctrine of

laches.

Discovery Rule – Tolling of S of L = f(reasonable diligence) Demand and Refuse Rule – S of L = f(opp to demand)

Cause of action does not accrue until the injured party discovers by exercise of reasonable diligence facts which form basis for it.

S of L runs from when owner demanded and possessor refused delivery of property.

Principle: Visibility intended to put owner on notice, but it’s

insufficient for chattel. Discovery rule makes up for it.

Principle: Offer maximum protection for true owners.

For: (1) Different visibility requirement discourages larceny in

art. (2) Encourage careful practice in art purchases. (3) Owner

rights shouldn’t be invalidated b/c of mechanical applic of law.

For: Protects true owners. Important to foreign buyers, who are

not likely to have sufficient notice from domestically due

diligence. (2) Clarity & predictability. Against: (1) Onus on owner to prove actions were reasonably

dilig. (2) Perverse: non-diligent search means possession = theft.

Against: Rewards inaction. Perverse: a thief has a better shot than

an honest possessor.

Purpose of S of L: (a) stimulate activity, (b) punish negligence, (c) promote repose.

Comment [T4]: A thief can never acquire good title and no one can acquire good title from a thief, even a bona fide purchaser who is unaware of the stolen nature of the property.

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SHARED OWNERSHIP

SYSTEM OF ESTATES

ESTATES AND FUTURE INTERESTS: Policy tensions:

1. Allowing owners to disaggregate property rights and the policy of encouraging or mandating consolidation of rights in a land

owner. Consolidation arguably promotes fee use and transfer of land b/c buyers would rather deal with just one owner.

2. Problem of conflicts among generations – the old want to control property even after they die and younger generation do not

want to be subjected to that control. How long can the dead control the property? There are rules invalidating unreasonable

restraints on alienation and the rule against perpetuities abolishes future interests that vest too far into the future.

There are four major categories of present and future interests:

1. Fee simple absolute – potentially lasts forever, inheritable, alienable

2. Defeasible Fees – could also last forever but terminates when some event happens

3. Life Estates – last for the life of the owner and then passes on to grantor or 3rd

party chosen at the time life estate was created

4. Leaseholds – transfer possession for a fixed period of time

ESTATE – PRESENT INTEREST FUTURE INTEREST

Present estate --------------------------------t---------------------------------- Grantor 3rd

Party

Fee Simple Absolute – no one has a right to possess it in the future; you

own the whole timeline

None None

Life Estate – owner has a right to possess it until he/she dies; remainder

in the future (vested, contingent – subject to open, divest.)

Reversion Remainder

Leasehold – leaseholder has the right to possess it until a date of

expiration; reversion to landlord in the future

Reversion Remainder

Fee Simple Determinable – grantor conveys property to grantee until an

event occurs in the future; at that point the property automatically returns

to grantor

Possibility of Reverter None

Fee Simple Subject to Condition Subsequent – like determinable but

grantor reserves right to reclaim; NOT automatic, relevant for adverse

possession clock (A from X to Y, but if Z, then X reserves the right to

reclaim the property)

Right of Entry None

Fee Simple Subject to Executory Limitation – like determinable but if

event occurs the land goes to 3rd

party, not to grantor

None Executory Interest

Fee Tail – Right to possess property until biological line runs out; popular

way for aristocrats to tie up land forever

NOTES:

Fee Simple Determinable – if grantor fails to assert rights, present owner retains possession and could adversely possess it

Fee Simple Subject to Condition Subsequent – Many courts reject idea that owner of right of entry can wait as long as she

wants. Instead, SOL runs after the condition if violated (for adverse possession).

Life Estates:

o Vested remainders – belong to a specific person and no conditions must be satisfied for remainder to become

possessory

Absolutely vested – remained will not change (O to A for life, then B)

Vested remainder subject to open – remainder belongs to class that may increase (O to A for life, then to

children of B)

Vested remainder subject to divestment – can be divested after a later event happens (O to A for life, then to

B, but if B drops out of law school, then to C → B has a vested remainder subject to divestment w/ executory

interest in C)

o Contingent remainders – if it belongs to an unspecified person or a condition precedent that must be fulfilled before it

can become possessory.

Condition precedent – O to A for life, then to B if she graduates from law school (contingent on law school)

Unascertained person – O to A for life, then to 1st child of B (contingent on B having children)

Comment [T5]: Automatic transfer so adverse possession clock starts.

Comment [T6]: Starts laches doctrine (failing to act promptly to enforce a claim/right) or waiver.

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THE RULE AGAINST PERPETUITIES:

PURPOSE: To prevent testators from tying up properties with contingencies too far into the future.

RULE: Future interests are invalid unless they are CERTAIN to vest or fail to vest within the lifetime of

someone who is alive (“in being”) at the creation of the interest or no later than 21 years after her death.

Creation of interest - created by conveyance or inter vivos transfer (moment of sale, delivery of gift, or

signing of trust document if it’s irrevocable or whenever trust becomes irrevocable). A future interest in

a will is created when the testator dies.

Vest – When condition that made future interest contingent or uncertain to happen does happen

Life in being – Is there a chance that the interest could vest more than 21 years after the death of anyone

alive at the creation of the interest (corporations don’t count)

Perpetuities period – time w/I which the interest must vest

STEPS:

1. Is there an executory interest, a contingent remainder (or a vested remainder subject to open)?

2. What is the contingency or uncertainty you’re dealing with?

3. When will the contingency be resolved (when will the future interest vest or fail)?

a. The clock starts when the interest is created

4. The contingency must be resolved within 21 years after the death of someone who was alive at the time

the future interest was created. (Life + 21 years)

Examples: (Print RAP worksheet)

1. To A for life, then to A’s first child to reach 18. Contingent remainder & uncertainty: when does child reach 18? → NOT

VOID b/c outside limit is 18 yrs (<21 yrs after death of A – validating life).

2. To A for life, then to A’s first child to reach 25. Contingent remainder & uncertainty: when does child reach 25? → VOID

(>21 yrs after death of A – validating life).

3. To the Church as long as services are held every Sunday, then to Bush. Executory Interest (FSSEL) & uncertainty: when can

Bush get it? → VOID (Estate in church can last >21 yrs after Bush’s death).

4. To the Church as long as services are held every Sunday, then to Bush, as long as he is still alive at the time. Executory

Interest & uncertainty: when can Bush get it? → NOT VOID (Bush is a validating life and uncertainty will resolve @ death).

5. To my wife for her life, then to my daughter Jillian on her 35th

birthday (Jillian is 5 @ time of my death). Contingent

remainder & uncertainty: when will Jillian get it? → NOT VOID (Jillian is a validating life and the uncertainty will resolve

before her death).

6. To my wife for her life, then to our grandchildren in equal shares. There are two children 2 time of death but no

grandchildren.

ALTERNATE RULES:

Wait and see statutes: 90 year period

Saving statute: Any interest that would violate RAP shall be reformed…to give effect to interest of creator.

Saving clause drafted by lawyer: Interest shall terminate, if it has not already terminated, no later than 21 yrs after death of

last survivor of my descendants who are alive at the time the instrument was creatd)

Uniform Statutory Rule Against Perpetuities – Exempts commercial transactions from RAP & charities. Creates a 90 yr

wait and see period.

Cy Pres – (equitable reformation) interpret a trust to achieve the donor’s intent (e.g., lowering contingency from 25 to 21 yrs

to validate future interest)

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CONCURRENT OWNERSHIP

CREATION:

Kipp v. Chips Estate – ambiguous deed – Intention of the parties, gathered from the complete and entire

document, wins over technical terms or their formal arrangement. Legis. prefer tenancies in common over

joint tenancies. Gould conveyed land to parties. The granting clause provided that the conveyance was to

parties as “joint tenants” while the habendum clause (which names the grantee and defines the estate to be

granted) as “tenants in common.” H: The court looks at entire deed and here, found that the deed created a

tenancy in common. WHY: (1) State legislature prefers tenancies in common (TIC favors transferability and

discourages ill will. (2) Deed was unambiguous so no external evidence required. Interpretation steps: 1st look at

the specific language, if ambiguous, then look at language of the whole doc, if still ambiguous, then all relevant

evidence can come in.

Types of concurrent ownership:

1. Tenancy in Common - most basic. Each tenant in common has a separate interest in the property,

which he can dispose of as he chooses. If A and B are tenants in common, and A sells his interest to C,

then B and C are tenants in common. The interest of each party does not have to be equal (i.e., A can

have 25% and B 75%)

2. Joint Tenancy – similar to TIC except that joint tenants have “rights of survivorship” – when one dies,

the other automatically gets the interest. If A and B are joint tenants, and A dies, B gets A’s interest

regardless of what A’s will says. Joint tenancy is useful because it keeps property out of the probate

process, saving time and money. Traditionally, to create a joint tenancy, parties need the four unities:

Unity of time - interest created @ same time

Unity of title – interest created by same document

Unity of interest – equal shares (50/50, 33/33/33)

Unity of possession – each joint tenant had the right to possess property

3. Tenancy by the entirety – like joint tenancy but available only to married couples. TBEs cannot be

severed unilaterally by one party. TBE is terminated by divorce. Exists in about ½ of the states.

Benefit: creditors of one spouse can’t go after the other spouse’s share.

PARTITION:

Delfino v. Vealencis – A partition by sale should be ordered only when (1) it is clear that physical partition is

unfair or impractical AND (2) the interests of the owners are better promoted by partition by sale. parties are

tenants in common with P owning 69% and D 31%. Property is rectangular. D operates a garbage business but

P wants to develop property on his own share. H: Trial court made a mistake by ordering a partition by sale

and not a physical partition. WHY: (1) Courts favor physical partitions; (2) Partitions by sale should be

ordered only when: (a) it is clear that a physical partition is unfair or impractical; AND (b) interests of the

owners would be better promoted by a partition by sale. Court should balance and consider interests of all

tenants.

Partition – legal remedy for co-tenants (tenants in common) who cant agree on how to use property.

Voluntary partition – owners voluntarily partition property by physically dividing it or selling and

sharing the proceeds

Involuntary or judicial partition – one of the tenants files a lawsuit for partition against other cotenants.

Order of court could be:

o Partition by sale – forced sale and division of proceeds

Usually sold only if physical partition will result in “great prejudice” to one of the owners

o Physical partition – preferred choice

Comment [T7]: IF A,B,C are joint tenants but C sells his interest to D. A and B are still joint tenants and C is a tenant in common with A and B.

Comment [T8]: If one unity is missing, the joint tenancy is severed and becomes a tenancy in common. If A&B are joint tenants and A sells his interest to C, C&B become tenants in common.

Comment [T9]: Partitions by sale is an extreme exercise of power and seems really unjust/unfair if opposed by one party.

Comment [T10]: If there are multiple owners, physical partition is harder. Here there are only two competing interests. Also, the character of the land – rectangular – makes it easier.

Comment [T11]: The trial court concluded that a physical partition would cause great prejudice to the parties since D’s garbage business would hinder P’s proposed residential development. The trial court based its conclusion on findings about the possible harm on P’s interest. The court must consider the interests of all tenants in common, not merely the economic gain of one tenant. The D has lived on the land for a long time and her business is on the land. A partition by land would force D to give up her home and risk her livelihood.

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LANDLORDS AND TENANTS

LEASES:

Berg v. Wiley – no self help repossessions! – Property that has not been abandoned or voluntarily surrendered

may be repossessed ONLY by resorting to judicial process. P leased restaurant space from D on a 5 yr lease. P

closed restaurant to comply with order from D and Health Department. Before lease expired, D entered the

premises and changed the locks. H: Property that has not been abandoned or voluntarily surrendered may be

repossessed by owner ONLY by resorting to the judicial process (i.e., no self-help evictions). WHY: (1) policy

to discourage landlords from taking the law into their own hands & look with disfavor upon any use of self-help

to dispossess a tenant in circumstances which are likely to result in breaches of the peace (2) court provides a

fast-track process for evictions (3) even though entry was not forcible, if the court held that defendant’s self-

help was legal, future tenants would be more vigilant to protect their property, and this would set the stage for

the violent confrontation that the state is trying to prevent

Old common law: Self-help may be used to retake property if (1) landlord is legally entitled to possession and

(2) landlord’s means of re-entry are peaceable

Pros of New Rule Cons

chances for violence, problems w/ distrust

Preserves opportunity for quick resolution w/ fast track hearings.

Ensures Ts due process

W/ legal action come legal costs -> time and money

In practice, it could take L months to evict T legally

T has opportunity to abuse property.

L will probably pass on costs of potential litigation to all Ts (dist)

Can parties K around it? In theory, but (a) it could still be disputed in ct and (b) Ts are in weak bargaining position (adhesion)

Types of Leaseholds

Type Characteristics Notice to Terminate

Term of years Definite period which can last only days to a

long time. Inheritable and alienable. If

landlord transfers reversion, new owner takes

property subject to the lease and new landlord

cannot terminate lease unless agreement so

provides.

Ends automatically at term. No notice

necessary because the notice to terminate is

built in.

Periodic tenancy Indefinite in length, periodic rental payment.

“Month-to-month” or “year-to-year”

Automatically renews unless either party

terminates arrangement. Transferable and

alienable unless lease agreement provides.

Common law – notice to terminate must be

given at least one period in advance w/ max of

6 mos. States have shortened this max notice

period to 1-2 mos.

Tenancy at will (very rare) Terminable by either party at any time and no

fixed period. If parties agree to a periodc

payment, courts likely to interpret as periodic

tenancy. Transfer of title terminates this type of

tenancy.

Most states require a notice to terminate, which

courts imply as a periodic tenancy.

Tenancy at sufferance (not really a leasehold) When a tenant wrongfully holds over after termination of a tenancy. Tenant is liable for fair rental

value during period of wrongful occupation. Hold over tenant is still legally entitled to stay until

landlord gets an eviction order from a court.

SUBLEASES AND ASSIGNMENTS:

Ernst v. Conditt – go-kart assignment – If the transfer is a sublease, no privity of K between landlord-owner

and sub-lessee (sub-tenant) thus, sub-tenant is not liable to landlord for breach. Ernst leased to Rogers.

Rogers operated a business on land and then sold business to Conditt. Conditt wanted a lease extension and

amended lease to lengthen term and to show that Ernst constented to “subletting the premises to Conditt”

(suggesting that Rogers would be liable for rent if Conditt did not pay. Conditt failed to pay rent H: The use of

technical words in the lease is not conclusive b/c facts and circumstances surrounding execution show that the

agreement was an assignment of the lease and not a sublease. WHY: (1) the court found that Rogers’ express

Comment [T12]: Self-help for old common law, 2 elements must be met: (1) It was not accomplished in a peaceable manner and therefore could not be justified under the common-law rule, and (2) any self-help reentry against a tenant in possession is wrongful under the growing modern doctrine that a landlord must always resort to the judicial process to enforce his statutory remedy against a tenant wrongfully in possession.

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agreement to remain liable did NOT create a right of re-entry or reversion. (2) the term sublet is used in the

agreement, but it has been used to mean both assign and sublet (ambiguous) (3) Rogers parted w/ property upon

selling go-kart business and the landlord rented to Conditt for ALL of the extended term.

Privity

Privity of contract – contract cannot confer rights or obligations under it on non-parties

Privity of estate – interest of people who both have an interest in the same land.

Subleases vs. Assignments – important b/c it affects remedies available to landlord if he stops receiving rent

Assignment – when tenant (assignor) assigns all her interests under the lease for the entire unexpired

term of the lease to the transferee (assignee)

o If assignee fails to pay rent, landlord can sue either assignor or assignee

o Possession goes L→T→T1→L

Landlord (L) has privity of contract with Tenant (T); L has privity of estate with assignee

(T1) so L can recover via privity of K or estate)

Sublease – when tenant transfers the leasehold for a period less than the full remaining time of the lease

or reserves a right of entry

o If subtenant fails to pay rent, landlord can only sue original tenant

o Possession goes L→T→T1→T→L

L has privity of contract and estate with T, so L can only recover from T and not T1

Kendall v. Pestana – Commercial leases: Where commercial lease provides for assignment only w/ prior

approval of lessor, consent may only be withheld if lessor has a commercially reasonable objection to the

assignee or proposed use. Concerns a hangar owned by the city, which city leased to Perlitch. Perlitch then

subleased it to Bixler who then sold his business to O’Hara. Lease provided that written consent of lessor

(Perlitch) was required before lesee (Bixler) can assign his interest (to O’Hara). Perlitch actually wants to rent it

out at a higher rent to Pestana! Perlitch argues that he has an absolute right to arbitrarily refuse request. Courts

says NO! Traditional majority that lessor has right to arbitrarily refuse has been eroding because:

1) Dual nature of lease as a conveyance of leasehold interest and a contract – because of shortage of

housing and commercial space, allowance of lease clauses prohibiting assignments is being curtailed by

statutes

2) Restatment Second of Property adopts the minority view that landlord’s consent to alienation cannot be

withheld unreasonably. The preservation of values that go into personal qualities of tenant (like ability

to pay) does not justify allowing landlord the power to arbitrarily and without good reason to allow

transfer of property.

3) There are factors to refuse a contract: financial responsibility of proposed sub-lessee, the suitability of

use for the particular property, legality of proposed use, and need for alteration of the premises. Denying

solely on basis of personal taste, convenience, or sensibility is not commercially reasonable.

4) The market value of real property during the term of the lease properly belongs to the lessee. When

lesee executed the lease, he takes on the risk that he would be paying too much rent if the market

crashes. If the market is good, he shouldn’t be deprived of the contractual benefits.

ABANDONMENT:

Sommer v. Kridel – D entered lease w/ P from 1972 to 1974. D was discharged from army, lost engagement,

and become a student, supported by stepfather. Couldn’t afford rent wo wrote landlord asking for sympathy and

willing to forfeit down payment of 1st month’s rent and security deposit. P doesn’t reply and refuses to re-let

apartment to another prospective tenant who was willing and able to pay. H: Landlords have an obligation to

make a reasonable effort to mitigate damages if tenant wrongfully abandons a lease. Tenant is still liable for

back-rent and expenses incurred in re-letting. WHY: (1) Old majority rule is that landlords did not have a duty

to mitigate but law of estates has evolved to mirror law of contracts which emphasizes equity and fairness; (2)

Comment [T13]: Note that T can sue T1 for rent and can implead T1 in the same lawsuit. L still cant recover twice.

Comment [T14]: Interest of “owner” to have control over the person entrusted w/ lessor’s property. You want to know who is going to be renting the place.

Comment [T15]: Mirrors conventional rule in K that non-breaching party has to make an effort to mitigate damages.

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Lost volume doesn’t apply b/c prospective tenant requested D’s particular unit and none else; (3) L has burden

of proving that he used reasonably diligence (b/c he’s in a superior position of information by taking out ads,

etc.) POLICY: Not imposing duty to mitigate is inefficient and allows “valuable rental space” to lie fallow.

POLICY AGAINST: Imposing a duty increases rent or security deposits on everyone, hurting lower income

people disproportionally + tenants are more likely to break leases, which will increase vacancies in short run.

Landlord’s remedies incl. suing for back rent, and below: (1) Accept Tenant’s Surrender Leasehold terminates. No further obligations and landlord is free to lease the property

to someone else. Remedies still available for breaches prior to surrender. (2) Re-let on Tenant’s Account Landlord refuses to accept tenant’s surrender and the tenant remains liable. But tenant

implies a wish to be relieved of the liability, which occurs if the landlord can find a

replacement tenant. Original tenant still liable if new tenant defaults. (3) Sue for Damages Damages based on anticipatory breach. Breach must be unequivocal. Damages =

difference b/n reserved rent and fair rental value. Assumes that the landlord relets the

premises and suffers only the difference. (4) Sue for Rent at the End of the Lease Landlord waits until the unpaid rent has accrued to the end of the term before he sues.

Modern courts impose a “duty” to mitigate, which could affect damages.

For duty: breach may be efficient and duty avoids waste Against duty: L bargained for security of income; judicial interp tough; search costs

K around it: autonomy, mkt trusted. Counter: imbalance of power problem,

especially if acceleration clause

Stonehedge Square Limited Partnership v. Movie Merchants, Inc. (PA)-Stonehedge owns and operates

shopping center (L) and entered into lease with General Video Corporation (T) and T assigned its rights under

lease to Movie Merchants (T1), and L wanted to hold T1 liable on the lease and sued for rent under acceleration

clause in the lease.

a. Rule → Non-breaching commercial landlord has no duty to mitigate (they are referring

to a commercial lease): REASONING:

Rule is firmly established in PA

Established rule is simple (less litigation)

Old Landlord & Tenant Act of 1951 does not modify landlord’s duty to mitigate

Fundamental unfairness in allowing breaching tenant to require nonbreaching

landlord to mitigate damages

Tenant was in a position to mitigate his own damages (by assigning, etc).

a. Could say that Sommer and Stonehedge are reconcilable since that one applies to residential

leases and this to commercial, but it seems like court’s reasoning of common law rule of no

mitigation could just as easily apply to residential leases too (contradicting Sommer v. Kridel

even though most states require L to mitigate if lease abandon in residential leases):

i. Simple to apply; unfairness to L.

b. States split on duty to mitigate in commercial leases

c. Which is the better decision? Sommer because want to protect tenants and have fair results

(tenant could lose all their $ and have to move to cheaper place) and want to use housing

stock efficiently but argument for Stonehedge is that don’t want to reward breachers and

punish no breachers.

IMPLIED WARRANTY OF HABITABILITY:

Green v. Superior Court – slumlord nailed on breach – SF public inspector cited 80 housing code violations of

landlord’s property incl. (1) collapse of bathroom ceiling, (2) absence of heat (3) plumbing blocked (4) rats,

mice, and roaches (5) faulty wiring (6) bad stove. RULE: **Once proper NOTICE to Landlord is given,

Tenant may lawfully withhold rent AND retain right of possession in a leasehold if landlord breaches the

implied warranty of habitability. STANDARD: the breach must materially affect health and safety. Damages

should be difference between actual rent and fair market value for property in poor condition. WHY: (1)

abandon traditional no warranty/caveat emptor policy b/c in the past land was more important than housing and

farmers generally could repair things, conditions are more like contract, landlords are better equipped to deal w/

issues (2) urbanization and population growth mean that low-rent tenants don’t have bargaining power (3)

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consumer expectations of renting a habitable home must be protected (4) housing codes suggest that legislature

wants to place burden of maintenance on landlord.

Major changes in landlord-tenant law from implied warranty of habitability:

1. Abandons caveat emptor

2. Landlord-tenant covenant was dependent →party’s obligations are contingent on other party complying

with their own obligation. Breach of this K relieves other party of obligation.

Bases for implied warranty:

1. Arises from contractual relationship between landlord and tenant where tenants expect that apt is

habitable during lease term

2. Housing code – renting out a place is an implied representation that landlord would comply w/ housing

code

NOTE: Some violations of housing code are not serious enough to be a violation of the implied

warranty of habitability (it has to be material) but also some conditions that do not violate the

code can count as breach such as (no heat or hot water, broken windows, pest infestation)

Remedies available to tenant: ***Tenant needs to give landlord proper notice***

1. Termination of tenancy (Rescission of K)

2. Withholding rent

3. Rent abatement

4. Damages

5. Injunction or specific performance (court order to fix problem)

6. Repair and deduct

7. Housing code remedies – inspector visit and inspection facility orders landlord to fix problem else fines

Implied warranty is non-disclaimable. Restatement allows parties to K as to condition as long as

agreement is not against public policy or “unconscionable”

Most courts refuse to extend implied warranty to commercial leases b/c

o Commercial tenants are usually sophisticated; and

o Have sufficient bargaining power to obtain fair terms; and

o Tenants often have the power to make repairs or improvements (per lease agreement)

Implied Warranty of Habitability History. No responsibilities on L

negative duty in an implied covenant of

quiet enjoyment (no constructive eviction) in early 20th century affirmative duty

in an implied warranty of habitability

Implications.

(1) Leaseholds now more like K than

conveyances. In K product must conform to representation.

(2) L & T covenants become dependent.

No longer must T sue for injunction first.

(3) T can seek a remedy w/o abandoning

the property. (4) Perversity-T-friendly statutes may

have homelessness; Ls don’t want

to deal w/ poorer Ts, priced out

Remedy.

(1) Repudiate the lease/rescind K – most

allow it outright; some require L’s breach to be “material; Uniform Res L

and T Act allows it only if breach

“materially affects health and safety.” (2) Rent withholding – until problem is

fixed; allows T to stay in the property

(3) Rent abatement – ct can reduce rent owed; the diff b/n actual and fair

rental value given poor condition

(4) Damages – T can recover rent + b/c of violations of implied warranty

(5) Injunction

(6) Repair and deduct (7) Housing code remedies – housing

inspector may testify and ct may order

civil or crim fines

Residential NOT commercial (where

parties have = bargaining power & T has

an interest in making repairs)

Grounding: majority-assumed; minority-

housing code or implied in circ.

Burden: Strict for termination.

Negligence for damages.

K around it?

For: autonomy/free mkt; negotiating

could price

Against: majority of jurisdictions don’t

allow it; social safety net; poorer renters could be ramroded; loophole for mean Ls

Procedure. T must provide NOTICE. L

gets a certain time to respond.

RETALIATORY EVICTION:

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Building Monitoring Systems, Inc. v. Paxton – UD action and D is asserting retaliatory eviction defense.

Shortly after moving in, D informed P that apt plumbing and wiring need to be repaired. Mgr tried but failed to

fix. Cty Health Dept determined that conditions violated health code and ordered P to fix. P served eviction

notice #1 but reinstated tenancy after accepting rent. D complained to health dept again. P served eviction

notice #2. Rule: Landlord cannot evict in retaliation if T exercises legal rights when L violates a protective

housing statute. H: Even without a retaliatory eviction statute, legislation for health and safety standards

show legislative intent to improve housing conditions, which might be frustrated by tenants reluctant to

report violations. ***Court adopts 2nd

Restatement of Property Defense:

1. There’s a protective housing statute

2. Landlord is in business of renting

3. Tenant is not in default in performance of obligations

4. Landlord is motivated to evict b/c tenant complained about violation of #1

5. Tenant’s complaint was made in good faith

Once repairs are made, L may serve T w/ eviction notice and bring a UD action w/o submitting evidence of

intent, but landlord has burden to show that T has had reasonable opportunity to find other housing.

Retaliatory eviction does not apply to commercial leases

Housing codes run parallel to implied warranty of habitability

HOUSING DISCRIMINATION (FEDERAL LAW):

The Fair Housing Act (FHA)

Applies to all sales and rental of housing.

Exceptions: (a) Single-family homes, if owner owns less than four. If owner doesn’t live in the home he can sell once every 2

years. (b) Can’t use if seller advertised or used services of a broker, agent, etc. (c) Owner’s home, as long as not more than 4

families could live there independently.

N/A to ability of states and feds to regulate the max # of occupants.

Discrimination (applies to renter or buyer, or persons affiliated w/ them)

(a) Can’t refuse to negotiate for sale or rental b/c of race, color, religion, sex, familial status, nat’l origin

(b) Can’t discriminate through terms or conditions.

(c) Can’t advertise to rent or sell dwelling by indicating preference based on race, gender, etc.

(d) Can’t tell someone that a vacant unit is taken b/c of race, gender, etc.

(e) Can’t misrepresent qualities of neighborhood (e.g., racial makeup) to induce into selling or renting.

(f) Can’t refuse to make reasonable accommodations to afford equal access.

Equal Access

(g) Have to allow buyers to modify the premises to enjoy equal opportunity of use. Renter may need to restore it to its original

condition upon leaving, though.

(h) Covered multi-family buildings built after 1988 must be accessible by handicapped. Covered multi-family dwellings include,

generally, 4 or more unit buildings.

(i) Act sets a floor, not a ceiling. State may require more.

Excepted Groups

Religious organization can allocate property based on religious preferences. Private clubs can favor members. Elderly homes can

give preference based on familial status.

Enforcement

Private civil action.

U.S. DOJ can bring civil actions on behalf of the government. Officer w/in the civil rights department would get 3 testers, 2 white

and 1 black, and give them equal credentials.

Funky: Female seeks female for apt share. Inadvertently banned under §3604(c) of the FHA.

Comment [T16]: Uniform Residential Landlord and Tenant Act creates a rebuttable presumption that eviction is retaliatory if it comes w/I 1 year of tenant taking action to assert rts protected by implied warranty. If landlord is denied right to evict, landlord has to show legitimate, nonretaliatory business reason.

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HOUSING DISCRIMINATION (STATE LAW):

Mister v. A.R.K. Partnership – unmarried cohabitants lose out to religious objection – Ill Human Rts Act of

1987 prohibits disc based on sex or marital status in real estate transactions. Marital status is def: “legal status

of being married, single, separated, divorced, or widowed. A.R.K. refused to rent to Ps – 2 male-female

cohabitating couples – D claims policy reflects religious belief against unmarried cohabitation, but no evidence

supports this. H: Ill statute does not protect unmarried opposite-sex adults who cohabitate from

discrimination. Look @ statutory language for compromise.

For Ps/opposite-sex rentors (losers) For Ds/landlords (winners)

Textual interp: Relationship reflects sex and marital status. Ds’

denial is totally related to sex: if they were of same sex, Ds wouldn’t object; or married of opposite sex, no objection.

Textual interp: Refusal to rent based on couples’ consensual

relationship, not their sex or marital relationship. Act allows denial of renting to persons of one sex.

History: Anti-fornication law is old, rarely enforced. Amendment

to act recently rejected to exclude unmarried cobhabs. It is not the courts’ job to assume the legislative role in shaping policy.

Counter: packing the record -> inaccurate portrayal of intent.

History. Anti-fornication law still on the books (had not been

repealed), was echoed in 1979 Jarrett case->common law marriages not recognized; against open & notorious cohabitation.

Consistency! Leg rejecting amend not the same as 1970s leg.

Leg history: bill sponsor said unmarried cohabitants not included Remedial leg: generally construed liberally. Counter: intended to protect on the class intended to be covered

Counter policy: alternatives to marriage allow efficient unions Policy: Alternatives to marriage weaken the family.

Beyond the FHA? Diff def’n for familial status; Ill includes ancestry.

Many state laws have statutes prohibiting discrimination based on marital status – protecting tenants from denial of housing

because they are or are not married.

Can landlords refuse to rent to unmarried couple based on religious beliefs? Probably not.

o Claim of a federal constitutional right to an exemption from antidiscrimination laws have been struck down by the

SCOTUS:

o Employment Division v. Smith – except in very unusual cases, generally applicable laws cannot be disregarded on

ground that compliance interferes with free exercise of religion

o Congress passed Religious Freedom Restoration Act (RFRA) prohibiting govt from substantially burdening free

exercise of religion unless theres a compelling state interest and no less-restrictive means (strict scrutiny) [struck

down by SCOTUS, see below]

In City of Boerne v. Flores, SCOTUS struck down RFRA b/c 14th

Am gave Congress power to protect “liberty” of religion as

defined by 1st Am but to not go beyond it.

ARGUMENT: Had landlords been able to use religious belief argument to counter anti-segregation laws, then those laws

would lose their force. Same with FHA.

Comment [T17]: The court looks to similar statutes as an aid and comparison of similar

enactments. The majority looks to the criminal prohibition against fornication (the version in effect

at the time of the violation, which outlawed

cohabitation with another not his spouse that is open and notorious) and also case law indicating the

public policy of promoting marriages (by renouncing common law marriage).

Biggest flaw in majority’s reasoning: the

fornication statute is outmoded and in fact, the statute was amended so as to not include

cohabitation by unmarried couples of the opposite

sex because it’s a crazy outmoded statute. RESPONSE: the statute that should be interpreted

is the version that existed during the violation and

during the filing of the complaint and as recently as 1979, the Supreme Court of Illinois affirmed

that criminal fornication statute (expressing public

policy against open and notorious nonmarital cohabitation) so it’s not so antiquated

The concurring judge looks to the legislative history – the debate

Biggest flaw in concurring judge’s reasoning: debates could be helpful but probably not dispositive. Plus, this is only the response of 1 person among a ton of legislators. Not a good guide of the whole legislator’s intent RESPONSE: the responses to the questions show the sponsor’s intentions of what the Act should and should not cover

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RELATIONS AMONG PROPERTY OWNERS

TRESPASS – def: unprivileged physical invasion of someone else’s property.

Intel Corp. v. Hamidi – emails & trespass to chattel – Over 2 yrs, D sent e-mails critical of P to current

employees on P’s email system. D did not breach any barriers and offered to and did remove from list-serv any

recipient who wished to be removed. D’s emails did not cause physical damage nor functional disruption to

company’s computers. Contents did cause discussion among employees. H: Court will not find or extend

trespass to chattel law where plaintiff cannot show injury to property or legal interest in that property. (One

who intentionally interferes w/ another’s property is liable only if the interference is harmful to

possessor’s materially valuable interest. WHY: No actual injury proven. Servers not damaged or slowed. For

trespass to chattel, owner must show loss of possession and none exists here. P’s argument: transmitting signals

qualifies as physical contact w/ chattel + e-mails cause decrease in productivity.

NUISANCE – unreasonable interference (non-trespassory) with the use and enjoyment of one’s property.

Nuisance if harm is substantial (like decreasing property value) and conduct is unreasonable. (compare with

trespass which protects exclusive possession); harm must be substantial for liability

Prah v. Maretti – solar panels – P house had solar panels. D bought neighboring land and built his home. P

advised D that if D builds the home at the planned location, the house would substantially & adversely affect

P’s solar system. H: Plaintiff has stated a claim for nuisance and order granting D’s MSJ was incorrect.

WHY: (1) Many jx protect landowner from malicious obstruction of access to light (spite fence cases) under

common law private nuisance doctrine. (2) In the past, policies were accepted that limited access to sunlight [as

long as it didn’t cause physical damage, right to use land was paramount, sunlight was only for aesthetic

enjoyment, and society’s interest in not restricting development] these policies are now obsolete. (3) Society has

increasingly regulated land for general welfare (incl. alternative energy), (2) access to sunlight has gained more

importance, (3) and policy favoring unhindered pvt development is no longer in harmony w/ society. *The law

of private nuisance – the reasonable use doctrine – is best suited to adjudicate these types of conflicts.

DISSENT: Landowners right to use his property according to limits of ordinances, statutes, and

restrictions of record is fundamental to a free society. Harm only to a normal neighbor – so people who don’t

have solar panels.

Nuisance – usually means offensive physically to the senses. Difference from trespass is that trespass is the

use of another’s property (physical) versus nuisance is a disturbance in the enjoyment of land.

Private nuisance

Public nuisance – brought by gvt on behalf of public (supplemented by gvt regulations)

***Factors from Restatement = reasonable use doctrine – case by case analysis:

1. Location – relative (pig farm in rural area is reasonable but not in Beverly Hills)

2. Activity – character and extent (blasting music at night may be unreasonable but okay during the day)

3. Harm suffered by P

4. Priority – Who was there first? ← not dispositive

5. Relative Social Value of “Enjoyment invaded”

Remedies:

1. Injunction

2. Damages

a. Forced sale

b. Difference in fair market value

c. Purchased injunction

3. People can contract and negotiate with each other

CA v. General Motors – nuisance re: pollution (complete); probably better for the legislature; manufacturers do

not directly pollute, they just sell cars

Comment [T18]: Trespass law protects current possessors, so those w/o possessory rights (e.g., holder of a future interest) are not protected.

Comment [T19]: Contrast w/ Ebay v. Bidder’s Edge – D used a robot program to search eBay site. Trespass bc if replicated by other search engines, could have harmful impact on functionality of the servers (access 100,000 times a day, 1-2% of info requests) In the aggregate, such services will deny legitimate users access.

Comment [T20]: The relevance is that the access to light was uniformly rejected as being inconsistent with the country’s need to develop. (Ancient lights – if P had received sunlight across adjoining property for a specified period of time is entitled to receive unobstructed access to sunlight across adjoining property). Long ago, ancient lights was uniformly rejected. Court responds that the old policy reasons for overriding ancient lights (development of country) is obsolete. Sunlight has become more important now. It doesn’t seem that they are bringing back the doctrine of ancient lights. If he brought back ancient lights, Prah would automatically win. The other extreme would be to uphold Maretti’s rights (FL court). Court says it depends on circumstances and whether it is reasonable. So nuisance law would resolve this on a case-by-case basis. Spite fence cases have shown that many jx have protected landowners from intentional & malicious obstruction of access to light. Even w/o ancient lights, an owner’s rights to sunlight is protected.

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EASEMENTS – right to do specific acts on someone else’s land. Intended to be permanent or for a specified

period. Also not revocable at owner’s will. In the absence of any agreement, the owner of the easement has the

responsibility to maintain it. Usually created by a deed granted by owner of burdened land to easement owner.

Easements are transferable.

Different from licenses, which are temporary invitations where owners waive the right to exclude non-

owners and simultaneously exercise their privilege to admit others. Licenses can be express (paper invitation)

or implied (shop owner allowing public to enter) ***MAIN DIFFERENCE: Licenses can be revoked at any

time by the owner.***

Two types of easements:

1. Easement appurtenant → “runs with the land”

a. This easement benefits the dominant estate

i. The easement stays with dominant estate if title changes

b. Servient estate – parcel where easement is located

i. The easement stays with servient estate if title changes

2. Easement in gross → stops w/ person – transferable; does not benefit another parcel of land

a. No dominant estate; only servient

b. Examples include: power lines, sewage, public easements

c. When sold, the easement in gross stays with the owner of the easement

CREATION - Easement created by express grant

Urbaitis v. Commonwealth Edison – disputed land ‘conveyed’ land to railroad who then passed the perpetual

easement to make a bike path. H: A court will interpret a transfer as a fee simple unless language in the

document, when viewed as a whole, explicitly states that it is an easement or right of way. WHY: Even though

the deed says “right of way” the wording “convey and warrant” in the granting clause controls.

EASEMENTS AND LICENSES

Easements created by estoppel – turns a license into an easement if a party reasonably relied on continued use

of the “license” (+made reasonable expenditures). A license is merely permission to go on the land of another

(like sporting events). Difference is a license is revocable at any time and an easement is not. When a license is

not bare, naked right of entry, but includes the right to erect structures and acquire an interest in the land in the

nature of an easement by construction of improvements, the licensor may not revoke the license and restore the

premises to former condition after licensee has ecercised the privilege given by the license and erected

improvements.

Holbrook v. Taylor – A license becomes an easement if P can establish that in the exercise of the license, he

spent significant money in uses connected with reasonable reliance on that license. Reasonable. Neighbor

lets other neighbor use driveway while building his house then puts up steel cable 5 yrs later to block him.

Court held that an appurtenant easement by estoppel was established because Taylor made improvements to

the land since easement. [reasonable reliance + investment]

***For an easement by estoppel, a claimant must show:

1. Action under privilege of license (had the right (permission or tacit approval to build)

2. Improved land or erected structure

3. At considerable expense

How to prevent license from turning into an easement:

1. Explicitly state in K that neighbor waives right to an easement by estoppel (P will argue that such

cannot be waived)

2. Prevent improvements on land or building anything

3. Agree on a temporary easement that expires in the future

4. Sell easement

Policy: against easements by estoppel – bad to have land burdened by unrecorded easements; for

easements – protects licensees

Comment [T21]: Affirmative (positive) easements – a right to do something on someone else’s land Restrictive covenant or negative easement – a right to prevent others from doing something on their own land Affirmative covenant – a duty to do something on your own land to benefit other owners

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Kitchen v. Kitchen – (Michigan) Court ruled that Michigan will not recognize easements by estoppel. Rather,

statute requires that easements to be in writing. “Irrevocable license” (a/k/a easements) cannot be based on

oral promises alone.

WHY?

Easements constitute an interest in real estate and are not revocable – they need to be clear and in

writing to prevent litigation based on he-said, she-said approach

Prevents owners from falsely claiming that others gave them oral permission to cross property and that

they relied on this promise to build their homes

Clarifies property rights, prevents fraud, and decreases needless litigation

Purchases will be placed on notice because easements would be recorded (prevents surprises for future

owners of the servient estate)

PRESCRIPTIVE EASEMENTS – prescriptive easements is what adverse possession is to fee simples. Courts

are sometimes more lenient on some factors – depending on character of land and use.

ELEMENTS: (**A Hooker ON Every Corner – Actual, Hostile, Open & Notorious, Exclusive, Continuous + Statutory Period)

1. Actual – courts tend to relax substantial identity – clear line of path not necessary since there is a

substantial identity to the easement

2. ***Hostile – against owner’s interests; w/o permission

3. Open & Notorious – enough to give notice

4. Exclusive – **for public prescriptive easements there is no exclusivity requirement – owner can

still be there, as long as not completely in the way of others’ use. If a single individual wants to

claim a prescriptive easement, then they cannot share it with others.

5. Continuous – depends on the character, for beaches, people don’t use it during bad weather

6. For the statutory period

Concerned Citizens of Brunswick Cty. Taxpayers Assoc. v. Holden Beach Enterprises – beachgoers won path

though exact placement (actual requirement) moved due to nature – the path to beach is prescriptive easement,

attempts to exclude beachgoers were unsuccessful though reasonable attempts to prevent continuous use.

Owner has to successfully discontinue use.

How to defeat a prescriptive easement – need to defeat just one element:

1. Block access one a day a year to prevent continuous

2. Put up a sign granting permission to defeat adverse/hostile

3. Bring suit before SOL is up – problem: for public prescriptive easement, whom do you sue?

IMPLIED EASEMENTS

Implied: Easement by pre-existing/prior use.

Elements: 1. Common grantor (parcels used to be a single property)

2. Back when there was a single parcel, there was a “quasi-easement” (one part of the parcel was being

used by another part of the parcel) (note that this should’ve existed & used at the time of the severance)

3. The use was “apparent, continuous, and reasonably necessary”

o Apparent – something that the buyer knew about or reasonably should have known about when

buying the parcel

o Continuous – the use is still going on

o Reasonably necessary – something like “usefulness” – it confers a substantial usefulness to the

dominant parcel, implying that the parties intended to keep it in place after the property was sold

[see that courts’ interpretations of these elements, especially the “reasonably necessary” sub-

element, vary]

Comment [T22]: Note that beachgoers cannot usually win or at least will have trouble meeting the HOSTILE requirement. In fee simple, exclusive is not shared with the owner. For easements, however, you can share it with the fee simple owner. So you can’t have a rule that would require strict exclusivity. This does not tend to get applied for easements with prescription.

Comment [T23]: Public prescriptive enforcement – it’s tough to sue more than a couple of individuals, because filing a suit against defendant A, only stops the statutory clock against defendant A. Maybe one can file a lawsuit against the government (who represent the people) BUT the government is not trespassing on the land.

Comment [T24]: Schwab v. Timmons court notes that implied easements may only be created when the necessity for the easement is so clear and absolute that without the easement, grantee cannot enjoy the use of the property.

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Russakoff v. Scruggs – lake used by lot owners for frogging, sprinkler feed, court held that there was an

easement by prior/pre-existing use; plaintiffs met elements: (1) the P’s lot was part of a single tract, (2) when

P’s predecessors bought the track, the lake was the servient tract, and (3) there is evidence that the Ps used the

lake for recreation and to water their lawns (using a pump). That use was continuous and apparent. Plaintiffs

also had a legitimate expectation to use the lake for their enjoyment. The development company envisioned the

enjoyment of the lake by those who bought tracts around it.

Russakoff had an appurtenant easement (benefited his parcel) and when he moves, the person who

buys the house also gets to use the easement because it runs with the land.

Implied: Easement by necessity – key points: (1) just showing want or need is not enough and (2) if it is self-

inflicted, one is barred from claiming easement by necessity.

ELEMENTS:

1. Common grantor

2. Necessity – (e.g., actual necessity to access a road or if a lake is the only source of water)*

3. Necessity has to have existed at the time of severance

RATIONALES

1. If seller and buyer of landlocked property, they would’ve included an easement in the deed (no one

would by a landlocked parcel), but maybe they forgot (i.e., if they had thought about it, they

would’ve created an explicit easement)

2. It’s bad public policy to have landlocked parcels

Schwab v. Timmons – no easement by necessity because P failed to satisfy prong #3 – necessity should have

existed at the time of severance – no easement by implication (prior existing use) or necessity because P can

access roadway by building over bluffs instead of going over D’s land (so not landlocked) although

inconvenient and because at the time of severance, P was not landlocked. P sold the bluff to someone else! R:

(1) Easement by necessity only if common owner severs landlocked portion of property and owner of

landlocked portion cannot access a public roadway – US never severed a landlocked portion of property (2)

Owners had access to a public road, even though not ideal or convenient, but they sold it! – landlock-ing

resulted not from grant of property but their own conveyance (3) policy of not sanctioning hidden easements

If P cannot show that he meets prong 3, he cannot have an easement by necessity.

Public policy disfavors easements by necessity – implied easements in general – because they are

hidden. There should be public records to prevent surprises.

Termination of easements: 1. Servient and dominant parcels are placed under one ownership

2. Abandonment

Pre-existing Use Elements Necessity Elements

(1) Common grantor (former unity of ownership) (1) Common grantor

(2) Quasi easement – one part of the land had to be benefiting the land before the severance/split

(2) Necessity – necessary for egress

(3) Apparent, continuous and reasonably necessary (more than

convenient, but not required to be absolutely necessary)

(3) Necessity at time of severance – necessity has to exist at the

time of the severance Goals: at least one party would have demanded it at the time of

severance

Goals: (1) Logic: parties would probably have created an

easement themselves. (2) Public interest in not having landlocked

parcels. We want people to have access to roads.

Downside of implied easements (a) surprise buyers, (b) discourage alienability, (c) upset expectations of servient estate owners.

Comment [T25]: An easement by implication can be “destroyed,” however, if the person who buys the servient land did not have notice of the easement or its use. When this happens, the owner of the servient land is free from the easement. But here, the record shows that the defendant had notice of an “apparent, continuous, and reasonably necessary to enjoyment” use. The defendant even pulled water pumps that were feeding off the lake.

Comment [T26]: Not landlocked when he or she has difficulty getting from his or her land to a public road as long as he or she can get to land from a public road.

Comment [T27]: Russakoff would not win under this theory because he’s not landlocked.

Comment [T28]: Courts analysis was really strict since land was bordered to west by Green Bay, to the south by another owner, and east and north was bordered by a cliff and rocky terrain.

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COVENANTS

CREATION

Covenants – are “negative easements” (restrictions) intended to run with the land binding successors –

agreements that bind owners and successors that give them the right to prevent others from doing something on

their own land. Real covenants are agreements among landowners like contracts with something extra because

they bind future owners. The most common real covenant is when it limits use of land to single family

residential use because people will buy more if they have some sort of guarantee that it will be residential

around them (↑ home values)

Real Covenants at Law – Requirements:

1. Intent – both parties [A-B] must intend to bind their successors

2. Covenant has to touch and concern the land (physically or economically affect the land)

3. Privity of estate:

Horizontal Privity – relationship between original covenanting parties (A-B). Both must have a

mutual interest in the land subject to restriction (e.g., landlord & tenant, concurrent owners,

grantor & grantee, owner & owner of easement). Note that neighbors don’t have horizontal

privity if they don’t have a covenant.

Vertical Privity – refers to relationship between original covenanting party and successor (A-

C::B-D). Parties are in vertical privity if the successor takes the entire estate in the land of

predecessor.

Burdens & Benefits – every covenant has a burden and a benefit; most covenants involve reciprocal

burdens and benefits.

For a burden to run to a successor, you need horizontal and vertical privity

o A promises B to build only single-family homes (A has burden, B has benefit). A sells his

property to D. B, to enforce the covenant, has to show horizontal privity between A and B;

and vertical privity between A and D.

For a benefit to run to a successor, only need vertical privity

o A promises to build only sf homes (A has burden, B has benefit). B sells his property to C.

A starts building an apartment. C, to enforce the covenant, only has to show vertical privity

between B and C.

o A promises to build only sf homes. (A has burden, B has benefit). B sells property to C. A

sells property to D. D starts building an apartment. For C to enforce, has to show benefit has

run (vertical privity b/w B and C) and burden has run (horizontal privity b/w A and B;

vertical privity b/w A and D.)

Comment [T29]: The agreement between A-B is grounded on contract, not covenant – the covenant binds subsequent owners.

Comment [T30]: If A owns land in fee simple and coveys to C in fee simple, then A&C are in vertical privity. If A leases to C or gives life estate to C, they are not in vertical privity.

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Runyon & Williams v. Paley – (condo builders) – D Paleys want to build condos on their property. Runyon and

Williams contend that Paley’s property is subject to restrictive covenant prohibiting construction of condos.

HELD: Runyon had no vertical privity b/c they got their land before covenant was created. Williams met all

elements and proved that is is a real covenant b/c (1) economic impact on land (enhanced value of dominant

estate and decreased value of servient estate) (2) proves benefit and burden run (satisfied both horizontal and

vertical privity) and (3) proved that intent of parties was to run with the land and bind successors.

WILLIAMS: REAL COVENANT (RESTRICTIVE COVENANT)

1. Intent YES Clear from language of agreement that original parties intended for burden (restriction) to run regardless of who owns it.

2. Touch and Concern YES It’s a restriction on the use of the land.

3. Privity YES FOR PRIVITY, SHE NEEDS TO SHOW VERTICAL & HORIZONTAL PRIVITY:

For Burden: Paleys vertical to Brughs (yes, because Brughs they have fee simple ownership) and Burghs horizontal to Gaskins (yes, Brughs

has horizontal privity because both have mutual interest in same land)

For Benefit: Williams can show vertical privity (fee simple ownership of estate)

EQUITABLE SERVITUDE

3. Notice YES The Paleys would have read the deed that mentioned the restriction or referred to it (they would’ve had actual and constructive).

RUNYONS: REAL COVENANT (RESTRICTIVE COVENANT)

1. Intent NO When 1/9/1960 restriction was written, the Runyons are not successors to land Gaskin owned at the time, Runyons owned their land before

Brughs bought their land

2. Touch and Concern

3. Privity NO Runyons wouldn’t have had the benefit because they don’t have vertical privity. They’re not successors to land benefitted by the promise.

EQUITABLE SERVITUDE

3. Notice NO The Paleys would not have read the deed that mentioned the restriction or referred to it (they would’ve had actual and constructive).

Equitable Servitudes –

Requirements:

1. Intent - Landowners have to intend to bind successors

2. Covenant has to “touch & concern” the land – economic or physical

3. Successor has notice (actual or constructive – does the person youre trying to enforce the restriction

against knew or reasonably should have known) when he bought the property [**look at deed first for

notice – notice is taken care of so long as there was proper filing of the deed. Assume that everyone is

supposed to do a title search when they buy property]

See table above for Runyon v. Paley – Williams won on real covenant. Runyons still don’t win on equitable

servitude because they cannot prove intent.

Implied Reciprocal Servitudes – based on a common scheme of restrictions – (read this under the intent

element in a covenant or servitude) When a common grantor develops land and divides it and sells the lots and

includes a common scheme of restrictions on all the lots, the grantees acquire by implication the right to enforce

the same restriction on the grantor (if the grantor’s lot does not have an explicit restriction

Elements:

1. Intent – common grantor

2. Touches and concerns the land

3. Notice – common scheme obvious

D -> purchaser

[implied reciprocal servitude]

1 [explicit] 2 [explicit]

3 [explicit] 4 [explicit] 5 [explicit]

6 [explicit] 7 [explicit] 8 [explicit]

TERMINATION

El Di. V. Bethany Beach (booze seller just wants to sell his booze) – Covenant to prohibit alcohol not

enforceable because conditions have changed so much. Changed Conditions Doctrine – covenants will not be

enforced if conditions have changed so much inside the neighborhood restricted by the covenant that

enforcement will no longer be of substantial benefit to the dominant estate. Developers of Bethany Beach

restricted prop to residential use only and prohibited sale of alcoholic beverages. This covenant affected 2/3rd

of

the property. Alcohol is for sale at a packaging store 200 yds from El Di’s business and several nearby

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restaurants. Holiday House customers have followed a BYOB/brown-bagging policy for years. H: Covenant no

longer enforceable when conditions have changed so much (1) change need not be to the whole parcel, partial

change is sufficient (2) purpose of covenant was to maintain quiet, residential, church dominated community.

Now it’s a resort town w/ 85% of the municipality not subject to restrictions. (3) Town zoned D’s property for

commercial use in 1952. (4) Consumption of alcohol is tolerated by owners of similarly restricted lots (20 yr

brown bagging policy. + Public Policy to control the sale of liquor. (5) El Di’s business is in the commercial

section.

Ways to Terminate a Covenant 1. By common ownership – if same entity owns all affected parcels, he can terminate it

2. By release/agreement:

a. If all the parties agree to rescind covenant

b. Or if provided by the covenant, termination by a % vote or in a number of given years

3. Restricted duration – covenant has an expiration or statute setting expiration

4. Abandonment – widespread non-compliance

5. Estoppel – (unclean hands) If P w/ right to enforce a covenant is himself violating it

6. Changed conditions – if conditions have changed so much that enforcement of the covenant would no

longer benefit dominant estates; covenant is valueless to parties

7. Injunctive Relief – if covenant is unreasonable

8. SoL – when someone violates covenant, the right to sue stops

CONDOMINIUMS AND PRIVATE SUBDIVISIONS

Nahrstedt v. Lakeside Village Condominium Assn. – COMMON INTEREST DEVELOPMENT – cat lady

just wants to keep her cats! – Covenants recorded in declaration of common interest are enforceable unless

they’re unreasonable. Unreasonable if (1) burden substantially > benefits of restriction, (2) arbitrary, (3)

contrary to public policy) P had 3 cats in her condo and wanted reasonableness test applied on a case-by-case

basis. Covenant restricts: No animals (which shall mean dogs and cats) livestock…kept in any unit. P says

covenant not enforceable against her and that application of reasonableness should be on a case-by-case basis.

Court declines because covenant applies to whole (policy: decreases litigation). No pets policy is enforceable

as an equitable servitude because (1) intent to parties for it to run w land binding successors 2) touches and

concerns the land and 3) notice given since pet restriction was contained in condo’s agreement document and

recorded w county recorder before unites were fold. For common interest properties, the test is

reasonableness

COMMON INTEREST DEVELOPMENT – encompasses a pvt subdivision (spread out condos) and condos

(every owner owning their place in fee simple and common areas are owned by HoA where all owners are

members or owned by owners as joint tenants). Common rules include the appearance of the exterior,

restrictions on ability to rent unity out (approval of HoA governing board). CCR-covenant, conditions, and

restrictions

TO ENFORCE Covenants of Common Interest by Equitable Servitude 1. Must have intent

2. Touch & Concern the land

3. Notice 4. Many states add an additional requirement that Restrictions must be reasonable (enforceable

equitable servitudes unless unreasonable)

a. REASONABLENESS – some states have a dual approach. If a rule is created before the

units are sold, it does not have to be reasonable. Once the units are sold, all other rules made

after the sale must be reasonable.

Comment [T31]: COOPs – building is owned by a corporation and shareholders are the people who live in units, renting units from corporation (ie they are tenants of the corporation in which they hold shares) so theyre their own landlord. In a condo, every unit owner has their own mortgage. In a coop, the corporation pays the mortgage, so if one person defaults on their share of the mortgage, other residents have to make up the difference.

Comment [T32]: Since Nahrstedt is an owner, she can get together with her neighbors to abandon the restriction.

Comment [T33]: Burden>benefit; arbitrary; against public policy

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RELATIONS BETWEEN PROPERTY OWNERS AND THE GOVT ZONING: THE PLANNING PROCESS

Richardson v. City of Little Rock Planning Commission – Landowner’s plans should be objectively measured

against ordinance standards. Planning commissions cant arbitrarily deny plans if not based on ordinance. Zoning board overstepped bounds in arbitrarily denying app – P wanted to build a subdivision. Plans were

rejected on the basis that the proposed cul de sac was too close to adjacent lots and that the “marginal

development potential because of the restricted means of access and unusual lot shapes.” P did not propose a

cul de sac and the ordinance does not contain any language about marginal dev use. H: A planning commission

does not have discretionary power to deny an application when the application meets the minimum

requirements set out by the zoning ordinance. RULE: Planning commission’s authority is bound by zoning

ordinances so they cannot arbitrarily deny proposals if they don’t have that kind of discretionary power

especially when the plan meets the minimum requirements.

Enabling Legislation → Zoning Ordinance → Planning Commission

2 extra sources of law besides statutes and common law:

units of local gvt (cities, towns, villages) that enact ordinances (essentially statutes)

administrative agencies that promulgate regulations and by adjudicating cases

Local gvt and administrative agencies delegate power to local govts and administrative agencies and that’s the limit of their power.

Their power is derived from whatever power is delegated to them. Usually these are broad delegations of power. Their power can be

delegated or taken away at any time by the legislature.

Zoning – dividing land and placing use restrictions on land (e.g., residential, commercial, and industrial zones). Zoning restrictions

are usually cumulative: if there’s a factory, you can put it in the industrial zone. If you have a business, you can put it in the

commercial and industrial zone. You can put a house in an industrial zone.

ZONING: NONCONFORMING USES [amortization – retroactive restriction on land use]

PA Northwestern Distributors v. Zoning Hearing Board – Amortization of a lawful pre-existing non-

conforming use is per se confiscatory and violative of PA const. (taking w/o just compensation) – adult book

store owner wins! – H: No amortization period allowed in PA for lawful pre-existing non-conforming use as

long as it doesn’t create a nuisance because amortization period violate the PA Constitution (or if its abandoned

or if gvt exercises eminent domain). Nude book store gets to stay because the requirement of amortization and

discontinuance of a lawful pre-existing (before zoning code) non-conforming use is confiscatory and violates

the PA constitution as a taking w/o just compensation. (1) Standing law is that munis lack power to force a

change in nature of an existing lawful use or property; (2) If nonconforming use is lawful, property owner has a

right which cannot be abrogated unless nuisance, abandoned, or extinguished by eminent domain; (3)

amortization is retroactive and is very different from ordinance restricting future use. It would prevent book

store owner of lawful use of his property by forcing him to cease using it as an adult bookstore w/ 90 days. If

gvt desires to interfere w/ owner’s use, where use is lawful and is not a nuisance nor is it abandoned, it must

compensate owner for resulting loss. Concurring opinion says as long as the time given for amortization is

reasonable, then amortization would be okay. Don’t outlaw all amortizations.

Legislature

City Gvt (City Council)

Administrative Agency

Enabling legislation

Zoning Ordinance

Planning Commission

Comment [T34]: The can deny plans based on things outlined in the planning ordinance. Point out the ordinance being violated. The denial letter should say the reason why it doesn’t comply with the ordinance with the ordinance cited. Write the letter properly and it will be sustained – show that the commission is within its authority.

Comment [T35]: How to react to non-conforming use:

1.No special treatment – no town tries to enact a zoning ordinance that does this: its really harsh to reverse an investment really quickly 2.Exempt them from ordinance (grandfather them in) 3.Give them some time to phase out

Comment [T36]: Another way of dealing with a non-conforming use – so that owner will have reasonable time to bring use into conformity – enough time for owner to get reasonable return on their investment, find another place to set up shop, etc.

Comment [T37]: Gvt can regulate property a point. If gvt goes too far in infringing owner’s rts, it’s a taking and gvt has to pay just compensation.

Comment [T38]: As a policy matter, not allowing amortization hinders communities’ ability to change. Would like to keep amortization and would hold amortization in this cause unreasonable because it’s way too short.

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Ray’s Stateline Market, Inc. v. Town of Pelham (donut counter case) – pre-existing non-conforming use is

generally exempted/grandfathered if the proposed change does not result in illegally expanding

nonconforming use and if the change wouldn’t have an appreciable effect on the neighborhood. **A

zoning ordinance applies to preexisting use when use is altered for a purpose or in a manner that is substantially

different from the use to which it was put before alteration. F: changing donut counter to Dunkin Donuts

counter is not a substantial change. Court rules for market bc coffee counter permit would not result in a

substantial change or an illegal expansion of the nonconforming use and the sign permit would not result in any

appreciable effect on the neighborhood. Zoning ordinances can limit any extension, expansion, or enlargement

of a nonconforming use and prohibits its change to substantially different nonconforming use.

FACTORS IN EVALUATING EXTENT OF NON-CONFORMING USE:

1. Whether challenged use is merely different manner of using original nonconforming use; or

2. Whether it constitutes a different use AND whether the challenged use will have a substantially different

impact upon neighborhood

NOTE: Court has recognized that nonconforming uses may be expanded as long as expansion is a (1)

natural activity, (2) closely related to manner in which a piece of property is used at time of the enactment

of ordinance creating non-conforming use

ZONING: VARIANCES

Lang v. Zoning Board of Adjustment – swimming pool case – Variance (should) be granted bc of exceptional

property conditions (narrow shape & preexisting structures) + enforcement of ordinance would result in

exceptional, undue hardship or (2) if public benefits outweigh proposed changes variance due to “undue

hardship” – granted variance bc backyard and lot was uniquely shaped and had been a non-conforming use

(the lot’s dimensions were smaller than subsequent zoning law) . The unusual narrowness of Calabrese’s lot,

combined w preexistence of paved driveway and garage along northerly side of property’s rear yard, and that

these unique attributes of property constituted exceptional and undue hardship w/I meaning of the statute.

Variance granted and allowed him to construct an in-ground swimming pool. Court supported variance because

of property’s unusual narrowness and shape justified the variance. Also, replacing an above ground pool with

average sized in-ground pool is consistent with the promotion of a desirable visual environment and would

advance the safety and visual purpose of zoning

***Reviewing courts also give wide latitude to zoning authorities because they have familiarity w/ community.

Absent clear abuse of discretion, the courts will not declare their decisions invalid

2 techniques to allow departures from zoning ordinances:

Variances – permissions to deviate from zoning law when application of the ordinance would (permission to depart from the terms of

the zoning ordinance):

1. Impose an unnecessary hardship; and

2. The proposed use would not be contrary to the public interest and would not substantially impair the purpose of the zoning

plan and ordinance

Special Exception – exception to the ordinance that’s specified in the ordinance itself

*RULES VERSUS STANDARDS - Regulating by rules and by standards:

Rule – hard line (minimum age for presidency, speed limits)

o Advantages: easy to apply, outcomes are predictable

o Disadvantage: inflexible, easy to imagine “hardship” cases where applying the rule doesn’t seem right (speed limit

and emergencies)

Standards – fuzzier, more fact sensitive classifications (law of nuisance (governed by reasonableness), negligence, implied

warranty of habitability, zoning with variances

o Advantage: allow shaping to accommodate hardship cases

o Disadvantage: outcome is hard to predict; how would the standards be applied in practice

Zonings have moved from being rules to standards (taking out rigidity of early zoning). With zoning, its hard to anticipate the best

outcome ex ante. There may be fact situations where we do not want a strict rule. Variances mitigate the effect of strict rules.

Comment [T39]: The zoning ordinance provides that a variance may be granted on proof of undue hardship based on 3 criteria:

1.exceptional narrowness, shallowness, of shape of the property, 2.exceptional topographic conditions or physical features 3.exceptional situation uniquely affecting property;

The statute also provides that a variance may be granted without hardship is the variance would promote the purposes of the zoning Act and the benefits of the variance would substantially outweigh any detriment.

Undue hardship should focus on whether the strict enforcement of the statute would cause undue hardship based on the unique conditions of the property (vs. whether a proposed structure like a pool would be too large and that the size is the reason for variance) “Undue hardship” – usually a strict test:

1.Will not be granted if self-imposed 2.Not found unless there is no economically viable use of the property if zoning law is enforced

Even w/o hardship, the Board also concluded that the proposed pool would promote the purposes of the zoning ordinance because in-ground pools look better and the neighbors wouldn’t be bothered by it (visually)

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ZONING: AESTHETICS

Stoyanoff v. Berkeley – Pyramid house loses – RULE: Aesthetic zoning is okay if not arbitrary and

unreasonable and serves the purpose of promoting the general welfare (w/I bounds of zoning ordinance and

is constitutional). Denial is reasonable if D can show that structure would (1) be detrimental to property

values, (2) not in conformity with character of the community, and (3) not in conformity w desirable land us

in community & furtherance of ordinance P applied for weird looking house in a snobby community. The

applicants were refused a building permit for the construction of their proposed residence upon the ground that

the permit was not approved by a city architectural board (board) which was set up to assure that plans for

buildings conformed to minimum standards of appearance. Almost all of the other houses have traditional

architecture. P challenged “aesthetic” criteria as (1) unconstitutional bc its too vague and allows for

unreasonable, unguided, and arbitrary choices violating due process and (2) city exceeded its statutory power in

enacting the ordinance/architectural review board – which the enabling statute did not authorize. **in the

matter of enacting zoning ordinances and the procedures for determining whether any certain proposed structure

or use was in compliance with or offended the basic ordinance, the court would not substitute its judgment for

the city's legislative body if the result was not oppressive, arbitrary, or unreasonable and did not infringe upon a

valid preexisting nonconforming use:

Stoyanoff arguments:

1. The creation of an architectural board for the purpose of maintaining general conformity with style is unauthorized by the

enabling statute

a. D’s response: The enabling statute provides in part that…such regulations shall be made with reasonable

consideration…to the character of the district…with a view to conserving the values of buildings…

2. That Ordinances 131 and 281 are invalid and unconstitutional as being an arbitrary and unreasonable exercise of police

power (based on aesthetic values) Arbitrariness and subjectivity violates due process.

a. D’s response: It’s not just taste but the ugliness affects property values, the Board is made up of architects, plus the

applicant has a chance to be heard and there’s an appeals process

i. Problem is gauging the adverse effect on stability of values would be speculation because the house has not

been built

b. Enabling statute…”towns…are hereby empowered to regulate and restrict…” P ignores other parts of the

ordinance: “unsightly, grotesque and unsuitable structures, detrimental to the stability of value and welfare….be

avoided and that appropriate standards of beauty and conformity be fostered and encouraged…”

3. That Ordinances 131 and 281 are invalid as an unlawful delegation of legislative powers

a. D’s response: There are public hearings with notice to the applicant, by the Architectural Board and the City Council

on appeal on the factual issues to be determined under the ordinance. So the realtor’s rights are protected in this

respect.

ZONING: EXCLUSIONARY ZONING

Southern Burlington County NAACP v. Township of Mount Laurel – Munis must, through land use

ordinances, plan + provide reasonable opportunities to appropriate housing for low- and middle-income

families. When regulation has a substantial external impact, welfare of the citizens beyond the borders of

the muni cannot be disregarded and must be recognized and served! NAACP wins (on principle, practically

no effect, however) – zoning required big lots ($$) and high % dedicated to industry – H: Saving on property

taxes is invalid reason for exclusionary zoning bc it violates state’s equal protection by limiting adequate and

sufficient housing. Mt. Laurel Case – a town must allow its fair shareof the region’s demand for low & middle-

income housing. Mt. Laurel also placed an affirmative responsibility on the town to cause such housing to be

built (density bonuses to developers who build low income housing, etc.). Also important are the spill-over

effects – if towns argue in a similar way, this would pack all the poor people into a poor town, which would be

de facto segregation.

1. If munis pass zoning laws that exclude the poor, theres a prima facie showing of an equal protection

(state law constitution) violation

2. Zoning regulations must promote general welfare not just for the town of Mt Laurel but also surrounding

towns (CONTROVERSIAL)

Comment [T40]: Very common!

Comment [T41]: COURT: w/o further elaboration, our opinion is that the zoning ordinance is presumptively contrary to the general welfare and outside the intended scope of the zoning power.

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3. Court makes clear that it relies on state law, not fed constitution to foreclose on SCOTUS overruling and

not even on statute b/c amending state constitution is more difficult.

4. Remedy given: 90 days from date, or additional time, to adopt amendments to correct deficiency in

zoning code.

Cost of local govt = Property Taxes = (tax rate)(value of property)

See that elected officials have an incentive to lower the tax rate (so to keep property taxes coming, you want to keep the value

of property up by encouraging industrial and commercial uses AND for residential parcels – you want them to be bigger and

more valuable) or keep the cost of local govt down (lower school population so lower density towns)

o Note that even if the mayor is not a snob or a racist, he would still have the same incentive to keep densities low,

lowers taxes, and increase property values

Comment [T42]: Has not worked well b/c theres still a shortage of housing for low and middle income people

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TAKINGS CLAUSE

“PUBLIC USE” REQUIREMENT

Kelo v. City of New London – economic (re)development plan for area = “public use” P are residents and

owners of homes in Fort Turnbull, a neighborhood in the City of New London. Pfizer announced that they

would build a facility near Fort Turnbull. Two mts later, New London’s City Council gave approval for a

development corporation to prepare a development plan. NLDC is a private non-profit w/ mission to assist the

city council in economic dev planning. NLDC also had eminent domain power. NLDC planned to build all sorts

of things – parks, condos, offices, etc.(more tax revenue, more jobs)

DISSENT: No pre-condemnation use that was affirmatively harming society. Draws a distinction

between a public harm like blight (which is a public use) and getting rid of something that is not a public harm.

Eminent Domain – gvt power to take pvt property for (1) public use (2) w/ just compensation. When gvt wants

to take property, it has to be for a “public use” (in most cases, there’s no serious dispute about the exercise of

ED) Procedure: Gvt files a suit for condemnation proceedings against the property and one of the questions would be how much

would the owner be compensated

What is a “public use” – there has to be some rational link between taking and some public purpose

CASE LAW before Kelo o Poletown – transfer of land to GM which wanted to build a plant. They threatened to move to another state unless

Poletown was condemned, Detroit agreed. Challenged as not being a public use. Majority said it’s a public use by

supporting the economy of Detroit. o Hawaii Housing Authority v. Midkiff – HI lots were owned by a small # of people. Gvt “took” land and sold that

land to tenants. o Berman v. Parker – gvt condemned poor neighborhoods (slums), take them, and sell them to private developers for

revitalization. Takings challenged based on not being a public use – Court: renovation of cities is a public use and

courts will be very deferential to legislature’s determination of what is in the public’s interest o NY CITY – wanted to attract intl business so condemned old electronics district w/ a lot of small businesses to build

WTC

REGULATORY TAKINGS (govt’al regulations) sometimes a taking, depends on ad-hoc analysis

Penn Central Transportation Co. v. City of New York – NY City enacted a Landmark Preservation Law to

preserve historical buildings. The law places restrictions on the property so that the owner cannot change how

the landmark looks unless she gets approval from the Landmark Preservation Commission. The plaintiff owns

Penn Station – a historic landmark – and wants to build an office building on top of the station. The

Commission rejected the plaintiff’s plans because the plan would destroy the silhouette and would change the

character of the station into nothing more than an aesthetic joke. HELD: Not a taking because it does not

interfere with present use of terminal. Denial of use of “airspace” is not an automatic taking because

“takings” jurisprudence does not divide parcels into discrete segments (underground, ground, airspace).

Court will focus on character of the action and interference in parcel as a whole: 1. Economic impact of regulation and extent to which regulation has interfered w/ distinct investment-backed expectations

(note that the latter is narrower)

a. Just economic impact – not having a skyscraper is probably a massive loss for the plaintiff; but if you look at it in

terms of investment backed expectations (they haven’t lost anything)

b. Interference Investment-backed expectations: In Penn Stn – when they bought it, they expected to run a train

station, certainly not to raze it and build a skyscraper (see that this is more gvt friendly and economic impact is more

owner friendly)

c. The regulation does not interfere with the present use of the terminal; the law allows the

plaintiff to use the terminal for the same purpose used for the past 65+ yrs -> the law allows the

plaintiff to have a reasonable return on their investment 2. Character of the governmental action

a. More likely to find taking when gvt physically invades a property than when interference arises from a governmental

program

Comment [T43]: As a response to this decision, many state legislatures passed statutes barring takings for “economic development” some defining this as taking of private property to give to another private owner

Comment [T44]: Courts give great deference to legislatures in determining what is a public use. The deference includes that the court will not require that there be a “reasonably certainty” that the expected public benefits will actually accrue from the development WHY? -legislatures are better equipped for fact finding to decide whats in the public interest -legislatures are democratically elected so they represent their constituents -matter of opinion -public purpose is open to debate, where public use is easier to define SEE THAT W/O EMINENT DOMAIN, GVT WILL HAVE TO NEGOTIATE WITH EACH OWNER, EACH OWNER HAS AN INCENTIVE TO DELAY (LAST HOLD OUT GETS MOST MONEY) – STANDSTILL!

Comment [T45]: NOTE: Penn Central would apply to personal property (i.e., not just real property) because all property is treated the same under the Takings Clause

Comment [T46]: If this isn’t the case, claimant can say that gvt took 100% of the air rights – this cant be. Court says that analysis looks at the whole.

Comment [T47]: Note that claimant will inflate economic impact while gvt will play up the lack of interference w/ investment backed expectations

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b. Implicit in Goldblatt – use restriction on property may constitute a “taking” if not reasonably necessary to promote a

substantial public purpose (i.e., could the gvt accomplish this goal in a way so as to not “take” property) or if it has

an unduly harsh impact on owner’s use of property

3. Extent to which a single property owner is being singled out or whether the burdens are being spread more widely

(say there’s only one historical building except for over 400, then stronger argument for a taking)

a. In PA Coal – “average reciprocity of advantage” where lots of people are burdened and everyone is enjoying

correspondent benefits -> if this exists, less likely that it’s a taking

b. Landmark laws are not like discriminatory or reverse spot zoning where a regulation arbitrarily

singles out one parcel for different, less favorable treatment than neighboring parcels

i. It’s true that landmark law burdens some owners more than others – but this does not

mean that the law effects a “taking”

ii. The plaintiff’s argument that theyre singled out is unavailing because there are over 21

historic districts and over 400 historic landmarks in NYC

iii. POLICY: Private owner should not pay to provide a public good.

iv. **Offset by transferable development rights – ordinance would allow owner of

burdened property to transfer the rights to another building (tack on an extra 10 stories to

another building)

**Note that Penn Central is very pro gvt and it is hard for a property owner to win under a Penn Central regulatory taking. P would

have to show a very large drop in the value of the property or great interference with investment backed expectations. He also will

have to show being singled out or having to bear the burden of a public benefit

PHYSICAL TAKINGS – STRICT RULE: Permanent Physical Occupation is a per se taking (regardless of

economic impact or purpose served). Hard line rule so P should first argue physical taking then regulatory.

Loretto v. Teleprompter Manhattan - Loretto owns building. Teleprompter company installed a small box on

her roof but its on her property – pursuant to City’s laws that allows companies to install boxes and wires.

There are TV cables across her roof and a cable that drops down the front of her building. It is a taking bc it

destroys the owners rights to possess, exclude others, use, and dispose that part of the property. NY’s statute

says landlord may not interfere with installation of CATV facilities and may not demand payment from any

tenant for permitting CATV or from CATV company in excess of what state commission says is reasonable.

DISSENT: Penn Central can say that they were more burdened because they lost millions of dollars,

and Loretto only had to give up a small piece of her roof. In modern times, govt regulations can diminish value

of property far more than minor physical touching. This rule (permanent physical occupation) is a poor way of

distinguishing significant vs. insignificant intrusions

MAJORITY DISSENT

Precedent Pumpelly – permanent flooding of property is a taking

Causby – repeated low airplane flights is a taking

Kaiser Aetna – gvt imposition of a public navigation

easement over pvt owned water is a taking

A lot of the precedent is on a larger scale (flooded farm)

vs. small box on a roof

Penn Central – most recent case held that all claims that

gvt action that reduces the value of property will be

evaluated by the Penn Central factors (economic impact,

etc.)

Policy Rule has more than tradition to commend it, there’s good

policy reason: a physical appropriation is more serious

(property is a bundle of rights: to possess, use, and dispose it)

and appropriation cuts off a part of the bundle

Penn Central lost a lot more than Loretto

This rule (permanent physical occupation) is a poor way

of distinguishing significant vs. insignificant intrusions

Administrability Easy to administer because there are no difficult line drawing

problems

It would be difficult to form a definition for “permanent” and

what is a “physical invasion”

*Remember that govt/CATV can leave the box on the roof as long as she’s justly compensated (to be

determined at trial). Having CATV probably increased her property value, so her compensation might be $0.

Also, govt mandated structures like fire escapes wouldn’t be physical takings b/c the owner would still own

those items.

WIPEOUTS only for real property! 100% reduction in value from regulation → per se taking

Comment [T48]: The majority and dissent disagree over whether Penn Central has been singled out to bear the burden of a public program. The majority finds that the burden is spread among other parcels and properties that have been designated as historical whereas the dissent found that the buildings affected are separated from one another (unlike a regular zoning regime) and they are treated differently from their neighbors (Penn Station versus skyscrapers). To the dissent, it’s important to have reciprocity (and the decrease in the value of the property is offset by an increase in the value that flows from similar restrictions on neighboring properties.

Whether the burden rests solely on Penn Central rather than distributed among other property owners makes a difference because 1) the gvt should not make a private party pay by themselves to “improve the public condition” (the public should bear the burden for benefits that they will enjoy); 2) if the costs are spread among the public, then its probably not a taking

Comment [T49]: Loretto would lose her case under Penn Central on balance.

1.Minimal economic impact & No interference w/ investment-backed expectations b/c the cables existed on roof when she bought the building [Loretto loses] 2.Character of governmental action – there’s actual physical intrusion in this property (unlike Penn Central b/c that only dealt with regulation) [Loretto wins] 3.Extent that she is being singled out – the law applies to every landlord in NY (the cable TV) [Loretto loses]

Comment [T50]: Physical possession hacks through all the sticks in the bundle of property rights.

Comment [T51]: Two competing arguments: 1)Deprivation of all value = taking 2)Regulation to prevent harm bc no owner has right to harm the public = not a taking

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Lucas v. South Carolina Coastal Council – beach house wipeout - State prohibited construction wherever the

beach has eroded in the past to prevent further erosion. This prevented Lucas from building houses on the

beach houses. The law was passed after Lucas bought the parcels. RULE: If regulation denies ALL

economically beneficial/viable use of the land in the name of the common good (i.e., to leave property

economically idle) → per se taking. R: (1) similarly situated owners have engaged in same use, this imports

lack of any common law prohibition. Similarly situated landowners are permitted to continue use denied to

claimant. (2) Confiscatory regulations (i.e., those that prohibit all economically beneficial use of land) – Any

limitation so severe cannot be newly legislated or decreed, but must exist in title itself, in restrictions that

principles of State property and nuisance law already place on ownership.

1) Where regulation denies all economically beneficial or productive use → taking

2) Legislature can pass law which can be characterized as preventing harm so you can have an exception to

taking on basis of preventing harm

3) If forbidden use is already illegal under common law nuisance, then deprivation of value wont be a

taking

***NOTE: Distinguish by saying that here, the trial court found that the regulation have rendered the lots

valueless

**EXCEPTION: Chattels/Personal Property - Court uses Par. 17 for personal property: the holding of Lucas

does not apply to personal property (i.e., not real property) so like Andrus v. Allard – prohibiting sales of eagle

feathers – gvt does not compensate for this, since it’s not a taking **B/c of State’s traditionally high degree of

control over commercial dealings…With personal property, you take your chance, because it’s a highly

regulated world and one risks having personal property rendered economically worthless (like the feathers or

machine gun dealer after machine guns are outlawed)

*Practical effects:

Shifts power from legislatures to judges bc post-Lucas, regulations that would ban use of land to prevent

harm would need to persuade courts that public harm is a nuisance.

Question again is who should pay for the cost of the public benefit (protecting beaches)

Regulations must tie harm to existing nuisance law or leave some economically available use

JUST COMPENSATION Interest taking is a physical taking, BUT when there is no net loss to owner, just

compensation for taking = 0

Brown v. Legal Foundation of Washington - IOLTA Program/Accounts is for deposits that on their own would

not generate enough net interest after administrative costs. Precedent: Phillips v. Washington Legal Foundation

held that interest income from IOLTA accounts was private property of the owner of the principal. Phillips

Rule: Interest follows principal. MAJORITY: (1) State law requiring client funds that could not otherwise

generate net earnings for client is not a regulatory taking; (2) law that requires interest on those funds be

transferred to a different owner for a legitimate public use could be a per se taking requiring payment of just

compensation, but (3) because compensation is measured by owner’s monetary loss – 0 net loss – then no

violation of Just Compensation Clause. The focus is not on what gvt gains, but what owner has lost. The interest

only exists because of the IOLTA program, and if it was possible for moneys to earn interest on their own, they

wouldn’t be in an IOLTA program.

DISSENT: Majority focuses on “net loss” while dissent focuses on “fair market value.” Mkt value is not

what owner lost, but the value of the good in the market. The decision counters Phillips precedent. Disagrees

with majority’s “before picture” – IOLTA accounts are earning interest, theyre worth something, and according

to Phillips, it’s the owner’s property. Rationale (which is very bad) of majority: What the gvt hath given, gvt

may freely take away. “ROBIN HOOD TAKING”

Comment [T52]: Note that parts of the opinion describe “extinguishment of value” and “denies all economically beneficial or productive use of land.” These are not necessarily the same thing. Property can have value even if you can’t build on them.

Comment [T53]: Even if value is not technically reduced to $0. Trial court found that the value of property has been reduced to 0 (i.e., taking). South Carolina Supreme Court found no taking because the regulation was enacted to prevent a public harm. [Chances are trial ct was wrong that the actual value of the parcels is $0. Strange because owner can still use the land and there’s possibility that he would be allowed to build on the land in the future.

Comment [T54]: Pursuant to court’s power it already had to prevent the use, prohibition is not a taking

Comment [T55]: Palozzolo v. Rhode Island (2011) - Subsequent purchaser can still bring a Lucas claim, even if the purchaser knew full well that when he bought the property, the law has already taken effect (2 camps of allowing Lucas claim: 1) strong view that the timing of the purchase doesn’t matter for investment back opportunities 2) weak: timing matters

Comment [T56]: Legal services for the needy

Comment [T57]: Pecuniary compensation is measured by net losses rather than value of public gain: If there was no IOLTA program, their interest would have been 0 (“before picture”) – if the money would have been able to earn interest to begin with, it wouldn’t be in an IOLTA account *Because compensation is measured by owner’s own monetary loss – 0 when Washington Law is obeyed – no violation of just compensation

Comment [T58]: Bentham – property follows law – you would be more for takings since property is a creature of the law Bastiat – law follows property – you would be more against takings

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HOW IT ALL STARTED…

Johnson v. M’Intosh - U.S. conquerors win, Indians lose-How it all Got started

Ps received land grant in Illinois from Piankeshaw Indians. D received grant from the U.S. for same land. Ps

seek ejectment. Chiefs of Indians were in rightful possession according to tribes. Proclamation of 1763, Virginia

law, and federal law prohibited private purchases of Indian land. Why the hub-bub? State govts were granting

lands in the West to settlers before govts purchased it from Indians. Major financially speculative question of

the day.

Court says the general principal was that discovery gave title to government. Said the British government

owned north America in fee simple and Indians had the right to possess the land until they sold it to the

government. After the revolution, Indians still had right of occupancy and since gov’t has fee simple,

government has right to sell land as fee simple even though Indians are still living there…so the buyer only has

the right to go on the land once Indians are bought out. The first half of the opinion is about purchasing the land

but second half also talks about purchase or by conquest. The second half is acquisition of Indian land by

conquest. The result of the case has been ambiguity on whether Indian’s right of occupancy can only be

extinguished by purchase or also by conquest. First half of opinion says its purchase, second half says its

conquest too and cases following have decided both ways.

Takings Clause - What constitutes a taking?

Physical Takings (Loretto)

per se taking;

any permanent physical occupation

Regulatory Takings

(Penn Central)

Wipeouts (Lucas)

per se taking for confiscatory regulations that deprive owner of all economically viable use of land OR if

regulation doesnt substantially promote legitimate govt end

Penn Central

requires balancing of three factors: Economic Impact+investment backed

expectations, Character of Gvt Action, Singling Out

Comment [T59]: Ultimate Source of Law

1)Federal Constitution

2)Federal Statutes 3)Federal Agency Regulations & Decisions

4)State Constitutions

5)State Statutes 6)State Administrative Agency Regulations and

Decisions

7)Local Ordinances 8)Local Agency Regulations and Decisions

9)Common Law

a)Precedent b)Analogies (indirect precedent, not binding but

can help things hang together)

c)Public policy