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Contents

Contents...................................................................................................................................................................1 What is Property?.....................................................................................................................................................3 Trespass and Nuisance.........................................................................................................................................3 Property and Equity.............................................................................................................................................3 Coase Theorem................................................................................................................................................3 Repeated Trespass and Injunctions..................................................................................................................4 Building Encroachments..................................................................................................................................4 Coase, Calabresi and Melamed........................................................................................................................4 Ex-Ante/Ex-post problem (page 63)................................................................................................................4 Restitution and Mistaken Improver.....................................................................................................................4 Original Acquisition.................................................................................................................................................5 First Possession....................................................................................................................................................5 Discovery.............................................................................................................................................................6 Land Grants from the Federal Public Domain.................................................................................................6 Acquisition through Creation...............................................................................................................................6 Accession.............................................................................................................................................................6 Adverse Possession .............................................................................................................................................7 Disabilities and the Statute of Limitations.......................................................................................................7 Sequential Possession..........................................................................................................................................8 Value Subject to Ownership....................................................................................................................................8 Property and the Human Body Moore v. Regents of the University of California......................................8 Owner Sovereignty and its limits.............................................................................................................................8 Protecting the Right to Exclude...........................................................................................................................8 Self Help..............................................................................................................................................................8 Exceptions to the Right to Exclude......................................................................................................................9 Necessity Affirmative Defense.....................................................................................................................9 Custom.............................................................................................................................................................9 Public Accommodation Laws..........................................................................................................................9 Anti-Discrimination.........................................................................................................................................9 Fair Housing Act............................................................................................................................................10 Owner Sovereignty and its Limits.........................................................................................................................10 Abandonment.....................................................................................................................................................10 1

Destruction.........................................................................................................................................................10 Transferability ...................................................................................................................................................11 Forms of Ownership..............................................................................................................................................11 Numerus Clausus...............................................................................................................................................13 Waste..................................................................................................................................................................13 Alienation...........................................................................................................................................................13 Rule against Perpetuities....................................................................................................................................14 Methodology..................................................................................................................................................14 Concurrent Ownership.......................................................................................................................................14 Tenancy in Common......................................................................................................................................15 Joint Tenancy.................................................................................................................................................15 Entity Property.......................................................................................................................................................15 Leases.................................................................................................................................................................16 Implied Warranty of Habitability (IWH).......................................................................................................17 Duty to Mitigate.............................................................................................................................................17 Transfer of Tenant Interests...........................................................................................................................17 Condominiums, co-ops, and common-interest Communities............................................................................19 Condo.............................................................................................................................................................19 Co-op..............................................................................................................................................................19 Title Recording......................................................................................................................................................19 Nemo Dat v. Good Faith Purchaser for Value...................................................................................................19 Types of Recording acts.....................................................................................................................................20 The Law of Neighbors...........................................................................................................................................20 Nuisance.............................................................................................................................................................20 Easements..........................................................................................................................................................21 Negative Easements.......................................................................................................................................23 Termination of Easements.............................................................................................................................23 Covenants...........................................................................................................................................................23 Notice and Common Plan..............................................................................................................................24 Termination by Changed Circumstances.......................................................................................................24 Termination by Abandonment.......................................................................................................................25 Takings...................................................................................................................................................................25 Eminent Domain................................................................................................................................................25 2

Regulatory Takings............................................................................................................................................26 Takings Test...................................................................................................................................................26

Property Outline
What is Property?
Trespass and Nuisance
Trespass is interference with possession of land Nuisance is an unreasonable infringement of the right to use and enjoy ones land o Requires a certain degree of intent o An injury (interference with enjoyment) o Must be substantial and unreasonable (balancing test) No damage in trespass, gave punitive damages (mobile home across land w/o permission) Intentional, no harm, unreasonable refusal by a vulnerable plaintiff, Generally: no punitive damages for a nominal award o Right to exclude is hollow unless it comes with sufficient means to protect it Why is right to exclude so important? o Self-help fears o Autonomy o Possible liability issues o Privacy o Efficient use o Really goes to the core of dignity, humanity and citizenship Merest v. Harvey: W/o right to exclude people with more means resources will victimize those with less Categorical/essentialist view of the right to exclude o Whatever consequences that flow from that are okay as long as they protect the right No real damages, planes flew low around dudes house (settled forever by Causby) Ad coelum rule not law, column of space above and below, guy loses Functionalist utilitarian view (contrast with Jacques) Cant have a well and a septic system in the same place; very unneighborly dynamic Neither one was a nuisance, well was a reasonable use, had his permit first (good faith an issue?)

Jacque v. Steenberg Homes, Inc.

Hinman v. Pacific Air Transport

Hendricks v. Stalnaker (classic private nuisance case)

Property and Equity


Coase Theorem

Basics: In the absence of transaction costs parties will agree to maximize net wealth. Baseline entitlement irrelevant; two parties will find the most efficient joint use of the resources (always most valuable use, come to agreement that is mutually beneficial) 3

Extension of Coase: courts should try to resolve cases in the most efficient way. Almost amorally. In issues of incompatible uses, courts should give entitlements to minimize transaction costs and be clear (parties will negotiate in the shadow of the law) Issues o Bilateral monopoly two parties hate each other (hard to negotiate) o Endowment people overvalue what they have o Assembly costs hard to get people together (holdouts/free riders)

Repeated Trespass and Injunctions Baker v. Howard County Hunt

Dogs run across farm during hunt, attack family, destroy things; Baker seeks injunction Injunction granted, dogs were a repeating trespass (may be reasonably foreseeable test for property that creates a trespass while not in exclusive control)

Building Encroachments Pile v. Pedrick and Golden Press v. Rylands

Footings of buildings were encroaching on land due to poor survey (good faith) Liability rule in GP (found for D no injunction); property rule in Pile (injunction granted) #1 Protected by property rule if plaintiff must voluntarily sell their entitlement to another person at a price the P agrees to o People have a duty to respect the rights of owners and whatever value they attach to it o Jacques, Hinman, Smith, Pile #2 Protected by liability rule if state determines the objective value for someone to compensate the Owner for their entitlement o Recognize that issues with negotiation often arise and courts better resolve conflict o Golden Press; Weatherbee #3 D gets entitlement, P can only stop D with Ds consent o Hinman #4 P can force D to transfer the entitlement to P for a payment of money compensation. o Spur D wins but not really Ex-ante refers to analysis of the situation before some critical event takes place Ex-post refers to analysis that takes place after critical event o Courts drawn to this, breeds liability rules because costs are so high Restitutions require 3 things o Defendant is enriched o At plaintiffs expense o Under unjust circumstances House built on wrong land (good faith questionable), builder destroyed house in cover of night Options for Good faith improver (all liability rules) 4

Coase, Calabresi and Melamed

Ex-Ante/Ex-post problem (page 63)

Restitution and Mistaken Improver

Producers Lumber v. Olney Bldg. Co.

o May recover for the amount of enhanced value o Improver may remove the building if it can be done without great expense to land or building o Improver can buy out the landholder of the original value of the land o If neither can pay for land/improvement, court can sell to highest bidder A good faith improver is a trespasser, bad faith destruction breeds liability to the original landowner, building becomes a part of the land

Original Acquisition
First Possession
1. 2. 3. 4. Actual Possession Intent to Control communicative act Series of acts intended to communicate that one controls a piece of property Effective exploitation through control Mineral rights - Some pre-possessory interest if using due diligence to explore for the mineral in an area When should the court find a clear winner early in the process: o If there is heterogeneous knowledge and ability, give it early and make it clear o If there is homogenous knowledge, best if protected by a governance scheme
Pierson v. Post

D kills fox while P is hunting it on unpossessed land; Actual capture, wounding, or killing of the animal is the moment of possession, dissent wants intent to control as possession P kills whale, leaves it to float to shore, D finds whale and sells it. Court has to decide between fast fish loose fish (salvager) and iron holds the whale (killer owns the whale) IHTW incentivizes whaling, but FFLF would promote new technology but may be inefficient Courts defer to custom in narrow circumstances o General use everybody knows about it o Longstanding custom o Limited application to field and area o Not deferring to custom would otherwise destroy the industry o Not contrary to general law o Cons: out group externalities, evidentiary difficulties but People will rape an open resource D scaring ducks from Ps decoy pond with gun, this is Keebles livelihood, sues for the disturbance This was unfair competition, court does not like that, would protect fair competition Sunken boat, P marked trees and left a buoy which washed away, D finds ship and salvages it Have to demonstrate an ability to recover the property and show/communicate due diligence to exercise control over the resource to other parties We want actual possession because it rewards those who have produced the most for society Abandonment Property is abandoned when owner intentionally and voluntarily relinquishes all right, 5

Ghen v. Rich

Keeble v. Hickeringill

Eads v. Brazelton

title, and interest in it


Popov v. Hayashi

Popov caught ball, got mobbed, dropped it and Hayashi got it. In rare move, court sold ball and split profit Popov deserved a chance to finish acquiring possession of the ball (pre-possessory interest)

Discovery
Johnson v. MIntosh (1823)

Indians sold land to Johnson ancestor. Later, Indians grant land to US. US sells to MIntosh. Johnson sues for ejectment of MIntosh Nemo Dat (cannot give what you do not have) Johnson would win, because his title is better Discovery conquest/custom allowed peace between European powers (general broad intent) Cultural labor theory of value whites will use land better (functional argument) Necessity system built on shafting Indians, have to continue to do so (functional argument) Built a monopsony, only federal govt could buy their land Positives? State law could have been much more hostile, it actually protected their land It is a huge source of entitlement but only for the people who belong o Gives an enormous source of endowed wealth Property regime has enormous consequence on those without voice and the disenfranchised

Land Grants from the Federal Public Domain

Acquisition through Creation


International News Service v. Associated Press

INS could not get news from Europe stole APs research and rewrote it Majority News is a quasi-property which gains value in its acquisition/creation o Very Lockean perspective on acquisition of property o This is a right only against competitors, not the general public Brandeis leave it to the legislature Holmes wants misattribution not misappropriation; value does not make property Principle of Accession: doctrine where you acquire property that is intimately connected with objects that are already our property Doctrine of Accession: someone mistakenly takes up a physical object that belongs to someone else and transforms it through her labor into a fundamentally different object (Weatherbee) Doctrine of Increase: General rules absent agreement to the contrary; Carruth offspring follows mother W (good faith improver) converted Gs (true owner) timber into barrel hoops (hoops worth 28x more) When D acts in good faith, he may keep improved property but must make original party equal through damages Must also have substantial transformation (physical or value hard to prove) o This is about driving a conceptual wedge between the true owner and the object Edwards starts soliciting cave he found, part of it lies below Lees land May allow intrusion if the person that applies for it shows a bona fide claim and alleges facts showing a 6

Accession

Weatherbee v. Green

Edwards v. Sims (ad Coelum rule revisited)

necessity for inspection and examination of the adverse partys property ad coelum applies, intrusion is allowed because his property may lie inside the cave that Edwards is profiting off of Dissent possession theory, only have rights to what you can subject to dominion or use. Adverse possession is: o Actual o Exclusive o Open and notorious o Adverse under a claim of right Why do we require a lot more than mere trespass to confer property ownership? o Owners might allow some trespass o Trespasses on undeveloped land: owner might never notice someone had been trespassing o We don't want to remove a gatekeeper (even if it's not very good) with someone who would be a terrible gatekeeper (adverse possessee). Why do we permit adverse possession? o Lockean Rationale: effectiveness of the gatekeeper, "sleeping on rights", TO has lack of desert o Utilitarian Rationale: adverse possession lowers transaction costs by cutting need for prospective purchasers to investigate ancient claims to property. o Hegelian/Personhood Rationale: adverse possessor has a closer relationship to the property; reliance interest and endowment effect. Man sells land twice, one man possesses it adversely, paid taxes, fenced in land, lived across the street Plaintiff let SOL run, knew Burnet was on the land, he was open and notorious, D wins P on Ds land for 30 years, knew she was not owner; Court uses strict standard for good faith (rare) P fails that test; good faith often analyzed by looking at the claim of right Deeds of 3 properties did not correspond to where they built their summer houses, instead of switching, they sue to take others land. Must meet all adverse possession requirements: Sufficient Continuity: sufficient when the land is consistently occupied during certain times of the year. o Helps if there are permanent improvements on the land (i.e., home and dock). Tacking: Rule: tacking of adverse possession is permitted if the successive occupants are in "privity" (i.e., contractual relationship) (ex: sale, gift, running of deed between parties suffices). Typically, state statutes provide that the statute of limitations is tolled for owners suffering from certain narrow classes of disabilities, including being under age, insane, legally incompetent or sometimes in prison at the time the adverse possessor enters the property Guy makes tape, P sues for conversion; SOL is the important issue in this case 3 possible rules for when SOL begins to toll 7

Adverse Possession

Lessee of Ewing v. Burnet (194)

Carpenter v. Ruperto

Howard v. Kunto

Disabilities and the Statute of Limitations

Songbyrd, Inc. v. Estate of Grossman

o Conversion rule the moment the adverse possessor converts the property (court picks this, 3 year SOL) makes most sense for adverse possession (Sporn) o Refusal of a demand to return rule (Guggenheim) o Subject Discovery test once P becomes subjectively aware of the adverse possession (OKeefe)

Sequential Possession
Armory v. Delamirie F1 v. C1 F1 has property right over anybody but true owner (jewelry found) Clark v. Maloney F1 v. F2 F1 same logic as Armory (logs) Anderson v. Goldberg C1 v. C2 C1 same logic as Armory (logs)

Value Subject to Ownership


Property and the Human Body Moore v. Regents of the University of California

Dr. patents cell line from Ps spleen, makes $3 billion off of it, conversion suit fails, informed consent suit proceeds; no precedent There was no property right in the removed spleen; he wanted it removed had intent to abandon it Policy concerns: hamper innovation, create disincentives to the conduct of socially beneficial research; people may just start selling body parts (especially the poor people) functionalist argument Mosk dissent = INS majority, INS Brandeis dissent = this majority

Owner Sovereignty and its limits


Protecting the Right to Exclude
Intel Corporation v. Hamidi

Fmr. Employee spamming Intel, causing lost time but not physical damage. Intel sues for trespass chattels Will not sustain action for TTC without damage (lost time not enough); court says that Intel had self-help remedies Some policy concerns o They opened themselves up to the internet; dont want to clog the internet o Technology is changing rapidly; let legislature deal with it o Do not need to squeeze the new technology into old laws o Injunction would have been essentially hollow, would make court look bad (inability to enforce) Always permitted to some degree question of when/where the courts demand more of a monopoly right to enforce right to exclude D leased property to P for restaurant, reserved the right to retake possession should the lessee fail to meet lease conditions; P broke lease; D locked P out when she left for the night and re-let the property If D is legally entitled to possession then he can retake if he does so properly Court decides that you cannot resort to self-help for eviction because it cannot be done peacefully There was a forcible entry and detainer statute which provided a decision in 10 days or less this is peaceful Guy and wife buy car, they divorce, he has to pay for car, she gets it, he defaults Repossessors come at 4:30 a, and start to take her car, she gets things out of it with permission and no fight UCC in taking possession a secured party may proceed without judicial notice if this can be done without 8

Self Help

Berg v. Wiley

Williams v. Ford Motor Company

breach of the peace (Tell your client to raise hell) Why allow this type of self-help? Lower costs for financing, Easier way to gain collateral on default

Exceptions to the Right to Exclude


Necessity Affirmative Defense Ploof v. Putnam

P moors boat to Ds dock. Storm comes, D removes boat, Ps ship and family are injured Ps trespass is excused due to necessity, actual property right may shift (property rule- #3) Necessity is fine when: o There would be high transaction costs to litigate the permission to use the property o Use of land is not onerous/destruction o Consequences of forbidding the necessity would be grave Matters what your purpose is, also matters what creates the necessity (danger vs. inability to go forward) Ps only remedy is if the ship damaged the dock (while docked)

Custom McConico v. Singleton

D hunted on Ps uninhabited, unimproved land against Ps refusal Court holds that custom of allowing people to hunt had essentially become law default license o Can be overcome by posting laws or fencing in land (statutes have codified this either way) Posting laws are default rules that can curb transaction costs o Only works when there is a clear demarcation of boundaries (may mean a fence is required) 42 USC 2000(a): (1) inns, hotels, motels; (2) restaurants etc.; (3) entertainment o Cannot exclude due to discriminatory factors because these are places of public accommodation P was banned for card counting, Casino could not do this without putting it in hotel rules Court chose that default rule should weigh in favor of public access as opposed to owner sovereignty Market may correct any negative effects of exclusionary policy courts need only step in when it is discriminatory Compare the right to exclude with the individual right, usually court will weigh in favor of stronger right o Strength of right is a fact determinative test o The more a place opens their doors to the public and benefits from said openness, the weaker the interest in the right to exclude - Brooks v. Chicago Downs Assn. o Schmid had a very obvious disparity (1st amendment v. right to exclude on private university) o Shack had two strong rights (human rights v. right to exclude on private farm) o Uston had 2 weak rights (right to exclude in casino v. public accommodations) Courts acted conservatively (interpreted the 13,14,15 amendments very narrowly) o Private actions did not fall under these clauses according to the court; only state action did o Attempts to zone cities by race were discriminatory, but not private efforts to do so Ps sign a covenant agreeing not to let blacks into neighborhood. Ds (black) move in. State Supreme Court 9

Public Accommodation Laws

Uston v. Resorts International Hotel

Anti-Discrimination

Shelley v. Kramer (1948)

ordered enforcement. The Supreme Court said it was unconstitutional Because state court enforced private covenant, a state action is implicated. Therefore, a state violated 14th Amendment when State court ordered enforcement Later Fair Housing Act eliminated unilateral discrimination in housing sales Justifications for distinguishing this restrictive covenant from general right to exclude o Covenants are a lot like zoning (functionally equivalent already held to be unconstitutional) o Excluding an entire group for a long time is different than excluding one person o Shellys are in possession, this would be an ouster (better have a great reason to do this) o Diminished owner interest group dynamic makes interest weaker o Judicial enforcement of non-natural property rights is state action o Common Law / Norms: agreements about collective property concern the property, not the owner Prima facie case o Have to be one of the protected classes with no other outstanding issues (qualified) o Denied housing with housing still available Burden of proof shifts to D to show a non-discriminatory reason why the applicant was not approved Evidence of pre-text? Defendants actions, Consistency, Ad hoc explanations, Available v. non-available Advertising a racial preference is not allowed under this Mrs. Murphy exception (houses 3 or less families and its owner) Can discriminate but cannot advertise it Private clubs & religious organizations (so long as they dont take government money) FHA and roommates Right to purchase property doesn't necessarily trump the constitutional rights of privacy, free association etc.

Fair Housing Act

Owner Sovereignty and its Limits


Abandonment
Look for signals of abandonment Location, condition, no name etc; Eads v. Brazelton How can people take control once the D walks away? o First possession, Accession, Terra nullius barren wasteland, Reversion to state control o There is no real mechanism for what to do with abandoned land If a person DOESNT have perfect title: Property is abandoned when owner has voluntarily relinquished all right, title, claim, and possession with the intention of terminating ownership without vesting it any other Traditional Rule: Real property cannot be abandoned (D had perfect title) Ds land became a negative value asset, they tried to sell it, let the government try to sell it. No buyers. D had not fully abandoned the land, still belonged to them thus they owed damages for HOA fee Height of the right to exclude preventing of property from being used or resold against your will Destruction is the ultimate in right to use and exclude, its complete dead hand control You can do whatever you want while you are alive destroy a painting etc. 10

Pocono Springs Civic Association v. MacKenzie

Destruction

Eyerman v. Mercantile Trust Co.

Lady wants house destroyed in will, neighborhood wants it kept, destruction was $39K net loss Court says it would be against public policy to destroy this house hurt the aesthetical/historical aspects There is no good reason for the destruction; AND the act is against public policy Acts are against public policy when: they have a mischievous tendency so as to be injurious to the interest of the state apart from illegality or immorality Courts will almost never order the destruction of property causing substantial loss in value Right to transfer o Enhances owner autonomy- permits owner to shed gatekeeper responsibility for thing owner no longer wants/needs o Allows owner to appoint successor as gatekeeper of the asset. Efficiency justifications - Allows for property to be reallocated to person who values its most (especially without transaction costs Coase theorem) Two types of transfer Exchanges (quid pro quo) and Gifts Absolute restraints are void; limited restraints may be valid if reasonable o Some evidence of an unreasonable restriction % of market covered Whether there is invidious intent Discrimination Mechanism of alienation

Transferability

Lauderbaugh v. Williams

Lauderbaugh wants to sell outside the association, there is a restriction on alienation Court focuses on future holders of land instead of the present owners Restriction unreasonable because it was arbitrarily applied, done by high percentage vote (easy to blackball) Possessory Estate Owning an estate in land rather than land itself is legitimate legal right to occupy the land immediately o Freehold not a particular date but can still end o Non-freehold ends on a particular date Future interest possibility of right to possess in the future (does not include right to possession until some future event) Fee Simple Absolute O > A and his heirs or O > A o Largest Estate permitted by law, full possessory rights, alienable, inheritable o Courts assume fee simple today unless deed language looks like it is creating a lesser estate Life Estate O > A for life (reverter O); O > A for life then to B (remainder to B) o Alienable by gift or sale and ends at the death of original owner (but not by will) o Can only convey the life estate in yourself (O >A for life who sells to B, once A dies, it reverts to O) life estate per autre vie Fee Tail O > A and male heirs of his body o Only when the family dies out is there a reversion or a remainder 11

Forms of Ownership

o Generally these are fairly easy to convert into a fee simple o These are abolished by statute in most states Defeasible Fees o Fee simple determinable (FSD) As long as while during until This is an automatic end if condition is not met Future interest is a possibility of reverter if condition is not met Occurrence of named event will trigger the start of statutory period for adverse possession o Fee Simple Subject to Condition Subsequent (FSSCS) To A but if, right of reentry Same as FSD but interest does not end automatically Future interest is a right of reentry Clock does not start for AP but still cannot sleep on rights (doctrine of laches) o Fee Simple Subject to Executory Limitation (FSSEL) To A, as long as she doesnt smoke, but if she does, to R Gives an executory interest R (Check against RAP) Future interest is an Executory Interest Reversionary Interests o Reversion:(follows a life estate, some leaseholds)follows natural end of a life estate and in other contexts which an owner has not disposes of the entire fee. to A for life (O implicitly retains a reversion o Possibility of Reverter: (Follows FSD) O will automatically get the property back if the built in condition occurs. O grants to A as long as then to O if the grantor dies, his successor takes interest o Right to Entry/Power of termination: (Follows a FSSCS) Grantor has option to take action (nothing happens automatically ) O grants to A but if then O has the right to reenter and take Remainders o Indefeasibly vested indentity of takers is known (O > A then to As 3 current Children) o Contingent Remainder O > A for life then to As children if male (Reversion if not met) o Vested Remainder Subject to Complete Divestment: identity of interest holder is certain and the remainder is certain to become possessory, unless some specified event occurs Magic Words: To A for life, then to B; but if B fails to graduate by 19, then to C. (A has life estate, B has a remainder subject to complete divestment with a condition subsequent, C has an executory interest. If B fails to graduate by 19 her remainder will automatically be terminated or divested) o Vested Remainder subject to open vested remainders in one or more ascertainable members of a class that may be enlarged O > A and his kids (his current son B has a remainder vested subject to open if any more kids are born) Holographic will left to 3 daughters unless they marry or die, in which case it moves to the surviving daughters question is what happens when the all 3 daughters marry or die This is a life estate determinable in each daughter with an executory interest in the sisters shares, with a 12

Williams v. Estate of Williams

reversion in fee simple to grantor and his heirs


Klamath Falls v. Bell

D&S (the corp) > KF so long as library. Executory interest in D&S (the people) RAP does not allow this; D&S get crossed out; city ends up with an FSD instead of an FSSEL The corp dissolved so their reversion went to the heirs of D&S the beneficiaries of the corp. Requires people to use a standard set of forms; New forms must come from legislature Externalities Similar market participants and purchasers of property would have a bitch trying to find out about everything that went with the land unless its one of the forms Royal Whiton does not want his property to go to his daughter-in-laws side. Too fucking bad. 4 grandchildren get 1/6 of a fee simple, 5th grandchild has a 1/3 fee simple to her and her heirs on her fathers side Did Royal create a Fee tail for Sarah? Looks like it, Holmes says that since fee tails are illegal, she has a fee simple absolute Gerrish signed a lease that was year to year for the rest of his life This was essentially a life estate determinable Third party costs effected by this kind of tenancy o Value is lost to purchasers and to his heirs o Creditors of the estate are affected when the value of the property is compromised using the state as security. o Purchasers generally: people are buying properties that have been rented out. Future purchasers will have to gather more information and terms of the leases relating to the property to make sure the sort of property right ruled here isn't present.

Numerus Clausus

Johnson v. Whiton

Garner v. Gerrish

Waste
Brokaw v. Fairchild

Brokaw leaves a house to each kid in life estate, George wants to raze it and erect an apartment Daughter has contingent remainder is she outlives George, contingent remainder in other kids if she doesnt Right of life estate is use, not complete dominion (Still have more rights than a lessee) Ameliorative Waste increased market value impermissible if it destroys subjective value for remainderman (not based on efficiency)

Alienation
Mountain Brow Lodge v. Toscano

Will grants land to Odd Fellows club with clause that if they dont use it or if they try to sell it then the land reverts back to the grantors estate Court rules that sale provision is an absolute restriction on alienation and is invalid Balancing test between restraints on use and alienation limits o Remedy involved o Externalities on market how many buyers does the restriction eliminate? o Does restriction benefit other land? 13

o Does it discourage improvements? o Does it encourage gifts to charity?

Rule against Perpetuities


No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest Vesting is eliminating any of the suspense elements regarding a future interest 1. Classify All Interests 2. Any interests subject to RAP? a. Contingent remainders - need to resolve the question of who the remainderman is and whether remainderman will satisfy the conditions precedent b. Executory interests - taking of possession or the executory interest becomes an indefeasibly vested remainder c. Open classes (Ex: To Amy and her children) i. You could have many children and the class does not close until you're dead. ii. So, to avoid RAP you need your class to be closed and specific. 3. What event has to happen for these interests to vest? 4. Identify the life in being that validates (look when interest is created when testator dies in a will) a. Reversions are exempt from the rule against perpetuities b. The life in being at the time the interest is created doesn't have to be related to the interest c. The fetus of a dead testator is considered a life in being at the time of creation. 5. If RAP, cross out interest and reclassify
Klamath Falls Revisited

Methodology

City has an FSSEL, with D and S having an EI which is subject to the RAP D and S are the lives in being, this interest does not have to vest within their lives and 21 years RAP is invoked, strike out the EI and reclassify it as a FSD Can reflect relationships of owners or usage JT have no property rights vis a vis each other (no exclusivity of each other) Both can exclude or include strangers, use property for profit or enjoyment, sell interest Remedy for either party is exit with automatic right to partition, not judicial arbitration o 2 types Partition in kind (PIK) physical land division Partition by sale (PBS) division of proceeds from sale according to the parties interest. Partition has to be impracticable or inequitable and The interests of the owners would be better promoted by a PBS o Can give any reason for partition and court will likely grant it o Future interests have a weak incentive to arbitrate against partition, current interest is strong Waste = future interests have incentive to arbitrate, weak incentive for current interests Why are judges reluctant to entertain actions of waste (in comparison to suits by future interest holders) o There are differences in transaction costs 14

Concurrent Ownership

o Absentee/minor/unborn future interest holders o Easier for cotenants to monitor other cotenants o Easier coordination o Cotenants are always holders of the same interest Owelty payments that correct the imbalance of a PIK Siblings Partition rights, contribution, etc. are the same for TIC and JT Only significant difference is right to survivorship (there is no such right in TIC) Goes to the heir of the person who dies (O > C, D, Es shares go to their heirs) It is flexible, interests need not be equal Spouses right to survivorship O > C, D, E (illustration of right of survivorship) o If C dies his interest is split between D and E o If D dies, E gets 100% share; E dies > his heirs Only really appropriate for husband and wife or a family business The Four Unities must be satisfied (T-TIP) o Time Each interest must be acquired or vest at the same time o Title Each must acquire title by the same interest or by joint adverse possession (not by intestate succession or other act of law) o Interest Each must have the same legal interest in property, such as fee simple, life estate, lease, etc. although not identical fractional shares o Possession Each must have the right to possess the whole If any of these fail, it becomes a TIC (either person can sever and make the JT a TIC) Use a straw transaction to turn a TIC into a JT (sell TIC to one person who sells it back as a TIC) There is a general bias against JTs, so be clear in your language if that is what you want What if a joint tenant enters into a lease? unclear but would seem to violate TTIP TIC, P wants to sell property, D wants to keep her chunk of the land, wants PIK, P wants PBS PIK is given when physical attributes of land allow for practical and equitable division, when impracticable or inequitable PIK destroys a lot of wealth, has given way to PBS as more common P sues her cousin because D is overgrazing the land Ouster clear demand by cotenant for use that is refused by the other cotenant o Acts that necessarily exclude the other tenant are an ouster Determinative factor in this case is that the land only had one use and there was only so much grazing that the land could take before it was an effective ouster 15

Tenancy in Common

Joint Tenancy

Delfino v. Vealencis

Gillmor v. Gillmor

Entity Property

Leases
Rent Landlord always expects to collect rent o Regular interaction between landlord and tenant o Increased landlord interest o Leads naturally to some level of management and supervision Often specified or permitted by lease agreement Timing o Present value of a reversion is larger o Leases are often used as an instrument for managing complex asset systems o Permits a division of labor and a specialization of function Leases can serve to diversify risk (important) Leases in Numerus Clausus o Term of years stated date of termination o Periodic Tenancy renews on a cycle; must give notice at least equal to length of cycle If lease is not terminated, it is renewed for entire cycle o Tenancy at will either party can terminate when they want o Tenancy at sufferance - individual that was once in rightful possession of property, holds after this right has ended. Differs from trespass because original entry was permitted. This difference limits L ability to use self-help to evict TAS. L can use FED or bring action in ejectment. Options for Tenant suffering a potential breach o Remain in possession and sue for lost profits o Rescind the lease o View breach as an end of the lease and sue for damages Term of years lease, T kicked off land by army Court holds that T must pay rent since he would have been able to collect windfalls, has to take losses too L builds encroachment onto Ts leased land, T stops paying rent Covenant to pay rent is dependent on covenant to grant possession, T does not have to pay rent Tenant had another independent covenant to repair the property not absolved from this Does L owe T a warranty of fitness? Paint chips in grazing land bunch of dead cows Caveat lessee, T liable for rent; beast raiser probably in best place to know land fitness L rents to residential and a cocktail lounge. Ts get annoyed, ask L to make it stop. He fails. They stop paying rent. L sues for rent, Ts argue constructive eviction Covenant to provide possession also comes with quiet enjoyment, when this goes away: constructive eviction L not typically responsible for other tenants unless L has power to control the offensive conduct that has foreseeable effects Effect, not intent is the key issue 16

Paradine v. Jane

Smith v. McEnany

Sutton v. Temple

Blackett v. Olanoff

In re Kerr

T has lease for 2 years, goes bankrupt, L finds new T 1 month after T stops paying Old Ts only responsible for the time it went unrented, L wanted difference in rent between 2 tenants Surrender implied K for a mutual release of obligations o Tenant stops paying rent this is an offer o L relets for a longer term this is an acceptance T has agreement with L to not allow another drugstore in the building, rent reduced if there were vacancies L let doctor dispense drugs out of his office, T vacates. Court construes lease as interdependent What factors were important to decide if this was interdependent? o Boiler plate contract that came with a rider o Reduction in rent when vacancies o Breach was the essence of the bargain (economic importance) Court finds two sets of rights in the lease: o L-T relations of privity of estate o Lease stipulations & privity of contract. (How important were these in making privity of estate?)

Medico-Dental Building Company of LA v. Horton and Converse

Implied Warranty of Habitability (IWH) Javins v. First National Realty Corp.

1500 housing code violations, Ts stop paying rent, claim L breached lease by allowing disrepair IWH cannot be waived by either party, best invoked when there are ongoing violations o Landlord cannot retaliatory evict (illegal lease doctrine did not do this IWH replaced it) Landlord cannot go out of business to avoid IWH; question as to what violations should matter Consequences o Impact depends on enforcement levels (generally very low) o Payouts are low does not attract lawyers, not much effect on housing for IWH

Duty to Mitigate Sommer v. Kridel

T sends letter to L surrendering his lease. L never responds, sits on his butt, does not mitigate L has to mitigate breaching party has duty to prove he didnt (shift from farms to high rises) Reasons to mitigate - Tenant couldnt pay before (judgment proof plaintiff); Steady income; Vacant properties have their own issues; costs of litigation Mitigation - T owes rent for reasonable time of vacancy plus difference in lower rent and advertising costs Surrender L accepts surrender when locks changed etc., D pays for months vacant but nothing else Sublease: each sublease is a carving out of the previous lease & creates an interest of somewhat lesser extent than the interest from which it is taken. (responsible to the person immediately above in the chain of leases) o No privity of estate under a sublease because the subtenant's interest is not carved directly out of the landlord's interest Assignment: operates like alienation - prime tenant alienates prime lease to first assignee (assignee is held responsible to the original landlord, instead of the tenant who transferred the property) o Landlord and Assignee are in privity of estate because the assignee's interest is directly carved out of the landlord's interest. 17

Transfer of Tenant Interests

o Privity of contract between the Landlord and the prime tenant is not destroyed. o No privity of contract exists between the Landlord and the assignee. Privity of Contract & Privity of Estate o Privity of Contract - easy to identify - whoever has signed the lease o Privity of estate - Two requirements: Must have interests directly carved out of the interest of the each other One of the parties must be in actual possession of the property. What Obligations run with privity of estate? Any covenants that run with the land & define the leasehold interest. Why does this matter: o If you are an inactive landlord, you will prefer a sublease, because the prime tenant will serve as the landlord to the sub tenant. o If you are an active landlord, you probably prefer an assignment, because the tenant must pay you rent directly and perform other obligations that run w/ the land. o AND if the assignee defaults, the prime tenant is still under privity of K to the landlord (acts as a surety for $$ owed) Other Concepts in Assignment: o Assumption If the first assignee expressly agrees to be bound by terms of the original lease (is bound by privity of K AND privity of estate to the landlord. o Novation Occurs when the parties agree to terminate any privity of contract between the prime tenant & the landlord (landlord must agree) L Leases to Jaber (Privity of Estate & Privity of Contract), Jaber creates an assignment to Norber & Son, but includes a reversion clause, Norber & Sons agree to pay Jaber's rent, and in consideration for the contract five additional promissory notes. Norber & Sons contracted to transfer the estate to Miller. The promissory notes were split into monthly payments to make it more manageable for Miller to pay The estate burns down! Miller sues Jaber, arguing that the promissory notes are actually rent payments, and that because the transfer was a sublease, rent obligations terminate when the property is destroyed. Question: Is the transfer from Jaber to Norber & Sons an Assignment or a Sub Lease? o Common Law: If there is any possibility of a reversion, then it is a sublease regardless of what the K says. o Massachusetts Rule: Should carry out the intent of the parties, rather than the strict common law rule because laypeople will not understand how to properly structure an assignment under strict common law rules. Because Jaber intended to assign the property to Norber & Sons, it is an Assignment. Because it is an assignment, the promissory notes are consideration to induce the assignment, rather than rent for an assignment. o Because it is consideration for the assignment, it arises out of privity of contracts and is still owed to Jaber, whereas if it was rent it would have arose out of privity of estate the duty would have ended when the estate was destroyed. 18

Jaber v. Miller (1951)

Kendall v. Ernest Pestana

San Jose leases to Perlitches, 25 year sublease to Bixlers Perlitches assign to Ernest Pestana Bixler asks Pestana to assign to Kendall, Pestana refused, demanding increased rent and other terms Had to ask per their lease CA goes with the minority rule (this is a default rule that you can K around) o Majority CL rule Landlord can deny this for any reason at all o Growing minority rule can only deny where lessor has a commercially reasonable objection Suggest deference to landlord (subject to judicial review) This is an ex ante thing, they are screwing shit up by doing this Landlord- Dictatorship Unit-holder governance- democracy Why rent? Financing, Diversification/risk, Specialization Why own? American dream/personhood Autonomy, Investment, Tax-Preferred Ownership

Condominiums, co-ops, and common-interest Communities

Condo Nahrstedt v. Lakeside Village Condo (1994) (Crazy cat lady)

530 unit condo complex - constitution contains Covenants Conditions & Restrictions for everyone in complex. Enforced by home owners Association. CCR prohibited pets. Main Argument - CCR is unreasonable - statute says they have to be reasonable - claims application to her pets is unreasonable "as applied"; Argues no adverse effect on other residents Florida Approach Rules in Project declaration (Constitution / CCR etc.): no reasonableness standard unless completely arbitrary or it violates public policy New rules or interpretations must be reasonable Ct. - Best interest of social fabric of complex's community to strictly enforce the contract o Don't want residents to over litigate the issue - hurts fabric of condo's community o Wouldn't be able to draw the line on a case by case basis (i.e. Cat okay, liger not okay)

Co-op 40 West 67th Street v. Pullman

Pullman being a huge dick to neighbors, they vote to remove him. He refuses, they sue him for possession and ejectment Court uses Business Judgment Rule (this can lead to bad evictions) deference to business unless: o Board acted outside of its authority o In a way that did not legitimately further the corporate purpose o Or decision was done in bad faith Do tenants need greater protection from commercial landlords? o Landlord bears costs of eviction o Coop board spreads out costs o Court is ok with the double standard because its NY and landlords have incentives to change tenants

Title Recording
Nemo Dat v. Good Faith Purchaser for Value
Nemo Dat cannot give what you do not have thief does not gain good title Courts have developed rules to protect the good faith purchaser for value 19

o Good faith thought title was good o Value actually purchased it Recording is an ex post approach o Organized by transacting parties names o Records do not carry much presumption of validity o Provides notice and protects purchasers The title examination directly involves notice and good faith purchasing o You start at the immediate seller and see who sold it to him etc, then once you hit the statutorily designed limit, then you go back the other way to make sure nobody sold it twice o End up with a chain of title Race winner of race to record prevails o Nothing to do with good faith purchaser for value Notice subsequent good faith purchaser for value wins unless he has notice (actual, constructive, or inquiry) and a recorded interest gives constructive or record notice o No way you can win if you have notice o If neither party records, last purchaser wins Race-notice subsequent good faith purchaser for value wins only if he has no notice and records first o Still really strong incentive to record Shelter Rule o If O conveys to A who does not record, then conveys to B who does record then grants to purchaser C not in good faith or value, the right belongs to C o Original Owner Exception B cannot sell back to O using the shelter rule, right reverts to initial purchaser 1913 Hood deeds to plaintiff in escrow (his when she dies); 1928 hood conveys to nephew and brother who record; 1933 she dies, plaintiff records (race-notice statute) There was no evidence of consideration for nephew and brother (no value) - Dissent says work by the nephew was consideration (followed by some courts) Plaintiff adverse possesses land, fences it in, it erodes, D claims land for value in good faith, claims P did not record Adverse possession cannot be taken away by a sale flag need not fly forever Causes a huge rise in information costs for a purchaser, starts chain of title over Wild deed goes one direction, Gage sells to P who records in 1932, recorded by original claim in 1936, wild deed recorded by earlier party in late 1936 (chart in the book) Plaintiffs purchased an unrecorded deed, statute does not protect this (until Gage records)

Types of Recording acts


Hood v. Webster

Mugaas v. Smith

Zimmer v. Sundell (932)

The Law of Neighbors


Nuisance
Requires Actual/substantial injury 20

o Effects property but less tangible in nature o Invokes right of quiet enjoyment o Have to balance nuisance with the suffering 4 Tests o Was intrusion committed on plaintiffs land or outside the land? o Was harm direct or indirect? o Was the invasion tangible or done by some intangible substance? o Did the intrusion deprive plaintiff or possession of the land or merely the use or enjoyment of such Restatement o Multi-pronged balancing inquiry to determine unreasonableness o Nuisance is a substantial, non-trespassing, invasion, effecting the use/enjoyment caused by either an ultrahazardous activity or intentional/unreasonable activity Three approaches to unreasonable Badness exceeds some threshold of wickedness Becoming Worse dramatic change for the worse Cost-benefit values of conflicting uses Iron Company operates 24/365 has over 200 employees; vibrations, dust, noise are bothering neighbors Not a trespass because it was not tangible, trespass and nuisance should be kept distinct, could be nuisance Ds plant damaging homes. Court gives damages to owners to allow plant to keep open Court chose a type 2 Options if an injunction was granted o Settle expensive o Clean up expensive This really screws the landowners because for a small fee, the company can just fuck their shit up forever This may have turned out differently if the landowners sought an injunction ex ante (cant pursue nuisance because there is no harm) Spur has feed lot, Del Webb starts building towards it, Spur is building towards Del Webb Developer sues for public nuisance (has a loss of sales) Court decides on Rule 4, Del Webb must pay for reasonable costs of moving or shutting down, but right given to plaintiff Landowner may not have relief if he comes into a neighborhood that is reserved for industrial or agricultural endeavors and has been harmed thereby Most of these end up as a 3. Defendant is not enjoined from operating his business Voluntary restriction on exclusion rights Easy way to create is by grant (put it in writing and record it) Often involves neighbors; neighborly thing to do is resist formalities But informality leads to litigation Two types of easements 21

Adams v. Cleveland-Cliffs Iron Company

Boomer v. Atlantic Cement Company (956)

Spur Industries v. Del E. Webb Development Co. (Coming to the Nuisance 964)

Easements

o Appurtenant most common (dominant and servient estate) o Easement in Gross attached to a specific person (Non-inheritable, non-transferable) Profit a Pendre one party has the right to remove a resource from anothers land o Includes an implied license to access the land to get the resource (irrevocable as long as profit lasts) Court has to define this agreement: license, lease or easement in gross? Numerus Clausus at work D is servient estate, wants to remove sign from wall. This is an easement in gross because it was granted only to the plaintiff. Not a license because it was not revocable Plaintiff landlocked his own parcel. He want an easement by implication or necessity Easement by Implication prior use was continued for so long that it was meant to be permanent while under common owner o Quasi easement (not in this case) o Would have to show that the road used to reach their home Easement by Necessity land split by a grantor o Has to be some level of necessity at the time of severance o Has to be a high level of necessity to get an easement o Common ownership followed by a severance that leaves one landlocked parcel o Easement by necessity does not remain in existence if necessity is abated Trucks going onto Ds land every day, P wants easement by prescription Elements of easement by prescription o Actual o Open and Notorious o Not exclusive o Not necessarily continuous (continuous use required not all the time though) o No claim of right requirement P given an indefinite easement in the form of an injunction (a rule 1 decision), D must tear down the building he built when he relied upon the denial of the injunction Reasons to require compensation for bad faith prescriptions (court opts for harsher rule) o Would interfere much less with true owner deference o Wouldnt interfere as much with issues of keeping title clear o There are evidentiary problems, gets really complicated Taylors have permission to use a road, do so to bring supplies to build a house which Holbrooks are aware of. Holbrooks revoke ability to use driveway once house is built, Taylors want easement by estoppel Easement by estoppel o Owner gives permission o Non-owner relies to his detriment o Owner revokes permission o To the considerable expense of the non-owner 22

Baseball Publishing Company v. Burton

Schwab v. Timmons

Warsaw v. Chicago Metallic Ceilings Inc.

Holbrook v. Taylor (998)

Easement by estoppel is good as long as necessary, found in this case 4 situations that are allowed in English Common Law o Light window o Air flowing o Water flowing in artificial stream o Lateral support building Fountainbleau is building a huge building to bloc Eden Rocs sunlight, too damn bad for the Eden Roc Eden Roc does not get their prescriptive negative easement for the light American courts refuse to make these Spite Walls are now an actionable nuisance, but this was not alleged by Eden Roc FB is acting reasonable but may be still a nuisance (compare to Hickeringill) By deed sell back the easement End of term Terminating Event Merger common owner unites dominant and servient tract Can be terminated by prescription (blocking easement) Abandonment Terminate by estoppel Recording statute Eminent domain kills your easement Misuse D is using the land for use of a different piece of land this is not allowed If uses are too entwined, then the easement will be enjoined; court stops easement until it can be determined what it can and cannot be used for Intensity of use for dominant tract is judged on a reasonableness standard (factual inquiry) Real Covenant runs with the land Equitable Servitude promotes fairness and equity because you cannot force somebody to perform if they do not have notice Promises to keep and maintain garden, this is an affirmative covenant (AC) Promises to keep it open/not build negative covenant (NC) Promises to allow other people access to garden affirmative easement Guy had notice, but it was not on the deed he wants to build on the land o If not on the deed, you can look to the record through a title search He cannot build on the land because he had notice 23

Negative Easements

Fountainbleau Hotel Corp. v. Forty-Five Twenty-Five Inc.

Termination of Easements

Penn Bowling Recreation Center v. Hot Shoppes, Inc.

Covenants

Tulk v. Moxhay

Neponsit Property Owners Association Inc. v Emigrant Industrial Savings Bank

Covenants for payments for common amenities bank gets some land doesnt want to pay fees What is required for a covenant to run with the land? o Parties intend it to do so o Must touch and concern the land with which it runs Fee for communal improvements, not for land itself No hard and fast rule for this matter Is it a good distinction to say that only negative covenants touch and concern the land? No. Why negative but not positive? Less chance of irreparable injury What about has to affect legal relations o Land of burdened owner is benefitted by these improvements o Work funded by fees directly affects the value of the land

Gives judges the discretion to decide whether this is the sort of agreement we allow parties to enter to bind future parties o Privity of estate between 2 parties, special and simultaneous relationship to the land relaxed in this case
Notice and Common Plan

Controls use and enjoyment beyond land divisions Neighbors can restrict your use of your land. Hard to change and hard to unbundle What is the law of servitudes trying to balance? o Trying to determine which covenants will run with the land/be enforced o Trying to figure out which agreements are essentially personal in nature o What level of notice is required? Actual notice Constructive would have known if you investigated the records Inquiry notice simple looking around would make you see restriction o What actions need to precede a valid contract? o Which covenants are patently illegitimate? (racial) o Which covenants have outlived their utility over time?

Sanborn v. McLean

D wants gas station behind house, enjoined by P to stop them from building it, nothing in chain showing a restrictive covenant D had inquiry notice (pretty broad rule) There was a reciprocal negative covenant/neighborhood plan that ran with the other houses in the neighborhood o Deeds from a common grantor in single subdivision give notice to subsequent purchasers o Starts with first restricted sale Never retroactive (difference in courts as to how many lands must have the restriction to start this o Assures buyer of character of neighborhood and holds developer liable to those who have paid and are relying on the plan 24

Termination by Changed Circumstances

Restriction no longer a benefit to any landowner o Not measured by mere market value deals with intrinsic values as well o Very narrow doctrine has to affect every lot o Does not look outside the area of the covenants or to zoning changes (unless it makes covenant illegal) Does not apply to Easements D owns house, P owns lot. P wants to build commercial building, says house has no commercial value Lower court gave the wrong test see correct test above, remands for jury trial

Bolotin v. Rindge

Termination by Abandonment Peckham v. Milroy

P does not like D, seeks to enforce restrictive covenant against home businesses Abandonment has to be habitually and substantially violating the covenant o 4 businesses out of 1600 lots not habitual and substantial Laches requires: o Knowledge or reasonable opportunity to discover on part of a potential plaintiff that he has a cause of action against a D o An unreasonable delay by P in commencing said action o Damage to D resulting from the unreasonable delay Estoppel requires: o An admission inconsistent with claim asserted afterward o Action by the other party in reasonable reliance on that admission o And injury to that party when the first party is allowed to contradict its admission, statement or act Public policy Private parties are allowed to restrict the land use as they see fit

Takings
Eminent Domain
Kelo v. City of New London

Town takes Ps land to build shopping center. P is pissed. Is this a taking for public good? Properties are not blighted, no designated final private party. Private party will develop eventually Court says that there is a deference to legislation about what is public good (public purpose) o Berman ok to use eminent domain when end use is private use Took over functional non-blighted land in a D.C. slum clearance o Midkiff redistributed property to other people deemed ok If there is pretext then the courts can overturn OConnors 3 horrible tests o Govt takes title o Open to public use (railroads, roads, etc.) o Other public purpose (in Midkiff and Berman) Thomas he would destroy Berman and Midkiff o He identifies major issues with eminent domain its racist 25

o Says public use is public use, not general welfare (still ok with government taking title

Regulatory Takings
May take land without compensation if done for the health and general safety and stuff Line between eminent domain and regulatory takings is wavy and deals with compensation Is there a public use? almost always yes Is there a taking? o Permanent physical occupation taking per se o Total economic waste unless it mimics what the CL nuisance would do o Ad hoc Factual determination Character of governmental action Harm prevention v. benefit Economic impact diminution in value (Denominator problem) Interference with investment backed expectations Somewhat circular because expectations are determined by court action Is also very pro-development And focuses on property rights of people with money to invest The more it seems to single out and destroy one person, the more likely it is to be found a taking Coal Co. owns subsurface rights to coal mine, sells surface to Mahon w/o right to supports Statute passes that forbids mining in ways that harms surface estate (cant take out supports) Extent of diminution in value o Holmes 100% of column rights o Brandeis Columns are a small part of total coal mine o Denominator problem how much of what? How much is too much? Need to protect the public against nuisance like harms o Holmes this is not a public nuisance its the nature of the deed o Brandeis gaping holes in the earth are a public nuisance, just like noxious fumes would be Reciprocity of advantage among property owners if there is mutual benefit or mutual disadvantage then it is not a taking that requires just compensation Penn wants to build on its air rights but is restricted by a landmark preservation act Brennan ad hoc factual inquiry for every case, but has factors o Economic impact (Diminution in value) does not destroy discrete and whole property (Brandeisy) o Investment Backed expectations expected to run a train station, not build on the surface rights o Physical invasion v. regulation No regulatory taking in this case, they were allowed to transfer those air rights to others Rehnquist there was a big diminution in value, there was no nuisance, and finds no reciprocity Teleprompter attaches cables and boxes to Lorettos building, benefits tenants Supreme Court finds a taking creates a per se rule for permanent physical occupation - any government 26

Takings Test

Pennsylvania Coal Co. v. Mahon

Penn Central Transportation Company v. City of New York

Loretto v. Teleprompter Manhattan CATV Corp.

regulation that has the effect of imposing an easement on the land owner will be categorically considered as a taking that requires compensation Why is the court wrong? o Negative burden based on rent increases compared to value of land o Allows technology to spread efficiently o Gives public information Why is the court right? o Gets rid of right to possess and right to exclude o Strangers invade / removes autonomy o Makes an easy to enforce bright line rule with low proof burden Bought 2 beach front lots, SC legis. says no structures allowed] RULE: Harm prevention can justify a regulation only if that regulation is of a type that is recognized as permissible at the time the owner acquired title to the property. 2 categories where a taking could be found without fact-specific inquiry: o Regulations that compel the property owner to suffer a physical invasion of his property (Loretto) o Regulations that deny all economically beneficial or productive use of land Government must show: o Prohibited use would violate the background principles of State's law of property and nuisance that govern land ownership. o Right to engage in particular use not in bundle of rights owner acquired when purchasing land. Statute clearly eliminated all economically beneficial or productive use of Lucas' land, rendered the lots valueless. Concerns whether land can be used in a manner that is economically beneficial or productive.

Lucas v. South Carolina Coastal Council

27