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Dream Team Property Outline Scafidi 2008 Blackstone God-given dominion, humans divide it up Marxist all property is theft

eft bundle of rights that define property rights to use, exclude and transfer. the course: establishing initial ownership of things then we think about transfer dividing ownership in different ways external controls over ownership compare: Discovery Chain of title First Possession Lockean Public domain + labor = ownership. Combining your labor with something previously un-owned (or something you can construct as previously un-owned, e.g. Johnson v. MIntosh) appropriates that thing as your own property. - Lockean proviso - you can only take what you can use. Assumes relatively unlimited resources property = means sovereign stands behind owners rights personhood - you can extend your will over things in the world b/c of relationship

I. First Possession
A. Acquisition by Discovery a. Johnson v. MIntosh (US, 1823) - land grant to P invalid b/c Indian tribe didnt have power to grant title. i. Discovery & land grants are the root of the US land system, so the US gov has the exclusive authority to purchase Indian lands ii. Legal mechanism for turning something un-owned property iii. distinction b/t mere possession and actual title. J. Marshall says Indians have mere right of occupancy (so long as their behavior is civilized), not ownership or sovereignty. iv. European view of property as an exploitable economic resource. To Europe, America was functionally uninhabited b. absolute title must be exclusive title c. Discovery v. Conquest B. Acquisition by Capture a. Pierson v. Post (NY, 1805) - for ferae naturae, property is acquired by occupancy only. Simple pursuit without wounding/circumventing/ensnaring an animal does not confer the right of 1st possession. You must manifest an unequivocal intention, deprive the animal of its natural liberty in some way i. dissent: Only a reasonable prospect of catching is necessary. We should follow hunters custom. Majs rule might deter hunters b. Ghen v. Rich (Fed Dist. Ct. Mass, 1881) Local custom wins out. Hunters harpoon/line in whale enough for title, so hunter gets $ back from guy who profited from found whale oil

i. Policy consideration: unless custom is protected (killer gets whale), whaling wont be profitable c. Keeble v. Hickeringill (QB, 1707) P recovers in tort for Ds malicious interference w/ Ps trade i. we want to encourage use of skill/industry like Ps pond ii. P can recover for the disturbance (not the loss of the fowl b/c Ds luring the birds away to his own pond would be lawful) iii. competition v. intentional interference. Ct relies on precedent: establishing a competing school is ok, but scaring away students is not iv. sic utere tuo ut alienum nan laedas use yours in such a way that you wont harm anyone elses d. constructive possession - P in Keeble has constructive possession of the animals on his land a quasi-property right. A pretense, legal fiction i. rationale soli: landowner has constructive possession of ferae naturae on his land i.e., landowner is regarded as the prior possessor until the animals take off e. The Rule of Capture and other Fugitive Resources i. Fugitive Resources analogies drawn to wild animals for other fugitive resources. e.g., oil, gas, water. ii. initially, oil & gas treated like ferae naturae. Belong to owner of land so long as they come onto the land in some way 1. analogies in Keeble apply here. OK to attract water/oil onto your land (pump it), under this fugitive resource analogy. Escape rationale. If you reinject it (i.e., re-release it into the wild), someone else can then claim in. iii. water: 1. English rule: first capturer is owner. 2. American rules both systems allocate poorly a. Western: surface waters, prior appropriation (first to put it to reasonable/beneficial use. b. Eastern: riparian rights. land along waterfront. Riparian landowners can generally take what you need so long as you dont really decrease the flow, damage the acquifer. C. Acquisition by Creation a. generally, if your expenditure of mental/physical labor creates an entity (tangible/intangible), you have a proprietary right to commercial exploitation (separate from the ownership of the entity) b. Intellectual Property i. INS v. AP (US, 1918) D copying Ps news from bulletin boards & early editions for reprinting. Is there property in news? Yes, property interest in news survives the first publication between the competitor parties 1. focus is on rights b/t parties, not b/t P and the public. after publishing, no property interest against the public but there is property interest b/t competing parties

2. news is stock in trade gathered at a cost. quasi-property 3. note: this case would be easily settled today, b/c a copyright automatically attaches to printed material post-1990 ii. Cheney Brothers v. Doris Silk Corp. (2d Circ., 1930) Ct cannot prevent D from copying Ps silk designs (note: copyright laws at the time didnt extend to printed patterns) 1. In the absence of a common law or statutory right, a mans property is limited to the chattels which embody his invention. Others may imitate at these at their pleasure 2. Ct. limits INS v. AP to its facts; it didnt create any sort of common law patent. a. distinctions: nature of product being imitated, duration of value, nature of the industry 3. J. Hand here says this is up to Congress to outlaw monopolies. S says: this case is early example of leave-it-to-Congress IP concerns about overextension Categories of IP: Patents, Copyrights & Trademarks - to promote creative activity, but limited in order to advance competition. - Founders wary of creating monopolies. very clear about protections of limited duration - promote the progress of science to secure for a limited time - in Europe, far more natural-rights-based justification for this protection. More Lockean. We call it copy-right, Europeans call it authors rights or creators rights (focus on the individual, not on the copying). Moral right of attribution (have your name on your work when someone borrows it) - patents and copyrights when they expire, fall into public domain 1. Copyrights a. protects expression of ideas, not the ideas themselves. Original tangible media expressions music, writing, computer software, etc. Doesnt include anything thats functional b. begins when the work is set down in the medium in question. Lasts 70 years after authors death c. in Cheney Bros., cloth designs were not given copyrights. Today anything expressive can be copyrighted 2. Patents a. novel, useful & non-obvious processes/products (inventions). i. non-obvious = not evident to a usual person in the field. ii. Bar for useful set very low b. 20 years, not renewable c. patent is tradeoff: in exchange for disclosing your process, you get a limited monopoly d. utility patent e. design patent - which protects parts of design that are not functional but ornamental. lasts 15 years. 3. Trademark

a. words/symbols indicating the source of a product. Protects source indicators of goods or services (brands, designs), protects goodwill of company that creates trademark and the consumers who rely on that brand. Excludes things which are functional b. can last as long as it is used in commerce and is sufficiently policed so that it doesnt become generic (aspirin, cellophane, tupperware) c. registered federally, but also protected by common law. Comes from Commerce Clause NOT Art. I, 8 d. use requirement: in US, you must register the trademark AND actually use it. some countries have no use requirement in trademark (e.g., a problem in China, where you can just preemptively register a name just in case) e. trademark sometimes referred to as soft IP 4. also under the aegis of IP umbrella: a. geographical indications (champagne generally applicable to wine, agriculture, handicrafts). if an organization wants to register a geographical indication (e.g., California raisins), it happens under trademark b. trade secrets info thats more profitable kept secret. e.g., recipes c. rights of publicity using valuable image in trade. Note: in the US, managed on state-by-state basis. rights of publicity strongest in CA. TN also (b/c Elvis). NY rights ok but dont outlast your death. iii. Smith v. Chanel (9th Circ, 1968) D copied the name in an ad (said perfume was better than Chanel # 5) and copied the fragrance (the juice). Ps perfume unpatented, & Ct said D had a right to copy it 1. imitation is the lifeblood of competition. Strong public interest in offering lower-priced comparable goods. Ps simply spending money does not create legally-protectable rights. 2. nominative use is perfectly legal you can use someones name/trademark to bash them so long as you dont take anymore of their trademark as absolutely necessary iv. Baird commentary: the goal is promotion of free market economy. Makes sense to give exclusive rights to tangible property but not always to information. Multiple persons can use the same piece of information. Competition depends on imitation. But allowing too much copying will undermine the incentives for progress in science/art. Still, we can go pretty far into allowing copying before we undermine this incentive. Question is: how much copying is enough? v. Nichols v. Universal Pictures (2d Cirt, 1930) P playwright sues D for producing movie w/ similar plot. Ct for D. does not cover everything 1. Idea-Expression dichotomy: copyright cant protect the idea, only the expression 2. typical for copyright cases to be this fact-based. Ct highlights the differences to show that only the mere idea was copied. P would want to highlight the similarities





3. note: generally a different standard of protection for historical facts. in the public domain (e.g., Amistad characters) 4. note: Derivative Works a. parody is protected. parody of a specific work b. satire is not protected. satire is borrowing from another work to criticize society more broadly Diamond v. Chakrabarty (US, 1980) - microbiologist trying to patent oil-dissolving bacteria. Patents approved for (1) method of producing bacteria & (2) process, BUT patent originally denied for (3) the bacteria themselves. S.Ct. affirms giving patent for the bacteria. 1. S.Ct. interprets manufacture or composition of matter (35 USC 101) broadly. S.Ct. says bacteria non-natural, so patentable. hitherto unknown natural phenomenon. 2. S.Ct backs off re: moral questions, leaves it to Congress. notes re: patents 1. you can patent plants if you have a new use for them 2. re: Europe v. US. cloning: Europe: patent the process, not the product. US, patent it all [correct???] a. Harvard patented the onco-mouse, to be used for skin cancer research. US allowed the patent, Europe didnt allow it. 3. medical procedures are patentable (so inventor can get credit, grants) but the patents arent enforceable - an exception for its use (so doctors hands arent tied in emergency) 4. pharmaceutical patents are about a product & selling the product. not about allowing doctor to do a procedure, provide service, etc. 5. under WTO - under certain circumstances, least-developed countries are permitted to issue compulsory licenses for pharmaceuticals if drug co wont do business w/ them, so that country can import generic drugs in public health emergency Vanna White v. Samsung (9th Cir., 1993) robot on board game looked like Vanna. Ct for White right of publicity extends to appropriation of identity 1. dissent: IP rights: balance b/t rights of owner & public domain. Overprotecting IP is as harmful as under-protecting it, b/c it stifles creative forces. Wrong to extend exclusive right to name, likeness, voice or signature to include any appropriation of Whites identity or anything that evokes her personality. 2. rights of publicity still evolving rights MGM v. Grokster (US, 2005) Ds made peer-tpeer filesharing software. Ct says one who distributes a device w/ object of promoting its use to infringe is liable for resulting acts of infringement by 3rd parties

1. Sony case: ok to sell VCRs knowing that some people might misuse it, b/c main purpose is for legit use. (Application of staple article doctrine as basis for patent: distribution of component of patented device is ok if its suitable for other uses dont impute intent to infringe unless its clear) 2. Ct. adopts the inducement rule as basis for copyright liability premised on purposeful, culpable expression & conduct. Secondary liability ok under this rule given evidence of inducement to infringe. doesnt tread on legitimate commerce or discourage innovation. c. Property In Ones Person i. Moore v. Regents of the University of California (CA S.Ct., 1990) Ds at hospital established cell line from Moores (leukemia patient) cells, patented it, made serious profits off of it. Cal Sup. Ct. denied conversion claim 1. Ct says rights of publicity/likeness are not property-based. Cells not unique. P cant possibly own rights to Ds inventive effort. Recognizing too much in the way of patients rights could deter research. 2. concurrence: P asking ct to recognize and enforce a right to sell ones body tissue for profit. Wrong on a moral/dignity level. 3. dissent: P at least had right to do w/ his own tissue whatever Ds did with it; CA law allows selling organs/blood for research; allowing only the non-disclosure claim is inadequate 4. pretty clear that Moore was wrongly-decided. Ct basically said P cant sell, so he gets no share in the profits. Ct couldve approached this in other ways to recognize some property interest in the cells (e.g., treated Moores cells as marketinalienable can give them away but not sell them) ii. Right to Include & Right to Exclude 1. Jacque v. Steenberg Homes, Inc. (Wis.S.Ct. 1997) - $1 nominal damages & $100,000 punitive damages for co moving mobile home across Ps land a. Right to exclude is on of the most essential sticks in the bundle of rights. Right is hollow if the legal system provides insufficient means to protect it. b. maybe theres a more efficient solution than Cts enforcing an absolute common law rule 2. State v. Shack(NJ, 1971) - D aid organization did not trespass, w/in the meaning of the penal statute, to provide aid to migrant workers on Ps farm a. cant assert a property right to prevent ones access to gov services (Fed aid bill for migrants). Property rights cannot include dominion over the destiny of persons the owner permits to come upon the premises

b. Law denies occupants (here, migrant workers) the power to contract away their essential rights to health/welfare/dignity c. right to property is not absolute. Rights are relative public/private necessity may justify entry onto anothers lands d. maybe view this as: modifying the right to exclude to affect express purposes of the legislature & dividing the bundle of sticks by allowing in rights of others 3. reliance interest in property idea that preexisting rights of access to property cant simply be taken away b/c non-owners may have relied in the past on that access. Sometimes involves allowing continued access or redistribution to vulnerable parties

II. Subsequent Possession

A. Acquisition by Find
1. A finder has possession against all but the true owner, although the phrase true owner will depend on who the other claimants are, because title is relative. 2. Armory v. Delamirie (1722) (chimney sweep finds jewel) a. F: P finds jewel and takes it to jeweler; apprentice takes jewel. b. H: P entitled to jewel (or value thereof). Finder does not acquire absolute title, but claim is good against all but true owner. Prior possessor prevails over subsequent possessor (First in Time). c. Note: D could not produce jewel; made to pay P highest possible value! Master is responsible for agent regardless of circumstance. D here was a bailee of the boy, who was a bailor. 3. Bailment: Rightful possession of goods by person w/o title. Property is relinquished (intentionally or unintentionally) from true owner to another. a. Bailee must intend to possess the property. b. Must be an understanding that the property will be returned. No transfer of title. Gets complicated when unintentional. i. Voluntary bailment: bailor gives to bailee (valet, dry-cleaning) (a) Highest duty of care ii. Constructive: goods left by guest/client (umbrella at restaurant) (a) Lowered duty of reasonable care iii. Involuntary: Bailee finds goods (man leaves umbrella at bus stop) (a) Lowest duty of care

4. Remedies: Personal and Real Property a. Personal Property Trover = damages Replevin = return b. Real Property Trespass = damages Ejectment = return 5. Food for Thought a. Would the jewelers apprentice have a claim if P had stolen the jewel from the house instead of having found it? No. Ps possession must merely be lawful as against the person who deprived him of it. Obviously, the owner of the house would have a strong claim. 6. Hannah v. Peel (1945) (quartered soldier finds brooch) a. F: P finds brooch, gives to police; police return to D; D sells. b. H: P entitled to brooch (or value thereof). Brooch was lost and was found by P. D never aware of brooch. Brooch was on land, not in it. c. Relevant Precedent: Bridges v. Hawkesworth: Packet of money discovered by customer on floor of shop. Customer is entitled to keep the find. Packet was never in the possession of the shop owner. (Applied in Hanhah). South Staffordshire Water Co. v. Sharman: Employee of company discovered a ring while cleaning company pool. Employer (also the property owner) was allowed to keep the ring, not the finder. Elwes v. Brigg Gas Co.: Lessee discovered old boat in land he had leased. Lessor entitled to boat, regardless that he was unaware of its existence. Boat was in land, not on it. 7. McAvoy v. Medina (1866) (pocket-book in barbershop) a. F: P finds pocket-book in barbershop; gives to D; no one claims. b. H: D entitled to pocket-book. Distinction between property lost and property misplaced and not removed. Example of constructive bailment 8. Additional Notes a. Mislaid / Abandoned / Lost Mislaid: Finder acquires no title. Abandoned: Owner has relinquished title; Finder acquires title. Lost: Finder acquires title, EXCEPT: i. Embedded in soil ii. Private location iii. Owner is occupying/living on property iv. Finder is acting as agent b. Treasure

At English common law, found treasure belonged to the king. Today, treated like any other found property (lost / mislaid / abandoned). c. Shipwrecks At English common law, wreck (washed ashore) belonged to the king. At maritime law, lost ship is owners property (salvagers get reward). This country usually applies traditional finders law. d. Bonds Home Run Baseball (Popov v. Hayashi) Judge decides that feuding fans will split value of baseball.

B. Acquisition by Adverse Possession

1. Elements a. Actual Entry giving Exclusive Possession Physical entry onto property. Some statutes require some enclosure or improvement. b. Open and Notorious Owner will notice of reasonably vigilant c. Adverse (Hostile) and Under a Claim of Right Permission from owner precludes hostility. 3 views on intent: i. State of mind is irrelevant; Connecticut Doctrine ii. State of mind = I thought I owned it (Manillo v. Gorski) iii. State of mind = I know I dont own, but I intend to; Maine Doctrine d. Continuous for the Statutory Period Time period specified by statute Clock stops when owner begins motion to eject. e. Color of Title Claim is founded on a written instrument that is invalid. Necessary in some jurisdictions, optional in others. Even when not required, can be beneficial to claim. i. May allow shorter statute of limitations. ii. In all states, will allow constructive possession. (a) actual possession under color of title of only a part of the land covered by the defective writing will count as constructive possession of all that the writing describes. 2. Van Valkenburgh v. Lutz (1952) (Triangle Lot) a. F: D used property as his own for 30+ years; P purchased property at auction, brought this action to compel D to remove certain objects.

b. H: For P. Proof fails to establish that D acquired title by adverse possession. Cultivation (of garden) did not utilize entire premises (required by statute). Structures on property did not qualify as improvement. Ds failure to assert ownership in prior action indicates lack of hostility. c. Note: D claimed a prescriptive right, which is a right to use the property although title remains with the owner; a right of way and other easements. 3. Manillo v. Gorski (1969) (15 staircase) a. F: D adds staircase that mistakenly goes 15 onto Ps lot; 20+ years pass. b. H: Intentional hostility not required; mistaken claim of title will suffice. Maine Doctrine (Preble v. Maine): Must have hostile intent; rewards aggressive hostility, disfavors honest, mistaken encroacher. Connecticut Doctrine (French v. Pearce): No inquiry into mindset; if all elements have been met, then adverse possession. Most jurisdictions have abandoned the Maine Doctrine in favor of the Connecticut Doctrine, like the court does in Manillo. c. Note: i. Where encroachment is slight and not apparent to naked eye, no presumption of open and notorious along common boundary. (a) Dont want to impose burden of constant surveying (urban areas). ii. Where encroachment is accidental and removal would cause great hardship, court may force conveyance of occupied land at fair value. (a) Must balance the interests at stake. 4. More on Mistake a. Doctrine of Agreed Boundaries: Where there is uncertainty, oral agreement is enforceable if neighbors subsequently accept line for extended time period. b. Doctrine of Acquiescence: Long acquiescence is evidence of agreement between parties fixing boundary (even when less than statute of limitations). c. Doctrine of Estoppel: Where N2 changes position in reliance on N1s statements or conduct, N1 is estopped to deny validity of his representation. Can also apply when one neighbor is silent in the face of expenditures by the other that suggest the location of the boundary line. 5. Adverse Possession against the Government a. Under common law, adverse possession does not run against any government. Some state statutes now permit it on same terms as private land. Others permit it with a much longer statute of limitations. Others permit it only against governmental lands held in proprietary capacity (as opposed to public or governmental). 6. O'Keefe v. Snyder (1980) (Stolen Paintings) a. F: In 1976, P sought replevin for three paintings allegedly stolen in 1946. b. H: Viability of Ps claim depends on when Ps cause of action accrued and the SOL began to run; this court adopts the discovery rule.


Discovery Rule: P's cause of action will accrue when she first knew, or reasonably should have known through the exercise of due diligence, of the cause of action, including the identity of the possessor. i. SOL will not run until then as long as P has diligently pursued the loss. ii. Shifts inquiry from conduct of possessor (satisfy elements of adverse possession?) to conduct of rightful owner (due diligence?). (a) Burden of proof is placed on rightful owner.. c. Note: Voidable Title: The UCC permits a person with voidable title to transfer goods to a good faith purchaser for value under certain circumstances. i. See Note 5 on 155 (I need help on this). Tacking: Combination of consecutive periods of possession. i. OKeefe permits tacking so long as possessors are in privity.

7. NY State a. Guggenheim Case NY rejected the discovery rule on ground that it provides insufficient protection for owners of stolen artwork, holding instead that SOL for replevin does not run against good-faith purchaser until true owner makes demand for return and purchaser refuses. 8. Cultural Property a. Does it matter if a claimant is a nation, people, or individual? b. Cultural internationalism vs. Cultural nationalism (Rayden, personhood). 9. Native American Graves Protection and Repatriation Act of 1990 (NAGPRA) a. Goal: Repatriate sacred objects back to native custodians. b. Requires museums to inventory Native American sacred objects and return them, upon request, to a direct lineal descendant or tribe. Burden is placed on museum to show Right of Possession, which is possession obtained with voluntary consent of rightful owners. Native American sacred objects essentially exempt from adverse possession.

C. Acquisition by Gift
1. Elements: a. Intent b. Delivery Feudal Origin (Livery of Seisin) Manual i. Traditional Rule: If gift can be delivered manually, it must be. (a) Modern trend indicates that traditional rule is eroding. (1) Scherer v. Hyland: Leaves check on table, commits suicide. ii. If manual delivery is impossible because of size / weight: Constructive


i. A key or some object that grants access to gift. Symbolic i. Something symbolic of the gift (a writing: I give my grand piano) c. Acceptance 2. Types of Gifts a. Inter Vivos Gifts given between living people. i. Need intent to make a present transfer of ownership. ii. Any element of futurity will make gift void. iii. Cannot be conditional or revocable. b. Donatio Causa Mortis Gifts given in contemplation of imminent death. If donor fails to die as expected, gift is void. Does not apply to suicide. Revocable by donor before actual death. c. Testamentary Gifts given by way of a will. d. Conditional An engagement ring is a conditional gift. Must be returned if engagement is broken off for any reason. ??? 3. Newman v. Bost (1898) (Fucking the Help?) a. F: On his deathbed, Van Pelt expressed verbally his desire to give all the property in his house to P, the housekeeper. Physically gave P the keys to several pieces of furniture. D, administrator of the estate, took some property. b. H: Constructive delivery will not suffice for small items that could have been manually transferred. P keeps only that which she was given keys to. c. Rule: No gifts (causa mortis/inter vivos) without both intent and delivery. i. Where manual delivery is possible, constructive delivery will not suffice. d. Note: Because gifts causa mortis are viewed as undercutting the Statute of Wills, courts will be stricter in assessing the validity of such gifts. i. A gift causa mortis requires the presence of a witness. 4. Gruen v. Gruen (1986) (Klimt Painting) a. F: P alleges that father gifted him painting on 21st birthday by letter, but never transferred painting. Father died; stepmother refuses to give it over. b. H: Painting to P. Father made a valid inter vivos gift with a reserved life estate in the chattel. No actual delivery or acceptance was necessary. c. Rule: The delivery necessary to consummate a gift must be as perfect as the nature of the property and the circumstances at hand will reasonably permit.


d. Note: Important distinction between intending to make an inter vivos gift with a reserved life estate and a testamentary gift. Former is a present transfer of ownership and can be accomplished with a letter (like here). Latter is a transfer of ownership at death, and is invalid unless made by will.

III. Possessory Estates

A. Feudalism, Fee Simple, Fee Tail a. some definitions i. heirs persons who survive the decedent & are designated as intestate successors under the states statute of descent. No living person has heirs (yet). (In most statutes of descent, priority is: issue, then parents, then collaterals) ii. issue all descendants (kids, grandkids, etc.). Distribution per stirpes means that if A has multiple kids and one kid dies before A, then that dead-kids kids will inherit the dead-kids share iii. ancestors parents. By statute, parents usually take as hears if the decedent leaves no issue iv. collaterals other family not in ancestor-descendant line v. escheat if A dies intestate w/out any heirs, property (real & personal) escheats to the state where the property is located b. Feudalism land tenure system. originally, any grant of land required some service due up the ladder, even symbolic services. i. Feudal incidents include: homage & fealty (oath of loyalty); aids (lord can demand $ from tenants in certain financial emergencies); forfeiture (lands forfeited to lord if breach of oath of loyalty or refusal to perform feudal services) ii. at tenants death: wardship & marriage (lord was heirs guardian until heir came of age; lord entitled to possession of tenants land, rents & profits, but with obligation not to commit waste); Relief (heir has to pay a sum [years rent] to relieve the land from the lord and claim the inheritance); Escheat (if tenant died w/out heirs, land returns to lord) iii. Decline of Feudalism: Quia Emptores (1290 statute) prohibited subinfeudation in fee simple, but allowed free substitution of land. As a result principle of free alienation of land (transferable); lordships began to disappear and land accumulated in kings hands. move from personal relationship-based system economic relationships. services & incidents taxes & wages. c. Fee Simple - an estate capable of being inherited by whoever turns out to be the heirs of the fee simple owner. Can endure forever. As close to absolute ownership as our system allows. The largest estate in terms of duration. The whole bundle of sticks. Descendible & devisable.


i. originally for fee to endure, conveyance from the lord had to be to A and his heirs. (Note: this still give heirs no rights). But once the fee became alienable (A could transfer it to B and his heirs, e.g.), feudal incidents became almost meaningless. The fee (originally just a holding) became an alienable fee simple, a freehold estate not terminable at the will of the lord. ii. today, and his heirs is meaningless and no longer required. to A is sufficient to create fee simple d. Fee Tail (obsolete today) grantor conveying land to A and the heirs of his body. descends to As lineal descendants until the bloodline runs out, then followed by a reversion or remainder i. original impetus: rich families wanted to prevent transfer of land to anyone outside of the family line but someone could give away the fee simple (cutting off the inheritance rights of his issue). So fee tail as mechanism for perpetuating aristocracy. said to be entailed (can specify male heirs of her body, etc.). Primogeniture. ii. problem w/ fee tail: holder could give away his possessory interests during his lifetime, but the estate would always revert back to his kids when he died. This encouraged abuses (rich kids). So, mechanisms developed to convert fee tail fee simple (cutting off rights of issue & any reversion/remainder). iii. fee tail replaced today by life estate. Fee tail exists only in Delaware, Maine, Massachusetts, & Rhode Island B. Life Estate conveyance to A for life. Or life estate pur autre vie = to B for the life of A. a. recognition of life estate meant (1) grantor can control who takes the property at the life tenants death; (2) As land/stocks/bonds came to be viewed as income-producing capital, trust management for the life tenant developed. Most life estates are created in trust. b. future heirs have no possessory rights but do have a right to see that property isnt wasted (see Baker v. Wheedon below) c. White v. Brown (Tenn, 1977) decedents will gave sister-in-law P the house to live in and not to be sold (will repeats My house is not to be sold). P sues for construction that will is fee simple title. Ds (heirs at law - nieces/nephews) claim that the will conveyed only a life estate to P & left the remainder to them i. lower courts found this gave a life estate, but Ct reversed. Ct for P. Ct struck the no sell provision from the will, construed it as a fee simple absolute. ii. state law & public policy: Presume that all the estate/interest passes unless the will otherwise limits it. The no sell restraint on the houses alienation does NOT indicate a clear-enough intent to pass only a life estate. The restraint does not overcome the laws presumption against partial intestacy. iii. attempted restraint on alienation void b/c inconsistent w/ fee simple [which ct just imposed!] and contrary to public policy






iv. Dissent: majority can only make sense of the will by striking out the no sell restraint, which was repeated in the will. That intent was very clear, and majs construction conflicts w/ clear intent traditional rule against direct restraints on alienation. Generally, restraints on alienation violate efficiency: makes property unmarketable; perpetuates concentration of wealth; discourages improvements on the land; cant mortgage the land; creates hardship for creditors who cant reach the property i. 3 types of restraints on alienation: 1. disabling restraint withholds from the grantee the power of transferring his interest. (see White v. Brown) 2. forfeiture restraint if a grantee tries to transfer his interest, its forfeited 3. promissory restraint grantee promises not to transfer his interest. Enforceable by contract remedies (damages, injunction) NOTE: Valuation of Life Estate & Remainder How do you determine the present value of the life estate and the remainder? Courts, taxing authorities, & insurance companies generally use life expectancy i. value of life estate = present value of the right to receive [interest rate] % annually of [total value of life estate] for the life tenants life expectancy. ii. value of remainder = present value of the right to receive [total value of the life estate] in x many years (where x years is the life tenants life expectancy) Baker v. Weedon (Miss, 1972) husbands will gives life estate to Anna (P, 3rd wife) and then, if she dies w/out issue, property to grandkids (Ds, remaindermen). Land value of farm supposed to triple in the next 4 years. Anna 73 yrs. old & poor, so she sues to sell land now so she can live off the $ in trust, but remaindermen want to hold onto land for now. i. Trial ct for P, ordered sale under theory of economic waste (land sitting undeveloped, unfarmed = waste) ii. Ct reversed, remanded to figure out some other equitable remedy besides forcing sale of entire property. Forcing a sale deprives remaindermen of valuable Ct says we must use the necessary for the best interest of all parties rule. (interests of life tenant and the remaindermen). Equity does not warrant the remedy of sale of all the property since this would unjustly impinge upon the vested rights of the remaindermen. 1. true that Ct has power to order sale to prevent waste, but there must be necessity. Sale not necessary to prevent waste law of waste evolved to reconcile competing interests of life tenants v. remaindermen. Life tenants want to sell lumber; remaindermen want to let the trees grow. Law may seem unnecessary (theyll settle, right?), but


bilateral monopoly & transaction costs will prevent efficient settlements. Plus, remaindermen may be yet unborn. i. Affirmative waste (injurious acts that have more than trivial effects, like extracting minerals from the land) ii. Permissive waste (failure to take reasonable care of the property disrepair. Essentially a negligence question) iii. Ameliorative waste - changes character of property in a way that is objectionable to the remaindermen iv. Economic waste h. creating a trust instead of a life estate generally always a better idea to create a trust. Same function as life estate, but avoids all the legal problems. Trust more flexible. i. Trustee holds a legal fee simple as manager of the property, administers the trust for benefit of the life tenant & remaindermen, & has fiduciary duties to both. Power to sell, lease, mortgage, etc. ii. e.g., O conveys land to X in trust to pay the income to A for life, and then to pay the principal to As children who survive A. O is given the express power to sell land. C. Leasehold Estates a. whereas the fee simple, fee tail, & life estate are freehold estates (involved seisin [certain type of possession] at common law), Leasehold Estates are non-freehold possessory estates. (at common law, the landlord held seisin, & the tenant merely had possession). D. Defeasible Estates - conveyance to A so long as/upon the condition that a. Fee Simple Determinable - if the words expressing the restriction are temporal/durational in some way: so long as, while used for, during the continuance of, until __ no longer uses the land for i. ends automatically possibility of reverter b. Fee Simple Subject to Condition Subsequent - phrase is not temporal, but descriptive in some other way: but if, provided, however, that when the premises, on the condition that if the premises i. doesnt automatically terminate, but may be cut short or divested at the transferors election right of reentry c. Fee Simple Subject to Executory Limitation property goes to a third party i. shifting executory interest ii. springing executory interest d. to keep in mind re: freehold estates & future interests i. a will has no effect on disposition of property until testator croaks ii. keep an eye out for questionable restrictions constraints that can be void as against public policy or contingent upon illegal activities Cts may void these. iii. some conditions like O to A upon As finishing law school in theory, you might have to wait until the end of As life to see


iv. O to A upon As finishing law school O has converted his own Fee Simple into a FSSTEL in himself. b/c we have a gap in time, we need a court of equity to recognize this. v. If O wants to ensure that a B gets property upon Cs failure to perform a certain condition, its sometimes safer NOT to create a FSSTEL with an executory interest but INSTEAD to create a FSD or FSSTCS and convey Os interest in the property to B. 1. Why? b/c the transferors future interests are not affected by the Rule Against Perpetuities (see below) vi. common law rule was that the possibility of reverter and the right of reentry only descended to heirs at death of the owner. In most states today both future interests are descendible inter vivos. vii. w/r/t Statute of Limitations SOL starts running on possibility of reverter as soon as the FSD ends. SOL starts running on right or reentry when the condition occurs, in most states. viii. while holders of future interest of life estate can bring an action for waste, holders of a future interest in a defeasible fee interest (FSD, FSSTCS, FSSTEL) cannot bring an action for waste. 1. Why? b/c the present possessory owner of a defeasible fee interests is entitled to act as if they have a fee simple (until the condition is broken) e. Mahrenholz v. County Board of School Trustees (Illinois, 1981) i. deed conveyed 1.5 acres of 40 acre farm to school: this land to be used for school purposes only; otherwise to revert to Grantors ii. Ct says Fee Simple Determinable created (1) grant of exclusive use followed by (2) an express provision for reverter: 1. original owners wanted to give land to school only so long as it was needed & no longer. Ct reads the word only as a limited grant (rather than a full grant subject to a condition) and a temporal limitation (as opposed to forever in Latham case) 2. otherwise to revert to Grantors herein seems to trigger a mandatory return. (and FSD reverts automatically) 3. basically, only + revert = FSD iii. note: some states (California, e.g.) treat all defeasible fee interests as FSSTCS requires that future interest holders affirmatively act to take possession (no automatic forfeiture, basically) f. Mountain Brow Lodge No. 82, Ind Order of Odd Fellows v. Toscano (CA, 1967) i. Ds are trustees/administrators of grantors estate. 1950 land grant to P social club subject to use conditions If land fails to be used by P social club or in the event of sale or transfer of all/part of the property, it reverts back to Ds. ii. Ct strikes from the deed the clause prohibiting resale/transfer void as an absolute restraint against alienation.


iii. Issue: is the use condition a defeasible fee (Ds argue) or just a restraint against alienation (Ps argue) which is therefore void? Ct for Ds: Fee Simple Subject to a Condition Subsequent 1. intent alone enough to establish this. No formal language necessary to create FSSTCS if the grantors intent is clear 2. condition is just a condition restricting land use, not a restriction on alienation iv. note: Ct here reads language almost identical to Mahrenholz in different way g. Condemnation of Defeasible Fees where the gov takes by eminent domain land owned by defeasible fee, who does it pay? The present possessory owner, or the holder of the future interest? i. general rule present possessory owner gets all the money. most easily identifiable, most associated w/ the land plus who knows if remote contingency will come to fruition ii. but Restatement: where its pretty obvious that the condition is about to be broken, it makes sense to split the interest between the present possessory owner and the owner of the future interest iii. City of Palm Springs v. Living Desert Reserve (Cal, 1999) (note case) deed gave city land in FSSTCS, w/ right of reentry going to Reserve. City is present possessory owner, so if city condemns the land, it pays itself (and keeps the money). Ct says city cant hold the condition w/ one hand and exercise eminent domain w/ other. Reserve gets 100% value of the land, b/c condition broken 1. Ct rejected citys argument that, under the Restatement, the violation of the condition wasnt imminent iv. Ink v. City of Canton (Ohio, 1965) (note case) - shows the inefficiencies of tearing property into present & future interests. Sum of the parts dont always equal the whole 1. heirs give 33.5 acres to the city on condition that it gets used as a public park. State highway dept condemns land (from city) has to pay city for the land. Ct says: city only gets the value of the land as used as a public park the heirs get the difference b/t that amount and the full value of the land h. NOTE: Defeasible Life Estates: its possible to create a life estate defeasible upon marriage i.e., widow gets a life estate so long as she doesnt remarry. However, this is now generally void: i. derives from common law notion that husbands support wives, so a remarried widow wont need support anymore. Outdated today ii. modern law protects surviving spouses elective share (provides fee simple ownership in deceased spouses estate regardless) iii. tax incentive since 1940s, a proviso for forfeiture upon remarriage is not exempted from the marital tax deduction


iv. violates the common law rule against restraints on marriage. Any provision that has the purpose of coercing abstention from marriage or penalizing remarriage is void. 1. In theory, if the motive is simply to provide support until remarriage, then the provision may be ok. e.g., to A for life, so long as A remains unmarried, then to B might be ok, BUT to A for life, but if A marries, then to B would not be ok.

IV. Future Interests

A. future interest gives legal rights to the owner. Its a presently-existing property interest that may become possessory in the future, with legal rights & liabilities that can be sold or given away. a. future interest holder can sue for waste; can sue 3rd parties injuring land; can act to prevent adverse possession; Also, if future interest holder dies and remainder is transmitted to heirs, this is subject to tax B. Transferors future interests: a. Reversion interest left in the owner (or in the successor in interest of a testator) when he carves out of his estate a lesser estate and does not provide who is to take the property when the lesser estate expires b. Possibility of Reverter when an owner carves out of his estate a determinable estate of the same quantum. Follows a FSD. c. Right of (Re)Entry when an owner transfers an estate subject to condition subsequent and retains the power to cut short or terminate the estates. C. Transferees future interests: note a. Vested Remainder (1) given to ascertained person and (2) not subject to a condition precedent (other than the termination of the preceding estate) i. Vested Subject to Open (subject to partial divestment) if one member of the class is ascertained & there could be later-born children entitled to share, and theres no condition precedent ii. the law prefers vested remainders b. Contingent Remainder (1) given to an unascertained person or (2) made contingent upon some even occurring (other than the termination of the preceding estate) i. cannot become possessory so long as it remains contingent. ii. compare: 1. O to A for life, then to B and her heirs if B survives A, and if B does not survive A to C and his heirs. B and C have alternative contingent remainders. O has a reversion. 2. O to A for life, then to B and her heirs, but if B does not survive A then to C and his heirs. B has a vested remainder in fee simple subject to divestment, and C has a shifting executory interest which can become possessory only by divesting Bs remainder. O has no reversion.


iii. note: life estate can end prior to death of the life tenant (e.g., if life tenant tries to convey a fee simple, estate may revert to O) iv. compare: 1. to A for life, then to B, but if B dies under 21 to C. B has a vested remainder in fee simple subject to divestment. 2. to A for life, then to B if B reaches 21. B has a contingent remainder in fee simple, not entitled to possession until age of 21 c. Executory Interest must: i. divest or cut short some interest in another transferee (shifting executory interest), or ii. divest the transferor in the future (spring executory interest) D. Destruction of Contingent Future Interests: Rule Against Perpetuities a. 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. v. Its inefficient to allow dead guy to control property in perpetuity. Donor can only provide for those he personally knew and then the first generation after them vi. RAP affects contingent remainders & vested remainders subject to open, executory interests, and class gifts. RAP does NOT affected vested remainders. vii. charitable organization exemption: if both the possessory estate and the future interest are in charitable orgs, RAP doesnt apply viii. Cross out the entire gift (not just the offending language) ix. Though some states might look at the circumstances (say, A has a 20 year old kid good chance theyll hit 25), the common law rule is the conveyance on its face x. future interests retained by the transferor (reversions, possibilities of reverter, rights of entry) are not subject to the Rule against Perpetuities xi. always assume that anyone can still have kids (even old chicks) i. RAP has been modified in some states: i. Wait & See Doctrine 1. perpetuities period. allows court to wait & see for the entire perpetuity period to see if these interests vest or fail. Any interest thats still contingent at the end of the period the gift fails. under this rule, weve fixed one part (the final bit), but the ownership during that period is still up in the air 2. 90 years ii. Cy Pres (see prey) 1. gives court authority to modify the grant so that it doesnt fail under RAP, to bring it into the perpetuities period. The court has to make the smallest modification possible least invasive way of changing the gift.


2. benefit: immediate resolution of the gift. drawback: judicial discretion j. the Trust how to circumvent the RAP & control the property for generations into the future i. use (usus fructus use of the benefits of the property) says you can have one owner but another who benefits from it ii. O enfeoffs the trustee and his heirs to hold Blackacre for the use of A and his heirs. this only happens when theres some springing/shifting interest iii. RAP doesnt touch this b/c the legal ownership remains ascertained in a person. this also circumvents the estate tax k. Symphony Space v. Pergola Properties (NY, 1996) in 1978, D owner sells building to Symphony Space for tax break, re-rents it for $1/yr w/ option to buy back every few years until 2003. D tries to exercise option to buy in 1985, but P Symphony Space refuses. Ct for P. i. R: Commercial options are NOT exempt from the prohibition against remote vesting (RAP); Ds option here is void. ii. Ct looks both to NY statutory prohibition against remote vesting (AKA, RAP) and to the common law rule against unreasonable restraints against alienation iii. options create contingent interest, which undermines RAP policy objectives & creates a disincentive for Ps to develop the property iv. b/c case involves corporations & no life is specified, period is just 21 years. Here, option is open for 24 years and the NY saving statute (presumption against courts reading-in RAP violations) cant apply b/c theres a clear intention to keep option open longer v. Ct refuses to apply the Wait-&-See approach vi. Ct rejects Ds arg that apply RAP would defeat parties intent. The purpose of the RAP is to defeat intent of parties who create a remotely-vesting interest.

V. Co-Ownership and Marital Interests

A. Common Law Concurrent Interests
1. Types, Characteristics, Creation a. Tenancy in Common (TIC) TIC each own a separate but undivided interest in the property. Each Ts interest is alienable, descendible, and devisable separately. No rights of survivorship between Ts. Undivided fractional interests (even 90/10). Default tenancy.


b. Joint Tenancy (JT) JTs are collectively regarded as a single owner, with each JT owning the undivided whole of the property. Right if Survivorship: When one JT dies, no property interests pass to anyone. Instead, the estate simply continues in the surviving tenants. At common law, Four Unities were necessary to create a JT (today, some states allow a JT to be created simply by stating explicit intent to do so). i. Time: The interest of each JT must be acquired or vest at the same time. ii. Title: All JTs must acquire title by the same instrument or by joint adverse possession, A JT can never arise by intestate succession or other act of law. iii. Interest: All JTs must have equal undivided shares and identical interests measured by duration. iv. Possession: Each JT must have a right to possession of the whole. The severance of a JT results in a TIC. i. Can be accomplished mutually or unilaterally. Judicial Partition i. Court may physically partition the JT into separately owned parts or it may force sale and divide the proceeds. Avoidance of Probate i. Historically, JT used a poor mans will ii. Creditors can access JT during debtors lifetime, but at death the debtors interest is extinguished. (a) Extinguished share still be subject to federal taxation at death. Special Circumstances i. If JTs die (almost) simultaneously, law treats it as if one JT died first with respect to one half of the property and the other JT died first with respect to the other half of the property. ii. If one JT murders the other JT, the JT becomes TIC. c. Tenancy by the Entirety (TE) Same as JT, but requires marriage. Can only be created in husband + wife. Rights of survivorship. NY has TE, limited to real property (including condos/co-ops). Divorce/Death dissolves TE into TIC i. Cannot be dissolved by unilateral severance. 2. Severance of Joint Tenancies a. Riddle v. Harmon (CA 1980) (shady wife severs JT no strawman needed) i F: Riddle + husband owned property in JT. Riddle instructed her attorney to prepare a deed that would transfer an undivided one-half deed in the subject property to herself. ii H: Severance is acceptable. iii Rule:


i. Two to Transfer outdated. No strawman necessary. One joint tenant may unilaterally sever a JT without the use of an intermediary device. iv Note: i. Tenant choosing to sever the tenancy in secret must record the severance somewhere. b. Harms v Sprague (IL 1984) (mortgage does not destroy JT). i F: Brothers owned property in JT. One brother assigned a mortgage to D for his portion of the property. He then died, leaving his interest to D. ii I: Is JT severed when less than all of the JTs mortgage their interest in the property? Does such a mortgage survive the death of the mortgagor as a lien on the property? iii Mortgage Theories: Title Theory: Bank has legal title to the property because they financed the mortgage. Lien Theory: There is a lien on the property as collateral for a loan, but it doesnt affect the legal title of the property. iv H: IL follows lien theory, so unity of title is preserved and mortgage does not dissolve JT. Mortgage by one JT will not survive his death. Mortgage exists as a lien on his interest in the joint tenancy when he dies, the interest is extinguished and with it the lien of the mortgage. 3. Relations Among Concurrent Owners a. Delfino v. Vealencis (CT 1980) (Partition Garbage Lady) F: P and D owned real property as TIC. P brought this action for partition by sale. D moved for partition in-kind (physical division). H: For D, partition in-kind. Rule: i A partition for sale is appropriate only upon satisfaction of 2 conditions: (1) The physical attributes of the land are such that a partition in kind is impracticable or inequitable; and (2) The interests of the owners would better be served by partition by sale. Note: i All other factors being equal, the law traditionally has a preference for partition in-kind over partition by sale. ii However, modern practice has trended towards partitions by sale, either because the parties all wish it or because courts are convinced that sale is the fairest method of resolving the conflict.


b. Spiller v. Mackereth (AL 1976) (cotenant uses entire warehouse) F: P and D owned building as TIC. P sued when D used entire building as his warehouse, refusing to pay rent or to vacate half the building. H: For D. To be liable for rent, co-T must have denied other co-T right to enter. Request to vacate is insufficient because co-T holds title to the whole and may rightfully occupy the whole unless other co-T asserts possessory rights. Rule: i In the absence of an explicit agreement (to pay rent) or an ouster, a co-T in possession is not liable to other co-Ts for value of his use. (1) Ouster (describes 2 fact situations): (1) The beginning of the running of the SOL for adverse possession, or (2) The liability of an occupying co-T for rent to other co-Ts. Food for Thought: i What if the occupying co-T changed the locks? Ouster? c. Swartzbaugh v. Samson (CA 1936) (walnut trees/boxing pavilion) F: P and D1 owned a piece of real property in JT. Against Ps wishes, D1 leased a portion of the property to D2 for use as a boxing pavilion. I: Can one JT who has not joined in the leases executed by a co-T and another maintain an action to cancel the leases? H: No. D1 was free to lease his share of the property to D2. Note: i Only one JTs share has been leased, so the other JT retains her right to enter the leased premises. (1) Thus, although he pays rent to D1, D2s refusal to allow P access to his leased portion could be considered an ouster. ii The JT out of possession may compel the JT in possession (the lessor) to account for rents collected from third parties. d. Accounting For Benefits / Recovering for Costs Accounting i Rents and Profits (1) A co-T collecting rents or profits (mineral lease, timber) from a third party must account to (pay) co-Ts for the amounts received. (1) Unilateral improvements to land (agriculture, restaurant) not subject to accounting. ii Taxes, Mortgage Payments, Other Carrying Charges (1) A co-T paying more than his fair share is entitled to contribution from other co-Ts, or to credits for such payment in an accounting or partition action. (1) However, if enjoying exclusive possession (of equal value to such payments), then no right to contribution from others. iii Repairs


(1) Absent an explicit agreement, a co-T paying for necessary repairs is not entitled to contributions from others. (1) How much to spend is too uncertain for law to settle. (2) Will, however, receive a credit in accounting/partition actions. iv Improvements (1) No right to contributions and no credit in accounting/partition action. (1) Owelty: At partition, non-contributing co-T ordered to pay contributing co-T his share of enhanced property value resulting from improvements.

B. Marital Interests
1. Termination of Marriage by Divorce a. Overview At common law, upon divorce property of the spouses remained the property of the spouse holding title (usually the husband). Modern rule is equitable distribution: Property is divided by the court, in its discretion, on equitable principles. b. In re Marriage of Graham (CO 1978) (Is an MBA marital property?) F: During 6 year marriage, wife worked full-time and did housekeeping while husband earned undergraduate and MBA degrees. I: In marriage dissolution, is a MBA degree to be treated as marital property subject to division by the court? H: No. An educational degree is not property. i Personal to the holder; cannot be assigned, sold transferred, conveyed, or pledged; terminates on death. Cumulative product of many years education and hard work. Used to obtain property; not property itself. c. Additional Cases Greer v. Greer (CO 1973): Distinguishable in that husband and wife accumulated marital property. i Where there is marital property to be divided, such contribution to the education of the other spouse may be considered by the court. Mahoney v. Mahoney (NJ 1982): Professional degree is not marital property, but contributing spouse is entitled to: i Reimbursement Alimony: Supporting spouse should be reimbursed for financial contributions she made to spouses professional training. OBrien v. OBrien (NY 1985): Professional degree is marital property to be equitably divided. i Reimbursement inadequate like giving back the down payment on real estate without remuneration for asset appreciation. ii Most courts follow either Graham or Mahoney; NY is the exception.


d. Elkus v. Elkus (NY 1991) (Opera Singer) F: Over the course of a 17-year marriage, P (wife) ascended from obscurity to stardom as an opera diva. D (husband) contributed to her rise. I: Is Ps career/stardom marital property subject to equitable distribution? H: Yes. To the extent that Ds contributions increased the value of Ps career, the appreciation was a product of the marital partnership. Rule: i It is the nature and extent of contributions rather than the nature of the career (licensed or otherwise) that will determine the status of the enterprise as marital property. e. Termination of Marriage by Death of One Spouse Common Law i Dower (1) Surviving wife takes 1/3 of all freehold land that was owned by her husbnad at the time of marriage or that was acquired thereafter. ii Curtesy (1) Same for surviving husband. (1) Only attaches if issue capable of inheriting land are born. Modern Law i Forced Elective Share (1) Surviving spouse has the option to renounce the will (if any) and elect to take a share (usually _ or 1/3) of deceaseds property. 2. The Community Property (CP) System a. Introduction Three Property Regimes i American Common Law System (1) H&W hold all property in separate ownership ii American CP System (1) H&W hold property acquired from earnings after marriage as CP, and inherited property as separate property. iii Universal CP System (1) H&W hold all property from whatever source as CP. In CP system, property acquired or possessed during marriage by either party is presumed to be CP. i Strong presumption; can be overcome by preponderance of evidence. In most states, H&W can freely change (transmute) character of property by written agreement, and in some states, by oral agreement (CP to separate property and vice-versa). If marriage is terminated by divorce, some states require equal division of CP while others will make an equitable division. b. Community Property Compared with Common Law Concurrent Interests


Husband and Wife i CP can exist only between husband and wife. JT or TIC can exist between any two or more people. Conveyance of Share i Neither spouse can act alone to convey his or her undivided one-half share of CP, except to the other spouse. Need spousal consent to convert CP into separate property. Death i Each spouse can devise by will of one-half of the CP at death. No survivorship. If a spouse dies intestate, his/her share of the CP passes to the other spouse. Sale After Death i At death of one spouse, CP gets stepped-up tax basis. (1) Considerable advantage for federal income tax purposes. (1) H&W buy house for $100; when H dies house is worth $300; W sells for $325 only pays taxes on $25 instead of $225! c. Management of Community Property In a joint tenancy or tenancy in common each tenant can separately convey his/her undivided interest; not the case with CP. The manager of CP acts as a fiduciary. CP must be managed for the benefit of the community; thus each spouse must act in good faith in exercising authority (good judgment is not necessary). Usually, liability to creditors follows management and control. d. Mixing Community Property with Separate Property Inception of Right Rule i The character of the property is determined at the time of initial purchase. Time of Vesting Rule i The character of the property is determined when all installments are paid. Pro Rata Sharing Rule i Community payments buy in a pro rata share of the title. e. Migrating Couples Characterization of property depends on the domicile of the spouses when the property is acquired. Once the property is initially characterized, ownership does not change when the parties change domiciles barring explicit intent/consent by both parties. 3. Rights of Domestic Partners


a. If the jurisdiction recognizes common law marriage, than the couple married by common law (cohabiting parties must manifest their intent to be husband and wife and hold themselves out as such) have the same rights as a couple married with a license and ceremony. b. Goodridge v. Department of Public Health (MA 2003) (Gay Marriage) F: Seven same-sex couples initiated this action to obtain marriage licenses from the MA DPH. I: May MA deny the protections, benefits, obligations conferred by civil marriage to two individuals of the same sex who wish to marry? H: No. Such exclusion is incompatible with MA constitutional principles of respect for individual autonomy and equality under the law. i Fails the rational basis test for due process and equal protection. Note: i Mitt Romney ordered state officials not to record marriage licenses issued to non-resident (same-sex) couples. c. Additional Notes HI recognizes reciprocal beneficiary status, which confers inheritance rights on same-sex couples. VT recognizes thee civil union, which confers all the same benefits, protections and responsibilities CAs domestic partnership statute affords same-sex couples all the same legal rights and obligations NJs domestic partnership statute is more limited, conferring only certain healthcare and retirement benefits. Defense of Marriage Act (1996): Congress says that no states shall be required under the full faith and credit clause to give effect to any samesex marriage contracted in another state. i NY and RI will respect same-sex marriages performed in MA.

VI. Leaseholds: The Law of Landlord and Tenant

A. Leasehold Estates
1. Definitions a. Term of Years: An estate that lasts for some fixed period of time, or for a period computable by a formula that results in fixing calendar dates for the beginning and ending. Can be made determinable upon the happening of some predetermined condition or occurrence. Termination determined at outset; no notice necessary.


Death of L or T has no effect on duration. b. Periodic Tenancy: A lease for a period of some fixed duration that continues for succeeding periods until either landlord or tenant gives notice of termination. (month-to-month, year-to-year). Example: month-to-month, Year-to-Year. If no notice, period is automatically extended. In NY, termination requires advance notice of 1 full calendar period. Death of L or T has no effect on duration. c. Tenancy at Will: A tenancy of no fixed period that endures so long as both landlord and tenant desire. Ends when one of the parties decides to terminate or upon the death of one of the parties. Termination usually requires ~ 30 days notice. d. Tenancy at Sufferance: Arises when a tenant remains in possession (holds over) after termination of the tenancy. 2. Garner v. Gerrish (NY 1984) (T alone has right to terminate). a. F: D entered into a lease with the privilege to terminate at a date of his choice. When the lessor died, P, as executor, brought this action to evict D. b. I: Did the lease create a life tenancy determinable at the will of the tenant, or did it merely establish at tenancy at will (determinable by either party)? c. H: Lease expressly granted D the right to terminate; it did not reserve that right for both parties. To hold otherwise would frustrate the intent of the parties. d. R: The CL rule that a lease that grants only the T the right to terminate is indefinite and must be converted to a TAW is antiquated and is now abandoned in favor of an interpretation more faithful to the parties intent. e. Food For Thought: Did the court violate the principle of numerus clauses? 3. Crechale & Polles, Inc. v. Smith (MS 1974) (Can I stay month-to-month?) a. F: At expiration of 5-year lease, D sought to extend on month-to-month basis. P refused, failed to evict D, cashed Ds check for 1 months rent, refused to cash subsequent checks, then attempted to hold D for another 5-year term. b. I: Is D liable for an additional full-term as a holdover tenant? c. H: No. P elected to terminate the lease but then failed to evict, so acceptance of check for 1 months rent is consent to month-to-month extension. d. Possible Holdover Remedies: Sign new lease. Treat as trespasser; evict and seek damages. Hold as tenant; create a new binding TOY (not to exceed 1 year). Accept rent check and (implicitly or explicitly) extend month-to-month.

B. The Lease
1. Importance a. A lease gives rise to a landlord-tenant relationship, which carries with it certain rights, duties, liabilities and remedies that do not attach to other relationships.


2. Is it a lease? Considerations: a. Intentions of the parties. b. Number of restrictions on use. c. Exclusivity of possession. d. Degree of control retained by grantor. e. Presence/absence of incidental services. 3. Conveyance v. Contract a. A lease is both. Conveyance: Transfers a possessory interest in land. Contract: Contains a number of enforceable promises. 4. Statute of Frauds a. Leases are subject to the SOF (leases longer than 1 year must be in writing). 5. Form Leases and Bargaining Power a. Form leases do not necessarily imply a lack of bargaining power. Avoids cost of contracting with individual parties. Market drives form leases towards optimal terms.

C. Selection of Tenants
1. Federal Fair Housing Act of 1968 a. Prohibits discrimination in the sale/rental/terms/ conditions/privileges/viewing of residential property to anyone because of race, color, religion, sex, national origin, family status or handicap (including AIDS and addiction). NY State adds sexual preference, marital status and profession (lawyers). Austin Texas adds students! b. Exemptions: Any single-family house sold or rented by an owner, provided: i That said owner does not own more than 3 such single-family homes at any one time. Rooms or units in a dwelling containing living quarters for no more than 4 families where the owner occupies one such quarters as his residence.

D. Delivery of Possession
1. Hannan v. Dusch (VA 1930) (Implied duty for L to put T in possession?) a. F: P leased real estate from D. When P attempted to enter he found the former tenant wrongfully holding over. P complained but D refused to take action. b. I: In the absence of an express agreement, will a landlord be required by law to oust trespassers so as to have a leased property open for entry by the tenant at the beginning of the lease term? c. Two Approaches: English Rule: Lessor impliedly required to put lessee in possession. i Lessor in better position (knowledge + legal) to deal with holdover. ii Any trial would rely principally on testimony from lessor.


iii Lessee would not lease without such an assurance you sign a lease because you want an apartment, not a cause of action. American Rule: Lessee has legal right to possession, but no implied duty on lessor as against wrongdoers. i Landlord should be able to lease premises with old T still in possession without fear of liability. ii Wrong to hold landlord responsible for the tort of another. iii Prospective tenants can always expressly bargain for delivery of possession in their lease agreements. d. H: American Rule is better; Ps cause of action is against the holdover, not D. e. Note: Case law remains divided on the subject. Restatement (Second) of Property adopts the English Rule

E. Subleases & Assignments

1. Ernst v. Conditt (TN 1964) (Assignment v. Sublease) a. F: P leased property to Rogers, who then agreed to sublet to D upon the understanding that I will remain liable for the performance of the lease. D defaulted and P brought this action. b. I: Was the transfer an assignment (D is liable) or a sublease (Rogers is liable)? c. Two Approaches: Common Law Rule: i An assignment arises when a lessee transfers his entire interest under the lease the right to possession for the entire duration of the term. ii A sublease arises when the lessee transfers anything less than his entire interest under the lease. Modern Rule: i Consider the intent of the parties. ii Actual words used (sublet) are persuasive but not conclusive. d. H: Under either rule, the agreement was an assignment; D is liable. Rogers reserved neither an interest nor a right of reentry in the lease. Use of the word sublet is not dispositive. 2. Kendall v. Ernest Pestana, Inc. (CA 1985) (unreasonable denial of assignment) a. F: D leased a hangar to B. Pursuant to the lease agreement, P sought Ds approval to take assignment of Bs lease. D refused for no apparent reason. b. I: Where a commercial lease contains an approval clause (stating that the lease may not be assigned without prior consent of the lessor), may a lessor arbitrarily withhold such consent? c. Two Approaches: Majority Rule: Lessor may arbitrarily/unreasonably refuse approval no matter how suitable the proposed assignee appears. i Stare Decisis ii T could have bargained for the addition of a reasonable clause. iii L should have freedom of K to realize increased value of property.


Minority Rule: Consent may be withheld only where the lessor has a commercially reasonable objection to the assignment. i Restraints on alienation are not preferable. ii Implied duty of good faith and fair dealing in every K. iii T should not have to bargain for reasonable clause. d. H: Minority rule is preferable. e. Notes: Reasonable Objections: i Financial/Commercial viability of proposed assignee. ii Suitability/Legality of proposed use. iii Proposed alteration to premises. iv Bargained for provision outlining acceptable/unacceptable assignees. Unreasonable Objections i Personal taste, convenience or sensibility. ii Desire to charge higher rent than originally bargained for. NY Residential i Generally allow subleases/assignments; only reasonable objections. ii Scarce housing; no restraint on alienation prevents economic waste. If permission unreasonably denied; sublease anyway, recover costs later. NY commercial is less clear.

F. Tenant Who Defaults

1. Tenant in Possession (Self-Help) a. Berg v. Wiley (MN 1978) (Changes Locks on Restaurant) F: P leased real estate from D. After a disagreement, D forcibly evicted P by changing the locks while she was absent. I: May D use self-help to forcibly evict P? Two Approaches: i Common Law Rule: Landlord may use self-help to retake premises from tenant in possession without incurring liability provided: (1) Landlord legally entitled to possession (tenant has held over or materially breached a lease containing a reentry clause); and (2) Means of reentry are peaceable; only reasonable/permissible force. ii Modern Rule: Self-help never acceptable where tenant has not abandoned or surrendered premises. Must use judicial process. (1) Forcible Entry/Detainer Statutes: Summary proceeding designed to expedite the cumbersome process of ejectment. (1) Discourages taking law into own hands; prevents breach of peace. (2) In theory, supposed to be fast and efficient. (3) In practice, can still be time-consuming and expensive. H: Modern rule is preferable. P entitled to damages for wrongful eviction. Notes:


i Berg v. Wiley applies to residential as well as commercial leases. ii Modern Rule is the trend, but is not yet the majority rule. (1) Commercial leases may contain self-help clauses. (1) But, courts are strict in defining reasonable/permissive force. 2. Tenant Who Has Abandoned Possession a. Sommer v. Kridel (NJ 1977) (Broken Engagement) F: D leased apartment but never moved in. Sent letter asking to be released. P ignored letter, did not re-let apartment, and sued 2 years later. b. Riverview Realty Co. v. Perosio (NJ 1977) F: D leased apartment for 2 years but left after 1. P waited 9 months, did not re-let apartment despite willing tenants, and then sued for back-rent. c. I: Does a landlord have a duty to mitigate damages by making a reasonable effort to re-let premises wrongfully vacated by an abandoning tenant? d. Two Approaches: Common Law (NY) Rule: Landlord under no duty to mitigate. i Based on Property Law ii Lease is a transfer of property, not the landlords problem. Modern (Majority) Rule: Landlord has duty to mitigate. i Based on Contract Law. ii Lease in a K, ordinary K rule for mitigation of damages applies. e. H: Fairness and equity dictate that modern rule is preferable. Discourages waste/vandalism. Damages still available after mitigation if: i L expends $ finding new T. ii L forced to rent at lower price. iii Long period of vacancy despite diligent effort. f. Notes: Landlord has burden to prove reasonably diligent effort. Surrender: Ts (implicit or explicit) offer to end tenancy.

G. Duties, Rights, and Remedies (Re: Condition of the Leased Premises)

1. Quiet Enjoyment and Constructive Eviction a. Reste Realty Corp. v. Cooper (NJ 1969) (Water in Basement) F: D lessee abandoned premises after lessor failed to remedy leak in basement. P later acquired premises and assignment of Ds lease; sued. I: Was there a breach of covenant so as to justify Ds abandonment? H: Yes. The implied covenant of quiet enjoyment was breached. R: Any act or omission (by L) which renders the premises substantially unsuitable for the purpose for which they are leased, or which seriously


interferes with the beneficial enjoyment of the premises, is a breach of the covenant of quiet enjoyment and constitutes a constructive eviction. Notes: i Right to claim constructive eviction is lost if T fails to vacate within reasonable time. ii T may remain in possession; sue for difference in value of premises. iii An actual eviction from a part of the premises relieves T of liability for all rent notwithstanding continued occupation of the balance. (1) Restatement (2nd) rejects; says reduced rent, not all rent. (2) Usually does not apply to constructive eviction. (1) NY courts are split. b. The Illegal Lease Doctrine: Brown v. Southall Realty Co. (DC 1968) If premises are in such a condition as to be in violation of statutory code provisions, then the lease is an illegal contract and is unenforceable. i Does not apply if code violations develop after execution of lease. ii Minor technical violations dont count; must be substantial. iii T is at sufferance; L still entitled to reasonable rental value. 2. Implied Warranty of Habitability a. Hilder v. St. Peter, (VT 1984) (House in Total Disrepair) F: P leased apartment from D that turned out to be in a state of disrepair. I: Is P entitled to reimbursement for rent paid + compensatory damages? H: Yes. D breached the implied warranty of habitability. R: In the rental of a residential dwelling unit an implied warranty exists that the landlord will deliver and maintain premises that are safe, clean, and fit for human habitation. (well-known package of goods and services) Implied Warranty of Habitability: i Covers all latent and patent defects in essential facilities of the unit. ii Cannot be waived. iii Violation of statutory housing code constitutes prima facie case. iv Outside of code violations, court should consider whether the claimed defect has an impact on the health or safety of the tenant. v Landlords not liable for defects caused by tenants. vi Tenant must show that landlord has been put on notice and has failed to remedy defect despite reasonable time for correction. vii Remedies: (1) Pay rent up front; seek damages later for difference between value of dwelling as warranted and value as it exists. (Hilder). (2) Withhold rent; force landlord to initiate action. (3) Self-Repair; withhold cost from future rent. (4) Punitive damages may be available if breach is willful and wanton. Note:


As a result if this holding, the doctrine of constructive eviction, wherein a T must abandon in order to escape liability for rent, is no longer viable. (1) However: (1) Some jurisdictions have not yet adopted the warranty. (2) Warranty may not apply to certain leases (commercial; singlefamily).

b. Retaliatory Eviction Most Jurisdictions have a rebuttable presumption of retaliatory motive if L takes unfavorable action with a given period (usually 90 to 180 days) after a good-faith complaint by a T. i After that period, T bears burden of proof. NY is different; L allowed to take unfavorable action as soon as defect has been remedied as long as T is provided with adequate time to procure other housing. i Burden on L to prove adequate time. ii Of course, subject to all the normal restrictions (FHA, etc.) Protections rarely extend to commercial leases.

H. Problem of Affordable Housing

1. Chicago Board of Realtors, Inc. v. City of Chicago a. F: Chicago passed the Residential Landlord and Tenant Ordinance, which essentially codified the implied warranty of habitability. b. Policy Implications: Principle beneficiaries ill be the middle-class. i Ts with good financials more attractive to landlords because they are less likely to be late with rent or to abuse privilege to withhold rent. ii Leads to a conversion of rental housing to owner housing; drives supply up and price down for those in a position to purchase property. Principle losers will be poor tenants, future tenants, some landlords and some out-of-state banks.


IX. Judicial Land Use Controls: The Law of Nuisance

A. Nuisance v. Trespass. nuisance = non-trespassory invasion. we treat intentional nuisance different from intentional trespass: a. intentional trespass strict liability; no reasonableness inquiry. b. for intentional nuisance we make reasonableness inquiry, amount of harm & utility. c. seems inconsistent sometimes that dumping contaminated water onto your land (trespass) would create strict liability but releasing polluting gases onto your land (nuisance) wouldnt necessarily create liability so: R2 i. R2 Torts 826(b): intentional invasion is unreasonable for purposes of nuisance law if (1) gravity of the harm caused outweighs the utility of the actors conduct; OR if (2) the harm caused by the conduct is serious and the financial burden of compensating for this and similar harm to others would not make the continuation of the conduct not feasible ii. clause (2) allows for payment of damages where the utility outweighs the harm caused (e.g., a polluting factory is nonetheless necessary to a community so damages can be paid to those harmed instead of an injunction). This moves intentional nuisance direction of intentional trespass B. public v. private: a. private nuisance protects rights in the use & enjoyment of land. only owners of land can bring suit b. public nuisance protects public rights. Only a member of the public showing special injury can bring suit common law vestige, environmental groups hate it so law liberalized a bit: R2 now allows suits for injunctions (not damages) to be brought by public officials, any person who has standing as a representative of the general public, a citizen in a citizens action, or a member of a class in a class action C. Nuisance Law & Environmental Controls - regulation vs. incentive system a. regulations more direct, certain, easier to monitor, political action. argument that incentive systems face problem of commodifying environmental quality b. incentive systems (cap-and-trade = charge per unit of pollution, or permit trading). argument that incentive system is lower cost, encourages technological development i. e.g., 1990 amendments to Clean Air Act pollution allowances can be traded fy sources of sulfur dioxide re: acid rain D. 4 possible actions re: nuisance a. abate the activity by granting an injunction (Morgan, Estancias) b. let the activity continue if D pays damages (Boomer) c. let the activity continue by denying relief d. abate the activity if P pays damages (Spurr)


E. Morgan v. High Penn Oil Co. (NC S.Ct., 1953) - Ds oil refinery 1000 ft from Ps lot (house, trailer park, restaurant). Ct affirms $2500 damages & injunction a. clearly a nuisance here: D intentionally & unreasonably caused noxious gases/odors to escape onto Ps property; evidence shows D will continue to release gases in the future b. R: textbook rule (R2 Torts) an interference w/ use & enjoyment of land, in order to give rise to liability, must be substantial; it must also be either intentional and unreasonable, or the unintentional result of negligent, reckless, or abnormally dangerous activity c. what will happen after this ruling? Refinery will likely try to buy out Ps. Ct in effect gave Ps a property right they can now set a price for and sell back to Ds. Or maybe its a way to create an incentive for the refinery to clean up its act F. Estancias Dallas Corp v. Schultz (TX, 1973) Ct affirms injunction for P to stop D from operating incredibly loud AC equipment on newly-constructed apt. building. P not required to seek only $ damages a. Storey case: held there should be a balancing of the equities to determine if injunction is appropriate (compare injury to D/public of granting injunction to injury to P of not granting injunction). Nuisances have been permitted to exist for necessity rather than on a Ds right to continue Necessity may compel relief by damages rather than injunction b. applying Storey rules: no necessity of Ds here compels P to have to seek only $ damages instead of injunction. c. note: balancing the equities (comparative hardship efficiency is the objective, to avoid greater harm or social cost) is different from the nuisance inquiry (utility of the conduct vs. the gravity of the harm caused). Ct doesnt take into account the broader public benefit here G. Boomer v. Atlantic Cement Co. (NY, 1970) dirt, smoke, vibration. lower cts gave only specific past damages to P homeowners, but no injunction a. Q: What relief should court grant where injunction cost is grossly disproportionate to Ps harm? H: One viable option is to grant an injunction which can be vacated upon D paying P permanent damages b. Ct departs from established NY rule (grant injunctions where theres a nuisance and substantial damage is shown) because of the disparity here c. Ct decides not to order a postponed injunction. Permanent damages will better compensate Ps for total economic loss to their property present and future, hopefully compel D to invest in research, cut overall pollution d. dissent: maj is licensing a continuing wrong, allowing to pay fee to pollute e. note: Ct compares permanent damages to a servitude Ct basically gave D cement company the right to buy the servitude away from Ps f. Ct says this remedy is just the remedy to private individuals if its a public nuisance, then its up to gov agencies to come in and regulate. H. Spurr Industries v. Del E. Webb Development Co. (Ariz, 1972) a. Q: (1) Where the operation of a lawful business (feedlot) becomes a nuisance b/c of nearby residential area, does a suit by a land developer merit an injunction? (2) Assuming the nuisance may be enjoined, may the


land developer by required to indemnify business owner (for moving expenses, etc)? b. H: (1) feedlot is an enjoinable public nuisance; also a private nuisance to the residents. P entitled to relief (injunction) b/c of the damage to his customers (home-buyers) c. H: (2) P must indemnify D: D here had no indication that a new city would spring up here hes required to move not b/c of wrongdoing but b/c of the rights & interests of the public. Not too harsh to require a developer to indemnify those who are forced to leave as a result of development of rural area d. true that theres often no relief for Ps coming to the nuisance, but business owners cant complain when they build on outskirts and cities expand I. coming to the nuisance doesnt bar recovery (as in Spurr v. Webb), but courts should consider it as a relevant factor. a. some states have right to farm statutes protecting pre-existing farmers from nuisance suits a sweet chart: P wins D wins traditional - property rules - injunction - no action modern - liability rules - D pays damages, nuisance continues - P may be required to indemnify D -

X. Private Land Use Controls: The Law of Servitudes

A. Easements
1. Terminology a. Servitude: Interests in land, binding and benefiting not only the parties to the agreement in question but also their successors. i Positive Servitudes Easement: A is given the right to enter upon Bs land. (1) Easement Appurtenant: Gives the right to whoever owns the parcel of land that the easement attaches to/benefits. (a) Dominant Tenement/Estate: Property that carries a right to use a portion of a neighboring property. Easement attaches to/benefits. (b) Servient Tenement/Estate: Property that is subject to use by another for a specific purpose. Easement burdens. (2) Easement in Gross: Gives the right to some person without regard to ownership of land. 38

(a) Because it does not benefit any land, it involves no dominant estate, only a servient tenement/estate. (3) General Rules: (a) If it is unclear which type of easement the parties intended, the law construes in favor of easements appurtenant. (b) Both types of easements are usually alienable/transferable. Profit (Profits Predre): A is given the right to enter upon Bs land and to remove something attached to the land (timber, minerals, wild game). License: Oral or written permission by landowner allowing lecensee to do something that would otherwise be a trespass (dinner guest, movie ticket). (1) Usually non-transferable + revocable. ii Negative Servitudes Negative Easement: A is given the right to enforce a restriction on the use of Bs land. (1) Examples: (a) Right to receive light for building; solar panel; right to a view. (b) Right to receive air in a defined channel. (c) Right to receive support for a building. (d) Right to receive water in an artificial stream. (e) Right to receive maintenance on a fence. (2) Today, preference for equitable servitudes over recognition of new negative easements. Exceptions Include: (a) Conservation Easement (preserve scenic/historic areas) (i) Uniform Conservation Easement Act (UCEA). (ii) Perpetual in duration; transferable; can be in gross. (iii)Value is income tax deductible. (b) Facade Preservation Easement (i) Prevents the faade of a house on the national Register of Historic Places from bring altered. (ii) Value is income tax deductible. (c) Primary Residence Easement (i) Restricts owner, present or future, form using property as a vacation home. (ii) Reaction to growing popularity of vacation hoes left vacant for most of the year. Covenants Running With the Land (1) Real Covenants: Must arise from agreement between original property owners. (a) Horizontal Privity: Horizontal in time; can only be created when partitioning one large parcel of land. (b) Vertical Privity: Vertical in time; must have a consistent chain of title. (i) No adverse possession or abandonment/finding.


(2) Equitable Servitudes: Result from a defect in the attempted creation of a real covenant; parties made a mistake but court of equity will recognize. 2. Creation of Easements a. Rules i Statute of Frauds Being an interest in land, easements (and profits) fall within the SOF, thus, creation generally requires a written instrument. ii Exceptions Fraud Part Performance Estoppel Prescription Implication b. Holbrook v. Taylor (KY 1976) (Easement by Estoppel) i F: D allowed P to use a road that crossed his land while P was building his house and for some time thereafter. P also made minor improvements to the road. Later, D obstructed the road and put up no trespassing signs. ii I: Did P establish an easement? iii H: Yes. License made irrevocable by equitable estoppel. iv R: Where a licensor is aware that a licensee has made significant expenditures in reliance on the license, the license becomes irrevocable (becomes an easement). v Notes: Shepard v. Purvine (OR 1952): Where parties are neighbors/friends, an oral license relied upon is just as valid and irrevocable as a writing to insist on a written deed would be embarrassing! Henry v. Dalton (RI 1959): Opposite position; to transform a license into an irrevocable right by way of estoppel is a tenuous premise secure a writing or take your chances! c. Van Sandt v. Royster (KS 1938) (Easement by Implication) i F: P brought this action to enjoin D from using an underground lateral sewer that crossed his land. ii I: Was an easement ever created on P land? iii R: Easement by Implication: Stems from the idea of a quasieasement in which a single owner utilizes one portion of his land (quasi servient tenement) for the benefit of another (quasi dominant tenement). Easement by Prior Existing Use: Implied on the basis of apparent + continuous use of a portion of a tract of land existing at the time the tract is divided. (1) Implied to protect the expectations of grantor/grantee that existing use will continue after partition + transfer.


(2) Hinges on notice. Prior use must have been known parties (or within the possibility of contemplation) at the time of conveyance. Easement by Necessity: Easement is necessary to enjoyment of land, and necessity arose at the time the tract was divided. iv H: Yes, an easement by implication (Prior Existing Use). v Notes: If the dominant tenement and the servient tenement come into the same ownership, the easement is extinguished altogether. (1) If title is subsequently re-divided, a new easement by implication can arise if circumstances dictate as such. d. Notes: Easements by Necessity + Prescription i Easements by Necessity Endures only so long as it is necessary. Most courts require strict necessity. (1) Some courts, however, will make exceptions where access exists but is claimed to inadequate, exceedingly difficult, or costly. Weight of authority today holds that only reasonable necessity is required for an implied easement (in favor of grantor or grantee). (1) NY and TX, however, follow old rule that strict necessity is required for implied easements in favor of grantor. See 688 v. 695 ??? ii Easements by Prescription Similar to adverse possession: open and notorious, continuous, adverse, and under claim of right (obviously not exclusive). (1) Usually longer statutory period because prescription of an easement can be less clear. A few courts have retained the Fiction of the Lost Grant: (1) If a use is shown to have existed for 20 years, it is presumed that an easement was granted and the grant was lost (non-rebuttable). In most states, a public prescriptive easement can be obtained by long continuous use by the public under a claim of right. (1) Example Rockefeller Center closes 1 day each year. e. Mathews v. Bay Head Improvement Association (NJ 1984) (Dry Sand?) i F: State owns tidal wet sand area via Public Trust Doctrine (PTD). Bay Head Improvement Association (a quasi-public body) owns the dry sand. ii I: Does non-resident public have right to use the dry sand area of beach owned by a quasi-public body (as opposed to a municipality)? iii H: Yes. Prior decisions held that under PTD public is entitled to reasonable access to dry sand necessary to enjoyment of wet sand area. Here, right is extended from municipal to quasi-public context. Relevant Factors for Determining Reasonableness: (1) Location of dry sand area in relation to the foreshore. (2) Extent and availability of publicly owned dry sand area. (3) Nature and extent of public demand.


(4) Usage of dry sand area by the owner.

B. Covenants Running with the Land

1. Covenants Enforceable at Law: Real Covenants Historical Background a. 19th cent Eng landowners looked to contract law (b/c of cts refusal to recognize new types of negative easements) whats needed is a property right enforceable by/against subsequent possessors. This existed in England in the privity of estate context, but Eng cts refused to extend that b. in the US: Real Covenant a promise respecting the use of land that runs with the land at law. e.g., B promises A not to build a factory on Bs land i. burden & benefit (like the dominant & servient estate). If property is transferred to subsequent possessor and a party sues, that party must prove that the burden/benefit runs to the subsequent possessor. 1. traditionally, test for the running of the burden is tougher than test for running of the benefit - horizontal privity and vertical privity 2. rule: in US, b/c privity of estate is defined as between landowners as successive, a covenant is enforceable against successors when its created in conjunction w/ the transfer of some other interest in land. a. e.g., if B promises A not to build said factory had been part of a deed conveying land 3. old view (burden can run only when theres horizontal privity) now rejected in favor of modern view: horizontal privity of estate is not required for a covenant to run at law to successors ii. Real covenant can be a negative promise or affirmative promise. iii. A covenant is not enforceable against an assignee who has no notice of it c. Vertical privity runs with the estate in land, not the land itself. That is, a covenant is enforceable by & against remote parties only if those parties have succeeded to the original parties estates in the land i. old rule: Burden Side (covenant only enforceable against someone who has succeeded to the same estate, i.e., not an adverse possessor) & Benefit Side (covenant enforceable by a person succeeding either to the same estate or to a lesser interest carved out of the estate) ii. R3 changes the rules: discards the vertical privity requirement for both the burden and the benefit 1. negative covenants treated same as easements all owners & possessors of burdened land are bound by negative covenants regardless of the extent of their interest or the manner in which they obtained their interest.


Consequently, all owners & possessors of benefited land are entitled to enforce the covenant 2. affirmative covenants diff rules for each category: a. lessees benefits of covenants to maintain/repair run to lessees, as do those that can be enjoyed w/out diminishing the benefits value to lessor. The only affirmative covenants that bind lessees are those that can more reasonably be performed by the person in possession than person holding reversion b. life tenants both the benefits and burdens of affirmative covenants run to legal life tenants. But their liability for performance is limited to the value of the life estate c. adverse possessors if they havent yet taken title, theyre liable on affirmative covenants burdening the property but generally the benefits of affirmative covenants dont run to them 2. Covenants Enforceable in Equity: Equitable Servitudes a. Equitable servitude = a covenant respecting the use of land enforceable against successor owners or possessors in equity regardless of its enforceability at law. i. burdens the land itself, not the estate. (like an easement) ii. Whereas remedy for breach of a real covenant is damages in a suit at law, the remedy for breach of an equitable servitude is an injunction or enforcement of a lien in a suit at equity. b. Tulk v. Moxhay (Eng Ct of Chancery, 1848) the birth of the equitable servitude. F: P sold Leicester Square land to Elms w/ covenant that Elms would keep it open/undeveloped & give nearby residents access. Elms then sold it to D, who wanted to develop it. P sues for injunction. i. Q: Shall a party who has notice of the covenant be permitted to use the land in a manner inconsistent w/ the contract entered into w/ his vendor? ii. H: The purchasing party is enjoined for reasons of equity. iii. inequitable that Elms could turn around & re-sell property for higher price (land not burdened w/ covenant) than price for which P originally sold it. (windfall to Elms) iv. policy: allowing D purchaser to develop land would deny parties the security of knowing that their covenants will be enforced v. it doesnt matter whether the covenant runs with the land. (not a property question; its an equity question). the court would enforce a mere agreement, provided the purchasing party had notice 3. Creation of Covenants - a real covenant must be written (cannot arise by estoppel, implication, or prescription [as can an easement]). An equitable servitude may be implied in equity in some circumstances. Cant arise by prescription.


a. Sanborn v. McLean (Mich S.Ct., 1925) - Detroit 1890s-era subdivision. P neighbors sue to get injunction to stop owners of lot 86 from building a gas station behind their house i. Ct finds a reciprocal negative easement owner of multiple lots can sell some lots (with restraints on these lots sold) and keep restrictions on the lots retained. The servitude is mutual 1. RNE runs with the land; operative on any owner who has actual or constructive notice 2. RNE must start from a common owner ii. Q: Is Ds lot subject to the reciprocal negative easement? iii. H: Lot 86 was bound by a RNE before D bought it, and D had constructive notice. Thus, D enjoined from building gas station iv. Ct finds D had constructive notice (residential restriction pretty obvious; D had inquiry notice couldve asked easily) b. in Sanborn, its clearly wrong to call it an easement. So why the temptation to call it a form of an easement (here, a reciprocal negative easement)? B/c you dont create covenants by implication. If you create some kind of restriction out of the air, it would have to be implied in some manner. big point: you cant imply a real covenant. so court uses the language of an easement c. other notes on Sanborn: i. court didnt mention nuisance at all, but they probably couldve ii. 1925 case. S.Ct. declares zoning constitutional in 1926 (Euclid) iii. S points out: Here, a restriction that had no history was created in order to have some kind of reciprocity (opposite of Garner v. Garrish) 4. Scope of Covenants a. Hill v. Community of Damien of Molokai (New Mex, 1996) - P neighbors sue to get D AIDS group home out of neighborhood. Covenant says no lots can be used for purpose other than single family residence purposes. Ct for D AIDS patients on both issues: i. A group home is permitted under the use covenant. group home meets residential use requirement (designed to provide traditional family structure meals, social, emotional, financial support... not like a boarding house) and meets single-family requirement (municipal ordinance definition of family includes 5 unrelated persons, public policy favors allowing group homes, integrating AIDS patients) 1. Ct rejects Ps complaint re: increased traffic ii. enforcing the restrictive covenant against the group home violates the Fed Fair Housing Act (which requires reasonable accommodations to handicapped like HIV+) 1. Ct rejects patients discriminatory intent claim, but allows Disparate Impact claim (people w/ handicaps often need to live in group homes) and Reasonable Accommodation claim


iii. S points out: the effect of this case is that communities who want to keep group homes out will put stricter requirements into their covenants (ie, residents must be related, etc.) b. Shelley v. Kraemer (US, 1948) (note case) 1911: 30 of 39 St. Louis neighbors signed 50-yr agreement: no Negroes or Mongolians. 1945: Shelly (black) bought house, didnt know about restrictive agreement. racist neighbor Ps sued. D Shelly appeals, says 14th EP violation i. Q: 14th violation, even though the restrictive agreement is private? ii. H: Judicial branch cant enforce a covenant that the legislative branch is not allowed to pass even if the rule itself was created by private parties. iii. Private restrictive agreement standing alone doesnt violate 14th (b/c no state action involved), but it would violate EP where restrictive agreement can only be enforced by judicial involvement (barring sale of house) 1. Ct said 14th Framers intended basic enjoyment of property rights as pre-condition to civil rights iv. note: today, this case would fall under FHA c. how does title search company get around enforceable restrictive covenant that might violate FHA (3604: cant print/publish anything w/r/t sale or rental indicating any preference, limitation, or discrimination based on race, color, religion, sex, handicap, familial status, or national origin)? i. leave it out (risking liability for omission)? ii. include covenant w/ legal statement saying Im just doing title search as matter of job d. How do you terminate a covenant? i. De facto terminated because its unenforceable ii. Properly terminate: 1. Expressly via a writing 2. Abandon an easement/covenant waive use of it over time you can lose an easement/covenant if you never use it. 3. Unification of properties - easement = extinguished (Cant have easement over your own property) 4. Changed circumstances 5. Common Interest Communities a. 3 types: (1) homeowners associations; (2) condominiums; (3) cooperatives i. most state have statutory scheme for organizing a CIC require a declaration of rules governing, which must be disclosed to purchasers ii. R3 definition: obligation that binds the owners of individual lots or units to contribute to the support of common property, or other facilities, or to support the activities of an association, whether or not the owner uses the common property or facilities, or agrees to join the association iii. condos: each unit (or interior space) in a condo is owned separately in fee simple by an individual owner. Exterior walls,


land beneath, hallways, & other common areas are owned by the unit owners as tenants in common. 1. declaration of condominium must be filed before 1st sale; provides for a unit association to make rules, etc. 2. monthly charge to maintain common facilities, insurance. Proportional representation type system fraction for common expenses, voice in management (vote), and sometimes tax assessment 3. horizontal & vertical privity requirements generally satisfied for condos 4. succession: condo can be left to whomever you like. In a co-op, though, board has to approve all potential owners b. Nahrstedt v. Lakeside Village Condominium Assn. (CA S.Ct, 1994) D condo association has pet restriction in the projects original declaration (its constitution), fines creepy cat lady P, who claims she didnt know when she purchased condo. Older women tend to like cats. i. Q: Is a no-pet restriction contained in a condo assocs original declaration enforceable? ii. H: Such original restrictions are presumptively valid, and this one isnt arbitrary, doesnt violate public policy, and the burdens dont outweigh benefit. Cat lady loses. iii. CICs all about subordination of rights, giving up degree of freedom; ability of homeowners to enforce their CC&Rs (covenants, conditions & restrictions) is key. Generally, enforcement possible only if the CC&R meets the requirements of equitable servitudes & covenants running w/ land iv. CA statute: enforce CC&Rs in communitys declaration unless unreasonable. Ct adopts Florida courts rule (no statute there): apply reasonableness test only to restrictions adopted by vote of homeowners assoc; give a presumption of validity to restrictions contained in the original recorded declaration v. Question CC&Rs from original declaration ONLY if (1) violates public policy (2) arbitrary (3) burden far outweighs any benefit 1. protects general expectations of condo owners 2. discourages lawsuits based on personal exemptions, purchasers can rely on original document, cheaper for other owners (will have to pay legal fees), doesnt clog courts 3. burden of proof on the challenger (owner) 4. stability enforce written instruments 5. shouldnt force assoc to engage in divisive decisionmaking. disrupts harmony 6. focus on burdens effect on whole community, not just P c. NY uses business judgment standard (not reasonableness). cts just consider whether the community assoc board exercised its discretion in good faith and with regard for the communitys best interests i. burden on the owner, not the association


ii. cts dont have to 2nd guess decisions made by associations. d. Note: New Yorks Cooperative Apartments i. co-op: title to land/building held by a corporation; residents own all stock; elected board of directors; long-term renewable lease. Residents are both owners & tenants of corporation ii. since mortgage is shared, failure of one tenant to pay his share can put the whole thing at risk so, serious screening process iii. NY cts: co-op board can deny entry to anyone for any reason, provided it doesnt violate fed or state civil rights laws. BUT, if applicant can prove racial/ethnic discrimination, co-op must admit them or pay damages e. Mulligan v. Panther Valley Property Owners Assn.(NJ, 2001) (note case) gated community members (not board) vote to amend declaration to exclude sex offenders. P member challenged this on the grounds that it violated public policy. Ct for D (assoc) i. Ct applies reasonableness test (rather than NYs business judgment test) ii. potential danger: if so many communities pass such restrictions so as to make a large segment of the housing market unavailable to these individuals (sex offenders) iii. does community performs quasi-municipal functions, such that their action is analogous to governmental actions? iv. regardless, sex offenders arent a protected group (but that may always be shifting) v. Sashas brother in law is a registered sex offender

XI. Zoning
A. Introduction
1. Ideological Underpinnings a. Separation of uses b. Protection of the single family home c. Low-rise development d. Medium-density of population 2. Village of Euclid v. Ambler Realty Co. (Supreme Ct. 1926) (Euclidean Zoning) a. F: P bought property for industrial purpose. D enacted zoning ordinance restricting Ps property to non-industrial uses, causing it to lose value. b. I: Is the ordinance constitutionally invalid as an unlawful exercise of police power causing deprivation of liberty and property w/out due process of law? c. H: No. In light of the many legitimate purposes furthered by the ordinance, the end in view is sufficient to justify the general rule of the ordinance. i Promote health and general welfare of population. ii Preserve character of residential neighborhoods. iii Reduce congestion and traffic. 47

iv Provide adequate light and air. v Prevent overcrowding; avoid undue concentration of population. vi Facilitate adequate provision of transportation, water, sewage, schools, parks and other public requirements. vii Secure safety in instances of fire or mass panic. d. Notes: i Under Euclidean Zoning permitted uses are cumulative; higher uses (single-family hones) are permitted in areas zoned for lower uses (industry), but not vice versa. ii Generally, commercially zoned property sells at a higher price than residentially zoned property. 3. Enabling Legislation a. Zoning is an exercise of the police power of the state but al states have adopted enabling acts that delegate zoning authority to local governments. i The Standard Act empowers municipalities to restrict the height, number of stories, and size of buildings and other structures, the percentage of a lot that may be occupied, the size of yards, courts and other open spaces, the density of population, and the location and use land for industry, residence, or other purposes. Standard Act requires the creation of a Planning (Zoning) Commission and a Board of Adjustment (Zoning Appeals). In most cases, the Standard Act stipulates that all zoning regulations will be in accordance with a Comprehensive Plan, which is a statement of the local governments objectives and standards.

B. The Nonconforming Use

1. PA Northwestern Distributors, Inc. v. Zoning Hearing Board (PA 1991) a. F: P opens porn shop. Soon after, D amends zoning ordinance to prevent such use by restricting location and operation of adult commercial enterprises. b. I: Is an ordinance that requires the discontinuance/amortization of a lawful preexisting nonconforming use unlawful as taking without just compensation? c. H: Yes. If the government wishes to interfere with a lawful nonconforming use, where the use is not a nuisance and is not abandoned, it must compensate the owner for the resulting loss. d. Concurrence: Amortization provisions not per se unconstitutional. Should apply balancing test from Sullivan: do beneficial effects to community from discontinuance outweigh losses to affected landowner? e. Notes: i Abandonment or destruction (by an act of God) of a nonconforming use will terminate it. ii Right to maintain a nonconforming use runs with the land; thus it will survive a change in ownership. Some jurisdictions allow nonconforming uses to expand to meet increased demand.


Some jurisdictions even allow one nonconforming use to be changed to another nonconforming use, so long as the change does not increase the impact of the use on the zone in question. iii Generally, a pre-existing use is protected; plans are not. However, in some jurisdictions vested rights doctrine or estoppel will protect plans based on extent of planning or detrimental reliance.

C. Expanding the Aims of Zoning

1. Aesthetic Regulation a. State ex rel. Stoyanoff v. Berkely (MO 1970) (Pig in the Parlor) i F: P was denied a permit to construct an unusual (pyramidal) home in the highly traditional neighborhood of Ladue. ii I: Is the Ladue ordinance unconstitutional as an arbitrary and unreasonable exercise of police power? iii H: No. The ordinance promotes the general welfare in that the beauty of a fashionable residence neighborhoodis for the comfort and happiness of the residents, and it sustainsvalue of property in the neighborhood. Court relied largely on the property value argument as opposed to the legitimacy of aesthetics as its own zoning objective. b. Anderson v. City of Issaquah (WA 1993) i F: Despite his good-faith efforts, Ps proposals to construct a commercial building on mainstreet were repeatedly denied as aesthetically inadequate. ii I: Are the design requirements in Ds municipal code unconstitutionally vague? iii H: Yes. The code at issue is unconstitutional in that it does not provide any semblance of effective or meaningful guidance to applicants and invites discretionary and arbitrary enforcement of the law. iv Takeaway: Aesthetic standards are an appropriate component of land use governance when drafted to give clear guidance to all concerned parties. Has been architectural/artistic backlash against design restriction. v Notes: Private Restrictive Covenants: Private architectural restrictions governed by different standard than public. Specific standards not necessary; committee must simply act reasonably and in good faith. First Amendment Concerns: No court has held that the 1st A protects architectural expression, but some have suggested that design regulation should be subject to heightened scrutiny. c. City of Ladue v. Gilleo, (Supreme Court 1994) i F: Ladue City Ordinance prohibits owners from displaying any signs on property or in windows (except for sale, residence identification, + safety). ii I: Is the ordinance violative of 1st Amendment right to free speech?


iii Holding: Yes. Ds interest in minimizing visual clutter is far outweighed by the chilling effect that the ordinance will have an important medium of expression. Ordinance may regulate aesthetics of signs; not content. Private covenant can prohibit any kind of signage. iv Notes: Art? (Page 898) Adult Entertainment: Regulations seem content based, but have been upheld as regulating the secondary effects of such businesses on the quality of urban life a substantial state interest. Religious Establishments: Religious Land Use and Institutionalized Persons Act of 2000 prohibits regulations that impose substantial burdens on religious exercise unless in furtherance of a compelling government interest. 2. Controls on Household Composition a. Village of Belle Terre v. Boraas (Supreme Court 1974) i F: Village ordinance limited land use to single-family dwellings; 6 college students living together in a house failed to qualify. ii I: Is the ordinances distinction between related and unrelated individuals constitutionally permissible under the equal protection clause? iii H: Yes. The goal is permissible; the police power is not confined to elimination of filth...[it can be used to establish] a sanctuary for the people. iv Notes: Moore v. City of East Cleveland: When a city undertakes such intrusive regulation of the family, neither Belle Terre nor Euclid governs; the usual judicial deference to the legislature is inappropriate. b. City of Edmonds v. Oxford House, Inc. (Supreme Court 1995) i F: P sued D to enjoin the operation of a group home in an area zoned for single-family use. ii I: Does the zoning restriction limiting a family to 5 or fewer persons qualify under the FHAs maximum occupancy exception? iii H: No. Rules that cap total occupants in order to prevent overcrowding are exempt under the FHA; rules designed to preserve the family character of a neighborhood focusing on household composition do not. iv Food for Thought: Concerned neighbors chip in a buy a house that was going to be sold for use a group home; is there a cause of action under FHA? House sold to group home; neighbors bring action for injunction, later drop suit; can group home due neighbors under the FHA? v Notes: NIMBY: Not In My Back Yard, and related phenomena


3. Exclusionary Zoning a. Southern Burlington County NAACP v. Township of Mt. Laurel (NJ 1975) i F: D utilized land use regulations to ensure that only a certain socioeconomic demographic (beneficial to the tax base) are able to afford housing within township. ii I: May a developing municipality use land use regulations to make it impossible to provide low and moderate-income housing? iii H: No. Every developing municipality must, by its land use regulations, presumptively make realistically possible an appropriate variety and choice of housing options. Mt. Laurell II: Every municipality (as opposed to developing ones) must make such provisions; not enough to remove barriers, must take affirmative steps. iv Notes: Exclusionary Zoning Techniques: (1) Minimum Housing-Cost: Invalidated by courts; no rational relationship between cost and advancing public health + safety. (2) Minimum Floor Area: Have largely been superseded by comprehensive Housing Codes. (3) Minimum Lot-Size: Have been upheld when justified by certain conditions, but exclusionary effects have provoked skepticism. (4) Minimum Setback Requirements: Similar effect to minimum lot-size requirements. Widely upheld because they advance health, safety and aesthetic concerns. (5) Barring Mobile/Manufactured Homes: Traditionally upheld but recently have been met with judicial skepticism. Other States: (1) Pennsylvania: Municipalities similarly required to provide all types of housing; no subsidies, so developers will pursue legal remedy only if they believe there is a market for the housing. (2) New York: More passive; housing must meet community and regional needs. (3) Massachusetts: Statute allows developers of low cost housing to apply directly to the local zoning board; removes red tape. (4) Connecticut: Statute permits expedited judicial appeals for developers of affordable housing projects. Tiebout Hypothesis (1) Specialization and competition among suburbs is efficiencyenhancing. People benefit by being able to vote with their feet to congregate with others of similar taste and get the package of public goods they most prefer. Waring Blender Model (1) All land uses and all types of households should be represented in every neighborhood in proportion to the representation as a whole. (2) Diversity within, no diversity between neighborhoods.


Inclusionary Zoning: (1) Techniques to require or encourage developers to supply low end housing. (a) Permits conditional upon a certain % being low-end. (b) Incentive structure lifting density limits in return for more lowend housing.

XII. Eminent Domain and the Problem of Regulatory Takings

A. The Power of Eminent Domain: Sources and Rationales a. power of the gov to force transfers of property from owners to itself b. nor shall private property be taken for public use, without just compensation c. 3 elements: is there a public use is whatever the gov has done w/ property actually a taking have we paid just compensation d. fear: eminent domain (or its abuse) could discourage incentives in developing property; the gov could just be a ruling majority e. justifications for takings power: gov owns land originally/default; gov couldnt negotiate like a private party (b/c of secrecy & corruption problems) i. counterargs: gov should just go out & negotiate just like any private party ii. Posner says: Where transaction costs are low, law should require the parties to transact in the market. Where transaction costs are high, people must be allowed to use the courts to shift resources to more valuable use, b/c the market is unable to perform this function B. The Public-Use" Puzzle: 1. Kelo v. City of New London (US, 2005) public use = public purpose. a. NL wants to redevelop economically-depressed area, but 9 holdout homeowners. Public park project & office project (Pfizer) b. Q: Does New Londons decision to take property for the purpose of economic development satisfy the 5th Am public use requirement? i.e., does it serve a public purpose? c. trial ct: city cant take land for park project, can for office project CT Sup.Ct: all the proposed takings are valid. S.Ct. affd. d. Berman v. Parker (condemnation to redevelop blighted area ok) deference to legislative plans, public welfare is broad/inclusive e. Hawaii v. Midkiff: all that matters in determining public use is the takings purpose, not its mechanics (direct transfer to private individuals, in Hawaii case) f. public use doesnt mean open to the public for use just means public purpose g. OConnor dissent: ct should ask whether theres a harm being addressed/fixed by takings simple economic improvement isnt a valid reason.


h. i.

2. Note: a. b. c. d.

e. f.

i. almost anything that can be said to generate some incidental benefit to the public can be called public purpose ii. OConnor saw the righting of a wrong in Hawaii case breaking up monopolies of landowners. iii. S says OConnor was looking at it sort of as a nuisance are these properties contributing to the economic distress of the community OConnor wants that particular property itself to be causing harm. If theyre not (as she saw here), they shouldnt be taken for any public use note: this case sort of set-off a public outcry that kind of overthrew the effect of this case set-off race b/t state govs (to protect homes/business) and localities (emboldened by the Kelo opinion) ends-based test in Kelo (basically, the public use requirement means the same as valid police power, so any condemnation is ok so long as it serves public purpose) versus means-based test (is the exercise of eminent domain really necessary?) Just Compensation just to whom? homeowner or the public who foots the bill? rule is: we just stick to market value. But homeowners often value property more (b/c relocation costs, sentimental attachments, suitability of the property for particular/idiosyncratic needs). statistics show high-value condemned land systematically receive more than fair market value; low-value parcels systematically receive less proposed taking either: (1) satisfies the public-use test & may go forward upon payment of just compensation OR (2) fails the publicuse test & may go forward only via a voluntary transaction where the owner sets price. [liability rule = forced. property rule = voluntary] regardless of just compensation, argument that condemnation makes the owner feel as if theyve lost something note: fed gov can condemn property owned by state/city

C. Physical Occupations and Regulatory Takings 1. synopsis, courtesy of wikipedia: a. Pennsylvania Coal v. Mahon established the doctrine of regulatory taking and the

dimunition-of-value test, in contrast to other tests, such as the permanent physical occupations test (Loretto v. Teleprompter Manhattan CATV Corp.), the nuisance-control measures test (Hadacheck v. Sebastian), and the total takings test (Lucas v. South Carolina Coastal Council). Additionally, the case was one of the first to address the denominator problem with regard to regulatory taking.

2. Is there a taking? Y: transfer of title; permanent physical occupation, regulation that goes too far N: abatement of common-law nuisance, average reciprocity of advantage (if there is no a.r.o.a. then theres no taking) Maybe: temporary physical invasion; interference w/ distinct investment-backed expectations 3. Loretto v. Teleprompter Manhattan CATV (US, 1982) cable on roof


a. Q: Does a statute requiring landlord to put cable wires/box on building constitute a taking? b. H: A permanent physical occupation authorized by the government is a taking, and theres thus no balancing of the public benefit vs. economic impact on the owner. c. temporary physical invasion only impairs the use, ct applies balancing test. permanent physical occupation, no balancing d. reasoning: Permanence goes to basic property rights, & wires destroy rights to possess, use, & dispose. Special kind of injury when a stranger directly invades & occupies the property. Constitutional protections cant be made to depend on the size of the area occupied e. compare: periodic flooding of property wont be a taking versus Reste Realty Corp v. Cooper (periodic flooding is constructive eviction) f. J. Blackmun dissent: per se categorical rule is silly. Permanent/Temporary distinction is untenable. This will undermine legs ability to regulate areas of LL-Tenant law. i. instead, ct should ask whether the state has interfered w/ owners use of space, whether the owner has alternative uses for the space ii. plus, at the end of all this, P will get $1 fee. this is waste of time 4. Hadacheck v. Sebastian (US, 1915) - L.A. annexed Ps clay deposits land, passed ordinance: no brickyards w/in city limits (misdemeanor) a. Q: Is an ordinance depriving business owner of his ability to manufacture on-site a product from on-site raw materials (thus making business less economical) a deprivation of property? b. H: abatement of a nuisance is never a taking i. the public bad test: if gov action is depicted as nuisance-control measure (police power), then there is no taking notwithstanding the loss worked by the regulation. ii. of course, how do you know whats preventing-a-harm and whats securing-a-benefit? c. police power: one of the most-essential, least-limitable powers of gov; only limit is that it cant be exercised arbitrarily or to unjustly discriminate d. a vested interest cant be asserted over the police power just b/c of conditions once obtaining (previously undeveloped land). That would stifle development. Private interests must yield to community e. Reinman v. Little Rock w/in police power to declare that w/in certain areas a certain type of business (thats not a nuisance per se) shall be deemed a nuisance in fact & in law 5. Pennsylvania Coal v. Mahon (US, 1922) - PA statute forbids mining that could cause subsidence of structure used for residence, except where miner owns the surface land. Ps got deed to surface land in 1878 from Ds deed reserves right to remove coal, P took premises w/ the risk, waives all potential damages claims a. Q: Is statute an exercise of the police power or of eminent domain? b. H: diminution-in-value test: Whether a regulatory act constitutes a taking (requiring compensation) depends on the extent of diminution in the value of the property.


i. while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking c. J. Holmes endorsed conceptual severance idea: statute effectively abolishes what PA recognizes as an estate in land (right to mine coal) d. public desire to improve the public condition isnt enough to warrant taking a constitutional shortcut (and avoid paying full price for the change) e. P was dumb not to buy sub-surface rights shouldnt get windfall now f. Brandeis dissent: statute controls a nuisance, valid exercise of policepower. Coal = land. Surface & sub-land is one indivisible estate. i. Purpose doesnt cease being public just b/c some people benefit incidentally. gov often uses police power to regulate bldg height ii. diminution-in-value test sucks. Value relative to what? iii. b/c public protection is the purpose, we need not worry about reciprocity of advantage. There was no r.o.a. required in Hadacheck, Reinman v. Little Rock, etc. g. note: {I think} PA Coal is the only big case to endorse severance. e.g., US S. Ct in Keystone Bituminous Coal Assoc v. DeBenedictis (1987) followed Brandeis view held that PA statute (reqg coal cos to keep up to 50% of their coal in place to prevent subsidence of land) was not a taking. The coal that had to remain in place was not a separate segment of the property (as Holmes would argue) but rather was only a percentage of the total coal owned by the company. i. dissenters said: what about PA Coal, conceptual severance law?? h. re: average reciprocity of advantage b/t the landowners neither can take all of their coal out, but they both benefit. This reciprocity will often be used to determine how far the government can go. This concept comes back often in takings 6. Penn Central Transportation Co. v. NYC (US, 1978) Grand Central. NYC Landmarks Preservation Law commission must approve changes, but also try to ensure that owners receive reasonable return on investment. a. Q: May a city, as part of a historic landmark preservation program, place restrictions on individual historic landmarks without effecting a taking? b. NOT a taking restrictions substantially related to general welfare, both to permit beneficial use & afford P opportunity to see reasonable return c. factors to consider: regulations economic impact on P; interference w/ distinct investment-backed expectations; character of governmental action d. Ps arguments (ct rejects all) i. deprivation of potential economic use was a taking ii. severance argument that airspace is property interest iii. the law is imposed only on selected individuals [spot zoning] & uniquely-burdens some landmark owners over others. (J. Rehnquist dissent makes much of this) e. TDRs transferable development rights a form of compensation to ease burdens of land-use restrictions.


i. note the circularity, though: if regulation w/out TDR requires compensation and regulation w/ TDR doesnt require compensation, isnt TDR just a proxy for just compensation? ii. Scalia agrees thinks TDRs are the gov trying to get off easy f. S says: after this case, landmark designation law considered pretty solid. Average reciprocity of advantage across the community 7. Lucas v. South Carolina Coastal Council (US, 1992) trial ct found that law barring Lucas from building on beachfront property made property valueless. state s.ct. held regulation valid as a police-powers exercise a. Q: regulation-that-goes-too-far or nuisance-abatement? b. H: total takings test: Land use regulations that prohibit all economic uses of the property are takings, unless the prohibited uses are common law nuisances. c. Scalias justifications: regulations prohibiting-all-economic-use carry a heightened risk that property is being singled out, pressed into public service under guise of mitigating serious public harm; legislatures simple recitation of the harmful or noxious use justification doesnt shield the regulation from the categorical rule that total regulatory takings must be compensated otherwise, wed be ignoring Mahon (If regulation goes too far, its a taking) d. the common-law nuisance exception: Regulation prohibiting-alleconomic-uses can only avoid compensation reqt if the proscribed use interests werent part of owners title to begin with i.e., if the use was already a common law public or private nuisance (i.e., if the use was always unlawful according to background principles of nuisance and property law) e. dissents: inconsistency (95% = no recovery, 100% = recovery). land owner shouldnt be able to harm others by showing proper economic loss. wrong to rely on state ctss framing of fuzzy common law nuisance doctrine rather than state legislatures policy determinations f. S says: this is sort of a marginal nuisance one more house not ok even though neighbors have built houses there 8. Palazzolo v. Rhode Island (US, 2001) framing Lucas & Penn Central holdings. P formed corporation to buy land near wetlands, regulations designated land as protected, then corp fell apart & P acquired sole title. the council rejected 2 of Ps development plans on protected area a. P sued for inverse condemnation (forcing state to condemn the land & pay for it P saying gov has gone so far that its basically a taking) b. H: Landowners acquiring title to property after a regulation goes into effect does not bar a takings claim. i. unreasonable regulations dont become reasonable over time. Otherwise, state would be putting expiration date on takings clause ii. Ct rejects state arg that the regulation, once passed, becomes a Lucas background principle which inheres in the title itself. Ct says: whatever a background principle is, its def not a regulation


c. P failed to show Lucas-style deprivation of all economic use. P could still build on part of land. Ct rejected Ps severance argument d. Ct said: claims under Penn Central must be analyzed on remand (regulations economic impact on landowner; interference w/ investmentbacked expectations; character of governmental action) e. S says this case stands for: someone should be able to bring the takings challenge protects that. this decision restricts the eminent domain power pretty seriously i. even though P here acquired land b/c title passed to him, this holding applies to anyone buying land as well (i.e., speculators) Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency Notes: Matters of Remedy Nollan v. California Coastal Commission Dollan v. City of Tigard