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Property Outline Fall 2011 Painter-Thorne Got 96 in class Follows Book INTRODUCTION What is property?

Bundle of rights: Right to use Right to exclude Right to transfer o These rights are not unitary and maybe shared due to social effects. o They are about human values. Interdependence of Property Rights: common law entitlements & ways in which limited by rights of others Property Theories: 1. First possession and labor theory- (John Locke) You have put the effort into the land therefore it is yours, but some must be saved for others Today looks at the outcomes of giving the rights opposed to who simply put in the labor (greater good). 2. Positivism/Sovereign says- (Bentham) sovereign defines the property rights, sovereign gives and the sovereign can take away, law and property go together. 3. Personality Theory- (Hegel) Property defines who we are and we need it to be complete. 4. Unitary Rule- You and only you have control over the property, tries to deny outside forces. 5. Social Relations Theory- we may own land, but must understand our rights are affected by those around us. 6. Economic Theory- Tragedy of the commons Moore v. Regents- answers the question of if a person has the right to their cells when they are harvested against their knowledge/will and used to make a profit. Yes, however conversion may not be claimed because the use of his cells are for the greater good. Court applied labor theory to the development of cell line, social relations theory for medical advancements, and sovereign theory for the state statute. Giant-sized values property rights affect: Freedom, equality, democracy, distributive justice ($$$)

CHAPTER 1: TRESPASS: RESOLVING CONFLICTS BETWEEN THE RIGHT TO EXCLUDE AND THE RIGHT OF ACCESS
1.1 Trespass Trespass: a. elements: i. unprivileged 1. lacking necessity to access property (or whether open to pubic access) a. private or open to public? 2. lacking consent (whether owner has opened ones property to visitor) 1

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volitional physical 1. if not physical, could be a nuisance iv. on anothers property v. added element for criminal trespass after being forbidden b. remedies: i. fair market value (FMV) (or similarly meaningful compensation): 1. loss of market value, or 2. actual cost of lost property (how much raw material cost?), or 3. cost of restoration ii. punitive damages iii. injunctive relief likely success on merits (or serious questions on merits) & possibility of irreparable injury (or balance of harms in favor)

1.1.1 Public Policy Limits on the Right to Exclude Limitations on Right to Exclude (Privilege to Enter): owners do not have despotic dominion over property so as to have absolute right to exclude I. Private Necessity (of the particular person & benefits that flow from it) a. State v. Shack owner employs & houses migrant workers on his property (who have medical/legal concerns), doctor/lawyer enter onto farm pursuant to Congressional mandate to help, owner says can only have access in his presence, they refuse & owner sues i. criminal trespass statute, common law trespass, Employment Opportunity Act, Bill of Rights (cannot infringe upon s First Amd rights to inform migrant workers of their rights) ii. s invaded no common law possessory right of s living on land 1. right to exclude is limited by duty not to use ones property in ways that harm others rights (public or private necessity) a. Policy Rationale: property ownership cannot include dominion over destiny of persons permitted on premises + personal well-being is highest concern within legal system disadvantaged occupants may be so dire that law not recognize their contracting away of rights to health/welfare/dignity 2. Policy Rationale: deferred to federal legislation & interpreted its protections broadly b/c cannot reasonably expect Congress to have been so specific as to explicitly protect each individuals rights Supremacy of federal statutes (that are also inherently products of compromise) a. in line w/ Constitutional Avoidance doctrine by reasoning around the Constitutional question by altering state law interpretation II. Consent (Actual or Inferred) a. Desnick v. American Broadcasting consent procured by fraud committed by news program secretly intending to write an expos i. fraud has no legal significance here b/c no evidence of interference w/ property ownership or possession or invasion of anyones private space/private life ii. property held open to general public subject to greater scope of inferred consent (as opposed to ones consent to private property) & cannot split up where there is & is not consent per individual entrant 1.1.2 Right of Reasonable Access to Property Open to the Public 2

A. Uston v. Resorts International Hotel Inc. excluded from casino b/c well-known for Blackjack card-counting system a. RULE: once establishment have thrown premises open to public, cannot assert absolute right to exclude people unreasonably (unless persons actions endanger other customers or act disorderly) b. counting cards had not been expressly forbidden by this casino i. a right cannot exist in name only, so cannot engage in practices that accomplish same as discrimination c. though considerable historical evidence in old common law, that was in fact a right of reasonable access for public purposes 1.2 Public Accommodations Statues 1.2.1 The Antidiscrimination Principle Federal Law- Race, Color, Religion, National Origin I. Civil Rights Act of 1964 -public areas iii. segregation iv. 1. hypo: Latino family that does not speak English refused service b/c restaurant didnt want do serve ppl who dont speak English language not covered by this statute a. current dispute over whether Latino counts as a race & what if family looks white but just does not speak English b. counterpoint: language can be a proxy for national origin discrimination v. enjoyment of goods, services, facilities, privilegesof any place of complaint has to say more to establish that place alleged in complaint is in fact place of public accommodation 1. shall not apply to a private club 2. if its operations affect commerce, or if discrimination or segregation by it is supported by State action II. Civil Rights Act of 1866 discrimination, originally only state-based a. 1981(a): the same rightto make and enforce contractsas is enjoyed by white citizens b. 1982(a): the same rightas enjoyed by white citizensto inherit, purchase, lease, sell, hold, and convey real and personal property i. Germans, blacks, Irish, etc as separate races State Laws- Sex, Sexual Orientation, Age, Marital Status III. a. sue under statutes b/c more concrete than vague old common law rules b. address question of whether statute coverage is exhaustive or suggestive? c. modern majority rule for amusement proprietors: no duty to provide reasonable access & consent to remain may be withheld, as long as consistent w/ state & federal civil rights laws IV. Discrimination Against Person with Disabilities a. Americans with Disabilities Act of 1990 1.3 Free Speech Rights of Access to Private Property Free speech rights are constitutionally protected against state action but not against private action Company Towns- Marsh v. Alabama a. Where a private corporation takes over all municipal functions and substitutes for the government, First Amendment freedoms cannot be denied to expression in a customary manner on a towns sidewalks and streets, even though the town is privately owned. 3

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b. The more an owner, for his advantage, opens up his property for the use by the public in general, the more do his rights become circumscribed by the statutory and constitutional rights of those who use it. c. Balance between freedom to speak and private property rights. Shopping Centers a. Federal Constitution (minimum level of protection) i. First Amendment protects picketing at a shopping center where it directly relates to the use to which the shopping center was being put and where there were no other reasonable opportunities to convey the message. Logan Valley Plaza ii. A privately owned shopping center may generally prohibit speech on its property when it is unrelated to the shopping centers operations. Lloyd v. Tanner iii. The shopping center had not been dedicated to public use. iv. First Amendment applies to state action, not actions by owners of private property used non-discriminatorily for private purposes only. v. May allow few wealthy property owners to stifle speech of the poor masses b. State Constitutions (may provide more rights than federal constitution) i. Majority: No free speech rights in privately owned shopping centers. ii. Minority: Regional and community shopping centers must permit the reasonable exercise of free speech and assembly by individuals, subject to reasonable restrictions. N.J. Coalition v. JMB Realty; PruneYard iii. Shopping malls have substantially displaced downtown business districts as centers of commercial and social activity (previously public speakers would be downtown) c. Test: to determine extent of free speech rights on private property, consider: i. Normal use of the property ii. Extent and nature of invitation to the public iii. Purpose of the expressive activity in relation to the private and public use of the property iv. General balancing of expressional rights and private property rights v. Granting rights of access for free speech purposes does not amount to a takingof the right of the owner PruneYard vi. Consider the landowners right not to speak (not decided in PruneYard) vii. Free speech access is neither required by the First Amendment (Lloyd) nor prohibited by the Fourteenth Amendment (PruneYard). d. National Labor Relations Act: May allow unions access to private property to organize or picket unless there is reasonably effective alternative means of communicating with employees. 1.4 Beach Access and the Public Trust Public Trust Doctrine: overriding right to exclude to keep open certain property needed for public use (balanced against whether valid alternative means for public access) Matthews v. Bay Head: NJ Rule extends right to enjoy tidal land to privately-owned dry sand beaches b/c need to be able to come out rest/put towel down (rule in most states) a. applies to all places where there an ebb/flow of tide & navigable inland lakes & rivers b. right to enjoy tidal areas meaningless w/o proper access & ability to make full use i. compounded by fact that no public beaches in borough c. homeowners assn already quasi-public institution that cannot deny public membership to its beaches have to open up membership to public, but can charge a fee for access 4

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CHAPTER 3: COMPETING CLAIMS TO PROPERTY


3.1 Conquest 3.1.1 Property Rights Derived From Competing Sovereigns Johnson v. MIntosh (1823, p. 3) Johnson (P) brings action for quiet title not just possession, but legal ownership after buying land from Indians in 1773 & 1775 a. MIntosh (D) must show a valid title extending back to the period prior, and an unbroken chain of good title extending back before that (1773 is critical date) i. Chain: Title starts with Indians, passes to Europeans/England via conquest, then to Commonwealth of Virginia via royal grant, then to State of Virginia via treaty (1779), then cedes Illinois to the United States (1787ish), and then to MIntosh via a land patent b. Holding: For D, Indians do not hold title and cant sell it c. US has exclusive right to land stemming from discovery by Europeans and conquest through defeating the Brits and gaining independence d. Right of Title wins- Johnson did not have a valid title to the land II. Acquisition by Conquest a. General Rule: taking possession of enemy territory through force, followed by formal annexation b. Provides security for all those who thought that they had good title, via the colonies/states/US/land patents c. Reinforces the absolute right of the sovereign III. Government Grants- granting property rights to an owner a. Homestead Act- allowed citizens of right of one quarter or less of unappropriated public lands 3.3 Labor and Investment I. Theory: if one puts labor and investment in property should be hold rights to the property II. Quasi Property in News or Knowledge: a. General Rule: The fact that a product of the mind may cost money and labor to produce and may have value for which others are willing to pay, is not sufficient to ensure to it the legal attribute of property. b. Knowledge, truths ascertained, conceptions, and ideas becomeafter voluntary communication to others (without copyright, trademark, or patent)free as the air to common use. III. Unfair Competition in Business: a. Business competitors are under a duty to conduct their own business as not to unnecessarily or unfairly injure that of another. A business may imitate its competitors products, though, so as not to allow a monopoly. Cheney Bros. v. Doris Silk Corp. IV. INS v. AP: Protects the property right of the first capturer. Question to whether unfair competition law should be expanded to prohibit misappropriation or the unauthorized taking of publicly disclosed information that a first competitor invests time and effort to create when the taking diminishes or eliminates the first competitors incentive to continue to create the information. a. Supreme Court agreed with AP that by its work it produced something of value and should be entitled to legal protection from misappropriation of its product. If it could not have a monopoly on the sale of news it collected, its incentive to gather news would be either substantially reduced or eliminated. b. INS argued that it was anomalous for INS to be the only entity not allowed to repeat the information it read on APs boards, which was public. Holmes dissented agreeing with INS that there could be no property interest in publicly disclosed facts and that APs only ground of 5 I.

compliant would be that INS had palmed off APs work. Brandeis also dissented agreeing that it was circular to argue that AP had produced something of value for the news would be affected by the legal decision whether or not to grant AP a monopoly on the right to sell information. 3.5 Possession I. Capture/Possession Rule: Title to property is acquired only through successful occupancy (capture, possession, finding, or control), not ineffective labor at attempting to capture. a. Pierson v. Post : Mere pursuit is not enough. Ownership of animals may be obtained by capture or mortal wounding by one who does not abandon his pursuit. b. Popov v. Hayashi: rejects the capture rule in which if the ball had been stopped and the intention to control the ball manifested would have been enough. The court adopted the rule that the fan must have complete control of the ball. However, where an actor undertakes significant but incomplete steps to achieve possession of a piece of abandoned personal property and the effort is interrupted by the unlawful acts of others, the actor has a legally cognizable pre-possessory interest in the property. c. Argument for Capture Rule: Less litigation; encourages competition. d. Argument for Pursuit Rule: Promotes interference with anothers activity encouraging violence and unfair competition which in turn would discourage competition.

CHAPTER 4: INTELLECTUAL PROPERTY


4.1 Intangible Property I. II. The least tangible thing imaginable is an idea The core subjects of intellectual property law- trademarks, copyrights, and patents are all governed by federal statutes a. Constitution authorizes Congress to promote the progress of science and useful arts, by securing limited times to authors and inventors the exclusive right to their respective rights and discoveries Internal Tensions of Intellectual Property Law a. Ideas are generally not subject to ownership i. We must be free to use ideas generated by both ourselves and others in order to engage in all human activity. ii. Too much private property in ideas would limit our autonomy and block desirable economic activity by creating insuperable transaction costs. b. At the Same time i. Exclusice control over certain intellectual products is necessary both to protect the ability of the author and inventos to get credit for their works and to create economic incentives to spur, promote, and motive further intellectual progress. c. This is the core problem of intellectual property law

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4.3 Trademark Law I. Trade mark law gives the owner of the mark the exclusive right to use it in connection with the sale of a particular good or service in a particular area. a. Based on state common law 6

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b. Grows out of stat unfair competition law that prohibits palming off ones products as those of another Lanham Act orovides notice of trademarks by allowing them to be registered with the federal Paten and Trademark Office Qualitex Co. v. Jacobson Products Co. a. Conclude that sometimes, a color will meet the ordinary legal trademark requirements. b. Statutory definition of a trademark requires: i. that a person use or intend to use the mark ii. to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods even if that source in unknow 15 U.S.S 1127

4.4 Copyright Law I. Copyright protection exists in orginal works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. Works of authorship include the following categories : a. literary works b. musical works, including any accompanying words c. dramatic works. Including any accompanying music d. pantomimes and choreographic works e. pictorial, graphic, and sculptural works f. motion pictures and other audiovisual works g. sound recordings h. architectural works Exclusive rights in copyrighted works a. To reproduce the copyrighted work in copies or phonorecords b. To prepare derivative works based upon copyrighted work c. To distribute copies or phonorecords of copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending d. In the case or literary, musical, dramatic, choreographic works, pantomimes, motion picture or other audiovisual work, to display the copyrighted work publicly e. In the case of sound recordings, to perform the copyrighted work publicly by means of digital audio transmission. Limitations on exclusive rights a. Fair use of a copyrighted work i. Use is not an infringement of the copyrighted work b. Factors in Considering Fair Use i. The purpose and character of the use, including whether such us is of commercial nature or is for nonprofit educational purposes ii. The nature of the copyrighted work iii. The amount and substantiality of the portion used in realation to the copyrighted work as a whole 7

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iv. The effect of the use upon the potential market for or value of the copyrighted work FEIST PUBLICATIONS, INC. v. RURAL TELEPHONE SERVICES CO., INC. (U.S. 1991) 1095: Feist creates areawide telephone directories based on local telephone companies phonebooks. Rural alone refused to license its listings to Feist, so Feist used them without permission. OConnor rules that since facts alone are not copyrightable, and the sine qua non of originality, not mere sweat of the brow, is not met by a phonebook that lists numbers alphabetically, Rurals phonebook is not protected by copyright. a. OConnor: originality requires some element of creativity. b. Principle: the primary objective of copyright is not to reward the labor of authors but to promote the Progress of Science and useful Arts (1097). c. Key principle: Copyright awards originality, not effort. i. An argument in favor: The government granted Rural its monopoly over phone service, and with that should come obligations, e.g., to share certain information. (Counter: This obligation is not spelled out anywhere. In any case, Feist could collect the information through other means.) ii. An argument against: Unfair because Rural did all of this work and does not get the reward. (Counter: This is not a question of fairness but of incentives. It would be unfair to consumers to foreclose the practical economic possibility of area-wide phonebooks.) Contributory Infringement a. SONY CORP. v. UNIVERSAL CITY STUDIOS (U.S. 1984): Court rules that VCR manufacturers are not liable for contributory infringement, because the VCR is capable of significant noninfringing uses, e.g. time-shifting, recording at one time to watch at another time, which has no demonstrable effect on the potential market for the copyrighted work, and which is not a commercial use in character or purpose. (The idea being: we should not ban or constrain a technology with noninfringing benefits simply because it also permits infringing uses.) i. So: SONY = significant noninfringing uses as basis for producers of new technology avoiding liability for contributory copyright infringement. Fair Use a. Suntrust Bank v. Houghton Mifflin Co. Gone with the Wind Type Book The Wind Done Gone b. To establish copyright infringement prove: i. Ownership of valid copyright (registered copyright which isn't legally required but does get you monetary damages) ii. Someone used or copied original elements of the copyrighted work without permission c. Court said that Ms. Randall did infringe on Suntrust's copyright, so question of fair use d. Court said yes, fair use e. To determine fair use: i. Character and purpose of the use 1. It's commercial, she wrote the book entirely to sell, but it's transformative 2. She created a whole new story 3. Parody isn't always transformative or fair use, but it almost has a natural claim to transformation (in the property of parody itself) ii. The nature of the copyrighted work 1. A hierarchy of copyright protection in which original, creative works are afforded greater protection than derivative works or factual compilations 8

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2. It's hard to parody something if you don't copy it --- parody targets more creative works (for example, you wouldn't parody the news) iii. Amount and substantiality of the portion used 1. In relation to the work as a whole 2. How much are you taking and are you taking substance that's really important 3. How much is too much? 4. Parody requires enough to "conjure up" the original in the minds of the readers, but beyond what is necessary to "conjure up" is too much 5. Too much = serving as a market substitute 6. How do we know if you've taken enough? f. What does the court say about this literary comparison? Is it something the court should be doing? i. It's not necessarily the court's responsibility to play a part in literary comparison ii. The court is not an expert in literary criticism g. What's the reasonable amount of material required to conjure up the story? How do we know what the reasonable amount is? i. Purpose matters - the purpose for which it's being used ii. Whether it's a market substitute 1. The court says 'we don't know' 2. And then the court moves on to the next factor h. What's the harm the court is worried about? i. That original works won't continue to be made because there's a loss of incentive because of substitutes ii. Killing market value as a result of criticism is allowed, but you cannot terminate market value by producing a substitute of the work! i. Why would TWDG not affect GWTW market? Harry Potter Lexicon a. Mostly quotations, not much commentary b. The court in SunTrust says stock characters are not copyrightable, but are Harry Potter characters stock characters? c. Other people can use wizards, but not the particular characters in Harry Potter d. J.K. Rowling likes the website because she thinks it helps her sales, but she doesn't want t book published

4. 2 Publicity I. The Right of Publicty- a celeberitys right to the exclusive use of his or her name and likeness. The right is most often asserted by or on behalf of professional athletes, comedians, actors and actresses, and other entertainers . MLK Center for Social Change v. American Heritage Products- defendant sold memorial busts of MLK along with a booklet A Tribute to MLK. Use of the name and image of MLK to gain profit with out the permission of the MLK Center for Social Change. a. Court here is concerned w/ fairness & avoiding situation where one could exploit someone elses success for their own benefit, could argue that celebritys name/likeness is the essence of

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their labors & language in opinion against unjust enrichment & not reaping where another has sown b. & should be able to be passed down i. MLK had the right to use his image for profit, if he choose not to do so then why should that choice be exploited following death? It shouldnt Does Georgia have right of publicity? a. Yes How is it linked to right of privacy? a. Georgia Constitution i. "now law shall ever be passed to curtail, or restrain the liberty of speech, or of the press; any person may speak, write, and publish his sentiments, on all subjects, being responsible for the abuse of that liberty" Balance between right to alienate/exclude/leave to heirs my celebrity, and everyone else's right to the public domain and free speech, etc.

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CHAPTER 5: HUMAN BEINGS AND HUMAN BODIES


5. 2 Slavery Dred Scott v. Sandford :The constitution protected slavery and did not treat slaves as citizens, thus a slave had no standing to sue in federal court. Moreover, the Missouri Compromise was unconstitutional because it deprived owners of their constitutional rights to slaves. a. Depravation of property, and a taking by congress exercising its power in a way that conflicts with due process in which depriving of property, nor should private property be taken for public use. b. First, the language of the dec of indp would see to embrace the whole human family, but that couldnt have meant a universal application because the founding fathers were slave owners. c. Second, slavery is protected under the constitution because of the fugitive clause stating that if a salve escapes to a free state that state must return the slave. d. The court should have dismissed the case if they didnt have jurisdiction, not look at the merits case. e. Could argue that the framers limited slavery, and freedom was general. The very provision they used could be used the other way. What about the Missouri compromise doesnt deprive them of their property that if they travel to this location than that property is no longer their property and if they remain it is still their property. Fugitive slave clause doesnt say a slave anywhere isnt treated as a slave everywhere- only a fugitive slave running across borders. Missouri compromise takes private property? must compensate? f. Could you argue, 3/5ths compromise suggests that slaves werent simply chattel, they were at least being treated as 3/5ths of a person which means maybe they could be treated as a citizenship. g. The court have read citizenship in a way that permitted the court to disengage race from citizenship. They could have said if you are a free person, regardless of race, you can file a lawsuit. Slaves are not free so they cannot file a suit. So the issue could have been was Scott a free slave where he was living and capable of filing a lawsuit. 5.3 Children I. In the Matter of Baby M determining the validity of Surrogacy Contract a. Who does the baby belong to, and is the contract valid? 10 I.

i. No valid contract for surrogacy, ii. Child to birth mother b. Sources of law invalidating surrogacy contract i. Statutes 1. Laws prohibiting the use of money in connection with adoption a. Ways around ie: pay for medical expenses 2. Laws requiring proof of parental unfitness or abandonment before termination of parental rights is orderd or an adoption granted 3. Laws that make surrender of custody and consent to adoption revocable in private placement adoptionsMoney in exchange for a baby 4. Whitehead couldn't revoke her termination of maternal rights ii. Public policy 1. Rights of natural parents are equal concerning their child, the fathers right no greater than the mothers. a. Regardless of the marital statues of the parents 2. Contract disregards best interests of the child 3. Against the sale of a child or mothers right to a child c. Money i. Paying or receiving money for the adoption of a child is illegal ii. Court says surrogacy is the same as buying a baby iii. They were buying the biological mother's interest in the child (not the child necessarily) iv. Does it matter that it was Whitehead's egg instead of Stern's egg? 1. Yes, because she's selling her reproductive capacity and her rights as the biological mother, not the baby itself v. What if she had entered into a contract for no financial compensation and it's for her sister? vi. What if she had a right to revoke but she still got paid? 1. Probably not because it's still the exchange of money with an adoption d. Surrogacy contracts are not illegal, but they are unenforceable

CHAPTER: 6 ADVERSE POSSESION


Adverse Possession: if, within the number of years specified in the Statute of Limitations, the owner of land takes no legal action to eject person who claims adversely, owner is barred from bringing an action in ejectment 6.1 Titile v. Possesion 6.1.1 Border Disputes I. Brown v. Gobble & disputed ownership of 2-foot wide tract on boundary of their properties a. tacking doctrine allows parties claiming adverse possession to use predecessors conduct on property to meet time requirements of adverse possession

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i. majority clear & convincing evidence objective standard where periods of fencing/weeding of tract by claimants tacked with continuous same actions by all previous (minority rule only uses preponderance standard) b. neighbor on neighbor encroachment cases make up the majority of modern cases on adv possession is it good idea for adverse possession to allow to take land from neighbor? especially where adverse possessors only used for weeding/planting flowers? i. s knew that ss were doing this on their land & waited 9 years for legal action society might have interest in giving land to those who are maintaining the land 1. counterpoint: Browns were being neighborly & should encourage neighborly behavior instead of encouraging neighbors to sue each other a. counter-counterpoint: is it really fair for Browns who should be able to rely on their land deed, rather than having it eaten away by their neighbors should we force ppl here to re-deed themselves? 2. counterpoint: perhaps instead award s a prescriptive easement? (half a loaf is better than nothing) 6.1.2 Color of Title I. Romero v. Garcia brought suit to quiet title to land she & deceased husband bought from his parents a. Romeros purchase deed in 1947. Garcias argue that it was inadequate to function as color of title: insufficiently clear, lacking signature. Court quiets title in Romeros favor because the latter argument is clearly erroneous (color of title just requires a writing, not a signature), and with regard to the former argument, subsequent acts (building house, surveying land, etc.) sufficiently clarified the deed to allow it to function. b. indefinite & uncertain description of property in deed may be clarified by subsequent acts of parties c. could argue for continuing to recognize adverse possession based on defective titles to provide remedy against simple mistakes (especially when not within their control) d. she could have instead sued for equitable reformation of deed requiring that she act with reasonable promptness (waited too long?) & have done nothing wrong in relation to the property (coming to seek relief with clean hands) e. if fails to meet these requirements, Garcias could assert laches against her claim to the property reasonable promptness completely different kind of rule than & at odds with Statue of Limitations requiring beyond certain period Color of Title - determine whether the title is sufficient or defective. 6.1.3 Squatters I. Nome 2000 v. Fagerstrom s used land owned by for various purposes from 1944-1987 but did not build house on it until 1978, which s claim defeats adverse possession claim a. only arises in few places still w/ lots of rural empty space Western state citizens more likely to be comfortable w/ concept of adverse possession, than more built-up Eastern states i. owners often wait until second to last year before SoL b/c maybe hope it would stop before having to make ejectment action, but makes suits more difficult b. s claim not not exclusive b/c they were Native Alaskans & Native doctrine only sees them as stewards of land but not exclusive occupiers (does not even allow for adverse & hostile state of mind) i. not just question of how Native ppls would have used the land, but how any owner would have used the land would have used the land in the way s did

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c. court open & notorious standard requires lesser exercise of control & dominion where ordinary members of the community recognized adv possessors actually possessed & rural land here (significant development of the land not required here) i. some states statutes actually list the reqmts for showing actual use AK statute here does not, so cts looks to common laws interpretation of what shows actual use d. determination of whether claimant acts upon land of another sufficiently continuous, notorious, & exclusive does not necessarily depend on existence of significant improvements, substantial activity, or absolute exclusivity i. s claim title to larger portion of land than was granted by court use of certain hiking trails did not constitute sufficient dominion & control over south portion ii. case implies that title owners were not holding land to mine it (many reasons for purchase possible), but why shouldnt owner be allowed to own but not use their land/use it later? a. premised on assumption that not doing anything with your land is unreasonable very Lockean-based idea that in order to qualify as reasonable true owner, only way one could be making productive use is by presently making productive use b. could have fence/put no trespass signs or give the adverse possessors a lease (lease seems easier to administer) perhaps extent of burden of doing something with land depends of vastness of the land 2. counterpoint: other courts create judicial presumption that this land free to not be used constantly (instead lowers standard for rural areas) a. counter-counterpoint: would go against traditional homespun American frontier notion by not awarding the land to those have made productive use of the land 3. counterpoint: should see land as something realizable for its monetary value & allow owner to hold onto & wait until later (hard cold cash approach) b/c land w/in our economic system performs a different role than it used to (can know lands valuable attributes much more easily & wait to make use of them) & can be hard to monitor all of your disparate land holdings

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1. Actual Possession-

There must be a sufficient physical structure which sets off the SOL at the time that structure is determined to be placed, the clock on the limitations period starts to run.

The adverse possessors actions must be such as to assert general ownership of the property, for example: - Enclosing the property, Accepting a deed that mistakenly describes the parcel (color of title), or Ordinary use to which the land is capable and such as an owner would make of it. If scope of non-owners actions is limited rather than general, he may be granted a prescriptive easement rather than adverse possession. Adverse possessor generally takes same title that original owner hadsubject to all liens, easements, covenants, etc. (unless the adverse possessor acted inconsistently with those interests). Must be an sufficiently physical structure on the property. (Nome 200) Camper parked on the property might be arguable, but if there are some other structures there such as a shed or item built on the property that might be applicable.

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2. 3. 2. Open and Notorious

Acts giving reasonable notice that possessor is claiming dominion, so that owners can defend land.

Possessory acts must be sufficiently visible and obvious to put a reasonable owner on notice that her property is being occupied by a non-owner with the intent of claiming possessory rights, for example: - Enclosing the property by fence or wall. Building a structure or driveway, or Clearing the land or cultivating it. Actual notice not required. 4. 3. Exclusive
The possessor should not share possession with a third party

Generally means that the use is of a type that would be expected of a true owner of the land in question; does not mean that no one but the owner uses the property. (HYPO) Non-owners possession cannot be shared with the true owner. Two adverse possessors who possess property jointly may acquire joint ownership rights as tenants-in-common. Personal use rather than shared with public: - MAJ: Prescriptive rights may not to vest in large groups or in the public as a whole. - If a group is sufficiently connected, like a tribe, it may qualify. 5. 4. Continuous
The possessor should be in the property for the entire time, consistent with the amount the neighbors are there. OR Tacking with Privity may meet SOL limit.

Adverse possessor must exercise control over the property in the ways customarily pursued by owners of that type of property. Look at how the neighbors are using the land. Nome 2000 v. Fagerstrom Tacking: Succeeding periods of possession by different persons may be added together. Brown v. Gobble MAJ: Successor must be in privity with original adverse possessor (transfer of title to the successor not dispossession by successor). - Cannot tack where one adverse claimant ousts a preceding adverse claimant. (HYPO) - Groups tacking, as long as they are united, different groups at different times (HYPO- kids in a classroom in and out they may be a united group, like all in section 1, represent.) 6. 5. Hostile and Adverse

Refers to the objective state of mind of possession, they must act like a true owner of that type of property

Non-permissive: If true owner permits the use, the claim for adverse possession will generally fail. MAJ / Lack of Permission Test (Objective): Possession must be without the true owners permission; adverse possessors state of mind is irrelevant (whether mistaken or intentional). - Nome 2000: this is an objective test because the court does not care what the subjective state of mind would be. Looks to the actions of the party.
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Brown v. Gobble: (Minority View pg.310) Good Faith. Subjective Test may be a better test. Mistakenly acting as though you owned it. I thought I owned it(class discussion) Initially Permissive Use Most courts hold that a use that starts off as permissive cannot become adverse without either: an explicit revocation of permission by the true owner, or (HYPO) an explicit statement by the adverse possessor to the true owner that he intends to oust him. MIN: Some states may allow the non-owner to acquire prescriptive rights despite initial permission by the true owner (by estoppel or because owners conduct implies revocation of permission). Absence of Express Permission or Attempted Ouster MAJ: Possession of anothers property is presumed to be non-permissive. Exceptions: Where use is commonly understood to be permissive (HYPO) (e.g., common areas of shopping malls) Co-owner of property cannot acquire adverse possession against another co-owner without an explicit ouster. Some courts require the adverse possessor to allege a claim of right (claim of title, or claim of ownership), which generally means that he expressly or impliedly intended to appropriate and take the land as his own to the exclusion of all others (similar to actual possession element). 7. True Owners State of Mind
Whether the true owner permitted the use of property

If the true owner gives permission to the use of the land the adverse possession claim is defeated Adverse possessor must show that his use was nonpermissive to obtain ownership of the land 8. Adverse Possessors State of Mind
The Objective Test makes the possessors state of mind irrelevant

Four approaches exist: OBJECTIVE 1) Lack of Permission test based on the possession (rule in most states) SUBJECTIVE 2) Based on claim of right a. Possessors intention to appropriate and use the land has his own to the exclusion of all others 3) Based on intentional disposition a. Adverse possessor must be aware that she is occupying property owned by someone else and must intend to oust or dispossess the true owner.. 4) Good faith a. Exact opposite of an intent to oust owner, rather require a good faith occupation to prevail.

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9. For The Statutory Period


Check the states statutory limit.

Many states toll the SOL. if the true owner is under a disability, such as infancy, insanity, or incompetency (wardship), imprisoned, or absent from the state. 10. Under Color of Title
Check to determine whether the title is sufficient or defective.

Some states lower the number of years required to obtain adverse possession when the owner has color of title. An individual acquires a color of title when a written conveyance appears to pass title but does not do so, either frim want of title in the person making it, or the defective mode of conveyance. In some states, an adverse possessor may obtain title to entire parcel of land if he purchased the property pursuant to a deed that mistakenly (not fraudulently) described the borders of the property and he, in good faith, possessed a substantial portion of the property described in the deed (believing that he owned the whole area) provided the other elements are met. Other states may apply a shorter S.O.L. period to those who enter property under color of title. 11. Claims Against the Government Generally, adverse possession claims cannot prevail against the government (some states have abolished or limited this rule). Exception: Property held in proprietary capacity (not held for a public use) may be lost to adverse possession.

6.2 Hohfeldian Terminology I. Identifies the eight basic legal rights a. Four Primary entitlements i. Rights ii. Privileges iii. Powers iv. Immunites b. And their Opposites i. No-rights ii. Duties iii. Disabilities iv. Liabilities II. Two Tables Jural Opposites right privilege power no-right duty disability Jural Correlatives privilege power no-right liability

immunity liability

right duty III.

immunity disability

Jural Opposites a. One must have one or the other but not both. (Balancing rights) 16

IV.

V.

Jural Correlatives a. Any time the state confers an advantage on some citizien it necessarly simultaneously creates a vulnerability on the part of others. b. LEGAL RIGHTS ARE NOT SIMPLY ENTITLEMENTS BUT JURAL RELATIONS i. If X has a right against Y that he shall stay off the formers land, the correlative (and equivalent) is that Y is under a duty toward X to stay off the land ii. If A has a duty toward B, then B has a right against A c. When thinking about legal rights it is important to identify i. Who has the entitlement ii. Against which specific individuals does the entitlement run, and iii. What specific acts are encompassed by the entitlement Disentangling the Bundle of Rights a. Puts legal rights (Right to use, Right to exclude, Right to transfer) into constituent parts b. Adverse Possession Doctrine not only makes the adverse possessors use privileged but also makes the true owners use unprivileged. i. BALANCING

6.3 Justifications for Adverse Possession: Roots Which We Should Not Disturb or Land Piracy I. Traditional Justifications for adverse passion a. Providing a degree of certainty of ownership to possessors of land by eliminating the possibility of stale claims to land title i. Lowers cost of establishing rightful ownership claims by removing the risk that ownership will be disputed on the basis of the distant past. 1. Shortens the period during which prospective purchasers and lenders need to examine the state of title. ii. Adverse possession both settles disputes and allows further transactions to take place. 1. However, it is almost always more efficient and economical to rely on the boundaries fixed in the record of title to identify the record owner than it is to conduct a lawsuit to determine whether the elements for AP have been met b. Encouraging the maximum utilization of land. i. Prevents valuable resources from being left idle for long periods of time by specifying procedures for a productive user to take title form an unproductive user 1. However, using the property is not always beneficial to society a. If the adverse possessor really values the property more than the true owner, why not require them to find out who is the rightful owner and offer to purchase the property ii. Protects the AP who has come to shape his roots to his surroundings and when the roots have grown to a certain size, cannot be displace without cutting at his life iii. Posners Economic Analysis 1. Adverse Possession promotes efficiency by vesting ownership in APer iv. Moral Basis 1. Possessor comes to expect and may have come to rely on the fact that the true owner will not interfere with the possessors use of the property. 2. It is morally wrong for the true owner to allow a relationship of dependence to be established and then to cut off the dependent party Problems with Adverse Possession a. Good Faith i. Should an adverse possessor gain tile to property if he knows he is occupying the property belonging to another? 1. Intentional Land Grab 17

II.

2. Good Faith Requirement 3. Mistaken Belief ii. Differs from jurisdiction to jurisdiction b. Rural Land i. Some courts have adtoped different standards 1. Actual Possession- some courts have held that actual possession can be established by lesser acts the would be required in an urban area 2. Law requires the APer to use the land as an average owner would use it, and if the land in the area is not used intensively , then actual possession can be shown with fewer acts. ii. Should the courts presume that the possession of rural land is permissive rather than nonpermissive? 1. Take the owner in Nome 2000, may have had no objection to the Fagerstorms use of the land because it did not interfere with any of the owners interests. iii. Problem is RUAL is SUBJECTIVE 1. What is Rural? c. Family i. Should possession be presumed to be permissive when that adverse possessor and the record title holder are I the same family or otherwise related? 1. Courts Differ on Opinion d. Border Disputes i. New York effectively abolished adverse possession in most border dispute cases. 1. Requires the building of permanent structure and not just things like maintenance, fences, plantings, and sheds. 6.4 Prescriptive Easements I. Elements for establishing a prescriptive easement are the same as those for adverse possession EXCEPT that the claimant must show adverse USE rather than Possession. a. ELEMENTS:To Claim Prescriptive Easement must establish: i. Open ii. Notorious iii. Exclusive iv. Adverse v. Continuous and vi. Uninterrupted Use of the claimed easement for the statutory period b. Claim of Right i. Generally Duplicative of no permissive requirement, however some courts interpret this element to impose a state of mind requirement on the part of the adverse user, defeating the prescriptive easement claim if it can be shown that the user of the land did not intend to trespass but believed she had the permission of the landowner c. Acquiescence i. Acquiescence: usually adds nothing to the test, in the sense that in all prescriptive easement cases the true owner allowed the behavior to continue for some time. ii. But some states add content, saying acquiescence means the owner must have actually known about the use and allowed it to continue without formally granting permission. d. Presumptions as to Permission i. Most states presume that use by a non-owner of the land is nonpermissive ii. However a fair minority of courts presume that use, unlike possession, is presumptively permissive rather than adverse 1. Neighborly gesture to allow use 18

II.

e. Good Faith Problem i. Some argue courts should differentiate good faith and bad faith trespassers and award prescriptive easements on to those trespasser of good faith f. No Negative Prescriptive Easements i. No negative prescriptive easements in U.S., e.g., I have never entered your property but have relied for years on you not doing something (e.g., building new stories on hotel as in FONTAINEBLEAU), and now you try to do it and I attempt to prevent you. g. Acquisition by the Public i. Trend in modern cases toward allowing the public in general to acquire a prescriptive easement, while often presuming that public acces to private land is permissive in the absence of clear evidence to the contrary. ii. Sometimes owners are even taken to have made an implied gift (dedication) of their land to the use of the public h. Subsequent Owners: acquire land with all easements intact (those rights have been removed from the original owners bundle) i. Another difference between prescriptive easement and adverse possession is that the presumption in latter is almost always that lack of explicit permission means nonpermissive possession, whereas in former the lack of explicit permission is increasingly presumed to mean permission: we should not punish one neighbor who quietly permits another to do something if the former later changes his mind. COMMUNITY FEED STORE, INC. v. NORTHEASTERN CULVERT CORP. a. Feed Store D has used gravel lot since 1956 for delivery and customer vehicle turn-around. 1984 survey establishes that P owns large part of it. P attempts to construct barrier. Court rules Feed Store has established prescriptive easement.

6.5.1 The Improving Trespasser - ENCROACHING STRUCTURES I. Structures that Decrease the Value of Land (SPLIT): a. Maj: Owners normally have the right to end a continuing trespass i. Owners obvi want it removed ii. MIN: Many courts, especially older cases, hold that the property owner has an absolute right to an injunction ordering an encroaching structure removed, no matter what the cost involved or the relative value of the properties or the extent of the encroachment. Removal of the encroaching structure is ordinarily ordered if the builder knowingly built on neighboring property. II. Relative Hardship Doctrine: Majority of Courts often refuse to grant an injunction ordering removal of the structure and instead merely order the trespasser to pay the owner the fair market value of what was lost if: a. Encroachment was innocent (result of a mistake) b. Harm is minimal c. Interference in the true owners property interest small d. Costs of removal substantial e. De minimis non curat lex (that the law will not concern itself with trifles): A court will not grant equitable relief to P who seeks a decree which will do him no good but which will work a hardship on another. III. Increase the Value of Land (SPLIT): a. Annexation: An owner of land is deemed to be the owner of structures or improvements built on it. 19

IV.

V.

i. Some courts hold that a trespasser cannot have the advantage of any benefits he or she has made to the property. Such improvements belong to the landowner, without compensation to the trespasser for labor or materials. Unjust Enrichment: Some courts hold that an innocent trespasser who improved property in the good faith belief that it was her own property has a right to compensation for the value of the improvements made when those improvements increase the value of the property. a. Somerville v. Jacobs i. P mistakenly built warehouse on Ds land. D claims ownership. Court rules that to give D right to building without compensation would be unjust enrichment. ii. An improver of land owned by another was entitled to recover the value of the improvements from the landowner, or alternatively, to purchase the land for the its value less the improvements where there was: 1. Reasonable mistake of fact that the land was owned by the improver 2. Good faith by the improver iii. Dissent argued that this rewards negligence, allows for private eminent domain, diminishes security in ownership and instead suggested that the owner should have the option to purchase the improvement, sell the property, or require the trespasser to remove the improvements (which would give the innocent owner more bargaining power). Bad Faith Improver: Courts agree that a bad faith improverone who deliberately builds on someone elses propertywill not be granted a right to compensation and will ordinarily be required to remove the encroaching structure.

7.4 Nuisance 7.4.1 Protection of Use and Enjoyment of Land I. Nuisance a. Is a substantial and unreasonable interference with the use of enjoyment of land b. Typical cases involve activities that are offensive, physically to the senses and which by such as offensiveness makes life uncomfortable such as noise, odor, smoke , dust or even flies. c. Must be distinguished from trespass i. Nuisance concerns ones enjoyment of owners use of her own land that interferes with her neighbors use and enjoyment of his property ii. In nuisance the interest being protected is the right not to exclusive possession(trespass) but to the use and enjoyment of her land iii. Protection of this interest is not absolute because the harm must be substantial and the interference deemed unreasonable before nuisance will be found. iv. Trespass is direct v. Nuisance is indirect invasion d. Must be distinguished from negligence i. Both encompass unreasonable conduct but nuisance focus on the RESULT of the conduct rather than the conduct itself e. Can be distinguished and temporary or permanent nuisances. i. Permanent Nuisance irreparably injures the plaintiffs property or is of such a character that is likely to continue indefinitely 20

ii. Temporary Nuisance - can be alleviated or abolished by a change in the defendants conduct 1. The claim accrues or increases in amount or value upon each new incident resulting in a nuisance injury. 7.4.2 Defining Unreasonable Land Use I. Page County Appliance v. Honeywell a. A computer was installed in the Central Travel Service. The computer was manufactured, installed, and maintained by Honeywell. The radiation the computer gave off affected the quality of picture and functioning of the televisions displayed at Page County Appliance Center. John Pearson (owner of Appliance Center) sued ITT and Honeywell for nuisance and tortuous interference with business relations. b. Rule: defendants conduct must be a substantial factor in creating the problem. Owners can still be liable under nuisance law even if they are not negligent in their actions (may be unforeseen externalities etc) Fancher v. Fagella a. Brought suit for a sweet gum tree that is claimed to be a noxious nuisance i. Tree trash, and damage to retaining wall b. Normally trees and vegetation are not a nuisance, but when they cause actual harm or pose an imminent danger of actual harm to adjoining property then they can become a nuisance i. Only when trees or vegetation may be regarded as a nuisance when they cause actual harm or pose an imminent danger of actual harm to adjoin property Unreasonable harm to the use and enjoyment of land a. Restatement (Second) of Torts 826(a)- Defines land use as unreasonable when the reavity of that harm outweigh the utility of the actors conduct. In looking at the gravity of the harm the courts look at i. The extent ii. Character of harm involved iii. The social value that the law attaches to the type of use invaded iv. The suitability of the particular use or enjoyment invaded to the character of the locality v. And the burden on the person harmed of avoiding the harm b. Protected interests include freedom from: i. Pollution, noise, odors, and smoke c. How serious must the interference before for a nuisance to be present i. Requires the harm to be deemed substantial d. How do we determine whether the harm is unreasonable? i. Two Focuses to approaching 1. Rights Analysis and Fairness a. Focuses on the parties themselves, asking whether the plaintiffs right to the security should prevail over the defendants right to freedom of action on their own land

II.

III.

21

b. Harm is a nuisance because the type or amount of harm is one that owners should not have to bear for the good of society, at least in the absence of compensation 2. Social Utility and Welfare a. Compares the costs and benefits of providing a remedy b. Find a nuisance when the gravity of the harm out-weighs the social utility of the harmful conduct c. Focuses on society as a whole, asking whether society in general is better off if the activity goes forward despite the harm

e. Rights Considerations i. No Spite Fences- courts usually grant injection when such fences are constructed only to block a neighbors light and air 1. Applies to other unreasonable conduct, if conduct done out of spite with no other purpose other than to injure an others enjoyment and use of their property it will be considered unreasonable and a nuisance. ii. for regulating them will go too far in limiting the freedom of ones use of their property or because regulation will a cause and unfair surprise iii. In some cases a harm will not be deemed a nuisance because the harmful activity was establish first. 1. When a plaintiff comes to the nuisance one can argue that she created the problem for herself f. Social Welfare Considerations i. Cost benefit ii. Incentives iii. Lowest cost avoider 1. Which party can more cheaply avoid the cost? 2. Should this party also bear the burden of paying that cost g. Public Nuisances i. An unreasonable interference with a right common to the general public ii. Private landowners could obtain a remedy against a public nuisance only if they suffered some special damage different from that which is generally suffered by the public as a whole. h. Remedies i. Two separate questions in all nuisance cases: 1. Which party has the basic entitlement? a. Does the plaintiff have a right to be secure from this kind of harm, or does the defendant have the right to engage in the activity? 2. What remedy should be used to vindicate or avenge the entitlement? ii. Three basic kinds of remedies 1. Property Rule 2. Liability Rule 3. Inalienability 22

Remedies

Plaintiff's Entitlement

Defendants entitlement

Property Rule

can get an injunction ordering to stop has the legal liberty to commit the harm the harmful conduct; if wants to commit without liability; if wants to prevent the the harm, must offer enough money to harm must offer enough money to induce induce to give up 's right to be free to agree to stop the harmful conduct from the harm.

Liability Rule

can get damages from for committing the harm, but no injunction; is free to commit the harm if is willing to pay the damages (Damages)

can stop 's conduct if is willing to pay damages as determined by a court to compensate for 's loss of profits. (purchased injunction)

Inalienability Rule

has no right to commit the harm; any agreement by to allow the to commit the harm is unenforceable.

has the right to engage in the protected activity; any agreement whereby gives up the right to engage in the conduct is unenforceable

Current Nuisance Law Overall Outline A. Plaintiff may obtain an injunction against Ds conduct, when: a. Ds conduct is unreasonable (causes more social harm than good) and casus substantial harm to Plaintiff B. Plaintiff may obtain damages but no injunction if: a. Defendants conduct is reasonable (it causes more social good than harm and therefore should be allowed to go forward), BUT the harm to Plaintiff is substantial so that it is unfair to burden Plaintiff with the costs of Defendants socially useful conduct C. Plaintiff is entitled to NO remedy if: a. The harm to Plaintiff is not substantial; or b. Defendants conduct causes more social good than harm; and it is not unfair to impose the costs of Defendants activity on Plaintiff; or c. The imposition of damages would put Defendant out of business and avoiding this result (because of the social value of Ds conduct) is more important than preventing the harm to P D. Plaintiff is entitled to purchased injunction if: a. Defendants conduct causes more harm than good; but it is fair to impose the cost of shutting down Defendants activity on Plaintiff (E.G. when Plaintiff comes to the nuisance)

B.

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7.4.3 Light and Air I. Fontainbleau Hotel Corp v. Forty-Five Twenty-Five Inc a. Both Fontainbleau and the Eden Roc Hotel were luxury hotels in Miami Beach. Fontainbleau began work on an addition to its hotel (on the northern border of its property) that would block the sun from around 2 oclock in the afternoon until the end of the day from the cabana, swimming pool, and sunbathing areas of Eden Roc (on the southern border of its property). There is reason to believe Fontainbleau chose to build it on the northern border so as to cause trouble for Eden Roc: was actuated by malice and ill will on the part of the defendants president toward the plaintiffs president.) b. If structure has a useful and beneficial purpose and comports with zoning laws, any disruption of light/air does not constitute a nuisance (disregard English doctrine of ancient lights) II. Law and Economics a. Economic analysis of law seeks to identify the most efficient rule among several alternatives i. Descriptive analysis explains existing patterns of legal doctrine as a set of rule that promote efficiency. ii. Prescriptive or normative analysis use criterion of economic efficiency to determine what the legal rules should be b. Market Transactions- provides a way to measure costs and benefits i. Elements of a Transaction: 1. Initial distribution of property (who has what rights) 2. Offer price by a non-owner (measure of benefits) 3. Asking price by an owner (measure of costs) ii. Market value- determined by how much individuals are willing and able to pay for entitlements c. Definitions of Efficiency: i. Pareto Superior- someone gains by the change and no one is injured or made worse off by it ii. Pareto Optimal- no further pareto superior exchanges can be made, that is no other changes in allocation of resources can be made without harming others or making them worse off than they were before. iii. Wealth Maximization- benefits of the change outweigh the costs 1. one most often used in economic analysis of law d. Externalities: Costs imposed on third parties by legal actors that are not taken into account in the actors own revenue-cost determination. i. (Fontainbleaus construction of hotel creates externalities such as Eden Roc will lose business and value.) ii. Private cost-benefit calculation may not equal social cost-benefit calculation 1. If operations cause more harm than good, it is therefore inefficient and the operations should cease. iii. Economic actors should internalize their external costs to promote efficiency 1. This argument ignores the possibility of positive externalities. 2. What about if Fontainbleau pays for Eden Rocs losses and damages.

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e. Coase Theorem: Criticizes internalizing external costs (pg 391) i. Joint Costs: 1. Externalities really are joint costs created by incompatible land uses because each owner inflicts costs on the other (problem is to avoid the more serious harm). 2. To avoid the harm homeowners would inflict harm on the factory owner; to avoid the harm the factory owner would inflict harm on the homeowners. The costs are reciprocal. ii. Subsequent Bargains: 1. Coasre argues that it is crucial to remember that parties are free to bargain around any allocation of entitlements made by the courts. 2. Important element of economic analysis of law for it means the parties may achieve the efficient result notwithstanding the legal rule chosen by the court. iii. No Transaction Costs 1. Whoever values the entitlement more will either keep it if they already own it or will buy it from the other. 2. If there are not transaction costs, it does not matter which legal rule is chosen because any legal rule will produce an efficient result 3. Tells whether the activity should go forwardnot who should pay. Only an analysis of distributive justice can tell who should bear the cost. 4. Eden Roc receives injunction, Fontainbleau could try to pay them for their damages if there is a profit to be achieved after compensation for damages.(visa-versa) pg. 391 iv. Distributive issues 1. It is important to note that even though the choice of the legal rule has no effect on efficiency in the absence of transaction costs, it has an enormous effect on the distribution of wealth between the parties. 2. The distribution of the increased wealth between parties will depend on their relative bargaining power or bargaining skills. 3. Distributive Justice- Even if indifferent to a choice of legal rules from an efficiency standpoint, we may prefer one entitlement over the other a. Fairest result b. Considers merit of change 4. Efficiency analysis tells us where the activity should go forward, but it tells us NOTHING whatsoever about who should pay for this outcome. v. Transaction Costs (bargaining and information costs) 1. If transaction costs are present, courts may increase efficiency by assigning the entitlement to the party that would purchase it in the absence of transaction costs. Otherwise, high transaction costs could inhibit the bargaining to obtain the efficient result. 2. When courts are talking about administerability they are talking about transaction costs.

25

vi. Lowest Cost Avoider (imperfect solution) 1. Because courts often lack perfect information, they may place the burden on the party that has the best access to the best information and the greatest incentives to make a general cost-benefit analysis or on the party that can avoid the harm at the lowest cost. f.

Objections to Efficiency Analysis i. Efficiency is a function of initial distribution of wealth: value is determined by willingness to pay, so the wealthy can afford to pay more even if the item would be more valuable to the poor. ii. Offer / Asking Problem 1. Asking price is not limited by wealth in the same way the offer price is (one person may have a different asking price and offer price for the same item). 2. Coase Theorem may depend on which party is given the entitlement initially. iii. Difficulty in defining voluntary v. coerced exchange. iv. Difficulty in defining transaction costs v. resources that should be paid for. v. Efficiency has a conservative bias.
1. Gives greater weight to the interests of the wealth and the large corporations that currently wield substantial economic power a. B/c value is defined by the reference to willing ness and ability to pay 2. Tends to privilege property owners over the interests of non-owners. 3. Holds other factors constant in decision process; does not consider

III.

alternative market structures vi. Commodification 1. not all values should be analyzed in terms of buying and selling Prah v. Maretti
a. Prah, who has one of the oldest homes in the community (so he was there first), uses solar panels for energy (heating etc.) in his home. Marettis building project threatens to block out the light and jeopardize that use of energy. When Prah learned of Marettis building plans he told him that if the house were built in the proposed location it would greatly affect the solar energy system. b. RULE: Obstruction of light/air can be a nuisance (is a claim for which relief could be granted as a matter of law): ex) when light is being used as a source of energy/to improve general welfare of a community (also, public policy is less in favor of development than it used to be) c. States the three traditional polices are obsolete i. The right of landowners to use their property as they wished, as long as they did not cause physical damage to a neighbor. 1. Court says society has increasingly regulated the use of land by a landowner for the general welfare. 2. Use of solar energy benefits society for it is clean and efficient ii. Sunlight was valued only for aesthetic enjoyment or as illumination 1. Sunlight has taken on a new significance in recent years (A Resource) 26

iii. Society had a significant interest in not restricting or impeding land development 1. The policy favoring unhindered private development in an expanding economy is no longer in harmony with the realities of our society. 2. The need to easy and rapid development is not as great as it used to be

CHAPTER 8: SERVITUDES: RULES GOVERNING CONTRACUAL RESTRICTIONS ON LAND USE


8.1 Servitudes I. Servitude- a legal device that creates a right or an obligation that runs with the land or with the interest of the land a. Restatement- A right or obligation runs with the land if it passes automatically to successive owners or occupiers of the land or the interest in land with which the right or obligation runs. i. E.G. - an owner may grant her neighbor the right to use a road or driveway crossing the owners land. If the permission is informal and irrevocable at will be the owner, it is called a license and not a servitude ii. If the permission is intended to be permanent or irrevocable, however, it is a type of servitude called an easement iii. If the obligation is intended to continue even if that owner sells the land on which the road sits, we say the burden of the servitude runs with the burdened or servient estate 1. Future owners have a continued obligation to allow the use of the road to be used by the easement owner- the beneficiary of the servitude- the right runs with the benefited or dominant estate iv. The right to do something on someone elses land is called an affirmative easement b. Restrictive Servitudes- servitudes may be negative as well as affirmative i. One owner might promise to restrict her property to residential use. If the obligation is intended to binding on all future owners of the land, the burden runs with the burdened land (servient estate) ii. Restrictive servitudes are traditionally created in 3 forms 1. Negative Easements a. MUST BE IN WRITING 2. Restrictive Covenants- agreements between landowners to restrict the use of their own land for the benefit of each other a. Created b/c the courts limited the number and kind of easements which could be created 3. Equitable Servitudes- relaxed some of the technical requirements and imposing land use restriction when it seemed fair to do so a. Equity courts used injunctive relief instead of damages to enforce their judgments, they were governed by equitable servitude laws rather than real covenant laws rd c. The restatement 3 seeks to unify the aspects of these 3 servitudes i. It abolishes the terms negative easement and equitable servitude 1. Any obligation restricting the use of ones own land is to be called: a. Negative or Restrictive Covenant 27

2. Any affirmative rights to do something on someone elses land is to be called an easement . 8.2 Licenses I. Licenses- a revocable permission by a landowner which allows a use of his or her property a. No writing is required, and many licenses are implied by the circumstances b. They are not transferable or devisable (able to be willed) i. Licenses are usually only irrevocable in 4 circumstances 1. License coupled with an interest 2. Promises to grant a license a. E.g Theater tickets 3. The other 2 occasions, easement by estoppel and constructive trusts, in which licenses are irrevocable are in the sections 8.3.1.1 and 8.3.1.2

8.3 Easements I. Usually permanent rights to enter or control property possessed by another a. Irrevocable by the grantor b. Generally transferable both during life and by will or inheritance Affirmative Easements: rights to enter land or rights to do something on someone elses land. a. Profits: rights to remover objects from real property such as timber or minerals, coal, gas, oil, gravel, sand. Negative Easements: property owner agrees not to do something on his or her own land Serviant Estate: Property burdened by an easement Dominant Estate: Property benefited by an easement 8.3.1 Creation by Implication 8.3.1.1 Easements by Estoppel (Irrevocable Licenses) I. Easement by estoppel a. Courts may prevent a real property owner form revoking a license if the owner grants the licensee the right to invest in improving property or otherwise in dudes the licensee to act in reasonable reliance on the licensee i. Owner is estopped from denying continued access to his land for whatever period is deemed just under the circumstances. b. Doctrine of easement by estoppel effectively converts a revocable license into an irrevocable easement. Holbrook v. Taylor a. H gives T permission to use roadway, T purchases adjoining land, builds house, maintains road, in 1970 H and T become adverse and H blocks road b. Brought action to establish use of the roadway. c. Court held easement by estoppel i. Use of roadway was always done by permission, invested in land that was only accessible by the roadway, and invested in improving and maintaining roadway 28

II.

III. IV. V.

II.

8.3.1.2 Constructive Trusts Trust a. A property arrangement in which an owner, called a settlor, transfers property to another person, called a trustee, with instructions to manage the property for benefit of a third party, called the beneficiary. b. Trustee is said to have legal title to the property c. Beneficiary has the equitable or beneficial title d. Most trusts are created expressly by a trust doctrine or a will II. Constructive Trusts: a. Often used in place of easement by estoppel i. much more general, and can be applied more broadly (at the cts discretion) than easement by estoppel b. Sometimes, absent a written agreement or will the court will treat an arrangement as if the grantor had created a trust arrangement, regardless of the grantors intent. c. Constuctive trust- one which is found to exist by operation of law or by construction of the court, regardless of any lack of express agreement between or intent on the part of the parties d. Created by operation of law to avoid unjust enrichment (when one party has been wrongfully deprived either by mistake, fraud, or some other breach of faith or confidence, of some right, benefit, or title to property) e. Require a property owner to use her property for the benefit of another or to grant a non-owner access to the property, or to transfer possession or ownership to another. f. holder of the title cannot in good conscience retain the beneficial interest III. Rase v. Castle Mountain Ranch a. Tavenner owned a ranch, allowed and invited and others to build cabins on land, since 1922, in 1963 cabins were put under lease agreements (for legal purposes) - no intent of T to terminate leases, but wanted loophole if necessary, T sold land to , T refused to terminate leases, terminated leases, sued for injunction and easement. b. Issue: Whether permissive building and occupation on property not intended to be temporary is sufficient to create right of occupation. c. Decision: Yes constructive trust d. Rules/Analysis:NO prescriptive easement (permissive) or adverse possession, Invitation and permission to improve land creates trust, which is transferable in sale. i. To satisfy trust and fixture.: occupation and use for reasonable amount of time (13 years here) or compensation for cabins ii. Even though document may describe itself as a license, court may hold it to be a constructive trust in order to prevent unjust enrichment. Found to exist by construction of court, the relationship between these parties mirrored a trust situation. e. Contrast this case with Holbrook v. Taylor. Right to live v. right to cross. These individuals are fighting for their right to live. This case exemplifies the difference with constructive trust and easement by estoppel indefiniteness. ?????????? Any other differences between easement by estoppel and constructive trusts? I.

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8.3.1.4 Easements Implied from Prior Use I. Implied easements a. Easements that are recognized in particular types of relationships despite the absence of express K to create an easement. i. May be applied in fact or implied in law b. Implied easements are appurtenant, not in gross Easements Implied from Prior Use (Quasi-Easements) a. Severed property. i. Only applies in situations where property owner has conveyed part of his land to someone else without mentioning that he used the conveyed part in some way for the benefit of the part he has retained. ii. The problem arises because he obviously would not have bothered to grant himself an express easement beforehand, but the other party inherits it nevertheless. b. Requires three elements: i. Common ownership before being severed ii. Prior use during the period of common ownership 1. Key: if there was no prior use, some other easement rule must apply. iii. Reasonable necessity c. GRANITE PROPERTIES LIMITED PARTNERSHIP v. MANNS i. The diagram of apartment complex, shopping center, driveways (440). ii. P conveyed part of his commercial property to D, but failed to mention he had been using passage over that property for years in order to get convenient access to parking lot of Ps apartment complex and deliveries to Ps shopping center. Appears to have been a mistake on both sides. iii. Court rules that given proof of prior use, Ds knowledge of the use at the time of purchase, and the fact that the use was important enough to justify preserving it (reasonable necessity, though not strictly necessary), P has an easement implied from prior use . iv. Usually, as here, a right to get access to one part of severed property over the other. v. Most litigation concerns what qualifies as reasonable necessity. Trend toward beneficial as opposed to strictly necessary. 1. Though not necessary, it is more than convenient: property owners purchased their houses at higher market value because of expectation that access to lake would continue . d. Easement from prior use can take two forms: i. Easement by reservation, in which grantor reserves an easement to the portion of his property hes selling: very hard to get, because everything should be in the writing in a property transaction. Requires that buyer should have known that no reasonable seller would have intended to include what was conveyed. GRANITE is one of the rare exceptions. ii. Easement by grant, in which an easement to the property retained by grantor is implied in the title to the portion hes selling. (intended)

II. III.

30

e. Easement from prior use is an example of an implied easement, like prescriptive easement, easement by estoppel, easement by constructive trust, and easement by necessity. i. All of these are equitable exceptions to the statute of frauds requirement of a writing to establish property rights, intended to prevent enforcement of fraudulent oral promises. f. Most implied easements are rights of way for the passage of people or vehicles to get to the property. 8.3.1.5 Easements by Necessity I. Owner of a landlocked parcel may obtain an easement for the ingress and egress over the remainng lands of the grantor a. Two elements i. Common Ownership- at one time there was unity of title of the two parcels of land ii. Strict Necessity- no outlet for the dominant estate to a highway except over the serviant estates land FINN v. WILLIAMS a. Williams sold part of land to Bacons, who sold to Finns. Finns had always used passage over Williams driveway to get to town: there is no other way. b. Court rules that an easement by necessity was implied in the original severing of the two tracts. i. Promotes 1. efficient utilization of property and 2. Effectuates the interests of the parties. ii. BUT latter generally trumps former c. Most courts rule that i. no easement of necessity will be recognized if it is clear that the grantor intended to sell, and the grantee knew she was buying, a landlocked parcel d. Some courts rule otherwise, saying easement by necessity applies regardless of parties intent, or, in other words, we simply do not want to allow people to sell landlocked parcels. e. Some courts hold that the ultimate goal is promoting the development and marketability of the property, so an easement over the grantors remaining land benefiting the landlocked lot is implied as a matter of law irrespective of the true intent of the grantors, f. Some states have statutes to deal with landlocked parcels, e.g., requiring one party to pay the other for the easement allowing him to cross land. 8.3.2 Creation by Express Agreement Express easements are created by agreement by parties Every state has a SOF that requires easement to be in writing to be enforceable a. Exceptions: i. Prescriptive easements ii. Easements by estoppel iii. Constructive Trusts iv. Implied Easements v. Necessity

II.

I. II.

31

III.

IV.

V.

Rule Against Reserving an Easement in a Third Party a. Traditional Rule: Many states hold that a grantor may not sell a parcel of property to one party and reserve and easement over that property in a third party b. Some courts have used the doctrine of estoppel to prevent the grantee from interfering in the easement reserved to the third party. c. Other courts have changed the traditional rule, allowing reservation of an easement in a third party. d. Simple to get around: if grantor transfers to third party first who then transfers to the other party while retaining an easement in himself. Substantive Limitations on Kinds of Easements that Can Be Created a. Limits on Negative Easements that are Recognized i. Traditionally only recognized: lateral support, light and air, and the alteration of artificial flow of water ii. Modern law recognizes Conservation Easements (historic preservations, solar easements) iii. Generally covenants and servitudes are used to restrict conduct (different than easements, though) iv. Covenants have different requirements (touch and concern, privity) and different defenses (changed conditions and undue hardship) v. Owners can generally create easements in gross, but it is difficult to create a covenant in gross b. No Affirmative Easements on Ones Own Land i. Traditionally law of easements did not allow creation of an affirmative duty to do something on someones own land (this can be achieved by covenants and servitudes, though) Running with the Land: a. Requirements for the Burden to Run with the Land central question about easements concerns the circumstances under which they run with the land i. Writing: need not be in subsequent deeds if in the chain of title and can be found by record search ii. Intent (of grantor): may be express language or implied by the type of easement iii. Notice 1. Actual notice: knowledge in fact 2. Inquiry notice: reasonable buyer would discover from inspection 3. Constructive notice: deed is discoverable in a record search of the chain of title Requirements for the Benefit to Run with the Land (Appurtenant v. In Gross)- the second question is whether the benefit runs with the land a. Appurtenant If an easement is intended to benefit whoever owns a particular parcel of land i. the benefit will run with the land and be enforceable by future owners of the benefited land b. En Gross- If the benefit is not intended to run with the ownership of the dominant parcel, i. Enforceable by the beneficiary of the easement ii. The benefit belongs personally to the grantee c. The test for distinguishing appurtenant easements form easements in gross is in the intent of the grantor 32

VI.

I.

II.

III.

IV.

8.3.3 Interpretation of Ambiguous Easements: Scope and Apportionment Appurtenant easements: a. One that would have little or no benefit separate from the neighboring land i. eg. Access to dominant estate through serviant estate b. Transferred when the dominant estate is sold so long as the requirements are met for easements running with the land. c. Cannot be sold separately from the land. Cox v. Glenbrook - Road may not be widened beyond its originally intended size. -the road is a back road and the easement language stated it was for a one lane back road, so they must maintain the road in that manner. a. As a general rule, the owner of an easement may prepare, maintain, improve or repair the way in a manner and to an extent reasonably calculated to promote the purposes for which it was created. The owner may not, however, by such action, cause an undue burden upon the servient estate, nor an unwarranted interference with the rights of others who have a similar right of use. Easements in gross (SPLIT): a. One that would be useful or beneficial separate from the ownership of the neighboring property i. e.g. such as for profit (Telephone Lines) b. MAJ: Generally assumed to be transferable, especially for commercial easements and profits prendre. c. If an easement is for personal convenience or enjoyment, a court may find that it was intended to be non-transferable d. MIN: Some states may retain the old rule that easements in gross are not transferable under any circumstances. Scope of the Easement a. Three issues arise in determining whether the owner of an easement is misusing it by going beyond the scope of activities contemplated by the grantor i. whether the use is of a kind contemplated by the grantor; ii. whether the use is so heavy that it constitutes an unreasonable burden on the servient estate not contemplated by the grantor; iii. whether the easement can be subdivided. b. Kind of Uses Encompassed by the Easement i. Many courts hold that a general right of way may be used for any reasonable purpose. ii. Some courts disagree and hold that rights of way are limited to the specific purposes contemplated at the time they were created. 1. (notes- one ct held that a right of way does not include a right to erect poles and electric wires on or next to the roadway. Another ct held digging a trench to bury phone lines does not exceed the scope of utility easement). iii. Most courts agree with Henley and interpret easements broadly iv. Henley v. Continental Cablevision A telephone companys easement to erect poles and run wires to houses encompassed the right to run cable television wires as well (use expands with technology). 1. Henley interpreted the scope of the easement broadly, why didnt they interpret the easement in Cox broadly? Economic analysis, it isnt a two party situation, it is an entire development. Cox case, the parties could negotiate for widening the road but in this case, if the court chose a different rule, there may be a chance where no negotiation is possible. Additionally, there is a public policy interest that it would be environmentally damaging to allow additional installation of cable systems, when a more efficient option is the solution. 33

V.

VI.

VII. VIII.

IX.

Unreasonable Additional Burden a. Grantors intent determines whether an activity constitutes an unreasonable additional burden beyond that contemplated at the time the easement was created. b. When intent is ambiguous, court balances freedom of development rights against rights to security from undue burden. c. Green v. Lupo, although allowing motorcycle to use the road, stated that such could be limited and regulated to protect the legitimate interests of the owner of the servient estate. Similarily, in Cox v. Glenbrook Divisibility or Apportionability a. Appurtenant Easements i. MAJ: Benefits the entire dominant estate and is apportionable among subsequent owners if the dominant estate is divided. Cox v. Glenbrook b. In Gross Easements i. Nonexclusive: grantor, or owner of the servient estate, has reserved for herself the right to use the easement in conjunction with the granteegenerally held to be nonapportionable. ii. Exclusive: grantor has no right to use the easement in conjunction with the grantee generally apportionable. Extension of Use: a. MAJ/ Traditional Rule: Easement may not be extended to access a non-dominant property. Change in Location of Easement: a. Traditional Rule: Owner of servient estate must obtain the consent of the easement holder to move it. b. Modern Trend: Owner of servient estate, at her own expense, may make reasonable changes in the location or dimension of the easement when necessary to permit normal use or development of the servient estate i. if the changes do not significantly lessen the utility of the servitude, increase the burden on the holder of the servitude benefit, or frustrate the purpose for which the servitude was created. Terminating Easements: Easements last forever unless they are terminated by: a. Agreement in Writing (release of the easement holder) b. Terms of the Easement Itself c. Merger (when holder of servient estate becomes owner of the dominant estate) d. Abandonment (owner of easement by conduct evinced an intent to abandon it) e. Adverse Possession or Prescription (by owner of servient estate or third party)

Marketable Title Acts: may require owner of easement to re-record periodically. Changed Conditions and Undue Hardship: do not generally apply to easements 8.4 Covenants I. Real covenant a. Easement is a property right in someones land and Covenant is a contractual right. b. Remember that courts disfavor negative easement so parties turned to covenant. Courts didnt like contractual binding obligations on property in which parties never signed to that contract so they created hoops like running with the land to restrict these covenants. II. Real Covenants and Equitable Servitudes: Contractual agreements made by one landowner to another to use or not to use ones own land in particular ways a. Servient Estate: parcel that is restricted. b. Dominant Estates: enforcer of the restrictions. c. Enforceable against succeeding owners 34

III.

d. Affirmative Promises: Require the owner to take certain actions for the benefit of neighbors e. Negative Promises: Restrict the use of ones own land for the benefit of neighbors f. Remedy for breach of Real Covenant: damages g. Remedy for breach of Equitable Servitude: injunction Covenant Running with the Land: Promise made between the owners of two parcels of land that binds not only the original promisor and promisee but also future owners of both parcels. (called covenants/servitudes) a. If future owners of the servient estate are bound by the restriction we say that the burden of the restriction is running with the land. b. If future owners of the dominant estates are entitled to enforce the restriction against the servient owners, then the benefit runs with the land.

When a dispute arises between the original covenanting parties, it is governed by general rules of contract. When the issue is whether the covenant is enforceable by later owner of the burdened parcel, the rules below govern. law of real covenants- law of equitable servitude IV. Privity of Estate: Covenants are allowed to run with the land only if the original covenanting parties had a special simultaneous relationship to land called privity of the estate. a. Horizontal Privity: relationship between original covenanting parties b. Vertical Privity: Rules about the relationship required between the original covenanting parties and their successors in interest c. Equitable Servitudes avoid the technical rigors of the privity doctrine, which made it impossible to arrange for reciprocal enforcement of covenants among owners in a subdivision. i. Its a non-possessory interest in land that operates much like a covenant running with the land. Difference is based on the remedy plaintiff seeks: Holders of a COVENANT seek MONEY damages whereas holders of EQUITABLE SERVITUDES seek INJUNCTIONS. d. Restatement Third: abolishes the distinction between real covenants and equitable servitudes, treating both as running with the land. Both injunctive relief and damages available. Benefit Held in Gross: Covenants that touch and concern the use of land for the benefit of the owner of neighboring land are presumed enforceable only by the current owner of the benefited parcel; there must be explicit language to allow the original covenantee to enforce the promise. a. Most courts will not allow the burden of a covenant to run with the land if the benefit is held in gross (even if the original parties so intended). b. Exceptions: i. Covenant held by homeowners association on behalf of owners in a neighborhood, a governmental entity, or a charity. c. Proposed R3d: Covenant in gross will be enforced if it is reasonable and does not violate public policy. Burden Held in Gross: A lessor (but not a prior owner) remains liable for the burden of a covenant when he leases the land.

V.

VI.

35

Real Covenants were said to run with the land, binding the servient estate and benefiting the dominant estate if: (Traditional remedy of damages) I. Writing a. Covenant is in writing if the original covenanting parties put it in writing. b. Sales literature generally does not qualify as a writing. c. Exceptions (apply only to Equitable Servitudes): i. Some states allow equitable estoppel to enforce sales literature or oral promises where there was representation, reliance, and notice. ii. Implied reciprocal negative servitude (common scheme and notice) Intent to Run with the Land a. The original covenanting parties intended both the burden and the benefit to run with the land. b. Express Intent: i. Covenant is made to grantor or grantee and their heirs or assigns ii. is intended to bind future owners iii. is intended to run with the land c. Implied Intent: i. A covenant benefiting the owner of neighboring land is presumptively intended to run with the land so long as it touches and concerns the land. ii. A common scheme may indicate intent. Notice a. The purchaser of the servient estate was on notice of the covenant at the time of purchase. b. Actual Notice -actually knew c. Implied -abnormal, special facts and case Winn Dixie v. Dolgencorp d. Inquiry -applies to anyone in which the facts and circumstances would give rise that should have known by inspection e. Constructive -discoverable in records of the chain of tile f. Courts SPLIT: Whether a grantee is on constructive notice of restrictions placed in a deed of a different parcel binding the grantors remaining land when no reference to that restriction is placed in the deed transferring the remaining land: KotseasTrust case i. Some courts hold that the grantee is not on constructive notice because notice of the restriction is outside the chain of title to the parcel being transferred. ii. Other courts hold that the grantee is obligated to search all grants made by the grantor during the time he owned the land being transferred (or at least all the deeds to contiguous parcels). iii. Also if a common prior owner of neighboring lands Privity of Estate a. The original covenanting parties each had a simultaneous interest in land at the time the covenant was created and that the burdens and benefits of the covenant would pass to successors to those interests. The benefit of the covenant is held by the owner of some dominant estate before it would be allowed to run with the land. The presence of vertical privity on the benefit side helps ensure that the covenant will be enforceable only by an owner of a lot intended to benefit from such enforcement. Traditionally, the benefit of covenant cannot be held in gross. 36

II.

III.

IV.

b. Real Covenant: i. Burden: requires both horizontal and vertical privity ii. Benefit: requires vertical privity c. Equitable Servitude: i. Burden: privity not required except if covenant is in a lease, then vertical privity is required ii. Benefit: no privity required d. HORIZONTAL PRIVITY (RELATION BETWEEN ORIGINAL COVENANTING PARTIES): i. Mutual Privity Test (simultaneous ownership eg. Landlord-tenant) is established if: 1. If the covenant is contained in a lease transferring possession of land from landlord to tenant. 2. Covenant is contained in a deed that divides property ownership between a present estate and future estate. (e.g life estate) 3. OR if the covenant is contained in a deed conveying ownership of land and one or both parties owns an easement burdening the property of the other ii. Instantaneous Privity Test (MAJ rule in U.S.): 1. Is established by placing the covenant in a deed of sale that creates the restriction and impliedly or expressly states that the covenant is intended to benefit remaining land of the grantor. a. Lease (landlord-tenant) b. Deed (grantor-grantee) c. Mortgage / Lien (mortgagor-mortgagee) d. Easement (promisor-promisee) iii. Do Not Satisfy Horizontal Privity 1. Agreements between neighbors not part of a simultaneous conveyance of another property right. 2. Agreements between grantor-grantee not made at the same time as the conveyance of the property interests benefited and burdened. e. VERTICAL PRIVITY (RELATION BETWEEN ORIGINAL COVENANTING PARTIES AND THEIR SUCCESSORS): i. Strict vertical privity doctrine that included the technical requirement that the grantor not retain any future interest in the land. ii. Strict vertical privity does not exist if: 1. Successor has an estate of lesser duration than the prior owner: 2. Lessee-lessor 3. Sublessee-Sublessor 4. Life estate-reversion / remainder 5. Neighbors who are intended beneficiaries of the covenant but not successor owners or possessors of the parcels owned by the covenanting parties iii. Whitinsville Plaza Case: vertical privity is present on the benefit side because Trust transferred all its rights in the land to Plaza. However on the burden side, Kotseas merely leased the land to CVS-retaining powers to control the burdened land, there was no strict vertical privity on the burden side.

37

V.

iv. Vertical privity does exist: 1. Transfer of all rights in the property 2. Adverse possession (owner-adverse possessor) 3. Assignment of lease (assignor-assignee) v. Relaxed vertical privity requirement would impose the burden on any future possessor of the burdened land and the benefit of the covenant on any future possessor of the benefited land. 1. Homeowners association (as agents of the property owners whose property is reciprocally benefited and burdened, they have standing to enforce covenants some states require express intent) 2. MIN: Some states allow possessor of dominant estate to sue for damages even if he has a possessory interest of less duration than the grantor Touch and Concern a. The covenant touched and concerned the land. This test is intended to identify the kinds of obligations that should run with the burdened estate because they are intended to and legitimately will benefit current and future owners of the dominant estate. b. Two-Factor Test (in the courts view, should the covenant run with the land): i. Connected to use or enjoyment of the land (burden side) ii. Affects market value of land (benefit side) 1. increasing dominant estate and/or decreasing servient estate c. Examples: i. Covenants not to compete commercially Whitinsville Plaza v. Kotseas ii. Covenants to pay homeowners association dues (other covenants to pay money not favored) iii. Restrictions on use (residential only / not to sell liquor) iv. SPLIT: Affirmative easements requiring an owner to do something (like run a golf course) on his land may be disfavored d. Reasonableness: Modern approaches turn our attention away from the question of whether servitude or covenant is related to land and toward questions of reasonableness. Davidson Bros. v. Katz & Sons i. Factors for reasonableness(to determine if a covenant is reasonable the court listed factors to be considered) 1. Whether the covenant had an impact on the consideration exchanged 2. Area it concerns 3. Its duration 4. Whether it violates public policy because it constitutes an unreasonable restraint on trade a. There's public interest in having the elderly have easier access to a supermarket 5. Whether it interferes with Public Interest d. Where the burdens and benefits created by the covenant are of such a nature that they exist independently from the parties ownership interest in land, the covenant does not touch and concern the land and will not run with the land. Thompson on Real Property. Restatement.

38

VI.

Covenants were said to be enforced by injunctive relief as so-called Equitable Servitudes if: a. Notice b. Intent- (of a common plan) lake lots c. Touched and Concerned d. No privity required

8.4.3 Interpretation of Ambiguous Covenants I. II. Narrow Interpretation: courts generally interpret restrictive covenants narrowly when ambiguous (look to plain language, public policy). Blevins v. Berry-Lawrence County Assoc. a. restricted covenant didnt define what counts as a single family use and the stay was residential. If they are charging these individuals to stay, or these individuals stay temporary like transient and a hotel- could argue not residential but the court defines residential broadly. b. The court says that the restriction goes to the structure not to the use of the property. c. When ambiguity exists restrictive covenants should be read narrowly in favor of free use of property. d. Residential v. Commercial Use i. Group Homes (SPLIT) 1. Some say use has all characteristics of residential (family-like) use. Others say if you charge people to live there, it is commercial (but what about regular apartment tenants?). 2. Restrictions affecting people with disabilities may be void for public policy reasons or violate anti-discrimination laws. 3. Anti-discrimination statues: a. Restrictive covenants that discriminate against persons with disabilities may violate federal civil rights statutes, including Americans with Disabilities act of 1990 and the Fair Housing Act of 1968 e. Restrictions to Single-Family Dwellings (SPLIT): i. Some say refers to structure of the dwelling (not partitioned into apartments) ii. Others say it refers to use of the dwelling (by one family only what is the definition of a family?) iii. Language determines where to imply to structure only or also who lives there, its at the courts discretion

8.4.4 Modifying and Terminating Covenants I. II. Changed conditions and relative hardship doctrines may result in nonenforcement of a servitude Changed Conditions a. Covenants will not be enforced if: i. Conditions have changed so drastically inside the neighborhood restricted by the covenant that ii. Enforcement will no longer be of substantial benefit to the dominant estates ( El Di v. Bethany Beach 39

b. Changes Outside the Restricted Subdivision: Changed conditions doctrine applies to changes outside the restricted subdivision only when those changes have so adversely affected every lot (not just fringe lots) in the subdivision that enforcement is pointless. III. Relative or Undue Hardship: Covenants will not be enforced if: a. Harm caused by enforcement (hardship to the owner of the servient estate) will be greater by a considerable magnitude than the benefit to the owner of the dominant estate Blakeley v. Gorin b. Hardship must be great c. Benefit must be small (if benefit is substantial, will not apply even if hardship is great) d. Economic Frustration: Mere change in economic conditions rendering it unprofitable to continue a restrictive use may not be alone sufficient to justify abrogating a restrictive covenant. e. Damages Instead of Denying Relief: Instead of simply denying relief under changed conditions or relative / undue hardship doctrines, the court may choose to grant damages in lieu of an injunction. Other equitable doctrines and defenses that may result in nonenforcement

VII.

a. Acquiescence: he has tolerated previous violations of the covenant by the owner of the servient estate b. Abandonment: he has tolerated violations of the covenant by owners other than restricted parcels in the neighborhood covered by the covenant c. Unclean Hands: he has violated the covenant himself d. Estoppel: he has orally represented to the owner of the servient estate that he will not enforce the covenant and the owner of the servient estate has changed his position in reliance on the oral statement. e. Laches: he has an unexcused delay in enforcing the covenant against a breach (not so long as to establish prescriptive rights), which prompted investment reliance on the failure to object, and enforcement would now be unconscionable f. Marketable Title Act: he has failed to re-record the covenant after a specified period of time (it is terminated by operation of law) g. Language in the Instrument: the covenant terminates by its own terms within a stated number of years unless renewed h. Merger: the dominant and servient estates come under common ownership (same as easements) i. Release: all parties affected by the covenant agree in writing to terminate the covenant or release the property from it j. Prescription: if violation of the covenant is open and notorious without permission continuously for the statutory period i. E.g. Adverse possessor and violated the covenant the whole time. k. Violation of Public Policy: it violates public policy.

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8.5 Regulations of Covenants and Homeowners Associations I. Homeowners Associations: Organization, usually managed by a board of directors chosen by the homeowners in an area, with powers to enforce restrictive covenants on property in the area. a. Can enforce Covenants if Declaration Empowers them b. SPLIT: Whether architectural review committee has duty to act reasonably. c. SPLIT: Whether a developer can retain control over the association after all lots are sold (at least where a majority or supermajority of owners can obtain control). d. Unrestricted lots- most hold buys of unrestricted lots to a constructive notice of covenant in deeds of property in the near vicinity II. Appel v. Presley a. Developer can retain the right to change the covenant, but it has to meet a reasonable requirement. Cant change the general scheme of the subdivision i. Still have to keep the buyers interest in mind III. Shelley v. Kraemer a. Equal Protection Clause of the 14th Amendment prohibits judicial enforcement by state courts of restrictive covenants based on race or color b. The covenant itself wasnt unconstitutional, it was the states enforcement of it through the courts that was unconstitutional. c. Critiques: i. People should be able to sell to who they want 1. Public/private split within property ii. If you own a private property, you should have the right to sell it to anyone you want, but you cant do so based on discrimination. iii. It goes against public policy. IV. Evans v. Abney a. Court concluded that Bacon would have closed the park, rather than desegregate it i. Its not state action, its his decision to close the park ii. Its a private action of the heirs to close the park V. Implied Reciprocal Negative Servitudes in Residential Subdivisions a. Apply to common plans or schemes i. Applies to developers who create common subdivisions ii. Its reciprocal because everyone in the community is bound by it and is benefitted by it 1. They can sue you for violating it, and you can sue them for violation iii. When youre buying a property in one of those subdivision, youre agreeing to be bound by those restrictions b. Balancing of interests i. The developers have an interest in retaining control over development in subdivision may increase market value and attract buyers ii. Dead hand problem, where developer still controls the land after he died c. Evans v. Pollock i. The doctrine can be applied when common plan or scheme exists without it being in every deed 1. Common plan or scheme does not have to apply to every plot in order for it to apply 2. Just need an overall, general scheme of development d. Sanborn v. McLean i. Buyer in a residential neighborhood should be on inquiry notice if there is a uniform pattern of development that might suggest the existence of a common plan 1. What the notice here? If it's not in their chain of title, are they still on constructive notice? 41

a. They should check the neighboring properties deeds? b/c they could look at neighborhood to see uniform residential high-grade neighborhood b. Then you check your deed, and you see there is not a restriction--> then under this jurisdiction you have to check and see if common owner placed restrictions in neighboring deeds c. Inquiry: where you see oh this is a residential neighborhood, only houses d. Constructive: courts will find if its in a neighboring deed from common owner then sufficient notice e. When uniform pattern of plan, then this will put you on inquiry notice to check for restrictions 2. There is some notice, and some 3. On constructive notice, on lots in the same vicinity if they are owned by same grantor e. Riley i. Majority says there needs to be a writing 1. If its not in your deed, youre still on constructive notice if its in your neighbors deeds 2. For Rileys, the restriction wasnt in anyones deeds until after they purchased the property, so theyre not restricted ii. You NEED a writing to establish a negative implied easement Implied reciprocal negative servitudes: a. The doctrine was invented to deal with the intent, notice, and privity of estate issues that arise when a developer imposes grantee covenants on all lots in residential subdivisions and when the developer intentionally or inadvertently leaves those restrictions off some of the lots i. Covenants restricting land in subdivisions are mutually enforceable by and against all owners if the properties were all intended to be part of a common scheme or general plan 1. The common plan can be shown by a. A presence of restrictions in all or most deeds to property in an area b. A recorded plat (map) showing the restrictions c. The presence of restrictions in the latest deed d. Observance by owners of similar development of their land and conformity to the written restrictions e. Language stating that the covenants are intended to run with the land f. The recoding of a declaration stating that the covenants are intended to be mutually enforceable 2. Evidence tending to show that absence of a common plan is that some deeds are unrestricted and that the restrictions are nonuniform ii. Today developers record a declaration prior to the sale of the first lot describing the common plan and providing buyers notice of the conditions, covenants, and restrictions applicable to the subdivision Developers power to enforce the covenants: a. When the developer seeks to control property after selling last plot, is seen a meddling, and the courts may deny the developer standing to bring suit to enforce the covenants b/c of the policies underlying the rule prohibiting the benefit of covenants to be held in gross i. Freeing the current owners from the "dead hand" of the past-- and the continuing control of prior grantors in particular-- promoted both the liberty of current owners and efficient use of the land (there is therefor a strong but not universal, presumption against continued enforcement by absentee developers who no longer own property in the neighborhood) 42

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b. Some courts will allow developer to continue to enforce covenants when the declaration allows this, at least where the owners have the power to amend the declaration and there is no showing that the developer "retained unreasonable or imperious control over artistic decisions of homeowners long after completing the subdivision" Enforcement by homeowners association a. It is well stated, that as agents of the property owners whose property is reciprocally benefited and burdened by servitudes, homeowners associations have standing to enforce those servitudes if the declaration given them power to do so The problems of unrestricted lots: a. Most courts hold that buyers of unrestricted lots are on constructive notice of covenants in other deeds in the vicinity sold by the same grantor b. The terms of a recorded declaration are impliedly included in the deeds to lots covered by the declaration Lots retained by grantors: a. Most courts hold that only parcels within the common scheme are restricted and that the grantor's intent to leave a tract or parcel out of the common scheme is determinative Blevins a. Trying to promote free use of the land i. If the language is ambiguous, courts interpret it narrowly to free up use of the land Presumptions: a. Courts traditionally interpreted ambiguous covenants in the manner that would be the least burdensome to the free use of land i. Courts have held that restrictive covenants are regarded unfavorably b/c the law favors the free and untrammeled use of real property; restrictions of the free use of land. Are disfavored by public policy and must be strictly construed b. Today the touchstone for interpretation of covenants seems to be the intent of grantors i. This intent must be shown by express language in the deed or a declaration but may be supplemented by extrinsic evidence where necessary to interpret an ambiguity ii. Given the modern view that such reliance is reasonable and that the covenants often increase the value and attractiveness of the property, the Rest. 3rd suggest that is no longer generally acceptable that courts should err on the side of unburdening the property from restrictions 1. This new approach favors the security and reliance interests of those who brought property in reliance on covenants restricting neighboring land and promotes those interest over interests in free use of land 2. The assumption is that limitations of lands use may promote rather than impede alienability

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CHAPTER 9: PRESENT ESTATES AND FUTURE INTERESTS


9.1 Division of ownership over time I. Landowners may own property in two ways: a. Concurrently i. they posses the property together and work out how it will be used in the future ii. Husband and wife, roomates b. Ownership may be divided over time i. Present estate: holder has the right to possess the property while her property rights last ii. Future interest: holder will obtain the right to possess the property when and if the present interest terminates c. Grantor specifies the circumstances under which the property will shift in the future from the present interest holder to the future interest holder d. The creation of future interest may therefor constitute a direct or indirect attempt to control the future uses of real property i. Present and future interest may be created b: 1. sale, 2. lease, 3. will or 4. trust e. Future interest exist the moment they are created even though the future owner has no right to possess the property until the happening of the triggered event (will not become possessory interest) II. By delegating property to owners the power to create future interests, the legal system enables people to exercise some degree of control over who owns property in the future and what the future owner is entitled to do with the property: two pressing legal issuses--> problem of dead hand control and social hierarchy a. Problem of dead hand control: problems arise b/c owners may seek to control who owns the property long after they die i. Conditions may limit what owners may with their property, thus interfering with freedom of future owners to control the property. This may both undermine autonomy of future owners and the efficient use and transfer of property 1. Concentrating property in the hands of future use ii. Rigid enforcement of restrictions imposed long ago by grantors who could not anticipate current conditions would sometimes prevent property from being devoted to its best uses as social circumstances and needs change. b. Social Hierarchy: another problem associated with the ability to create future interests is the possibility that by imposing restraints on alienation and use, owners will have the wanted or unwanted effect of concentrating ownership in the hands of certain groups and excluding others i. Such systems can be race related, or exclusion to property existing to only family heirs ii. As more land becomes tied of up by restraints, more people would be excluded from the ability to participate in the real estate market III. Regulation of future interests may help to similarly maintain the dispersal of access to property so that a decentralized market system can function properly a. The relationship between future interests and the prob. Of dead hand and hierarchy can be better understood by considering the feudal origin of modern property law.

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9.3 The Contemporary Estates System Terms to Know Estates further classify interests and refer to when and how ownership ends. All estates are interest in land. Estates are a subset of interest Devisable: A property is devisable if the owner can transfer ownership by a will- a testamentary transfer. Descendible: A property is descendible or inheritable if the property can pass by the states intestacy statute to heirs if the owner dies without a will. Alienable: A property is alienable, assignable, or transferable if owner can sell or give it away during his lifetime- an inter vivos transfer. Fee Simple Absolute: is an estate with an infinite duration. There is no inherent end to ownership. The owner may sell away, devise it by will, or die without a will and have the property go to decedents. A fee simple property is alienable (transferable or assignable), devisable and descendible. Life Estate: Its duration is measured by someones life. It is alienable inter vivos by the life tenant, for a term lasting so long as the measured life, but it is generally neither devisable nor descendible. If the life tenant transfers the property to a third party, that right to use the property ends with the original tenants life. As long as it lasts, its holder may use the property, collecting all the rents and profits generated from it. He may use the property as its owner would, except that he must not destroy the value of successive future interest. Life Estate Pur autre vie: If A transfers her life estate to B, Bs interest is called a life estate pur autre vie Bs ownership ends not on Bs death, but on As death. A life estate measured by the life of another person (A). Bs life estate pur autre vie is alienable just as As life estate was alienable. Since B may die before A, Bs life estate pur autre vie is devisable and descendible, but the interest in the estate terminates upon As death. Owner transfers property, to A for the life of B 9.3.1.1 Fee simple absolute: I. Fee simple absolute: property ownership without an associated future interest a. An owner of a fee simple interest in real property has the present right to possess and use the property, the right to sell it or give it away, and the right to devise it by will or leave it to her heirs b. b/c no one owns future interest in the property, no other individual has any presently identifiable legal right to obtain ownership of the property in the future c. A conveyance (transfer of an interest in real property) of a fee simple interest can be accomplished by the following language i. ' O to A': the presumption is these would be words of purchase, language that identifies the owner ii. ' O to A and her heirs' 1. It indicates a fee simple interest in A 2. The words "and her heirs" do not give A's heirs any interest in the property a. Though if 'A' dies they may inherit the property , or 'A' may choose to leave it to them in her will 3. "A" is referred to as words of purchase "and her heirs" is referred to as words of limitations words that convey what type of estate is being conveyed 45

iii.

'O to A in fee simple' 1. FSA: No one has any future interest in this property. Owner in FSA can do whatever she wants with property-- sell, gift,

9.3.1.2 Defeasible Fees: I. Defeasible fees: present interest that terminate at the happening of a specific event other than death of the current owner a. Two crucial distinctions in the categories of defeasible fees: i. Whether the future interest is in the grantor or in a third party, AND ii. Whether the future interest becomes possessory automatically when the stated even occurs or becomes possessory only if the future interest holders chooses to assert his property rights Automatic transfer to grantor a. When the future interest reverts automatically to the grantor on the happening of the stated event, the present interest is a fee simple determinable and the future interest is called a possibility of reverter b. Any language denoting that the ownership is limited to a time period during which certain conditions are met will generally be interpreted as evidence of the grantors intent to cut off ownership rights automatically when the condition is violated or met. Transfer upon grantors assertion of property rights: a. Instead of providing for automatic transfer of property rights upon violation of the condition, the grantor may choose to retain for herself or her heirs the right to decide, at the time the condition is violated, whether to retake the property b. If the future interest owner chooses to assert her rights when condition is violated or stated event occurs, the property ownership shifts to her; if she does not assert her rights, ownership stays with the current owner i. Current interest is called fee simple subject to a condition subsequent ii. Future interest is called right of entry (sometimes referred to as a power of termination) c. Possibilities of reverter and rights of entry were traditionally not transferable, but now the majority if states hold that future interests are alienable as devisable and inheritable d. Traditionally Major differences between possibilities of reverter and rights of entry involve statute of limitations for adverse possession i. When a condition in fee simple determinable is violated or occurs, the possibility of reverter kicks in automatically, giving the holder an immediate right of possession 1. The statute of limitations starts running immediately, and if the holder of the possibility of reverter does nothing for statutory period, title will shift back to the current possessor 2. A right of entry does not become possessory until the holder asserts right of possession; if the holder of right of entry never asserts right, the title will remain with the present owner estate e. Modern approach: is to treat two types of future interest the same under one of the two theories i. First, the court may apply the doctrine of laches to prevent the holder of a right of entry from waiting too long to assert her right of entry; 1. laches prevents recovery when an unreasonable delay in asserting legal rights unfairly prejudices another ii. Second: as a policy matter, it seems inappropriate for the one who violates a condition to face the perpetual possibility of a claim by the current holder of right of entry

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1. For this reason, the modern but not universally accepted approach has been to start the running of the statute at the moment the condition is violated, making rights of entry effectively similar if not identical to the possibilities of reverter Transfer to a third party: a. When the future interest in a defeasible fee belongs to someone other than the grantor, the present interest is called a fee simple subject to executory limitation, and future interest is called an executory interest automatic b. These interest are identical to the fee simple determinable, with ownership shifting automatically on the occurrence of the contingent event, except that ownership shifts to a third party rather than reverting to grantor

9.3.2 Life Estates I. Present interest: called life estate a. Future interest: in grantor reversion, no one else is named presume its in grantor b. In third party: Remainder --> follow life estates i. Can have multiple remainders

9.3.2.1 reversions and remainders I. Life estate: a conveyance from O to A for life creates a life estate interest in A --> meaning that A owns the property during his lifetime a. Current Interest- Life estate b. The future interest -following a life estate can be either in the grantor or in a third party i. If property reverts to grantor it is called reversion--> "O to A for life" ii. The future interest in third party if called remainder --> "O to A for life, then to B"

9.3.2.2 Contingent and vested remainders II. Contingent Remainders: remainders are contingent if one or both of the two conditions are met a. contingent remainder- condition precedent i. Remainder will take effect only upon the happening of an even that is not certain to happen b. Contingent remainder- nonascertained person i. Remainder will do to a person who cannot be ascertained(known) at the time of the initial conveyance. Vested Remainders: include any remainders that are not contingent a. Remainders to persons who are identifiable at the time of the initial conveyance and for

III.

whom there are no conditions precedent other than when life estate owner dies. Vested Remainders are of three kinds: 1. vested remainder absolute (not subject to change) a. O to A for Life, then B b. (we know A will dies, and we Know B so theres no contigngency) 2. vested remainder subject to open (Remainder that will be divided among people who have yet to be born.) a. O to A for life, Then to Bs children. (B has kids at time of grant)(ascertained)
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MAJ: Close the class at termination of life estate (MIN: Members of class born after termination of life estate share in the estate) 3. vested remainder subject to divestment Remainder vested but can be lost upon happening of event e.g O to A for life, then to B, but if B has flunks out of law school, the property shall revert to C 4. If vested remainder holder dies before life estate terminates, his heirs inherit his interest.
9.3.2.3 Destructibility of contingent Remainders: I. The traditional rule (Minority): provided that contingent remainders were "destroyed" in two circumstances a. First, contingent remainders were destroyed if they did not vest before the preceding life ended b. Second, cont. remainders were destroyed by "merger" -->meaning prior estate (the reversion in the original grantor) had terminated by merger with contingent remainders before those contingent remainders became vested, they were destroyed c. The traditional rule effectively limited the grantors ability to create contingent remainders that vest far in the future, destroying many future interest that could have vested after the death of the current life estate holder----> therefor resulting in the freeing of land form archaic restrictions The modern rule (Majority)holds contingent remainder are indestructible a. The rule providing for destruction of contingent remainders never applied to equitable estates, thus a contingent remainder in a trust would never have been destroyed by the termination of proceeding estates b. if condition does not occur by end of the life estate, the property reverts as fee simple subject to executory limitation, if condition then occurs, it springs directly from the reversion holder to the contingent remainder holder. i. Contingent remainders likely to vest too far into the future are today regulated by the rule against perpetuities

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9.3.2.4 Doctrine of Worthier Title I. Cannot create a remainder in a life estate grantors heirs a. O to A for life, remainder to Os heirs interpreted as O to A for life, reversion in O b. Medieval inheritance tax-avoidance scheme c. Many states treat this as a rule of construction that can be overcome with specific language d. Many states have abolished the doctrine by statute

9.3.2.5 Rule in Shelleys Case I. Cannot create a remainder in a life estate holders heirs a. O to A for life, remainder in As heirs interpreted as O to A in fee simple absolute b. MAJ: have abolished the rule if actually wanted to give heirs rights must make it clear that you must do so c. f you see A to life and her heirs assume fee simple unless explicitly states left to hiers. 48

9.3.3 Fee Tail I. Estate whose purpose is to keep property in a family dynasty with a reversion or remainder to take effect when the blood line runs out. (pride and prejudice Mr. bennet has all daughters and no sons, kicked out of the house by the cousin) a. O to A and the heirs of As body b. Some states treat fee tail as fee simple absolute, allow fee tail owners to convert it to fee simple absolute by transferring it, or treat it as a life estate in present owner with remainder in fee simple to her issue.

9.4 Interpreting ambiguous conveyances 9.4.1 Presumption Against Forfeitures and the Grantors Intent Wood v. Board of County Commissioners of Fremont County- when there is ambiguity, avoid forfeiture, default rule is fee simple absolute. Cts will only construe fee simple determinable/ fee simple subject to condition subsequent if conditions are explicitly stated in the deed. A. County does not have to return land because its not being used as a hospital anymore: Conveyance does not clearly state intent to retain discretionary power to reenter the land if the land ceased to be used for the stated purpose (a memorial hospital). Does not convey a fee simple subject to a condition subsequent. B. presumption is that no future interests are created C. part of this also goes to presumption against forfeitures: presumption of no conditions unless specified makes it so there was no forfeiture by transfer of hospital to different location D. *justified by public policy, alienability, and the right of the grantee E. Cts could also have interpreted as a constructive trust: grantor (Wood) meant to set up a charitable transfer, but did so incorrectly. II. Cathedral of the Incarnation in the Diocese of Long Island v. Garden City- when there is ambiguity, look at the grantors intent and try to execute it. A. (in this case, deed created a right of reentry if land stopped being used by church, but this right was not reassignable. Thus, assume that intent was for Church to be able to sell if wasnt going to be returned to original grantor). B. *justified by freedom of contracts. 9.4.1.2 Fee Simple versus Life Estate I. Edwards v. Bradley- no restraint on alienation with fee simple absolute. Cts should construe deeds to uphold grantors intent. A. Jones wants to be able to exclude Bradley from will because she is bitter. But Lilliston will said O to A upon the condition it not be sold or encumbered, then to A, B, C. Ct. interprets will as life estate rather than fee simple subject to condition subsequent to make it so that Jones couldnt stop Bradley from getting what Lilliston will intended for her.Viva left land to daughter, conditional that if she attempted to sell or use for creditors, interest would cease and would pass to children in equal shares in fee simple. Upon death, daughter directed land to be sold and divided, but (daughter) protested, trial court found life estate = no fee simple interest to daughter. B. Issue: whether life estate or fee simple transfer to daughter Decision: affirmed, life estate. C. Rules/Analysis: Intent of grantor - NOT to allow land to go to daughters debt NOT fee simple 1. NO use of fee simple in that section, when lawyer had used many other times specifically. 2. Conditional limitations on life estate is ok. 49 I.

Notes and Questions A. Estates- The courts could have created a system where property owners could create future interests however they pleased, but they did not. 1. Courts wanted to protect the rights of current property rights of current owners to use/ transfer property and to promote social interest in efficient land use 2. Balances the rights of grantors and grantees 3. Rule against creation of new estates- court must fit a future interest into an established category- not just try to infer the interest that the grantor intended to create B. Interpretations and the presumption against forfeitures- 2 schools of thought 1. Effectuate the grantors intent 2. If ambiguous, avoid recognition of a future interest 1. So as to prevent the loss of property by the current owner C. Policies behind the presumptions against forfeitures 1. Gives current landowners the right to possess and use their property to its full economic potential as economic conditions and social values change 2. Lets property users shift to more valuable or desired uses D. Purpose Language- When conveyance includes language explaining the purpose of the transfer, like in Wood, the vast majority of courts agree that the language is precatory- not intended to have any legal significance 1. Follows the presumption against forfeitures furthering grantees rights 2. The courts are not, however, unanimous on this issue- it is possible to find a future interest in the absence of clear language creating one 3. Some courts are eager to find a future interest when the property is donated to charitable purposes 1. In the absence of a future interest, the owner is entitled to shift the property to a non-charitable use- this goes against the intent of the grantor and against the public interest 2. These courts would apply the presumption against forfeitures to only noncharitable property E. Restraints on alienation 1. clause used in the conveyance of real property that seeks to prohibit the recipient from selling or otherwise transferring his interest in the property a. would be valid if attached to a life estate, but void if attached to a fee simple b. courts can rule in favor of calling it a life estate or a fee simple F. Changed conditions 1. The changed conditions doctrine denying enforcement of covenants when circumstances are so drastically changed that they are no longer of benefit to the dominant estate has traditionally not applied to future interests a. Some states have statutes that remove future interests from charitable properties i. Should the court grant relief from such restrictions in the absence of a statute? 9.4.2 Trusts and the Cy Pres Doctrine 625-626 a. If property is created for the benefit of someone else and circumstances change, can go to ct and get the trust instructions changed. b. Cy Pres: when specific charitable purpose becomes impossible to achieve, trust may be used to benefit another charity, provided intent was general charitable purpose. c. Eg. changing of trust from protestant boy to any student. 50

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d. Alternative: substitute private trustees, allowing discrimination according to grantors intent. e. -cts want to get rid of encumbrances and restraints on alienation- BUT with charities the presumption is to authorize restrictions on alienation (want to make sure charities use land for charity work). 9.5 Regulatory Rules Future Interests are regulated by both common law rules and statues Main Structural Rules: 1. The rule prohibiting the creation of new estates 2. The rule against unreasonable restraint on alienation 3. The rule against perpetuities 4. The interpretive rule prohibiting waste of the present estate 5. The prohibition on invalid racial conditions 6. The rule against unreasonable restraints 9.5.1 Rule Against Creation of New Estates (The Numerous Clause Doctrine) I. II. A conveyance that does not fit within any of the established categories must be interpreted to create the most closely analogous estate Rule has both formal and substantive dimensions A. Formally, it means that grantors must put their conveyances in a recognizable from if they want courts to recognize the package of rights they intended to create B. Substantively, it means that certain packages of rights will not be recognized 1. This limits the number of packages of ownership bundles that can be created, facilitating exchange both by making it easier to determine what one is buy and by ensuring that owners have certain basic rights when they acquire those bundles . C. Abolition of the fee tail D. The rule against creation of new estates helps consolidate property rights, either immediately or over time, in a single owner. Johnson v. WhitonA. cts will fit in one of the established categories of estates. (ct. decides this one is most like fee simple) B. pg 627 I. II.

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9.5.3 Rule Against Perpetuities The rule against perpetuities invalidates future interests that may vest too far into the future. Frutre interests are invalid unless they are certain to vest or fail to vest within the lifetime of someone who is a live in being at the creation of the interest or no later than 21 years after her death. I. Rule Against Perpetuities: 3 step analysis Step 1: Identify the future interest a. RAP applies to(3): i. Executory Interests ii. Contingent remainders iii. Vested remainders subject to open 1. -If future interest in grantor (e.g. Possibility of Reverter, Right of Entry, Reversion), state statute may require interest to vest within 30 years of creation Apply RAP a. Future interest is VOID if there is any possibility that the future interest will vest more than 21 years after the death of all lives In being at the time of conveyance 51

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i. Substep- identify all of the lives in being at the time of creation of interest to determine the validating life ii. Substep- Determine when interest vests (or not) iii. Substep- Will it be more than 21 years after death of life in being? 1. Answer will look like this- Here the future interest is void because or Here the future interest is valid because If the future interest violates RAP, strike the offending language or check to see if possible to save by applying Cy Pres a. When striking offensive language, strike until valid conveyance remains i. Thus, if multiple future interests, may need to strike more than one b. Be familiar with how results differ under cy pres, wait and see, and Uniform Statutory Rule Against perpetuities

9.5.4 Waste I. Doctrine of Waste a. You're allowed to reasonably exploit your interest(s) as long as it doesn't unreasonably impair the other party(ies) interest(s) b. Applies to any split estate i. Landlord tenant ii. Life estate and remainder iii. Trustee beneficiaries iv. Co-tenancies c. Default doctrine i. The parties can expressly state obligations on the estate owners and those would control ii. Kicks in if the conveyance is silent; if parties are silent on the conveyance and imposes obligations by default 3 types a. Affirmative (voluntary or permissive) i. Some deliberate, affirmative destructive action that the possessory estate holder takes that unreasonably diminished the market value of the property ii. Acting intentionally to damage land iii. Typically to benefit the life tenant iv. Over exploiting the land v. Life tenant's gaining economically at the extend of the remainder holder (with the exception of vandalism) b. Permissive waste i. Neglect or failure to maintain property reasonably ii. Letting it deteriorate iii. Turns on what a reasonable owner would do to maintain the property iv. Similar to affirmative because the remainder holder's economic interest has been impaired; we tend not to think it's to the benefit to the life tenant though, even though they are benefitting by not paying for repairs v. Could argue that life tenant failed to make reasonable improvements if that's what a reasonable owner would have done vi. Differences between: 1. Intent to act on the property c. Ameliorative waste i. Value of the property is enhanced but the remainder person didn't want that action taken 52

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ii. Sometimes condoned by the courts but not always iii. Allows life tenant to fundamentally alter property so remainder holder is getting something that's completely different (instead of house he's getting pathway to brewery) - court said that's ok if the character of the surrounding area changes and leaves the property valueless as it is then we'll condone it iv. Best interest of the parties test v. Applies to sales of the property as well 1. If sale is the best way to get the value out of the property because the previous use of the property is now deteriorating the value of the property vi. Just because it benefits both parties, it's not always the case that if it's economic benefit, but remainder holder must object for it to be ameliorative waste The cost of the action to remainder holder is important in determining if there has been an issue with waste on the part of the life tenant a. More economic loss = less reasonable Remedies a. Injunction to stop the act or induce care b. Suing for damages Always the possibility to establish a trust (as opposed to life estate) a. Typically we dont like life estates because it affects alienability, but with trust you have neutral 3rd party (trustee) to make decisions to benefit the trust

9.5.5 Racial conditions I. II. III. Courts seemed all over the place on this issue whether they violate the 14th amendment or not If the reversion is automatic, the courts going to say there's no state action, generally Hermitage a. We're depriving the school of income from the trust b. The court will split hairs; arguments that courts can be wrong c. For those type of interests that require some action by the court, the court will typically find state action (e.g. right of entry) or if the court is being asked to divest someone of property i. Look at the grantor's intent to see whether the trust can be saved under cy pres; was there a general intent or a specific intent 1. General intent: then we can save the trust 2. Specific intent: typically, cy pres won't save the trust Arguments a. No right answer in terms of property doctrine but arguments can be madeco

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9.5.6 Rule Against Unreasonable Restraints on Marriage I. Lewis v. Searlers a. Will stated to nicee all of my real and personal property of which I may die seized and possessed, so long as she remains single and unmarried. In the event that she does marry he desires property to be divided equally between my nieces and nephews b. Whether this is an unreasonable restraint on marriage? c. Held: No i. This was not a provision that constitutes as a penalty of marriage, but rather instead of initially dividing the property evenly the will aim to insure that the single woman be taken care of financially until marriage 1. Old school treatment of marriage that a woman will be financially cared for by her husband- no suga momma for you 53

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Restraints on marriage a. R2d of Property 6.1 provides that restrictions in donative transfers of property designed to prevent acquisition or retention of an interest in property by the transferee in the event of any first marriage of the transferee is invalid unless the dominate notice of the transfer is to provide support until marriage (Lewis v Searlers). b. Allows restrictions on i. some, but not all, first marriagges of the transferee is vailid if, and only if. Under the circumstances, the restraint does not unreasonably limit the transferees opportunity to marry. c. 6.2 i. Restraints on remarriage are enforceable only if they apply to the donors former spouse and restraint is reasonable under all circumstances Gender Roles a. Argued that cases involving women as parties often implicate tacit assumptions about gender roles. b. How should courst thing about restraints on marriage if one goal is to promote gender equality Encouragement of diviorce a. Provisions in gifts of property encouraging separation or divorce are widely viewed with disfavor and generally held to violate public policy b. Exception i. If the dominant motive of the transferor is to provide support in the event of separation or divorce, then such restraints would be valid Restraints on Religion a. an otherwise effective provisions in a donative transfer which is designed to prevent the acquisition or retention of property on account of adherence to or rejection of certain religious beliefs or practice on the part of the transferee is valid. i. Shall receive his share of the bequest only if he is married at the time of my death to a jewish girl whose both parents were jewish 1. Did not infringe on sons right to marry freely but upon his right to inherit the property ii. R3d of trusts takes opposite position

CHAPTER 10 COMMON OWNERSHIP AND FAMILY PROPERTY


10.1 Varieties of Common Ownership I. Property rights may be divided among several, or even many, persons, with specific sticks in the bundle of rights that make up the property allocated to different persons or groups a. Rights can be shared as well as divided Focus on two main forms of common ownership a. Co-ownership i. Tenancy in common ii. Joint tenancy iii. Tenacy by entirety b. Family property

II.

54

10.2.1 Rights and Obligations of Co-owners I. Tenancy in Common a. Each tenant in common, no matter how small her fractional interest, has the right to possess the entire parcel unless all the cotenants agree otherwise by contracts i. Referred to as an UNDIVIDED INTEREST ii. The fractional amount is important only for such questions as how the purchase price will be divided when the property is sold. iii. In many situations co-tenants will choose to possess the property together b. When a tenant in common dies his interest goes to his devisees under his will or his heirs under the state intestacy stature if he has not left a will or otherwise disposed of the property c. Tenancy in common may be transferred by the following language : i. O conveys Blackacre to A and B as tenants in common ii. O conveys Blackacre to A, B, and C as tenants in common, with a undivided interest in A, and undivided interest in B and a undivided interest in C Joint Tenancy a. Right of Survivorship i. The main difference between joint tenancy and tenancy in common ii. When a joint tenant dies, her property interest is immediately transferred to the remaining joint tenants in equal shares. 1. Joint tenants have no right to devise their interest upon death b. Formalities of Creation i. Certain formalities were traditionally required to create a joint tenancy 1. Often referred to as the unity of time, tile , interest, and possession ii. This means that 1. The interest of each joint tenant must be created at the same moment in time 2. All joint tenants must acquire title by the same instrument or title 3. All joint tenants must possess equal fractional undivided interests in the property and their interests must last for the same amount of time 4. All joint tenants must have the right to possess the entire parcel. iii. Some states have passed statues to abolish one or more of these formalities c. Severance i. A joint tenant who transfers her property interest can destroy the right of survivorship of her fellow owners ii. If A sells her interest to C the joint tenancy is severed, and Bs right of survivorship is destroyed 1. The result is that B and C will own the property as tenants in common iii. A joint tenant who wishes to destroy the right of survivorship while retaining her life interests can convey her interest to another who conveys it back. iv. Severance occurs only between the selling owners and the remaining owners; owners; it does not change the relations of the remaining owners among themselves. v. O conveys Blackacre to A and B as joint tenants vi. Joint tenancy versus dual life estates with alternative contingent remanders 1. It is possibel to create and indestuctible right of survivorship if one uses the form of life estates and remanders a. O to A and B as life tenants, with a remainder in A if A survives B, and a remainder in B if B survives A. Interpretation problems and presumptions a. The current practice is to interpret ambiguous conveyances as a tenancy in common. i. Imposed by both statute and common law b. This presumption has influenced the drafting practice in most states. 55

II.

III.

IV.

V.

VI.

VII. VIII.

Transferability of co-tenancy interests a. Joint tenants and tenants in common are free to transfer their interests without the consent of their co-owners i. Remember if a joint tenant transfers interest right of survivorship is destroyed Partition a. Joint tenants or tenants in common have the power to file a law suit for judicial particion of commonly held property. i. Court may order the property to be physically divided among the co-owners ii. If that is not feasible or appropriate court will order the property to be sold and the proceeds to be divided up in proportion of ownership shares b. Voluntary partition where co-owners agree to partition, either physical or by sale, without the courts involvement c. Grantors sometimes attempt to prevent partition by including restrictions in a deed or will i. Courts are likely to uphold them is they are reasonably limited in time and have a reasonable purpose Fiduciary obligations of co-tenants or joint tenants to share benefits and burdens of ownership a. Concurrent owners are legally obligated to share benefits and burdens of ownership. b. Sharing the benefits of ownership i. tenant in possession has not duty to pay rent to the non-possessing tenant unless they have ousted them. (Ousting-wrongfully excludes others from jointly owned property). There is a duty to pay rent if the property is too small to be physically occupied by all the co-owners (constructive ouster). Co-owners have a right to hare any rents paid by third parties who are possessing the property based on fractional interest in the property. c. Sharing the burdens of ownership: i. co-owners have duty to share basic expenses needed to keep the property (mortgage, insurance). Co-owners have NO duty to share costs of major improvements unless they agree to do so. When co-owner notifies other co-owners of necessary repairs, he can recover respective shares of expenses. d. Accounting: i. requiring co-owners to pay their portion of maintenance expenses of hand over requisite portion of rents earned from 3rd parties Trespass a. Each co-tenant is entitled to invite others onto premises even if co-owners object. Adverse Possession and Ouster a. Co-tenant cannot obtain Adverse Possession against another unless the possessing tenant makes clear to the non-possessory tenant that he is asserting full ownership rights in the property to the exclusion of the other co-tenants. b. Non-possessory tenant must be put on notice that co-owner is claiming adversely the nonpossessory tenant's interest. c. Acts of ousting must be sufficient (changing locks and refusing to give key) d. Statute of limitations does not start until an unlawful act such as trespass. No unlawful or tortious act occurs when co-owner possesses the whole property because the co-owner's property interest have not been infringed.

10.2.2 Tenancy by the Entirety I. II. Joint Tenancy only available to married couples and abolished by majority of states. Similar to Joint Tenancy, except: a. Co-owners must be legally married b. The property cannot be partitioned except through a divorce proceeding 56

c. Majority of States: interests of each spouse cannot be sold, transferred, or encumbered by


mortgage without consent of other spouse, with the result that the right of survivorship cannot be destroyed by transfer of the interest of one party, d. Majority of States: creditors cannot attach property held through tenancy by the entirety to satisfy debts of one of the spouses. States prefer to interpret conveyances and ambiguous conveyances to a married couple as intended to create a tenancy by the entirety Arguments against these arrangements are that they discriminate on the basis of sex because management powers over the property were traditionally given to the husband.

III. IV.

10.3 Conflicts over Rent and Possession Olivas v. Olivas a. when a spouse departs a residence held as community property due to marital friction, a constructive ouster is effected. i. Common Law precedent support the proposition that the remaining spouse should pay rent to the co-tenant when both cannot be expected to live together on the property. b. When the spouse abandons the property so that he can live with girlfriend, there is no ousting and he cannot collect rents. i. He was being pulled away not pushed 10.4 Conflicts over Transfers by One Co-Owner I. Basic Rules of Co-Tenancy provide that Co-Owners have the right to possess the entire property, the right to transfer their individual fractional interests, the right to share rents earned by the property in proportion to their ownership interest, and the duty to share maintenance and upkeep expenses. II. What happens when Co-Owners cannot agree who will possess and how property should be used? a. Resort to legal procedures of requesting accounting and ultimately partition. b. Should there be a remedy short of partition to deal with conflicts about possession? (addressed in following cases) 10.4.1 Tenancy in Common and Joint Tenancy 10.4.1.1 Family Conflicts over Use of Common Property I. Carr v. Deking: a. Father and son tenants in common, father leases interest to defendant without discussing it with his son. Son never consented to nor ratified this lease and never authorized his father to act as his agent? i. Can one party of a contenant lease his interests without the consent of the other tenants in common? 1. Yes b. A cotenant may lawfully lease his own interest in the common property to another without the consent of the other tenant and without his joining the lease. 10.4.1.2 Death II. Tenhet v. Boswell: a. A lease entered into by a joint tenant does not sever the joint tenancy. b. A lease entered into by a joint tenant expired upon the death of that tenant. i. During the duration of the active lease the leasee and other joint tenant are tenants in common? 10.4.1.3 Divorce I. Kresha v. Kresha: a. Husband and wife where tenants in common, before divorce father leased to the son without the mothers knowledge. The diviorce awarded the property to the mother. She wrote her I.

son terminating the lease, Can she?


57

II.

b. Pursuant to a divorce proceeding where one party is awarded the entire ownership of certain lands, those lands are taken subject to leasehold interests in the ex-spouse's former ownership interest. Notes pg 680 all questions

10.5.1 Historical Background 10.5.1.1 Coverture, Dower, and Curtsey I. Common law of England a. Single woman enjoyed same property rights as men b. Once married, husband retained sole power to possess and control the profits of all land owned by himself and his wife i. Coverture:: status of wife in this arrangement ii. Husband and wife treated as one person; the husband 1. Power to convey his wife's property without her consent and to control all profits of the land 2. Needed husband's consent to sell her land II. Equity courts of England: created ways married women could exercise property rights during marriage a. Antenuptial agreements i. Husbands voluntarily gave control over property to their wives b. Trust could be created for the benefit of the wife, and she could enforce the trust without husband's consent i. Fathers made a trust for their daughters to prevent property from passing to their sonin-law III. Common law gave surviving spouse a life estate in land owned by deceased spouse a. Wife's dower interest: life estate in 1/3 of lands which husband acquired during the marriage; could be inherited by children i. Dower interest couldn't be sold by her husband without her consent, nor be used to satisfy his debts b. Husband's curtsey interest: life estate in all land owned by wife during their marriage i. Only applicable if the couple had a child capable of inheriting the property c. Dower and curtesy remain only in a few states, and where they exist, they are equalized 10.5.1.2 Married Women's Property Acts I. Married Women's Property Acts: passed in all common law states a. Pros i. Abolished coverture and removed economic disabilities on married women ii. Married women had same rights as single women and married men iii. Wife's earnings are her separate property and can't be controlled by her husband b. Cons i. Failed to grant women who worked inside the home for no wages any rights in marital property 1. Had a duty to work inside the home ii. Those who were able to earn wages inside the home weren't allowed to control their earnings c. Still a lot of gender inequality in access to property 10.5.2 Community Property and Separate Property Two basic systems governing marital property rights in the US: Separate property system (majority) and community property system (minority)

58

I.

II.

III.

10.5.2.1 Separate Property System During Marriage a. Spouses own their property separately: includes property owned before the marriage, and property acquired during marriage. They're responsible for their own debts i. Creditors can't go after a spouse's property ii. Spouses may choose to informally share property (costs of household, joint bank account, etc.) b. Not absolute: spouses have a legal duty to support each other, which may require a sharing of property i. May be forced by a court order for maintenance, but very rare On divorce a. Statutes provide for the equitable distribution of property owned by each of the parties on divorce i. Distribution subject to a wide range of factors ii. Gives the trial judge discretion in determining how the property should be shared or shifted between parties 1. Have to consider the standards to be used in dividing property, weight of different factors, and determination of intangible resources that are considered 'property' b. Provision for alimony: periodic payments from one spouse to the other i. Not that common, and if awarded, usually temporary ii. Most states aim at financial independence for both parties On death a. While a spouse can dispose of her property by will, separate property states can limit her ability to determine who gets her property on death i. Statutory forced share: allows the surviving spouse to override the will and receive a stated portion (usually 1/3-1/2) of the estate 1. Protects the interest in the survivor of defining an indefeasible right to receive a portion of the testator's estate b. When there's no will, some states give it all to the surviving spouse, others split it between the spouse and children 10.5.2.2 Community Property System During Marriage a. Spouses own their property separately: property acquired before and after marriage i. All other property acquired during the marriage is equally owned b. Like a partnership: most states grant spouses equal rights to manage community property i. Both have a duty to manage the property in good faith ii. Both have to agree to convey interests and assets c. On divorce i. Most community property states adopt the equitable distribution principle 1. Issues of how to characterize specific items of property as specific or community On death a. A spouse may dispose of her separate property and one half of the community property by will b. No statutory forced share statutes i. Spouse has vested interest in one half of the community property 10.5.2.3 Premarital Agreements Premarital agreements are generally held to be enforceable, whether or not they are reasonable, and most states require that they be entered into voluntarily a. Different states have different guidelines to determine if an agreement is enforceable 59

I.

II.

I.

II.

Uniform Premarital Agreement Act (UPAA): adopted in about half the states a. Premarital agreements not enforceable if: i. Parties didn't execute the agreement voluntarily ii. Agreement is unconscionable 1. Party not provided a fair and reasonable disclosure of property or financial obligations of the other party 2. Did not voluntarily waive the right to disclosure in writing 3. Did not have an adequate knowledge of the other's financial assets

10.5.2.4 Homestead Acts I. Almost all states have homestead acts to protect the surviving spouse and children from the claims of creditors of the deceased spouse a. Generally allow the spouse to live in the family home for her life 10.5.3 Divorce: Equitable Distribution of Property I. Most states, whether they provide for separate property or community property, try to equitably distribute the property accumulated during the marriage a. There are big earning disparities between men and women i. Women undertake the bulk of the responsibility of raising children ii. It's unpaid, and interferes with a women's ability to work full time b. Women suffer disproportionately from divorce i. Men's standard of living increases, women's decreases c. "A marriage is, among other things, an economic partnership to which both parties contribute as spouse, parent, wage earner, or homemaker" -Obrien v. Obrien II. Montana Equitable Distribution Statute a. Equitable distribution of property i. Takes into account different factors, including the nonmonetary contribution of a spouse as a homemaker, the extent to which such contributions facilitated the maintenance of the property, whether the property division serves as an alternative to maintenance arrangements b. May also set aside a portion of the estates in a separate fund or trust for the children III. In Re Marriage of King a. Facts: Pamela King, P, and Jack King, D, divorced and the court awarded the family resident to P. D, a professional gambler, wants to sell the home and divide the assets. b. Rule: The court may consider the best interest of the child and set aside a portion of the marital property in lieu of child support. c. Reasoning: The father wants to sell the home and divide the assets, but that is not in the best interest of the children. The children would be uprooted from their home, the fees and taxes that would have to be paid could not be used to support the children, and the father does not have a stable job where he could ensure he would be capable of supporting his children. It is equitable to grant the wife a proportionally larger share of the marital property to offset her increased obligation of raising her children if the husband is not financially capable of contributing for the child's support. The only reasonable means to protect and promote the interests of the children is to award the home to Pamela. IV. Obrien v. Obrien a. Facts: While parties were married, the husband, P, attended medical school full time. The wife, D, gave up a pursuit of a teaching certificate, and worked and contributed most of the funds to maintain the household and P's education. Not long after P obtained his license, he filed for divorce. b. Rule: A professional license may constitute marital property because it is a thing of value that was acquired out of the marital relationship, from contributions from both parties. 60

c. Reasoning: Both parties contributed to the living and educational expense. Not only did D contribute the majority of the couple's income, she also performed household chores and managed the family finances. i. The Equitable Distribution Law says that spouses have an equitable claim to things of value acquired out of the marital relationship, and that they are subject to distribution, even if the 'thing of value' may not fall within the traditional concept of property. ii. Equitable distribution is based on the premise that a marriage is an economic partnership to which both parties contribute. iii. claims a professional license isn't marital property because it doesn't have an exchange value on the open market and is not alienable. d. Concurring Opinion: Have to make it possible for the courts to revise the distributive award in case the career choice ends up not happening. 10.6 Unmarried Partners Three Main Approaches i. Status Approach ii. Contract Approach iii. Partnership Approach

I.

Theory of recovery under unjust enrichment (constructive trust a. Watts v Watts i. P argues the D accepted and retained benefit of services she provided knowing that she expected to share equally in the wealth accumulated during their relationship (implied in fact contract). And it would be unfair for D to retain the assests accumulated under these circumstances, and the constructive trust should be imposed on the property as a result of the D unjust enrichment ii. Unjust enrichment elements 1. A benefit confer on the D by P 2. Appreciation or knowledge by the D of the benefit 3. Acceptance or retention of the benefit by the D under circumstances making it inequitable for the D to retain such benefit III. Three arguments a. Implied contract i. One against public policy ii. For adequate consideration b. Unjust enrichment i. Unfair to leave one party with all the assests acquired through efforts of both ii. Equitable principles impose a constructive trust on the property to avoid unjust enrichment of a part who violates his fiduciary duty and acquires that property expense of the person to whome the owned the duy iii. Partition iv. Partnership, intended to share everything equally v. License CHAPTER 11: LEASEHOLDS/TENANCIES
Chapter 11 Leaseholds/Tenancies Leaseholds/Tenancy: landlord-tenant relationship that divides the property interests between them. Landlord transfers possession of property for specified period to tenant in return for a promise of rental payments. When the tenancy is over, possession reverts to landlord unless she has sold her interest to someone else. (need court proceeding to evict) Residential Tenancies: rental property for the purpose of establishing a home. Commercial Tenancies: nonresidential use, including operation of a business for profit or operation of a nonprofit institution such as a church or hospital. MORE SOPHISTICATED.

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Majority of rules are the same for both types of tenancies. Court will analyze the 2 situations differently because the underlying policy considerations (bargaining power- residential) and the justified expectations of the parties may differ.

Categories of Tenancies 1. Term of years: any specific period of time. Ends: term of years ends automatically at agreed-upon time or it may be terminated before the end of fixed period upon happening of some event or condition stated in the lease (failure to pay rent, open meth lab) Future Interest: retained by landlord is reversion, if shifts to 3rd party instead its a remainder Death of either party does not terminate tenancy (heirs can have lease) Eviction: allowed only when tenant is breaching material term of the lease (example: covenant to pay) SOF: requires writing if term is over 1 year 2. Periodic tenancy: Renews automatically each month, unless either party notifies (1 month) that he intends to end Many have no written leases or specified end but pay monthly (month- to-month tenancies) Death of either party does not terminate tenancy. Heirs may choose to end tenancy, unless statute or common law rule prevents this. Eviction: landlord can evict only by providing the requisite notice that tenancy will not be renewed SOF: requires writing if period if it is more than one year, if month-to-month no writing required 3. Tenancy at will:(pretty much abolished) Similar to periodic tenancy except: Can be ended with no notice by either party at any time. No Defenses allowed. Oral tenancies at will are valid Death: traditionally terminates tenancy at will. When a state requires a notice of 1 month before termination, the tenancy at will cannot be distinguished from a monthto-month periodic tenancy When a statute requires notice of different periods, the distinction of tenancy at will and periodic tenancy is significant. o Tenancy at will: may have absolute right to evict since tenancy is at end (must give notice) defenses not available. o Periodic Tenancy: may not be able to terminate the tenancy if tenant has a defense to eviction (ex-violation of the implied warranty of habitability) Problems with Tenancy at Will: dealing with homes, most states have abolished because we dont want people being told to leave their homes without notice. 4. Tenancy at sufferance (holdover tenant): tenant rightfully in possession who wrongfully stays after leasehold has terminated 1 step above trespassers Distinguished from trespasser who never had a right to possess the property (lawful for owner to physically eject trespasser, self-help) Eviction proceeding and court judgment are generally required to evict tenant, and tenant at sufferance Landlord who accepts rent check from a holdover tenant may be held to have agreed to a new tenancy calculated by the rental payment schedule (Month to month checks creating a month-to-month tenancy) Public Policy: dont want to kick people out of their homes without notice If you collect the money you create new tenancy, or you can refuse to accept and sue, or you can deposit the check and write that you are not agreeing to renew the tenancy and that the money is just for the current possession of the property (your afraid they wont pay if you dont deposit it now) Statute of Frauds (SOF) Majority: require leases > 1 year be in writing, leases 1 year are enforceable whether they are written or oral Oral Periodic Tenancies: enforceable under SOF when period 1 year (month-to-month enforceable because relevant period is 1 month, even when they can last > a year in total) Regulation of Landlord-Tenant (L-T) Relationships Majority: L-T relationships heavily regulated by both common law and state and federal statutes Uniform Residential Landlord and Tenant Act: Procedural regulations impose formal requirements for: o Procedures that must be followed o Creating the L-T relationship: some require writing for leases > 1 yr o Termination of the L-T relationship: ordinarily require notice and an eviction proceeding (summary process) Trespassers dont get any summary process, self-help is okay. Substantive Regulations define parties' obligations to each other o Administrative Agencies pass codes (ex-specifying the minimum requirements for rental property)

62

o o

Common Law also governs mutual obligations (ex- all leaseholds include an implied covenant of quiet enjoyment, landlord promises not to disturb tenant's use and enjoyment of property) Implied habitability

Distinguishing Tenancies from Other Property Relationships Tenants generally have a right to retain possession in the absence of judicial eviction Tenants may have right under certain circumstances to continue occupancy over landlord's objections Farmworkers relationship with employer has many elements of L-T relationship (land exchange for services) Whether a migrant farmworker who resides in facility provided by employer is entitled to a court hearing before being evicted? Vasquez v. Glassboro Service Association, Inc. (1980) 737: when a migrant farmworker's employment is terminated, he may be removed from employer-provided housing only through judicial proceeding. Not tenant, unconscionable License verses Lease: Owners have right to self-help against licenses. Students living in dorms, apartment manager living on premises are exempted from the protections of the URLTA. STUDENTS IN DORMS ARE NOT TENANTS (they are licenses). If no statute answers the question, ask whether the owner transferred exclusive "possession" of a defined space, if so a lease will be found. If there is no particular space granted, or possession is not exclusive, a license is likely to be found. Transfers of Leasehold Interests Tenant's leasehold includes right to possess property in exchange for rent subject to terms of agreement Landlord's rights include the reversion- right to obtain possession when the lease term ends Either Party may transfer her property interest. YOU CAN ONLY TRANSFER WHAT YOU WON Tenants Right to Assign or Sublet When the lease is silent: ASSUME tenant is entitled to transfer her possessory interest by assignment or sublease. o Policy of promoting alienability o Assignment: conveys all the tenant's remaining property interests without retaining any future rights The covenants run with the land. (ex-paying RENT) Owner can sue EVERYBODY o Sublease: tenant retains some future interest or right to control property in future. Or if there is a right of entry when subtenant violates agreement. The covenants do not run with the land Owner can only sue original tenant Example: Tenant sublets 4 months of his 6 month lease. Subtenant fails to pay rent Landlord can sue the tenant, who remains contractually obligated to pay the rent Can't sue the subtenant because the covenant doesn't run with the land If both tenant and subtenant don't pay rent, landlord evict the tenant, which can end the lease, terminating subtenant's right of possession When the Lease requires the landlord's consent: o Question of whether to make a reasonableness criteria in the phrase "no subletting without the landlord's consent" Kendall v. Ernest Pestana, Inc. (1985) 758 Traditional majority rule: if a lease contains an approval clause, the lessor can arbitrarily refuse to approve an assignee, no matter how suitable the assignee appears to be, and no matter how unreasonable the lessor's objection Minority Rule (this court used): in a lease where assignment is allowed only with the prior consent of the lessor, such consent may be withheld only where the lessor has a commercially reasonable objection to the assignment o Slavin v. Rent Control Board of Brookline Court says that reasonable requirement applies only to commercial leases, and not residential leases. Would bring about too much unnecessary litigation End of the Tenancy: Landlords Right to Recover Possession v. Tenants Right to Remain (Just Cause Eviction and Foreclosure) Landlord is entitled to evict a tenant who breaches material elements of the lease (failure to pay rent, pay rent on time) A tenant with a term of years cannot be evicted before the end of the term unless he breaches the lease; Landlord, however, has no obligation to renew the lease Conflicts About Rent

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Landlords Remedies When Tenant Fails to Pay Rent: Summary Process Possession/eviction and back rent (tenant fails to pay, continues to occupy) o Tenant Defenses: implied warranty of habitability, retaliatory eviction, and unlawful discrimination Holdover tenant and the renewal of the tenancy (tenant holds over and continues to pay) o Landlord can enter into a new tenancy relationship Majority: if landlord accepts rent, new periodic tenancy established Minority: Tenant bound to another term of same length as original term o Landlord can sue for possession (notice) Self Help (Most courts say that a landlord cannot engage in self-help to remove the tenant) Summary process (quick way to regain possession) Landlords Duty to Mitigate Damages Traditional Rule: No duty to mitigate (can wait until the end of lease and sue for entire amount) Modern Trend: requires the landlord to mitigate damages (reasonable/good faith effort) Remedies for tenant moving out early and stopping payment before end of lease term: 1) Accept the tenant's surrender Landlord agrees that the tenant will not be legally obligated to pay the future rent Landlord can still sue for back rent and damages for breach of the lease Damages: estimate of the amount the landlord lost because of the tenant's failure to perform his obligations under the contract o Amount is not the remaining rent, but the agreed-upon rental price minus the fair market price o The landlord can re-rent the apartment, so all he loses is the difference between what the tenant agreed to pay, and the amount he can get from a replacement tenant 2) Re-let on the tenant's account Landlord refuses to accept the surrender: actively look for a new tenant and re-let the apartment on the tenant's account When new tenant found, landlord can sue former for the difference between old rental price and new rental price New rent has to be a reasonable amount (can't rent the apartment to his sister for $5 and attempt to recover the difference from the old tenant) 3) Wait and sue for the rent at the end of the lease term 4) Reasonable duty to mitigate

Arguments for duty to mitigate: Mitigating damages is efficient because it encourages landlords to rent the premises rather than leave them vacant By waiting around and waiting for unpaid rent to accumulate, landlord is increasing damages that could be avoided if he would re-let the apartment to another tenant Not losing anything by re-renting He can be compensated by the tenant for all extra costs of re-letting the premises Everyone's better off If there is no duty to mitigate: landlord is wasting scarce resource, tenant locked into apartment, there is a loss of social wealth. Arguments against duty to mitigate: Non efficiency argument Landlord bargained for the right not to have to look for another tenant before the end of the lease. He owns that right, and the tenant has no right to take that away without adequate compensation Burden of proof Landlord has the duty to persuade the decision maker that he tried to mitigate damages and to justify his damages by an inability to mitigate (Summers)

Tenants Right to Habitable Premises (Defenses for Tenant)


NON-WAIVABLE. Matter or public policy.

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1. -

If tenants can move out, argue constructive eviction, if they cant move out argue implied warranty of habitability or partial constructive eviction. Argue constructive eviction if there is no issue of habitability Covenant of quiet enjoyment (noises, smells, atmosphere) landlord impliedly promises not to disturb the tenant's quiet enjoyment of the property. Actual Eviction: If the landlord breaches the lease by physically barring the tenant from the property, the tenant's obligation to pay rent ceases entirely. Partial Actual Eviction: o Traditional rule relieved the tenant of the obligation to pay rent completely even though the tenant continues to occupy the rest of the premises o Modern Rule: Rent Abatement (FMV, %) Constructive Eviction: (Majority) landlord substantially interferes with the tenant's quiet enjoyment of the premise that it physically (impossible/uncomfortable) bars tenant from entire premises. o Remedies: rent abatement for months you dont pay rent. Punitive damages for morally culpable conduct. o What happens if tenant stops paying rent and fails to move out? Traditional rule: is that the tenant can raise a defense of constructive eviction only if he moves out within reasonable time period (if stays- evidence that interference was not sufficient) (argue partial constructive eviction) o Blackett: (loud bar) where a landlord has control/ permits conduct of third persons that substantially impairs the right of quiet enjoyment of other tenants it is a constructive eviction (landlords omission of action) Partial Constructive Eviction: (Minority/Trend- does not need to be complete constructive eviction) o Minjak Co.: (dangerous/malicious) a tenant may assert the Defense of constructive eviction for the nonpayment of rent even they have only abandoned a portion of the demised premises due to the landlords acts partial constructive eviction (minority) Majority: tenant has to leave (full constructive eviction) Intentional and malicious acts of the landlord will impose punitive damages Traditional/Majority: cannot hold other tenants responsible for constructive eviction. Only the landlord. Trend: hold landlord responsible for other tenants when he has the ability to control the conduct interfering with quiet enjoyment. Warranty of Habitability: An implied warranty owed by a landlord to a tenant to provide leased premises that are properly maintained in habitable condition (safe and suitable conditions of premises). Defense and separate action (just pissed off and want to do something, not already being evicted) Tenant can still live there (just dont have to pay) Before Javins, the owner had no responsibility to repair. All they had to do was hand over possession and that obligated the tenant to pay rent. (Majority) Javin's rule: the owner has an obligation to maintain the property when the tenant is paying rent. Rent and habitability become contingent on each other. We say that this is the contract approach. o Many courts hold that the implied warranty is not violated until the landlord has been notified of the problem and had a reasonable opportunity to fix it o Implied warranty more of a contract relationship that focuses on unequal bargaining power of parties Public policy reasons: not wave able we do not want slums Remedies: o Rescission, or right to move out before the end of the lease term (without having to pay rent) There must be a material change in the housing condition o Rent withholding (Defense to Landlords claim for possession or back rent) tenant has the right to stop paying rent and continue living in the premises o Rent abatement: Some states apply the fair market value test: rent reduced to fair value Most states simply reduce the rent by a percentage amount that reflects the seriousness of the violation and the amount of discomfort experienced by the tenant o Repair and deduct: tenant pays for repairs and then deducts the cost of repairs from rent o Injunctive Relief/Specific Performance: ordering landlord to comply with housing codes/repair o Compensatory Damaged: reimbursing tenant for rent already paid when damages exceed violation/repairs Retalitory Eviction

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a. b.

c. d.

e.

A removal of a tenant from possession of property due to the tenants complaints or conduct to which the landlord is opposed Hillview Associates: tenants termindated for forming homeowners association 1. In order for a landlord to terminate the primary motive must not be retaliatory. There must be a good faith desire: EX disposing of entire proerpt, make different use of property, or lack financial ability to repair Imperial: you cannot be evicted for complaining about health and safety Robinson ., Diamond housing Corp i. Reasoning- Edwards- looks at landlord motives and subjective state of minde. If the landlore is trying to punish the tenat for ecercising their rights then the eviction is impersmissible. Also , public policy doesnt want landlords exploiting the system by wasting land and intimidating tenants or punishing them ii. Dissent: a landlord should bot be treated as a public utility How long may the tenant stay? i. Until there is a legeitiment business reason ii. Cannot reufes to renew lease iii. Utah: if you make repairs you can evict them

12.3.3 RECORDING ACTS The Recording System" The recording system is intended to provide buyers of real property with the security of knowing that they will really own the property interest they are buying Every state has passed a recording act, which provides for a central registry at each locality--often at a county level--where holders of real property interest can submit copies of deeds, mortgages, leases, easements, general plans, judgment liens etc.--> submitting a deed to the registry is called recording the deed The common law rule: 'first in time first in right' based on theory grantor could not convey what they did not own; once property interest had been transferred to the first grantee, the grantor had nothing left to convey to the subsequent grantee o Idea was you could not transfer it again, always second seller was out of luck o Fraud going on, no way for so many to protect themselves Recording acts changed the common law rule: by defining the circumstances under which a buyer who has recorded his interest in the proper registry of deeds will prevail over a buyer who did not properly protect his interest in recording a deed o "a subsequent purchaser who has no notice of a prior conveyance and who records his interest will prevail over any prior unrecorded interest. Recording acts also define priorities when recorded deeds conflict. A purchaser who has notice of a prior conveyance and records his deed is protected against any conflicting claimants who record their interest later." In cases of property interest not covered by the recording act, the common law rule of "first in time, first in right" applies It is important to recognize that recording acts do not require that a deed be recorded for a conveyance to be legally valid. The deed is valid against the grantor upon delivery with or without recording. o It always valid against grantor whether recorded or not The function of recording ordinarily is to adjudicate disputes between multiple claimants to the same property by defining priorities. o These priorities define whose interest will prevail in different disputes; usually these disputes involve multiple grantees o The doctrine of estoppel by deeds operates to vest the grantors interest immediately in the grantee. This is generally true even if the grantor records her deed before the grantee. 66

If try to sell property but I dont really own it, deed goes right past me straight to you Once you legally assert something cant go back on those words You cannot claim you did not convey interest earlier Conflicts occurring between mutliple purchasers The recording system will not protect the grantee against all risk o In many places, the buyer may have to check other parts of the court system to determine whether a

lawsuit being brought affects ownership of the property, a will being probated affects the title, or a divorce proceeding being filed by owners results in change in property rights. o The recording system will not protect a buyer against a claim for adverse possession; for this reason, the buyer must investigate to determine whether any such claims may be in the wings o The recording system generally protects only buyers, not donees (the recipients of gifts) o Idea to determine who is legitimate owner How to Conduct a Title Search: Tract index: the simplest way to index and research title; where the buyer can find, in one place all interest that purport to affect the title to that particular tract-- not every place has such system though Grantor-grantee index: separate files are kept for the grantee and grantor o In each separate index all instruments are listed both alphabetically and chronologically by the last name o The index describes the bare outlines of each transaction, including the grantor and grantee, a description of the land, the type of interest conveyed, the date recorded, and the book and page number where a copy of the document can be found o First start with who buying property from, look to grantee index GO BACK as far as statute says GRANTOR INDEX: look up last person you d Marketable title acts may describe a time period beyond which interests are lost if they are not re-recorded o If find conveyance from sovereign you can stop The period for which each search starts when the grantor acquired her interest (the date of execution of the first deed giving title to the grantor) and stops on the date a new conveyance of that interest is recorded o The search in the grantor index starts at the date of execution rather than at date of recording b/c the grantor may have mortgaged the property or encumbered it after acquiring it (after receiving the deed at the closing) but before recording the deed
If you have two innocent parties, one is going to lose o Usually one who recorded will be considered more innocent

Types of Recording Acts: Race statutes: o As between successive purchasers of land, the person who records first prevails -- even if the person who records first knows about conveyance to someone else (only exist in NC and LA o This is true even if B knows A bought property Notice Statutes: o A subsequent purchaser prevails over an earlier purchaser only if the subsequent purchaser did not have notice of the earlier conveyance Further, the notice statute protects any purchaser without notice against prior unrecorded interests even if purchaser does not record first Between two innocent people When both people did not record, bona fied purchaser did not know about 67

Race-Notice Statutes: (in effect in 25 states and DC) o A subsequent purchaser prevails over prior unrecorded interest only if she Had no notice of the prior conveyance at the time she acquired her interest AND Records before the prior instrument is recorded o GA follows race notice o Under RACE NOTICE: have to meet BOTH conditions

12.3.3.4 Chain of Title Problems: I. Sabo v.Horvath a. At the time that Lowery executed the deed to the Ds, he had complied with the statute to a sufficient extent so as to have an interest in the land which was capable of conveyance. b. A quitclaim grantee can be protected by the recording system assuming the grantee purchased for valuable consideration and did not otherwise have actual or constructive knowledge as defined by the recording laws. c. If a grantor transfers prior to obtaining title,and the grantee records prior to title passing, a second grantee who diligentlyexamines all conveyances under the grantors name from the date that the grantor had secured title would not discover the prior conveyance. B/c the Ds deed was a wild deed and not within the chain of title, the Ps, even with diligence, would not have found the Ds deed in the recording system. d. Ds deed, as a wild deed, was outside of the chain of title, and does not give constructive notice to the P and is not duly recorded under the Alaskan Statute Inquiry notice will be imputed if the subsequent purchaser would have discovered the conveyance had she acted reasonably to investigate facts at her disposal Wild Deeds: a. Deeds outside of the chain of title b. Can come to life from being recorded too late or too early c. Too early: i. O to A that O does not own. A records. B, the true owner, conveys to O. At this point, property auto transfers to A under the doctrine of estoppel by deed. However, unbeknownst to A, O conveys title to X, who has no notice of the conveyance of O to A In most states, A would prevail against O but in a battle between A and X, X would prevail in most states. d. Too late: i. O to A, A doesnt record. A to B, who records. O to Z, who doesnt have notice of O to A. B then finds out about O to A and records it. 1. In contest b/w B and Z, Z prevails b/c O to A deed was recorded too late 2. Neither A nor B was in Os chain of title at the time Z purchased, so Z had no way to learn of conveyance to B ii. O to A, doesnt record. O to X, who has notice of conveyance to A. X records, then A records. X to Z, who has no notice of conveyance to A. 1. b/w A and Z, Z prevails bc O to A was recorded too late Shelter Doctrine a. Allows a bona fide purchaser to convey property to a 3rd party even if the 3rd party is on notice of earlier conveyance i. Ex: O to A, doesnt record. O to X, bona fide purchaser without notice of conveyance to A. X records. B/c X recorded first 1. X would prevail in a notice or race-notice jurisdiction 2. X then conveys to C, but C has notice of conveyance of O to A a. Shelter doctrine lets X convey to C despite Cs notice

II. III.

IV.

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CHAPTER 15 Regulatory Takings Law 15.1 Property asa Mediator b/w Citizens & State 15.1.1 Definingv. Defending Property Rights I. a. b. Property rights serve twin roles: Protector of individual rights against other citizens and Safeguard against excessive govt interference

II. State must have the power to pass laws regulating and limiting the use of property to protect public health, safety and welfare (defining property rights) a. To protect against abuse of power, the state decentralizes groups

b. To maintain the decentralization, owners must be protected from having their property rights seized or unduly infringed upon by the state (defense of rights) III. a. i. Distinguishing between courts role as definer sand defenders: 5th Amendment protection via takings clause (no taking w/o just compensation) 3 elements: 1. 2. 3. a taking for public use without just compensation

ii. Doesnt limit the govt interference from taking property but insures just compensation will be given b. 14th Amendment protection via due process

c. Police Power: encompasses original power to pass legislation regulating private conduct (ie environmental and speeding laws) i. When acting w/in the scope of legitimate police power damnum absque injuria: damage without legal redress d. Eminent Domain: power to take or condemn private property

15.1.2 Eminent Domain Power and Condemnation Process I. Regulated by statute

II. Can be exercised by the government directly and sometimes via an agency that is empowered by the govt to take property for specific purposes (ie Port Authority) III. Quick-take statutes authorize immediate seizure of property and require owner to file lawsuit to recover damages a. Most statutes require agency to attempt to negotiate a purchase for a fair price before filing lawsuit against OWNERS to condemn property 69

i. 15.2 Public Use

In this case, govt is charged with suing for possession

15.2.1 Federal Constitution I. Kelo v.City of New London a. The D has carefully formulated an economic development plan to provide benefits to the community at large in terms of jobs and increased tax revenue. Promoting econ development has long been recognized as an accepted function of govt. The govt pursuit of public purpose will often benefit private parties. 15.2.2.1 State Constitutions I. Public Use Test: a. b. Public necessity of the extreme sort requires collective action; Property will be subject to public over sight after transfer to a private entity i. And the property is selected because of facts of independent public significance about the property being taken, rather than the advantage to the private entity to whom the property is transferred. II. Many states interpret their state constitutional public use requirements more stringently than SCOTUS a. Some use the substantially predominate requirement public use must substantially predominate over private use b. Others hold that the property must be dangerous to occupants or neighbors and in need of demolition/redevelopment/etc c. Few hold that the taking must be justified in the sense that the public purpose could not be achieved in any other way than through a taking of one owners property and transfer to another 15.2.2.2 State Statutes: I. Almost all states have passed legislation or constitutional amendments that limit the power of municipalities to take property for economic development purposes (after shock of Kelo) a. Some prohibited use of eminent domain to take property from one person to another if the taking is for econ development b. Some prohibit all takings of property from one private owner for transfer to another unless property is open for public use (meaning public ownership/access) c. Many passed laws prohibiting takings unless property taken is blighted raising health/safety concerns d. Some regulate takings by procedural measures designed to increase public participation in the process through more hearings or better public notice or through requirements that the taking authority present sufficient evidence to justify the taking e. Other states require higher compensation than fair market value if a persons home is taken 70

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