UNIT 3: PROPERTY LAW
Property Law
Eminent Domain
 The power to take private property for public use by a state,
municipality, or private person or corporation authorized to exercise
functions of public character, following the payment of just
compensation to the owner of that property.
 Ex:Widening a road, construction of golf course, condo/shopping
complex, etc.
Eminent Domain
 New London condemned 15 non-blighted homes in a middle-class
neighborhood as part of an economic development plan that included a
state-of-the-art 90,000-square-foot research and office facility that
would be occupied by pharmaceutical giant Pfizer, Inc.
 the economic development plan & condemnations were necessary to
spur economic development and stimulate a sagging economy.
 U.S. Supreme Court in Kelo v. City of New London gave the city its seal of
approval and held that the Fifth Amendment of the United States
Constitution permits municipalities to condemn non-blighted private
property for the valid public purpose of economic development.
 Other cases: Norwood, OH – p. 267
Property
Defined as anything subject to ownership. 2 types:
 Real Property: land, buildings, anything permanently affixed
 Sometimes called realty
 Personal Property: everything else; can be tangible or
intangible
 What’s Your Verdict, page 268
Intellectual property:
 Defined as intangible property created by intellect &
includes:
1. Copyrights: protects work of authors, artists &
composers. Owned by creator for lifetime + 70 years
 Ex: songs, books, computer programs, architectural plans
 Copyright Infringement is unauthorized copying, sale, display
or performance of a protected work
 Fair use: limited use, ex: quoting a paragraph from another
book, one line in a song
Intellectual property:
2. Trademarks
-unique word, mark, symbol or device that identifies a
product of a business
-EX:
3. Service marks
-unique word, mark or symbol that identifies a service
EX: NBC’s three tone chime
-both protected indefinitely as long as there is continuous use
and the mark is in the public eye
4.
Intellectual Property
4. Patents: exclusive right to make, use, import, sell and offer a
product or process.
-Ex: business methods, chemical patents, software patents
- Valid for 20 years
5. Trade Secrets: valuable information to the owner that they
attempt to keep secret.
-Ex: Coke’s secret formula, Sales customer list
How Property is Acquired & Held
 Constructive Delivery: symbol of the gift given as substitute
 Example: keys to a car
 Accession: right of an owner to property based on an increase
 Example: crops & animals born for a farmer.
 Lost property: owner doesn’t know when/where possession was
lost
 Mislaid property: placed intentionally then forgotten
 Occupancy: acquiring abandoned or discarded property
 Page 275 caption & Question of Ethics
2 basic ways to hold property
 in Severalty: sole ownership
 Co-ownership
 Joint tenancy: equal ownership & right of survivorship
 Tenancy in common: shares unequal & no right of survivorship
 Tenancy by entireties: married couples have joint ownership
 Community property: all property acquired by husband & wife
is community property with each spouse having 50% ownership
Chapter 15 Assessment
 Page 280: #1-14
 Page 282: #32-39
Chapter 16 - Bailments
 physical possession of personal property is transferred from
one person (the 'bailor') to another person (the 'bailee') who
later returns the property or delivers it to a third party.
 Bailment is distinguished from a contract of sale or a gift of
property, as it only involves the transfer of possession and not
its ownership.
 Examples: giving car to valet, storing goods in a warehouse
 Actual bailments: bailee receive & accepts goods themselves
 Constructive bailments: bailee receives symbol of the
personal property (keys to car)
Bailment duties
 Gratuitous Bailment
 only one party benefits, generally the bailee
 must provide extraordinary care, strictly liable for damages
 ex: stay in someone’s FL vacation home for free
 Mutual Benefit Bailment:
 both parties benefit
 bailee must provide ordinary care, liable if negligent
 Involuntary Bailment:




without consent of bailee
benefits only bailor
Provide minimal care
Ex: caring for a lost dog, items delivered to the wrong house
 Must the bailment contract be in writing?
 What’s Your Verdict – p. 289
Chapter 16 Assessment
 Page 294: #1-12
 Page 296: #20-31
Chapter 17 –Ownership & Transfer of
Real Property
 Right to air space above land: ownership power extends to
the upper atmosphere
 Ex: skyscrapers, tall trees.
 Mineral rights: ownership extends from the land’s surface to
the center of the earth.
 Doctrine of capture: person who extracts is granted ownership
Limitations on ownership
 Easements: the right to use the real property of another
without possessing it
 Restrictive covenants: promise made between buyer & seller
about use of the land
 Zoning ordinances: city or county regulation on the location
of residences, business & industrial areas
 Spot zoning (treatment of a single property differently than
other similar properties) generally prohibited unless there is a
variance granted by a city or county
Transfer of Ownership
 Grantor (party who transfers ownership powers) & grantee
(party who receives ownership powers).
 Deed: legal document used to transfer ownership of real
property.
 Conveyance: When ownership is granted by a deed
 Adverse possession: person publicly possesses the land of
another private person for years
Leasing Real Property
 Lease: one party receives temporary possession of another’s
real property
 Rent payment is given as consideration
 Landlord is lessor, tennat is lessee
 Eviction: landlord removes tenant from the real property
 Subletting: tenant leases all or part of the property to a third
party
 Page 314: #1-11 & Page 317: #32-37
Chapter 18 – Insurance
 Contractual agreement that protects against financial loss
 Life, health, auto, home, business
 Policy: written contract of insurance.
 Face value: maximum amount that could be paid for injury
 Premium: consideration paid by the insured (party
covered/protected) to the insurer (State Farm, Geico, All State,
etc.)
 Indemnify: insurer makes good on and covers the loss to the
suffering party (insured)
Types of Insurance
 Life:
 Term-written for a certain number of years
 Whole-for as long as the insured lives or 100 years; aka ordinary or
straight life
 Fire: protects damage caused by fire and smoke
 Casualty:
1. Automobile:
-Collision moving car(s) collides
-Comprehensive (vandalism, theft, weather)
-No-fault insurance: all parties in automobile accident are
indemnified by their own insurance company, regardless of fault
2. Burglary, robbery, theft & larceny: protects personal property
3. Liability: if parties suffer injury or loss from negligence
4. Disability: hospital bills, loss of income. “if you get hurt and miss
work it won’t hurt to miss work.”
Property & Casualty Insurance
 Property Insurance: Fire, theft, act of God
 Casualty Insurance: losses from accident, chance or negligence
 Insurable interest: your potential to sustain a loss
 Endorsements: attachments to policies for additional needs; aka
riders
 Example – page 325
 Coinsurance: fire insurance policy clause, requires policyholder
to maintain coverage equal to a percentage of the value of the
property.
 Page 336 #1-12
 Page 338 #26-31
Chapter 19Property Distribution upon Death
 Decedent: person who dies
 Estate: property of the deceased (personal & real)
 Testator: maker of a will
 Executor: appointed to carry out the will’s directions
 Testate: dying with a will
 Intestate: person who dies without a will
 Administrator appointed by the court to take charge of intestate’s
property
 Very costly on beneficiary & adds large estate tax costs
 Living will: directives to physicians for life support issues
Requirements of a will
Testamentary intent: no duress or undue influence in
signing the will
2. Testamentary capacity: maker must know property
involved & who stands to benefit upon their death.
3. Writing: will must be in writing, signed and witnessed by
two adults.
 Codicil: formal, written, witnessed amendment
-usually the result of marriage, birth or divorce
 Holographic will: written & signed by decedent, no
witness. Recognized by some states
 Nuncupative (nun-coo-pa-tive) will: an oral will, must be
witnessed
1.
Distribution of a will
 After proof of death is established the executor of the estate
has four responsibilities:
1. Organizing & appraising assets, collecting debts owed to
the estate
2. Public notice of the estate & filing claims against it
3. Paying valid claims against the estate
4. Distributing remaining money according to the will
-Statutory period for filing claims is generally 6 months
-Law Brief, page 345. If a person dies without a will…
Trusts
 The transfer of some or all property to another party with
direction from a third party
 Settler: Creator of the trust. Aka trustor or donor
 Trustee: legal entity that has title & direction to the property
 Beneficiary: party for whom the trust has been created
 Child, grandchild
Trusts (cont’d)
 Inter vivos trust: Created during the settlor’s lifetime
 Latin for between the living
 Testamentary: Created after the settlor’s death