PROPERTY LAW OUTLINE
I. POLICY THEMES and ARGUMENTS
THEMES
Administrability (Clarity,
notice, conforming behavior,
efficient courts system, faster
resolution, more investment b/c
safer)
EXAMPLES
First Possession (Pierson- certain rule not likely to lead to disputes)
Adverse Possession (clearing up confusion about old titles, deterring sleeping on
rights b/c wait too long and we have bad evidence hard to admin)
Gifts (Newman bureau case, ct wanted clear signs to show his intent, wanted policy to
avoid confusion)
Expectations- Deal with the facts on the ground and be practical
Servitudes (Let private parties work em out)
Productivity, Investment,
Labor (encourage development,
Locke theory of property)
First Possession (Pierson dissent, labor encourages killing foxes, labor of hunting
should be incentivized) (Keeble (killing ducks, majority wants rule that encourages
ducks for market, commerce) (Ghen rewards lancer, industry important) (Johnson
labor of discovery)
Takings (Boomer where ct even if there is a conflict b/t factory, the ct is impressed by
how many job created, etc)
Implied Easements (productive use relevant, Holbrook v. Taylor investments, don’t
want to waste, reward productive use, same with easements implied by necessity)
Adverse Possession (someone using is efficient, Lutz- lots of cultivation required)
Estates (Fear of dead hand and inefficiency)
Nuisance (sometimes value productive use, sometimes not worth it)
Expectations, Intuition,
History, Custom (want law to
mesh with society)( note
sometimes be a little circular b/c
law shapes expectations and vice
versa)
First Possession (Johnson (maybe unfair?), (Ghen majority honoring clear custom)
(Pierson dissent also wants custom/expectation of sportsman) (Johnson relies on
history of conquest, doesn’t want to undue)
Takings (Penn Central, Lucas)
Marital Property (expect sharing)
Landlord/Tenant (expect LL to do some things, expect habitability)
Adverse Possession (honoring rights to land that have taken root in one’s being)
Servitudes (private parties can agree)
Conservation, Exploitation
Wild Animals (Govt regulate to conserve, trumps right of discovery)
Easements (conservation easements)
Fairness, Equitable
Distribution (providing basic
needs)
Adverse possession (forced to share if you don’t; pay attention)
Takings (not sure consistent with equity, possibility that poor were likely to be taken
and suffer undercompensation)
Zoning (worry about exclusive zoning, poor people communities)
Estates (RAP- anti-dynasty, hostility to aristocracy)
Marital (divorce, equitable distribution, etc)
Landlord Tenant (want to be fair to poor, etc)
Subjectivity, flexibility
First Possession (Pierson dissent, law should be allowed to change/evolve as custom
does) (Johnson, first in time is somewhat flexible b/c it can be interpreted)
Takings (value of home)
Exclusion (keep out for whatever reason)
Adverse Possession (depends on scienter sometimes)
Servitudes (different parties get to make their own values)
First in Time
(But…ambiguities, first whites,
first to capture/chase?)
First Possession (Pierson, Macintosh)
Coming to the nuisance (advantage to people first in time)
But see adverse possessions (first in time gets trumped by second occupier)
“Property” as a legal
conclusion/label to rights that
law chooses to recognize
First Possession (Pierson, Macintosh)
State defines property (Belida, pet raccoon, state defined as not property)
Takings (Lucas re background principles- possibility that some sticks just don’t come
with your property if state decides before you buy)
Property is relative (you don’t
always have ownership over
everything all the time, depends
on other person, context)
First Possession, Fugitive Resources (Keeble- rights against interferor different from
rights against competitor)
Adverse Possession (depends on who is using it)
Discovery (Armory v. Delamirie- chimney sweep had rights against subsequent
possessor goldsmith but not against original owner)
Nuisance (pig in the parlor- rights relative to what else id going on in the
neighborhood)
Bundle of sticks (lots of various
ones, legal relationships b/t
people with respect to things)
First Possession (Moore (Dissent) (Might not want to let you sell your spleen, but
right to deny use by others)
Takings (Conceptual severance) (individual sticks, Rhenquest Penn Central dissent,
if any stick taken then takings, disputed)
Estates and Future Interests (something could be subject to one person for a period
of time and then someone else for another period of time)
Gift (Gruen, life estate and future interest divided)
Marital (Sometimes need both to control same stick)
Landlord Tenant (some sticks to each)
Servitudes (some right to do some things)
Keeping the Peace
First Possession (Pierson) (Papov- rules trying to avoid less fighting, tripping, etc)
Right to Exclude (Jacque- avoid self help, fighting)
Nusiance (set up rules to keep order)
Servitudes (let parties agree)
Tragedy of the Commons
(Demsetz, Under cultivate with
no investment to make better b/c
no exclusive rights? Tendency to
overuse v/c other people share
costs. Want to avoid
overconsumption, overuse, and
undercultivation.)
Nuisance (harming other people, not taking them in consideration, internalizing
externalities)
Duties of Co-Owners (want people to do some repairs)
Tragedy of the Anti-Commons
(Heller and Eisenberg; underuse, difficulty of bargaining for
each use, too many transactions
costs; Transaction costs)
Heller/Eisenberg (Gene fragments, licensing)
IP (White v Samsung (dissent)(how to make creative stuff if have to get permission
from everyone, powerful language, danger of property rights being too strong, costs to
public)
Eminent Domain (for assembly problems, too difficult for gov to do productive uses
if lots of transactions costs, Poletown GM plant)
Estates (Dividing the sticks too much is inefficient)
Right to Exclude (one of most
essential sticks, keep others off
land, freedom and autonomy)
Private Property (Jacque v. Steenberg (invasion, no real harm to landowners, but
allowed punitive damages)
Takings (Loretto- No balance of harms/benefits b/c right to exclude so important)
Landlord Tenant (sometime tenant, sometime LL)
Private Home (very special)
Private Property (Jacque (privacy, autonomy, personal rights)) (Moore (special
interest in body part, majority thinks so special they cannot be owned, but may be so
special that they should have property rights to guard them)
Takings (Kelo (one problem was lack or recognition of home, worry of under
compensation b/c of subjective values people have))
Co-Ownership (no partition, marital protections of home from creditors, marital
family)
Limits (Sometimes property
rights should be limited, not
absolute, other Constitutional
right involved; human dignity)
Private Property (State v. Shack (private interest limited b/c important interest of
giving workers help)) (Moore (sometimes property shouldn’t govern at all, organs,
babies, sex) (Pruneyard- protesters access to shopping mall required) (Intel v Hamidi
(don’t want to limit another’s right to speak)
Takings (Bay Head (right of access to beach)
Eminent Domain (qualification of right to exclude b/c you get money when
compensated)
Intellectual property (limited in some ways, right of publicity, copyright limited)
Adverse Possession (trumps original owner sometimes)
Nuisance (can operate as long as not infringing others)
Servitudes (limits what you can do, conservation easements)
Honesty (want to reward, not
deter)
Discovery (Hannah v. peel- Encourage honest finding)
Adverse possession (cts differ in mental state required, some seem to reward
dishonesty and other honesty, see Manilla)
Formalism (Obsessed with
labels, magic words) V.
Pragmatism (work thing out as
they are on the ground)
First Possession (Pierson majority very formal, dissent wants instrumental)
Concurrent interests
Servitudes (especially history, weird developments)
Dead Hand (Fear of, don’t want
past to control future)
Estates (RAP- ambivalence about long dead people controlling current use of
resources, not good at predicting how resources should be used today)
Servitudes (may not want new buyers to e bound by prior decisions)
Property v. Liability Rules
Adverse Possession (encroachment, mistake, how to determine)
Takings (how to solve property conflicts)
Nuisance! (where to give right in order for efficient outcome)
Eminent Domain (liability rule, gov pays but landowner cannot just stop it)
Slippery Slope
II. THEORIES & JUSTIFICATIONS OF PROPERTY
Styles of argument
 Formalistic→ Based on labels and precedent (Pierson majority)
 Instrumentalist→ Wants to serve purpose but not be unnecessarily strict when there is evidence (Pierson Dissent)
(Gruen)
Theories of Property
 Property is about relationships b/t people w/ regard to things
 Property is about excluding others from exerting right over something
 Rules will very based on goals, policy, and context, advancing some goal, relative, mode of power
 Locke- property based on labor/investment/production, expenditure of labor and money is foundation
Tragedy of the Commons (Demsetz)
 Problem
o Grazing land for everyone, If too many sheep come, though, then there will be overgrazing, Benefit of
sheep, only bear little cost of land, so each person increases herd without limit; Each pursuing own best
interest, “freedom in the commons brings ruin to all,” not enough incentive to conserve b/c each person
gets the whole benefit and no costs; End up with over-consumption or over-pollution, etc
o Cannot get everyone to work together b/s of transaction costs, negotiation problems, holdouts
 Demsetz solution
o Private property; Internalize costs (take costs into account) and therefore manage sheep to sustain land;
Prevents land from being destroyed through personal incentive
 What about an externality from one land to another (like erosion)
o Secondary benefit of private property regime
o Dam builder example
o One person can bargain with another single entity (instead of everyone as in the commons) in order to solve a
problem
o Easier to solve problems when negotiations are just b/t a few owners
 What about a liability rule?
o Assume X (benefiting 100) is liable for damage to Y land (150 damage)
o Two ways to solve:
 1. Liability rule for X to pay Y or reduce X actions
 2. Y “bribes” X to reduce actions
 Coase Theorem!
o Only in the absence of transaction costs (unrealistic assumption)
o The costs will be the same regardless of the legal rule
 Challenges to the idea
o Maybe in smaller community a commons could be sustainable
o How to manage a commons? Smaller numbers, long term relationships,
o We have government to manage common property
 Alternatives:
o Voluntary cooperation
o
o
o

Government regulation/forced
See Anticommons alternatives for more
Analogy of IP public domain to public roads, etc
 Example: People need roads to bring sheep to market. But would there be a tragedy of the
commons on the road?
 Government can make rules that protect and control the over-consumption that we worry
about, Also in the realm of private property (railroads, etc)
 It can also be done without government- Like a homeowners association, Situations
where commonality of interest promotes cooperation
 So solutions to problem…
 Government ownership- Taxpayer fudging of public roads and bridges
 Private ownership but government mandate access
o Common carriers (phones, etc)
o Government roads rules to regulate Bay Bridge
 Toll but everyone gets access and toll is a set price
 So return on investment I road
o Private funding and profit overcomes the (potential) under-cultivation problem
o Private ownership w/ voluntary cooperation
o Everyone agrees to reduce water consumption
Possible Analysis:
o 1) Pure Coase Theorem (no transaction costs, doesn’t matter which rule)
o 2) Transaction costs (Information, cooridantion, negotiation, decision making)
o 3) Property v. Liability rule
o 4) Potential problems w/ prop rule (Bilateral monopoly, holdouts, strategic behavior)
o 5) Potential theories for liability rule
 a) First In Time
 First to sink costs in to something
 First person there, coming to the nuisance
 b) Cheapest Cost Avoider
 Party best able to handle costs
 One with most value at stake
 This would be a counterargument to Boomer
o Alternatives
Anti-Commons- Heller and Eisenberg: Can Patents Deter Innovation? Anticommons in Biomedical Research
 Tragedy of commons
o Explains why people overuse shared resources
 What they’re talking about
o Gene sequences that are developed
o Then later they are needed in other research
o “Upstream” basic research
o “Downstream” applied research
 But to do downstream research you have to access a “patent thicket” where you have to get
permission from several generations and different property right holders
 So problem is both proliferation and fragmentation of property rights in biomedical
research
 Anticommons/ Overpropertiztion
o People underuse scarce resources b/c too many owners can block each other
o Privatization model
o Lots of owners “upstream” make it difficult for advances downstream b/c rights must be bought, fees
paid, too many people to negotiate with
o Owners have different agendas, goals, transaction costs too high to deal efficiently
o Many owners overvalue discovery and set price too high
o Kazinski- anticommons in IP would stifle creativity, growth
 Possibility that it’s not really a tragedy of anticommons
o
o
o


There could be voluntary mechanisms for sharing
Like a community/ homeowners association
There could also be third parties that allow you to buy a blanket license
 Like a radio station or a karaoke bar
o Maybe owner of property is in best position to protect it, determine how it should be used, etc,
 Reputation, side effects, etc
 Moral objection (like don’t want to make weapons)
Other possible solutions:
o Modify the remedy to have profit sharing (like downstream developers would get materials but then
share profits if make something valuable with it)
 Idea of compulsory licensing
 Similar to private ownership but govt regulations of who has access
 Problems: could be calculated too little/much, concern that govt will make mistakes or be too
slow; maybe market would do a better job
o Government cap on licensing fees
 So owner still has choice but cannot charge too much
 Problem of saying “no” is like charging too much
 Maybe you have to be nondiscriminatory or maybe the government will say you have to say
“yes” to everyone
o Restrict the way something is patented
 Like limit the use or something
 If you had to get more applied to get a patent then there would be less of a thicket of patents
 Counterarguments: it could deter basic research, back to under-utilization
o Big pharma and big academics are repeat players and can figure out how to bargain and negotiate
solutions
 Another voluntary solution
o Instead of using property rights we could have government fund that early research
 Eisenberg may think this is a better regime
 It was the system there before privatization
 Objections: academic researchers need incentive so give them patent rights to make money,
government maybe cannot pay the same amount of as private companies
o Limit private property (Nichols)
o Compulsory licensing scheme (private ownership, mandated access)
o Govt provision
Note that many of these “solutions” could lead to same problems of original commons
o Maybe govt would not do a good job
o Overuse, abuse or not enough
o So could all go in a big circle
SEE Slides, etc, for more on Property and Liability Rules
III. FIRST POSSESSION:
ACQUISITION OF PROPERTY BY DISCOVERY, CAPTURE, AND CREATION
A. Discovery and Capture
First In Time Rule – Whoever gets to land first has property rights to it.
 Johnson v. M’Intosh: Holding that property owner granted land by US government has superior title over grant
from Indians because US was first in time to “discover” the land and take title to it.
First To Indicate Appropriation- Possession of fugitive resource indicated by marking, or reasonable effort to
mark, first ownership.

Ghen v. Rich: Whale hunters, strike w/ lance and whales wash up on shore, normally (custom) the person who
finds alerts hunter to come get whale . If you’ve done everything you can to imprint your lance on whale you have
right to the whale (custom upheld); as long as person has put out some effort to indicate appropriation.
o Custom is useful, clear, everyone knows how it works. Do not want judges interfering with rules already
working (custom)
Effort To Obtain- Ownership to person to captures with productive labor.
 Keeble v. Huckeringill- Upholding right to hunt ducks on own land where person had created duck pond,
enjoining D from scaring animals away.
o Impermissable interference with trade, productivity
Possession by First to “Occupy”- Pursuit alone insufficient to create property interest
 Pierson v. Post- Holding that the first person to “occupy” the fox owns it, not from pursuit alone.
o Not as clear as other cases, this one goes against custom
o Dissent: Property in animals should be acquired without bodily touch…provided pursuer be within reach,
or have a reasonable prospect of taking, what he has thus discovered with an intention of converting to his
own use
Notes:
 Other examples of First-In-Time
o Water rights, IP, Domain/Website names
 Interpretation- First in time to do what? (capture, mark, attract, nature of resource important)
 Animus Libertende- Captured animal not yours if escapes, unless habit of returning
o But govt regulate Geese, conserve resources, commons, context
 Rule of Capture for Other Fugitive Resources
o Oil movement- If oil leaves to B land, B can take also (but both can drain)
o Oil angle drilling- Trespass
o Oil Reinjection- If move to B’s land, B can pump
 Alternatives to First in Time:
o Bidding, Lottery, Merit, Need, Force, Custom, Labor, Sharing
Policy:
 Advantages:
o Intuitive/consistent to human nature
o Productivity and competition (encouraged labor, investment, etc w/ promise of reward)
 This is especially important in prop law
o Clear rule, admin efficiency, easier to resolve disputes, relatively inexpensive
o Predictable, people conform lives to clear rules, custom
o Subjectivity (court can take some circumstances into account
o Easy, simple administrability, fast
o Need for efficiency, reward productivity
o Clear rules for conforming behavior
o Honors expectations, “state of things”
 Disadvantages:
o First to do what? Inefficient and unclear sometimes
o Fairness, equitable distribution
o Sometimes doesn’t make sense or is too ambiguous
o Fastest may not be most efficient owner of resources (investment, productivity, etc)
o Can be kind of random (like someone just stumbled on a thing)
o Ambiguity (potential for bias, room for judgment)
o Encourages too much exploitation? Too fast? (rules governing oil and gas encourage everyone to get it
out as fast as possible)
o Maybe legislatures should decide these things rather than judges
o Some resources may be too important for society, etc, to allow to fall into one particular individual
 Other:
o Obvious problem with ignoring native American rights (Savages, non Christian, Indian rights diminished
but not completely non-existent)
o
Where power came from- (might, domination, European superiority, Christianity, no progress of left to
Indians, etc)
B. CREATION
Normally First In Time Property Right In What You Create- But Limits, Some Public Domain, Policy
 Nichols v. Universal Pictures Corp.- Two plays, both involve love story and Irish and Jew families, copyright
infringement? Held that property rights extend beyond the exact text of the play, but in this case too different to
be infringement; the less developed the characters the less they can be copyrighted; some content remains in
public domain; copyright did not cover everything that might be drawn from play.
 White v. Samsung Electronics- Samsung TV commercial showed a robot dressed like white, parody implying the
phones will last so long that White will have been replaced by a robot, sues for right of publicity. Held for White
right of publicity. Dissent: Private property essential; reducing too much to private property can be bad;
overprotection harmful if stifles creative forces; now a tort to remind public of a celebrity; too broad to protect
anything that reminds viewer of White, set of show; need balance lots of IP law diminishes owner rights; public
robbed of parodies, want to encourage free expression and building on other ideas; right to publicity not
geographically limited; first amendment issue; line b/t commercial and noncommercial is blurred or gone; no
substantial state interest here.
Notes:
 General Rule is if you create something you have right to exploit it (but right to exploit may be separate from
ownership) (problem arises when your creation but rights to exploit not yours alone)
 IP Caveats
o Not same as with land (extra thinking doesn’t consumer anything, no resource being used up)
o Undercultivation is problem, need to create incentives to promote activity/labor/investment/ competition
(so create exclusive rights)
 “Idea/Expression Dichotomy”- tenet of copyright law (expression and exact details protected, buttoo abstract, raw
material, idea generally is not protected)
 Right of Publicityo Rewards labor/investment in careers, incentivizing personality, avoid consumer confusion
Policy:
 Justifications for IP
o Rewarding labor, fair to get profits from your hard work, incentivising productivity!
o Clarity- tangible- IP must be fixed in a copyrightable medium (but protection is of intangible)
o Special connection b/t author and work product
 Limits on Property Right in IP
o Person should not get everything arising out of property
o No protection for basic abstract ideas
o No exclusive rights to relativity or evolution
o Want to promote creativity and productivity (would be impeded with too much exclusion)
o So we leave some of the ideas in the “public domain” in order to keep productivity (Public domain is
basically commons of IP)
o Kazinski worried about end goal and making creative productivity difficult
o Over propertization might stall this (tragedy of the anticommons)
o Nothing genuinely new, grows by accretion, should be some left in public domain
o Could limit free speech, con rights, need limit on prop right (think mall protesters)
 But is creativity really stifled?
o Maybe she would approve them if they asked
o But maybe we cannot rely on that, especially when work is criticism
o Another theory of IP copyright- “Fair use”
 Sometimes allows copying of expressive works- Needed where voluntary bargain not likely
(because transaction costs, self serving refusal to bargain, parody, etc)
 So he makes the point that these rights are limited in many other IP contexts
 Anti-commons beyond IP
o Much of what Kazinski is talking about is creativity (Main idea in IP is that you must build on ideas of
others
o
Maybe property rights like nuisance- Reducing too much to private property can be bad
 Public works, streets, etc reduce private land but increase value of other private property
 Other benefits of public infrastructure: Increase value, Reduce transactions costs
IV. RIGHT TO EXCLUDE & ONE’S PERSON
Jacque v. Steenberg Homes (Wisc. 1997)- D moved mobile home through P property even though explicit refusal to
allow. Expensive and dangerous to use alternative route. Trespass?
 Held: Yes. Right to exclude others is essential in bundle of rights that is property. Every person exclusive right to
enjoy property in any way does not invade rights of another person. Society has an interest in punishing, integrity
of legal system, avoids self-help.
o Right to Exclude
 One of the sticks in bundle of property rights
 Big stick, punitive damages
Intel Corp. v. Hamidi- Intel sued fore trespass of chattels (Chattel = tangible property other than real estate; Trespass of
chattels = interference with personal property that has caused injury) after employee sent emails to coworkers.
 Held: For D Hamidi. Not a strong right ton exclude in this context. No injury here. Free speech.
State v. Shack (NJ 1971)- D owns farm with Migrant workers on it, P entering to provide medical and legal services to
migrant workers, D owner sought to limit access. Trespass?
 Held: No. Ownership of property does not include right to bar access to governmental services available to
migrant workers. No absolute right in real property. Rights relative.
 Policy:
o Human values, property doesn’t mean you control people
o Health, welfare, dignity paramount
o Unorganized and without political power
o Access to information
o Recipients- of speech, services, equality and freedom
Moore v. Regents of the University of California (Cal 1990)- Moore has leukemia, goes in for treatment, told must
remove spleen. Did not tell him that his cells were unique and access to them was of great academic and commercial
value. Spleen removed, cells saved and copied without his knowledge or consent, made cell line, patented it, sold for
hundreds of thousands of dollars, worth billions. P sues for lots of things (lack of consent, etc) and conversion of property.
Does P have property right in removed cells?
 Held: No. No judicial precedent supporting. Patented cell line and products produced from it cannot be P
property. Cell line same type of cell as in every human, would be like property interest in blood. Patenting of
inventive effort allowed, not discovering of natural raw materials. Not under current law.
o Existing cal law of disposing body parts
 Health and safety concern
 There are so many things that you cannot do with discarded cells that it cannot be property
 Prof says questionable argument, the statutes don’t really say anything about research
 Limiting your right to do something doesn’t mean there is no right at all (Recall
McInsosh, Indians had right to occupy but not to sell)
o Moor doesn’t own the patent
 Court recognizing labor/incentive property rights on behalf of researchers who made the new cell
line
 Nervous to give nonpossessory property rights, confusion when possession is separate from
ownership
 Conversion should not be extended to include cells b/c… (Bad idea to expand law)
o 1. Against public policy
 Importance of discovery and creativity in research
 Threatens to destroy economic incentive
 Future of medical research in jeopardy
 Sort of an anticommons problem, researchers do not know who’s cells are whose, would have to
search and get permission, huge transaction costs
o 2. Better suited to be decided by legislature


o 3. Tort of conversion not necessary to protect patient’s rights
Concurrence:
o Moral issue, no right to sell body for profit, bad ramifications, sanctity and special nature of human body
in the law.
 Maybe there is a distinction that the court ignores
 Two different “sticks” in the bag of property rights
 Maybe just saying you don’t want others to sell your body parts (not that you want to sell them
yourself)
 Court seems to bundle these rights together and be concerned that Moore is asking to sell body
parts for profit
Dissent:
o Property law extremely broad, bundle of rights, some sold but not given away and vice versa, Moor
should have had right to do whatever the D did with his own tissue, condemning unjust enrichment,
parties not in equal bargaining power, human organs and blood can be legally sold. Nondisclosure action
not likely to be sufficient.
 Lots of examples where you have one stick in the bundle but not another
 Rights to posses, use, exclude, dispose by sale or gift
 These rights do not apply to all forms of property
 Just b/c excised cells are limited rights, doesn’t mean you should have none
Notes:
 Property right = Owners can include/permit Or exclude/deny
o Two right together are necessary and sufficient conditions for transferability
 Property in One’s Own person?
 Right of publicity widely recognized
 Rooted in right of privacy
 Reasons for property rights in person similar to other areas
 One should not reap what another has sewn
 Right to publicity = patent and copyright laws
 Provide economic incentive
Policy:
 To Exclude:
o Cultivation, administrability, idiosyncratic values, expectations (in land and in home), privacy (home,
personal space), Peace (avoid fights)
o Note trespass to chattels not as strong as to land.
 In Jacques the rule was clear and administrable
 Harder to determine in chattels than in real property
 Need stronger right to deter in land to prevent intrusion of home
 Not really as relevant to property (not a private home)
 Business? Public? Less privacy interest from home
 Peace (Maybe)
o Expectations (Maybe)
o Speech interest
 Present in Hamidi but not Jacques
 Maybe there are other reasons on the side of the trespassor
o Transaction costs
 Maybe fear of making email too inefficient
 Don’t want people to have to ask permission before writing email
o Do we need this rule to get Hamidi’s email to the recipients
 One possibility is for server to be your castle like your home
 Then people would set their servers to people who want to send email, etc,
 Posner suggests if efficient for email to go through then they will
 When exclusion gets trumped
o Concern for people on the other side (rather than property owner)
o What about…landowner’s interests?
 Peace? Still a bit of a concern b/c belligerent owner doesn’t want to allow guests in
Privacy? Plus it doesn’t seem like a very private environment
 It has been opened up to people to come in and farm (Like Intel allows workers to use email)
o Expectations? (Determined in part by how private)
 Here we see those expectations as lower
o Shack is an outlier case (Most courts not sympathetic to this argument)
 Also note that this is just interpreting NJ property law
 Note some constitutional issues, etc
Epstein Economic Argument For Exclusion
o Buyers and sellers should deal as they see fit
o Market forces will check abuse
o Those who exercise absolute rights in capricious fashion pay for their folly by losing the markets
Regarding Private Body
o Perhaps some things should not be the subject of property right at all or perhaps some types of property
rights such as transfer for money
o Property should not be seen as an abstract monolith but rather as a bundle of rights that vary from type to
type
 Types of rights: Possess, use, exclude, transfer, include
o
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
V. POSSESSION BY FIND
Armory v. Delamirie (Kings Bench 1722)- P chimney sweep finds jewel, brings to D shop for evaluation, offered money,
refused, wanted stone back, refused. Action in trover (money damages resulting from D conversion of chattel).
 Held: Finder does not acquire absolute property right or ownership, yet has such a property interest as will enable
him to keep it against all but the rightful owner
 Rule: Prior possessor prevails over a subsequent possessor
o Variation on a first in time rule
o Notes:
 Title of finder is good against the whole world but the true owner
 Property is a relationship among people with respect to things
 Title of ownership is relative, B can have title against C but not A
 Rule of taking property (maybe illegally?)
 One who has acquired the possession of property, whether by finding, bailment, or by
mere tort, has a right to retain that possession as against a mere wrongdoer who is a
stranger to the property
Hannah v. Peel (Kings bench 1945)- D owned house, never occupied it, was requisitioned for soldiers a few times. P
soldier found a “brooch” pin above window, turned it in to police, police gave to D who sells it, P wants the money from
it. Possession of discovery by the discoverer or by person who owns the property where found?
 Held: For P. A man possesses everything which is attached to or under his land…but not necessarily everything
which is lying unattached on the surface. P found brooch, did the commendable and meritous thing of turning it
in, D had no possession/knowledge of it.
 Precedent:
o Bridges v. Hawkesworth- P found envelope of money in a public business, gave to D owner to hold,
advertised, no owner, wants returned.
 General right of finder to any article which has been lost, as against the world, except the true
owner. D never had custody of money, nor within protection of his house. P gets money.
 Note that is was public building, not private residence
o South Staffordshire Water Co. v. Sharman- D clearing out pond found rings. D working under orders of
P. P wants rings.
 Possessor of land is generally entitled to chattels found on land. Makes no difference that the
possessor is not aware of the thing’s existence. Working as agents for P.
o Elwes v. Brigg Gas Co.- Prehistoric boat found in soil of P land by D.
 P property lessor has property of boat, no difference that he was not aware of its existence.
o The court does not make really convincing argument
 Doesn’t really explain why it chose Bridges
McAvoy v. Medina (Mass 1866)- D barber, P customer finds purse on table, who has right to possession?
 Held: For D barber. Normally finder of lost property has valid claim to same against all world except true owner.
But this is not lost property, accidentally misplaced is not lost. Rule better adapted to secure rights of true owner.
o Notes:
 Mislaid, Lost and Abandoned
 Distinctions made by court
 Circumstances matter a lot
 Employees and other Agents
 Commonly turn on lost-misplaced-abandoned distinction
 Usually employees have to give to employer
 Police officers- court held for citizens who found money, not sheriff who gathered it
 Treasure trove
 American law treated like other property
 Case where workers in Idaho found gold in driveway, owned by landowner
 See more pp 122-123
 Shipwrecks
 Maritime law, salvage
 Title given to US and States in territorial water
 Legislation
 Lots of legislation in this area of property law
CASE
Armory
Sweep finds
jewels
RESULT
Finder (sweep)
wins, not
landowner
KEY FACTS
P found it, 109, prior possessor
prevails over subsequent
possessor, First in time
Bridges
Lost money in
business floor
Finder wins, not
“locus” owner
Staffordshire
Rings in mud
found by pond
cleaner
LO wins, not
finder
First in time (shop owner didn’t
know it was there)
Dropped in public part of shop
Less under control of D
Money just dropped accidentally
(not placed for safekeeping or
“mislaid” like put in shop on
purpose and forgotten about)
Honest finder
Lots of time has passed
Buried in mud
Found by employee
Not public
LO didn’t know
Elwes
Old boat
underground
LO wins, not
finder
Buried in soil
Found by tenet
Not public
McAvoy
“Mislaid” wallet
LO wins (barber
shop), not finder
Mislaid, not lost
Hannah
Finder?
Involuntary “invitation”
Public?
Never lived there
Brooch on ledge/in crevice
Not finding in a “destructive
way”
Not employee
RATIONALE
Labor- finding- incentivize finding of lost stuff, useful to
society to
Administrability- bright rule
Expectations
Discourage lying (finding something as saying its his,
encourage honest finding)
Peace?- If we gave to last person in possession it leads to
fighting
Administrability
Concern with getting property back to rightful owner less
relevant where owner less likely to come back
Expectations- less normal for shop owner to control stuff
in public area (less privacy), no responsibility of shop
owner to have kept it safe
Rightful owner not likely coming back
Encouraging honest finders
True owner unlikely to return (b/c dropped accidentally)
Higher expectations, more privacy
Don’t want to encourage “rooting around” and people
digging for things
Encourage using services, trusting employees
More attached to property
Encourage investment, planning, coordination
Higher expectations, more privacy
Don’t want to encourage “rooting around” and people
digging for things
More attached to property, buried under it, part of it
Rightful owner likely to return, better to leave at store w/
L/O
Discourages the honest finder
Less privacy
Encourage reasonable security
True owner unlikely to return
Honest finder, gave to police, want to encourage honest
finder
Mislaid or lost?
Notes:
 Mislaid v. Lost
o Mislaid – put something somewhere and left it there
o Lost – you have no idea where something is
o Abandoned – intentionally discarded
 Critiques of the distinctions
o Administrability difficult (guessing mental state of rightful owner)
o People who lost things could also retrace their steps
 In arguing these…remember that circumstances very important (time, place, public, employee, etc)…and policy
(what we want to encourage) and remember alternatives (like split baseball money)
VI. ADVERSE POSSESSION
Van Valkenburgh v. Lutz (NY 1952)- 1912 Lutz family buys lots, next to triangular lots 19-22, creates travel way across
it, built little shack on it in 1920, big garden on it/farming in 1916/1928. P Valkenburgh acquired title in 1947, tried to get
D off it, built fence, D admitted no title but asserted right to the travel way, earlier judgment for D Lutz. Current case to
compel removal of certain encroachments upon P lands. Lusz 20 + years on land (stat of lim is 15). Adverse possession?
 Held: For P. No adv pos by D b/c no actual occupation. Premises not improved. Garden not cultivation. D did not
assert a “claim of title” and admitted P owned land in earlier suit.
o Elements of NY adv pos law
 Clear and convincing proof of 15 years
 Actual occupation
 Protected by substantial enclosure, or (not here)
o Why enclosure wanted?→ Notice (no sleeping on your rights)
 Usually cultivated or improved (majority says no, dissent says yes)
o Want to reward productivity, Also related to notice
 “Under claim of title” requirement
 Worried about state of mind of adverse possessor
 Some courts add this as a requirement
o Kind of inconsistent…b/c on one hand they want him to have though he owned it
and on the other wanted him to know he didn’t own it but wanted to
 Enough cultivation?→ No
 Dissent: His intentions should not matter, issue of title asserted irrelevant. Evidence of occupations should have
created adv pos
o Farm/garden of substantial size
o Worked continuously
o Raised chickens, planted new crops, cut timber
o One-room dwelling
o Traveled way, marked boundaries
 Wants to adopt the state of mind is irrelevant standard
Mannillo v. Gorski (NJ 1969)- D on property, built steps extending 15 inches onto another property, claims title to land
by adverse possession. P says D lacks requisite intention. Is mistaken belief that possessor has title to land a requisite
hostile intention to sustain obtaining of title by adverse possession?
 Held: Yes, for D. Any entry (regardless of intention) and possession for the required time which is exclusive,
continuous, uninterrupted, visible and notorious, even though under mistaken claim of title, is sufficient to support
claim of adv pos. Standard of “open and notorious” may not include minor encroachment along common
boundary. May use equity/compensation to fix undue hardship.
o Two possibilities
 Main Doctrine
 Intention of occupant a necessary element of ad pos
 Ignorance = no ad pos
 Rewards possessor, disfavors honest/mistaken entrant
 Connecticut Doctrine
o
o
 Intention is irrelevant
 Only causes confusion to rely on hostile intent of occupant
New state of mind requirement
 Likely the first- irrelevant
Rationale/Policy:
 Don’t want to reward those w/ bad faith state of mind and punish those with good faith
 That seems backward to the court
 Stare Decisis
 Court feels free to change the law here b/c no reliance here
 Encroachment is open
 But may not be that obvious
 Actual knowledge requirement
 May be very difficult to administer
 Don’t want mind reading
 Maybe instead a should-have-known requirement would have been better
 Fairness
 Court possibility of instead of giving D right to exclude, just grant money damages
o Liability rule
o Remember difference b/t liability and property rules
Notes:
 Adv pos transfers ownership, It vests a new title in adverse possessor
 New title relates back to date of event that started statute of lim running, acts as if ad pos was owner since that
date
o Statute of limitations is the trigger
 Elements of Adverse Possession (139)
 1. Actual entry giving exclusive possession
o Physical occupation
 2. Open and Notorious
o Not Hidden
 3. Adverse and under Claim of Right/ Title
o Occupation not w/ permission of landowner
 So not for tenets, etc
o Some courts say there are different states of mind required…
o
4. Continuous for the statutory period
 Three possible state of mind requirements:
 1. Objective standard
 State of mind is irrelevant
 Held in England
 2. Good-faith standard
 I thought I owned it
 Varies in US
 3. Aggressive trespass standard
 I thought I didn’t own it but I intended to make it mine
 Bad faith
 Occassionally


Color of title and constructive adverse possession
o Claim of title
 Expressing the requirement of hostility on part of adverse possessor
o Color of title
 Claim founded on written instrument (deed, will) or judgment or decree that is for somereason
defective and invalid
 Essential in a few states
 For more see pp 145
Color of title and constructive adverse possession
o
o
o
Mistake:
 Most jurisdictions have abandoned Main doctrine
Notoriety:
 Owner of land must have actual knowledge of adverse occupation
Mistaken boundaries can be resolved with…
 1. Agreement
o Neighbors accept line for long time
 2. Acquiescence
o Through time, but less than stat of lim, evidence of agreement
 3. Estoppel
o One neighbor makes representations about boundary, other neighbor changes
position in reliance on it, then first neighbor estopped from denying the validity
of his statements
 Mistaken Improvers
 Problem of innocent improvers, mistaken build on land of another
 Usually come variation of compensation, unless trivial
Policy:
Powell, The Law of Real Property
 Statute of limitations, beyond which prop owner cannot bring an action
 Recovery of land by another person in possession
 Law of ad pos is synthesis of statutory and decisional law
 Ad pos functions as method of transferring interests in land without the consent of the prior owner
 Social judgments of aging claims, assure security
Ballantine, Title by Adverse Possession
 Policy to reward those who use land in a way beneficial to the community
 Too much account of individual case
 Purpose to automatically quiet all titles which are openly and consistently asserted, to provide proof of meritous
titles, and correct errors in conveyancing
Holmes, That Path of the Law
 What is justification of depriving man his rights?
 Loss of evidence?
 Desirability of peace?
 Man neglects right long enough cannot complain
 Position of person gaining right- has been on land so long that to take away causes resentment, deep instincts of
man
PRO ADVERSE POSSESSION:
Reasons why we might want adv possession (b/c seems like its contrary to first in time goals)
 Efficiency→ Efficient Use/productivity (127), Reward, incentive
 Expectations→ Holmes 127-28, Singer 128, Thing you have enjoyed long time…feel its yours…hurt to be taken
away; Possessor has come to expect and owner fed those expectations by not acting, not fair to cut of dependent
party; Reliance
 Peace→ Quiet controversial titles (Valentine); People are sometimes just confused; Automatically quiet all titles
openly asserted, correct errors in conveyance, fix mistakes
 Equality→ Maybe some have more than they need if they are not paying any attention to it; Whereas others are
totally dependent on the land; Distributive justice, basic needs of people (like State v. Shack)
 Administrability→ Automatically sounds easy?; But maybe the requirements make it not that administrable; Loss
of evidence (Over time)
 Owner shouldn’t sleep on their rights→ Stall an action is bad (126); Evidence goes bad, harder to administer,
aging claims problematic; Encourage good citizenship; Pay taxes
CON ADVERSE POSSESSION
But Maybe No Good Justification for Adverse Possession…
 Alternative ways to clarify→ Agreements, etc, see below
 Expectations→ Expect property to be yours no matter what
 Uncertainty/Conflict
 Privacy/Autonomy→ We recognize property in many ways (right to exclude) to promote people’s autonomy; Buy
land, do what you want with it
 Too much incentive to exclude→ Kick everyone off no matter what
 Discourage Conservation
 Too much litigation→ Everyone suing right away?
 Expensive to monitor→ Waste
Property v. Liability Rules (Epstein argument)
o Property rule
o Protects property interest
o All transfers voluntary
o Liability rule
o Transfers forced (can be taken without owners consent)
o Compensation approach
o Adv pos would give original owner some fairmarket value
o Court thought about alternative damage possibilities, why? See n 144-145
o Why couldn’t the court give injunction and then have one party
o Chose liability rule b/c worried about transaction costs blocking a bargain
 This is the classic reason to use a liability rule instead of a property rule
o Liability rule = damages ordered
o Some govt agent determined amount of money to be paid
 As opposed to an injunction where party could choose whether or not they wanted to accept
payment
 Potential problems with liability rules?
 It lessens the right to exclude
 Maybe prop rights should be strong enough to value idiosyncrasies and allow exclusion
regardless of amount of money
 On the other hand that may be inefficient, etc
VI. ACQUISITION BY GIFT
Newman v. Best (NC 1898)- P 18 y/o orphan housekeeper, D administrator of estate of deceased guy, alleges guy gave to
P “gift causa mortis” of keys to bureau, told her he wants her to have everything in house and insurance policy in bureau.
Is this a valid transfer of possession?
 Held: Yes and No.
o Two things required
 1. Intention to make the gift
 May be inferred from facts, if clearly knew what he was doing and intended gift
 2. Delivery of the thing given
 Constructive delivery
o Plainly appears that it was the intention of the donor to make the gift, and where
the things intended to be given are not present or incapable of manual delivery
(size or weight)
 But where the articles are present and are capable of manual delivery, this must be had
o P owner?
 Title to insurance policy did not pass to P b/c not handed over
 Bureau and any other article of furniture, locked and unlocked by any of the keys given to P, did
pass to P as owner
 Other articles of household furniture did not pass b/c of want of delivery
Intent?
Delivery?
1. 3000 life insurance policy
2. 200.94 value of household property
Maybe. Did say “everything in the house.”
But also he was giving bureau and it was
just inside, so may be an accident.
Yes. Everything yours. Not hidden like the
policy.
3. 300 value of piano
Yes.
4. 45 value of bedroom furniture in
Julia’s room
Yes. Given inter vivos. Witnesses, etc.
No. No excuse for constructive or
symbolic delivery b/c he could have
handed it over physically.
Yes. Keys given to furniture. Constructive
delivery. Only counts for things keys open.
Other furniture not delivered.
Maybe. Remand in this issue. See whether
there is constructive or symbolic delivery.
Yes. Put in her room for her use.
But see… Gruen v. Gruen (NY 1986)- P father sent letter giving him painting but father wanted to keep it until he dies.
Died, son wants it. D stepmother says no real transfer of ownership. Transfer ownership in a letter?
 Held: Yes. Elements of gift established
o To make a valid inter vivos gift there must exist the intent on the part of the donor to make a present
transfer; delivery of the gift, either actual or constructive to the donee; and acceptance by the donee
o Clear and convincing standard
o Requires donor intent to make an irrevocable present transfer of ownership; if intention is to make
disposition effective only after death, the gift is invalid unless made by will
o Test of ownership or possession for enjoyment is: whether the maker intended the gift to have no effect
until after the makers death or whether he intended it to transfer some present interest
 If present transfer of interest, gift effective immediately
o Valid inter vivos gift, must be delivery (physical, constructive, symbolic) sufficient to divest donor
dominion and control over property
o Acceptance by donee is essential , where gift is of value to donee, acceptance is presumed
 Intent and delivery and acceptance?
o Intent → yes
o Acceptance → yes
o Delivery?
 No actual physical delivery
 Giving an property interest (remainder) but keeping possession (life estate)
 Breaking painting into two rights “sticks”
o Remainder- whats left after my life
o Life estate- possession/title right now
 Court says you don’t have to deliver painting and then have it handed back in order to keep life
estate
 Accept symbolic delivery in series of letters
 Court even says sometimes symbolic delivery is even better then constructive delivery in
circumstances where actual delivery would be silly given the interest/right that is being
conveyed
 May be better for intent than actual delivery
Notes:
 Two requirements:
o 1. Intention→ May be oral evidence
o 2. Delivery→ Requires objective act
 Constructive
 Handing over key or some object that will open up access to the subject matter of a gift
 Symbolic
 Handing over something symbolic of the property given
o Note: Requirement of deed to transfer land
 Difference b/t gift and will
 Gift is giving now
o Irrevocable
 Will is giving later
o Can be revoked/changed/etc
 Gifts of Personal Property






1. Delivery (transfer possession)
o Reasons:
 “Wrench of delivery”- giver really knows
 Evidence
o Exceptions/Alternative:
 Constructive
 Handing over key or some object that will open up access to the subject matter of a gift
 Symbolic delivery
 Handing over something symbolic of the property given, usually written document
2. Intent (to make a gift)
3. Acceptance (usually presumed)
Example: Suppose O wearing watch, hands A a signed writing saying “I hereby give A the watch I am wearing
o Traditional rule- watch must be handed over
o Restatement rule- watch can be transferred by document
 But ha to be “I give you my watch”
 No “I will give you my watch”- that’s and unenforceable donative promise
o Intent? Yes, note suggests intent
o Delivery? Symbolic delivery is note. But that exception not justified b/c watch easy to deliver (hand it
over)
 Strict/traditional reading is that exceptions are only in cases where object cannot be handed over
 Restatement is more liberal
Miscellaneous:
o Gift causa mortis
 Gift made in the contemplation of and in expectation of immediate approaching death, is a
substitute for a will
 Deathbed gift
o Inter vivos gift
 Given while alive
o Why so stingy w/ the rules?
 Wants to encourage people to make wills and avoid fraud
o Hypotheticals: see pp 187
 2. Guy says he wants to give insurance policy, tells servant to hand it over but doesn’t
 Intent but no completed delivery. No gift
 3. I want to give you bureau. Move it to her room. Inside is the policy.
 Delivery to her room clear. Intent no, didn’t mention. No gift
 4. I want to give you bureau and insurance policy here is the key.
 Intent. Constructive delivery of bureau. May lack delivery of insurance policy.
 5. I want to give you stong box and insurance delivery
Notes:
o 1. Hypo
 Ownership but not life estate?
 Harder to justify no delivery when all the sticks are being given
o 2. Hypo
 What about letter saying you can have it when I die
 Less likely a gift. More like a failed will.
VII. SYSTEM OF ESTATES POLICY
Bundle of Sticks
 Estates exist apart from land, bundle of sticks, legal relations b/t persons, can divide sticks and separate over time
and b/t people, amount/degree/nature/quality of person’s interest in land
Restraints on Alienation:
 Objections to restraints on alienation:
o 1. Makes property unmarketable


o 2. Perpetuates concentration of wealth b/c rich have to keep wealth
o 3. Discourages improvement on land if cannot sell one they’re done
o 4. Hardship on creditors who cannot reach the property
Classifications of restraints on alienation:
o 1. Disabling restraint
 Withhold power to transfer interest
o 2. Forfeiture restraint
 If tries to transfer, it is forfeited to another person
o 3. Promissory restraint
 grantee promises not to transfer interest
 Enforceable by K remedies
Restatement 2 of Property
o Treats all these restrains alike when imposed on fee simple
o Absolute restraint on a fee simple is void
o Partial restraint, circumstances reasonable, effect, duration
Anti-Commons:
 Baker v. Weedon- Weedon has numerous marriages, children, dies, leaves life estate to last wife, then to be
divided among grandchildren. Suit, lower ct ordered sale and division of proceeds for economic waste. Can court
order her to sell it?
 Held:
o Must be “necessity” to order sale of land for the prevention of deterioration/waste
o Also consider whether a sale is necessary for the best interest of all parties, that is, the life tenant and the
contingent remaindermen.
o Here the best interest of all the parties would not be served by a judicial sale of the entirety of the
property at his time- great financial loss to the remaindermen.
 The problem- the land cannot be exploited for most efficient use and no one will buy Anna’s life estate (b/c why
build and then lose land at her death
o Everyone could agree to alienate though…
 But there are major practical problems with coordinating
 So the authors say to use a trust
 This is like Heller, Anticommons
o Too many sticks divided in too many ways then there are too many impediments to efficient use
o Cognitive bias? Transaction costs
 Every patent holder thinks they have the cure to cancer
 Here the future interest holders think the land will be worth way more in a few years, but if that’s
true then wouldn’t someone else be willing to buy it for that price now? Prof thinks so
 Court feels the remaindermen’s numbers are right
o And since the sale would be for much less, then it’s not in their best interest, so a court ordered forced
sale is not appropriate
o But we may be able to come up with reasons for forced sale in terms of anticommons
 But prof says the key idea is that when the sticks in the bundle are all so divided, efficient alienation can be
difficult- as in the anticommons discussion
Economic Waste:
 Can become relevant when A and B have property interests at the same time
 Waste concept is that A should not be able to use land in way that unreasonably interferes with B’s expectations
 Maximize the property value
 Injurieous waste – liability arisies injurious acts that reduce value of property
 Permissive waste – negligence, failure to care
Dead Hand Control and RAP:
RAP and Alterntatives
Pro
Con
Traditional Common Law Rule
Clarity and Administrability (one time
calculation at time, grantor just has to
follow rule) (logic is easier to figure out
Against intention of grantor;
Overinclusive (may eliminate interests that
don’t actually create an uncertainty far
that what actually happened, research,
etc);
into future); Outlived usefulness as limit
on accumulation of wealth (b/c we have
taxes); Might make land difficult to
alienate/efficient use (this applies to below
also)
Wait and See for Common Law Period
Closer to Intent of Grantor
Too complex to calculate and to keep
track of everyone;
USRAP (Wait and see for 90 years)
Closer to Intent of Grantor
Abandon Completely/Perpetual Trusts
Closer to Intent of Grantor;
Trustee deals with problem of tying up the
land;
Clarity and Administrability;
Money and power for lawyer to make trust
and makes hard for other people;
90 years too long (still a lot of dead hand
control) (not really enforced so much
later?); (too arbitrary)
Abandoning alienability (trusts help but
may be very conservative);
unforeseeability (dead people don’t do
good job of predicting future efficiency;
VIII. CO-OWNERSHIP TENANCIES
DIFFERENT TYPES:
Tenancy in Common
(T in C)
Joint Tenancy (JT)
Tenancy by the Entirety
(T by E) Not in cal
CREATION/
REQUIREMENTS
-Default
-To A and B
SURVIVORSHIP
TERMINATION
No
- 4 Unities (some states) (340)
(time, title, interest, possession)
- Clear intent, e.g. “to E and F
as joint tenants”
-To husband and wife (some
states)
- 4 unities and marriage
Yes
-Partitian requested by either
tenant (p. 341)
→ IO
-Destruction of a unity by
either tenant (→ T in C)
- Partitian requested be either
(→ IO
-Divorce (→ T in C)
Yes
Delfino v. Vealencis (1980)- T in C; Delfino owns 99/144ths and Vealencis has 45/144ths. Delfino developer wants
partition by sale and split proceeds. Think they can buy her out, whereas Val wants partition in kinds to remain on
property
 We know…
o The standard kind of partition is to split the property into shares and each side gets
o But you can also sell the whole property and split proceeds by chares
 Court held: No; Partition in kind is way to go
o Best use for all parties is most fair
o Default presumption is partition in kind, not partition in sale
 Exception, where:
 1) Impracticable to do partition in kind
o a) Physical attributes of land
 Lake, land
o b) Lots of tenants in common and everyone would get a tiny amount of land
 Too small to be used, etc
 2) Interest owners better served by partition in sale
o Like here there is a special interest in the home
OBLIGATIONS
ACTION FOR
CONTRIBUTION
CREDIT IN
ACCOUNTING
CREDIT UPON
PARTITION
HOW CALCULATED
TAXES/MORTGAGE
Yes (unless in sole
possession)
REPAIR
Justification- unfair,
people might just stop
paying taxes,
No (absent agreement)
IMPROVEMENT
Justification- repair not
as big concern as taxes;
questions of how much
should be spent are too
uncertain for law, leave
to parties
No (absent agreement)
(money coming in from
rent)
Yes
Yes
Taxes paid in excess of
share
Yes
Yes
Cost
You can get rent money
for repair/ improvement
when being rented out
Same as Credit in
Accounting, you get get
money if you spent
money on
repairs/improvement
Yes
Yes
Justification- see above
+ / - Value
Credit if increased
value, but could be
docked if improvements
hurt value of property
Swartzbaugh v. Sampson- Joint Tenancy b/t husband and wife, D wanted to lease part, Husband thought good idea and
wife not. Can one Joint Tenant who is objecting cancel the lease?
 Held: No
o JT each of joint tenants can do stuff with the property without asking the other
o Unity of possession
 Neither has exclusive possession
 But each can do stuff with their part of the possession
 Can wife do anything?
o Remedies:
 1) Partition
 Get out and take your share (like Delfino)
 2) Ouster
 She could recover from lessee ½ of rental value of leased land
 If not, try to get them out
 3) Accounting
 She could ask for her half of money going to husband
o But if your CT is occupying the land (rather than a lessee) you cannot demand
rent
 What happens to money you pay out (380)
o Like if you pay taxes, mortgage, improvements…see chart above
Notes:
 How does joint tenancy in fee simple differ?
o Differences:
 In JT there is no future interest in survivor to be transferred (alienable) (its automatic)
 In a JT the survivorship interest can be destroyed easily (like by one party breaking the
agreement)
 Where as in the contingent remainder you cannot transfer or change unless both agree (no
unilateral destruction)
Policy:
Possible Benefit of Multiple Owners:
 Benefits from pooling resources
 Can afford something together
 Cooperation is good, should be encouraged

But make sure the rules actually do encourage it
Tragedy of the Commons:
Do these rules do a good job in dealing with tragedy of the commons problems?
 Do want to incentivize repair and improvement
o So can get some credit, costs
 Otherwise worry about undercultivation
 But also good to give more money for repairs than improvement b/c improvements not a
important as repairs
 Maybe more fair and practical to say pay when taking money in, but not just for spending it
 Encourages partition
o Deal with problems by not being co-tenants
Tragedy of the Anti-Commons:
 Partition
 Maybe if doctrine, Delfino, might lead to lots of partition = ant com problem if keeps getting
fragmented
Administrability


Maybe too much formalism
Avoid costs and hassle of probate
Examples/Problems (342):
 1. O conveys land to A, B, and C as joint tenants. Subsequently A conveys interest to D. Then B dies intestate,
leaving H and his heir. State of title?
o Start with JT (in ABC); When A transfers to D, time unity broken; And different instrument (so no unity
of title); So D has T in C with B and C
 What if B had died leaving a will devising his interest to H?
o Trick here is to figure out relationship b/t B and C; C still has his share as a joint tenant by right of
survivorship; So D has 1/3 and C has 2/3 (automatic survivorship; See top pg 341 “one joint tenant
can…unilaterally…third party…severs…
 2. T devises land “to A and B for their joint lives, remainder to the survivor” What interests created?
o Doesn’t say anything about them being joint tenants; It creates a T in C that lasts for their lives; Like a
specialized life estate; But nothing about creating a joint tenancy; Contingent Remainder in FSA
 3. A and B are planning to be married. Two weeks before the ceremony, they buy a house and take title “in A and
B as tenants by the entirety” Several years after marriage, A moves out of house and conveys his interest in the
house to his brother C. C brings an action to partition the property. What result?
o Because they were not married yet, they did not take the property in T by E; So T in C (or JT then then
turned into a T in C); A can convey his interest to C; And it can be destroyed unilaterally by request for
partition
IX. MARITAL INTERESTS
PROPERTY CONSEQUENCES OF MARRIAGE
DURING MARRIAGE
UPON DIVORCE
ON SPOUSES DEATH
Common law:
Common law:
T by E → automatic survivorship
Depends on title (see last section)
- If T by E then…see Sawada
(also 391), cannot be
severed/parititoned unilaterally,
unlike JT or CO; comanagement
requirement protects from creditors
Old way- based on title (399), who was
id’s as owner, TC could still be
maintained after divorce, but
advantaged husband b/c wife property
became husbands on marriage. Wife
entitled to support (alimony).
Common law dower and curtesy (416)
- Dower was gift made at wedding,
surviving wife all freehold and land
husband had during marriage
- Curtesy widower entitled to life estate
in each priece of wife’s real property if
certain conditions met
New way- Equial/”equitable
distribution” of all/marital property,
equitable principles, need, fault, other
considerations; sometimes all property
Common law – elective share statutes
(418)- can be defeated by intervivos gift
- aka “forced share”
other times limited to certain things;
(400). Alimony support for limited
time.
- surviving spouse an elective forced
share in all property real and personal that
decedent spouse owned at death
- forced share can trump will, skim off
all the devisees in will
Intestate succession
Community Property
Community Property
Community Property
- Only applies to some property,
designated as comm. property –
420
Equal/equitable division
At least ½ of comm. property to surviving
spouse (421-423)
Also question of all community
property or just some (421) all
“marital”
property
So limiting on devising community
property to 1/2
- Some comanagement and some
protection from creditors (421423), limit unilateral actions
Co management
Contested area: human capital
Note- goal in both is to provide for
surviving spouse
Sawada v. Endo- (1977)- D car accident, owned property T by E with wife, conveyed to sons, can creditors get that land
or was conveyance allowed?
 First…
o Skip the conveyance
o When Mrs. Endo dies in a T by E
 Automatic survivorship → goes to Mr. Endo
o Then if judgment against him they could go after property to get damages
 Question:
o Was the T and E to sons legitimate?→ Yes
o Subject to claim of creditors?→ No
 Reasoning
o T by E needs both consent; T by E not subject to creditors of one party (As opposed to JT which can be
voluntarily broken); T by E must be managed together (no unilateral action)
 Majority Rule
o Only both spouses acting together can manage and subject property to claims of creditors
o Estate not subject to creditors of only one spouse
 Policy based rationales
o Protecting family home, important investment (edu, emergency, second mortgage)
 Compare to JT
o In Schwartzba each parties could lease their own part (didn’t consent but lease was valid)
o If that had been a T by E, would it have come out differently?→ Yes, need consent of both parties,
Cannot make the lease that wife objected to
In re Marriage of Grahm - 6 yr marriage. Student and flight attendant. Husband worked part time. Wife 70% financial
support. Wife supported husband while he went to college. Does a MBA constitute marital property in a divorce?
 Held: No, None of attributes of property in usual sense of the term. Reimbursement only happens if demonstrate
enhanced earning capacity
o Comm property state in Cal
o Community shall be reimbursed for community contributions to education or training of a party that
substantially enhances the earning capacity
o Gets back money it put in + interest
 Not a share of increased earning- The increased earning is just a trigger for paying back her part
of the tuition money
Mahoney v. Mahoney




No professional degree was not marital property
o Too speculative value; Demeaned concept of marriage; Instead give “reimbursement alimony”; Cover all
financial contributions towards spouse education
Trial ct had held yes…family made investment
o She contributed share; Increase in future earning capacity that she should get; See slide 40% share
Dissent
o Thought this was the one assist produced in the marriage; Equity demands extraordinary remedies to
prevent extraordinary measures
Discussion:
o What is property? It has some sticks but not the other
 MBA no exchange value, no objective market value, terminates on death and not inheritable;
Convincing? Maybe not. Just b/c an interest terminates it can still be property (life estate)
o Dissent likely recognizes the policy problem→ Need to tailor rule to enforce justice?
o Slippery Slope?
 Commodification of education (Or education too personal?)Lots of things increase earning
potential?
o Problems with Administrability in reimbursement
 Maybe too speculative? Or locks spouse into a career path that maybe they don’t want
 Future risk and uncertainty about value
o Maybe opportunity costs→ for wife who didn’t pursue her own career
o Commodification of marriage?
 An investment for money; Or love; We don’t want to harm relationships
 Also, its hard to commodify some things (like future earnings) but not other benefits (like
companionship) and liabilities (like cooking) and may lead to under/overcompensation
Elkus v. Elkus (NY 1991)- Husband helped wife become famous Opera star. 17 yr marriage, opera star, husband active
role teachings, critiquing, coaching. Is the career/celebrity status marital property subject to equitable division?
 Held: Yes; To the extent that D efforts led to increase in the value of P’s career, this appreciation was a product
of the marital partnership, and therefore, marital property subject to equitable division
 Note that this rule “double counts” wages if party remarries
 This would recognize more than tuition (Like child care, etc)
Notes:
 Legal Fiction- Husband and Wife Are One (T by E)
o Married Women’s Property Act- Brought right to women, no longer just husband protection
The Community Property System:
 Intro:
o Some states (CA) permit couples to elect community property (also Az, Ca, Id, Lo, Ne, NM, Tx, Wa, Wi,
Ala) 419
o Can choose:
 American common law system → old property in separate ownership
 American community property system → acquired property as comm. prop, inherited as separate
prop
 Universal community property system → all property whatever source comm. prop
 Aspects of community property
o Assumes spouses equally contribute
o Earnings of each owned equally
o Anything bought with earnings
o Separate property = before marriage, gift, devise, descent
o Can freely change character of property in written agreement
 Community Property Compared with Common Law Concurrent Interests
o None of comm. prop states recognize dower or curtesy or T in E
o Husband and wife
 Only them com prop
 Held as TC or JT (no T in E)
o
o
o
o
Conveyance and share
 Neither can convey undividied one-half share of comm. prop
 Neither can change character without assent of the other
At death
 Each can dispose by will ½ comm. prop
 No survivorship
 Intestate = surviving spouse
Sale after death
 Entire comm. prop receives a “stepped up” tax basis for federal income tax purposes
 Possible tax advantage here
Management
 Equal management power
 Must agree, not like TC or JT
Recap different approaches to dividing property at divorce:
 1. Increased earning capacity = marital property
o Trial ct in Grahm (colo); Elkus
 2. Investment in education = marital property
o Cal (but only if increase earning capacity)
 3. Investment in education = factor in division calculation
o Dicta in Grahm (colo)
 4. Investment → Alimony
o Dicta in Grahm (Colo); “Reimbursement alimony” idea in Mahoney
 More?
Policy:
T by E Policy: Souses can only subject property to creditors together
o Yes→ Avoid inequality; Family owns together, want financial refuge; Creditors can see the title before lend,
don’t need special rights; Flexibility of couples to choose; Protect family home
o No→ Maybe family should face problems together; Not fair to other people who needs home; Maybe not fair to
creditors, plaintiffs, injured (couldn’t have anticipated, no recovery even though lives destroyed?);
Disadvantaging single parent homes, non married, etc (so many family units not getting the benefits); Possible
anticommons problem, demanding cooperation could tie up property and hinder efficient use
Rationales/Objections of Property Consequences of marriage
 Pros
o One person would be very disadvantaged
o Recognized labor of home maker (or that they had lost opportunities)
o Allows people to maintain standard of living (avoid poverty)
o Encourages people to got out of bad relationships (don’t have to worry about financial insecurity)
o Promote marriage as an institution by incetivizing benefits
 Stable family for children, etc.
o Incentivizes division of labor (could be pro or con)
 Pro- one parent can focus on children
 Con- one parent dependent on other
o Encourages equal investment in family assets
 More investment
 More purchasing power
o Discourages frivolous marriages
 B/c threat of having to divide property on marriage
 And divorce a bigger problem one in the marriage
o Children benefit from shared assets post divorce
 Especially if the non-earning partner gets custody
 Discourage fighting b/c property consequences
o Clear rules help dissolve bad relationships and ease the very emotional conflict quickly
o

Con
o
o
o
o
o
o
o
o
o
o
o
Encourage premarital agreements, will, other planning
 Otherwise you might have to split property for no reason
 To avoid default rules
 Especially for default rules
Increasing divorce by decreasing dependency
Not as necessary where people marry with career and status
Harder to administer
 Administrative hassle = money for lawyers
Lots of judicial involvement in private matters
Can provide inconsistent outcomes depending on classifications, etc
 Alternative- require pre-planning?
Gold digging
 Dishonest intention
Rules not really necessary for many modern couples
Discourages investment in (women’s) human capital
 Division of labor sounds nice but really it doesn’t take account of fact that most will end in
divorce and one member who hasn’t been out will not have tool they need to survivie outside of
rel’ship
 Reinforces traditional gender roles
Discourages earning by one party
Hurts children to have one person raising child and one away- should be shared
Pre-planning not realistic b/c no one thinks about divorce
Consequences in terms of other types of relationships:
RATIONALE
SAME SEX COUPLES
Security For Non-Earner
-Inequality in earning power
-Reliance applies here too
Provide for Kids
-- (Especially accidental kids?)
-- (Limited resources have to be divided
somehow?)
-Have kids also, adopt
-Not all hetero couples have kids
- (Con) bad environment for kids b/c of
stigma?
- (Con) Maybe the purpose of marriage is
to plan for accidental pregnancy, special
need for state default rule
OTHERS
- Common law marriage?
- Mandatory marriage for accidental
parents?
Encourage Division of Labor
Encourage Committed Relationships
X. LEASEHOLDS
A. TYPES AND SELECTING TENANTS:
Types of Leasehold Estates:
1. Term of Years
2. Periodic Tenancy




Lasts for fixed or computable period, e.g. for one year
Can be 1 day or 3000 years
Must be for fixed period but it can be terminable earlier upon happening of some event or condition
B/c states from outset when it will terminate, no notice of termination necessary

Lease for a period of some fixed duration that continues for succeeding periods of until either the
landlord or tenant gives notice of termination
“To A month to month” (example)
If notice not given period is automatically extended for another period




3. Tenancy at Will
4. Tenancy at
Sufferance
Notice
o ½ year for year-to-year leases
o Less than a year → equal to length of period but not to exceed 6 months
o Must terminate on final day of period, not middle
 Many states may shorten
Death of landlord or tenant doesn’t effect periodic tenancy or term of years


No fixed period that endures so long as both landlord and tenant desire
If lease provides that it can be terminated by one party, it is necessary at the will of the other as
well if a tenancy at will has been created
 Ends when one of parties terminates it
 Ends at death of one of the parties
Usually period of notice (30 days)
 What happens when tenant doesn’t leave
 LL can evict or create new tenancy
See pg 451
Selection of Tenants and Unlawful Housing Discrimination
Federal Law
 14th Amendment
o Equal protection; Can limit enforcement of private discrimination; More ont his later (Shelley v.
Kraemer)
 Civil Rights Act of 1866
o Only covers racial discrimination in sale or rental of property; No exceptions
 Fair Housing Act (this is the main one)
o Covers race, color, religion, sex, handicap, familial status, national origin; Covers housing, advertising,
housing related services; Lots of exceptions; See problems below for major provisions or pp 460 – 462;
Don’t need to prove discriminatory motive, proof of discriminatory effect is sufficient
State Law
 May cover more (Marital status, sexual orientation)
Notes:
Lease
 An arrangement can be a lease, or something else like a license or life estate
 Matters whether or not an arrangement amounts to a lease b/c it gives rise to the landlord-tenant relationship,
which carries with it certain incidents- certain rights and duties and liabilities and remedies
 Conveyance v. K
o Both
o Creates property rights and a K
o Contract principles usually relied on (see pp 458)
 Statute of Frauds
o Usually oral less for less than a year
o Usually others must be written
 Leases can be wordy, lots of contingencies
o Lots of form leases, take-it-or-leave-it basis w/ no negotiation
o Lots of unequal bargaining power issues
Questions/Examples:
 1. Apt to rent in home, ad in newspaper:
o For rent: Furnished basement apartment in private white home; black couples applies and is rejected b/c
race
 FHA 3604, Cannot print/publish ad for housing that indicates preference for sex, race, etc
 This is preference for race, violation of FHA
 Exception:







Single family homes renter by owner that doesn’t own more than three (small scale
landlords)
 Small owner occupied housing (the Mrs. Murphy exception, boardinghouse, etc)
o So notice…that she could not place the ad but could do the discriminating if she
wanted to, under the FHA
 Civil Rights Act
 Applies! No exception applies
2. Ad for apt for “able-bodied tenant, blind woman applies and is rejected b/c of disability
o FHA:
 Ad in violation of act b/c language of discrimination
 But if no language in ad, then she could still choose not to rent to blind b/c of Mrs. Murphy
exception for renter occupying the house
 This doesn’t violate civil rights act (that’s only for race)
3. To maintain the condition of houses, LL limits 2-3 bedroom house to 4 people. Refuses to rent to couple w/
three children
o FHA
 Doesn’t violate b/c based on the number of people, regardless of age (allowed to limit number of
people on property)
 Justified on grounds of maintaining value of property
4. LL rents 1-bedroom to 2 adults but not to 1 adult and 1 child. 2 bedroom to 2 adults and 2 children but not to 1
adult and three children.
o Glover v. Crestwood held this violate FHA b/c of familial statuts
 “Familial Status”
 Means one or more individuals (who have not attained the age of 18 yrs) being domiciled
with—
o (1) a parent or another person having legal custody of such individual or
individuals; or
o (2) the designee of such parent or other person having custody, with the written
permission of such parent or other person
5. LL refuses to rent to couple because they are unmarried
o Marital status not covered by FHA
6. LL refuses to rent to gay couple based on sex orientation
o Sexual orientation not included in FHA
 But most states laws are broader and include this
7. LL sexually harasses female tenant
o Discriminatory classes covered includes sex
o Sexual harassment has been understood as sexual discrimination
o Harassment did constitute discrimination covered by FHA
B. DUTIES, RIGHT, REMEDIES
Constructive Eviction
 Move out and stop paying rent
 Triggered by act or omission which renders premises substantially unsuitable for the purposes for which they are
leased, or which seriously interferes with beneficial enjoyment of the premises (this is considered the broad view)
o Ex: Too many rats, either move out and stop paying rent or use old rule to sue for damages
o See 531; Tenant can sometimes stay and sue for damages = value of property
Reste Realty Corp. Cooper (1969)- D leased basement from P, abandoned 2 + years before end of lease because the floor
periodically flooded, lessor was aware of condition had promised to fix before renewal of lease but never did. Did tenant
have right to constructive eviction and pay no rent?
 Held:Yes
 Rules:
o Problem Known To Lessor
 If condition was known to lessor, there was a duty to disclose it to tenant.

o
Latent defects which are not reasonably apparent to the ordinary prospective tenant are not
assumed by tenant
Covenant of Quiet/ Constructive Eviction
 Any act or omission of the landlord (or someone acting under landlord authority) which renders
the premises substantially unsuitable for that purpose for which they are leased, or which
seriously interferes with the beneficial enjoyment of the premises, is a breach of the covenant of
quiet enjoyment and constitutes a constructive eviction of the tenant
 Covenant of quiet enjoyment
 Right of tenant to have the beneficial enjoyment and use of the premises for the agreed
term
 Tenants right to claim a constructive eviction will be lost if he does not vacate the premises
within a reasonable time after the right comes into existence (reasonable time determined by
circumstances of each case)
Implied Warranty of Habitability
 Defined:
o Duty on LL to maintain housing habitable condition; Adopted in most states (some common law, many
statutory); Only for residential leases (majority rule); Cannot be waived (majority rule- see 541 n 48);
Exception- casual leases, some others
 Remedies Under This Doctrine
o Move out, stop paying rent
o Stay and withhold rent (or pay into escrow- see p 539 n 47)
o Fix and deduct expenses from rent
o Stay and then sue for rent paid (Hilder)
o Additional compensatory and punitive damages possible (Hilder)
o (Injunctive relief- see p 542)
 Note on remedies
 Different cts use different calculations (542)
 Could be a sneaky way into a type of waiver if the rent is reduced at the beginning (if ct
measures as difference b/t rent agreed and fair rental value) (as opposed to measuring as
difference b/t the value of the dwelling as warrantied and the value f the dwelling as it
exists in defective condition)
Hider v. St. Peter (1984)- P renting apartment, paid all rent dues and security payment, cleaned but got no deposit back as
promised; broken window, self install door lock, toilet clogged an inoperable, bathroom light and outlet doesn’t work,
water leaked from water pipes, plaster falling from walls, raw sewage permeated and in basement, landlord kept
promising to fix and never did.
 Implied Warranty of Habitability
o Exists in the lease (for tenancies for specific period and at will)
o Landlord will deliver over and maintain, throughout the period of the tenancy, premises that are safe,
clean and fit for human habitation
o Covers all latent and patent defects in the essential facilities of residential unit
o No assumption of risk by tenant, cannot be waived
o Tenant must 1) notify landlord and allow reasonable time to fix before bringing action and 2) show that
the defect affecting habitability existed during the time for which rent was withheld
o Remedies:
 Rescission, reformation, and damages
 Measure as difference b/t the value of the dwelling as warranted and the value of the dwelling as
exists in defective condition
 Or withhold payment of future rent
 When tenant pays to fix, can deduct that from the rent
 Punitive damages if willful and wanton or fraud
 Held: Tenant remained in premises and recovered damages, including punitive from “slum lord”
 Notes:
o Standard
 Varies, adequate habitability, uninhabitable for reasonable person, objective is safe and healthy
housing
o
Retaliatory Eviction
 Most forbid this by LL
 Create rebuttable presumption of retaliatory purpose if the landlord seeks to terminate a tenancy,
increase rent, or decrease services within some good faith period after good faith complaint or
other action by a tenant based on the condition of the premises (90-180 days)
 Tenant bears burden of proof
Notes:
Common Law: Caveat Lessee
 LL’s only duty = not interfering with tenant’s possession (implied covenant of quiet enjoyment)
 Limited Exceptions: Explicit duties in lease; Latent defects; Unmaintained common areas; Uninhabitable
conditions in short term furnished housing
 Remedies
 Physical ouster- terminate lease and stop paying rent
 Otherwise sue for damages
Disputes usually arise in two ways
1. Tenant might wish to vacate or stay and pay less or no rent
2. Tenant might be injured by allegedly defective premises and claim damages against the landlord in tort
Theory of constructive eviction
 If one could characterize a shortcoming in leased premises as unlawful disturbance by landlord – as a breach of
the covenant of quiet enjoyment implied in all leases- and if the disturbance was so substantial as to amount to
eviction, and if the tenant thereafter abandoned the premises, then it was as though the tenant had been evicted,
the eviction was “constructive”
 Relieved of obligation to pay rent
Scope of covenant of quiet enjoyment
 Expanded to include beneficial enjoyment
 Implied covenant when landlord has effect of depriving the lessee of the beneficial use of demised premises,
whether by positive acts or interference or by withholding something essential to full enjoyment and included
within the terms of the lease
 Tenant may sue for damages or abandon if breach substantial
Partial Eviction- actual and constructive
 If there is actual eviction even though from part of premises only, tenant is relieved of all liability for rent
notwithstanding continued occupation of the balance
o Res reject this and provides that the tnanant may receive an abatement in the rent but may not withhold all
rent
o Usually not relieved of all obligation when constructive eviction on part of premises only
o Tenant’s Remedies
 Stay in possession and sue for damages- difference in value of property with and without breach
of quiet covenant
 Abandon premises
 No liability for future rent
 Entitled to recover damages to compensate for losses and for higher rent in replacement
premises
Illegal Lease Doctrine
 Serious housing code violation in existence at time of lease made, where LL had actual or constructive notice of
violation
 Only works at time you made the lease, so not a solution to every problem b/c not apply to problems that develop
later
 Another new remedy: T can stay but withhold rent (LL entitled only to reasonable rental value in light of
condition of premises)
o Landlord has to sue tenant for recovery
o
o
Maybe withholding rent will give landlord more incentive to fix problem
Also may be more administrable
Policy:
The Dilemma of Landlord Tenant Rules:
 Problem of “moral hazard”
 Insured → tendency to relax efforts to prevent risk
 Landlord → incentive to neglect everyday repairs b/c costs born by tenants
 Tenant → incentive to neglect b/c costs eventually shift to landlord
The Problem of Affordable Housing/ Debate over LL-Tenant reforms
Implied Warrant of Habitability and Rent Control: Pro and Con
 Pro
o Ensure all housing is livable and decent, promote public health/safety/welfare; Higher quality of life;
Protects those with minimal bargaining power; Externality must be dealt with by LL causing them;
Tenants cannot fix usually, not all construction workers; Good where supply is low?; Housing is a merit
good (as opposed to market good); Everyone deserves some housing; Distributive justice and good policy
 Con
o Infringes on freedom of choice, contract (Maybe can bargain for cheaper housing and fix yourself);
Reduce resources that landlords devote to improving the quality of housing, making housing more costly;
Raised rents to cover additionally LL costs; Screen applicants more carefully, marginal tenants harder to
find homes, not in interest of poor; More discrimination of various sorts; Higher costs and decreased
profits = to landlords so reduce supply of housing = hurts tenants
 Note on Rent Control
o All economists agree that it is counterproductive; Has not brought average rents down to affordable
levels; But does allow people to stay in their existing places with the rent thay have become used to
Fair Housing Act
o Equity, special interest in the home
o Making sure that everyone has access to shelter
o Limitations in policy in Mrs. Murphy exceptioin b/c of respect we have for privacy and autonomy
Expansion of landlord obligations re housing conditions
o Equity (everyone has basic minimal level of conditions) Limitations on property (of landlord in some
cases), Risk posed by regulation (risky to be LL, shortage of housing, etc, Katrina-maybe everyone
should get housing but not going to have affordabele houseing If too many regulations imposed)
XI. NUISANCE:
See Slides For:
Morgan v. High Penn Oil Co.
Jost
Boomer
Estancias
Notes:
Intro


Nuisance law is a means by which common law judges resolve conflicting land uses
Sic uture tuo alienum non laedas
o One should use one’s own property in such a way as not to injure the property of another
Nuisance:
 Basic idea
o Substantial nontrespassory invasion of use and enjoyment of land
 Liability arises where invasion is
o Intentional and unreasonable, or
o Unintentional result of negligent, reckless, or abnormally dangerous activity
 Intentional
o Morgan and Res:
 When the person whose conduct is in question…act for the purpose of causing the nusance or
knows that it is resulting from his conduct, or knows that it is substantially certain to result
 Most nuisances are this type
Unreasonableness
 Jost Approach (750-51)
o Unreasonableness based on level of interference or harm
 Restatement Approach:
o Considers whether the gravity of the harm outweighs the utility of the actor’s conduct
 Discussion:
o Which is Morgan oil refinery?
 Probably the first
 Does it make sense to shut down a useful factory b/c of odors?
o In theory the oil refinery could negotiate to pay the neighbors to deal with it
o Problems?
 Inconsistent with first in time
 Inconsistent with trespass in the land case (bad regardless of degree of harm)
 Unclear, may not honor expectations
 Maybe harder to administer
 Another Restatement Approach: (752)
o An intentional invasion is unreasonable of the harm caused by the conduct is serious and the financial
burden of compensating for this and similar harm to others would not make the continuation of the
conduct not feasible
Remedies
 Traditional Rule
o Nuisance → automatic injunction
 Modern Trend
o “Balance the equities”
 Examples:
o Estancias
 Air conditioner loud and disturbing house
 Considers possibility of damages
 But imposes injunction, sort of presumption in favor of injunction
o Boomer
 Cement plant causing dirt and noise, nuisance
 Private suit not the right forum to set pollution policy (that’s for legislature)
 Choosing b/t damages and injunction…
 Ct doesn’t want to grant an injunction outright b/c it’s socially valuable
 Recognize difficulty of injunction
 Bargaining problems
 Transaction costs
 Costs to society
 Worry about damages
Policy:
PROPERTY v. LIABILITY RULES!
See Slides and Printout on Nuisance From Dave
Other concerns:
 Damages could be complicated to calculate
 Maybe injunction makes everyone’s rights very clear
XII. SERVITUDES
Intro to Servitudes
 Nuisance = disputes people get into
 Servitudes
o Agreements private parties make to avoid disputes
o Res: Servitudes
 (1) A servitude is a legal device that creates a right or an obligation that runs with land or interest
in land
 (a) Running with land means that the right or obligation passes automatically to
successive owners or occupiers of the land or the interest in land and which the right or
obligation runs
 (b) A right that runs with the land is called a benefit and the interest in land with which it
runs may be called the benefited or dominant estate
 © obligation that run is called “burden” burdened or servient estate
 Several types of servitudes
o Easements
o Covenants
 Covenants enforceable at law (real covenants)
 Convenants enforceable in equity (equitable servitudes)
A. EASEMENTS
Easement Defined:
(1) An easement creates a nonpossessory right to enter and use land in the possession of another and obligates the
possessor not to interfere with the uses authorized by the easement
Like using a driveway- Use but not camp on (no possession)
And they have obligation not to block it- This is an affirmative easement (rights of way)
Note there is also possibility of a negative easement- We’ll return to this later
See also Moira Easement Checklist
HOW FORMED
EXPRESS WRITING
BASIC ELEMENTS
Writing signed by party to be signed
(785)
JUSTIFICATION
Clear, administrable, and
reflects intent of parties, this
requires; easements can be
efficient use of land,
maximizing value of land by
sharing it
ESTOPPEL
Permission
Reasonable reliance Investment
Intent, encourages investment,
prevent waste, fairness,
honoring expectations, unjust
enrichment
IMPLIED FROM
PRIOR USE
Quasi easement;
Severance
Circumstances imply continued right of
use
Intent, trying to interpret
conveyance and whether it was
meant to have an easement,
encourages investment/efficient
productivity, prevent waste,
fairness, honoring expectations
ISSUES
May be less efficient, problems
with voluntariness, position to
bargain; notice; recording
system; could be fragmentation
of property; maybe inefficient
easements; impractical b/t
friends; excludes some
intended easements
Should be in writing? License
was meant to be ended, Ct goes
against intent, wanted a lesser
use. Administrability
problems; discourages licenses
b/c have to make sure other
person is not relying on it,
burden on person doing a favor
(cheapest cost avoider, Notice,
Fragmentation, Inefficient
easements, anticommons,
voluntariness (esp cuz they
bind future generations)
Should be in writing? Less
Administrability, Notice,
Fragmentation, Inefficient
easements, anticommons,
voluntariness (esp cuz they
bind future generations)
IMPLIED FROM
NECESSITY
Severance
Necessity at time of severance
Intent (see above),
investment/efficient
productivity, fairness, honoring
expectations,
PRESCRIPTION
Use for statutory period that is
open/notorious, continuous, adverse,
and under claim of right/mistake
Efficiency
Should be in writing?
Administrability problems,
Notice, Fragmentation,
Inefficient easements,
anticommons, voluntariness
(esp cuz they bind future
generations)
Not intended use; trumping
fairness, Notice,
Fragmentation, Inefficient
easements, anticommons,
voluntariness (esp cuz they
bind future generations)
Willard v. First Church (1972)- Woman sold property with easement for church to use as parking. Can an easement
reserve an interest in a third party?
 Held: Yes- This is example of a normal written expressed easement
 Appurtenant or in gross?
o Appertinant b/c runs with the land
o But note that it’s determinable b/c it must be used for the church
 Notice the lot 20 is the servient (burden of being parked on), Church is dominant estate (benefit of parking)
Easement by Estoppel:
 If injustice can be avoided only by establishment of a servitude, the owner or occupier of land is estopped to deny
the exitstance of a servitude burdening the land when:
o (a) owner permitted another to use that land under circumstances in which it was reasonable to forsee that
the user would substantially change position believing that the permission would not be revoked and the
used did substantially change position in reasonable reliance on the belief
 This is one in Holbrook
 Focus on this way
o (2) the owner represented that the land was burdened by a servitude under circumstances in which it was
reasonable to forsee that the person to whom the representation was made would substantially change
position on the basis on that representation, and the person did substantially change position in reasonable
reliance on that representation
Holbrook v. Taylor (1976)- T spent money building house, used road over H land to build. Easement by estoppel?
 Held: Yes, irrevocable license/easement by estoppel
 License to use may not be revoked where one party invested in reliance on it
 Here, they used it, used to take heavy equipment and material, constructed residence, maintained the road, all with
consent of H.
 Justifications? Expectations; Fairness; Efficiency
 Arguments opposed?
o Administrability, not sure of intent, uncertainty
o See Henry v. Dalton, 794, rejecting enforcement of oral permission as irrevocable license
 Security and importance of writing easements down
 Avoid disputes and litigation later
o Disincentiving permission
o Forces people to go to ct
Prior Use
 Unless a contrary intent…the circumstance that prior to a conveyance severing the ownership of land into two or
more parts, a use was made of one part for the benefit of another, implies that a servitude was created to continue
the prior use if, at the time of the severance, the parties had reasonable grounds to expect that the conveyance
would not terminate the right to continue the prior use
o

The following factors tend to establish that the parties had reasonable grounds to expect that the
conveyance would not terminate the right to continue the prior use:
 (1) the prior use was not merely temporary or casual, and
 (2) continuance of the prior use was reasonably necessary to enjoyment of the parcel, estate, or
interest previously benefited by the use, and
 (3) existence of the prior use was apparent or known to the parties, or
 (4) the prior use was for underground utilities serving either parcel
Main things to make clear
o They always happen when big parcel is divided into multiple parcels
o Ad when one person was using it they had quasi easement situation
o And then sever, question is whether one part supposed to be used and becomes a real easement based on
prior use
o And remember more than use prior use- need element that it was all owned by one entity that used the
thing and later when separated we could imply that the use would be continued
o Prior use alone not enough
Van Sandt v. Royster (1938)- All three lots were owned by Bailey, 19 along the street where sewer was, lot 4 and lot 20
sewer line ran under 19 to connect their property to sewer. Was there an easement created based on prior use.
 Held: Yes. Easement implied from prior use
 Had a big parcel; Then one part of one will be used for benefit of another
 Does that create a servitude that was supposed to continue? If parties had reasonable expectation for it to
continue.
 At time of conveyance the parties did have reasonable grounds to expect there was supposed to be continued use
 Ct basically puts people on notice- that had a sewer so they should figure out that it all connected
 But policy issue with recognizing unwritten easements regarding notice and understanding, intent
o Kinda unfair and inefficient to just inherit a burden
 Note also, can claim a violation of an easement beyond scope of terms, nuisance or trespass
Necessity:
 A conveyance that would otherwise deprive the land conveyed to the grantee, or land retained by the grantor, of
rights necessary to reasonable enjoyment of the land implies the creation of a servitude granting or reserving such
rights, unless the language or circumstances of the conveyance clearly (SEE SLIDES)
Distinction b/t Prior Use and Necessity
o Necessity is relevant to both
 In Prior Use, the necessity of the easement is just one factor used to determine whether an
easment will continue (lots of factors, prior use, conveyance severing parcel, necessity another
one)
o In Necessity
 Necessity is the primary reason
o Both apply only to circumstances where there was one big estate and then severance into smaller ones!
Othen v. Rosier (1950)- Couldn’t prove necessity. Couldn’t establish that the necessity was created at the time of the
conveyance.
Prescription
 Elements similar to those for adverse possession
o Cts struggle over establishing what state of mind makes a use adverse rather than permissive
 Res 2.16 (element of adversity)
o A
 Mistake doctrine, if the owner tried to give you a servitude but not signed right, for
example, then still the use must be open/notorious/etc similar to adverse possession
 SEE SLIDES
Matthews v. Bay Head Improvement Association (1984)- Whether, ancillary to the public’s right to enjoy the tidal lands,
the public has a right to gain access through and to use the dry sand area not owned by a municipality but by a quasipublic body.





Held: Yes. The public must be given both access to and use of privately owned dry sand areas where reasonably
necessary. Membership in the association must be public. Remand based on specific facts.
o Public trust doctrine: acknowledges that the ownership dominion and sovereignty over land flowed by
tidal waters, which extend to the means high water mark, is vested in the State in trust for the people.
Also wet sand, water, transportation and recreation
o To make it meaningful, public must have some access to private property
The group is technically private, nonprofit (Beachfront property, prevented access to beach)
Exception to right to exclude, based on public use, but maybe also more like state v. shack b/c the organization is
only quasi private and has public nature
Idea that sometimes private property yields to public necessity
o State v. Shack
o Maybe influence that the association was quasi-public (also like Shack)
Note that easement is created without any compensation from legislature (B/c ct made it, not the legislature)
Termination of Easements:
Preseault v. United States(1996): Is the conversion (by the legislature) of long unused railroad right-of-way to public
recreational hiking trails a taking of the property of the owners of the underlying fee simple estate?
 Held: Yes. The RR has an easement (not a fee simple)
o Easement does not change in use not reasonable foreseeable at time of easement establishment (and the
RR was not contemplating bike trails in 100 years)
 A bike and walking path is outside the scope of the purpose of the easement
 Use outside purpose is outside scope of easement
o Abandonment terminates an easement automatically
 Took off tracks and left
 One way to terminate easement is abandon is
 Not just not using it, must be unequivocal showing of abandon (like ripping of tracks)
 Easement may also be terminated by prescription
 Like if neighbors block driveway, not allowed to, but you don’t stop them for a long
time, that can be an abandonment
o Taking of the abandoned RR for trails is a taking of a new easement and requires just compensation
Negative Easements:
 The right of the dominant owner to stop the servient owner from doing something on the servient land
 Ex:
o 1. Blocking your windows
o 2. Interfering with air flowing to you had in a defined channel
o 3. Removing the support of your building (removing wall/excavating)
o 4. Interfering with flow of water from stream
o Unobstructed view
o Solar easement not blocking panels
o Conservation easement
 Prevent servient owner from building on the land except as specified in the grant
 Restatement
o Treats negative easements as restrictive covenants
Cts use both terms, interchangeable b/c it doesn’t matter
Notes:
Appurtenant v. In Gross
o Appurtenant = tied to ownership or occupancy
 Like the owner of a property next door can use it
o In Gross= benefit ot burden of a servitude is not tied to ownership or occupancy of a particular unit or
parcel of land
 Like just for me I can use the driveway
Servitude Variations:


Owner and successors may cross land
o Classic easement, right-of-way
Owner and her successors may not block windows
o Not right to use, but right to object to someone else’s use of land
o Negative easement
 B/c within narrow class of negative easements that cts have recognized
Policy:
Questions/Examples:
Problem 2, Pg 810:
 At the time of the conveyance there was a necessity, so an easement created to the landlocked property
 Then when A gets all the lots, the easement is extinguished b/c you cannot have an easement on your own land
 Then when A dies, and F inherits the landlocked property…
o Severance of one parcel into pieces
o Creates a necessity to the new landlocked parcel
o Can image a ct finding that there is an easement of necessity and likely in the same place as before (note
it could also be based on prior use here)
COVENANTS THAT RUN WITH THE LAND












Covenants Enforceable At Law: Real Covenants
Contract right respecting land use enforceable as a property right
Bargains b/t neighbors allocate resources and minimize externalities and conflicts
American cts permitted covenants to run in favor of and against successor landowners
Real Covenant- promise respecting the use of land that runs with the land at law
Different types of privity
o See Diagram pg 861
o Horizontal privity
 Meaning privity of estate b/t the original covenanting parties
o Vertical Privity
 Meaning privity of estate b/t one of the covenanting parties and a successor in interest
The First Restatement
o Declared that horizontal privity of estate is required for the burden of a covenant to run at law (but not
required for the benefit to run)
o Rejected by…
Third Restatement
o Horizontal privity not required for a covenant to run at law to successors
o Nonetheless the requirement of privity appears to persist in a number of states
Remember that a real covenant does not run with the land, it runs with the estate in land
o So applies to owners but not occupiers
o Restatement says no and allows to pass to owners and possessors of benefited and burdened property
Remedy = damages
Basic idea
o Promise respecting the use of land that runs with the land
Can be negative (won’t operate casino) or affirmative (will mow lawn)
Only recognized in England w/r/t promises b/t landlords and tenants
bCovenants Enforceable in Equity: Equitable Servitudes
Tulk v. Moxhay (1848)- P owned lot with garden, sold deed contained covenant to preserve garden. Sold again, new deed
did not have covenant, but buyer was aware of original, wanted to destroy garden.
 Held: Equitable servitude, enforceable by injunction, is a covenant respecting the use of land enforceable against
successor owners or possessors in equity regardless of its enforceability at law
o








Not fair for someone to buy cheap then resell with no covenant for more
 Prof said might be circular b/c discount would depend on whether or not the promise was
understood to continue
All subsequent owners/possessors bound, like easements, privity doesn’t matter
o Like an easement b/c it runs with the land itself, not just the estate
Remedy = injunction
Note in England this could not be a real covenant
o But in America it could
Requirements for equitable servitude
o 1) Parties Intended it to run
o 2) Subsequent purchaser actual notice
o 3) No strict privity requirements
Equitable Servitudes in US Law
o Less necessary than in England b/c real convenants easier to enforce
 Relaxed privity requirements
 Degree of relaxation varies (862)
In most states, no remedy distinction b/t real covenants and equitable servitudes
In many cases in US real covenants and equitable servitude indistinguishable
o New Restatement drops distinction and refers to covenants running with the land
Restatement bunches together real covenants and equitable servitudes:
“Covenants that runs with the land”
Requirements
o Writing
 Usually, although sometimes created by implication (eg neighborhood plan, same covenants on
all plots)
o Intent of Parties That Burden/Benefit run with theland
 Intent of original parties to covenant
o Notice?
 Usually provided by recording statutes, under which purchasers are rotected from unrecorded
claims (857)
 Sometimes imposed as independent requirement (eg Tulk)
 In absence of recording statutes, less common in US caselaw
o Privity?
 Requiremens vary
 New res abandons horizontal privity requirements and limits importance of vertical privity (8624)
 Not expected to know details of privity
o “Touch and Concern” requirement?
 Basic idea: promise has something to do with the use of land
 Not” Owner of blackacre will sing Happy Birthday to owner of whiteacre”
 Abandoned by new res
Shelly v. Kraemer (1948)- Are restrictive covenants designed to exclude persons of designated race from ownership or
occupancy enforceable?
 Held: No. The agreement alone is not violate of the 14th EPC. But granting judicial enforcement of the
agreements is denying equal protection and therefore the action cannot stand.
 Once concern of servitude s that they may violate public policy including constitutional provisions
 Also notice how these covenants were used to control entire neighborhoods
 Why controversial?
o Free speech ok, but not in individual’s home b/c const is limitation on state actions only
o I’m not govt so I cannot violate 14th
o But police can enforce private property rights
o Neighbors didn’t violate 14th with covenant
o Ct coming in and enforcing- neutral enforcing, then why violative of EPC? This is why the case is so
controversial.
 What discrimination by state?


o But for cause of exclusion- voluntary sale
o Enforcement of covenant requires race-based inquiry
o Big impact many generations and exclusion of whole neighborhood
o Bad to lock in status quo- changed circumstances
Restatement on This Problem
o Unenforceable Servitudes
 If arbitrary, spiteful, capricious, burdens fundamental right, unreasonable restraint on alienation,
unreasonable restraint on trade or competition, servitude unconscionable
 Bring more closely in line with general K principles
Why use 14th instead of Civil rights Act?
o Maybe to make holding more powerful
o Trump statutory changes leading to allowing discrimination again
Notes:
Creation of covenants:
 Must be written instrument, subject to SOF
 Real covenant cannot arise from estoppel, implication, or prescription
 Equitable servitude may be implied in limited circumstances, but still no prescription
Policy:
Restrictive Covenants- Prevent another from doing something (Tulk)
Arguments For
o Fairness, don’t want to allow buy cheap for promise then undermine promise
o Avoids high transaction costs for successive easements
o Efficient use, private parties managing externalities
o Don’t want to undermine value of promise/bargain by selling and buying back
o Avoid conflict, nuisance lawsuits, (895)
o Bargains less likely to be struck if possibility of getting out of it easily
Arguments Against
o May inhibit the market, or may not be efficient to enforce against successors
o May want to limit in time, ability of landowner to control future successors
o Many states require some type of renewal
o Only seems unfair if expectation that promise would last future successors
o Maybe community/legislature (zoning) is better for land use planning than private (This is also a policy
argument regarding takings)
Policy of servitudes summary
 Why worry about servitudes?
o Notice/voluntariness
 If don’t know about them when buy
 Maybe not fair
 Not efficient
o Non-democratic land use planning
 Private decisions not community as whole
o Fragmentation
 Multiple owners of interests in one piece of land can make efficient consolidation difficult
(Heller)
 Makes efficient use difficult, anticommons, transaction costs
o Locking in Inefficient Land Use Choices
 Issue where servitude difficult to remove because of fragmentation and other sources of
transaction costs
 Especially likely where servitude serves idiosyncratic whims>
o Changed circumstances

o
“Changed circumstances” doctrine allows judicial modification or termination of obsolete
servitudes
Conflict with specific public policy
XIII. ZONING
Village of Euclid v. Amber Realty- Zoning, property owners saying the laws violate constitutional due process by
reducing value without compensation.
 Held: No violation. Not necessarily all constitutional but generally zoning is not arbitrary and function fo police
power
Southern Burlington Country NAACP v. Township of Mount Laurel (1975)- Upscale town zoned basically with some
exclusively industrial areas and then residential zones were for single family houses, had the effect of preventing low and
moderate income housing. Claim is exclusionary. Does a system of land use regulation that make it physically and
economically impossible to provide low and moderate income housing for various categories who want to live nearby,
violate the state constituion for exclusing such people?
 Held: Yes. Violative. Municipality must make possible a variety of housing, low cost housing, some high density
housing up to the market share. Cannot foreclose opportunity to low and middle income families. Police power
supposed to be used to benefit welfare. Shelter a basic human need.
 What would US SC have said?
o Skeptical about constitionaly claim based on housing or economics
o B/c not a fundamental right
o Wealth distinctions not strict scrutiny
o Court deferential to zoning laws
 Then the city didn’t follow the ct’s ruling
o So they relitigated…
o Mount Laurel II
 Went beyond permitting the housing
 Required affirmative behavior on part of municipality make sure there is available housing
 “Inclusionary Zoning”
 Requires that affordable income housing be included in with single family homes
 Debate on Inclusionary Zoning
o Raising overall costs of other housing?
o Further perpetuate problem and leading to ghettos?
o Lower property taxes- require wealthy houses, well of residents, low need for public services?
o Specialization of towns? Where each town has different qualities? (Tiebout Hypothesis)
o Or model that has a little of everything? (Waring blender hypothesis)
Notes:
Basics:
 If servitudes were non democratic land use planning, zoning it its opposite
 Govt decides on plan to divide land uses into zones
 Berkeley- cumulative means the lower zones can also have higher uses but not vice versa
 Designed to prevent externalities, separation of uses, protection of single-family home, low rise development and
medium density population
Policy:
Justifications For Zoning:
o
Public welfare issues
o
Benefits of segregating residential communities from industry
o Easer access for emergency, increased security for home, reduce street congestion, nuisance/noise
o Like nuisance, suggesting goal of zoning is to prevent nuisance disputes and incompatible uses
 But why not just use nuisance law?
o
Too many cases, Administrability
o
Saves on investment, when building something in certain zones know it’s ok
o

o


o
o
 Why go farther than nuisance law?
Buffer zone and margin of error to lead to clear enforcement and administrability
What about keeping apartments out of single-family neighborhoods?
Nuisance? Sometimes maybe
 Extra traffic, noise, etc
 Important state goal to keep parasitic apartments out of some neighborhoods?
Assumes apartments are bad, but its ok for occupants to live there just not in our neighborhood
 Classist? Elitist? Exclusionary?
Impact on young people and students
But…solves collective action problems?
Protects property values, then increases taxes for state (pareto optimal)
ZONING
INCLUSIONARY ZONING
Pro
Con
Pro
Con
Avoid incompatable use
Classist and exclusionary
More Comprehensive than
nuisance
Too much focus on traditional
family
Solves externality problem of
poor people and social costs
Forced interaction can be
good, better preferences, get
rid of racism, etc
Administrability- what is the
appropriate units for inclusion
Trumps market
Solves collective action
problems
Maybe legislative decisions
dangerous if certain classes are
not represented, threats to
minorities politically
disempowered
Increases property values
Value of single family homes
E.g. better public transportation
Messes up what people want
and are willing to pay for
(market forces tend to produce
stratified neighborhoods) this is
causing inefficiencies
so inclusion is a disincentive to
new housing developments,
bad b/c used housing is offered
to lower incomes when newer
housing built b/c people move,
so less new development hurts
low classes
Defers to legislature
XIV. EMINENT DOMAIN AND REGULATORY TAKINGS
SEE SLIDES:
Power of Eminent Domain
 5th Amendment “nor shall private property be taken for public use without just compensation”
o Suggest by implication that private property may be taken for public use with compensation
o Two difficult issues: What counts as “Public use”; What constitutes a “taking” (land is bundle of sticks,
what if govt just takes some sticks?) (Regulatory takings)
Analysis:
1. Go over the three per se rules (SEE Slides)
 A. A permanent physical occupation authorized by the government is always a taking, no matter how small
(Loretto)
 B. Nuisance control regulations are never takings (Hedacheck)
 C. Rule- land use regulations that prohibit all economic uses of property are takings, EXCEPT when the
prohibited uses are common law nuisances. (Lucas)
2. Where case falls outside of per se rules, there may still be a taking based on Penn Central factors
 Open questions: How much is too much diminution?; What is proper denominator
2. Then consider the special problem of exactions (SEE Slides)
3. Then if there has been a taking…
 What is done for a public use? (See Kelo re Court’s broad view of public use) If not, the taking is invalid
 The government will have to obtain voluntary permission from the property owner if it wants to proceed
 Was there just compensation? (Consider the complications introduced in the note on p. 1113) If not, the
taking is invalid.
Kelo v. City of New London Connecticut (2005)- Owners of condemned property challenged city's exercise of eminent
domain power on ground takings were not for public use (phizer). Question of whether exercise of eminent domain power
is for public purpose, amount and character of land to be taken for project and need for particular tract to complete
integrated plan rests in discretion of legislative branch
 Held: city's exercise of eminent domain power in furtherance of economic development plan satisfied
constitutional "public use" requirement.
o city could not take petitioners' land simply to confer a private benefit on a particular private party
o executed pursuant to a carefully considered development plan, public benefit, deference to legislature
 Neighborhood
o Not blighted, but not great either; City is excited to have Phizer plant, development agency to buy up
property and and get local economic development; Homeowners saying no, just being used for private
purposes
 Dissent
o Too broad, don’t give too much deference to city, judges have some role
o The holding is limitless- any store taken to put in bigger more taxable business
 See also Poletown- Upheld takings for econ development in industrial site to alleviate unemployment. Blighted
condition. Outer limits of eminent doman, but overturned on state con law grounds. But in meantime this was like
Kelo.
 See also Oakland Raiders- City could not use eminent domain to keep football team in the city.
Loretto v. Teleprompter (1982)- NY law says apt owners required to allow cable-company to install cable boxes, wires on
buildings. Is that a taking?
 Held: Yes. A “Permanent physical occupation authorized by govt is always a taking. Regardless of public
interests it may serve. (One per se rule)
 Good govt interest to promote cable television?
o NY thinks so, want to promote it; Ct thinks its ok for city to recognize development of communication,
entertainment, education, etc
 So purpose s ok, but does there need to be compensation? Yes; Permanent physical occupation of landowner
property
 What is the physical occupation?
o Cable box, wores on outside of building
 Why should ct care?
o Size doesn’t matter
o Per se, categorical, rule
 Reasons
o Permanent physical occupation forever denies owner power to use the property
o Want strong property rights
o Clear rule, things that trigger takings → compensation
o Right to exclude is important stick in bundle
o Difficult line drawing problems
o Relatively few problems of proof
 What about law saying you have to allow free speech in the mall? Taking?
o No
o 1) There mall owner invited public in
 Private property interest not as strong
 See state v. shack
o




 Maybe mathews v. bayhead
2) Temporary invasion v. permanent occupation
 Temp, limited, not a taking
Dissent
o Does not like distinctions made by per se rule
o Arbitrary lines, need to look at extent of State’s interference
o Lots of important regulations (like forcing fire escape on building)
 Don’t want to stop that
o No principled way to distinguish fire from cable? All formalistic, strained distinction b/t physical
occupations
o Need balancing test
o Majority rule doesn’t explain all cases
Prof says…
o We’ll see this fight over and over
o Lots of straining rules to make outcome make sense
Could argue…
o Difference b/t broad public benefit and private benefit
 Does the landowner need compensation when something is broad public benefit? Maybe no
 But then where just a private benefit and private costs, at very least should be compensated?
o Could argue that this is about private party benefiting from govt regulation, not really a public benefit,
should not be a taking b/c not public use?
o Free riding for private cable company?
Strange nominal damages issue
o Saying it’s a taking
o Give 1 dollar
o Compensation not clear
o Could there be overcompensation problem also?
Majority
Per se rule
Perm physical
Occ = taking → compensation requirement
Right to exclude strange people
Free riding for private cable co
Cf More re profit for others
Uphold strong property rights
Dissent
Strained distinction
Doesn’t explain all cases
Temp v. permanent not clear even in this case
Increase value of building
Compensation not clear- 1 dollar?
Could lead to overcompensation?
Too much litigation
Impedes progress/ development
Subsidizing private company by reducing transaction costs
Hadacheck v. Sebastian (1915)- Law prohibits making bricks in LA, brickyard had been operating for years, cannot
move the clay, bought the land for that purpose, substantial investment, worth a lot, large factory, property not worth
much for residential purposes. Use regulation, is it a taking?
 Held: No. Another per se rule: Regulations curbing public bad is not a taking.
o Reasonable police power, good for society, regulation, essential power of govt
 Note this is not a physical taking
o Just a use restriction
 How could it be a taking
o Taking a stick in the bundle, valuable right to use as brick
o Makes the property worth a lot to very little, totally devalued
o Note in other case, dissent said physical occupation was not much of a harm
 And here there is substantial harm to owner
 Counterarguments
o Compensation is justified
o Taking a big stick, upsetting expectations
 Recall Spur case, where feedlot was compensated by encroaching developer (coming to the nuisance)
Pro
Land is still worth something
Con
Big valuable stick in property rights
Good idea to limit nuisances
Police power of govt essential, should not have to pay to govern
Upsetting expectation
Increase price of bricks
Fairness considerations
Note- its really not clear at all when property has been taken. Cts struggle with this….
One way to think about it is to think about what type of govt activities should result in compensation?
Rules Based on Measuring and Balancing:
Pennsylvania Coal v. Mahon (1922)- law forbids coal mining that caused subsidence of buildings. Challenged by
purchaser of home, challenging cola company to dig under home, but deed specifically allowed it to mine. Ie, sold home
but reserved right to mine coal. Con argument is D saying the statute takes property interest in coal. Is that a taking?
 Held: Yes.
o Look at extent of diminution of property
o When high definition in value then it’s a taking
 100% is definitely too much, but otherwise unclear
 Plus the homeowners bought the property and should get more rights than they paid for
 Think back to per se rules…
o Physical occupation?
 No
o Nuisance?
 Not specifically b/c private dwelling
 But dissent says this is a nuisance
 But Holmes wants to narrow Hadecheck and doesn’t think this is one
 Coal company interests
o The interest is to mione coal
o Govt has taken it away
o It’s gone too far
o To prevent right to coal is taking 100% of prop interest (diminution)
 Think of it as right to mine divided by right to mine = 100%
o Holmes also says this is not for “average recisprocity of advantage”
 Like a coal mining safety, etc
 The industry here is not being benefites
 Note Brandeis dissent
o Likes the distinction made in physical occupation (taking) and nuisance control (police power)
o Ex: 1150 n 26
 Takings should be just about physical takings
o Disagrees about diminution of value
 He views prop interests as a whole
 Values relative
 Compare value of coal with all other values of the land
 Consider right to mine as compared to whole property (surface and subsoil)
 Think right to mine divided by whole property to measure diminution < 100
o Note that ironically this might lead to even more taking b/c you could measure small property interests, as
compared to the whole, and it would be very little, piece by piece until the whole thing is taken
o Thinks this is a nuisance
 And constitutes a normal regulation like Hadecheck
 But maybe nuisance rights have been waived- a K case?? Just a private concern
 So recap- use regulation that goes “too far” will be a taking? How far, not sure, definetly 100% and matters how
you define prop rights
Penn Central Transportation v. City of NY (1978)- Law of historic buildings preventing Grand central from building
skycraper above it, taking away the “air rights.” Taking?
 Holding: No
 Note there is no physical occupation
o Not a clear taking
o Just a use regulation
 Do they adhere to Mahon and say the use can be a taking?
o Yes, they agree
o No longer a controversial issue
o Some big burdens = taking
 Articulate in more detail what factors are to consider when use regulation is a taking
o “Penn Central Factors”
 Economic impact of reg on claimant
 Degree of interference with investment backed expectations
 Whether it can be characterized as a physical invasion
 Permanent = taking for sure
 Lesser but not permanent = maybe but not definitely
 Their claimo Denied all air rights, taken 100% of airspace
o If define property right at issue as the airspace
o 100% of right to develop it has been taken
 ie airspace development / airspace development = 100%
So they say its like the right to mine in Mahon
 Ct holds
o No
o Looks at rights of parcel as a whole
 Arispace development / parcel as a whole bundle of sticks = less than 100%
o This is the “conceptual severance argument”
 And we see the ct being inconsistent with this application
 In Mahon they used the limited right divided by limited right to get 100
 Here they use limited right over whole to get less
 But maybe there’s a difference b/c in the former the right to mine was the only right they
had
o Pen Central has lots of right left
 Maybe can still build but something else
 So ct still has lots of value
 But the question remains- how much diminution is too much???
 Prof says not a ton of guidance of this case, but helpful
 Rhenquest Dissent
o No reciprocity in this case
o Gov is taking with no special benefit to the landowner, not using zoning to prevent nuisance, etc
o Thinks the state should pay for the stick it has taken
o Property not used as just the word property, it has lots of sticks, and the state here is taking one
Regulatory Takings:
Use restrictions can be takings, depending on “ad hoc, factual inquiries”
Factors (1159):
Economic impact, especially to the extent to which regulation has interfered with distinct investment based
expectations
Character of governmental action (physical invasions are worse)
Conceptual Severance/ the Deominator Problem
 Penn Coal:
 SEE SLIDES
Lucas v. South Carolina Coastal Council (1992) Ducks the question but suggests that…
“The answer to the difficult question may lie in how the owners reasonable expectations have been
shaped by the States law of property- ie whether and to what degree the state’s law has accorded legal
recognition and protection to the particular interest in land with respect to which the takings claimant
alleges a diminution in (or elimination of) value (1173, n 28)
Other issue from yesterday…relevance of nuisance
o

o



Nuisance Exception?
 Hadacheck: nuisance control regulations are never takings
 SEE SLIDES
 Penn Coal: This isn’t a nuisance. And no problem with public safety (1141)
 Bradneis Dissent: Any restriction imposed to protect the public health, safety or morals
from dangers threatened…SEE SLIDES
 Penn Central:
 Rehenqest dieent describes Hedacheck and related cases:
o Government can prevent a property owner from using his property to injure
others without having to compensate
o SEE SLIDES
 Lucas:
 SEE SLIDES
 Seems made up
 Just identifying
 Common law identifies what was classically a nuisance, no nuisance exception where
legislature just decides something is a nuisance
Notice something interesting…
o Total wieout of all the value will always be a taking
o Tru for land
o But as to different kinds of property…we might have expectation that is can be wiped out
Lucas Recap:
o Some sticks are conditional (limited by common law nuisance)
 This conditional can even lead to a total wipeout of use

o Where there is no such condition legislature cannot take all of your (economically beneficial?) sticks
 Question re economically beneficial v/c Salia talks about this on 1177
 This is controversial
 State action may be especially suspect when economic uses gone?
 Could argue that there are still other uses- camping, fishing, etc – so even if econ beneficial uses
gone, still not as bad as an actual taking
Dissent
o Argue about whether this was a total wipeout
Palazzolo v. Rhode Island (2001)- regulatory taking, cannot build house on wetland
 Not a permanent physical taking
 Not prohibiting use proscribed by common law principles
 Not all economically beneficial uses wiped out
 Turn to Penn Central analysis:
o Factors mentioned in Penn central
o Econ impact
o Investment backed expectations,
o Character of governmental action (physical invasions are worse)
o Etc
 But the regulations being challenged existed before he became owner…
o So state wants to say that he didn’t have any investment backed expectations
o Echo of Scalia argument
o Some sticks conditional
o Certainly when you know what you’re buying
 Court not willing to establish that as a per se rule
o Does that makes sense?
o
o
How is it fair that someone can buy land with regulation, probably pay less for it, and then challenge it?
Ct thinks regardless of whether its fair or not, we also don’t want govt to just get away with things b/c
changing ownership, etc
Should look at each case
Another question…
 We keep seeing reference to the purpose of the legislation
o Plays out in Lucas, Hedacheck
o So is purpose of the regulation relevant still in Penn Central ad hoc (outside a real common law nuisance),
or just
 This is Q of continuing controversy
 Some cts continue to consider reg purpose even if not common nuisance in context of penn
central analysis
 Usually when they look at the nature of government action
 Scholars think in wake of locas its not approporiate to look at gov purpose outside usiance
 Then just ask invasion or not (And not what gov purpose was)
Exacttions:
Nollan v. Cal Coastal Comm. (1987)- Law says cannot build on beach without permit from Cal coastal commission,
trading the permit for an easement (this is called exactment?)
 If this coastal commission denied the house building, would it be a taking?
o Might argue total wipeout? Or still some uses?
o Maybe not enough of diminution in value to find under Penn Central
 Maybe av reciprocity of advantage
o Court concludes would not be a taking to deny all together
 But granting permit on condition that people can walk on beach might be a taking.
 How can that be!?
 Key Holding:
o Must be a nexis b/t the condition imposed (in this case an easement) and the original purpose of the
building restriction
 1202 “unless…not a valid regulation”
 But why that a taking in sitch where a total liitaiton would not be a taking?
o We don’t want the govt to regulate extra and then buy easements for itself!
o This is funny money
o Govt cannot do it
o Lack of nexus converts purpose to obtain easement to serve a govt purpose but without paying a
compensation
o So they are trying to use it as a way around comp and takings law
o It also belies the notion that govt cares about original purpose of restricting growth
 Analogy to yelling fire unless pay govt
 Extortion?
 Also may be just not concerned about yelling fire
 But if not conderned, then maybe shouldn’t regulate
 Exaction
o Granting permit in return for some permanent phyicical invasion (check this)
 Can get out of an exactin by saing that the thing conditions is not an actual taking
 Review this, unclear
 What did ct determine?
o Nexus b/t permit scheme and easement?
o No
o People walking on sand was not related to the building of houses, the two things are not both “access”
o People won’t get walk on beach, if they cannot get to the beach
o How close nexus required?
Dolan v. City of Tigard (1994)- Dolan wants to expand business parking lot, permit but has to dedicate portion of
property a greenway. This is an exaction also. Basically have to give strips of land- bike path and greenway- in return for
building parkinglot
 Description of things imposed in central biz district
o New develop needs pedetrian pathways, etc
o
 Is there nexus b/t the easements and parking lot permit expansion?
o There is some
o Flooplain needed to help with extra runoff
o Bike path may help alleviate traffic
 So how close must nexus be
o Must be reasonably related and roughly proportional (quantum of burden imposed by exactin) to the harm
to the interest that wold be posed by developmet
 Here ct finds no rough proportionality
o Don’t have to give land as greenbelt fr runoff
o Could do something less extreme
o Don’t have to give up right to exclude, for instance,
Notes:
Eminent domain rule is a liability rule
 Not like the owner can object and then force parties to bargain
 Liability rule= just pay, no bargain
 When is use of a liability rule justified?
o Balance private and public interests
o In cases where we think important for govt to use, we may want to force it
o Special circumstances to make it an involuntary transaction:
 Transaction costs
 Holdouts
 Situation where bargain would not take place if just left to bargain
 See Posner 1095
 Low and high transaction costs
 High = use cts to shift resources
 Concern over liability rules
o May not reflect actual value
o Fair market value doesn’t take into consideration subjective values, interests,
 Recall Jacque v. Steamberg Homes
 Maybe not enough to just give market value
o Value of land might be measured differently from residential to industrial land, unequal
o If just compensation is insufficient then the theory is problematic
Policy:
Eminent Domain
 Pro
o Natual law theorists, eminent domain is an inherent attribute of sovereigntym necessary to very existence
of gov
o Posner- necessary to prevent monopoly, avoid holdouts, high transaction costs, lead to raise in prices
o Duty to compensate
 Without it, gov have an incentive to substitute land takings for other cheaper solutions
 Obvious fear of investors not to build
 Compensation protects landowners and limits state power
 Efficiency- impossible to measure idiosyncratic values
 Con
o Can be inefficient
 If encourages landowners to overinvest w/out regard to gov value
 Fairness, may be subjective valuations
o
o
Public Use
 Objective fair market value; Ignores sentimental value, etc
Just Compensation
 Payment of full market value, nt full compensation; Lots of other costs like relocation; Fairness
concerns
Should “public use” be broad or narrow?
BROAD DEFINITION
PRO
CON
Allows transaction of large amount of land for
development
Econ development has social utility- jobs and
taxes are good for everyone
Good to have cooperation with city planners,
private builders, wtc, to make big improvements
Too much deference to legislature
State can take too much, take any land as long as it will be more taxable,
etc
Disincentive to investment, why buy and build if govt will take
Even more subjective values not taken into consideration, FMV might be
insufficient
Get so end focused that means get ignored and leads to injustice, goes
against intuition/expectation
Public not really using the new area
STANDARD FOR EMINENT DOMAIN PUBLIC USE
Any legitimate
public purpose
Pro
Con
Kelo
Poletown
Benefits of public/private
partnership
Politics gets captured
shouldn’t defer
Ok
Ok
Liability on private entity
might be better (risk
sharing)
Discourage investment,
especially in blighted
areas
Deference is about
federalism- fed cts shouldn’t
be trumping local
government, will of people
Just Compensation
Not where
legislature captured
by private interests?
Actual use by public
Blight
Makes govt think carefully,
automatic check on power
Not ok?
Con language
Condemns only property
with very low value
Too late? May not want to
make an area wait until
completely blighted
Unfair burden to poor,
cannot replace
inexpensive house
Kelo dissenteconomic
development not
Too hard to draw the
line?
Oakland
Raiders
Ok
enough
Examples of some cases…should they be compensated takings? 1139-1140
 State law that requires infected red cedars to cut them down to protect apple orchards
o General
 Could substantially harm apple industry
 But how many people affected?
o Pro compensation
 It’s their personal property
 It’s an undue burden on just cedar tree owners
 Cannot get parties to transact privately- compensate to get rid of transaction costs
 If it’s too costly maybe not worth it cost-benefit analysis)
 Don’t want govt to over regulate in situations where not worth it
 Conforms to expectations (shape investment decisions)
 Normally having a tree is not a nuisance
 Maybe the apple trees are the “pig in the parlor” that don’t fit
 Depends on how valuable a “stick” having a tree is
 We wouldn’t do his balancing if we were talking about a right to exclude, for example
 Look at what society thinks is important
 Only a certain segment of the public is benefiting
 Just private farmers
 No reciprocity of advantage- unfair to make cedar people to pay for cedars
o Con
 Maybe too costly
 Everyone benefits from apple industry- healthy outcome- broad public benefit
 Maybe no comp needed if these owners benefit somehow
 Hedacheck- govt can regulate nuisance at its discretion, police power
 Harm prevention v. benefits? But still drawing a line here, what’s the justification?
o Limits compensation so govt doesn’t have to pay for everything it does
o But can we always distinguish b/t harm and benefit? No
o Maybe avoiding harm is more of a societal concern
o Nuisance law provides a clear rules for expectations
 Promotes investment, can use property as well as no nuisance
 In the abstract, laws regulating trees will be good for lots of different people in lots of different
applications
 “It all comes out in the wash” argument
 Everyone better off in the end even if some undue burdens in some cases
 Poultry quarantine law to protect chickens
o Pro compensation
 Too much regulation makes business lazy
 Over regulation inefficient
 Especially if skeptical of govt regulation generally
o Con
 It all comes out in the wash
 “average reciprocity of advantage” b/c there is a specific advantage to the regulated party
 They have to kill their chickens sometimes but overall it protects their chickens
 Same industry burdened is benefitting
 State destroys healthy orange trees to prevent spread of citrus canker and protect citrus industry
o Pro compensation
o Con
 So we’re starting to get some arguments down
 Don’t want overregulation
 But don’t want gov to havt ot pay for everything and stop
 Fairness
o Sometimes overburden some
o Maybe we want to make everyone chip in once in a while
1. A permanent physical occupation authorized by the government is always a taking, no matter how small (Loretto) v. 2.
Nuisance control regulations are never takings (Hedacheck)
Is this distinction good or bad?
 Good
o Clarity
o Benefits of regulation
o Language of amendment recognizes this as the distinction
o If every property is a bundle of stick…
 All you have to do is define the sticks narrowly and then everything becomes a taking
 Don’t want them to sell away other rights to manipulate and get more takings?
o Efficiency and clarity?
 Bad
o Doesn’t take into account the property interest
 Unfair if your entirely land use is gone
 Inefficient to grind property use to a halt
o Property is a bundle of sticks
 Physical occupation is just one
 See Rhenquest in Penn Central
 Property is not the duck, its contextual and lots of different sticks in citizens relation to
physical thing
 Some are way more valuable than physical occupation
o Slippery slope
 Don’t want to compensate everything
Argument about political process:
 Some regulations very broad- stopped by political process
 Some very specific- not stopped by politics, need compensation?
Katrina Rebuilding: Key Issues
Building Moratorium

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Basically saying wait for a few
months until they figure it out
When is the transition from an
emergency to a rational rebuild
plan, democratic derision making
process. Unrealistic to make
people wait?
Linked to eminent domain. Why
rebuild if govt going to go in and
rebuild shortly. Don’t want over
investment and loss!
Also tied up w/ regulatory
question. Let people build shacks
and then leter say no shack in X
neighborhood?
Maybe waiting will increase
costs?
How would moratorium issue be
considered? Maybe a taking, but
not a total wipeout if moratorium
(under Tahoe Sierra)
Need to consolidate services?
Disparate impact? Goes both
ways. Especially if people are
building shacks that will be
destroyed in next one.
Building Codes, Zoning, Other Regs






Consider Blender v.
Specialization question? It has
special importance here given
that some places are safe and
others dangerous, so extra
race/socioeconomic factors in
keeping people in certain
neighborhoods
Planning v. deregulationderegulation costly in the long
term?
Analogy to bay area? We all live
in especially dangerous area.
Maybe not a background
principle of property law.
Flood control failure as taking
multifactor test re reasonable.
Could state’s failure to prevent
flood constitute taking.
Multifactor test re reasonable in
California. Unreasonable risk of
harm.
Special problem in low income
areas?
Average reciprocity of
advantage? Maybe these plans are
good for everyone b/c increase
safety? Or maybe people shut out
Eminent Domain






Problems with distrust of
government, race issues, and govt
corruption (Also see Poletown,
skeptical) Maybe special problem
in cities
Generous compensation = full
extent of the loss (LA
constitution). Difference b/t fair
market value and what LA
provides-also consider loss of
losing property, relocation,
mental anguish, etc. So one
reason we are sometimes
concerned w/ ED is
undercompensation, but maybe
that’s not much of a concern in
LA
Based on tax assessment- too low
Regulatory taking? Elevation
requirement? Average
reciprocity? Common law
nuisance or other background
principle?
Maybe need different way is ED
prompts so much animosity
Political accountability? Better
post election? Still need
constitutional check?

and homeless will not be more
safe?
Zoning like Euclid? But note that
Euclid didn’t really do a taking
analysis. Some consider it a
regulatory taking and some not.
But remember that there is
nothing in Euclid that says zoning
is across the board not takings.

ISSUES THAT CUT ACROSS ALL LAND USE LAW
o
o
o
o
o
o
Why exercise control
 Tragedy of commons, externalitities, tragedy of commons, productivity (Boomer)
Problems with land use control
 Threat to progress (coming to nusicance too strict?
 Exclusion (zoning context)
 Notice (
 Bad planning (gov poor plan)
 Bad govt (
How to choose
 Comprehensive or individualized
 Centralized or decentralized (takings)
 Common law or legislature
What triggers control
 (harm/nuisance, agreement/servitudes, plan/zoning)
Remedy
 Liability rules v. Property rules (each case can generate four possibilities)
 Where we discussed
 Issue is remedy
 Property rule = injunction/stop
 Liability = damages/pay
 Entitled to build deck on neighbor prop? NO. Doworsky. But pay or tear down?
 Boomer no factorty in neighborhood. But shut down or pay? Pay
 Poletown, govt cannot bulldoze or pay damages, or no build/bargain. Say have to pay
damages
 Cannot object to feedlot in spur, but put up or bargain out? Pay liability to go away.
 Reasons to pick one or the othter
 Property
o Leads to voluntary bargaining
o So subjective value is accounted for
o Argument for property rule in Poletown? UNdercompensation
o Damages are hard for court to caluculate (especially subjective value, value
of home)
o Even if court makes mitskate, parties can bargain to correct( Coase)
 Liability
o Transaction costs can inhibit bargaining (Coase) (justification for liability
rule in Boomer Poletowm)
SEE SLIDES
Constitutional questions
 Equal protection (Mt laurel, Shelly v Kramer)
Takings (5th am etc)