I. Introduction A. Perspectives on Property law Occupation theory Labor theory Economic theory Natural law theory Utilitarianism B. What rights do you have w/ respect to your property? possess it use it manage it get income from it consume it destroy it modify it alienate it exclude others from it Generally, these rights transfer when you transfer ownership of the property. o VARA (Visual artists rights act) grants 3 rights to the original artist for his lifetime, even if the artist is not the owner- attribution, integrity, and, if the work is a work of ‘recognized stature’, the right to prevent destruction There are some types of property which the law says you can’t destroy or for which there are very strict regulations. E.g. historical buildings and artifacts, forests, other natural resources, endangered species, hazardous waste, evidence, US flag, money Right to Exclude- 3 possibilities o Owner can exclude for no/any reason. o Owner can exclude for a good reason o Owner can exclude as long as they don’t give a bad reason for doing so (e.g. race). C. How do you acquire property? buy it receive it as a gift borrow it (not permanent ownership, but for a stated period of time considered your property until permanent owner wants it back) create it find it after someone loses it inherit it steal it (rightful owner can recover it through criminal law) discover it (you make the first claim to something no one has ever owned) D. Right of publicity Intangible Celebrity has the right to use his name/image as he sees fit o prevents deception, unjust enrichment May be inheritable (Elvis)- publicity rights are part of celeb’s estate Page 1 of 16 E. Commons and Anticommons Commons- Community property. It’s important to have private property, otherwise people have incentive to take but not to share. Anticommons- multiple owners, each has the right to exlude other owners from selling or using their share. Results in non-use of property or in failing to maximize value. F. The Settling of Entitlements When the state is presented w/ the conflicting interests of 2 or more parties, it must decide which side to favor 3 Ways the law can decide o Property entitlement- The law says that one of the parties is the owner of the property, and the owner can control what happens to the property. The parties themselves can agree/bargain to change ownership or negotiate how the property should be used. o Liability entitlement- One party can do what it wants w/ the property, but must pay the other party for any damages that it causes to the other party. o Inalienable entitlement- A property right which cannot be transferred. The law prevents the owner from transferring the right to control what happens to the property. E.g. voting, grades, IDs, airline tickets, licenses, body organs, degrees. Why prohibit vote buying? o Equality argument- the poor are more likely to sell their vote. o Efficiency argument- it isn’t efficient to sell votes, leads to a decline in overall social wealth. o Inalienability argument- moral judgment that votes should not be saleable or transferrable. II. Personal Property A. Distinction between personal and real property All non-real estate. Tangible and intangible. If you sell land, what does that include? Things sitting on the land? Distinction between real and personal property. What about property that changes from real to personal like crops or natural resources? Wood- crops ready to be harvested that no longer draw nourishment from the soil are personal, not real, property. Fixtures- houses, etc, that are attached to the land- are part of real estate. Things that are movable are not. B. Finders Lost and found property- Original owner always has a right to it, but if we don’t know who the original owner is, and there are competing claims, who gets to keep it? o Sometimes, the owner of the land on which property is found has rights to it against everyone except the original owner, but other times, the finder has these rights. If the finder found it w/in the scope of his employment to the landowner (S. Staffordshire swimming pool case) or if he Page 2 of 16 trespassed w/ the intent of finding the object (Morgan buried treasure case), the landowner probably gets it. If the landowner never knew it was there and so never ‘possessed’ it (Bridges shopkeeper case, Hannah house turned into army barracks case), the finder probably gets it. o Categories of lost and found property Lost- original owner can’t be found, he still has a right to it, but we don’t know who he is. Abandoned- Original owner has relinquished any right to it, finder gets to keep it. Columbus-America. Mislaid- intentionally left someplace by the original owner, still constructively in his possession. Treasure-trove- Generally, owner of the property on which the treasure is found gets to keep it. Otherwise it would encourage trespassing. Morgan v Wiser. o Law of salvage- Property wasn’t abandoned, but the finder is entitled to an equitable reward for the trouble he went to to find it. This is generally the rule for shipwrecks. Columbus-America. So what rules can we formulate from all this? o Original owner’s right to the property always trumps unless it can be shown he abandoned the property o If the finder is not a trespasser, and not an agent of the owner of the land on which the item is found, generally the finder gets to keep the property. C. Gifts When does the recipient of a gift own the property in the eyes of the law? o Intent to give the gift, delivery of the gift and acceptance of the gift. o Delivery can be symbolic or constructive. o Acceptance is usually implied o Conditional gifts are not valid except for causa mortis. Two types of gifts: o Inter vivos gift- gift given by living person. Intent and delivery required. o Gift causa mortis- Decedent made a gift while in apprehension of death, and death occurred. Basically a gift conditional upon his death. Engagement Rings- 3 approaches o Fault-approach- Whoever’s fault the broken engagement is does not get the ring. o Irrevocable gift approach- rings are like any other gift and are irrevocable. o Conditional gift approach- Ring was gift conditional on wedding occurring, she never gets to keep. D. Bailees and Bona Fide Purchasers Bailment- you give personal property to someone who holds it for you under a contract, but you have to give it back. Changes possession but not title. Bona Fide purchasers- You buy something from someone in good faith believing they own it, but they actually don’t. What happens? UCC says that the bona fide purchaser has good title if the seller had voidable title, if the seller had void title the bona fide purchaser does not have good title. o Voidable title- gained by voluntary but fraudulent transfer Page 3 of 16 o Void title- non-voluntary transfer (e.g. seller stole it) III. Protecting Possession A. Trespass and the Right to Exclude Owner has the absolute right to exclude for any reason. o Only the entry of tangible items constitutes trespass, non-tangibles are a nuisance. Adams v Cleveland-Cliffs Iron. o Applies to personal web space too- Compuserve v Cyber Promotions. Damages for trespass o Steenberg homes- Compensatory damages are not appropriate for trespass, so only nominal damages can be given. Normally punitive damages are not available unless there are compensatory ones, but there is an exception for trespass and punitive damages can be given in addition to nominal ones. o The harm of trespass is the loss of the right to exclude, not any actual damages. Law must vindicate that right in order to prevent people from taking law into their own hands. B. Adverse Possession Criteria- if met, possessor owns property notwithstanding the deed o Actual, uninterrupted possession for the amount of time specified by statute o Open and notorious (visible) possession o Hostile (adverse) Tacking- adverse possession is descendable to parties in privity w/ each other Personal Property- Can be adversely possessed. The time of adverse possession accrues at the time the owner should have reasonably discovered that the property is gone- O’Keeffe. C. Mistaken Improvers If a person mistakenly but in good faith adds value to a chattel w/o the owner’s consent, he can gain ownership of the chattel or the value thereof, or compensation for the added value, if necessary to prevent injustice D. Vertical Limits Land owner owns air above the surface and has right to exclude. o You cannot adversely possess airspace. o You can get an easement. o Govt use of airspace can constitute a taking for which compensation must be paid. o Land owner has right to the land on his property in its natural state- if you do something that causes the weather patterns to change and harm landowner’s property, he can sue you. SW Weather Research. Below the ground o Law of Capture- you own what is under your land, but if the neighbors take out the minerals/gas under your land through wells on their land, they have rightful possession of it. o If there is a cave under your land and your neighbor’s land, and the only opening is on your land, neighbor can still exclude you from entering the part under his land. Page 4 of 16 E. Surface Changes Who owns the land if changes in the surface produce more land? Changes with waterfront (riparian/littoral) property o Avulsion- Sudden and perceptible change. Govt gets the land. o Accretion- Gradual, imperceptible change. Property owner gets the land. What if a meteor lands on your property? Landowner gets it. Goddard. IV. Intellectual Property A. Types Copyright- works of authorship captured in permanent form. Since 1978, copyright arises instantly on creation and lasts for 7 years past the creator’s death. o Originality required for copyright o Fair use test- balancing test to see if interest in inducing creatorship is balanced with societal benefit Trademark- Associates marks with a single good and protects consumers from being deceived as to the origin of goods bearing the mark. o Generic, descriptive terms can’t be trademarked. Kellogg v Nabiscoshredded wheat case. o Trademark dilution- activities that diminish the value of the mark. If there’s no chance of consumer confusion, it’s not dilution- Jordache (Lardashe jeans case). o 4 elements for trademark dilution mark is famous Δ is making commercial use of the mark Δ’s use began after mark was famous Δ’s use dilutes the quality of the mark by diminishing the capacity of the mark to identify and distinguish goods and services Trade secret- Gives those who manage to keep valuable information to themselves the exclusive access to that information. Dupont airplane flyover case. Right of Publicity- protects interests of celebrities in controlling the use of their names and images. Patent- Like a copyright for a process, not a work. Doesn’t arise automatically. Granted by US Patent office for 20 years from the date of application for the patent. Exclusive province of federal govt. B. History Article I § 8 gives C power to promote science by giving authors/inventors the exclusive right to their writings/discoveries for a limited time. Why? o Utilitarian/public benefit argument- encourage authors to introduce new ideas into society and give them an incentive to create o Natural rights argument- if you invent something, it’s yours by right, and you should get all the fruits of the exploitation of your work Misappropriation- INS v AP. Unfair competition or inappropriate borrowing of the fruits of another’s investment. You have a right to the credit for and profit from your labor. Page 5 of 16 V. Property in Living Things A. Animals and Other Organisms You have property rights w/ respect to a wild animal that you are attempting to murder or incarcerate and can prevent someone else from taking it if: o Occupation- you have control over it o You mortally wounded it and intend to keep its rotting corpse in order to dine upon its flesh and/or use it for decorative purposes o You trapped it You have no property rights w/ respect to contraband, so the government can steal and murder your companion if there is no statute allowing you to have your animal companion Generally, the state either owns wildlife, or has statutes preventing people from killing them without a special murdering permit. You can patent a living organism if (Diamond) o you invented it and it is not naturally occurring o it is useful B. Human Life Living people o Dred Scott- A slave is property and therefore does not have standing to sue. o Natural rights argument. You can’t own people. Dred Scott dissent. o If a doctor takes someone’s body organs, creates a new cell line and uses it for profit w/o his permission, you can’t sue the doctor for conversion b/c you can’t expect to retain the body parts after surgery. Also public interest in promoting research. Moore v UCLA. Dead bodies o Next of kin has right to possession of body, and deprivation of the body or any body parts must be accorded due process o State has right to reasonably regulate exercise of rights as to burial, etc o Property rights of heirs end at burial VI. Present Estates A. Introduction 4 types: o Fee simple o fee tail- doesn’t exist anymore. You used to be able to leave an estate to B and B’s heirs, and so on, and so on, forever. Today, if you leave an estate to B, it becomes fee simple absolute. o life estate o leasehold If you have no heirs and don’t will your property to anyone, your present estate escheats to the state when you die. Heirs= you don’t have heirs until you die. B. Fee Simple Absolute- Any attempt to limit the right to transfer is void. Page 6 of 16 Defeasible- If some particular thing happens, the estate expires, and someone else’s possessory right takes over. Any time there is a fee simple defeasible, there is a future interest. 2 types o Determinable- If the stated event occurs, it reverts back to the original owner. The owner has a ‘possibility of reverter.’ o Subject to condition subsequent- If the stated event occurs, it is conveyed to a party specified in the deed. The party specified has a ‘right of entry’ to take possession of the property if the stated event occurs. 1. Does the language indicate it may automatically end on some event or non-event? Yes It is a fee simple determinable. No 2. Does the language indicate a later terminating condition that must be asserted? Yes Then, it is a fee simple subject to a condition subsequent/executory interest. No 3. Does the language indicated that the estate is perpetual? Yes Then, it is a fee simple absolute! How to tell if you have a fee simple, fee simple determinable or fee simple subject to a condition subsequent. C. Life Estates A leaves estate to B for B to use during his life, but it goes to A and his heirs or someone else specified by A upon B’s death. B doesn’t have the right to convey it This creates a remainder interest in the party specified by A, and/or a reversion interest in A. Page 7 of 16 VII. Future Interests Present Estate Future Interest in Grantor Future Interest Fee simple absolute None None Fee simple subject to condition subsequent Right of entry None Fee simple determinable Possibility of reverter None Fee simple subject to executory limitation None Executory interest Fee tail Reversion and/or Remainder Life Estate Reversion and/or Remainder Leasehold Reversion and/or Remainder A. Reversions and Remainders Reversion- estate given by someone which transfers less than his entire right to the property. The property will revert to the original party or to another specified party if an event or condition occurs. Remainder- Future interest that waits until determination of preceding estate then moves into possession if the remainder is vested. o Vested- Interest becomes possessory when the preceding estate ends. Subject to Open- If the person or persons with the future interest is ascertained, but more members could join the class of people with a future interest Subject to divestment- An event can occur that will take away the future interest o Contingent- Interest has not yet become vested, it is contingent on some event occurring in order to become vested Once you grant a life estate, you can’t get it back or modify it, the grantee has the possessory interest B. Right of Entry and Possibility of Reverter Future interests retained by grantors who create fees simple defeasible. With a fee simple subject to condition subsequent, if the stated event occurs, the grantor person specified by the grantor has a right of entry to take back the estate but he must assert this right of entry, it doesn’t automatically go to him. With a fee simple determinable, where if a stated event occurs the property automatically reverts to the grantor, the grantor has a possibility of reverter. C. Executory Interests Future interest which can cut short the preceding present interest. 2 types: o Shifting- 2nd grantee’s interest cuts short that of the 1st grantee o Springing- Grantee’s interest cuts short grantor’s interest Page 8 of 16 E.g. ‘To A, so long as A does not use the property for commercial purposes, and if A does use the property for commercial purposes, to B’- B has shifting executory interest E.g. ‘To A, when she gets married’- A has springing executory interest.\ D. Rule Against Perpetuities No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest o Some life in being- Anyone who is relevant to the K, but not necessarily a party to it, is alive at the time of the conveyance and w/in the lifetime of whom it is absolutely certain that the interest must vest or fail. o Only applies to contingent and executory interests. VIII. Concurrent Ownership A. Cotenants Joint tenants o Multiple owners of one piece of property. Each of them owns equal rights to the entire piece of property. o Right to partition- If one party wants to sell the property, he can force the sale. If he wants out, either the other parties have to buy him out or a judge will order a sale. o Right of survivorship- if one cotentant dies, the other cotenants just absorb his right to the property, it doesn’t go to his heirs o You must explicitly state that a conveyance is a joint tenancy with the right of survivorship, otherwise it’s just assumed to be a tenancy in common o 4 unities- Time, title, interest, possession. Tenancy in Common- basically the same as a joint tenancy except no right of survivorship. This is the default tenancy- if a conveyance doesn’t specify joint tenancy, or if you try to convey a tenancy by the entirety to unmarried people, it becomes tenancy in common. B. Marital Property Tenancy by the entirety- Married couple owns property as a couple, not as individuals. How to divide property after divorce o Community property- All the assets of the couple acquired during the marriage belong to ‘the community’ (the couple jointly) and are divided jointly or, in some jurisdictions, equitably. Applies to 9 states- AZ, CA, ID, LA, NV, NM, TX, WA, WI Separate property- Property owned by one spouse before the couple was married or property acquired by gift/inheritance that plainly goes to one and not the other. Some jurisdictions have ‘transmutation’ where separate property becomes community property. Generally, if property was acquired in a community property state, it will be considered community property even if you are living in a non-community property state when you get divorced. o Equitable distribution Page 9 of 16 Equitable (not necessarily equal) division of property, usually just property and assets acquired during the marriage Starts from premise that each spouse has separate title Property rights of unmarried couples o Can contract to have basically same property rights as married couples o Used to be a public policy argument against allowing unmarried couples to get the same benefits as married couples b/c it encouraged immorality, now as long as it isn’t basically a K for prostititution it’s allowed. IX. Landlord and Tenant A. Introduction Traditionally, a lease was a conveyance of land like other estates. Now, it falls under contract law. Landlord always retains a reversion interest in property he leases. Tenant has exclusive right to possession and enjoyment of the property for the duration of the lease, including right to exclude. B. Types of Leasehold Estates Statute of frauds applies to leases A K for temporary conveyance fo property is not necessarily a lease. It must establish exclusive possession of the property. Cook v University Plaza dorm case. Even if you specify in the K that there is a landlord/tenant relationship, that doesn’t necessarily make it a lease. The reverse is also true. Creation Duration End Estate for years Express Fixed term Naturally at date fixed by lease Periodic Estate Express or implied Fixed term Upon notice by either party Estate at Will Express or implied Indefinite Upon notice by either party Estate at Sufferance Implied Indefinite Upon termination by landlord C. Delivery of Possession English rule- Landlord must put tenant in actual possession of the property. IF someone else is in possession, the landlord is in breach. Despite being called the English rule, this is the majority rule in the US today. ‘American’ rule- No implied agreement that the landlord will provide actual possession. D. Quiet Enjoyment Every lease contains an implied covenant of quiet enjoyment. o Landlord can’t substantially interfere w/ tenant’s right to use or enjoy the property. o A breach of the covenant of quiet enjoyment can lead to a constructive eviction. Constructive evictions- Duty to pay rent ends on constructive eviction. Page 10 of 16 However, if you claim a constructive eviction and the court decides there wasn’t an eviction, you’re in breach. o Partial evictions- some jurisdictions allow a claim for a partial constructive eviction so tenant doesn’t have to pay only for that part of the land. E. Conditions of Premises Warranty of habitability- K implies warranty of habitability of property in almost every state. o Substantial defects in the property make it uninhabitable o If you’ve lived w/ the problem for a long time, you’ve basically consented to it and waived the warranty You can claim a constructive eviction if your property becomes uninhabitable F. Tenant’s Use Misrepresenation as to what tenant intends to use property for at the time the lease is entered into can result in the tenant being evicted- Stroup porn store case. Fixtures that the tenant adds to the property generally belong to the landlord. Chattels/personal property belong to the tenant. Brown v Dubois. Unless otherwise specified in lease, tenant can sublet or assign the rent. o Sublet- partial lease period given to another person o Assignment- gives away all tenant’s rights for the entire lease period o X. Housing A. Housing Discrimination Federal Fair Housing Act- 42 USC § 3604- Prohibits the following o refusal to sell or rent based on race, color, religion, sex, familial status, disability or national origin o discrimination in the terms, conditions or privileges of sale/rental b/c of membership in above categories o advertisement indicating a preference based on the above categories o telling someone a property isn’t available when it is available b/c you don’t want him to rent it based on his membership in one of the classes o trying to get someone to rent b/c they are a member of one of the classes o Note this does NOT include sexual orientation Ask WHY the tenant was evicted or refused a lease. Membership in a class protected by the FHA doesn’t mean that you were discriminated against b/c of your membership. Stop whining. B. Housing Codes Local statutes or regulations requiring housing to meet certain restrictions or standards Can be high monetary penalties for violation C. Making Housing Affordable Rent control generally upheld under constl challenges if there’s a fair return Public housing Page 11 of 16 XI. Private Land Use Restrictions A. Overview Local, state, federal or even int’l regulations can be created for protection of plants, species, habitats etc Could enter into K w/ property owner not to harm the thing you want to protect You can get an easement to protect stuff- say an easement preventing property owner from picking flowers. That easement stays with the land even after it’s sold. Attach a covenant to the land Servitudes= covenants or easements B. Easements Right to make a specific use of land possessed by someone else Generally easements are transferable to another party, but the scope of the easement isn’t changeable Run with the land Types of easements o Appurtenant- You own the land next to the land for which you have an easement. Dominent tenement- the land that benefits Servient tenement- the land that is burdened o In gross- You aren’t a nearby landowner. E.g. utility company has easement to cross someone’s land to work on power lines o In favor of 3rd parties- You get an easement giving Suzy the right to use Paul’s land. o Affirmative- gives you the right to use someone else’s land o Negative- gives you the right to restrict someone’s use of his own land. 4 types generally allowed prevent someone from blocking sunlight into your windows interfering w/ airflow onto someone’s land removing support from someone’s building removing water from someone’s stream o Conservation easements- express negative easements in gross to protect habitat, species etc. Can be a tax deduction! o Profit- an easement to go onto the land and remove something Can be express or implied 4 types of implied o Prescriptive- Gained by continued adverse use. Same rules as adverse possession. o Implied by necessity- easement is strictly necessary for the enjoyment of a parcel of land. Usually this is for access to landlocked property. It is necessary that the landlocked property and the adjacent property used to be owned by the same person. o Implied by prior use- a use existed at the time one parcel of land was divided into two parcels o By estoppel- Generally, you relied on someone’s representation that you could use their land. Very hard to get. How to terminate an easement Page 12 of 16 Express expressly agree to terminate stated duration of express easement ends landowner adversely possesses the easement owner of servient tenement acquires dominant tenement o Implied End of necessity No more need for reliance with an easement by estoppel C. Covenants and Equitable Servitudes Real covenants and equitable servitudes are agreements, promises or deed provisions that bound or benefit owners of real property and run with the land Statute of frauds applies Covenants get remedies in law. Equitable servitudes get equitable remedies. A covenant cannot be enforced if it violates the Constitution- Shelley v Kraemer Covenants can be o Affirmative- Require owner of burdened estate to perform some act or pay money o Restrictive (negative)- Restrict or prohibit uses that can be made of the burdened property o Reciprocal negative- common plan to govern an entire community e.g. all the houses in the subdivision must be painted white To determine if a covenant is valid and binds subsequent owners, ask: o Is there an intent to bind successors? o Does it ‘touch and concern’ the land? o Is there privity? Must be horizontal privity between the original promisee and original promisor, and vertical privity between the successors of each. o Original Promisee V Horizontal E Subsequent Owner R T I C A L Subsequent Owner Original Promisor V E Subsequent Owner R T I C A L Subsequent Owner PRIVITY To determine if an equitable servitude is valid, ask: o Is there an intent to bind successors? o Does it ‘touch and concern’ the land? o Do the succeeding parties have notice of the servitude? Page 13 of 16 D. Nuisance A substantial interference of use or enjoyment of the land. Nuisance per se- 2 ways to prove it o Activity is a nuisance at all times, under any circumstances, in any location. E.g. a nuclear waste dump. o Activity is prohibited by law. Private Nuisance o Nontrespassory invasion of another’s interest in the private use and enjoyment of land o Must balance conflicting property rights Public Nuisance= Invasion of a right common to all members of the public You can be held liable for the nuisance caused by a 3rd party on your land if you know the activity is going on and will involve an unreasonable risk of creating a nuisance and you consent to it or fail to exercise reasonable care to prevent a nuisance from occurring XII. Governmental Land Use Restrictions A. Zoning Why have zoning? Zoning is accomplished by local regulations and is designed to avoid nuisances or poor community planning. Comprehensive plan- The plan for the municipality which will be put in place by zoning regulations. Not enforceable on its own. Non-Conforming Use- If an area is re-zoned, the buildings that are already there must be allowed to stay as non-conforming uses. for a period of amortization or for forever. Amortization periods give landowners time to catch up to new regs. Variance- If you want to build something in an area but the zoning regulations don’t allow it, you ask for a variance to build it. Must show necessity. Zoning regulations are const’l ‘on its face’ unless they are super unreasonable i.e. arbitrary and capricious. Zoning regulations may be ‘unconstitutional as applied’ and therefore constitute a taking if they are unreasonable as applied to the individual. Federal Statutory Restrictions on Local Zoning o Telecommunications act- Zoning must allow for cell phone towers to exist somewhere in the area so people can get cell phone service o Fair Housing Act- Zoning can’t violate FHA. o Religious Land Use and Institutionalized Persons Act- Prevents zoning laws from being enacted/changed w/ the intent of discriminating against a certain group. Any govt regulation of land use by religious bodies must serve compelling state interests and employ least restrictive means Constitutional Restrictions on Local Zoning o 1st Amendment- Free speech and free exercise clause. Mostly deals with zoning trying to exclude pornography stores. That’s unconst’l. There are 2 acceptable ways to zone porn stores: Let them be wherever there is a business area Keep them all in one area, or spread them out o Equal protection- This doesn’t apply to restrictions allowing only single family dwellings in an area. Page 14 of 16 B. Growth Controls Legal devices aimed at limiting the growth of an area Must be related to the general welfare C. Regulating Particular Uses of Land Historic preservation laws o May protect an entire area or individual structures o Constl as long as they are general in scope and aren’t arbitrary Environmental preservation laws- similar to historic preservation but more regulatory in nature Public Lands- National parks, forests, wildlife refuges etc Wilderness Act- Federal BLM can ‘preserve wilderness character’ of a designated wilderness area Huge deference given to govt agency regulations- as long as their decisions aren’t arbitrary and capricious, they’ll be upheld XIII. Takings A. Eminent domain Eminent domain= govt power to force transfer private property to the govt. It must be taken for a public use. o Majority rule is that as long as the public benefits from the use, eminent domain power can be used. o Minority rule is that public has to have the right to use the property acquired by eminent domain (e.g. SC) Governed by 5th amendment which states that private property may not be taken for public use w/o just compensation o Just compensation is generally the fair market value of the property o Sometimes special circumstances such as the special value of the owner’s peculiar use of the property may require compensation beyond the fair market value Condemnation= process by which property is taken and compensation is paid B. Regulatory Takings Lucas test- When govt regulations interfere with the landowner’s use of his property to the extent that there is no economically viable use for the property, there may be a taking. If they take only part of the property, use ‘denominator test’ (i.e. 2nd grade fractions) to figure out how much they took. Inverse condemnation= a landowner claims the govt has physically occupied or taken some property right from the landowner w/o compensation and w/o initiating the condemnation process. Penn Central test- Balancing test for cases that don’t fit into the ‘economically viable’ test from Lucas. To determine if there was a taking, compare: o the character of govt action- physical invasion? promotes public good? o the economic impact o the interference w/ investment backed expectations If you can show a physical invasion or a total destruction of virtually all the property value, there’s proably a taking. Very difficult to win under Penn Central Page 15 of 16 C. Exactions The govt will give you permission to do something, but only after exacting something from you Approval for a building permit is conditional on the dedication of a portion of land to public use. Test to see if exaction is valid o There must be a connection between the condition on the permit and the public interest o The conditions must be roughly proportional to the expected impact of the construction- e.g. if you’re building a mall, the exaction might be that you have to build roads Impact fees- Exaction is for money instead of land Page 16 of 16