Property Outline, Spring 2009
FUNDAMENTALS: Non-purchase land acquisition ........................................................................................ 4 I. First Possession.......................................................................................................................................... 4 e. Three Types:.......................................................................................................................................... 6 i. Acquisition by Discovery/Conquest ................................................................................................... 6 ii. Acquisition by Capture ....................................................................................................................... 6 iii. Acquisition by Creation .................................................................................................................... 9 f. The Right to Exclude .......................................................................................................................... 10 II. Subsequent Possession ............................................................................................................................ 10 a. Acquisition by Find............................................................................................................................. 10 b. Adverse Possession.............................................................................................................................. 12 THE SYSTEM OF ESTATES:.......................................................................................................................... 14 III. Possessory Estates in Land................................................................................................................. 14 a. Fee Simple ............................................................................................................................................ 14 i. Fee Simple Absolute ......................................................................................................................... 14 ii. Defeasible Fees ................................................................................................................................. 15 b. Fee Tail ................................................................................................................................................. 15 c. Life Estate ............................................................................................................................................. 16 d. The Rule against Restraints on Alienation ....................................................................................... 17 IV. Future Interests................................................................................................................................... 17 a. Future interests retained by the grantor: ............................................................................................... 17 i. Reversion .......................................................................................................................................... 17 ii. Possibility of Reverter (POR) ........................................................................................................... 17 iii. Right of Entry (ROE)...................................................................................................................... 18 b. Future interests created in a grantee ................................................................................................ 18 i. Remainder ......................................................................................................................................... 18 a. Vested Remainders:..................................................................................................................... 18 b. Contingent Remainders:.............................................................................................................. 18 ii. Executory Interest ............................................................................................................................. 19 c. Old Rules, Mostly Abolishe................................................................................................................ 19 d. The Rule Against Perpetuities .............................................................................................................. 19 e. Equitable future interests (as opposed to legal future interests) are created in a trust.......................... 21 V. Concurrent Interests............................................................................................................................... 21 a. Tenancy in Common............................................................................................................................. 21 b. Joint Tenancy ........................................................................................................................................ 21 c. Tenancy by the Entirety ........................................................................................................................ 23 d. Relations Among Concurrent Owners .................................................................................................. 23 VI. Leaseholds............................................................................................................................................ 25 a. Lease Distinguished from Other Relationships: ................................................................................... 25 b. Types of Tenancies.............................................................................................................................. 25 i. Tenancy for Years............................................................................................................................. 25 ii. Periodic Tenancy .............................................................................................................................. 25 iii. Tenancy at Will............................................................................................................................... 26 iv. Tenancy at Sufferance....................................................................................................................... 26 c. Statute of Frauds................................................................................................................................. 26 d. Landlord’s Duty to Deliver Possession ............................................................................................. 27 e. Landlord’s Duty not to Interfere with Tenant’s Quiet Enjoyment................................................ 27 f. Landlord’s Duty to Provide Habitable Premises ............................................................................. 28 Main, p. 1
g. Tenant’s Duties.................................................................................................................................... 29 h. Landlord’s Remedies .......................................................................................................................... 30 i. Subleases & Assignments ................................................................................................................... 31 i. Test:................................................................................................................................................... 31 1. Majority: Bright Line........................................................................................................................ 31 2. Minority: Intent of the Parties........................................................................................................... 31 ii. Two legal relationships arise with transfers of leasehold: ................................................................ 31 1. Privity of Contract............................................................................................................................. 31 2. Privity of Estate................................................................................................................................. 31 iii. Assignment..................................................................................................................................... 31 iv. Sublease............................................................................................................................................ 32 v. Covenants Against Assignment or Sublease................................................................................. 32 LAND USE CONTROLS:.................................................................................................................................... 33 VII. Servitudes............................................................................................................................................. 33 a. Easements ............................................................................................................................................ 33 ii. Types:................................................................................................................................................ 34 iv. Creation ........................................................................................................................................... 34 1. By Express Grant ........................................................................................................................ 34 2. By Reservation ............................................................................................................................ 35 3. By Implication (operation of law)............................................................................................... 35 a. Easement from prior existing use ............................................................................................ 35 b. Easement by necessity ............................................................................................................. 35 4. Easement by Estoppel ................................................................................................................. 36 5. By Prescription............................................................................................................................ 36 v. Scope................................................................................................................................................. 36 vi. Termination ..................................................................................................................................... 37 b. Covenants Running with the Land.................................................................................................... 38 i. Real Covenants: Covenants Enforceable at Law .............................................................................. 38 ii. Equitable Servitudes: Covenants Enforceable in Equity .................................................................. 39 iii. Common Interest Communities ...................................................................................................... 39 VIII. a. b. c. d. Eminent Domain & Regulatory Takings ...................................................................................... 41 What is Public Use? .............................................................................................................................. 41 What is a “Taking”?.............................................................................................................................. 42 What is Property?.................................................................................................................................. 43 What is Just Compensation? ................................................................................................................. 44 Main, p. 2
Main, p. 3
Property: a social institution that structures peoples’ relationships to each other & with the state regarding the
control & use & transfer of scarce resources
Initial allocation of entitlements: who gets what & why
General theories:
Locke: you own your own labor and once you mix your labor with something else, it becomes your possession
Utilitarian: there is a scarcity of resources. We want our resources protected and we expect it. Bentham
furthers the notion that definitions of property are just protections of our expectations.
Utility and efficiency: We don’t want to waste anything and we want to encourage the production of goods.
Policy goals.
Doctrine: Property can be broken down into constituent elements (right to use, right to exclusive possession,
and the right to dispose to transfer), but it is not possible to say that the combination of any 2 of theses makes
property.
Reoccurring Themes in Property
 The nature of the resource—is it limited? Does it carry moral implications?
 The social context in which the debate arises—if we are dealing with a corporation, then maybe econ should
be a chief criterion; if a family, then moral considerations may be paramount.
 Rule/standards debate—must decide the extent to which you actually want to settle a question: do you want
to be particular and rigid? Or do you want to be general and allow for more wiggle? There are a limited set
of categories that law operates in
 Institutional competence—it matters who is likely to be the most competent decision-maker? Will courts be
best suited for this? Or legislatures? How about consumers or hunters?
Judges’ Reasoning:
 Precedent, Statutory Construction, Federalism, Competing policy concerns, Effectiveness of remedies,
competing definition of property, Moore v. Regents
FUNDAMENTALS: Non-purchase land acquisition
I.
First Possession
a. Questions:
i. Who is a possessor?
1. Decisions based on who is the relevant community
a. Indians cannot hold title or sell land (Johnson v. M’Intosh)
b. Use the custom from whalers in re whaling, Swift v. Gifford, cited in Ghen v.
Rich
c. The one engaging in socially acceptable and encouraged behavior (Pierson,
Ghen & Keeble) rather than discouraged behavior (Hickeringill)
d. Impose different conceptions of property: Stuart Banner, “Two Properties,
One Land: Law & Space in Nineteenth-Century New Zealand” PPL 321
ii. What counts as being first?
1. Discovery principle: first European holds the exclusive right to appropriate lands
occupied by Indians (Johnson v. M’Intosh)
2. Steps along the continuum from Common  Private Property:
a. Think about it
b. Reasonable prospect
i. Custom rejected in Pierson v. Post
Main, p. 4
1. Administratively difficult
2. Maximize dead foxes?
3. Possibly less quarrels b/t hunters
c. Kill but no physical control, Ghen v. Rich
i. Gather it but disseminate it, INS v. AP
d. Mortally wound/physical control (the rule of capture)
i. Rule adopted in Pierson v. Post
1. Administrative ease
2. Maximize dead foxes: encourage better weaponry
e. Acquisition
iii. What acts are recognized as accounting for possession?
1. Wounding a fox (Pierson v. Post), killing a whale (Ghen v. Rich), using a decoy
(Keeble v. Hickeringill), gathering news (INS v. AP)
a. NOT designing a product (Cheney Bros., Smith v. Chanel, Inc.)
2. Decisions about which activities to reward for what reason: the law aims to channel
people into socially appropriate behavior & away from other behavior
a. Locke’s labor theory: Indian’s (unlike manure gatherer in Haslem v.
Lockwood (Conn. 1871) P. 16) didn’t sufficiently change the land through
labor to perfect a “property” interest in the soil (P. 17)
i. Carol Rose, P. 16 & PPL 180: limits to the right established by mixing
labor w/ something else
3. Court in Johnson v. M’Intosh decides based on government’s principles, not on
principles of abstract justice
a. But possession is a social fact, often with unspoken goals: Carol Rose,
“Possession as the Origin of Property,”PPL 180
b. Justifications for “First Possession” Rule
i. It can help create certainty, peace & authority (as majority in Pierson v. Post argues)
ii. Creates settled expectations: Fairly simple proof of property; pragmatic
iii. Libertarian argument (Epstein): must choose some system & first in time reasonable way to
start b/c minimal state intervention
iv. Advantages of a “Crystalline Rule” (if clearly define what is “first” according to a rule (as in
Pierson v. Post) rather than a standard):
1. Easier for courts to administer; relatively easier for the parties & the judges
2. Discourages lawsuits
3. More effectively channel ppl into appropriate acts
a. Ppl know if they do those acts they will be protected
c. Disadvantage of rules such as this
i. Constraining & inflexible: may promote injustice & inefficiency b/c reasonable adaptation
foreclosed
1. As disputes become more complex, legal system will often shift to standard: more
costly & less direction, but more fair/efficient result
d. Following Custom
i. Pro
1. If the goal is to kill whales, the custom of whalers is well attuned to that (better than a
lawmaker), Ghen v. Rich
a. Good if those making the custom attune to larger social goals.
b. Works where incentives are aligned (Posner: industry has an incentive to
protect customers, but not bystanders)
i. Posner: we expect customs to be efficient. Industries have analyzed
cost/benefit analysis for their own productivity
ii. Cons
Main, p. 5
1. Potential for insiders to exclude the interests of outsiders; control who enters, keep
out better whale killers, James Acheson, “The Lobster Gangs of Maine” PPL 129
a. Acheson also demonstrates administrative benefits of self-regulated custom
2. Could freeze existing technology in place & prevent new technologies by shielding
against competition (possible result if followed custom in Pierson v. Post; possible
b/c followed custom in Ghen v. Rich)
a.
3. Not everyone may have notice of the custom (possibly Ellis & Rich unaware of
custom in Ghen v. Rich)
4. There could be multiple customs, & have to choose amongst them; may not maximize
social value of all by choosing
a. Hickeringill/Green Peace scaring ducks may increase overall dead ducks by
saving some for tomorrow
5. Where external social costs (externalities) are larger than private gains, following the
custom will lead to overall loss to society
e. Three Types:
i. Acquisition by Discovery/Conquest
1. Discovery: “the sighting or ‘finding’ of hitherto unknown or uncharted territory; is
frequently accompanied by a landing and the symbolic taking of possession,” acts
that give rise to an inchoate title that must (on one view) subsequently be perfected,
w/in a reasonable time, by settling in and making an effective occupation (P. 11-12)
a. Discovery principle recognized by European colonizers transferred the
exclusive right of title to the U.S. government and states, despite Indian
occupation/possession. Johnson v. M’Intosh (S.Ct. 1823) P. 3
b. Locke’s labor theory, P. 15: “Whatsoever then he removes out of the state
that nature has provided, and left it in, he has mixed his labor with, and joined
to it something that is his own, and thereby makes it his property” (Ex:
manure gatherer in Haslem, P. 16)
i. Carol Rose, P. 16 & “Possession as the Origin of Property” PPL 180:
limits to scope of labor theory & not clear own what’s mixed w/ labor
2. Conquest: “the taking of possession of enemy territory through force, followed by
formal annexation of the defeated territory by the conqueror” P. 12
a. “Conquest gives a title which the Courts of the conqueror cannot deny,
whatever the private and speculative opinions of individuals may be,
respecting the original justice of the claim which has been successfully
asserted.” P. 8-9
b. In Johnson v. M’Intosh, to take possession from Indian occupiers, would be
more efficient for U.S. to purchase land rather than conquer (single purchaser
 low price)
ii. Acquisition by Capture
General rule: first to capture resource entitled to it
Common property --Think-----RP--------MW------------Acquisition--Private property
Considerations in determining what counts as capture:
1. Instrumental ends & unstated policy goals
a. Maximizing dead animals: wild animals must be captured to be owned; mere
chase is not enough.
i. Pierson v. Post (NY Sup Ct, 1805) P. 19: The rule of capture: the act
of mortally wounding an animal [so capture practically certain]
transfers common property into private property; (sufficient as
opposed to occupancy/actual bodily seizure)
Main, p. 6
2.
3.
4.
5.
1. Cases cited in Ghen v. Rich use similar whaling custom:
ownership after killed & physically possessed/anchored, Taber
v. Jenny & Bartlett v. Budd
2. Pierson Dissent by Livingston: prefers “reasonable prospect”
rule, the custom at the time; interest in the animal at point of
seizing prey while still in pursuit
3. All trying to encourage hunting & maximize dead foxes
ii. Ghen v. Rich (Dist. Ct. Mass, 1881) follows custom of the relevant
community (whalers) Swift v. Gifford. The custom here: whoever
finds the dead whale should report it for a finder’s fee; belongs to the
one who killed it (not actually “captured”)
b. Also favor the landowner (or likely one in reasonable pursuit) over one
engaging in malicious interference of lawful trade [can only interfere if
intend to capture an animal]
i. Keeble v. Hickeringill (Queen’s Bench, 1707) P. 31: Hickeringill could
not scare ducks away from Keeble’s pond (malicious interference).
Could have engaged in competition/capitalist venture.
1. Demsetz, P. 41: “Harming a competitor by producing superior
products may be permitted, while shooting him may not”
2. Not important H had duck pond first: Keeble’s improved
competition is acceptable
Notice
a. Ex: Property right follows animals w/ habit of return (cows, horses), but not
so for wild animals (deer) UNLESS others on notice (ex: elephant)
i. Goal: encourage domestication, encourage neighbors to return (so
they’ll buy their own cows), but also ensure others (hunters) are on
notice
b. Cave belongs to owner of surface land above it
i. HELLER: joint ownership b/t finder/adverse possessor and true owner
may be a better way (for oil wells, too)! Otherwise, bilateral
monopoly, Marengo Cave Co. v. Ross (Ind. 1937) P. 141
c. Weigh in deciding application of custom
Allocation of resources
a. The Law of Increase: owner of mare owns offspring b/c invests more, P. 36
b. Reward labor:
i. Haslem, manure case P. 16
1. Manure piles also put people on notice
ii. Oil & gas may be drained from neighbor’s land (unless negligent)
iii. May also percolate underground water (unless negligent or malicious)
1. Western states: reasonable use doctrine
Efficiency
a. The first to start building a dam has property interest in the water, P. 39:
reduce replication of building dams
b. Encouraging technology
c. Minimizing externalities
Demsetz, Tragedy of the Commons: “Toward a Theory of Property Rights,” P. 41
a. Maximizing number of dead whales may involve conserving some for future
b. Common property (everyone has a right to use; no individual has a right to
stop another from use; Open Access or Commons Property): likely to have
many external costs:
i. Time one, state of nature: there are plenty of trees
Main, p. 7
1. Costs of using resource external to decision
2. Not particularly harmful externality to the community/society
ii. Time two, increased pressure on resources, increase externalities: this
is where Demsetz says private property can step in to conserve scarce
resources
1. Worried trees will disappear; worth more to chop than to
engage in leisure, so rate of chopping increases
2. In the presence of externalities as resources become more
scarce, even though each individual acting in a purely selfinterested way, the net result/collective affect is social welfare
harming: destroys the resources for the community
a. NOT a tragedy of the commons b/c only transferring
value from community to individual
i. No loss of aggregate welfare or misallocation of
resources
iii. Time three: market value of trees worth 2
1. Last remaining fish/tree worth much more than 2 b/c they are
the only ones available for reproduction, but still only a market
value of 2
a. Individual still acting in self-interested way, still
continues chopping even though destroying own future
2. Now we have an economically inefficient outcome:
TRAGEDY OF THE COMMONS
a. Resources misallocated: resources used one way
(chopped down) when the parties would be better off if
resources were used another way (not chopped down)
b. These definitions of inefficiency & misallocation are in
reference to aggregate welfare, NOT distributive
welfare or the moral value
3. Transaction costs: difficult to make bargain to save the trees:
if transaction cost exceeds the price available & necessary to
stop chopping, the deal won’t happen
a. Information costs: find out who is doing the chopping
(larger parcel to survey)
b. Negotiating costs:
i. Holdouts (footnote 26, P. 51) can lead to failure
of bargain
ii. Free riders (another collective action problem):
want everyone else to pay off Sam, but not
willing to do so
c. Policing costs to enforce the deal
d. Coase Theorem: in a world w/o transaction costs, ppl
would bargain for efficient allocation of resources &
unimportant who receives entitlement
i. But property rules & laws do matter b/c
transaction costs exist: likely stuck with
entitlement initially received
ii. Calebresi: one answer to the Coase problem of
transaction costs is to assign the entitlement to
the cheapest cost-avoider
Main, p. 8
c. Private property is a social mechanism to encourage individuals to conserve
scarce resources in an inexpensive, easily manageable way; social welfare
maximizing move to create more aggregate wealth (step in at time 2)
i. Internalizes many of the local costs & benefits on individuals
ii. Helps reduce transaction costs for effects that spill over
1. Negotiating with fewer people, Robert Ellickson, “Property in
Land” PPL 146
iii. NO benefit for non-local costs & benefits that spill over (ex:
pollution), Ellickson
1. Other sorts of solutions necessary, especially for damage to
resources not easily defined as private property (such as air)
a. Judicial: nuisance
b. Administrative: central management/zoning
2. Common Property helpful in settlements to spread the risks &
protect/insure
a. Informal mechanisms (like gossip) may also prevent
tragedy of the commons
b. Also social benefits
iv. Encourages productive investment in the resource, Jeremy Bentham
(utilitarian, P. 53)
1. Trespass laws that are actually enforced allow move from
protection to production
v. Private property is easier to administer than commons or state-owned
property
vi. Encourages conservation of resources
d. Externalities: information not taken into account
i. If consider an offer, no longer an externality (cost taken into account)
ii. Externalities do not necessarily lead to inefficient outcomes
6. The Anticommons
a. Multiple rights to exclude others lead to under-consumption. Transaction
costs are too high. Resources under-used.
i. Ex: medical research & the molecule that cures Parkinson’s, Heller &
Rebecca Eisenberg, “The Problem of the Anticommons” PPL 159
ii. Ex: storefronts in the shift from Marx to markets. Overlapping
property rules.
b. Counter-productive unless protecting a resource
iii. Acquisition by Creation
General rule: recognize property by creation to reward labor (but difficult where labor
mixed with goods or labor of another)
1. Locke labor theory
2. Not always true you will own what you create
a. Boundary of joint labor
b. Luck & misfortune: may labor and lose (Pierson v. Post)
3. Acquisition by Accession: add to another’s property, that person may lose title but
still be entitled to the unimproved value. If improver denied title, owner entitled to
the added value of the property.
a. Labor added: product awarded to the owner unless value sufficiently increased
& improver acted in good faith
b. Labor and materials added: product awarded to owner of principal material
c. Confusion of goods: each entitled to proportionate share
4. Defining fair competition (flashback to Keeble v. Hickeringill):
Main, p. 9
a. Moral approach: concerned w/ encouraging production
i. A news-gatherer cannot distribute news information gathered by
another (quasi-property) International News Service v. Associated
Press (S.Ct. 1918) P. 60
1. Court’s moral (fairness) approach: AP should benefit from the
fruits of their labor (Heller: but every “creation” builds on
another); INS shouldn’t reap what haven’t sown
2. Counter-argument: Douglas Baird, P. 66: information is not
like wheat. Many ppl can use info without denying that use to
others
a. Public goods: consumption by one does not diminish
consumption by another
b. For this reason, no need to define highest-value user for
IP resources
3. Protecting & encouraging AP; perhaps discouraging new
technology & innovation
b. Efficiency approach: consumers better off w/ competition—maximization of
value to society
i. Acceptable to copy a fashionable silk pattern, Cheney Brothers v.
Doris Silk Corp. (2d Cir. 1929) P. 64
1. Court’s approach: this is the nature of competition!
2. Preventing monopolies
ii. May advertise a product as copying another, Smith v. Chanel, Inc. (9th
Cir. 1968) P. 65
1. Court’s approach: “imitation is the life blood of competition”;
lower price for consumers (distributive justice/fairness)
f. The Right to Exclude
i. The most fundamental right of property!
1. Property rights include the right to possess, use, transfer, and exclude others
ii. Free transferability of property rights: need the right to include (sell, for ex) AND the right to
exclude (protected by trespass and conversion)
iii. May protect right to exclude w/ punitive damages to reduce use of self-help, Jaque v.
Steenberg Homes, Inc. (Wisc. 1997) P. 100
1. Property rights protected solely by damages (rather than injunction) not strong
iv. Exceptions to the right to exclude:
1. Aid migrant farm workers on private land, State v. Shack (N.J. 1971) P. 101
a. Court decided state trespass statute did not reach this type of claim
i. Land ownership does not allow a right to bar government services
ii. Paternalistic need to prevent farm workers from contracting away their
rights
2. Civil Rights legislation forbidding various forms of discrimination
3. Rent controls & limits on landlord’s right to evict tenants
4. Adverse possession
5. Public rights of access to private beaches
6. Legislation protecting homeowners who have defaulted on mortgage payments
II.
Subsequent Possession
a. Acquisition by Find
Main, p. 10
i. Relativity of Title: The finder does not have an absolute ownership right, but more so than
all others except the true owner (or other prior possessors), Armory v. Delamirie (King’s
Bench, 1722) P. 108
1. Social context & sequence are important
2. Reasons to protect the finder:
a. Punish wrongdoers: Deter goldsmiths of the world
i. For this reason, willing to over-compensate the wronged finder (don’t
decrease value by the probability finder will lose to TO)
ii. But circular reasoning: goldsmith only a wrongdoer if the jewel rightly
belongs to the sweep
b. Reward honest finder: bring value back into stream of commerce &
encourage make possession known, more likely get object back to TO (this is a
new idea)
i. Mere possessor may be confident to come forward
ii. Mere possessor incentive to admit a finder, not actually TO
c. Increase likelihood return item to true owner
d. Carry out expectations of the various parties
i. The law helps create these expectations; to some extent already exist
e. Encourage bailor/bailee relationships: entrust goods to another knowing the
prior owner is favored for possession
i. Drop off dry cleaning, leave care w/ valet
f. Prevent self-help
ii. Once a 3rd Party wrongdoer pays damages to a Bailee, the Bailor (TO) has no action against
the 3rd Party wrongdoer, the case of The Winkfield (1901) P. 109 [a voluntary bailment]
1. However, if I (the intermediary) is a Finder, not a Bailee, the 3rd Party wrongdoer
may be liable to the TO, UCC 2-403
2. If I sold the object to 3P, either I or 3P liable to TO
a. If I disappears, 3P liable to TO (best position to evaluate I)
3. As time passes, TO loses connection to item & court less likely to protect claim
iii. Finder vs. Owner of Premises:
1. Finder gets it UNLESS
a. Relationship:
i. finder is a trespasser in a private place
ii. finder is an employee, South Staffordshire Water Co. v. Sharman
(1896) P. 114 [employee cleaning pool found rings in mud]
iii. finder is a lessee/bailee as opposed to lessor/bailor, Elwes v. Brigg
iv. finder is on the premises for a limited purpose
1. EXCEPTION: Hannah v. Peel (King’s Bench, 1945) P. 111
[soldier quartered in Peel’s house found brooch—court
awarded Hannah title]
b. Location:
i. finder finds the object under the soil, South Staffordshire; Elwes v.
Brigg Gas Co. (P. 116) [landlord title over finder/tenant, ship found
underground]
1. UNLESS treasure trove: could belong to either party
ii. finder finds object in someone’s home
1. EXCEPTION: Hannah v. Peel (King’s Bench, 1945) P. 111
iii. Property MISLAID (intentionally placed, forgotten) in public place,
McAvoy v. Medina (Mass. 1866) P. 118 [pocketbook left on table
mislaid & awarded to shopkeeper]
Main, p. 11
1. BUT LOST (accidentally left) property in public place goes to
finder, Bridges v. Hawkesworth (P. 113); if pocketbook left on
floor in McAvoy, finder would keep it
a. Bridges rule applied to private place: Hannah v. Peel
2. Another alternative: pure rule of “finders keepers, losers weepers”
a. Less administrative costs
b. Encourage true owners to take more care
c. Avoid legalizing morality: people will still return items to true owners
b. Adverse Possession
i. The rule: after statute of limitations runs, owner’s claim to possession barred & new title
created in adverse possessor (cannot record title until obtain quiet title decree)
ii. Theories:
1. Utilitarian: utility shifts from true ownerA.P. over time (attachment to land)
a. Holmes, cognitive value: “a thing which you have enjoyed and used as your
own for a long time, whether property or an opinion, takes root in your being”
b. Ellickson, prospect theory: value property in hand more than opportunity to
realize equivalent gain
2. Epstein/libertarian: would prefer never to take property from the true owner, but
increasing administrative costs over time are a legitimate concern
iii. Purpose:
1. Protects title
2. Bar stale claims (“sleeping theory”)
3. Reward productive use of land (“earning theory”)
a. Biased towards production, like Johnson v. M’Intosh
b. Productivitymore attached to land (Holmes)
4. Give effect to expectations
iv. Requirements for adverse possessor, dissent in Van Valkenburgh v. Lutz (N.Y. 1952) P.
129 [Lutz wrongly found not to have satisfied A.P.; majority reasoned no enclosure, not
sufficiently cultivated, gave up claim of possession b/c brought claim for easement by A.P.]
1. Actual entry giving exclusive possession
a. If entry on part of land, in constructive adverse possession
2. Open, notorious, and visible so as to give reasonable notice
a. Marengo Cave Co. v. Ross (Ind. 1937) P. 141 [A’s use of cave under B’s land
not sufficiently notorious]
b. Mannillo v. Gorski (N.J. 1969) [15 in. of stairwell not sufficient notice]—
deviates from the normal rule of INQUIRY NOTICE & says the court won’t
“presume knowledge”
3. Adverse and under a claim of right
a. Objective test (focus = true owner “sleeping theory”):
i. Actions appear to community as those of owner
ii. Must be occupying land without permission
iii. Applied in Howard v. Kunto (Wash. 1970) P. 153 [summer home,
switching of titles; no need for hostile intent]
iv. Good faith mistake insufficient
v. Switch to this objective Maine view in Mannillo v. Gorski (N.J. 1969)
b. Subjective test (focus = possessor “earning theory”):
i. Some Js require “good faith belief” he has title
1. Squatters lack requisite state of mind, P. 143
c. Color of title required by some Js (defective instrument)
d. Mistakes in boundary disputes
i. Mistaken beliefs about property right:
Main, p. 12
1. Majority: still adverse possessor (objective Maine view)
2. Minority: must have actual hostile intent to claim land
a. Dispense w/ this rule for objective Maine view in
Mannillo v. Gorski (N.J. 1969)
ii. Oral agreements:
1. Fix a boundary line & if a party acts in reliance, may estop the
other party
2. Acquiescence in boundary line over time is evidence of
agreement
iii. Mistaken improver
1. Modern courts give some relief to good-faith encroacher
a. Mannillo v. Gorski (N.J. 1969) P. 147 [minor
encroachment by G’s stairwell w/ no notice to T.O.
LIABILITY RULE (court may force true owner to
sell land at reasonable value to adverse possessor)]
4. Continuous, uninterrupted possession
a. Must have the same degree of occupancy and use as the average owner. Must
not have a break in the essential attitude of mind (“earning” & “sleeping”)
i. Seasonal Use
1. Seasonal possession sufficient if that is how the average owner
would use the property, Howard v. Kunto (Wash. 1970) P. 153
[H held title to K’s land b/c previous accident in records]
ii. Abandonment
1. Continuity broken if intentionally relinquish for any period of
time
iii. Tacking by successive possessors
1. Tacking possible if there is a voluntary transfer privity of
estate with a predecessor in interest, Howard v. Kunto (Wash.
1970) P. 153
a. Not possible if ouster prior adverse possessor or prior
adverse possessor abandoned property [suggests
“EARNING THEORY” dominates in U.S.]
i. Ex: no privity b/t squatters, P. 143
ii. American rule: after temporary ouster, S.O.L.
starts over (can’t add time previously spent)
b. Tacking occurs b/t owner & his successors
iv. Interruption by True owner
1. True owner breaks continuity if reenters with intent of
regaining possession
a. Objective testordinary acts of ownership
5. Payment of taxes required in several states
v. Disabilities of Owners
1. If owner disabled at time of adverse entry (ex. minority, “unsound mind,”
imprisoned), statute of limitations tolled until disability ends [suggests “SLEEPING
THEORY” dominates in U.S.]
a. disability arising after entry does not count
b. no tacking of disabilities
c. disability “removed” at death
2. If T.O. disappears & someone wishes to purchase from A.P., options for protection:
a. Lower price
b. Indemnity agreement
Main, p. 13
c. Title insurance
vi. Extent of land acquired by Adverse Possession
1. Without color of title
a. Take possession ONLY of land ACTUALLY OCCUPIED or controlled
2. With color of title—constructive adverse possession
a. Constructive possession of entire property described in instrument if good
faith claimant actually possesses significant portion
i. NOT if true owner or another party with prior constructive possession
(superior title) is present on the land not physically occupied by A.P.
(in that case, only get land actually occupied)
ii. NOT if fails to enter multiple lots owned by multiple true owners
(must be an entry against land in question)
vii. Interests Not Affected by Adverse Possession:
1. Future interests
a. If A.P. made entry when life tenant in possession, A.P. does not run against
owner of future interest (remainder)
b. If A.P. made entry before owner created future interest, A.P. runs against the
owner and his successor in interest
2. Liens, easements, equitable servitudes
a. S.O.L doesn’t begin to run until A.P. does something contrary to agreement,
which would give holder cause to sue
3. Governmental land
THE SYSTEM OF ESTATES:
III.
Possessory Estates in Land
An estate: an interest in land that is or may become possessory; measured by some period of time
Freeholder estate: seized with seisin (ownership)
Limit the types of estates b/c otherwise impose costs on 3Ps (Smith) & result in anticommons (Heller)
a. Fee Simple
i. Fee Simple Absolute
1. Potentially infinite duration with no limitations on its inheritability, and it cannot be
divested or end on the happening of any event
a. Only ends if die without selling, intestate w/ no heirs
2. Word of purchase: identify the person (“to A”)
3. Words of limitation: describe the type of estate (“and her heirs”)
a. Modern law: “and her heirs” no longer necessary. A deed or will is
presumed to pass the largest estate the grantor or testator owns, White v.
Brown (Ten. 1977) P. 221 [house to Evelyn White “to live in and not to be
sold” construed to be FSA w/ unenforceable restraint on alienation]
i. Cannon of construction got Lide’s intent right by accident (wanted to
provide for sister-in-law White for life)
4. Transfer:
a. Land is freely alienable, The Statute Quia Emptores (1290)
i. Sale or grant by deed
b. Right devise land or descend to heirs if no will, The Statute of Wills (1540)
i. Devise land by will; bequeath personal property by will:
1. Real propertydevisees
2. Personal propertylegatees
ii. State intestacy statute determines:
1. Real propertyheirs
Main, p. 14
a. England had rule of primogeniture
b. Types of heirs:
i. Issue: descendents, kids
ii. Ancestors: parents
iii. Collaterals: all related by blood
iv. Otherwise, escheatstate
2. Personal propertynext of kin
c. Henry Maine, “Ancient Law” P. 208
i. Noted the movement from statuscontract
ii. Now we’re moving back from contractstatus laws
ii. Defeasible Fees
1. Potential, though not the certainty, of infinite duration
2. Types:
a. Fee simple determinable (FSD)
i. End automatically when some specified event happens (“to school so
long as used for school purposes”)
ii. Words of special limitation: language that connotes that the fee is to
last only until a stated event occurs (“so long as,” “until”)
1. MUST use these words! Expressions of motive or purpose
inadequate
iii. Transferable, but still subject to the limitation
iv. Future interest: grantor has a “possibility of reverter” (POR) which
may be expressly retained (by words in a deed or will) or may arise by
operation of law
v. If land condemned, generally $ FSD
1. Different outcome in Ink v. City of Canton (Ohio 1965) P. 257
[value of FSD to city; remainder $ to POR holders]
a. Better outcome: city should used condemnation award
to purchase new park, transfer Ink’s POR to that park
b. Fee simple subject to condition subsequent (FSSCS)
i. Fee simple cut short at the grantor’s election after a specified
condition occurs. Does NOT automatically end—ends after the
condition occurs AND the grantor elects to reenter and terminate the
estate
ii. If LIFE ESTATE, it is a life estate “subject to a right of entry”
iii. Words of special limitation: language indicating fee simple may be cut
short if a condition happens (to school… “but if,” “upon condition,”
“provided, however”… ceases X use, grantor has a right to reentry)
iv. Transferable until grantor can AND DOES exercise right of reentry
v. Future interest: grantor has a “right of entry” implied IF the words are
reasonably susceptible to such an interpretation
vi. **courts prefer FSSCS to FSD b/c forfeiture optional**
1. Exception: Mahrenholz v. County Board of School Trustees
(Ap Ct Ill, 1981) P. 242 [appellate court construed “for school
purposes” as FSD w/ POR]
c. Fee simple subject to executory limitation (FSSEL)
i. Fee simple that, upon the happening of an event, is automatically
divested by an executory interest in a third person (“to school, but if it
ceases to use land for school purposes, then to hospital”)
ii. Future interest: 3P has an “executory interest”
b. Fee Tail
Main, p. 15
i. Estate endures as long as descendants of the original grantee are alive, and is inheritable only
by the grantee’s descendants
ii. Words of limitation: “to A and the heirs of his body” or “to A and his issue”
iii. Characteristics:
1. The tenant in fee tail could not defeat the rights of the tenant’s lineal descendants
2. The fee tail could be inherited only by issue of the original grantee
iv. Types:
1. Fee tail male: limited succession to male descendants of the grantee
2. Fee tail special: inherited only by the grantee’s issue by a specific spouse
v. Future interest:
1. Grantorpossibility of reverter
2. 3Premainder
vi. Modern law abolished fee tails, except 4 states: Delaware, Maine, Massachusetts, RI
1. In those states, disentailing possible by a deedcut off all rights of the original
tenant’s issue
2. Construing “and the heirs of his body” in other states:
a. SC & Iowa: A has a FSSCS (condition = issue); if issue, A can convey a fee
simple; if no issue, A’s estate ends at A’s death
b. Minority: A has a life estate, remainder in fee simple to A’s issue
c. Majority: A has a fee simple
i. Some: fee simple absolute
ii. Others: fee simple, defeasible fee: remainder to another specified if A
leaves no descendants at his death
c. Life Estate
i. Endures for a period of one or more human lives
ii. Types (ambiguous languagegrantor’s probable intent):
1. For life of grantee
2. Por autre vie: measured by the life of someone other than the owner of the life estate
3. In a class: remainder not possessory until ALL life tenants die
4. Defeasible
iii. Transferable
iv. Future interest:
1. Grantor  reversion
2. 3P grantee  remainder
v. Waste: the life tenant is entitled to the use and enjoyment of the land but cannot waste it—no
permanent impairment of value of land
1. Affirmative (voluntary) waste: life tenant destroys property or exploits natural
resources
2. Permissive (involuntary) waste: land allowed to fall into disrepair
3. Ameliorating waste: principal use of land substantially changed so as to increase the
value of the land
vi. Life tenant cannot direct sale of land if this will be a hardship to remaindermen, Baker v.
Weedon (Miss. 1972) P. 230 [Weedon’s grandkids keep Anna from selling farm]
1. Heller: courts didn’t want to direct the sale, but this led to a bad outcome: will
indicates Weedon wanted to provide for Anna
2. BETTER RULE: allow life tenant to sell land unless testator wanted that specific
property to stay in the family
3. EVEN BETTER RULE: avoid these problems with TRUSTS
vii. Defeasible life estates
1. Condition “so long as she remains unmarried”
a. Permissible if determinable (presumed intent is to provide for her)
Main, p. 16
b. Not permissible if subject to condition subsequent (presumed intent to punish)
i. VOID  no longer life estate?
d. The Rule against Restraints on Alienation
i. Land should be alienable (basic principle of property) & certain restraints invalid
ii. Types of restraints:
1. Disabling: grantee no power transfer interest
2. Forfeiture: grantee forfeits interest if attempts to transfer interest
3. Promissory: grantee promises not to transfer interest
iii. Total restraint on alienation of fee simple in any form (forfeiture, disabling, or promissory) is
void, White v. Brown (Ten. 1977) P. 221 [court pencils out “not to be sold”]
1. Absolute restraint on alienation void, but permissible to impose condition on FSD to
be used as a lodge, Mountain Brow Lodge No. 82, Independent Order of Odd Fellows
v. Toscano (Ct Apl CA, 5th Dist, 1968) P. 251
2. Heller’s better inquiry to determine whether a restriction affects marketability of
property:
a. Type of remedy (forfeiture here)
b. Number of buyers (few here)
c. Whether restraint benefits other land
d. Discouragement/encouragement for improvements
e. Encouraging gifts to charity
iv. Partial restraints on fee simple (restrict power to transfer to specific persons, by specific
methods, or until specific time) usually void
1. Exception principally for cooperative housing. Exceptions if there is a reasonable
purpose & restraints are limited in duration
a. Restraints regarding specified racial, religious, or ethnic groups are not
enforceable. Court approval would be discriminatory state action barred by
the Equal Protection clause (Shelly v. Kraemer)
i. Condition subsequent giving grantor right of entry not judicially
enforceable
ii. Determinable fee theoretically permitted b/c automatically reverts, but
may violate civil rights statutes and/or the Fair Housing Act
v. Disabling restraint on life estate void
1. But disabling restraint on equitable life estate (a spendthrift trust) usually valid
vi. Forfeiture and promissory restraints on life estate often upheld
IV.
Future Interests
A future interest: a present, nonpossessory interest capable of becoming possessory in the future
a. Future interests retained by the grantor:
i. Reversion
1. Future interest in the grantor after she conveys a lesser estate than she has & does
not transfer the balance to a 3rd party. May be expressly retained or may arise by
operation of law
2. Vested Interest: all reversions are vested interests even though not all reversions will
necessarily become possessory.
a. Vested = fully alienable, accelerates into possession on termination of the
preceding estate, and not subject to the RAP
ii. Possibility of Reverter (POR)
1. Future interest remaining in the grantor when a determinable estate is created (FSD)
& grantor doesn’t give balance to 3rd party
Main, p. 17
2. Transfer: not possible inter vivos at C.L.; however, now POR freely alienable both by
will and during life
3. Termination: C.L. could endure indefinitely b/c inheritable; however, some states
have statutorily limited the period during which these interest can exist
iii. Right of Entry (ROE)
1. Future interest in a grantor when he creates an estate subject to condition subsequent
(FSSCS) and retains the power to cut short the estate
2. Transfer: inalienable inter vivos at C.L.; however, now some states allow sale
3. Termination: C.L. could endure indefinitely b/c inheritable; however, some states
have statutorily limited the period during which these interest can exist
b. Future interests created in a grantee
i. Remainder
1. Future interest created in a grantee that is capable of becoming a present possessory
estate upon the expiration of a prior estate.
2. Characteristics:
a. Must be expressly granted in same instrument that created preceding estate.
b. The preceding estate must be a fee tail, life estate, or term of years.
c. The remainder cannot divest a preceding estate prior to its normal termination
3. Types of Remainder Estates:
a. Fee simple
b. Life estate
c. Term of years
d. Fee tail (where permitted)
4. Classification:
a. Vested Remainders:
i. Created in an ascertained person and is not subject to a condition
precedent. Ex: “to A for life, then to B in fee simple”
1. Indefeasibly vested
a. Holder of interest certain to acquire possession in the
future & will be entitled to retain the estate permanently
2. Vested subject to open
a. Vested in a class of persons, at least one of whom is
qualified to take possession, but class members’ shares
are not yet fixed b/c more persons can subsequently
become members of the class
i. Class closed if others can no longer enter class
3. Vested subject to divestment (condition subsequent)
a. Can become completely divested by a condition
subsequent or by an inherent limitation of the remainder
estate
4. May be “subject to open” AND “subject to divestment”
ii. Transfer: alienable inter vivos & devisable by will. Normally
descends to heirs, but can be limited so divested at death
b. Contingent Remainders:
i. Remainder given to an unascertained person OR subject to a condition
precedent.
1. Unascertained person
a. Person not yet born or one who cannot be determined
until the happening of an event
2. Condition precedent
Main, p. 18
a. An express condition set forth in the instrument which
must happen before the remainder becomes possessory
i. **The termination of a preceding estate is NOT
a condition precedent**
ii. Ambiguous languagecondition subsequent
(vested remainder)
ii. Transfer: at C.L. inalienable inter vivos; however, in most states today
CR is alienable, devisable, and descendible
iii. Contingent remainder in fee simple always creates a reversion in the
grantor
1. Alternative contingent remainders, grantor keeps reversion:
a. “O to A for life, then to B and heirs if B survives A, and
if B does not survive A to C and his heirs”
2. A vested remainder + executory interest, grantor need not have
a reversion
a. “O to A for life, then to B and heirs, but if B does not
survive A to C and his heirs”
ii. Executory Interest
1. Springing Interest
a. Future interest in a grantee that springs out of the grantor subsequent to its
creation, thus divesting the grantor (Ex: “to A when she marries)
2. Shifting Interest
a. Future interest in a grantee divests a preceding estate in another grantee
prior to its natural termination (Ex: “to A, but if B returns from Rome, to B”)
b. Example where EI trumps remainder: “O to A so long as no liquor, then to B”
c. Old Rules, Mostly Abolished:
i. Destructibility of Contingent Remainders
1. At C.L. (and still in some states), a contingent remainder in land is destroyed if it
does not vest before or ate the time the preceding freehold estate ends [RULE OF
LAW, not construction]
ii. The Rule in Shelley’s Case
1. At C.L., if one instrument creates a freehold in land in A, and purports to create a
remainder in A’s heirs, and the estates are both legal or both equitable, A (and not A’s
heirs) has the remainder [RULE OF LAW, not construction]
a. Mostly applied to life estates
b. Future interest: remainder or an executory interest
iii. Doctrine of Merger: when present & future interest held by same person in same form as
legal or equitable estates (in trust), would merge into next largest estate
1. Doctrine of Worthier Title
a. When an inter vivos conveyance purports to create a future interest in the
grantor’s heirs, the future interest is void and the grantor has a reversion
[RULE OF CONSTRUCTION that raises a rebuttable presumption that no
remainder has been created]
b. Future interest: remainders or an executory interest in real or personal
property
d. The Rule Against Perpetuities
i. 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
1. Must determine when vests in interest. Occurs when both of these criteria are met:
a. Person is ascertained
b. No condition precedent to their taking
Main, p. 19
ii.
iii.
iv.
v.
vi.
vii.
viii.
2. Irrelevant when the interest vests in possession
3. This is a RULE OF PROOF/law, not construction. It may defeat the grantor’s intent
a. interest holder must prove beyond logical doubt that the interest will
necessarily vest in interest w/in the period of the rule
LISTING OF the rap rule in U.S. STATES, P. 334
Applies to:
1. Contingent Remainder
2. Executory Interest
3. Vested Remainder Subject to Open
4. **Even applies to commercial interests in NY, The Symphony Space, Inc. v. Pergola
Properties, Inc. (N.Y. 1996) P. 313
Does not apply to vested interests:
1. Reversion
2. Possibility of reverter
3. Right of Entry
4. Vested Remainder (indefeasibly vested, subject to divestment)
5. **Also generally does not apply when time specified**
a. Ex: “O to B 30 years from today” treated like “O to O for 30 years, then to B
and heirs”
Lives in being
1. Any person who can affect the vesting of the interest and who is alive at the creation
of the interest can be a validating life, provided the claimant can prove the interest
will vest or fail within 21 years of the person’s death
2. May use different lives for different interests
3. A group/class can serve as a measuring life as long as all are ascertained at T(c) &
group not too big
Meaning of “vest”
1. Class gifts do not vest in any member of the class until the interests of all members
have vested. All-or-nothing rule: the whole class gift is void if any member of the
class might vest too remotely, Jee v. Audley (Court of Chancery, 1787) P. 307 [Jee’s
daughters]
2. Executory interest after fee simple determinable or divesting a fee simple vests only
when the condition happens AND it becomes a possessory estate
Application to Defeasible Fees
1. FSDEI is subject to the rule
a. EXCEPTION: gift over from one charity to another charity
b. Another EXCEPTION: fee simple determinable created by will
The “what-might-happen” test, Jee v. Audley (Court of Chancery, 1787) P. 307
1. if there is any possibility that a contingent interest will vest too remotely, the interest
is VOID. Courts do not wait to see what actually happens, but look at the interest at
the time of creation
2. Examples:
a. Fertile octogenarian: presume anyone can have children as long as alive, Jee
v. Audley (Court of Chancery, 1787) P. 307 [even 70-yr-old couple]
b. Unborn widow: Surviving spouse may not yet be alive. A’s new wife could
be born after A’s current wife’s death
3. REFORM
a. “Wait-and-See Doctrine”
i. More than ½ states apply this rule: the interests are judged by actual
events, not by possible events.
1. Some states: wait out relevant lives + 21 years
Main, p. 20
2. Uniform Statutory RAP: wait 90 years
b. Cy Pres Doctrine
i. Reform an invalid interest to approximate most closely the intention of
the creator of the interest
c. Abolition of the rule in some states for interests in trusts (allow dynasty trusts
that avoid taxes)
e. Equitable future interests (as opposed to legal future interests) are created in a trust
i. A trust is a fiduciary relationship in which one person (the trustee) holds legal title to
property (res) subject to equitable rights in beneficiaries. One person manages property for
the benefit of others. A person who creates the trust is the settlor.
ii. Requirements:
1. Settlor must manifest intent
a. Written instrument necessary for express trust of land
b. Written or spoken words or by conduct for express trust of chattels
2. Ordinarily, written instrument names trustee & specifies rights of beneficiaries & the
trustees powers
3. Property must be delivered to trustee
iii. Trustee
1. Broad powers to manage property in same manner as an intelligent person would
manage her own
2. Personally liable for breach of fiduciary duty: must exercise degree of care, skill, and
prudence as would a reasonably prudent person managing her own affairs (prudent
investor rule)
V.
Concurrent Interests
a. Tenancy in Common
i. Characteristics:
1. Each tenant has an undivided interest in the property, including the right to possession
of the whole
2. When one co-tenant dies, the remaining tenants in common have no survivorship rts
3. Equal shares are not necessary
4. Co-tenants can own different types of estates in the same property
ii. Transfer: each co-tenant can transfer his interest in the same manner as if her were the sole
owner
iii. **Today, presume tenancy in common whenever a conveyance is made to 2 or more ppl
(usually including spouses)**
b. Joint Tenancy
i. Characteristics:
1. Each tenant owns an undivided share of the property
2. Right of survivorship: the surviving co-tenant has the right to the whole estate
a. Avoid probate b/c not change in title at JT’s death
ii. Four unities: required at the time of conveyance AND throughout tenancy
1. Time: acquired/vest at the same time
2. Title: by the same instrument (title) or by joint adverse possession
3. Interest: identical interests; equal, undivided shares (size & duration)
4. Possession: an equal right to possess the whole property [the only requirement for
tenancy in common]
iii. At C.L., conveyance by H to “H and W as joint tenants” violated time & title requirements.
Today, most states allow conveyance from one spouse to both spouses as joint tenants (no
need for strawperson)
Main, p. 21
iv. **Today, must overcome presumption for tenancy in common w/ express words. At C.L.,
presumed any conveyance to 2 ppl (except spouses) created joint tenancy**
1. EXCEPTION for “joint and survivor bank account” [example of situation where
likely do not need all 4 unities]
a. UNLESS the account was only a “convenience account”
b. And UNLESS intended one party has no rights until the depositor’s death
(attempting to use account as will substitute)
i. BUT totten trusts & payable-on-death accounts may be upheld
2. Note on joint bank account: during lifetime, account belongs to each in proportion to
net contribution
v. Severance of a Joint Tenancy if 1 of 4 unities severed. Destroys joint tenancy & right of
survivorship, creates a tenancy in common:
1. Conveyance by joint tenant
a. If convey interest, sever joint tenancy with respect to that share
b. At C.L., could not convey interest to self to sever the joint tenancy; had to use
a 3P strawman
i. But strawman not necessary today, Riddle v. Harmon (CA 1980) P.
345
1. Really an example of the court bailing out a bad lawyer!
2. Result: problem of SECRET SEVERENCE
a. Likely the best solution is to require severance be
recorded
c. Cannot sever JT by devising interest in will; right of survivorship swoops in
2. Mortgage by joint tenant
a. Title theory states: a mortgage conveys legal title & thus severs tenancy
i. But some states that follow this theory argue that rightt of survivorship
too important to be severed by mortgage w/o clear intent to sever
b. Lien theory states (Majority): a mortgage conveys a security interest (not a
legal title) & does not sever a joint tenancy, Harms v. Sprague (Ill. 1984) P.
350
i. Such a mortgage does NOT survive the death of the mortgagor as a
lien on the property, Harms v. Sprague (Ill. 1984) P. 350 [in this case
Illinois Probate Act mandated the lien should survive up to the amt of
the deceased undivided interest, but Simmons waived at trial]
1. Bad results:
a. Bank’s response: never lend to joint tenants or only
lend if all joint tenants agree (transaction costs) &
secure fewer loans
b. Stronger incentive to foreclose quickly b/c worried joint
tenant might die
c. Raise cost of credit to everybody to account for risk
from joint tenants
d. William Harms of the world also badly affected b/c
worried that lenders will come after them
e. Unsophisticated lenders (who don’t do a title search)
get screwed!
2. Good results:
a. Most joint tenants are intimate, usually spouses. The
rule tells lenders to check w/ other joint tenant/spouse
b. Avoids the jeopardy of foreclosure
c. Heller article: “The liberal commons”
Main, p. 22
i. Most people don’t know why everyone w/ an
interest in the property has to sign, but do it
ii. Commercial leases more likely long-term, &
they will conduct a more sophisticated search
3. Lease by joint tenant
a. C.L. rule (MD Title Theory): a lease by one joint tenant severs J.T.
b. Tenhet v. Boswell (CA 1976): lease does not sever JT, so right of survivorship
is effective,
c. Partial/asymmetric severance: priority to leasee.
i. If leasor dies, the lease severed the JT. Leasor’s devisee’s interest
encumbered by remaining 5 years of lease
ii. If other JT dies first, no severance & leasor maintains right of
survivorship in entire property. Lease still good.
4. Agreement among joint tenants
a. Severance occurs if tenants agree to hold as tenants in common even if none
of the 4 unities are broken (intent controls)
5. Murder
a. Some Js: severancetenancy in common
b. Other Js: no severance, but the victim’s heirs get everything except the
murderer’s life interest in half the estate
c. Tenancy by the Entirety
Only recognized in ½ states today…
i. Characteristics:
1. 5th unity: an only be created b/t husband and wife, holding as one person
a. Divorcetenancy in common (majority) or joint tenancy
2. Severance by one tenant is impossible
3. Right of survivorship cannot be destroyed
ii. **C.L. presumption conveyance to husband and wife created tenancy by the entirety. Today,
some states keep this rule, others presume tenancy in common or joint tenancy.**
iii. At C.L., husband could alienate his interest (including right to exclusive possession), but
could not destroy wife’s right of survivorship
1. Today, wife has an equal right of possession
2. Rule on separate conveyances:
a. Majority: neither spouse can convey separately & creditors of either spouse
cannot reach the property
b. Minority: each can alienate his or her interest, and creditors can levy
separately on his or her interest w/o destroying rights of other spouse
iv. At C.L., could not be created in personal property; however, possible today
d. Relations Among Concurrent Owners
i. Themes:
1. Default rules today suspicious of cooperation; Civil Law more supportive of people
working together
2. Trying to prevent the tragedy of the commons…
3. “the act of one joint tenant without express or implied authority from or the consent
of his cotenant CANNOT bind or prejudicially affect the rights of the latter”… but
the cases tell us, really you CAN, Swartzbaugh v. Sampson (CA, 1936) P. 375
ii. Possession by One Co-Tenant
1. Each co-tenant is equally entitled to the possession of the entire property. The parties
may agree among themselves that one co-tenant has the right to exclusive possession
2. Ouster: when one co-tenant deprives another co-T of the right to possession (by
adverse possession OR refuse allow co-T use and enjoyment of the land, Spiller)
Main, p. 23
iii.
iv.
v.
vi.
a. Options for ousted co-T:
i. Bring suit to collect share of reasonable rental value
ii. Bring suit to partition
b. A demand to vacate or pay rent is NOT sufficient to establish an occupying
cotenant’s liability, Spiller v. Mackereth (AL 1976) P. 369 [tenants in
common; Spiller used entire warehouse]
i. This majority rule leads to a RACE to occupy commercial real estate
ii. Minority rule, Cohen v. Cohen (civil law tradition): if you move in,
you must pay rent to cotenants
1. Less beneficial when the land is inhabited for personal use, but
generally does foster more cooperation
iii. BEST CONFIGURATION:
1. Spiller rulepersonal use
2. Cohen rulecommercial use
3. Accounting by co-tenant in possession
a. Majority: If one co-tenant ousts another, he must pay reasonable rental value
b. Minority: a co-tenant must pay reasonable rental value even w/o ouster
4. Co-T’s rights when another Co-T leases out land, Swartzbaugh v. Sampson (CA,
1936) P. 373:
a. No right to demand rent from leasee
b. Right to an accounting from co-T
c. Could have the property partitioned
d. Still maintains ½ undivided interest in the portion of the land leased
i. Could attempt to get on the land. If ousted, action for ½ the fair
market value (but would likely only succeed if leasee knew JT—
otherwise, court may only allow accounting from co-T)
Accounting for Rents Received from a Third Party
1. Must be shared equally w/ other co-Ts, Swartzbaugh v. Sampson (CA, 1936) P. 373
Exploiting Natural Resources
1. Co-T entitled to mine or drill for oil, but must pay to the other co-tenants a
proportionate part of the net amount received
2. Some courts permit co-T to cut a proportionate share with no liability for its value to
other co-Ts (b/c visible & easily apportioned)
Actions by Co-Tenant to Protect Property
1. Taxes & mortgage interest
a. Each co-T liable for her share of taxes
i. EXCEPTION: if co-T in exclusive possession, duty to pay the taxes &
mortgage interest up to the amount of the reasonable rental value
b. If co-T pays off mortgage principal, subrogated to the morgagee & has
whatever rights it had (ex: lien)
2. Repairs
a. Repairs are voluntary & a co-T who makes necessary repairs can NOT compel
contribution from co-Ts
i. CAN get credit if partition & CAN offset the costs of necessary repairs
in accounting for rents
3. Improvements
a. No co-T has a duty to pay for improvements, and the cost may NOT be offset
in accounting for rents
i. CAN benefit from value added upon partition (& assume costs)
Adverse Possession
Main, p. 24
1. Co-T can become an adverse possessor only upon clear notice of repudiation of the
common title being given to the other co-tenants. Clear signal of actions amounting
to ouster. Exclusive possession alone is insufficient
vii. Partition
1. Any co-T may bring an action for partition:
a. undivided ownershipownership in severalty (SEPARATE interests)
b. Why?
i. We’re worried about the tragedy of the commons!
ii. Individual autonomy trumps value of working together
c. Covenant not to partition is void b/c unreasonable restraint
2. Courtpartition in kind (physical division) OR partition by sale
a. Favor partition in kind, Delfino v. Vealencis (Conn. 1980) P. 359 [V’s garbage
business & home on property; tenancy in common]
i. Partition by sale only if:
1. Partition in kind impracticable or inequitable
2. Interests of the owners would be better promoted by a sale
ii. If partition in kind not quite equal, one party may pay an owelty
b. Some states allow anyone with even a minute interest to force a partition by
sale, Heller, “The Liberal Commons” P. 368
i. Set of laws w/ detailed rulesunintended consequences of liberal
commons
c. When neither a physical partition nor a sale adequately divides property, may
partition in time, In re McDowell, 74 (Sur. Ct. 1973) P. 369 [rocking chair]
i. Sale, cut in half, burn, draw straws… none would do the trick
3. **NOT AVAILABE unilaterally for TENANTS BY THE ENTIRETY**
VI.
Leaseholds
A nonfreehold estate in land that lasts for a fixed time or by other agreement between a landlord and
tenant. It is both a conveyance of an estate in land and a contract containing promises
a. Lease Distinguished from Other Relationships:
i. Lease: tenant has the right to possession
ii. Oil and gas lease: grants a profit or ownership of minerals in place; not a leasehold
iii. Billboard “lease”: creates an easement (or license), which gives the lessee a right to use
iv. Lodging agreements: create a license (hotel guest) OR a lease (if lodger furnishes the place)
1. A license can be terminated at any time
2. More servicesless likely a lease
b. Types of Tenancies
i. Tenancy for Years
1. A tenancy with a beginning and end fixed from the outset; usually a calendar period
such as “one year” or “two months”
2. Creation: presume tenancy for years where the termination date is fixed upon the
happening of some event (ex: “until war ends”)
3. Termination: definite ending; expires without notice
ii. Periodic Tenancy
1. A tenancy for a fixed period that continues for succeeding periods (ex: “month to
month” or “year to year”) until either the landlord or the tenant give notice of
termination
2. Creation: by express agreement or by operation of law
Main, p. 25
a. Rent agreement: frequently arises by implication where the lease agreement
provides only for periodic payment of rent but no termination date
i. Where annual rent is payable monthly, most Js hold the period to be
year to year; some say month to month
b. Operation of law: created where the tenant holds over after the lease expires
or where he takes possession under an invalid lease
3. Termination:
a. Continues until proper notice is given. Notice must…
i. Be equal to the length of the period
1. Except 6 mo’s notice is required for a year-to-year tenancy
a. Some Js say only 1 month/ 30 days
ii. Specify the last day of the period & terminate the lease on that day
b. At C.L., if notice improper (not enough time), same as no notice (still liable
for rent)
i. Today: only liable for rent until date for which notice would have been
effective
iii. Tenancy at Will
1. A tenancy terminable at the will of either the landlord or the tenant
a. If terminable by only 1 party, NOT a tenancy at will. A term of years,
periodic tenancy, or life estate can be made determinable at the will of only
one party.
i. If tenancy NOT term of years, periodic tenancy, or life estate & is
terminable at the will of only one party…
1. Some Js: implied tenancy at will
2. Other Js: determinable life estate, Garner v. Gerrish (N.Y.
1984) P. 447 [Donovan leased house to Gerrish “for and during
the term of quiet enjoyment… Lou Gerrish has the privilege of
termination this agreement at a date of his own choice.”]
a. Closer to intent of parties
b. But no landlord/tenant relationship & must pay for
transfer of LE, even though paid monthly “rent”
3. Other Js: look to parties’ intent. A lease “so long as” certain
definite use is made is not a tenancy at will; OK to terminate at
the will of one party, Philpot v. Feld (Tex. 1982) P. 450
2. Creation: by express agreement or by operation of law
3. Termination: notice & an attempted assignment will terminate a tenancy at will
a. At C.L.: tenancy terminated on the day notice was given
b. Today: most state require notice, usually 30 days
iv. Tenancy at Sufferance
1. A tenant who holds over when her term expires is a tenant at sufferance
2. Landlord’s choice:
a. Evict the tenant or
b. Elects to hold the tenant another term up to 1 year (maximum)
c. Extension for:
i. periodic tenancy (majority view)
ii. term of years (minority view)
3. Innocent (unwilling) holdover tenants granted some relief
4. Willful holdovers may be subject to additional penalties such as double rent
c. Statute of Frauds
i. All 3 (term of years, periodic tenancy & tenancy at will) must be in writing
ii. Short-term lease exception:
Main, p. 26
1. Most states exempt short-term leases (usually one year) from the Statute of Frauds
requirement of a writing
a. An oral lease for more than a year creates a tenancy at will
iii. Oral Lease to commence in the future
1. Majority: an oral 1-year lease to commence in the future is valid, even though an oral
contract other than a lease not to be performed w/in a year is void
iv. Entry & rent payment under invalid lease
1. Oral lease may be void…
a. Entry by a tenant creates a tenancy at will
b. Payment of rent creates a periodic tenancy
i. Majority: year-to-year tenancy regardless of rental payments
d. Landlord’s Duty to Deliver Possession
i. Legal Right to Possession
1. A landlord has the duty of delivering to the tenant the legal right to possession.
2. If another person has paramount title, the landlord is in default
a. If the tenant is unaware of the paramount title before entry, he may terminate
the lease.
b. After entry, the tenant has no remedy unless he is actually evicted by
paramount title
ii. Actual Possession
1. English rule (majority): landlord has duty to deliver actual possession at the
beginning of the lease. If a previous tenant does not get out in time, the landlord is in
default
a. THIS IS THE BETTER RULE: landlord in a better position to kick out
tenants; know the status of tenants & whether they have a right to be there;
landlords more experienced at evicting bad tenants
b. Case is example of lease being more properly viewed as a contract
c. Rationale:
i. Tenant would not have entered into lease if had known at the time that
he could not obtain possession, would be compelled to commence
lawsuit, await law’s delays, and follow case through its “devious
turnings” to an end before he could hope to obtain possession of the
land he had leased (p. 386)
2. American rule (minority): no duty to deliver actual possession, only legal
possession, & the tenant has the burden of ejecting the holdover tenant, Hannan v.
Dusch (VA 1930, p. 384)
e. Landlord’s Duty not to Interfere with Tenant’s Quiet Enjoyment
i. Covenant of Quiet Enjoyment
1. A tenant has a right of quiet enjoyment of the premises without interference by the
landlord. If not expressed in the lease, such a covenant is always implied
ii. Eviction
1. Actual Eviction: If tenant evicted from the entire premises by anyone, the tenant’s
rent obligation terminates
2. Partial Eviction:
a. By the landlord: If tenant evicted from all or any portion of the leased
premises by the landlord, his rent obligation abates entirely until possession is
restored to him. Tenant may stay in possession without paying rent
b. By 3P: If the tenant is partially evicted by a 3P w/ paramount title, tenant can
terminate the lease, recover damages, or receive a proportionate rent
abatement
Constructive
Actual
Main, p. 27
Partial Eviction
Total Eviction
Remedies: get damages, but
can’t stop paying rent
**odd outcome: effectively
evicted, but still pay**
Reste
Remedies: tenant can leave
& stop paying rent
Remedies: completely abate
rent (pay 0) & get damages
for harm
Berg
Remedies: receive damages
where evicted wrongly
3. Constructive Eviction
a. If a landlord substantially interferes with a tenant’s enjoyment of the premises
without actually evicting the tenant, the tenant can claim constructive eviction
and vacate the premises, Reste Realty Corp. v. Cooper (NJ 1969) P. 522
[flooding in office not repaired; explicit covenant of quiet enjoyment]
i. Cannot claim constructive eviction b/c wrongful acts of 3P
1. EXCEPT landlord has a duty not to permit a nuisance on the
premises and also a duty to control common areas (prevent
tragedy of the commons)
2. Landlord may also be responsible for other tenants’ acts if the
landlord has the legal ability to correct the conditions and fails
to do so
b. Remedy: tenant’s only remedy is to move out within a reasonable time and
claim damages
f. Landlord’s Duty to Provide Habitable Premises
i. Landlord’s Duty at Inception of Lease
1. C.L. no implied covenant by the landlord that the premises are habitable or are fit for
the purposes intended
a. EXCEPTIONS:
i. A furnished house for short term (ex: summer cottage)
ii. Hidden defects known to the landlord
iii. Building under construction
2. Implied covenant/warrantee of initial habitability and fitness applied recently in
leases of urban buildings, including apartments & some commercial leases
a. Tenants may waive minor defects, but cannot waive more serious defects b/c
against public policy
b. Remedies:
i. Contract remedies: damages, restitution, rescission
ii. May also use rent for repairs or withhold rent
ii. Landlord’s Duty to Repair After Entry by Tenant
1. C.L. landlord has no duty to maintain and repair the premises. If duty expressed in
lease, the covenant to repair is independent of the tenant’s covenant to pay rent. If
landlord breaches, tenant must continue paying rent & sue for damages or spec. perf
2. Implied covenant/warranty of habitability and repair applied in urban leases. A
tenant’s covenant to pay rent is dependent upon the landlord’s performance of his
covenant, Hilder v. St. Peter (Vt, 1984) P. 533 [landlord must deliver AND maintain
premises in good condition during period of tenancy; essential facilities must be kept
in good condition: latent defects AND patent defects]
a. Sometimes applied to commercial leases if appears commercial tenant has
bargained for continuing maintenance
b. Waiver of implied covenant of habitability generally not permitted
c. Remedies: after giving notice & allowing time for repair
i. Terminate or continue the lease and recover contract damages
Main, p. 28
ii. Continue the lease and use rent to repair or withhold rent
iii. Breach of duty may be a defense to landlord’s action for rent
iv. BROADER REMEDIES THAN FOR CONSTRUCTIVE EVICTION
b/c able to stay in place
1. BUT APPLIES MORE NARROWLY (residential)
3. Statutory duties
a. Many states impose statutory duties of repair & maintenance, and tenants are
given various remedies for breach (ex: repair & deduct costs, withhold rent)
b. Prima facie evidence of a violation of implied warranty of habitability!,
Hilder v. St. Peter (Vt, 1984)
i. Also look to other defects impacting health & safety of tenant
4. Retaliatory eviction
a. Some recent cases hold that a landlord cannot evict a tenant in retaliation for
an exercise of statutory rights that depend upon private enforcement
5. Disadvantages of the implied warranty of habitability:
a. Not realistic damages as calculated in Hilder: the price you agreed to pay is
how much the crummy apartment is worth, not something better
b. Improved apartment will price out poor tenants; overall, increased rents
(landlords will increase rents because apts. need to be warranted) and
decreased supply of low-income housing. Middle-class tenants will be favored
over the poor, who are seen as more risky (see Posner’s opinion, Chicago
Board of Realtors, Inc. v. City of Chicago (7th Cir. 1987, p. 444)
i. In Chicago Bd. of Realtors, the city
1. Codified implied warranty of habitability
2. Established new rights for tenants and new responsibilities for
landlords:
a. Tenant may withhold rent if landlord violates term of
lease
b. Landlord must pay interest on security deposits
c. Security deposit must be held in Illinois bank
d. Landlord is forbidden from charging more than $10 for
late rent
3. Court held that minor re-allocations of rights between
landlords and tenants are reasonably related to legitimate
public goal
6. Advantages:
a. Easy to administer
b. Gives tenants bargaining power
c. Crummy apartments impose costs on ppl other than landlord & tenant
d. Promotes health and well-being of tenants
7. Similar args for/against implied warranty of habitability apply to rent control
g. Tenant’s Duties
i. Duty to Pay Rent
1. Duty to pay rent expressed in the lease. If not expressed, duty to pay the reasonable
rental value. In absence of agreement to contrary, rent due on the last day of the term
2. Rent Control: constitutional if it bears a rational relation to a legitimate public
purpose & if the landlord is given a just and reasonable return
ii. No Duty to Occupy
1. NO duty to occupy UNLESS lack of occupancy results in permissive waste or in
cases of a percentage lease
iii. Duty to Repair
Main, p. 29
1. C.L.: absent landlord duty to repair, tenant has a duty to make ordinary repairs to
maintain the property, and failure to do so subjects a tenant to tort liability
2. Covenant by tenant to repairliable for all repairs & if premises destroyed, tenant
must re-build
iv. Duty Not to Damage Premises
1. Lessee liable for acts that substantially damage or change the premises
2. Ameliorating waste: C.L. tenant could not change the structure even so as to improve
its value w/o liability for change. Today long-term tenants may be permitted to make
changes if the value of the premises not diminished
v. Duty Not to Disturb Other Tenants
1. Most Apt. leases include covenant by tenant that he will not substantially interfere w/
other tenants’ enjoyment of their premises
2. W/o such a covenant, tenant only has a duty not to commit a nuisance
vi. Acts of 3P Relieving Tenant of Duty
1. May be discharged from duty of paying rent by 3P acts that make it impossible or
difficult to continue the lease:
a. Use becomes illegal: if occurs after lease made
b. Frustration of purpose or impossibility of performance if
i. Frustrated use was contemplated by both the landlord and tenant
ii. The frustration is total or near total
iii. The event was not foreseen or foreseeable by the parties
c. Destruction of premises
i. unlike C.L., statutes permit tenant terminate lease if w/o fault
d. Eminent domain
i. Permanent taking of all lease property by condemnation extinguishes
the leasehold & lessee entitled to compensation
ii. Temporary taking does not terminate the lease—tenant must continue
to pay rent but can recover from gov value of occupancy taken
vii. Rights & Duties Relating to Fixtures
1. C.L.: fixtures cannot be removed by a tenant at the end of the lease. Courts look to
the nature of the article, how it is attached, and amount of damage that would be
caused by removal to determine tenant’s intention as to whether fixture
a. EXCEPTION: tenant permitted to remove trade fixtures
2. Modern trend: tenant can remove any installed chattel as long as no substantial
damage occurs & removed before end of the lease term
h. Landlord’s Remedies
i. Means of Assuring Performance
1. Distress
a. C.L. landlord could seize tenant’s chattels as security for rent past due
b. Today: statutory rights which eliminate self-help feature or require peaceable
entry
2. Statutory Liens
a. States have enacted a landlord’s lien on a tenant’s goods, giving a landlord
priority over other creditors; must judicially foreclose lien if rent in arrears
3. Security Deposits
a. Must be returned to tenant at end of lease minus any actual damages
4. Rent Acceleration Clause
a. Upon tenant’s default, accelerate all rents due
5. Waiver of Services & Confession of Judgment
a. Waiver of tenant’s rights without notice usually invalid
ii. Eviction of Tenant
Main, p. 30
1. For breach of covenant
a. Landlord’s right to terminate upon tenant’s breach of any covenant may be
waived if landlord consents to breach
b. Non-payment of rent: before termination, landlord must make a demand for
rent and give notice of termination
2. Through judicial process
a. Forcible entry and detainer or unlawful detainer: summary procedure to evict
a tenant quickly and at low cost
i. Notice to quit must be given
ii. Defenses: may only bring defenses which would entitle possession
3. Self-help
a. Some states permit landlord to use reasonable force to evict w/o court process
b. Others: landlord permitted entry only by peaceable means
c. Others: prohibit self-help, Berg v. Wiley (Minn. 1978) P. 500 [changing locks
unlawful b/c not peaceable]
i. 2 rationales for rules against self-help:
1. Protect individual tenants against landlord violence
2. Social benefit to reduce violence in society as a whole
ii. Counter: rules against self-help not necessarily helping tenants
1. Create back-door discrimination against riskier tenants
2. Still violent evictions (court marshal eviction)
i. Subleases & Assignments
i. Test:
1. Majority: Bright Line
a. If T transfers right of possession for entire remaining term of lease, then
assignment
i. Where T reserves right to re-enter premises if assignee does not abide
by certain condition:
1. Some states still consider this to be an assignment because the
condition is too insubstantial to trigger a sublease
2. Other states consider this to be a sublease because T has not
transferred his entire right of possession
b. If T transfers only part of remaining term of lease, transfer is sublease
2. Minority:
a. A few courts rely on intent of the parties to distinguish between assignment
and sublease, whether parties intended
i. to create new landlord-tenant relationship between them, or
ii. to merely transfer the existing lease to the new tenant
ii. Two legal relationships arise with transfers of leasehold:
1. Privity of Contract: relationship bet. two people who enter into a contract
2. Privity of Estate: relationship bet. two parties to the conveyance of an estate in land,
meaning covenants that meet the touch and concern requirement will be enforceable
against the parties
iii. Assignment
1. Unless lease prohibits, tenant can assign interest in leasehold
2. Assignee comes into privity of estate with the landlord & each can sue the other on
lease covenants which run with the land
a. Landlord can sue tenant (POC) or assignee (POE)
i. Assignee’s liability ends when reassign to third-party, unless was
assigned original T’s rights expressly as third-party beneficiary
ii. Tenant’s liability ends where L&A change terms of lease
Main, p. 31
1. Novation: landlord releases T from POC
b. Landlord could not have cause of action against original tenant, if:
i. Separate agreement indicates so bet. landlord and tenant
ii. Separate agreement bet. tenant and assignee where assignees agrees
to “assume all conditions of lease between tenant and landlord” 
similar to third-party beneficiary
3. Covenants Running to Assignees:
a. For a covenant to run to assignees…
i. Parties must so intend
ii. Must be in privity of estate (POE)
iii. The covenant must touch and concern the interest assigned (i.e.
leasehold or reversion)
iv. Assignee must have notice of covenant before acquiring the interest
b. Covenants that meet the touch & concern requirement:
i. Covenant to pay rent
ii. Covenant by tenant or landlord to do or not to do a physical act on
the leased premises (ex: furnish heat)
iii. Covenant to pay money IF payment is for property improvements OR
IF it protects the property to make it more valuable (ex: pay taxes)
iv. Covenant by the tenant to insure the property IF the landlord is
required to use the proceeds for rebuilding
v. Promise to arbitrate disputes arising under a lease
vi. Implied covenants, such as the covenant of quiet enjoyment
vii. Questionable: return security deposit, pay attorney’s fees, insure
premises to landlord’s benefit, refrain from operating competing
business
iv. Sublease
1. Unless lease prohibits, tenant can sublease and become the landlord of the sublessee
2. NO privity of estate b/t the sublessee and the original landlord
a. Landlord can only sue tenant, NOT sublessee
i. UNLESS sublessee expressly assumes covenants of the master lease,
in which case sublessee liable to landlord as 3P beneficiary on those
covenants
b. Landlord’s remedies against sublessee:
i. L could get equitable lien against payment stream b/t SL & T
ii. L also has equitable relief: seize a couch or other property from ST
who is not paying
3. Sublease occurs if the tenant retains a reversion: tenant entitled to possession again
before the tenant’s lease expires. If no reversion retained, it is an assignment
a. Modern trends contrary to C.L.
i. Some hold sublease occurs if tenant retains a right of entry upon
default in rent
ii. Some hold intent of parties determines whether transfer is a sublease
or an assignment
1. Although in determining intent, court may really look to
formalistic rules, Ernst v. Conditt (Tenn, 1964) [must have
“intended” assignment b/c transferred everything]
v. Covenants Against Assignment or Sublease
1. Generally valid, but strictly construed b/c restraint on alienation
a. Covenant waived by landlord if he expressly or impliedly consents
i. Once waived, the covenant is destroyed (The Rule in Dumpor’s Case)
Main, p. 32
2. Majority: If there is a covenant against transfer, absent a provision that the landlord’s
consent to transfer cannot be unreasonably withheld, the landlord may arbitrarily
refuse to accept a new tenant and has no duty to mitigate damages
3. Growing minority: landlord’s denial must be based on a commercially reasonable
objection, Kendall v. Ernest Pestana, Inc. (CA 1985) P. 490
a. Args for landlord:
i. Defer to property owners to control their property in number of diff
ways; compatible with this idea
ii. Contractual agreement; nothing in terms regarding reasonableness;
court should not insert its own terms
iii. Standard unpredictable, provides little guidance, likely to result in
litigation
b. Args for tenant:
i. Commercially reasonable standard allows landlord to assess whether a
potential tenant is suitable, able to pay.
ii. Minimal restraints on alienability favored in property law
iii. Commercially reasonable standard may have been bargained for by the
parties had they thought to put it in there  like implied “good faith”
that landlord will act reasonably
c. Commercially reasonable factors include (P. 494):
i. Financial responsibility
ii. Suitability of the use
iii. Legality of proposed use
iv. Need for alteration of premises
v. Nature of the occupancy
vi. Competition w/ landlord’s business
vii. But NOT commercially reasonable to deny T1 b/c currently renting
another space from L,
viii. NOT commercially reasonable to deny T1 b/c religious objections
ix. Consider networking externalities (shopping mall) & returns from
gross receipts**
4. BEST CONFIGURATION:
a. Personal leaseC.L. rule permitting arbitrariness
b. Commercial leaseKendall rule requiring reasonableness
i. UNLESS only a short term remains b/c hassle to rent for short period
vi. Cases:
1. Ernst v. Conditt (TN 1964, p. 388): Rogers, original lessee, transferred his interest to
Conditt (D). Agmt. bet. Rogers and Conditt, and bet. Rogers and Ernst, called transfer
“sublet”. Ct. applies contract law in lease agmt. to hold that, in determining
whether an assignment or sublease has occurred, the court will look to intentions
of parties, not the language of the agmts.
2. Kendall v. Ernest Pestana (CA 1985, p. 395): Lessor, Ernest Pestana (D), demanded
increased rent in exchange for consent to assign lease. Lessee intended to assign lease
to a third-party. Ct. held that a lessor may not unreasonably and arbitrarily
withhold his or her consent to an assignment.
LAND USE CONTROLS:
VII.
Servitudes
a. Easements
i. A grant of an interest in land which entitles a person to use land possessed by another
Main, p. 33
1. NOT revocable!
Easement
Grant for single use
Unspecified location
Single payment more likely
Duration typically unlimited
Irrevocable
w/in Statute of Frauds
Cannot bring actions (ex: for
environmental cleanup or trespass)
License
General transfer right of use
Specific location
Recurring payments
Duration limited
Revocable
Short-term lease exception to
Statute of Frauds
Can bring actions
ii. Types:
1. Positive/Negative
a. Affirmative: gives a person the right to go onto another’s land (the servient
land) and do some act on the land
b. Negative: gives a person the right to prevent a servient landowner from doing
some act on the servient land (RARE—usually done through covenants)
i. Cannot get a negative easement through prescription!
ii. Negative easements recognized by English courts:
1. Light
2. Air
3. Subjacent or lateral support
4. Flow of an artificial stream
2. Appurtenant/In gross
a. Appurtenant: benefits its owner in the use of another tract of land. It is
attached to the dominant tenement (benefited land) and passes to any
subsequent owner of that tenement
i. Easements appurtenant transfer with dominant tenement & burden
transferred w/ servient land
ii. **If ambiguous, easement appurtenant favored**
b. In gross: benefits a person personally and not as an owner of land; it merely
gives one the right to use the servient land
i. Assignable if parties consent or a commercial easement
1. Consent/intent in Miller v. Lutheran Conference & Camp
Association (Penn. 1938) P. 824
ii. **License favored over easement in gross, which clogs title**
iii. Intent & Public Policy Concerns:
1. We don’t compensate: intent
a. Except Western states do require $: private condemnation
2. Implied easements end when necessity ends: public policy > intent
iv. Creation
1. By Express Grant
a. Must be in a writing signed by the grantor (Statute of Frauds). If a grantor
gives oral permission to enter land, a license is created
i. Exceptions: fraud, part performance, estoppel & easement by
implication and prescription
b. Construction:
i. Can be created for any length of time
1. If forever, called a “an easement in fee simple”
Main, p. 34
ii. Ambiguity b/t easement or fee simple: easement if grant for limited
use, or for a limited purpose, or of a space without clearly marked
boundaries
1. But some courts presume grantor conveys the larges interest he
can convey, unless expressly limited, & favor fee simple
2. By Reservation
a. A grantor may convey land and reserve for himself an easement over the land
(although prohibited at early C.L., invented theory that grantee regranted the
easement to the grantor)
b. Exception of an easement: a deed provision that excludes from the grant a
preexisting easement
c. Reservation for 3P: not allowed at C.L. (still majority view)
i. Minority view: OK to reserve easement in 3P, Willard v. First Church
of Christ, Scientist (Ca. 1972) P. 785 [presumed Willard on notice b/c
chain of title included reserved easement for church parking; overturn
rule retroactively unless demonstrate reliance]
ii. Possible as a covenant
3. By Implication (operation of law)
a. Easement from prior existing use
i. If, before tract of land divided, a use exists on the servient part that is
reasonably necessary for the enjoyment of the dominant part and a
court finds the parties intended the use to continue after separation, an
easement may be implied
1. Implied grant: implied easement in grantee
2. Implied reservation: reserve easement in grantor
a. More difficult b/c courts read deed against the maker
b. Usually only by strict necessity
i. But some courts stick to reasonable necessity
even for implied reservations, Van Sandt v.
Royster (Ks, 1938) P. 796 [sewage]
ii. Requirements:
1. Common ownershipseverance: Easement over land granted
or reserved when the tract was divided
2. Only in favor of the dominant tenement (not in gross)
3. Use must exist at time of tract division
4. Use must have been continuous, apparent, and reasonably
necessary to the enjoyment of dominant part
a. Crazy reasoning: fixtures make a sewage line apparent,
Van Sandt v. Royster
b. Easement by necessity
i. Strict necessity, not merely convenience, usually for a way of access
1. Necessity must exist when the land is divided & dominant
tenement has burden of proof, Othen v. Rosier (Tx, 1950) P.
802 [could not prove no other access in 1896]
ii. Common ownershipseverance: Implied only when a tract is divided
iii. If landlocked by several parcels at once, court picks one and the others
pay pro-rata share to the servient tenement
iv. No prior existing use required
v. Owner of servient parcel has a right to locate easement provided that
right is exercised reasonably
vi. Terminates when the necessity ends
Main, p. 35
4. Easement by Estoppel
a. A gives permission for B to use his property; B relies on that permission to
substantial expense (which A knows); A is blocked from revoking, Holbrook
v. Taylor (Kentucky, 1976) P. 791 [license to use roadway became irrevocable
b/c reliance]
i. Rule discourages neighborliness ex ante, but ex post harm to Taylor
much more severe
ii. Could have charged Taylor damages (C’s 4th box)
b. Lasts only has long as to enable the person holding the easement to reap the
fruits of his expenditures
c. Minority rule: no easement by estoppel, Henry v. Dalton (applied in Othen)
5. By Prescription
a. An easement may be created by a period of adverse use (prescription).
i. English theory: lost grant
ii. Majority: permit prescription as a matter of public policy by analogy
to the law of adverse possession
b. Purposes of easement by prescription:
i. Preserving active uses
ii. Preserving productive uses
iii. Quiet titles (old titles costly to find; quell stale claims)
c. Elements of prescription:
i. Open and notorious use
1. No attempt to conceal; readily apparent
ii. Adverse and under a claim of [exclusive/personal] right, and
1. Court split on objective/subjective test
2. Use cannot be permissive, Othen v. Rosier (Tx, 1950) P. 802
[license to use roadway]
a. But even after one has been granted permissive use, if
one takes acts that indicate that the user is claiming a
right to use the land, the element can be satisfied
iii. Continuous and uninterrupted use (tacking allowed)
1. Only used to give notice to true owner
2. Need not be continuous all the time, only consistent with the
nature and type of the easement
a. Seasonal use of land during grazing season is sufficient
3. Most jurisdictions: owner must effectively interrupt the adverse
use, not merely protest or send a letter
iv. Ex: Miller v. Lutheran Conference & Camp Association (Penn. 1938)
v. Right of use rather than right of possession established
vi. Cannot get negative easements by prescription (Fontainebleau)
vii. Can get a prescriptive easement in gross
viii. Very difficult to increase the scope of the easement
d. Public easements
i. Public at large may acquire a public easement if the public uses private
land in a manner that fulfills prescription requirements (ex: roadway),
Matthews v. Bay Head Improvement Association (NJ 1984) P. 816
[beach access over land controlled by quasi-public body]
1. Judicial enforcementNOT a taking!
v. Scope
1. Scope of easement includes reasonably foreseeable ancillary use by the easement
holder beneficial to the use of the easement
Main, p. 36
a. Bike path not reasonably foreseeable to RR easement, Presault v. United
States (Fed Circuit, 1996) P. 843
2. Important: overuse or misuse do not terminate the easement – appropriate remedy is
injunction against misuse
3. Increases in scope depend on:
a. Intent of parties at the time easement was created
b. Whether the increase will unreasonably burden servient tenement
4. Express grant or implied easements can generally be increased, while prescriptive
easements cannot
a. Express: look to writing & surrounding circumstances
b. Implied: for use existing, changes necessary to preserve use allowed; for
easement by necessity, extent necessity determines scope
5. Subdivision of dominant estateeach subdivided lot has a right to use easements
appurtenant to the dominant estate, but servient estate cannot be burdened more than
was contemplated when the easement was created
6. Dominant owner CANNOT increase the scope of an easement by using it to benefit a
nondominant tenement! The easement may be extinguished if it is extended to a
nondominant parcel & the unlawful use cannot be eliminated
a. Another approach: permit new uses where not unreasonable and no increased
burden, Brown v. Voss (Wash, 1986) P. 833
b. Restatement also allows new uses of easement; squash anti-commons
7. Courts adopt reasonableness approach when judging alleged misuse of easements –
easements appurtenant may only be used for benefit of dominant tenement (Penn
Bowling Recreation Ctr v. Hot Shoppes)
8. Location of easement may only be changed by mutual consent
9. Servient owner may use the easement in ways that do not unreasonably interfere with
the easement holder’s interest
10. Joint tenants must use easement as “one stock”: each owner of the easement can veto
the use of other owners, Miller v. Lutheran Conference & Camp Association (Penn.
1938) P. 824
11. Easement in gross
a. If nonexclusive (use enjoyed by beneficiary & servient owner), easement in
gross cannot be apportioned
b. If exclusive (beneficiary has the exclusive right of enjoyment), the easement
can be apportioned or divided by the owner
vi. Termination
1. By unity of title
a. Extinguish easement when one person acquires title to both the servient and
dominant tenements
2. By dominant owner
a. Dominant owner may release easement by a writing, and…
i. Oral release not valid unless accompanied by an act showing intent to
abandon
ii. Nonuse or misuse does NOT extinguish an easement
1. Abandonment: must be conclusive & unequivocal
manifestation of either a present intent to relinquish the
easement or a purpose inconsistent with its future existence
2. RR removing tracks sufficient abandonment, Brown v. Voss
iii. Impossibility of achieving the easement’s purpose DOES extinguish
iv. Easement by necessity extinguished when necessity ends
3. By servient owner
Main, p. 37
a. Destruction of the servient tenement without fault of servient owner
extinguishes an easement.
b. A servient owner can terminate by prescription (adverse acts)
b. Covenants Running with the Land
i. Real Covenants: Covenants Enforceable at Law
1. Promise to do something/not do something specifically regarding the use of land. A
real covenant runs with the land at law so that each successor landowner may
enforce or is burdened by the covenant. Gives rise to personal liability only and is
enforceable only by an award of money damages
a. The law of contracts applies if the promise sues the promisor for breach
b. The law of property applies if a successor to the promise or promisor is
involved in a suit
2. Creation
a. A writing is required! Never implied or by prescription
b. Usually only grantor must sign, but grantee also bound
3. Enforcement by or against assignees
a. Elements in order for burden of promise to run with land
i. Intent
1. “Runs with the land” or “heirs and assigns”
2. If language is unclear, courts will look to the purpose of the
covenant and all the circumstances
3. Abolished in most states, the Rule in Spencer’s Case hold that
a covenant concerning a thing not in being will not bind
assigns unless they are expressly mentioned (“and assigns”)
ii. Horizontal privity of estate between original promisor and original
promise
1. England: horizontal privity only applies to landlord/tenant
relationships
2. Massachusetts: Privity of estate exists if both parties have an
interest in the property; mutual interest
3. U.S. Majority: Privity of estate exists if covenant was
contained in a conveyance of an interest in land (i.e. if the deed
contained the covenant); successor relationship
4. Restatement: mutual interest or successor relationship
iii. Full vertical privity of estate between original promisor and his
assignee
1. Majority: must succeed to the identical estate: full vertical
privity exists if assignee takes an estate of the same duration as
that owned by original promisor
iv. Touch and concern
1. Mostly applies to affirmative obligations to do something
rather than negative obligations
v. Notice
1. Protects only bona fide purchasers
b. Elements in order for benefit of promise to run with land
i. Intent
ii. Partial vertical privity (sublease)
1. Benefit will run to assigns of any interest in land (an identical
estate OR a lesser estate)
2. EXCEPTION: homeowners associations may sue to enforce
the benefit of the covenant even though they are not assigns of
Main, p. 38
any interest b/c considered an agent of the real owners
(Neponsit v. Emigrant)
iii. Touch and concern
c. After assignment, original covenantor’s obligations cease
d. RESTATEMENT of SERVITUDES: Under the Restatement, vertical privity
is not necessary for the burden or the benefit.
i. Negative covenants run to successors b/c interest in land
ii. Burdens & benefits run to successors to an estate of the same duration,
but not to persons who succeed to lesser estates
ii. Equitable Servitudes: Covenants Enforceable in Equity
1. Creation:
a. Many states say equitable servitudes need not be in writing; may be implied
b. In cases of restricted residential subdivisions, many courts imply a reciprocal
negative servitude on the lot in the absence of a writing – this will happen if
these conditions are satisfied: Sanborn v. McLean (Mich. 1925) P. 870
i. Developer had a general plan of an exclusively residential subdivision
(must exist at time of sale of first lot)AND
ii. The newcomers had NOTICE (either actual, record, or inquiry)
2. Analogous to an easement because no privity of estate is required
3. Elements in order to run with the land (benefit AND burden)
a. Intent
b. Notice required (replaces privity of estate)
i. Some courts impose duty to inquire about potential servitudes if
situation is suspicious (Sanborn v. McClean)
ii. Those who take with notice of a covenant may be enjoined from
violating the covenant Tulk v. Moxhay (Court of chancery, England,
1848) P. 864 [NO NEED FOR PRIVITY ANYMORE]
1. Actual notice is sufficient
2. If the covenant is in the deed to the assignee’s lot, record notice
is satisfied
a. If covenant is in deed to other assignees by same
developer, record notice also satisfied because of duty
to read everything in chain of title
iii. May not be enforced against subsequent bona fide purchasers without
notice
c. Touch and concern
i. Designed to prevent covenant from interfering with social value of
land
ii. Covenants not to do a specific act do run with the land
iii. Covenants not to compete touch and concern the land when applied to
the burden side
1. When applied to benefit side, it still touches and concerns the
land because enhancement of commercial value is sufficient
iv. Acts performed off the land do not touch and concern
v. Promises to pay money for improvements that benefit the land, even
though they’re not ON the land, do touch and concern (Neponsit v.
Emigrant)
d. Promise must be appurtenant
iii. Common Interest Communities
1. Scope of Covenants:
a. CC&R = covenants, conditions & restrictions
Main, p. 39
b. Residential community for disabled w/in scope of residential covenant for
single-family homes, Hill v. Community of Damien of Molokai (New Mexico,
1996) P. 893
c. Judicial enforcement of discriminatory covenants is state action forbidden by
14th Amendment, Shelley v. Kraemer (S.Ct. 1948) P. 905 [covenant restriction
on Shelley’s use of house]
i. Currently Shelly v. Kraemer limited to race, but as covenants
increasingly prominent in lives & cutting into freedoms, could very
well be extended
ii. Could also extend private community regulations to “constructive
public governance”
2. Termination
a. Possible if change of circumstancesno longer substantial value, Western
Land Co. v. Truskolaski (Nevada, 1972) P. 911 [original purpose still existed
& therefore still valuable]
i. If covenant still valuable to party, party can enforce it even if contrary
to higher social good, Rick v. West (NY Supreme Court, 1962) P. 916
[Rick wanted to change subdivision plan into hospital use; could not]
Injunction (Property Rule)
Damages (Liability Rule)
Neighbor
1. Western Land
2. Massachusetts
*Heller: makes more sense*
Developer/Pollutor
3. Change of Circumstances 4. Reverse damages:
doctrine (neighbors buy out neighbors pay Western
developer)
Land so he won’t break
promise (Spurr Industries)
b. Cannot avoid payment to homeowner’s association; abandonment of perfect
title not possible, Pocono Springs Civic Association, Inc. v. MacKenzie
(Superior Court of Penn. 1995) P. 921 [no home b/c no percolation]
i. Restatement 7.12: Modification & Termination of Certain Affirmative
Covenants, P. 923: Rules about excessive dues do NOT apply to
“obligations to a common-interest community or to obligations
imposed pursuant to a conservation servitude”
c. “Unreasonableness” determined by weighing burden and benefit of
enforcement of CC&R enforcement to everyone, Nahrstedt v. Lakeside
Village Condominium (Ca. 1994) P. 927 [cat case]
i. S.Ct. CA gave deferential review:
1. Cannot be arbitrary (rational basis)
2. Cannot be against public policy
3. Overall burden cannot outweigh overall benefit
4. Later case even more deferential review: For subsequent
financial decisions made by the board, “business judgment”
standard, Lamden v. La Jolla Shores Clubdominium
Homeowners (Ca. 1999) P. 941
ii. Restatement approach:
1. Lower standard for indirect (rather than direct) restraints, P.
939
2. But Sec. 3.8 Unreasonable Burdens on Fundamental Rights
invalid (limit speech, vehicles, personal behavior, kids)
a. Still potential for extremely intrusive covenants
Main, p. 40
b. Unclear whether rises to the level of STATE ACTION,
Mulligan v. Panther Valley Property Owners Assn.
(A.D. 2001) P. 943
Condo Rules:
Zoning:
No variance Mechanism
Variance mechanisms give discretion
*Prevents costs passed back to other *B/c an OK rule may be bad applied to
condo owners, but less flexibility
individuals
Administered by neighbors
Administered by bureaucrats
Voluntary membership
Public rule for all, less variation
VIII. Eminent Domain & Regulatory Takings
a. What is Public Use?
i. Public use = public purpose (it must benefit the public), Hawaii v. Midkiff (S.Ct. 1984)
1. Standard of review of public use set by Berman, used in Midkiff (P. 1102): “where the
exercise of the eminent domain power is rationally related to a conceivable public
purpose, the Court has never held a compensated taking to be proscribed by the
Public Use Clause”
2. Boundary of public use: condemnation of a residential neighborhood for extension to
GM plant, Poletown Neighborhood Council v. City of Detroit (Mich 1981)
a. Now condemnation for mere economic purposes not OK according to
Michigan constitution
3. Urban renewal: transfer of title to private redeveloper to develop according to
renewal plan satisfies “public use” requirement, Berman v. Parker (S.Ct. 1954)
[renewal SW D.C.]
4. Rule articulated in Kelo v. City of New London, Connecticut (S.Ct. 2005) [Economic
revitalization plan]
a. Stevens 4 + Kennedy swing vote:
i. Each landowner does not get a hearing
ii. Berman: enough general determination public use as a whole (P. 9-10)
iii. Reject argument that eminent domain should not be used for economic
development
iv. Reject heightened scrutiny, “reasonable certainty” proposal
b. O’Connor’s dissent:
i. Bright-line rule would be better
ii. Distinction b/t harming & benefiting public. She is trying to create a
nuisance-type test [but impossible to tell the difference—see Scalia in
Lucas]  City of New London would say economic decline is social
harm though
1. Three categories of public use:
a. Transfers of private property to public ownership, like a
highway
b. Transfers to private parties such as common carriers,
railroad, etc. who make property available for public
use
c. Transfers to private parties as part of program to serve
public purpose, as in Berman and Midkiff
i. This category most troubling, esp where public
purpose is economic development
ii. Berman and Midkiff involved taking private
property to cure public harms, but Kelo goes
Main, p. 41
too far because nearly any lawful use of real
property can be said to generate some incidental
benefit to public
iii. Citizens with disproportionate influence and
power in political power (large corps and
development firms) most likely beneficiaries, to
detriment of politically disenfranchised
b. What is a “Taking”?
i. Taking title
ii. Taking possession
1. A permanent physical occupation (PPO) by the government or by 3P with
government authorization is a de facto taking (inverse condemnation) and must be
paid for, Loretto v. Teleprompter Manhattan CATV Corp. (S.Ct. 1982) P. 1117
[bundle of rights view: right to exclude; backed away from view in Escondido]
a. Stretch out the “physical” requirement: Causby [planes]
iii. Regulatory takings
1. Harm test:
a. Police power is validly exercised to prevent harm or prohibit a nuisance, and
thus no compensation need be given
i. Zoning in general OK: police power to regulate for health, safety &
welfare, Village of Euclid v. Ambler Realty Co. (US 1926, p. 828)
ii. A regulation abating a nuisance is never a taking, Hadacheck v.
Sebastian (US 1915, p. 973) [brickyard]
b. BUT… where the purpose is for a public benefit, a taking has occurred
2. Severe economic loss:
a. May not be a taking if an owner is left with some reasonable economic value
in the property. Ad hoc inquiry: look to distinct investment-baked
expectations (Michaelman) & the character of the government action
(Loretto), Penn Central Transportation Co. v. New York City (1978)
i. Diminution in value w/ conceptual severance, Pennsylvania Coal Co.
v. Mahon (S.Ct: Holmes, 1922, p. 980)
1. Holding: While property may be regulated to a certain
extent, if that regulation goes too far in diminishing the
economic value of the property, it will be recognized as a
taking  Where a property regulation statute eliminates a preexisting property right, it is the equivalent of a taking without
compensation
2. Holmes viewed the “support rights” and “coal rights”
separately -- conceptual severance – in determining whether
there was a diminution in property
3. Brandeis dissent: look to largest common denominator
4. Lake Tahoe case seems to resolve conceptual severance in
favor of the Brandeis/Keystone view over the Holmes view
ii. Reciprocity test
1. Reciprocal benefits or advantages of regulation compensate for
its burdens. A regulation justified when burdens it imposed on
landowners were offset by benefits it conferred on them
(Understanding)
2. Each regulated owner receives some advantage, although not
necessarily equal  may not be a taking, Pennsylvania Coal
Main, p. 42
Co. v. Mahon (US, Holmes, 1922, p. 980) [no reciprocal
advantage; it was a taking]
3. Example: local ordinance that restricts height of all bldgs to
two stories. Regulated landowners benefit because adjacent
neighbors cannot erect 5-story blgds that block light and air 
not a taking because reciprocity of advantage
iii. Destruction of all economic value
1. If the regulation denies all economically beneficial uses, it is a
categorical taking UNLESS the state shows it is justified in
preventing a common law nuisance, Lucas v. South Carolina
Coastal Council (S.Ct. 1992) P. 1172
iv. Exactions
1. A city may impose on a property owner applying for a building
permit a condition that benefits the city (ex: provide a public
path for beach access). This condition must be logically
related to the specific public need that the owner’s building
creates
2. The test:
a. Determine whether the “essential nexus” exists b/t the
“legitimate state interests” & the permit condition,
Nollan v. California Coastal Commission (Scalia, S.Ct.
1987) P. 1199 [no nexus beach easement]
b. If nexus exists, decide if there’s rough proportionality
b/t the exactions and the projected impact of the
proposed development; reasonable relationship, Dolan
v. City of Tigard (Rehnquist, S.Ct. 1994) P. 1207
[burden on the city to prove proportional]
3. Timing:
a. An owner may challenge a regulatory taking enacted prior to his acquisition,
Palazzolo v. Rhode Island (2001) P. 528
4. State balancing test
a. Some states balance private loss against public gain. The trend is to look at
both the utility of the action (economic efficiency) & its fairness
5. Remedies for regulatory taking:
a. If a land use regulation is declared a taking, it is void and enforcement may be
enjoined
b. Where condemnation proceedings have not been instituted, a landowner can
sue for damages under the theory of inverse condemnation
c. What is Property?
i. Bundle of rights: taking of the right to exclude (conceptual severance)
1. But any regulatory change could become a taking according to this reasoning: a
regulation is a taking of some stick in the bundle of rights
ii. Positivist trap on the other extreme where the state defines property, the takings clause is
essentially eliminated: you never had the stick of property right to forbid migrant farm
workers from your property!
1. Who is doing it: the judge
2. State can keep re-defining property b/c property is what the state says it is (property
not defined in the Constitution)
iii. Anti-positivist view: “a State, by ipse dixit, may not transform private property into public
property without compensation,” Webb’s Fabulous Pharmacies, P. 1125
1. But how, when there is no federal definition of property?
Main, p. 43
d. What is Just Compensation?
i. Market value
1. Usually, just compensation = fair market value (the price a willing buyer would pay
a willing seller). Includes the value of possible future expectations as well as existing
uses (including the value of an expected renewal of a lease). It does NOT include the
loss of a business located on the land
a. EXCEPTION: where there is no relevant market such as for a special purpose
property, any just and equitable method may be used
ii. Partial taking
1. If only part of a tract is taken, the owner is entitled to severance damages
a. Some states: value entire tract before taking – value of remainder afterwards
(before and after rule)
b. OR: value of the part taken + net damages to the remainder after offsetting
benefits (value + damage rule)
Main, p. 44