Property Final Exam Outline Part I: Justification, creation, and allocation of property rights I. Property in Information  What is property is not conceptual question independent of facts. What we’re trying to look at is a set of conditions and decide if one party will have power to control resources against another. Then we argue whether they should have that power. o This is the Realist approach to law.  Who in any transaction can act or has to wait for permission? Decision about where to place rights makes a difference on structure of resulting market.  INS v. AP (Supp 1 1) o Pitney Majority: Quasi‐property right in news as against competitors.  Grant right because incentive needed in order to keep the news industry going and incentivize gathering news.  Property right because there is value  Property right because Lockean labor theory about infusing labor to create property. o Holmes: Just because there is value doesn’t mean property. Property is just a creation of law and value is just a matter of fact that arises because we decided there is property. o Brandeis: This is a matter for the legislature. Courts aren’t good at deciding what should be incentives, taking into account the whole context.  Realist effort where he’s looking at the practical effect of decision and trying to figure out what would happen. Now that he predicts result, deciding if that’s a good or bad outcome. o Pitney remedy is injunction until value disappears.  This remedy emphasizes value over incentives. For incentives, would need deeper study about what actually is proper incentive. o Holmes remedy is injunction unless give credit. o Pitney’s remedy is a property rule where AP can exclude. Holmes’ remedy is a liability rule where INS can decide if want to publish and either give credit or be liable.  Where you place the right has an effect on how market structured. II. Property in Land  Johnson v. Mc’Intosh (3): Positivism, Stability and Reliance o Guy 1 (Johnson): I bought this from the Pakeshaw Indians in 1773 o Guy 2 (M’intosh): I got a grant from U.S. gov. Pakeshaw gave it to U.S. by treaty in 1780 o Could the Pakeshaw give to U.S. if they already sold the land? Could they sell the land to Johnson in the first place? 


If they had a valid property right to transfer in 1773, then they had nothing left and M’intosh chain of title is empty. o Virginia passed statute in 1779 that said only gov could transact with Indians, but this wouldn’t effect decision because gov cannot extinguish a property right without compensation. o Instead, Indians didn’t have right to transfer in 1773 because U.S. had exclusive sovereignty of the land back then from the British. o Marshall: Not for the courts to question whether it was right for the British to have that title and for us to have adopted that principle, because that’s just the way it is. Thus, not for us to uphold rights that go against this principle, i.e. Indians able to sell. o Positivism – law is just what the sovereign says it is. Not about morality or natural rights. o Marshall: If the property of the great mass originates in it (the principle of first possession/discovery), it becomes the law of the land. o Marshall cares about stability and reliance. If labor is really your justification, what sort of property rule would you have? o An exclusive right where you don’t want to develop now, you’ll wait until the railroad in 20 years? Stable right that you can keep? o Usufruct rights where you can use it as long as you use it and if you leave, someone else can? Homestead Acts o Argument for homesteading instead of selling land at auction  Money – homesteading will actually bring in more money by expanding the market  Natural rights – right to happiness and Lockean property  Republic civic virtues of the yeoman farmer  Fairness – allow people beside speculators to get land  Distributive justice – protect the weak, not capital  Decrease the power of the federal gov  Decrease land monopolies  Advance civilization over the wilderness. o If you believe that you’re doing X to accomplish result R, then we should examine X to see if it really does further that goal. We need to examine the institutional details. III. Property in Wild Animals  Pierson v. Post (17) o Post was chasing a fox with dogs. Pierson grabbed it before Post had a chance to take possession o Labor – Post has put effort into hunting the fox, so he should win. o First possession – depends on what qualifies as possession. Physically in your hands, then Pierson. Looser standard of first sight, then Post should win. But do we know Post would have gotten the fox? 



What justifications for first possession?  Reliance and stability – security, clear and easy rule to apply. Avoids conflict o Goals: Want to kill as many foxes as possible. Also want clarity and ease of use. What rule would get us to these goals?  Livingston: Property once you have a reasonable chance while pursuing.  Majority says this would just lead to arguments  Majority: Actual possession required. Clearest and easiest. o Leave it to custom? Courts not good at deciding what best would further goals. Who would know better than hunters? Ghen v Rich o Whales would be harpooned, sink, then float to shore. o If this was Pierson v. Post, there would be no property until found on shore and got actual possession. o However, different circumstances here lead to need for a different rule.  Adopt the custom of the whalers and the killers get property right, but finders entitled to a salvage fee. Hypo: We have three kinds of whales. Three options for property rule (line holds the whale, iron holds the whale, salvage). Which would be best for each whale type? o 1. Whale 1 when hit dies and sinks to the bottom and floats away after a few days  Salvage – most likely to be washed ashore without chance to tag o 2. Whale 2 gets hit and fights and swims a long time, tires out after hours and dies.  Line because it’s not going under the surface and you can just have it pull you. o 3. Whale 3 jumps up and behaves violently, then dies and stays floating right there.  Not line because the jumping and pulling would sink your boat. Iron holds the whale. The answer you give to this question is a very functional analysis. What is the rule that best achieves a certain set of outcomes? o We have a certain set of resources, human motivations, and a set of outcomes we’ll obtain if we choose one rule or another. A. Tragedy of the Commons  Would dividing the ocean into squares work for whales? o Whales swim. They don’t stay in one space. When person sees a whale and asks self “Hunt now or wait until next year?” They’ll say hunt now or else risk losing it to neighbor when it swims away.  Have not internalized the cost. o These whales aren’t going all over the world, but in a range. Perhaps have to just have extremely large parcels and then divide management among a group. 

 Collective/management costs Tagging each whale would be extremely costly. Cost so high it outweighs gain. Lobsters o There is a large area with lobsters. o A group work together to govern themselves and their territory. o In theory, could have same tragedy of the commons. Solved the problem against the rest of the world, but now there is just a smaller group involved in overhunting. o Solution the lobsterman develop is informal policing. Very strong norms.  Strong boundary defense from outside  Inside, seniority decides who can put traps where first. Creates minor property (usufruct) right to an area, the right to use. o Rules established not by the state, but by the people that establish first come, first served and merit to constrain who can use. o Here, merit is seniority and who has the strongest gang/familial connections. Merit just what we want to elevate as important. IV. Property in Water  Friendwood v. Smith (Supp 102) o Exxon subsidiary is pumping water out of the ground which is causing subsidence on land of neighbors o Possible rules of decision:  Landowner has a duty not to use his property in a way that injures others. Reasonable Use – “American Rule”  Version 1 (Majority) – Negligence – reasonable relative to a general behavior baseline (a reasonable person)  Version 2 (Dissent) – Nuisance – reasonable under the particular circumstances at hand. Take more into account the other uses in the neighborhood  Absolute owner right to pump – “The English Rule”  Right of landowning neighbors to supported land o Because has been English Rule, reliance compels use that here. But American Rule from now on. o If the group of neighbors wants to change from English Rule to American rule, should they go to the courts or the legislature?  Probably easier to go to the court rather than go to the legislature which is dominated by money of industry.  In principle, judges institutionally (esp. not elected) have a bigger buffer from politics than elected representatives, so certain arguments don’t work as well.  Coase 

o It doesn’t matter whether you do subjacent support or absolute right to pump doesn’t matter. No matter who is liable, parties will figure it out on their own. They will either pay to stop drawing water or pay for support. o Coase theorem – in the absence of transaction costs, resources will find their way to the most efficient use irrespective of where you put the right originally. o But, there are transactions costs to prevent these deals. The thing that Coase really emphasized is that there are transaction costs everywhere, so we have to design our institutions to recognize that if you put the right in B, it often will stay in B and vice versa.  Judges and legislatures need to spend a lot of time deciding which is the most efficient allocation of rights because transactions costs lead to right usually staying there. In Friendwood, lots of transactions costs o Hard to tell what the marginal well is that the last well which would remove would stop subsidence. o There are lots of people in this neighborhood. How do we get them together? Collective action problems. Transaction costs play a significant role in determining ultimate allocation of resources and so have to design to think what the ultimate efficient outcome is and try to match that. Part II – Mechanisms for the Transfer of Property I. The Law of Finders  This is something that is property and then is lost. What happens to who finds?  The finder has a right good against all the world except the true owner. o Relativity of title  Armory v. Delamirie (96) o Chimney sweep found a jewel and took it to a goldsmith to get it valued. The goldsmith took it and didn’t give back jewel. o The finder has a right good against all the world except the true owner, so owned by chimney sweep.  What if Armory had been trespasser instead of invited? A walks down street, trespasses to pick up something clearly lost by the true owner. Takes it home. Gives it to B to do something. Who should have property? o Finder has rights against all but the true owner. If he hands it to B with intent to get it back, then it should still be A’s.  Hannah v. Peel (99) o Landowner bought some house that he never occupied. o Military temporarily requisitioned house, which was never occupied. Solider, Hannah, finds a brooch. 
o Hannah says I found it, so it’s mine. You aren’t true owner, so I have superior title. o Landowner says it is his because it was on his property and he has right to all on his property. o Decision:  Man has property to all attached to or under land.  Man does not possess things unattached on surface of land.  Publicness of the land not relevant. McAvoy v. Medina (105) o Defendant barber, plaintiff customer. Plaintiff finds a wallet left behind by previous customer. o Defendant takes to advertise and keep for true owner. Nobody comes. o Court decides there is a difference between property misplaced by setting aside and forgetting and property lost by accident somehow. Floor/table distinction.  What are they aiming at? Trying to get true owner his stuff back. More likely to get stuff back from shop keep?  Why does this justify floor table distinction? If you lost something, wouldn’t you go check your steps same as if you misplaced by putting something aside.  Maybe a better chance when you have set something aside then when it could have fallen out of pocket whenever. o What would be the remedy/benefit of winning for shopkeep? Do they get to use the money or do they have to hold in trust for true owner to eventually show?  They get to win this suit. If true owner shows, then they’ll lose that suit and have to pay value of the object, but if that never happens, he never has to worry if he’s spent it. II. Adverse Possession – An actual change in title  Statutes of limitations fix the period of time beyond which the owner of land can no longer bring an action or undertake self help from another person in possession o Functions to transfer land without consent of the owner  Holmes – use creates connection to a person and eventually connection strong enough that court will not sever connection. Duty of owners is to avoid others forming connections to their property.  Elements o 1. Exclusive actual possession  Case law shows what constitutes “actual possession.”  Treat the property as an owner would. o 2. Open and notorious  Want to give warning to actual owner through your open and notoriousness. o 3. Adverse (hostile) under claim of right 






Some places require adverse possessor to know it’s someone else’s and want to take it  Other require it to be a good faith mistake.  Other places the state of mind is irrelevant o 4. Continuous for the statutory period  Occupy in the way an owner would. If it’s just a summer house, continuous means go every summer. Different ideas about what state of mind needed: Why adverse possession? o (1) Punishing owners who sleep on their rights o (2) Rewarding people who use and improve land (productive uses) o (3) Settle controversies. Security and stability of title o (4) Reliance – people come to rely on being able to use property. We get attached to things and places. If the owner is away from the property and does not use, then his attachment is more attenuated and the new person’s has begun to create ties. Over time, we develop attachments that law must respect even if origin is a breach of law, a trespass Why not just determinative deeds and that’s it? o What if there are mistakes in the deeds? o We want to reward productive uses. Why don’t people just negotiate? o Although low transaction costs, lots of problems of holdouts and animosity between parties about “That’s mine. Get off.” Tacking on to someone else’s adverse possession claim o Some places need to establish own adverse clock o Other places can tack on ok. When clock starts running: o Discovery rule: When true owner learns the facts necessary to make a claim  Real problem with discovery rule is that it keeps people with ability to sue for a hundred years if they couldn’t match everything together until then. o NY Rule: Starts running when owner makes first demand to return property. 
NY v. Van Valkenburgh (115) o Lutz bought a lot with empty lots next to it. Over time, Lutz used empty lot for road, garden and as junk storage. Also had his brother build a home on the lot. o V’s buy the empty lots from the city and try to kick the Lutz’s out. o Case 1 – Lutz won right of easement.  Easement ‐ A narrow defined path across the property of another. Only can use to get from a main road to another place.  In preserving easement by prescription, they admitted the ownership of the V’s over the other part. o Case 2 about who has actual title 


In NY, adverse possession requires claim either under color of title (written document you have that had some mistake, so thought you had title) or with substantial enclosure, cultivation, or improvement.  Improvement addresses open and notorious. Treat the property as an owner would. o Majority characterizes facts so that doesn’t seem like much improvement. o Dissent characterizes as lots of improvements. Howard v. Kunto (136) o All the deeds are off by 50 feet. O’Keefe v. Snyder (144): When does clock start running on adverse possession claim? o Three paintings by Georgia O’Keefe she claims stolen in 1946. Snyder purchases them in 1975 and claims own by adverse possession because limitations period ran. o Court institutes “Discovery Rule” – shifts onus to the owner to look for the property. Cause of action accrues (clock starts) when first knew of all the facts which could be the cause of action. Would get the benefit as long as she does due diligence in recovering the property. o Guggenheim case (NY Rule) – clock doesn’t start ticking until true owner asks for property back. III. Prescriptive Easements  A right to use someone else’s land. Commonly a right to cross/travel.  Similar to adverse possession, but only get right to use, not actual title. Ownership of the land remains in the same place.  Servient estate = Land with easement.  Dominant estate = Land that gets to use easement.  Easement appurtenant – attached to the property. If dominant estate sold, the easement goes to the new owner. 1. Easement by estoppel  Easement by estoppel – irrevocable license created by reliance through substantial expenditures on the faith of the license.  Holbrook v. Taylor (677) o Action to establish the right to use a roadway of appellant. o Appellee built a home next to Appellant’s property in 1964. Had permission to use the road to build. No other place where could really be a road. o Appellee improved the road and widened it. o Use of road by permission is not adverse. Can’t set up prescriptive easement. o Court rules instead there is easement by estoppel. Irrevocable license to use created by the investment and reliance by the dominant estate in building home. 

He saw them making investment when this was the only way back and forth, saw them invest in the roadway, saw them build the house expressing their reliance.  What gives the guy bargaining power is that they invested. That’s what gives him ability to extract rent. We don’t like this.  Want to push the person who has the right to bring to attention to the law. Otherwise they’ll lose it. Shepard v. Purvine vs. Henry v. Daulton: o Shepard – oral licenses are valid and irrevocable o Henry – oral are revocable. Must write a license. o Forcing a writing not neighborly? 2. Easement by necessity  Public policy that no land should be made inaccessible. 3. Prescription  Easement created simply by use and passage of time. o Fiction of the “lost grant.” Implied that owner granted use and it was lost. o Time and attachment  Elements o Exclusive  Exclusive doesn’t mean only they used.  Exclusive means that their right to use doesn’t depend on anyone else’s right to use. o Adverse o Open and Notorious o Continuous for the statutory time o Under claim of right IV. Transfer of Private Property into Common Property: Public Trust Doctrine  Public has reasonable right to access public land through private land.  How would we justify a rule that would allow crossing? It used to be your property, but now it’s common property? o *Utility/Incentive to use*  Like the Comedy of the Commons – we want to incentivize people to get together and bond. We want people to use the land and get positive benefit, but they need a way to access. Thus, court will give access.  Why not make these people buy access? Rent‐seeking and holdout problem. Collective action costs.  There are certain kind of goods whose value increases the more people use them. Network goods. o Beach may not be a pure network good because at some point there may be overcrowding? o But really depends on how you define value? Social value o Maybe we just decide that everything is always subject to public trust doctrine and only when we need it, we reveal. o When person bought the property to begin with they should have had the understanding that some day the public trust doctrine might apply and should pay accordingly. 

Public prescriptive easement can be created by long continuous use by the public under claim of right. o Idea of implied dedication Mathews v. Bay Head (701) o There was an association that owned the dry land between the road and the public land of the wet sand beach. o Association restricted access to this land to members o Traditionally, wet sand is held by sovereign in public trust/common for all. o Next move was a right of access – if public couldn’t access, then wouldn’t be a right at all. Thus, public must have a right to access.  Public has reasonable right of access through private land. o But important that this was a quasi‐public entity that owned the dry land already. It’s another big step if it was pure private property. V. Gifts  To be valid, an inter vivos (transfer while alive) gift requires: o Intent to make a present transfer o Delivery of the gift  Delivery need only be symbolic. o Acceptance  Assumed when gift is a thing of value.  Gruen (166) o Plaintiff father sends son letter saying wants to give this painting as a gift, but keep a life estate and enjoy it during life. o Father dies without giving actual possession. o Plaintiff sued to get painting when stepmom won’t give it over. o There is intent to transfer o All that is needed is symbolic delivery because father intended to retain life estate possession. o Letter just split the fee simple into life estate and remainder. Both estates exist at the same time. o Contract – I promise to give you at 25. Sue and court says no consideration, go away. o Property – I give it to you now but retain life estate. It actually is his now.  Property doesn’t look at consideration and promise. It looks at intent, delivery, and acceptance. VI. Death  Current system of inheritance o Spouse o Children o Parents o Siblings o Grandparents o Siblings of Grandparents o Until you find someone related.  No right to inheritance. Inheritance comes from right to dispose of property as you will.  Why not cut off intestate at parents and let it go to the state otherwise? o Would help others. Maximize utility o Can’t really say that following likely intent of the party to disperse estate any farther than that.  Estate taxes o Further goal of redistribution of wealth so that money continues to circulate. o Prevent accumulation of wealth. o Owe some success to context. Warren Buffett couldn’t accumulate such wealth elsewhere. Maybe he owes money back to the system? o Again, no right to inheritance.  Shapira v. Union National Bank (Supp 186) o Doctor leaving his assets to his three children. He puts a condition on one so that son cannot receive inheritance until he is married to a Jewish girl. o Court allows it. Says it is not an encroachment on a serious enough right to the son. He has reasonable opportunity to marry. o They side with the doctor and want to do his will. The result if son doesn’t get married is go the state of Israel, so obvious that the Doc wants to promote Israel and Judaism. o Would court have supported “To my son if he never gets married, but otherwise to Israel?” NO. See Restatement of Property on 190.  Doc has right to dispose of property, but not to infringe on son’s rights. He’s infringing on son’s rights because we don’t think people should have to make that choice between no marriage plus inheritance or marriage and giving up money.  Daniel has a right to get married and state just won’t lend its power to this kind of choice.  Maddox o Condition that only get inheritance if marry a Quaker. This was not allowed because not enough choice. There were only like 5 or 6 choices which wasn’t enough. 
Restraint on remarriage – it is valid for a deceased spouse to say to widow that they can keep money only if don’t remarry. Is that justified? o Spouse has no right and so we allow any limits. o But what about the fact that spouse may have built things together? Spouses tend to pool resources. They make sacrifices for each other. Maybe she does have a claim as opposed to children. 
What we have is a context where we are continuing to enforce the will of someone who is dead, often in the teeth of the will/desire of someone who is alive. This tension of dead hand control against will of present generation continually arises. Part III – Building Blocks of a Property System; Varieties of Permissible Interests I. Freehold Estates A. The Fee Simple Absolute and the Life Estate  Property is a ball of rights. Largest ball of rights is the fee simple. Other things like life estates, present possessory interests, future interests are all things carved out of the fee simple.  Life estate = present possessory interest to possess for life. o When someone has a life estate, someone else has a remainder. They take possession when the life estate holder dies. o Both the life estate and the remainder exist at the same time. o “For life” – standard form for creating a life estate. o You can sell a life estate, assuming no restraints, and the measuring life is still the original life.  The magic words we use to create a particular type of estate are called “words of limitation.” o To person who gets the property, they are called “words of purchase.”  Originally a common law presumption toward life estates. Now presumption of fee simple.  Law of waste ‐ A cannot use property in a way that unreasonably interferes with expectations with the remainder person B. o If A is not repairing anything and letting property go to hell, then B can say “Fix the roof!”  Amerliorative waste – actively using land in a way that increases value, but increases in a way that harms the value of remainder person. o England: Development = waste o U.S.: Development is good, not waste. o Shows the attitude of development v. conservation  This temporal tension is why life estates are not recommended. 1. Restrictions on alienation  Disabling restraint – cannot alienate at all 


o Fee simple: Void as repugnant to the nature of the fee simple absolute o Life estate: Void also because then creditors could not get to it. Forfeiture restraint – if grantee attempts to transfer it’s forfeited to another person. o Life estate – these are valid  Forfeiture we allow because then there is still incentive to pay debts because attempts to sell will have you forfeit the property.  If you borrow against the life estate, incentive to pay could you still lose the property even if it doesn’t go to the bank.  Only affects one individual/generation. Once that individual dead or its is forfeited, then there is a fee simple absolute. Promissory restraint – grantee promises not to transfer. Enforceable with contracts and injunctions. Reject restraints on the fee simple: o Marketability/Efficiency – restraints make property more difficult to transfer and unmarketable because can’t necessarily use for best use. Disincentive to improve because couldn’t borrow against it because couldn’t transfer to bank. o Perpetuates concentration of wealth. We prefer to deconcentrate. o Autonomy – we like people being able to make their own decisions about property. 

White v. Brown (190) o Ms. Lide leaves a will that allows Evelyn White to live in the house, but not to sell. o Ms. Lide’s nieces and nephews say only a life estate and that they should have remainder. o “To live in but not to sell” isn’t one of the magic words. Could mean different things. o Presume fee simple because Ms. Lide wasn’t a lawyer and probably didn’t even know what a life estate was? Or do we interpret as life estate because obviously didn’t give full ownership? o If life estate, nothing in will about remainder = partial intestate. Remainder would be distributed to heirs using default intestate rules. Baker v. Weedon (197) o Weedon specified that he left property to wife and then if no children, to his grandkids from previous marriage. o Life estate in Anna Weedon, remainder in grandkids. o Anna Weedon wants to sell the property to support herself. Trial court orders judicial sale. o Appeals court says there must be a necessity for a judicial sale. Anna Weedon cannot sell now because not in the interest of the remaindermen. o Temporal conflict between current interest and future interest. C. Defeasible Estates 





Defeasance – a mechanism for designing property rights intended to control the use by creating conditions in the future that will cause ownership to shift. o Efforts to control uses of land Fee simple defeasible determinable – comes with possibility of reverter. When event happens, automatically reverts ownership to holder of the reverter. Fee simple defeasible condition subsequent – comes with right of re‐entry. When condition occurs, person has right of re‐entry but must exercise that right in order for ownership to change. Not automatic. Magic words determine whether determinable or condition subsequent o We prefer condition subsequent because easier to know about transfer because something actively has to happen. Cannot sell a provisional interest Mahrenholz v. County Board (209) o Land owners grant land to school district for school purposes only, otherwise to revert to grantor’s son. o 1973 – School district only using land for storage. o Determined to be fee simple determinable through the magic words (although they were mixed up). o Because couldn’t see provisional interest, mattered if determinable and he already owned and could sell or condition subsequent and had not re‐entered so could not sell. II. Interests A. Why interests?  Creating different interests is a way to control use of property into future. The question is “How much do we the state allow this one particular person to control into the future without giving someone all the rights? At one point do we say ‘enough’ and we give all rights to someone?”  There’s a battle between mindframe of letting people control forever vs. getting things back into market o Can talk about efficiency o Autonomy – not letting one generation control another o Fairness – equalizing effects of the market B. Types of Interests  Vested interests vs. future interests  Vesting – do you hold this conceptual interest in your pocket?  Two tools to control future of property: o Condition precedent – requirement that something happen before A gets interest. Creates a contingent interest/remainder in A. o Conditions subsequent – can take a vested interest and divest it. Goes in hand with executory interest. 

Executory Interest – interest held by another person that divests holder of vested interest or destroys a contingent interest Interests are not necessarily possession. Just an interest. Can have a vested interest that is not yet possessory. 



You analyze a sentence based on grammatic structure. Look for where the grant ends. If condition in the grant, then it’s a condition precedent. If it’s after the grant, then it’s a vested interest subject to divestment. If a contingent remainder does not vest, reversion to O. Examples: o O – A to life with remainder to B.  B has an interest right now, vested, but content is not possessory. It’s that when A dies, B becomes owner of fee simple absolute.  B has vested remainder. o O to A for life, then to B if B survives A.  This means a condition precedent to B coming into the estate. They have contingent remainder. Their remainder comes into being only if the condition is fulfilled.  If B survives A, then it vests immediately to B once A dies. o O to A for life, then to B, but if A survives B, then to C.  A life estate  B vested remainder subject to divestment by C. Comparison showing importance of vesting: o 1. O to A for life, then to B for life, then to C and her heirs.  A has life estate  B has vested remainder in life estate  Vested but uncertain to become possessory because B may predecease A.  C has vested remainder in fee simple absolute. o 2. O to A for life, then to B for life, then to C and her heirs if C survives A and B.  A has life estate  B has vested remainder in life estate  C has contingent remainder in fee simple absolute. 
O has reversion (reversion if C dies before A or B because never vested). O never gave up the right if C dies before A or B. That right always stayed with O. o The importance of vesting is shown by comparison between 1 and 2. If C dies before B, it’s already vested in 1, so it goes to C’s heirs after B dies, but in 2 it’s only contingent, did not vest, so reversion before it goes to C’s heirs. C. Rule against Perpetuities  We don’t want land tied up with contingent interests forever. Want to make sure land is marketable and want to encourage investment.  Rule against Perpetuities: No interest is good unless it must vest (as in there can be no ability to not vest) with 21 years of an existing life at the time of the conveyance. o For commercial property, it’s just 21 years (no existing life at beginning)  Some states use wait and see approach and allow interest to continue, but void if it does not vest within 21 years of validating life.  Uniform Statutory Rule Against Perpetuities – no more vesting lives. Uniform 90 years within which must vest.  Symphony Space v. Perhola (251) o Broadwest sells to Symphony with option to repurchase the theater in a variety of years up to 2003 (25 years) o Option void because violates Rule Against Perpetuities because could vest up to 24 years after the conveyance.  O to A, then to A’s children, then to Harvard Law School. o A’s kids have vested and HLS has vested. o Not subject to rule against perpetuities because all have vested. Rule against perpetuities only about contingent remainders.  O, a teacher of property law, declares that she holds in trust $1000 for all members of my present property class who are admitted to the bar. Is the gift good? Only vests if all pass the bar. o Validating lives are the members of class, so it’s all ok.  O hold in trust $1000 to the first child of A to pass the bar? o Void because A could die and child could take more than 21 years to pass the bar. Possibility it does not vest within 21 years. III. Nonpossessory Interests  Easements and covenants are series of land use techniques that are somewhat more flexible and with some more agreement but still about letting some people control use of resources at another point. o Again same tension about how much of an affordance you give Owner T1 to control the use at T2.  Easements and covenants are more consent based approaches to controlling land use. A. Easements  Affirmative easements – right to enter or perform an act on servient land. o Generally recognized easements: rights of way right to place clothes on line across neighbor’s land, right to nail fruit trees to neighbor’s wall, etc.  Negative easements – forbid one landowner from doing something on his land that might harm a neighbor.  Easement appurtenant – gives right to whomever owns the parcel that the easement benefits.  Easement in gross – give right to someone without regard to land ownership.  Law favors easements appurtenant if unclear.  Common law says cannot create non party easements (sell land but reserve easement for a friend), but dismissed as a feudal shackle in Willard v. First Church.  Easements are an interest in land that can be life estates, defeasible, etc.  Easements can be created by: o 1. Grant o 2. Implication – requires a prior common owner.  Easement implied from prior existing use when land subdivided. Done in order to preserve the expectations of the parties.  Easement by necessity – requires a common grantor. Theory is that preserving intent because cannot intend to grant land and make inaccessible.  Questions about how much access will defeat a necessity.  Willard v. First Church (672) o McG had two lots across from a church (19, 20). She let the church park on lot 20. o McG sells both lots to Peterson who sells to Willard. In sale to Peterson, McG explicitly gave church easement. Peterson did not explicitly say easement in transfer to Willard. Is there still an easement? o Court does balancing test of injustices of granting easement on a buyer who didn’t know about it or not. Grants easement. o Court rejects Willard arguing relied on idea that can’t do 3rd party easements. No reliance because he didn’t read the previous deed. 1. Scope of Easements  An easement is a particular use right granted to a particular estate. Cannot extend.  Can change location of easement if no extra burden.  Brown v. Voss (706) o Three parcels, A B C. B has easement on A. C does not. o Plaintiffs buy B and C. o Plaintiffs begin using easement to bring stuff to B and C. o Cannot extend an easement to additional property. Benefit cannot go to another property.  Even though B and C owned by same person, would only able to go to B by easement. Stepping on C is misuse. o An easement is a particular right that is only for the benefit of a particular estate. Anyone else, any other estate using this, would be trespass. o Question is what is the remedy for this misuse?  Majority: Damages, not injunction. Liability rule means a forced transaction requiring C to purchase right from A at court determined amount.  Dissent: Injunction. Property rule to A. Allows A to set a price for C to buy access if he wants it. o Dissent – an extension of use to C is a trespass. Just because no extra burden doesn’t mean shouldn’t deny. Should be an injunction. B. Real Covenants and Equitable Servitudes  Real covenants are evolution from negative easements. Negative easements gone contractual.  We want to try to enforce contracts on people who never agreed to them.  Difference between real covenant and equitable servitude is the remedy o Covenant – remedy is damages o Equitable servitude – remedy is injunction  Nowadays there is a merger of law and equity so covenants and equitable servitudes are actually the same. 1. Horizontal and Vertical Privity  If A and B reach an agreement, and D was not part of agreement. How can A sue D? What stands in for privity in contract? o The answer is that we have the ball of rights, the estate. What stands in for privity is that you are now the person holding the ball. The ball is the source of privity.  Horizontal privity – generally created through subdivision from common ownership. o Excludes agreements between a bunch of private owners. Would be enforceable against each other, but cannot bind future generations/owners with damages. o Now it’s been eliminated completely in RS3, Servitudes §5.2  Vertical privity (745) o Traditional  Promise can be enforced by someone with the same estate or a lesser interest carved out of that estate.  Promise can only be enforced against someone succeeded to the same estate as original promisor. 

If original owner was fee simple, then person enforced against must have fee simple. A lesser estate would just say “Sue the guy above me.” An adverse possessor creates a new estate. Could not enforce against. o RS3 

RS3, Servitudes §5.2 discards vertical privity for both enforcing and enforced against for negative promises.  All possessors can be enforced against.  All possessors can enforce. This changed to sue whoever is most capable of carrying out the agreement.  RS3, Servitudes §5.3 affirmative promises  Lessees – can enforce all. Can be enforced against if they’re in a better position to perform than the holder of the reversion  Life tenants – can enforce and be enforced against up to value of life estate.  Adverse Possessors (without yet title) – can be enforced against. Can only enforce for repair, maintenance, service. Covenants are not enforceable if no notice. 2. Creating Servitudes  U.S. against prescriptive negative easements.  Common ownership binds the entire remaining commonly owned land once first property sold with reciprocal negative easement.  Requirements for a real covenant: o 1. Appear that the grantor intended the restriction to run with the land o 2. Touch and concern the land  No absolute test for this. No common law definition.  Covenants restricting use of land almost always touch and concern.  Reluctance to enforce affirmative covenants against successors because fear need to continually supervise, imposing large personal liabilities on a successor, and resembles feudal rent too much. Also seen as a clog on title.  Monetary obligations ok in common interest communities  To touch and concern must substantially alter the rights of which would otherwise flow from ownership of the land.  Ex: Neponsit paid money for public parks in development, but carried with it an easement of common use. o 3. Privity of estate  RS3, Servitudes §3.2 eliminates touch and concern and presumes validity of covenant as long as not illegal, unconstitutional, or against public policy.  There are pros and cons to touch and concern vs. presumptive validity. 
Sanborn v. Mclean (751) o Homeowners try to build gas station. Neighbors claim a reciprocal negative easement although not in the deed. o This was originally common ownership then subdivided. o Other properties had easements on them in the deeds. These first sold with easements make the entire rest of the land that was under common ownership burdened by the reciprocal negative easement/servitude. o Person buying property should ask around and figure out if easement on their land.  Neponsit (755) o Covenant that required to pay annual fee of $4  Problems on 767: Valid under touch and concern? Restatement? o 1. No flag of any kind including the American flag may be displayed  Negative requirement. Touches my right as owner to display something on my property that I own.  Restatement of servitudes  Arbitrary and capricious? What if it was just couldn’t paint house red, pink, and orange? People couldn’t develop a neighborhood where they want subdued colors of houses?  Argue unconstitutional? But what’s the state action? It’s that it is invalid under the restatement as a matter of property law to put restrictions on a constitutional right. o Couldn’t we get Shelley v. Kramer idea also that state action would be court enforcing?  But this is a very radical decision that hasn’t really been adopted. Implied that state involved in all transactions unless purely voluntary on both sides. o Yes to fundamental constitutional right o 2. No sign except house location number may be displayed nor Christmas lights displayed outside house  Restatement – may encroach on people’s right to exercise religion?  But what about someone with a huge Christmas display that really increases traffic for the neighborhood. Enforce against them? o 3. No solar energy device  Keeping up a residential appearance. Not arbitrary. May be against public policy in Mass. 3. Covenants and the Exercise of Sovereignty by Private Parties  What is the Sanborn/Reciprocal Negative Servitude solving? o A developer selling a bunch of land at high prices with residential guarantee with promise of servitude, but then turning around and selling some of it as commercial, not being bound.  Can’t do this with contract because doesn’t run with the land onto the next owners. 



Problem: It’s very hard to evaluate what the later cost of keeping the single use scheme is. It’s hard to change the land to it’s more efficient use. o Damages scheme instead of injunctions? Shelley v. Kramer (783) o There is an agreement that all the owners agree to saying no blacks can own any of this property. Someone sold to black family and owners try to stop it. o Other owners argue no state action. o Court holds that community can only enforce with court which is state action. Thus, 14th Amendment equal protection applies. Very radical idea. o The sheriff will not enforce this. Do we really agree that the state enforcing private agreement is tantamount to state action? This would erase the standard constitutional division between state and private action. Fair Housing Act (376) o There are requirements on refusal to sell, rent, etc. o But there are exemptions. Why?  You kinda want to say who you get to live with in a small area.  Maybe we just don’t want to tie up affordable housing. Owner could just decide not comfortable with others and not rent at all and then there is less affordable housing for all.  Maybe it’s just a small section of the market and we don’t want to pick fights with a particular racist. o Decisions and exemptions may lead to big cascading effects as whole neighborhoods fall into exemptions and then they’re effectively off limits. 4. Termination of Covenants  If a covenant does not have a clear termination point so it could in principle go on forever, court is confronted with question of when do I no longer enforce.  The basic answer is “I stop when it doesn’t make sense to enforce anymore because the whole point behind it is gone.” o It takes a lot for this to happen. Courts are fairly conservative about when things change enough to get rid of a covenant. IV. Concurrent Ownership  These are the baseline rules for when people own stuff together. In reality, people would likely draft some sort of partnership or corporation.  Only meaningful power is partition – any party of a co‐tenancy (tenant in common or joint tenant) can seek partition, demand to break this up. o Partition in kind – divide up the property o Partition in sale – sell and divide the proceeds  No mechanisms for making decisions 

Critical thing to wrap mind around is that each party has an undivided interest in the whole, but a fraction of the share of it. o Co‐tenants don’t owe each other rent for occupying the house, but neither do they have the power to exclude any other co‐tenant from any part of the house. Co‐tenant has legal right to be there.  Don’t owe rent because I own every piece.  This is the best way to understand that own an undivided share. Ouster – situation where you act as a practical matter to deny the co‐tenant their right to use all parts of shared property, then you start to see adverse possession run. Have to be some actual affirmative effort to toss someone out. A. Tenants in Common  Shares can be created at different times and by different instruments  Shares are separate and are inherited by heirs like any other property. B. Joint Tenancy  Critical feature = right of survivorship. When a joint tenant dies, the surviving tenant gets his share without need for will or estate. Other’s share is just extinguished. o Feudal favorite because kept property together and prevented division because only one party inherits.  Interests must vest at the same time, all tenants title must be created by same instrument, al must have equal identical shares, each must have right to possession of the whole.  Can unilaterally converted into tenancy in common by conveying a share to a third party. C. Managing  For things that are necessary to pay in order to keep the property (taxes, removing liens) one party can pay and seek contribution from others  Cannot get contribution for repairs or necessary maintenance, or improvements. o Upon partition you can get repayment or the value of the improvement  Very brittle because decisions come up and no way to make them. Lead to partition.  Partition in kind preferred, but difficult. Usually partition in sale.  Spiller (300) o No duty to pay rent unless ouster  Delfino v. Vealencis (292) o One party holding a parcel running a garbage removal business out of it. Another set of parties that want to develop the parcel into a residential development o Partition in kind favored. D. Marital Property 1. Tenancy in the Entirety  Created only through marriage  Same as JT, but marriage required also. Cannot be unilaterally converted.  IRS can get at tenancy in entirety.  Sawada v. Endo (313) o The Sawadas were injured in a car accident by Endo. They had judgments in their favor against Endo. o After accident but before the summons served, the Endos conveyed their house to their sons to keep it from being subject to the judgment.  It’s only a fraudulent conveyance, transferring property to keep from judgment, if the property could be subject to satisfying the judgment in the first place. o Court determines that couldn’t have reached the property tenant in entirety because the judgment was only against husband Endo. Require an act of both tenants to alienate the property. Tenant in entirety indivisible except by joint action.  Policy reason for tenant in entirety indivisibility = protect the family unit and innocent spouse from the stupid acts of the other.  Gendered view where women stay at home and need protection while men go out and indebt themselves.  Married Woman’s Property Act o Majority states – creditor of one spouse cannot reach a tenancy by the entirety because one spouse cannot assign his or her interest. 2. Marital Property v. Community Property  Divorce o Old Common law – tenant in entirety converted to tenant in common. Husband keeps the property he brought in during marriage and wife ignored. o New common law = equitable distribution – property is divided by the court, in its discretion, on equitable principles.  How to equitably divide? o Divide all property? o Divide only marital/community property?  Marital/Community Property – marriage is a partnership and all property acquired from earnings during marriage should equally divided.  A degree not marital property (Graham, Mahoney). Just get reimbursed for any contribution, possibly rehab alimony. o O’Brien (NY) says it is and reimbursement not enough because no interest.  What about if D gets married again? Do we divide again in second divorce?  There are biases in the system about who in the marriage will make what choices. Women more likely to sacrifice something. We need to take this into account in the law and how we value something. o Are the same rules of 1970‐2000 the same as should be for 2020‐2040? 

Graham (322) o Wife contributed to husband’s education o An MBA is not marital property in divorce o Property limited to that with exchangeable value, can be assigned, sold, transferred, conveyed. o Give some kind of reimbursement alimony instead? o Dissent: This is the most valuable asset they’ve acquired. Only fair to distribute it. Elkus (328) o Court willing to adopt broader definition of property as anything of value. Husband sacrificed and helped wife to make her a star in opera world o To extent spouse led to increase in value of career, that is marital property and subject to equitable division. Part IV: Ownership and Control Over the Use of Property I. Judicial Boundaries A. Right to Exclude (Privilege to Enter)  State v. Shack (88) o You have people living on the land of the farmer. Farmer tries to exclude aid workers o Court says the right to exclude does not extend to the ability to effectively control the lives of others. 1. Morris Cohen  Cohen says we claim there is a distinction between imperium over people and dominion over things. However, in reality, dominion over property can give imperium over people because of the power that property gives. o Essence of property is the right to exclude.  The critical point to know is that when you’re making a choice about rule of property, there is background about people’s lives. How we define what property owners can do will effect others  Cohen says that property rights gives more power than the markets might realize.  Cohen simply a different empirical view. Human beings, in most of their relations are not in efficient markets. In most relations are in mutual coercion. Therefore, whenever we align property rights, we are not operating in a context empirically described as an efficient market, but as relations of power. o Thus property rights and decisions about who can do what to who are first and foremost structured in relations of power, not efficient exchange. Political consideration 
Cohen – the choice of the shape of property rights is a choice about how power distributed in society. 2. Richard Epstein  Property is a set of coherent rights and so we have to explain away the frayed edges of a case like Shack.  Absolute libertarian position – you have a right to exclude, Epstein isn’t gonna have a theory driven absolute right that ignores the sweep of common law which would people to ignore exclusion in certain times. I’m going to come up with a systematic way to explain a range of doctrines that bite away at absolutes. That system is necessity.  What about you’re in a bad storm and have to go onto someone’s land? o Under absolute libertarian, that’s trespass. o Actual common law, necessity. You’re not liable for that trespass.  Absolute property rights subject to necessity for recognized market failures. o Epstein likely to reject State v. Shack based on how not so much a failure of the market in migrant labor information/aid getting.  The critical claim for Epstein is that most human actions done through efficient transaction, so absolute rights acceptable. For the rare conditions where markets fail, we allow edges to fray and have exception B. Right to quiet enjoyment (privilege to use one’s property as one wishes)  Nuisance Law  Nuisance – when one party makes improper use that impairs/injures neighbor’s land or right to use. o Is the effect the kind of thing that we can reasonably expect a property owner to absorb?  In negligence, we focus on the actor. Was actor A reasonable based on cost/benefit analysis of potential costs? Nuisance not about reasonableness of the action. It’s about reasonableness of the effect.  There is a confusion in nuisance law o Restatement view of balancing the costs and benefits o Other view of a threshold concern that each one has a duty not to harm the other. Once you hit a certain threshold of negative effect, we say neighbor doesn’t have to suffer anymore. 1. Threshold Approach  Estancias Dallas Corp v. Schlutz (646) o Apartment complex has a big AC unit that is loud and noisy. Neighbors say the noise is interfering with ability to enjoy the land. o Ex ante, would have cost $40,000 more than to be a quiet system and the max damage you can do to $25,000 property is $25,000. Is it obviously negligent to not pay $40,000 to avoid $25,000 loss? o We’re in nuisance and not negligence, so the economic costs aren’t important. There is a threshold that the neighbors shouldn’t have to endure so that now, even though it will cost $150,000 to fix and would have cost $40,000 in beginning, still get injunction because reached the threshold. o Coase – injunction gives bargaining power to the homeowner. We expect bargaining because only two parties, but unlikely because of animosity 2. Balancing Approach  Boomer v. Atlantic (649) o Defendant had cement plant and plaintiffs were neighboring landowners who got all kinds of dirt on them. o Gives injunction but says that if pay permanent damages, then lift injunction. o Precedent says just give injunction but court won’t do that because loss to the defendant of closing would be way more than the loss to the plaintiffs of keeping on. Thus, we force a transaction on the homeowners part that allows cement plant to keep going for a price o Court argues against institutional competence. Not in the place to make air pollution policy. o Does this seem fair?  These people now forced to live with this cement plant’s problem.  But what if they’re all rich people who use these as second homes and this is a the factory that employs 300 people in this small town and it’s basically the whole economy?  Fairness hard in abstract. There is fairness in abstract property rights and then justice in context. 3. Coming to the Nuisance  Spur v. Del Webb (656) o Spur Industries does cattle raising. They had grazing land far from the city. o Del Webb Development buys land kinda far away and then expands until they go right up against the cattle farm. They cannot sell homes because of smell. o Court – two questions:  1) Is there nuisance? Yes. Spur has to move.  2) Does Del Webb have to indemnify Spur for the move? Yes. o What’s curious about this decision?  Doesn’t like that Spur has to move. Wasn’t their fault.  Development company should have surveyed the area first and thought about this before they bought the land, take that into account into when they bought the land.  They “Came to the Nuisance” – a nuisance existed but it wasn’t affecting anyone. Then someone came in right next to them. Why should the person have to stop just because someone came in? o Why does court make the decision it does? Because of the public health effects. There are people who live their now and it is a problem. 

Had it just been Del Webb, court would rule differently, but because of elderly homeowners, they rule this way. But these elderly too could have smelled the property! Enough of them did that the problem was Del Webb couldn’t sell. B. Private regulation – Homeowners Associations  Similar to nuisance in that restriction on property use due to close proximity to one another  Here it is an explicit ex ante restriction.  Courts involved in reviewing covenants/restrictions of Association, but presumption of reasonableness  Association uses governance to restrict property. Ongoing decision making body.  Common interest development chief feature = subordination of individual property rights to collective judgment of association, together with restrictions on use of real property. o Condo unit owners = a little democratic sub‐society of necessity more restrictive on use than outside condo. o Different from contract in that the rules can change even though you don’t agree.  Common interest communities, because of governance function, evoke sense of tension about being governed and being free, yet at the same time are agreements of contract and the private market.  Privity accomplished because all from original developer.  CCRs o Review for public policy ‐ They don’t have to be reasonable for a particular case. They just have to not violate public policy. o Review if completely arbitrary or if the burden is much bigger than the benefit. o CCRs don’t trigger tension between property and sovereignty because you agree ex ante and it’s like implementing your right to contract.  Want to protect reliance of others in the community  Business judgments o Presumption of validity for business decisions, so long as good faith, honest judgment, and furtherance of corporate purpose. o More deferential than CCR because just reviewing process.  Later decisions of board o Fairly deferential. o Review for reasonableness  Nahrsted (800) o Plaintiff owns a condo in a big complex. CCR does not allow pets. She has cats. She wants fines reversed and declaration that the restriction invalid. o Supreme Court says that the rule is reasonable  She knew about it beforehand.  Others may have signed on relying on the restriction  It’s not just about cats. o Is each of these reasoning susceptible to challenge reviewable for reasonableness? No. Court isn’t going to ask if the restriction makes sense in this particular case as long as it makes sense for the community itself (against public policy.) o Dissent concern about individual autonomy in owning pet.  Majority would respond that she exercised autonomy already by agreeing to CCR. C. Municipal Regulation – Zoning  Purpose is to define certain uses and separate uses. Some types of use don’t work well with other kinds of use, so we separate them.  Classic Model: o Zoning Commission and a Board of Adjustment o Distinct uses in different areas o Board makes individual adjustments when necessary  Two complementary parts to process o Legislative process with Zoning Commission deciding uses o Board with adjudicative process and Court reviewing  Constitutional as long as not arbitrary and unreasonable or having no relation to public health, safety, or morals.  May require a comprehensive plan.  Variances granted if special hardship and won’t have substantial detriment to the plan. o Undue hardship standard – no effective use of the property without hardship  Not necessarily most profitable use  Other effective uses includes selling to the neighbors or buying land from the neighbors to make it so in compliance with ordinance.  Court says that if hardship self‐imposed, then no variance.  If refuse to sell or to buy, that’s self‐imposed hardship.  If you divided property in such a way that cannot meet zoning requirement, that’s your problem.  Village of Euclid (828) o Ordinance adopted by the village council that has everything planned out zoning wise. Restrictions on what type of use can be made of property. o How does the zoning work?  Divide land into 6 different usage classes, 3 different height classes, 4 different area classes  Usage classes are cumulative ‐ in the most restrictive you can only build single family homes, parks, and that kind. The second level, you can build 



all of the first level, plus all that’s in the second level. This has become known as Euclidian Zoning. o This guys land has restrictions on it so that cannot put industry on part of it. He wants industry on it. Argument that this zoning denies equal protection of law, due process of law by denying the guy being able to make use of it. o Also argument that this is a taking. o Court holds that there are good reasons for separating uses. May seem unfair in a particular case, but this guy challenged the whole ordinance and the ordinance is fine. Commons v. Westwood (850): Variances o Guy wanted a variance to allow him to build a home on an undersized lot that did not meet frontage requirement. o Most of the homes in the neighborhood did not meet the requirements because were built before the ordinance. o The Board denied variance because they said that detrimental to the entire area and that there was no evidence to support undue hardship. o Must be specific fact finding by board finding no undue hardship. Fact intensive. Stoyanoff (872) o Plaintiff owned plot of land in Ladue. Plaintiff wants to build house that meets zoning and construction standards, but is in ultramodern style, not the traditional styles. o Architecture Board denies permit. o Argue against the Board ‐ aesthetics not part of promoting health and general welfare. o General welfare takes into account this psychological benefit.  But does this seem too mushy? Where’s the limiting principle? o This would not be a hard case at all in a homeowner’s association. It’s only a hard case because we’re already sensitive of gov’t compelling. Village of Belle Terre (901) o Village of Belle Terre is a tiny town on Long Island that restricts land use to one‐
family dwellings. o Family defined as people related by blood or marriage, or two unrelated people. o 6 students live in a house. City kicks them out. Students argue that this is unconstitutional. Long list of arguments. o Court holds that the ordinance is constitutional because it’s part of city’s police power.  Institutional competency – determining definition of family is for legislature so long as rational basis. Here there is rational basis because lots of individuals adds more cars and traffic and stuff. o Marshall dissents. What’s the dispute?  Douglas thinks no right at issue  Marshall thinks that this addresses fundamental right to privacy and association. Fails under this review Moore v. E. Cleveland (908) o This statute regulates the family itself. Can’t have more than one set of grandkids in the house. Here there were grandkids from two marriages. o Struck down because regulates family itself. Saying that certain people are family and some relatives are not. Too much of a judgment on lifestyle. D. Market Regulation: The Revolution in Landlord Tenant Law 1. Shifts in Doctrine  Caveat lessee  non waivable implied warranty habitability o Caveat lessee meant that the renter beware. Took it as they found it. Landlord could rent things that were in bad shape and renter could rent, so long as they knew about it. Renter could waive right to repaired doctrine  Landlord had no duty to repair. o Move to requiring landlord to meet code. Can’t shift below that. Non waivable implied warranty of habitability.  Independent covenants (tenant have to pay even if landlord don’t repair)  dependant covenants: nonpayment of rent, repair and deduct yourself o Now: Tenant can withhold or deduct rent until landlord repairs. His covenant to pay rent depends on landlord repairing/meeting code.  Rents at market  rent control o Several waves of rent control, especially in wartime. Justification is that need housing stock available in wartime. o Result is rent regulation  No liability for injuries on landlord liability negligence. No waiver o No liability before meant no need to invest in common space maintenance. o Now liability and refusal to enforce express waivers of this liability  Absolute right to refuse to rent  no discrimination, even arbitrary to rent  Landlord had to agree to sublease and could just refuse Require reasonableness in refusal  Right to evict at lease end  no retaliatory eviction; just cause required  Self help by landlord in eviction  Require summary process by landlord.  Distress/Distraint  Abolished o Distraint – landlord can seize property and hold against your rent.  No duty to mitigate  Duty to mitigate upon notice of abandonment o Walk away and historically the rule was it was still yours and had to pay. Now, landlord has to affirmatively seek to relet the property to mitigate damages.  No duty to deliver actual possession  duty to mitigate upon notice of abandonment o Now have to give actual possession.  No punitive damages on security deposit refuse to return wrongfully  Damages on security deposit 2. What this all means 


Market may give power to a landlord. Like in Cambridge, there is a lot of demand for rental units. Landlord might say “I have this unit, it doesn’t meet code. You can rent it, take it or leave it. I’ll find someone.” Supply and demand gives power to landlord. Law based story for whether landlord fix or not fix – law, by choosing whether to favor which group, landlord or tenant, reinforces power of landlord or may shift power to tenant. o There is a choice in picking a regime in which group to favor. This choice of rules is what gives bargaining power. Can’t look purely at supply and demand or at the material conditions of production and just see relations as a function of production means. If you flipped all the law toggles the other way, would get a very different power relationship. Part V: Property as a civil right against government regulation: Takings I. Intro  Why eminent domain? o Prevent holdouts and rent seeking o Keep land from being used inefficiently.  Why compensate? o Otherwise people wouldn’t invest for fear of seizure o Fairness o Property as civil right, so require due process II. Eminent Domain in the 19th and Early 20th Century  19th Century – eminent domain broad. Broad public use and not even guaranteed compensation. o Eminent domain as a way for cheap development. o Public use was anything benefitting the public.  Property as a civil right o Originates in Dred Scott v. Sanford. People have rights and cannot be abrogated. Here, right to property abrogated when Congress took slave/property away without due process. o Otherwise eminent domain is using people as means to an end. o Economic/Fair Market does not take into account non‐economic values, like an ethnic neighborhood.  Adair v. U.S. (Supp 268) o Federal legislation working to prevent discrimination against union members in employment. o This sets the baseline condition of negotiation in union formation. Hale. o Court said that this is an intervention in liberty of contract. Employees are free to contract with employers and employers are free to contract with whomever they want. 

o Holmes dissent is effectively Hale analysis – what you’re doing is setting up the baseline between unions nad employers. Maybe unions are a bad idea, but that’s not something the constitution should constrain. States should decide. Lochner o Courts go into this big analysis about whether this is genuine a health measure. o Baseline is that these are men who are intelligent and we must respect freedom to contract. If they want to work 16 hours a day, we should let them. o Holmes – laissez faire is one theory of the market. Progressive economic regulation is another. Democracy is the battle where this should be fought out. All this about the freedom to contract and the right not to be interfered with in public welfare. III. Eminent Domain 1. Public Use Requirement  Property may only be taken for a “public use.”  Government may not condemn property for private purposes., even if willing to pay.  Transferring property from A solely to transfer to B is not ok. Cannot take from A to benefit a particular individual.  Transferring from A to a private B is ok if future “use by the public” is the purpose, like railroads.  Can transfer from one class to another class.  Public use does not actually mean use by the public. Can also mean public purpose/benefit. o Public purpose is broad – includes spiritual, physical, aesthetic, and monetary welfare.  Kelo v. New London (945) o City development plan to increase jobs and tax revenue in distressed part of the city with a new office park, restaurant/retail area. o Development plan means not taking to benefit a particular individual. o Promoting economic development is a traditional function of government. o Not benefitting specific parties, just the generalized whoever will move in to the new development. o Important that part of a city development plan.  Berman v. Parker (949) o Community redevelopment o Look at plan as a whole to determine public purpose. Even if some property not blighted, area must be planned as a whole to work.  Hawaii Housing v. Midkiff (949) o Fee title transferred from lessors to lessees to reduce land ownership concentration. Upheld. o Eliminating social and economic evils is a public purpose. 2. Just Compensation Requirement IV. Regulatory Takings  Different from eminent domain in that not transferring fee simple 1. 1915‐1980  Power to regulate comes out of police power of the government o Gov’t could stop nuisances, regulate for health, etc. Gov has plenary power to regulate for health and safety. o Zoning not a taking because public welfare and stopping harm.  Hadacheck: If government action is nuisance control/preventing harm, then not a taking. o But what’s preventing harm and what’s conferring benefits?  Penn Coal: At some, if regulation goes too far, the diminution in value caused by regulation becomes a taking and must compensate. o Diminution relative to what? What’s the denominator?  Penn Central: Investment backed expectations  No conceptual severance to establish a taking (Penn Central)  Pennsylvania Coal (980): Diminution in value at some point becomes a taking o Invents regulatory takings. o Coal company owned land. Sold the surface rights but buyers had to waive right to subjacent support. o Statute comes along and says can’t cause subsidence. Surface owners say that waived subjacent support invalid. o Court says statute invalid. Restricting right to mine coal essentially kills the right, eliminates the estate. o To make commercially impractical is to destroy. o Brandeis dissent:  Unnecessarily restricts gov’t powers.  Cannot use land to create nuisances. Restrictions to prevent harm are not takings because essentially nuisance.  Penn Central (990) o Owners of Grand Central Terminal wanted to expand and build office building on top. There was a NY Law restricting modifications to historical landmarks. o Cannot conceptually sever to try to call it a taking. o Is this a harm or benefit? Hard to tell o Too great an interference with investment backed expectations?  Regulation does not interfere with primary expectation for the site, use as a train terminal. o They still get a reasonable return on their investment. 2. 1981‐1994 Revisions 

Exactions, using threat of something you can do in order to get something else you cannot do, must have nexus between purpose trying to achieve and the exaction demanded. o Not a taking if substantially advance legit state interests and does not deny an owner economically viable use of his land. Challenge the exaction and then you’re not in the Penn Central Takings 



Loretto: Permanent physical occupations are takings Nollan v. California Coastal (1042): Unconstitutional exactions o Nolans had a small beachfront property. They want to expand. They apply for permit. o Permit accepted conditionally by city. City would require a permanent easement for public across beachfront. o City could not get an easement on its own. Was using the threat of not granting permit, which they were fully in their right to deny, in order to get what they couldn’t otherwise. o Must be some nexus between the exaction and the purpose seek to further or else unconstitutional.  Here, purpose sought was to prevent psychological barrier to beachgoers. Not furthered by having easement connecting beaches. o If challenged under Penn Central, the court would look at diminution and value and legitimacy of the interest and uphold so long as don’t take too much, which is o This easement amounts to a permanent physical taking Lucas (1006) o Coastal land regulations o Taking if all economically viable use is eliminated.  Only not a taking if all economically viable use eliminated if wasn’t part of original title in the first place, i.e. could have been prevented under common law nuisance. o Harm/Benefit distinction dumb. Instead, should have to substantially advance state interests o Dissent: This is not valueless. There is still economically viable use. Dolan v. City of Tigard (1049) o Exactions must also be roughly proportional to the purpose want to further. o Person owned some property and wanted to develop it. City regulation requires certain amount of greenspace. City conditions permit on dedicating greenspace and a bike path. o It would not have been unconstitutional to refuse to grant the license to build because the city can regulate land use and zoning, city also has power to protect against decline of the waterways. o The exaction the court is willing to look at is the city saying “Ok, you can build, but only if you dedicate for this bike path and our greenway.” o For the bike path, the reasons given are congestion and non‐building.  Could be a nexus for congestion by reducing traffic, but they city doesn’t prove. So court remands.  The city’s problem is saying bike path “could” reduce traffic.  We want more facts about whether this will actually work. 3. 2000s Takings  Palazzolo v. RI (1025) o Guy buys property with corporation. Then some regulations come in. Corporation lapses and property transfers to the guy personally. o Guy challenges the regulations and state says that they were part of his investment backed expectations already. o Court doesn’t like idea that time would just make the regulation Ok as part of expectations. o Resolution of this is remanding to take into consideration the factors of Penn Central. There is still some value, goes from $3 million to $200,000 o What is the relationship between Palazzo and Lucas?  Denominator problem  If you want to extend Lucas, could say that there is a discrete part of property that has value, but another discrete part has been completely taken and then that’s under Lucas. o Stevens concern about new markets in specialized estates where buy only an individually regulated right.  Court also could say, Lucas said absolute value eliminated, but really it’s that you can’t leave a token value. We can then make token very large, something like $200,000 maybe which is only 6% of value left. o But Scalia said in a footnote in Lucas that 95% taking not enough to activate Lucas taking, although maybe Penn Central taking. o