PROPERTY I & II 1999-2000
Professor Krier
I.
Introduction to Fundamentals
Chapter 1 – First Possession: Acquisition of Property by
Discovery, Capture, and Creation
 real property- land
 personal property- property other than land
A. Acquisition by Discovery- the sighting or finding of
hitherto unknown or uncharted territory; frequently
accompanied by a landing and the symbolic taking of
possession, acts that give rise to an inchoate title
that must be perfected within a reasonable time by
settling in and making and effective occupation.
1. acquisition by conquest- the taking of possession
of enemy territory through force, followed by
formal annexation of the defeated territory by the
conqueror
2. occupancy theory and the principle of first in
time- the notion that being there first somehow
justifies ownership rights
3. labor theory and John Locke- the labor of one’s
body and the work of one’s hands are one’s own;
whatsoever one removes out of the state that nature
has provided and mixed his labor with, thereby
makes it his property.
B. Acquisition by Capture
1. Pierson v. Post
FACTS: Post was hunting a fox. Pierson, knowing
this, killed the fox and carried it off.
HOLDING: Property in wild animals is only acquired
by occupancy, and pursuit alone does not constitute
occupancy or vest any right in the pursuer. The
mortal wounding of an animal or the trapping or
intercepting of animals so as to deprive them of
their natural liberty will constitute occupancy.
Here, however, Post only sows pursuit.
DISSENT: (Livingston) a new rule should be
adopted: that property in wild animals may be
acquired without bodily touch, provided a pursuer
be in reach or have a reasonable prospect of taking
the animals.
a. Justinian Code- a collection of imperial
constitutions drawn up by a commission of ten persons
appointed by Justinian and published in AD 529 which
replaced all prior law.
2. Ghen v. Rich
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FACTS: Rich purchased a whale at an auction from a
man who found it on the beach washed up. The whale
had been killed at sea by the crew of Ghen’s
whaling sip which left Ghen’s identifying bomblance in the animal.
HOLDING: when all that is practicable in order to
secure a wild animal is done, it becomes the
property of the securer who has thus exercised
sufficient personal control over the wild animal.
While local trade usages should not set aside
maritime law, the custom can be enforced when it is
embraced by the entire industry and has been
concurred for a long rime by everyone engaged in
the trade. This particular trade usage was
necessary to the survival of the whaling industry,
for no one would engage in whaling if he could not
be guaranteed the fruits of his labors.
3. Keeble v. Hickeringill
FACTS: Keeble contended Hickeringill scared ducks
away from his pond resulting in damage.
HOLDING: Damages may be recovered for the
intentional frightening of wild game off another’s
land. Although no title to the game existed,
Keeble was using this land in a lawful manner.
Thus, Hickeringill interfered with this lawful use
and must pay damages.
NOTES:
(1) capture or control, in conjunction with being
first in time, guides legal analysis of the
ownership of wild animals. The present case
represents somewhat of a departure from these
rules, yet is still viewed as a natural and logical
extension of them.
a. ratione soli- refers to the conventional view that
an owner of land has possession, constructive
possession, of wild animals on the owner’s land;
landowners are regarded as prior possessors of any
animals ferae naturae on their land until the
animals take off.
b. Interference with capture- 37 states have enacted
legislation outlawing hunter harassment on stateowned land
4. Rule of Capture and Wild Animals- a trespasser who
captures a wild animal on the land of another might
still have no rights to the animal as against the
landowner, even though the land owner never had
actual possession or control and even tough the
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trespasser does. The court might say that the
landowner had constructive possession of the
animal.
5. Rule of Capture and Other Fugitive Resources
(resources that wander from place to place)- courts
sometimes liken these to wild animals and determine
their cases according to rule of capture. They
belong to the owner of the land and are a part of
it, so long as they are on or in it, and are
subject to his control; but when they escape, and
go into other land, or come under another’s
control, the title of the former owner is gone.
a. Ground water: In some states (western) water is
allocated according to the rule of prior
appropriation (the first to put it to good use).
In other states (eastern) water is allocated
according to various riparian rights.
6. Demsetz’s Theory of Property Rightsa. the emergence of new property rights takes place
in response to the desires of the interacting
persons for adjustment to new benefit-cost
possibilities
b. property rights develop to internalize
externalities when the gains of internalization
become larger than the cost of internalization
7. Externalities- a function of transaction costs;
encourage the misuse of resources. Exist whenever
some person makes a decision about how to use
resources without taking full account of the
effects of the decision.
a. not simply an effect of one person’s activity
on another person; rather, it is an effect that
the first person is not forced to take into
account.
b. Do not necessarily lead to inefficient resource
use, but do encourage it
c. Reciprocal; they arise from interactions or
conflicts among people in the use of resources
C. Acquisition by Creation- any expenditure of mental or
physical effort, as a result of which there is
created an entity, whether tangible or intangible,
vests in the person who brought the entity into
being, a propriety right to the commercial
exploitation of that entity, which right is
independent and separate from the ownership of that
entity. You own the fruits of your labor
1. Cheney Brothers v. Doris Silk Corporation
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2.
3.
4.
5.
6.
FACTS: Cheney Brothers, unable to patent or
copyright a garment pattern, sought damages for the
copying thereof
HOLDING: IF a person cannot obtain a patent or
copyright on its product, it cannot recover for the
copying of it by others. In the absence of the
statutory protection given a man’s creations by
patent or copyright law, a man’s property is
limited to the tangible objects which embody his
invention. When another creates a chattel through
imitation, the imitated person has no remedy.
Here, it is conceded that the creations of Cheney
were neither patentable nor copryrightable, and
therefore there is no remedy.
NOTES:
(1) probably the latest developing area of
property law, intellectual property has become
a hot topic in the information age. There has
been considerable development in the field
since this decision.
(2) The idea is to grant a limited monopoly: a
monopoly in order to encourage productive
incentives, but a limited one in order to
promote competition
International News Service v. Associated Pressnews is property to the first to create it
Smith v. ChanelCan imitate b/c no patent
Moore v. Regents of the University of California
FACTS: Researchers at UCLA, unbeknownst to Moore,
used specimens of his tissue to produce a
potentially lucrative cell line.
HOLDING: a person whose tissue is used for
profitable research and development without his
knowledge may not maintain a conversion act
thereunder. IT cannot be said that a person’s
tissue is property. Such a notion is at odds with
common law ideas of ethics.
Jacque v. Steenberg Homes
Private landowners should feel confident that
wrongdoers who trespass upon their land will be
appropriately punished. When landowners have
confidence in the legal system, they are less
likely to resort to self help remedies
State v. Shack
FACTS: Tejeras and Shack entered upon private
property, against the orders of the owner of that
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property, to aid migrant workers employed and
housed there.
HOLDING: Real property rights are not absolute,
and necessity, private or public, may justify entry
upon the lands of another.
NOTES:
(1) generally the right to exclusive possession is
considered the oldest and most widely
recognized right of private property in land.
This case, though, illustrates the central
limitation on the right to possession or use
of private property, i.e. it may not be used
to harm others. Here, the exclusion of Tejeras
and Shack was invalid b/c it would harm a very
disadvantaged segment of society.
7. The Right to Exclude
a. several limitations
b. legal rules limiting the right to exclude can
all be justified by the reliance interest in
property
Chapter 2 – Subsequent Possession: Acquisition of Property
by Find, Adverse Possession, and Gift
A. Acquisition by Find
1. Armory v. Delamirie
FACTS: Armory found a jewel which he took to
Delamirie, a goldsmith, for appraisal, but
Delamirie’s apprentice removed the stones which
Delamirie refused to return.
HOLDING: the finder of lost property, although he
does not acquire absolute ownership, does acquire
title superior to everyone else except the rightful
owner. Such title is a sufficient property
interest in the finder upon which he may maintain
an action against anyone (except the rightful
owner) who violates that interest. Additionally,
Delamirie was liable as he was responsible for the
actions of his apprentice
NOTES:
(1) title or ownership is relative. The rule that
the prior possessor prevails over a subsequent
possessor applies in cases involving land as
well as in cases involving personal property.
2. Hannah v. Peel
FACTS: Hannah found a broach at Peel’s home during
WWII and sought to recover it after police handed
it over to Peel.
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HOLDING: the finder of a lost article is entitled
to it against all persons except the real owner.
3. McAvoy v. Medina
FACTS: a wallet was inadvertently left at a barber
shop, a customer found it, and the barber asserted
ownership.
HOLDING: misplaced goods (items intentionally
placed by the owner where they are found and then
forgotten or left there) are deemed to be in the
bailment of the owner of the property on which they
were left
NOTES:
(1) the focus of the lost or misplaced property
cases is to determine whether it is likely
that the true owner can ever be found.
Therefore, b/c the finder was in the first
possession, he will have paramount rights. On
the other hand, where the goods have been
voluntarily placed there and forgotten, the
true owner is much more likely to be found.
As the true owner would be more likely to
return to where he remembered placing the
article, the owner of the premises will be
deemed the bailee for the true owner.
B. Acquisition by Adverse Possession
1. Theory
a. Powell- the theory upon which adverse possession
rests is that the adverse possessor may acquire
title at such time as an action in ejectment by
the record owner would be barred by the statute
of limitations.
b. Ballantine- the statute has not for its object to
reward the diligent trespasser for his wrong nor
yet to penalize the negligent and dormant owner
for sleeping upon his rights; the great purpose
is automatically to quiet all titles which are
openly and consistently asserted, to provide
proof of meritorious titles, and correct errors
in conveyancing
2. Van Valkenburgh v. Lutz
FACTS: Beginning around 1920, Lutz traveled across
a triangular tract to reach his home on a nearby
parcel and also built a shed and kept a garden on
the tract, but in 1947 P purchased the tract at a
tax sale, and when P demanded that Lutz vacate the
land, Lutz obtained a judgment that granted him a
right of way by prescription over the tract and
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then in a judicial proceeding established title to
the tract by adverse possession.
HOLDING: title to a parcel may vest in an adverse
possessor who occupies the parcel under claim of
right, protects the parcel by an enclosure,
improves or cultivates the parcel, and maintains
that state of affairs for the statutory period
NOTES:
(1) the traditional requirements for adverse
possession are that the possession be actual,
open, notorious, exclusive, adverse, or
hostile, continuous, under a claim of right,
and for the statutory period. These
requirements are variously expressed in the
statutes and the cases.
(2) The sort of entry and exclusive possession
that will ripen into title by adverse
possession is use of the property in the
manner that an average true owner would use it
under the circumstances, such that neighbors
and other observers would regard the occupant
as a person exercising exclusive dominion.
(3) Distinguish the adverse possessor’s absence
from the property, on the one hand, and
abandonment on the other. If the adverse
possessor abandons the propre – leaves with
no intention of returning – before the statute
has run, the statute stops, a new entry is
required, and the whole process must begin
anew. Distinguish also interruption by the
true owner before the statute has run – say by
bringing a successful ejectment action against
the adverse possessor, or by re-entering the
property.
(4) State of mind of the adverse possessor is
approached in three different ways: (1) it is
irrelevant (2) the required state of mind is
that he thought he owned it (3) the required
state of mind is he knew he didn’t own it, but
intended to take it.
(5) When a property interest is protected by a
property rule, the interest cannot be taken
from its owner without the owner’s consent;
all transfers are voluntary. When a property
interest is protected by a liability rule, the
interest can be taken without the owners
consent but only upon payment of judicially
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determined damages; transfers are forced.
Ordinarily adverse possession doctrine
protects (1) the owner’s interest with a
property rule before the statute of
limitations has run, then (2) the adverse
possessor’s interest with a property rule
after the statute has run.
3. Color of Title and Constructive Adverse Possession
a. claim of title is simply one way of expressing the
requirement of hostility or claim of right on the
part of the adverse possessor.
b. Color of Title, on the other hand, refers to a
claim founded on a written instrument or a judgment
or decree that is for some reason defective and
invalid. Even though this is not a prerequisite for
AP, it has certain advantages for the AP.
c. Actual possession under color of title of only
part of the land covered by a defective writing
is constructive possession of all that the
writing describes.
4. Manillo v. Gorski
FACTS: P filed a complaint seeking a mandatory and
prohibitory injunction against an alleged trespass
upon their lands. D counterclaimed for a
declaratory judgment which would adjudicate that
she had gained title to the disputed premises by
adverse possession
HOLDING: any entry and possession for the
required period of time which is exclusive,
continuous, uninterrupted, visible, and notorious,
even though under mistaken claim of title, is
sufficient to support a claim of title by adverse
possession. No presumption of knowledge arises
from a minor encroachment along a common boundary.
In such a case, only where the true owner has
actual knowledge thereof may it be said that the
possession is open and notorious.
NOTES:
(1) boundary disputes may also be resolved by the
doctrines of agreed boundaries, acquiescence,
or estoppel. The three doctrines are
interwoven by the court.
5. Mechanics of Adverse Possession
a. Howard v. Kunto
FACTS: The land occupied by Kunto was not that
to which he had record title, but he appealed a
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judgment quieting title in Howard who did have
record title.
HOLDING: where several successive purchasers
received record title to tract A under mistaken
belief that they were acquiring tract B,
immediately contiguous thereto, and where
possession of tract B is transferred and occupied
in a continuous manner for more than 10 years by
successive occupants, there is sufficient privity
of estate to permit tacking and thus establish
adverse possession as a matter of law.
b. Tacking- to establish continuous possession for
the statutory period, an adverse possessor can
tack onto her own period of adverse possession
any period of adverse possession by predecessors
in interest. Thus, separate periods of actual
possession by those holding hostilely tot he
owner can be tacked together, provided there is
privity of estate between the adverse possessors.
Privity of estate in this context means that a
possessor voluntarily transferred to a subsequent
possessor either an estate in land or physical
possession.
c. Improvements and Encroachments- buildings or
fixtures erected without right, whether in good
faith or not, become the property of the
Landlord. The modern tendency is to soften the
impact of this rule on innocent improvers either
by granting them compensation equal to the market
value of the improvement or permitting the
removal of the improvement. A party who
intentionally encroaches does so at his peril.
d. Disabilities- Most statutes give additional time
to bring an action is the owner is under a
disability. A disability is immaterial unless it
existed at the time when the cause of action
accrued.
e. AP against the government- Under the common law,
AP does not run against the government – state,
local, or federal. American courts have relied
on this rule.
6. Adverse Possession of Chattels
a. O’Keefe v. Snyder
FACTS: Snyder contended that he acquired one of
O’Keefe’s paintings by adverse possession
HOLDING: the discovery rule provides that, in
appropriate cases, a cause of action will not
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accrue until the injured party discovers, or by
exercise of reasonable diligence and intelligence
should have discovered, facts which form the
basis of a cause of action
I.
The System of Estates
Chapter 3 – Possessory Estates
A. Up from feudalism
1. Tenure
2. Feudal Tenures and Services
a. Free Tenures – In establishing their rule, the
Norman conquerors had principally in view
military security, economic support, and support
of the church. Accordingly, they developed
three major tenurial structures to organize
three social orders: men who fight, me who
work, and men who pray.
(1) military tenures – the mounted knight was the
central figure in warfare in those days and
the tenant by knight service was required to
provide a specified number of men to fight
for the king.
(2) economic tenure - to provide subsistence and
maintenance for the overlords, the tenure of
socage developed.
(3) religious tenures – service from the
ecclesiastics required, which might be knight
service or socage or singing mass every
Friday night
b. Unfree Tenures – peasants who worked the
manorial lands were called villeins.
They held
their land at the will of the lord and were
denied protection by the king’s courts.
3. Feudal incidents – Besides the services, a tenant
owed other duties and was subject to several
liabilities benefiting his lord. Feudal services
were fixed obligations.
a. homage and fealty – protection lay in the
strength and backing of a powerful overlord.
Hence, homage, binding man to man, was one of the
most significant features of feudal society.
Each military tenant did his homage to his
overlord in a solemn ceremony.
b. Aids – in a financial emergency a lord could
demand aid from his tenants
c. Forfeiture – if a tenant breached his oath of
loyalty or refused to perform feudal services,
his land was forfeited to the lord.
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d. liabilities at death of tenant –
(1) wardship and marriage – when a tenant died,
leaving an heir under 21, the tenant’s lord
was the heir’s guardian. The lord also had
the right to sell the heir in marriage.
(2) Relief – when a tenant died, the heir had to
pay the lord an appropriate sum, perhaps a
year’s rent, to come into his inheritance
(3) Escheat – if a tenant died without heirs,
the land returned to the lord from whom it
was held. Similarly, if a tenant were
convicted of a felony, the land escheated to
the lord after the king had exercised his
right to waste the land for a year and a
day.
4. Avoidance of Taxes – two ways to transfer possession
of land – A tenant in demesne could substitute
himself for some new tenant who would hold the land
from his lord or the tenant could add, without the
lord’s consent, a new rung to the bottom of the
feudal ladder, becoming a lord himself and having a
tenant who rendered him services. - Subinfeudation
5. Statute Quia Emptores (1290) – the king and his
barons, with much to lose by subinfeudation, did
much to curb this practice. The Statute Quia
Emptores prohibited subinfeudation altogether and
thus the mischief of devaluing feudal incidents.
The statute was a great statute which attempted to
shore up the feudal system but actually ended up
marking the beginning of the end.
* The major historic consequences: 1. The statute
established the principle of a free alienation of
land, which turned out to be a major force in the
development of property law and 2. In time, with the
working of escheat and forfeiture, existing mesne
lordships tended to disappear and most land came to
be directly held from the crown.
6. The Decline of Feudalism – after the Quia Emptores,
with free substitution permitted, the relation
between tenant and lord was basically an economic
one. The tenant was now the “owner” and services
and incidents were now a form of taxes. The
personal relationship was dying. After the Black
Death, survivors could obtain well-paid work outside
the manor, and many became wage earners. Wages
continued to rise and peasants continued to escape
form the communal obligations of manorial life.
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B.
The Fee Simple – out of feudalism developed a system
of estates in land. A tenant had status as a tenant
of the fee or a tenant for life. In the course of
time, status became estate. Each estate is defined
by the length of time it may endure.
1. How the fee simple developed
a. Rise of heritability- One of the key features of
feudalism after the conquest was that the land
was not owned by the possessor but was held by
the possessor as a tenant of someone else. The
tenants holding could not be inherited by his
heir, in effect the tenant had only a lifetime
tenure. Customarily, for an appropriate sum, the
lord would regrant the land to the heir. In
time, the lord recognized an obligation to admit
the dead tenant’s son and would consent to
descent in advance of death. The advance was
denoted by a conveyance from the lord “to A and
his heirs”
b. Rise of alienability – in the great expansion of
land of the rural population in the 13th century,
leaseholders were frequently tempted to sell
before they died and cut off the heirs’ right to
succession. With the increasing demand for land,
the ides that the tenant should be able to convey
the fee to another during his life openly and
without the lord’s consent began to gain
currency. Quia Emptores began, eventually, to
settle that the fee was freely alienable.
c. rise of fee simple estate – the fee simple is
absolute ownership, so far as our law recognizes
absolute ownership. It is the largest estate in
terms of duration. It may endure forever.
2. Creation of fee simple – the words “and his heirs”
inserted in a conveyance, indicated that A’s
interest in the land was inheritable by his heirs,
but such words did not give A’s prospective heirs
any interest in the land. (words of limitation,
whereas to A is a word of purchase).
3. Inheritance of a fee simple –
a. heirs – if a person dies intestate (w/o a will)
decedent’s real property descends to his or her
heirs. (persons who survive the decedent and
are designated as intestate successors under the
state’s statute of descent.
 NO ONE is an heir of the living
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
C.
Today, in almost all states, a spouse is
designated as an intestate successor of some
share of decedent’s land. Preferred heirs:
issue, is no issue – parents, if nonecollaterals
b. Issue (descendants) – is the decedent leaves
issue, they take to the exclusion of all other
kindred. Does not refer to children only but
also includes further descendants. If any child
of the decedent dies before the decedent leaving
children who survive the decedent, such a
child’s share goes to his or her children by
right of representation. (per stirpes)
 until 1925 primogeniture applied to most land
in England
c. Ancestors (parents) – by statute, parents
usually take as
heirs if the decedent leaves no issue
d. Collaterals – all persons related by blood to
the decedent who are neither descendants not
ancestors are collateral kin. (brothers,
sisters, uncles, aunts, cousins). If a decedent
leaves no spouse, no issue, no ancestors – the
brothers and sisters take in all jurisdictions.
e. Escheat – is a person died intestate w/o any
heirs, the person’s real property escheated to
the overlord, in feudal times. Now, such
property escheats to the state where the
property is located.
f. Devisees – devised land
g. Legatees – bequeathed personal property
* heirs take when decedent leaves no will, legatees
and devisees takes under a will.
The fee tail – invented to keep land safe for
succeeding generations, desire to keep land
inalienable. The purpose was to give the land to A
and his descendants generation after generation.
Expires when the original tenant in fee tail, and all
of A’s descendants are dead. Fee tail tenant had the
power to disential simply by conveying a fee simple
by deed to another.
* fee tail was abolished by Thomas Jefferson and
today, fee tail can be created only in Delaware,
Maine, Massachusetts, and Rhode Island. (in these
states a fee tail can be converted into a fee simple
by a deed executed during life, but cannot bar the
entail by will).
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
States w/o fee tail:
1. statutes provide that a limitation “to A
and the heirs of his body” creates a fee
simple in A, and that any gift over on A’s
death w/o issue is void. The statute
disentails and destroys the interests of A
and B automatically.
2. Statutes provide that a limitation “to A
and the heirs of his body” creates a fee
simple in A, but they further provide that
a gift over to B if A dies w/o issue will
be given effect if and only if, at A’s
death A leaves no surviving issue.
D. The life estate- b/c the early feudal relation
between lord and tenant involved only lifetime
tenure, the law had little problem recognizing an
estate for life.
 Two important consequences of judicial
recognition:
1. it meant that the grantor of the life
estate can control who takes the property at
the life tenant’s death
3. as land and stocks and bonds came to be
viewed as income-producing capital, trust
management for the life tenant developed
 A can transfer his life estate to B, in
Which case B has a life estate – pur autre vie
– that is, an estate that is measured by A’s
life-span, not B’s. If B dies during A’s
lifetime, the life estate passes to B’s heirs
or devisees until A dies. Every life estate
is followed by a future interest – whether a
reversion in the transferor or a remainder in
the transferee.
1. Rule against direct restraints on alienation is an
old one, going back to the 15th century or perhaps
even earlier.
a. restraints make property unmarketable
b. restraints tend to perpetuate the concentration
of wealth by making it impossible for the owner
to sell property and consume the proceeds of
sale
c. restraints discourage improvements on the land.
d. Restraints prevent the owner’s creditors from
reaching the property, working hardship on
creditors who rely on the owner’s enjoyment of
the property in extending credit.
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e.
restraints classified:
(1) disabling restraint: withholds from the
grantee the power of transferring his
interest
(2) forfeiture restraint: provides that if
the grantee attempts to transfer his
interest, it is forfeited to another
person.
(3) Promissory restraint: provides that the
grantee promises not to transfer his
interest. If valid, is enforceable by
contract remedies of damages or an
injunction.
 FEE SIMPLE: absolute restraint on a fee simple
is void, partial restraint is valid if, under
all of the circumstances of the case, the
restraint is found to be reasonable in
purpose, effect and duration.
 LIFE ESTATE: absolute restraint is void, but
a forfeiture restraint is valid.
2. valuation of life estate and remainder – for lack
of a better method, courts, taxing authorities, and
insurance companies value life estates and
remainders by resort to life expectancy tables.
3. Waste – the law of waste becomes relevant whenever
two persons or more have rights to possess property
at the same time. The central idea of the waste
concept is that A should not be able to use
property in a manner that unreasonably interferes
with the expectations of B. It is designed to
avoid waste.. the use of property that fails to
maximize the property’s value.
a. affirmative waste – arising from voluntary acts,
liability results from injurious acts that have
more than trivial effects. Generally injurious
has meant acts that substantially reduce the
value of the property in question.
b. Permissive waste – arising from a failure to
act, essentially a question of negligence and
failure to take reasonable care of the property.
4. seisin- possession of a freehold estate in land,
ownership.
E. Leasehold Estates – non-freehold possessory estates,
tenants do not have seisin.
F. Defeasible Estates – any estate can be created so as
to be defeasible upon the happening of a future
event,
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1. The most common kind of defeasible freehold estate
is a fee simple defeasible. This is an estate that
may last forever or may come to an end at the
happening of a certain event in the future.
2. A fee simple determinable is a fee simple so limited
that it will end automatically when a stated event
happens.
Sometimes called a fee simple on special
limitation, indicating that the fee simple will
expire by this limitation if it occurs. Created by
language connoting any words with a durational
aspect.
 accompanied by a future interest...future
interest is retained by the transferor in a
possibility of reverter.
3. A fee simple subject to condition subsequent is a
fee simple that does not automatically terminate but
may be cut short or divested at the transferor’s
election when a stated condition happens. Created
by language such as “but if…” “provided” “however”
etc.
 future interest retained by the transferor to
divest a fee simple subject to condition
subsequent is called a right of entry
Chapter 4 – Future Interests
A. Introduction
B. Future Interests in Transferor
1. Reversion – the interest left in an owner when he
carves out of his estate a lesser estate and does
not provide who is to take the property when the
lesser estate expires. Because reversions result
from a hierarchy of estates, they are thought of as
the remnant of an estate that has not entirely
passed away from the transferor.
* NO SUCH THING AS THE POSSIBILITY OF REVERSION!
2. Possibility of Reverter- arises when an owner carves
out of his estate a determinable estate of the same
quantum. (usually the carving of a fee simple
determinable out of a fee simple absolute. For all
practical purposes a possibility of reverter is a
future interest remaining in the transferor or his
heirs when a fee simple determinable is created.
3. Right of Entry – when an owner transfers an estate
subject to condition subsequent and retains the
power to cut short or terminate the estate, the
transferor has a right of entry.
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C.
Future Interests in Transferees
1. Remainders – a future interest that is capable of
becoming possessory at the termination of the prior
estate. It is not required that the future
interest be certain of future possession, only that
it be possible for the interest to become
possessory when the prior estate ends.
a. a remainder is vested if: 1. It is given to an
ascertained person AND 2. It is not subject to
a condition precedent (other than the natural
termination of the preceding estates)
b. a remainder is contingent if 1. It is given to
an unascertained person OR 2. If it is made
contingent upon some event occurring other than
the natural termination of the preceding
estates.
c. A remainder may be indefeasibly vested, meaning
that the remainder is certain of becoming
possessory in the future and cannot be
divested.
d. RULE TO BET ON: if the first future interest
created is a contingent remainder in fee
simple, the second future interest in a
transferee will also be a contingent remainder.
If the first future interest created is a
vested remainder in fee simple, the second
future interest in a transferee will be a
divesting executory interest.
 the owner of a vested or contingent remainder
may transfer the remainder during life, or the
owner may transfer the remainder by will or
intestacy if he dies during the life tenant’s
life, unless the instrument creating the
remainder requires the remainderman to survive
the life tenant. The general rule is that a
requirement of survivorship is not implied.
 Law has a preference for a vested remainder
and where an instrument is ambiguous, the
courts construe it in favor of a vested
remainder.
2. Executory interests – future interest in a
transferee that must, in order to become
possessory,
(1) divest or cut short some interest in another
transferee (shifting) OR
(2) divest the transferor in the future
(springing)
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a. Two Prohibitory Rules: No Shifting Interests; No
Springing Interests – Prior to 1536 common law
courts laid down two rules... the first of these
was that no future interest could be created in
favor of a transferee if the interest could
operate to cut short a freehold estate. The
second rule was that no freehold estate could be
created to spring up in the future.
b. The Rise of Use – the chancellor was concerned
with conscience, not seisin, and paid no attention
to the seisin rules of the law courts. When he
thought persons should be required to perform
their moral duties, the chancellor would step in
and protect a transferee, regardless of what his
legal rights might be. There developed in equity
a protected interest known as “use.”
 so far as the law was concerned, the feoffment
with livery of seisin created a fee simple
absolute in X; the law courts refused to
compel the feoffee to uses, X, to hold the
land for the benefit of A. The chancellor,
however, thought X had a good faith duty to
hold seisin for the benefit of A, the cest que
use, a corruption of the one for whom the
benefit was made.
 Another common method of creating a use was
the bargain of sale and deed.
 Springing uses as well as shifting uses might
be created in equity.
 Particularly b/c of its success in avoiding
those medieval taxes known as feudal
incidents, the use became universally popular.
c. The Abolition of the Use: the Statute of Uses –
provided that if any person or persons were seised
to the use of any other person or persons, the
legal estate (seisin) would be taken away from the
feoffee to uses and given to the one to whom the
benefit was made. AKA: the statute executed the
use, that is converted it into a legal interest.
 expanded legal future interests by converting
what were “shifting uses” and “springing uses”
in equity before 1536 into legal “shifting
executory interests” and “springing executory
interests”
 what are called executory interests today are
interests that would have been void prior to
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the Statutue of Uses b/c they violated the two
rules above.
 Statute seemed to have the power to destroy
the power to devise land in equity b/c it
converted equitable interests into legal
interests and land could not be devised at
law.
 Statute also made legally valid those deeds of
land that had previously been valid only in
equity.
d. Modern Executory Interests – the effect of the
statute of uses was to permit the creation of a
new estate: a fee simple subject to an executory
limitation. This is a fee simple that, upon the
happening of a stated event, is automatically
divested by an executory interest in a transferee.
 executory interests are ordinarily treated as
contingent interests, because they are subject
to a condition precedent. But where an
executory interest is to become possessory
upon an event certain to happen, it may be
treated as a vested interest.
 A possibility of reverter or a right of entry
can be created only in the transferor; an
executory interest can be created only in a
transferee.
 At common law there were differences between
the executory interest and the remainder. The
rules separating the two have been abolished
in all but a handful of states, and where
abolished, there may be no significant
differences in legal consequences between
executory interests and remainders. Modern
statutes often include executory interests in
an all-inclusive definition of a remainder.
D. Rules Furthering Marketability by Destroying
Contingent Future Interests
1. The rule in Shelley’s Case – one of the earlier
rules favoring marketability, recognized in Abel’s
case was given definite form. In addition to
furthering alienability, the rule prevented feudal
tax evasion; feudal incidents were due only if land
had descended to the heir, not if the heir took as
purchaser.
 A simplified statement of the rule:
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If one instrument creates a life estate in A,
and purports to create a remainder in persons
described as A’s heirs (or the heirs of A’s
body), and the life estate and the remainder
are both legal or are both equitable, the
remainder becomes a remainder in fee simple
(or fee tail) in A.
 the doctrine of merger merges the life estate
in A into a vested remainder in fee held by A.
the life estate cannot merge into a vested
remainder in fee simple if there is an
intervening vested life estate, blocking
merger.
 Rule in Shelley’s case applies only to
remainders and not executory interests.
 Rule applies only when the gift in remainder
refers to an indefinite line of succession,
rather than to a specific class of takers.
a. Abolition of the rule in Shelley’s case – rule
has been abolished in most states, but in few
states, however, abolition by statute is fairly
recent and does not apply retroactively.
2. The Doctrine of Worthier Title- the old common law
drew distinctions between titles acquired by
inheritance and titles acquired by purchase (that
is, other than by inheritance). Title by
inheritance was deemed worthier, so the law forbade
a person’s heir to take by purchase from his own
ancestor.
 the common law Doctrine of Worthier Title
provides that where there is an inter vivos
conveyance of land by a grantor to a person,
with a limitation over to the grantors OWN
heirs either by way of remainder or executory
interest, no future interest in the heirs is
created, but a reversion is retained by the
grantor.
 Furthers alienability, but is abolished now in
a number of states
3. Destructibility of Contingent Remainders – moved by
the requirement that someone must always be seised
of the land, and hence responsible for the feudal
dues, the judges laid down this rule:
 A remainder in the land is destroyed if it
does not vest at or before the termination of
the preceding freehold estate. If the
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remainderman is not ready to take seisin when
it is offered, he is wiped out and the seisin
moves on to the next vested estate.
 Reeve v. Long established the principle,
accepted today for determining all questions
of property rights, that where it is for the
child’s benefit, a child will be treated
retroactively as in being from the time of
conception is the child is later born alive.
a. Abolition of the destructibility doctrine – to
curb executory interests the Rule against
Perpetuities was developed. It appeared to be a
good idea to subject all contingent future
interests in transferees to one rule and to
abolish the destructibility doctrine.
4. The Rule Against Perpetuities
a. The Common Law Rule – the culmination of the long
struggle between the landowners who wanted to
keep the land within the family and the royal
judges who for centuries had tried to stand firm
against these efforts is this Rule.
 No interest is good unless it must vest, if at
all, not later than twenty-one years after
some life in being at the creation of the
interest. (property may be tied up with
contingent interests for lives in being plus
21 years thereafter, but no longer)
 Permits a man of property to provide for all
of those in his family whom he personally
knows and the first generation after them upon
attaining majority.
 It is a rule of logical proof. You must prove
that a contingent interest will necessarily
vest or fail within 21 years after some life
in being at the creation of the interest. If
you cannot prove that, the contingent interest
is void form the outset.
 Looking for a person who will enable you to
prove that the contingent interest will vest
or fail within the life of, or at the death
of, the person, or within 21 years after the
death of the person. This person, if found,
is called the validating or measuring life.
 Validating lives do not have to be people
mentioned in the instrument, but they do have
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to be people who can affect vesting of the
interest.
 Future interests retained by the transferor reversions, possibilities of reverter, and
rights of entry – are not subject to the rule
against Perpetuities. They are treated as
vested as soon as they arrive.
(1) gifts to classes- a gift to a class is
invalid if it might vest in one member of
the class too remotely.
 the gift to the class must stand or fall as a
unit
 If the gift to one member of the class might
vest too remotely. The whole class gift is
void.
 A class gift is not vested in any member of
the class until the interests of all members
have vested. A gift that is subject to open
is not vested under the Rule against
Perpetuities
 EACH and EVERY member of the class must be
IDENTIFIED and ALL conditions precedent for
EACH and EVERY member of the class must be
satisfied within the perpetuities period.
Chapter 5 - Co-ownership and Marital Interests
A. Common Law Concurrent Interests
1. Types, Characteristics, Creation five types of concurrent interests
(partnerships and coparceny are ignored)
leaving only tenancy in common, the joint
tenancy, and the tenancy by the entirety.
 Tenants in common- have separate but undivided
interests in the property; the interest of
each is descendible and may be conveyed by
deed or will. Each tenant in common owns an
undivided share of the whole.
 Joint tenants – have the right of survivorship
and together are regarded as a single owner.
In theory then, each owns an undivided whole
of the property. When one joint tenant dies,
nothing passes to the surviving joint tenant
or tenants. Rather, the estate simply
continues in survivors freed from the
participation of the decedent, whose interest
is extinguished. Common law insisted that the
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


interests be equal in al respects and four
“unities” were essential to a joint tenancy.
(1) time- interest of each tenant must be
acquired or vest at the same time
(2) title- all joint tenants must acquire
title by the same instrument or by
joint adverse possession. A joint
tenancy can never arise by intestate
succession or other act of law.
(3) Interest- all must have equal,
undivided shares and identical
interests measured by duration.
(4) Possession- each must have a right to
possession of the whole. After a
joint tenancy is created, however,
one joint tenant can voluntarily give
exclusive possession to the other
joint tenant.
Tenancy by the entirety- can be created only
in husband and wife. The tenancy by the
entirety is like the joint tenancy in that the
four “unities” plus a fifth- marriage, are
required, and the surviving tenant has the
right of survivorship. Considered to hold as
one person at common law; both are seised of
the entirety. Neither husband nor wife,
acting alone, has the right to judicial
partition of property held as tenants by the
entirety. Divorce terminates the tenancy by
entirety b/c it terminates the marriage, which
is a requisite for a tenancy by entirety.
Avoidance of probate- a joint tenancy is the
practical equivalent of a will, but at the
joint tenant’s death probate of the property
is avoided.
* probate- the judicial supervision of the
administration of the decedent’s property
which passes to others at the decedent’s
death: the probate court appoints an
administrator or executor who collects the
decedent’s assets, pays the debts and taxes,
and distributes or changes title to the
property to the beneficiaries.
A joint tenancy avoids probate b/c no interest
passes on the joint tenant’s death. Under the
theory of joint tenancy, the decedent’s
interest vanishes at death and the survivor’s
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ownership of the whole continues without the
decedent’s participation.
 Congress has provided that when a joint tenant
dies, his share of the jointly held property
is subject to federal estate taxation. Under
the state inheritance taxes, the fractional
share of a joint tenancy owned by the decedent
is taxed; the federal who-furnished-theconsideration test is not followed.
2. Service of Joint Tenancies
a. Riddle v. Harmon
FACTS: Mr. and Mrs. Riddle purchased a parcel of
real estate, taking title as joint tenants.
Several months before her death, Mrs. Riddle
retained an attorney to plan her estate. He
advised her that the property was held in joint
tenancy and that, upon her death, the property
would pass to her husband. She requested that
the joint tenancy be terminated so that she could
dispose of her interest by will. As a result,
the attorney prepared a grant deed whereby Mrs.
Riddle granted to herself an undivided one-half
interest in the property.
HOLDING: the court discards the archaic rule
that one cannot enfeoff oneself which, if
applied, would defeat the clear intention of the
grantor. There is no question but that the
decedent here could have accomplished her
objective by one of a variety of circuitous
processes. One joint tenant may unilaterally
sever the joint tenancy w/o the use of an
intermediary device.
IMPORTANT PRECEDENTS: Clark v. Carter (strawman
is indispensable and the two-to-transfer notion);
Burke v. Stevens (intermediary strawman used);
Reiss v. Reiss (transferred bare legal title to
son, as a trustee for her use and benefit. The
son promised to re-convey the property to his
mother or to whomever she selected at any time
upon her demand and the court upheld the
arrangement); Henderickson v. Minneapolis Federal
Sav. & Loan ASS’n (no fictional transfer by
conveyance and re-conveyance through a strawman
was required)
 Uniform simultaneous Death Act- provides that
one-half the property is distributed as if A
survived and one-half as if B survived.
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
Uniform Probate code- provides that the murder
severs the joint tenancy and coverts it into a
tenancy in common. The killer loses his right
to survivorship in the decedent’s share.
b. Harms v. SpragueFACTS: Plaintiff William Harms and his brother
John Harms took title to real-estate as joint
tenants. Meanwhile, defendant Sprague entered
into an agreement with the Simmons (who owned
property in the town) to purchase their property.
B/c Sprague had no security deposit, he asked
john Harms to so-sign the note and give a
mortgage on his interest I joint tenancy
property. John agreed and the two jointly and
severally executed a promissory note to the
Simmons’s. John executed a mortgage in favor of
the Simmons, on his undivided one-half interest
in the joint tenancy property. William was
unaware of the mortgage given to his brother.
John Harms died and by his will, Sprague was the
devisee of his entire estate.
HOLDING: the court found that b/c a mortgage
given by one joint tenant of his interest in the
property does not sever the joint tenancy, the
plaintiff’s right of survivorship became
operative upon the death of his brother. The
mortgage executed by John Harms does not survive
as a lien on the plaintiff’s property – a
surviving joint tenant succeeds to the share of
the deceased joint tenant by virtue of the
conveyance which created the joint tenancy, not
as a successor of the deceased. While John was
alive his mortgage existed as a lien on his
interest in the join tenancy, but upon his death
his interest ceased to exist and along with it
the lien of the mortgage
 title theory- under this form of mortgage the
mortgagee takes legal title to the land; the
mortgagor has only the equity of redemption.
 Lien theory- hold the mortgagor keeps legal
title and the mortgagee has only a lien on the
property.
3. Relations Among Concurrent Owners- “Each tenant
owns an interest in the fee and each has an equal
right to possession of the whole... neither a joint
tenant nor a tenant in common can do any act to the
prejudice of his covenants in their estate” By
25
definition each tenant is entitled to possession of
the entire parcel of land, yet he cannot exercise
that possession without coming into conflict with
the reciprocal right of his co-tenant.
a. Partition- the privilege of each co-owner to
transform a concurrent estate into estate held in
severalty. Equitable action of partition is
necessary if termination of the tenancy can not
be accomplished through a voluntary agreement.
The action is available to any joint tenant or
tenant in common; it is unavailable to tenants by
the entirety.
i. Delfino v. VealencisFACTS: plaintiff and defendant own, as
tenants in common, real property in Conn. The
property consists of 20.5 acres of land a
dwelling of the defendant in the extreme western
end of the property. The defendant occupies the
dwelling and a portion of the land, form which
she operates a rubbish and garbage removal
business. The plaintiffs, one of whom is a
residential developer, propose to develop the
property, upon partition, into residential
building lots. Defendant moved for a judgment of
in-kind partition and the court denied and
ordered the property sold at auction with the
proceeds to be given to the parties in accordance
with their interests.
HOLDING: It has long been the policy of the
court to favor in-kind partitions to sale.
Partition by sale should be ordered only if: (1)
the physical attributes of the land are such that
a partition in-kind is impracticable or
inequitable; (2) the interests of the owners
would better be promoted by a partition by sale.
Since the property in this case may practicably
be physically divided, and since the interests of
all owners will better be promoted is a partition
in-kind is ordered, we conclude that the trial
court erred in ordering a partition by sale, and
that, under the facts as found, the defendant is
entitled to partition of the property in-kind.
b. Sharing the Benefits and Burdens of Co-ownershipthere is a need for independent property rules to
determine how the benefits and burdens of
ownership are to be shared by the co-owners
i. Spiller v. Mackereth-
26
FACTS: Plaintiff and defendant owned a
building in downtown Tuscaloosa as tenants in
common. when a lessee, which had been renting
the building vacated, Plaintiff entered and began
using the structure as a warehouse. Defendant
then wrote a letter demanding that Plaintiff
either vacate half of the building or pay half of
the rental value, and, when plaintiff did
neither, she brought suit. The trial court
awarded defendant rent money and plaintiff
appealed
HOLDING: Each tenant in common has an equal
right to occupy; and unless the one in actual
possession denies to the other the right to
enter, or agrees to pay rent, nothing can be
claimed for such occupation.
 since there was no agreement to pay rent,
there must be evidence which establishes
ouster before plaintiff is required to pay
rent to defendant. Ouster can describe either
(1) the beginning of the running of the
statute of limitations for adverse possession
or (2) the liability of an occupying co-tenant
for rent to other co-tenants.
 Fiduciary duties- generally co-tenants are not
fiduciaries with respect to each other; each
co-tenant is expected to look after his or her
own interest.
A fiduciary duty is imposed
most commonly in one of two situation:
(1)where one co-tenant buys in concurrently
owned property at a mortgage foreclosure or
tax sale and then asserts a superior title
against co-tenants and (2) where a claim of
adverse possession by the co-tenant in
exclusive possession arises.
ii. Swartzbaugh v. SampsonFACTS: plaintiff
iii. Accounting for Benefits, Recovering Costsconcurrently owned property can yield a
variety of benefits. Of course, concurrent
ownership can also give rise to a variety of
expenditures. A co-tenant making such
expenditures might seek to recoup some or
all of them through a partition action or an
action for an accounting or an action for
contribution from other cotenants.
27
(1)
(2)
(3)
(4)
Rents and profits: in all states, a
cotenant who collects from third
parties rents and other payments
arising from the co-owned land must
account to cotenants the amounts
received... he must account for net
rents, royalties, and other proceeds in
excess of his share. This is only
based on actual receipts, not market
value.
Taxes, mortgage payments and other
carrying charges: a cotenant paying
more than his share of taxes, mortgage
payments, and other necessary carrying
charges generally has the right to
contribution from the other cotenants,
at least up to the amount of the value
of their share in the property. This
imposes on each a duty to contribute to
the extent of his proportionate share
the money required to make such
payments.
Repairs: as to necessary repairs, a
cotenant making or paying for them has
no affirmative right to contribution
from the other cotenants in absence of
an agreement. This is considered the
rule by “weight of authority and
reason.” The character and extent of
repairs are too uncertain for the law
to settle. Cotenant does receive credit
for reasonable repairs in a partition
action, though.
Improvements: as with repairs, a
cotenant has no right to contribution
from other cotenants for expenditures
for improvement and receives no credit
for the cost of the improvements in
accounting or partition actions. The
general rule is that the interests of
the improver are to be protected if
this can be accomplished without
detriment to the interests to the other
cotenants. In accounting for rents and
profits, the improver is allowed all
increments in value (if any)
attributable to the improvements.
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Part III Leaseholds: The Law of Landlord and Tenant
Chapter 6 – Tradition, Tension, and Change in LandlordTenant Law
A. The Leasehold Estate- tenancies, or leaseholds – of
which the principal ones are the term of years, the
periodic tenancy, and the tenancy at will – are nonfreehold estates.
1. The Term of Years- an estate that lasts for some
fixed period of time or for a period computable by
formula that results in fixing calendar dates for
beginning and ending, once the term is created or
becomes possessory. Must be for a fixed period but
it can be terminable earlier upon the happening of
some event or condition. No notice of termination is
necessary to bring the estate to an end.
2. The Periodic Tenancy- a lease for a period of some
fixed duration that continues for succeeding periods
until either the landlord or tenant gives notice of
termination. If notice is not given the period is
automatically extended for another period.
 Common law rules: half a year’s notice is
required to terminate a year-to-year tenancy.
For any periodic tenancy less than a year, a
notice of termination must be given equal to
the length of the period, but not to exceed
six months.
 Death: the death of the landlord or tenant
has no effect on the duration of a term of
years or periodic tenancy, but it does on the
tenancy at will.
3. The Tenancy at Will- a tenancy of no fixed period
that endures so long as both landlord and tenant
desire. If the lease provides that it can be
terminated by one party, it is necessarily at the
will of the other as well IF a tenancy at will has
been created. The tenancy at will ends, among other
ways, when one of the parties terminates it. It also
ends at the death of one of the parties.
a. Garner v. GerrishFACTS: In 1977 Robert Donovan owned a house and
leased his premises to tenant Lou Gerrish. With
respect to the duration of the tenancy, the lease
provides it shall continue “for and during the
quiet enjoyment form the first day of May, 1977
which term will end – Lou Gerrish has the privilege
of termination [sic] this agreement at a date of
his own choice. Donovan dies and Garner, the
29
executor of Donovan’s estates, served Gerrish with
a notice to quit the premises. When Gerrish
refused, Garner commenced this summary proceeding
to have him evicted.
ISSUE: whether a lease which grants the tenant the
right to terminate the agreement at a date of his
choice creates a determinable life tenancy of the
tenant or merely establishes a tenancy at will.
(or in other words, whether the lease should be
literally construed to grant the tenant alone the
right to terminate at will, or whether the landlord
is accorded a similar right by operation of law.
HOLDING: the lease expressly and unambiguously
grants to the tenant the right to terminate, and
does not reserve to the landlord a similar right.
To hold that such a lease creates a tenancy
terminable at the will of either party would
violate the terms of the agreement and the express
intent of the contracting parties.
* the lease in this case simply grants a personal
right to the named lessee, Gerrish, to terminate at
a date of his choice, which is a fairly typical
means of creating a life tenancy terminable at the
will of the tenant.
4. The Tenancy at Sufferance – arises when a tenant
remains in possession (holds-over) after termination
of the tenancy. Common law rules give the landlord
confronted with the hold-over essentially two
options: eviction (plus damages) or consent (express
or implied) to creation of a new tenancy.
a. Crechale & Polles, Inc. v. Smith
FACTS: Crechale and Polles, Inc. entered into a
lease agreement with John D. Smith and Gloria
Smith. The lease was for a term of five years.
Smith was informed near the end of his lease that
the new building which he planned to occupy would
not be complete until a moth or two after his
present lease expired. Arranged a meeting with his
landlord for negotiating an extension of the lease
on a month-to-month basis. Crechale maintains that
he told Smith to he did not want to get involved in
a month-to-month while Smith asserts that cRechale
said he could stay. Smith’s attorney presented a
lease that Crechale refused to sign, saying “oh go
ahead…it’s alright.” Later letters were sent back
and forth confirming and denying the oral
agreement. Crechale eventually stopped accepting
30
B.
checks from Smith and refused to inventory. Later,
Crechale wrote to Smith telling him he saw the
situation as a hold-over and that he was treating
it as a renewal to the yearly lease. Crechale
started to suit to recover back rent.
HOLDING: the appellant is not entitled to require
appellees to p0ay rent for a new term of the rental
contract as a hold-over tenant b/c Crechale at one
point wrote to Smith denying their agreements and
demanding that Smith vacate the premises.
According to AmJUR, once the LL has once exercised
his election not to hold the tenant for another
term, his right to hold him is lost. The landlord
refused to accept Smith’s check as payment then
later attempted to change his position by telling
tenant his was going to be treated as a hold-over
tenant.
 in most jurisdictions holding-over gives rise
to a periodic tenancy; in the balance, it
results in a term.
 The tenancy resulting form the hold-over is
usually subject to the same terms and
conditions as those in the original lease,
unless the parties agree otherwise or unless
some term or conclusion is regarded as
inconsistent with the new situation.
 Holds that the double rent statute was
intended by the legislature to provide the
sole action for damages as the result of the
tenant’s holdover. The common law rule has
been abrogated once and for all and may no
longer be used to impose the renewal of an
expired lease.
the Lease- an arrangement that resembles a lease –
indeed, an arrangement explicitly declaring itself, in
writing, to be a lease – might nevertheless be held by
the courts to amount to something else, such as a
license or a life estate.
1.
Bearing on the question are:
a. intentions of the parties
b. the number of restrictions on use
c. the exclusivity of possession
d. the degree of control retained by the granting
party, the presence of absence of incidental
services
2. It matters primarily whether or not an arrangement
is a lease b/c a lease gives rise to the landlord31
C.
tenant relationship, which carries with it certain
incidents – certain rights and duties and
liabilities and remedies – that do not attach to
other relationships
3. A lease is a conveyance and a contract
4. Statute of Frauds- intended to prevent fraud,
provides that leases for more than one year must be
in writing
5. Form leases- standardized documents offered to all
tenants on a take-it-or-leave-it basis, with no
negotiation over terms (seller is trying to avoid
the costs of negotiating and drafting a separate
agreement with each purchaser)
Selection of Tenants- once free to discriminate,
landlords are now constrained.
1. Federal Fair Housing Act (1868)a. partially exempts religious groups and private
clubs under certain circumstances, single family
houses sold or rented by the owner, rooms in
dwellings containing living quarters occupied by
no more than four families living independently of
each other
b. attempts to combat discrimination run back to the
adoption of the 14th amendment and its guarantee of
equal protection
c. as originally enacted in 1968, the FHAA did not
prohibit discrimination on the grounds of sex,
handicap, or familial status. Sex discrimination
was added to the Act in 1974; amendments in 1988
added the prohibitions regarding familial status
and handicapped persons.
2. The Civil Rights Act of 1866 provided that “all
citizens of the US shall have the same right in
every State and Territory as is enjoyed by white
citizens thereof to inherit, purchase, lease, sell,
hold, and convey real and personal property.
d. Soules v. US Dept. of Housing and Development
FACTS: Soules attempted to rent an apartment from
defendant realtor, Downs, who managed and rented
several properties. Downs asked Soules about her
children’s ages before allowing her to see the
apartment due to the elderly neighbors below the
unit. Soules contacted HOMES alleging
discrimination.
HOLDING: Because the question concerning the age
of the Soules’ child was motivated by what the ALJ
considered legitimate reasons – securing quiet
32
neighbors for the elderly downstairs, he shifted
the burden to the petitioners to demonstrate that
Downs’ allegedly legitimate reason for not renting
to the Soles the apartment was pretextual. Soules
did not carry the burden.
NOTES:
(1) a discriminatory motive need not be proved in
order to make out a prima facie case under
the Federal Fair Housing Act; proof of
discriminatory effect is sufficient. Claims
under the civil rights act probably do
require proof of intentional or purposeful
discrimination.
(2) Even if a prima facie case of disparate
impact of numerical occupancy restriction on
families with children was made out,
occupancy restriction could be justified on
ground it maintained economic value of the
property.
(3) Many states and localities prohibit
discrimination in the leasing of housing.
State and local measures may not, of course,
operate to narrow the rights and remedies
available under federal law, but they may and
sometimes do have a broader reach, covering,
for example, marital status and sexual
orientation.
(4) FHA provides for the award of reasonable
attorney’s fees to successful aggrieved
parties from losing landlords. This is to
encourage victims of discrimination to seek
judicial relief. Award of attorney’s fees
for defendants who prevail is permitted only
if the complaint is frivolous or in bad
faith.
e. Bronk v. Ineichen
FACTS: Plaintiffs, profoundly deaf women, sued
their landlord for not allowing them to have a
hearing dog, despite his no-pets policy.
HOLDING: Given the level of uncertainty and
conflicting evidence about the dog’s training
level, it was well within the province of a
rational jury to conclude that the dog’s utility
to the plaintiffs was as a simple house pet and
weapon against cranky landlord, and not
necessarily in that order. If the dog was not
necessary as a hearing dog, then his presence in
33
D.
E.
the townhouse was not necessarily a reasonable
accommodation.
Delivery of Possession
1. Hannan v. Dusch
FACTS: Hannan, the leasee, alleged that Dusch, the
lessor, failed to deliver possession of rented
property by allowing a former tenant to remain in
possession.
HOLDING: Under the American Rule, a landlord does
not impliedly covenant against the wrongful acts of
others, and is not responsible for the tortious
acts of third parties unless he expressly contracts
so. Where a new tenant fails to obtain possession
of rented premises solely b/c a former tenant
wrongfully holds over, his remedy is against the
former tenant and not the landlord. Under the
English Rule, in the absence of express provisions
to the contrary, there is I every lease an implied
covenant by the landlord that the premises will be
open to entry by the tenant at the time of the
beginning of the term.
2. Case law on the matter of delivery of possession
remains divided, with substantial support for both
the English and the American rules. Under the
American rule, the tenant’s remedies are against
person wrongfully in possession; He may sue to
recover possession and damages. AS to remedies
under the English rule, the tenant may terminate
the lease, sue for damages, take possession of the
remainder of the property if the third party only
possesses a portion, he may stop paying rent, go
directly against the third party, and may collect
appropriate damages
3. The American rule seems to be founded on the
argument that the tenant has sufficient legal and
equitable remedies available to protect himself
against a third party wrongfully in possession and
a greater incentive to use them than the landlord.
Subleases and Assignments
1. Ernst v. Conditt
FACTS: after Ernst leased the property to Rogers,
who assigned his lease to Conditt, Ernst sought
damages from Conditt for past due rent and removal
of improvements
HOLDING: Under the common-law rule, if an
instrument purports to transfer the leasee’s
interest for the entire remainder of the lease
34
2.
term, an assignment has occurred. However, if the
instrument purports to transfer the leasee’s
interest for any length of time less than the
remainder of the lease term, a sublease has been
established. Under the modern rule, the intention
of the parties governs in constructing deeds,
leases and other written transfers of property
interests. Here, under both common law and the
modern rule, the agreement between Rogers and
Conditt is an assignment rather than a sublease.
Rogers did not retain any interest in the lease,
and he also did not reserve a right of re-entry in
the event of a breach of any of the conditions.
Kendall v. Ernest Pestana, Inc.
FACTS: Ernest Pestana, Inc. Arbitrarily withheld
permission from Kendall, its tenant, to sublet its
leasehold.
HOLDING: Absent contractual language to the
contrary, a lessor may not arbitrarily withhold
consent to an assignment. The basic social policy
in this area is that interests in property,
including those of a leasehold nature, should be
freely alienable. Restrictions on alienability are
to be strictly construed against the lessor. The
lessor does have a reversionary interest in the
property, and therefore is entitled to assurance
that the lessee will not sublet to an irresponsible
person who may commit waste. This is a
commercially reasonable rationale for denying
permission to sublet.
There are no doubt others.
Absent some sort of reasonable basis for denial of
permission, however, it seems that public policy
favoring free alienability should override whatever
minor interest a lessor might have in arbitrarily
denying permission to sublet. The major arguments
in favor of retaining the right are unpersuasive.
The lessor’s common law right to look to no one but
the lessee for rent has been curtailed. The
argument that the lessee could have bargained for
free subletting does not stand up to scrutiny.
What the parties contemplated is not always clear,
and doubts should be resolved in favor of
alienability. Finally, the argument based on stare
decisis is also to be found wanting. When changed
conditions warrant overruling precedent, the court
may do so. Here, since the complaint alleged that
35
F.
Pestana had unreasonably withheld approval, a cause
of action was stated.
NOTES:
(1) residential real property leases involve
different public policies than commercial real
property leases. No state court has acted to
create a reasonableness requirement in a case
involving only a residential lease. Courts
are not precluded that there is such a
necessity of reasonable alienation of
residential building space that they ought to
impose on residential landlords a
reasonableness requirement to which they have
not agreed.
(2) It is never “commercially reasonable” to deny
consent to a transfer solely on the basis of
personal taste, convenience or sensibility as
the court in Kendall puts it.
(3) Rule in Dumpor’s Case: would terminate the
prohibition against assignment when the
landlord consents to an assignment unless he
specifically reserves the right to prohibit
future assignments
The Tenant Who Defaults
1. The Tenant in Possession
a. Berg v. Wiley
FACTS: Wiley, lessor of commercial property to
Berg for the purpose of operating a restaurant
thereon, locked Berg out of the premises when
Berg delayed making certain remodeling changes to
meet health code requirements.
HOLDING: The evidence amply supports the jury’s
finding that Berg did not abandon or surrender
the premises, and the lockout was thus not
justified on the ground of abandonment and
surrender. AS to self-help procedures employed
by landlords to remove defaulting tenants, the
common law rule was to permit such removal if
accomplished peacefully. Wiley contended that
only actual or threatened violence constitutes a
nonpeaceable entry. This is not correct. In
response to a long-applied policy to discourage
landlords from taking the law into their own
hands, the modern trend is to dispossess a
breaching tenant, and this represents the rule
that should be applied here. A landlord may not
remove a breaching or defaulting tenant’s
36
b.
possessions or bar tenant’s access to the
leasehold without resorting to judicial remedies.
Wiley’s failure to resort to judicial remedies
rendered the lockout wrongful as a matter of law.
NOTES:
(1) the court’s reasoning would seem to apply to
all leases, residential and commercial
alike. The reasons that may be states to
justify treating residential leases
differently are that loss of residence has a
greater psychological impact than loss of
possession of a place of business, and the
need for immediate replacement of commercial
space is less vital. Moreover, in the
commercial setting, there is more likely to
be equal bargaining power between the
parties
(2) several state courts have invalidated
another related self-help remedy- distraint,
or distress for rent – on due process
grounds. Under the common law remedy of
distress for rent, a landlord could seize a
defaulting tenant’s property found on the
premises and retain it until payment of
overdue rent, all without prior hearing.
The absence of prior hearing has proved
vulnerable to modern courts.
Note: Summary Proceedings
(1) at one time self-help was a very important
remedy for the landlord who sought to
recover possession of leased premises,
because the only alternative was a
cumbersome, time-consuming, common-law
procedure called ejectment.
(2) A response to the shortcomings of the system
began to develop in the 19th century –
legislative provisions for summary
proceedings. Today every state provides
some form of summary proceedings.
(3) Summary proceedings are intended to be just
what the name implies – a quick and
efficient means by which to recover
possession and in some jurisdictions rent,
after termination of a tenancy.
(4) Any matter extrinsic to the issue of
possession is normally excluded.
37
(5)
The difficulty is that typical summary
procedures can be time-consuming and
expensive, even if uncontested.
c. Note: Landlord’s Remedies in Addition to
Eviction
2. The Tenant Who Has Abandoned Possession
a. Sommer v. Kridel
FACTS: Kridel, the lessee, vacated the apartment
which he leased from Sommer, before the end of
the lease term.
HOLDING: A landlord does have an obligation to
make a reasonable effort to mitigate damages when
a tenant defaults on a lease. The landlord’s
duty to mitigate consists of making reasonable
efforts to re-let the apartment. The burden of
proof shall be upon the landlord to establish
that he used reasonable diligence in attempting
to re-let the premises. Among the factors to be
considered in determining whether the landlord
has exercised reasonable diligence are whether
the landlord has offered to show the apartment to
any prospective tenants, or whether the
availability of the apartment was advertised in
local newspapers. Here, despite the availability
of a prospective tenant who was ready, willing
and able to rent the apartment, Sommer allowed
the apartment to lie empty in order to increase
the amount of damages. Sommer could have
reasonable avoided the damages which accrued by
virtue of the apartment lacking a tenant.
NOTES: the Restatement offers other
justifications than the court in its surprising
position against the duty of mitigation:
abandonment of property is an invitation to
vandalism, and the law should not encourage such
conduct by putting a duty of mitigation of
damages on the landlord.
 Surrender: is a term of art that connotes
quite neatly a tenant’s offer to end a
tenancy. It terminates the lease, provided,
of course, that the landlord accepts the
tenant’s offer. If he does- if the surrender
is effected- this extinguishes the lessee’s
liability for future rent but not for accrued
rent or for past breaches of other covenants.
 Although Sommer refers to the no-mitigation
rule as the majority rule, according to a
38
G.
recent opinion by the Supreme Court of Texas,
forty-two states and the D. of C. now hold
that landlords have a duty to mitigate
damages.
 Court in Sommer held that the landlord must
treat the abandoned premises as “vacant stock”
and presumably the landlord must take the same
effort to rent the abandoned premises as he
makes to rent other vacant units.
b. Notes: Landlord’s Remedies and Security Devices
(1) rent and damages: the landlord’s right to
sue for back rent and damages occasioned by
the tenant’s breach of lease obligations is
straightforward. If the tenant is in
possession, the landlord may also terminate
the lease and recover possession.
Associated with the doctrine of anticipatory
breach (or repudiation)
(2) security devices: there is an old saw that
the landlord’s best security is judicious
selection of tenants. Most landlords want
more and they have developed techniques to
protect themselves:
a. security deposits: the purpose is to
protect the landlord in the event a
tenant defaults in rent, damage to the
premises, or otherwise breaches the
lease. In practice the landlord has an
incentive to imagine all sorts of
reasons why he should be entitled to
retain the deposit and with money in
hand he has the leverage to permit
abuse.
b. Other techniques: considerations,
bonuses for the execution of the lease,
designating the payment as advance rent,
or having a liquidated damages clause.
Duties, Rights, and Remedies (Especially Regarding the
Condition of the Condition of the Leased Premises)
- leases give rise to a problem called :moral hazard,”
a piece of jargon first used to describe the
“tenancy of an insured to relax his efforts to
prevent the occurrence of the risk that he has
insured against b/c he has shifted the risk to the
insurance company.” Once a lease is entered into,
the landlord has an incentive to neglect everyday
repairs b/c the costs of neglect are borne primarily
39
by tenants. Tenants, in return, have an incentive
to neglect maintenance, especially towards the end
of the term, b/c the costs of neglect will soon
shift to the landlord.
1. Landlord’s Duties; Tenant’s Rights and Remedies
- the early common law implied covenants concerning
title and possession, but not concerning the
condition of the premises. Absent some clause in
the lease providing otherwise, the tenant took the
premises “as is” and landlords were under no
obligation to warrant their fitness.
- The process of change began well over a century ago
and led to the development of a body of law that was
for a long time, very stable. But with the 12960’s
there began a period of sweeping reform – most of it
concerned with residential tenancies, much of it
initiated by courts rather than legislatures.
- The reforms have not so much replaced conventional
doctrine as riddled it. A given jurisdiction might
adopt one new reform and not another.
a. Quiet Enjoyment and Constructive Eviction
(1) Reste Realty Corp v. Cooper
FACTS: After being sued for back rent, Cooper
claimed the defense of constructive eviction
due to the substantial amount of water in her
premises after every rain storm.
HOLDING: Ordinarily a covenant of quiet
enjoyment is implied in the lease. When there
is such a covenant, whether express or
implied, and it is breached substantially by
the landlord, the doctrine of constructive
eviction is available as a remedy for the
tenant. An act or omission by the landlord
which renders the premises substantially
unsuitable for the purposes for which they are
leased, or which seriously interferes with the
beneficial enjoyment of the premises, is a
breach of the covenant of quiet enjoyment and
constitutes a constructive eviction of the
tenant. Here, there was sufficient
interference with the use and enjoyment of the
leased premises to justify Cooper’s departure
and to relieve her from the obligation to pay
rent.
NOTES:
(1) under the common law, a breach by a
landlord gave a tenant a cause of action
40
(2)
(3)
(4)
(5)
for damages, but not the right to suspend
rent payments or terminate the tenancy.
The obligation to pay rent was dependent
upon the tenant’s having possession
undisturbed by the landlord, however. If
the disturbance was so substantial as to
amount to eviction, and if the tenant
thereafter abandoned the premises, then
it is as though the tenant were evicted
(the eviction was constructive). And
once evicted, of course, the tenant was
relieved of the obligation to pay rent.
The covenant of quiet enjoyment was
initially limited to cases in which the
tenant actually ousted physically, but
with time it was expanded to include
beneficial enjoyment.
Without doctrines of quiet enjoyment and
constructive eviction, breach of such
obligations would ordinarily entitle the
tenant only to sue for damages. With the
doctrines, the tenant may also abandon if
the breach is substantial.
Eviction is not necessary to complete the
breach. A tenant should be able to stay
in possession and sue for damages equal
to the difference between the value of
the property with and without the breach.
The Illegal Lease: The court sketched
out the contours of the illegal lease
doctrine in a quick series of decisions
after Brown v. Southall Realty Company.
It does not apply if code violations
develop after the making of the lease.
Minor technical violations do not render
the lease illegal, nor do violations
which the landlord had neither actual nor
constructive notice. A tenant under the
illegal lease is a tenant at sufferance
and the landlord is entitled to
reasonable rental value of the premises,
given their condition. From the tenant’s
point of view the chief attraction of the
illegal lease is the leverage it
provides: the tenant can withhold rent
and still stave off the landlord’s
41
inevitable action to evict for
nonpayment.
b. The Implied Warranty of Habitability
(1) Hilder v. St. Peter
FACTS: Hilder leased an apartment from St.
Peter. During the course of the tenancy
various problems with the apartment manifested
themselves, including sewage leaks, nonfunctioning toilets, water leaks, failing
plaster, and broken locks. These were brought
to St. Peter’s attention, but nothing was
done. Hilder paid the agreed rent, but after
14 months of renting the premises, she brought
an action seeking recovery of rental monies.
The trial court awarded damages to Hilder and
St. Peter appealed.
HOLDING: An implied warranty of habitability
exists in residential leases. The old view of
leases was that the lessee took the property
as he found it. The view was proper in an
agrarian society, but in a modern urban
setting, this is improper. The modern tenant
bargains for viable habitation, and if he
receives less, he is not getting that for
which he contracts in the lease. For this
reason, a rented dwelling which is not
habitable amounts to a breach of contract by
the lessor, and standard contract damages are
available, as well as tort damages therefrom.
NOTES:
(2) the implied warranty of habitability does not
render pointless the doctrines of quiet
enjoyment, constructive eviction, and illegal
leases considered earlier. First of all, a
good handful of jurisdictions have yet to
adopt the IWH. Second, the IWH generally does
not apply across the board to all residential
leases; single family residences might be
excluded, for example, or agricultural or
long-term leases might be excluded. Third, a
majority of jurisdictions has declined to
extend the idea to an implied warranty of
fitness or suitability for purpose in
commercial leases.
(3) The standard of IWH and the shortcomings that
amount to breaches of the standard, appear to
vary among jurisdictions, but the differences
42
are probably more nominal than real when it
comes to actual cases. The place has to be
uninhabitable in the eyes of a reasonable
person.
(4) A number of cases agree with Hilder that in
the case of a breach, the tenant may avail
himself of al of the basic contractual
remedies – damages, recession, and
reformation. The tenant may withhold rent,
retain possession, and have the agreed rent
reduced by virtue of the landlord’s breach.
There is considerable disagreement about how
to calculate the rent reduction or damages.
(5) Note: Retaliatory Eviction
a. retaliatory eviction by the landlord is
forbidden by statute. A fairly common
approach is to create a refutable presumption
of retaliatory purpose if the landlord seeks
to terminate a tenancy, increase rent, or
decrease services within some given period
after a good faith complaint or other action
by a tenant based on the condition of the
premises.
H. The Problem of Affordable Housing
1. Chicago Board of Realtors, Inc. v. City of Chicago
FACTS: Chicago Board of Realtors, a group of
property owners, challenged the constitutionality of
Chicago’s Residential Landlord and Tenant Ordinance
contending that it violated various clauses of the
Constitution.
POSNER: the majority opinion, although reaching the
right opinion, does not go far enough. It makes the
rejection of the appeal seem easier than it is by
refusing to acknowledge the strong case that can be
made for the unreasonableness of the ordinance.
While the stated purpose is the promotion of public
safety, health, and welfare and the quality of
housing in Chicago, it is unlikely that this is the
real purpose and it is not the likely effect.
Forbidding landlords to charge interest market rates
on the late payment of rent could hardly be thought
to improve the health, safety, and welfare of
Chicagoans, and it may have the opposite effect. The
initial consequence of the rule will be to reduce the
resources that landlords devote to improve the
quality of housing by making the provision of rental
housing more costly. Landlords will try to offset
43
the higher cost by raising rents. The ordinance is
not in the interest of poor people. The principal
beneficiaries will be middle class.
2. Note: the Debate over Landlord-Tenant Reforms
3. Michael H. Schill, Privatizing Federal Low Income
Housing Assistance: The Case of Public Housing
Chapter 9 – judicial Land-Use Controls: The Law of
Nuisance
A. Remedies (and some substantive law)
1. Boomer v. Atlantic Cement Co.
FACTS: A group of land owners (P), complaining of
injury to their property from dirt, smoke, and
vibration emanating from a neighborhood cement
plant (D), brought an action to enjoin the
continued operation of the plant and for damages.
The trial court held that the plant constituted a
nuisance, found substantial damage, but b/c an
injunction would shut down the plant’s operation,
refused to issue one. Permanent Damages of 185,000
were awarded the group of land owners instead.
HOLDING: Damages may be awarded as an alternative
to an injunction in nuisance cases. Another
alternative would be to grant the injunction but
postpone its effect to a specified date in the
future to give an opportunity for technical
advances to permit the company to eliminate the
nuisance. However, there is no assurance that any
significant technical improvement would occur.
Moreover, the problem is universal, and can only be
solved by an industry-wide effort. Permanent
damages would themselves be a spur to conduct more
research. Future owners of this land would not be
able to recover additional damages, since the award
is to the land.
NOTES:
(1) the court denied injunctive relief and did so
by “balancing the equities”
(2) a court’s injunction need not ban an activity
altogether. Indeed, it is quite common for
courts to fashion specific orders to fit
particular cases. Thus a D might be required
to install a certain kind of noise abatement
technology or reduce air pollution emissions
to a stated level and so forth.
2. Spur Industries, Inc. v. Del E. Web Development Co.
FACTS: In 1956, D predecessors in interest
developed feedlots in an are some 15 miles west of
44
the urban area of Phoenix. In May 1959, P began to
plan the development of an urban retirement area
known as Sun city, by purchasing 20,000 acres of
farmland near Spurs feedlots. In 1960, D purchased
the property in question and began a rebuilding and
expansion program extending to the north and the
south of the original feedlot facilities. Homes
were first offered for sale by Web in 1960, when
odors from Spur feedlot were not considered to be a
problem. In December 1967, Web filed suit,
complaining that in excess of 1,000 in its
development were unfit for sale b/c of the
operation of the Spur feedlot. Web alleged that
the Spur feeding operation was a public nuisance
b/c of the flies and odor which were drifting over
Sun City. The trial court permanently enjoined
Spur from operating a cattle feedlot near Sun City
and Spur appealed.
HOLDING: Spur’s operation was enjoinable as a
public nuisance as far as the people in the
southern portion of Webb’s sun City were concerned.
Spur’s operation, which constituted a breeding
place for flies, was a public nuisance dangerous to
the public health, and Webb, having shown a special
injury in the loss of sales, has standing to bring
suit to enjoin the nuisance. However, there was no
indication here at the time Spur and its
predecessors located in the area that a new city
would spring up, full-blown, alongside the feeding
operation and that the developer of that city would
ask the court to order Spur to move b/c of the new
city. Spur is required to move not b/c he is
wrong, but b/c of the proper and legitimate regard
of the courts for the rights and interests of the
public. Having brought people to the nuisance to
the foreseeable detriment of Spur, Webb must
indemnify Spur for a reasonable amount of the cost
of moving or shutting down. Affirmed in part and
reversed in part, remanded for further proceedings.
NOTES:
(1) A public nuisance, according to the
Restatement “is an unreasonable interference
with a right common to the general public";
whether the conduct in question significantly
interferes with public health, safety, peace,
or convenience; whether the conduct is
proscribed by statute or ordinance; whether
45
the conduct is of a continuing nature or has
produced a permanent or long-lasting effect
are all things for the court to consider.
There must be a substantial harm caused by the
intentional and unreasonable conduct or by
conduct that is negligent, reckless, or
abnormally dangerous.
(2) The difference between public and private
nuisance is in the interests of those that are
protected: public nuisance protects public
rights; private nuisance protects rights in
the use and enjoyment of the land.
(3) The distinction between private and public
nuisance can be important in several respects.
First, since a private nuisance arises from
interference with the use and enjoyment of the
land, only owners of interests in land can
bring suit. Second, since a public nuisance
arises from interference with public rights,
any member of the affected public can sue, but
usually only if the person bringing suit can
show special injury.
(4) The Restatement’s objective is to leave
courts free to proceed with recent
developments expanding citizen access to the
courts.
(5) The prevailing view is that moving into the
vicinity of a nuisance does not completely bar
a suit for damages or injunctive relief but it
is a relevant factor for the court to
consider.
(6) A conventional view of long standing held that
nuisance claims could be resolved in one of
these three ways: abate the activity in
question by granting the P injunctive relief;
let the activity continue if the D pays
damages (Boomer); or let the activity continue
by denying all relief. Spur adds a new
possibility: abate the activity of the P pays
damages. The court in Spur, it appears,
developed the rule out of logic
3. Note: Nuisance Law and Environmental Controls
a. nuisance law has an obvious bearing on
environmental problems – pollution, for example,
interferes with the use and enjoyment of the land
as well as with public rights and thus, seems a
natural target for control as a nuisance.
46
b.
That the law of nuisance has a place in
environmental control seems clear, but there are
a number of reasons to conclude that its
contributions must be limited ones. Nuisance
litigation is an expensive, cumbersome, and
somewhat fortuitous means for resolving modern
environmental problems, typified as they are by
continuing and multiple causes, widespread
effects and multiple victims, and scientifically
complex issues as to cause, effect, and remedy.
There are weak incentives to bring expensive
lawsuits.
c. Judgments are better left to politically
accountable government branches.
d. A regulatory program typically proceeds by
prohibiting certain activities, requiring
installation of prescribed technologies, and
setting standards limiting emissions from
pollution sources. Incentive systems stand in
sharp contrast. Rather than command, they
induce. A variant – marketable or transferable
rights- sets a fixed number of pollution rights,
distributes them by one means or another and then
permits trading in the rights thereafter.
Incentive systems encourage more technological
innovation than does regulation.
e. While regulation remains the dominant approach to
environmental problems in the US, incentive
systems have made substantial inroads that may
prove to be of enormous significance.
Chapter 10 – Private Land-Use Controls: The Law of
Servitudes
- usually, but not always, the agreements involve two
or more parcels of land and the purpose of the
agreement is to increase the total value of all of
the parcels involved. Usually, but not always, the
effect of the agreement is to burden one parcel of
the land for the benefit of the other
- these agreements create interests in land, binding
and benefiting not only the parties to the agreement
in question, but also their successors. These
interests are commonly called servitude’s. Modern
servitude’s can be divided into two major types:
easements and covenants.
A. Easements
1. Historical Background
47
2.
Creation of Easements- an easement, being an
interest in land, is within the Statute of Frauds
(so too for profits). Creation of an easement
generally requires a written instrument signed by
the party to be bound thereby. However, in
addition to the usual exceptions of fraud, past
performance, and estoppel, an easement may, under
certain circumstances, be created by implication or
by prescription.
a. Willard v. First Church of Christ Scientist
FACTS: Although when Peterson bought a lot from
McGuigan, the deed reserved an easement on the
lot for the use of the Church, Peterson then sold
the lot to Willards without the easement.
HOLDING: contrary to the ancient common law
rule, modernly, a grantor, in deeding property to
one person, may effectively reserve and vest an
interest in the same property in a third party.
Today, courts primarily try to give effect to the
grantor’s intent, whereas the common law rule
would defeat that intent. Also, it must be
recognized that due to the encumbrance on the
property, the grantee paid a reduced price for
it. Therefore, it would be inequitable to allow
him to remove the third party’s interest, thereby
greatly increasing the property’s value. The
determination of whether the common law rule
should still be used involves a balancing of
equitable and policy requirements.
NOTES:
(1) Restatement third of Property provides that
an easement can be created in favor of a
third party, but contrary authority in a
number of states is cited.
(2) The court holds that an easement can be
reserved in favor of a third party but
states in footnote 8 that an easement cannot
be excepted in favor of a third party.
(3) A reservation is a provision in a deed
creating some new servitude which did not
exist before as an independent interest.
(4) An exception is a provision in a deed that
excludes from the grant some pre-existing
servitude on the land.
(5) English courts ultimately found a way around
English common-law holdings that stated that
easements could not be reserved b/c it did
48
not issue out the land granted. They held
that an easement “reserved” by the grantor
was not a reservation at all, but a re-grant
of an easement by the grantee to the
grantor. Because the reserved easement
theoretically involved a re-grant by the
grantee, the Statute of Frauds required the
deed to be signed by the grantee as well as
by the grantor. American courts held that
the grantee had, by accepting the deed, made
it her own and adopted the seal and
signature of the grantor.
(6) An easement appurtenant benefits the owner
of the easement in the use of the land
belonging to the owner. It attaches to the
dominant tenement and goes with it to
successive owners.
(7) An easement in gross does not benefit the
owner of the easement in the use of the land
belonging to the owner, but benefits the
owner without regard to the ownership of the
land.
b. Licenses:
(1) an easement must be distinguished from a
license. A license is permission given by the
occupant of the land allowing the licensee to
do some act that otherwise would be a
trespass.
(2) The privilege to use the land resembles an
easement, but the license is revocable whereas
the easement is not
(3) Two distinct exceptions to the rule that a
license is revocable: First, a license
coupled with an interest cannot be revoked.
Second, a license that becomes irrevocable
under the rules of estoppel. A license that
cannot be revoked is something very akin to an
easement.
c. Holbrook v. Taylor
FACTS: Taylor used a road which ran across
Holbrook’s property.
HOLDING: A right to the use of a roadway over
the lands of another may be established by
estoppel. One may acquire a license to use a
roadway where, with the permission of a licensor,
the licensee makes substantial expenditures,
erects improvements, or uses it for other
49
d.
purposes in reliance on the licensor’s grant of
permission. Under these conditions, the license
becomes in reality a grant through estoppel, and
it becomes irrevocable and continues for so long
a time as the nature of the license calls for.
Here, the use of the roadway by Taylor in
constructing Taylor’s home, the improvements made
to the roadway, the maintenance of the roadway,
and the construction by Taylor of a residence,
all with the actual consent of Holbrook,
indicated that the license to the use of the
roadway may not be revoked.
Van Sandt v. Royster
FACTS: Van Sandt found his cellar flooded with
sewage and discovered for the first time the
existence of a sewer drain across his property.
Royster and Gray refuse to stop using the drain.
HOLDING: whether there is an implied easement on
certain property will be implied from the
intentions of the parties, and such inference
will be drawn from the circumstances under which
the conveyance was made. Parties to a conveyance
will be assumed to know and contemplate the
continuance of reasonably necessary uses which
have so altered the premises as to make them
apparent upon reasonably prudent investigation.
****When one utilizes part of his land for the
benefit of another, a quasi-easement exists. The
part of the land being benefited is referred to
as the quasi-dominant tenement, and the part
being utilized is referred to as the quasiservient tenement. If the owner of the land, one
part of which is subject to quasi-easement,
conveys the quasi-dominant tenement, and easement
corresponding to such quasi-easement is vested in
the grantee, provided such quasi-easement is
apparent and continuous. An implied easement, in
favor of either the grantor or the grantee arises
as an inference of the intentions of the parties.
This inference is drawn from the circumstances
under which the conveyance is made. Factors to
consider include whether the claimant is the
grantee or grantor, the terms of the conveyance,
the consideration given, the extent of the
necessity of the easement and the extent to which
the use was or might have been known to the
parties. Where the land may be used without an
50
e.
easement, but cannot be used without
disproportionate effort and expense, an easement
may be implied on the basis of necessity alone.
NOTES:
(1) the law does not favor implied easements
since they are in derogation of the rule
that written instruments speak for
themselves. They also retard building and
improvements and violate the policy of
recording acts.
Othen v. Rosier
FACTS: Othen and Rosier own tracts of land that
were formerly a part of one larger parcel. In
order to reach any public highways, Othen must
cross over someone else’s property. Othen had
used a road which ran across Rosier’s property,
which Rosier kept in repair. As a result of
encroaching surface waters, Rosier erected a
levee on his property, which made the road so
muddy that for weeks at a time it was impassible
except by horseback. Othen filed a suit for
injunctive and declaratory relief, and for
damages. The trial court found that Othen had
acquired an easement of necessity.
HOLDING: Before an implied easement by necessity
can be held to be created, it must be shown that
there was a unity of ownership of the alleged
dominant and servient estates; that the roadway
is a necessity and not a mere convenience; and
that the necessity existed at the time of
severance of the two estates. Here, there was
unity of ownership of the lands now owned by
Rosier and Othen. However no easement may be
implied for the road b/c the original owner did
not reserve such an easement when he first sold
the property now owned by Rosier. The record
does not indicate that the roadway was a
necessity as of the date of the original grant
deed, rather than a mere convenience. Othen has
additionally not acquired an easement by
prescription, b/c his use of the road was not
under claim of right. Othen’s use of the roadway
was merely permissive and therefore constituted
only a license, which could not and did not ripen
into a prescriptive right.
NOTES:
51
-
-
-
-
-
-
(1) several states have attempted to solve the
problems posed by landlocked property through
statutory provisions providing for condemnation
of private ways. While the statutory provisions
vary from state to state, all jurisdictions
require payment to be made for the land taken by
the owner of the benefited property. The degree
of necessity required for condemnation also
varies; some states require a showing of strict
necessity; while others only require that the
necessity be reasonable under all of the
circumstances.
f. Easement by Necessity
In the early English cases, it was said that one who
grants a thing must be understood to have granted
that without which the granted thing cannot exist.
By the seventeenth century, an easement by necessity
came to be supported by a public policy that no land
be made inaccessible.
The easement by necessity was said to carry out the
presumed intent of the parties. In most cases, it
does not matter which justification is given, but if
the parties expressly provide that no way of
necessity exists, the court must decide whether such
a provision is valid.
There is some conflict in the cases over the degree
of necessity required for an easement by necessity.
Most courts, like the court in Othen, required
strict necessity, but some have granted an easement
by necessity where access to the land exists but is
claimed to inadequate, difficult or costly.
An easement by necessity endures only so long as it
is necessary. If the dominant owner secures another
way out from the landlocked parcel, the easement by
necessity ceases.
In some states, mainly in the West, statutes give an
owner of landlocked land the right to condemn an
easement across neighboring land upon showing the
requisite necessity. The condemnation is a judicial
proceeding, and the landowner must pay damages to
the owner of the land. Under these statutes, it
does not matter how the landlocking occurred; prior
common ownership of the dominant and servient
estates is not required.
g. Easement by Prescription
easements may be acquired by prescription, which in
many ways is similar to adverse possession but in
52
-
-
-
-
-
-
some ways distinctly different. Adverse possession
involves a statute of limitations running on a right
to bring an action to recover possession of the
land; the statute operates to extinguish the remedy
of the previous owner, leaving the adverse possessor
in indefeasible possession. A statute of
limitations upon the recovery of possession does not
cover actions concerning easements, which involves
use and not possession of land.
Inasmuch as legislatures enacted no legislation to
protect ancient easements, courts developed the
doctrine of prescription. Prescription rests upon
the idea that rights can be acquired simply by a
passage of time.
In 1189, American courts rejected the theory that
prescriptive easements rest upon use from time
immemorial. They developed the law of prescription,
applying by analogy the statute of limitation
relating to the recovery of possession. Generally
required the same manner of use as is required for
adverse possession: open and notorious, continuous,
adverse, and under claim of right.
Once the prescriptive easements were put on the same
basis as adverse possession, the lost grant theory
should have been seen as irrelevant.
Under the lost grant theory, the owner of the land
is presumed to consent or acquiesce in the use;
after all, the owner is thought to have granted the
easement. On the other hand, if the use is made
with the permission of the owner, the use is not
adverse. To secure a prescriptive easement under
the lost grant theory, the claimant must show that
the use was not permissive and also that the owner
acquiesced.
In a jurisdiction not following the fiction of the
lost grant, to prevent a prescriptive easement from
being acquired, the owner must effectively interrupt
or stop the adverse use.
In order to gain title by adverse possession, a
person must show exclusive possession for the
required period. The majority of courts requires
exclusive use for the prescription, but defines it
differently from the adverse possession requirement.
Exclusivity does not require a showing that only the
claimant made use of the way, but that the
claimant’s right to use the land does not depend on
a like right in others.
53
In most states, a public prescriptive easement can
be obtained only by long continuous use by the
public under a claim of right. The landowner must
be put on notice, by the kind and extent of the use,
that an adverse right is being claimed by the
public, not by individuals. Some courts use the
theory of implied dedication, rather than
prescription, for public easements.
3. Assignability of Easements- the benefits and
burdens of appurtenant easements pass automatically
to assignees of the land to which they are
appurtenant. Where the benefit is in gross,
however, the easement may not be assignable.
a. Miller v. Lutheran Conference & Camp Association
FACTS: Miller sought to prevent the Association
from using the lake for swimming or boating.
HOLDING: The deed from 1899 from the Pocono
Springs Water Ice Company to Frank Miller clearly
did not convey any bathing rights. However,
Frank did establish title to bathing rights by
prescription b/c the rights were used
systematically for commercial purposes. An
adverse enjoyment of an easement in gross may
ripen into title thereto by prescription; and
therefore Miller and Miller acquired title by
prescription. Further, Frank made a valid
assignment of one-fourth interest in all rights
to Rufus. The rights of fishing and boating were
conveyed to Frank thus showing that the grantor
company intended to attach the attribute of
assignability to the privilege granted. However,
even though easements may be divided amongst
different title holders, the easements must be
used or exercised as an entirety. They cannot be
commercially used and licenses thereunder cannot
be granted without common consent and joinder of
the Millers, who own a portion of the easement.
It follows that the estate of Rufus did not have
the right, by themselves, to grant a license to
the association.
NOTES:
(1) the modern trend rejects the old notion that
the benefit of the easement in gross was not
assignable. The Restatement view is that
easements in gross, if of a commercial
character, are alienable property interests.
Commercial characters is defined as when the
-
54
use authorized by it results in economic
benefit rather than personal satisfaction.
(2) When an easement is appurtenant, the burden
on the servient tenement is limited by the
needs of the dominant tenement. An easement
in gross has no such limitation, therefore,
American courts have attempted to prevent
the burden on the servient tenement from
increasing beyond what was intended by the
original parties.
(3) More recent cases permit any easement in
gross to be assignable if the parties so
intended. About the only easements that are
not assignable under the modern cases are
recreational easements.
(4) Restatement Third of Property provides that
easements in gross may be divided unless
contrary to the intent of the parties
creating the easement or unless the division
unreasonably increases the burden on the
servient estate.
4. Scope of Easements
a. Brown v. Voss
FACTS: the court of appeals held that an
easement granted for the benefit of the dominant
estate could be used for two dominant estates
where no increased burden to the servient estate
is shown. The servient tenement appeals.
HOLDING: if an easement is appurtenant to a
particular parcel of land, any extension thereof
to other parcels is a misuse of the easement,
unless the use does not overburden the easement.
The easement received no greater use as a result
of Brown’s acquisition, and thus the injunction
was correctly denied.
NOTES:
(1) this case illustrates that while the law of
easements can be traced back to the common
law, it is subject to judicial
interpretation. Here, the reasonableness of
the development, in the eyes of the court,
served as a basis for denying the
injunction.
(2) The manner, frequency, and intensity of the
beneficiary’s use of the servient estate may
change over time to take advantage of
developments in technology and to
55
accommodate normal development of he
dominant estate or enterprise benefited by
the servitude.
(3) A private easement of way does not usually
permit the easement owner to install on the
easement aboveground or underground
utilities, such as electrical lines and
sewer pipes. Most courts hold such uses are
not reasonably foreseeable by the parties.
Such courts view the purpose of the easement
of way as an entrance and exit of people and
vehicles.
(4) The general rule is that the location of the
easement, once fixed by the parties, cannot
be changed by the servient owner without
permission of the dominant owner.
(5) A prescriptive easement is not as broad in
scope as an easement created by grant, by
implication, or by necessity. Although the
uses of a prescriptive easement are not
confined to the actual uses made during the
prescriptive period, the uses made of a
prescriptive easement must be consistent
with the general kinds of uses by which the
easement was created and with what the
servient owner might reasonably expect to
lose by failing to interrupt the adverse
use.
5. Termination of Easements
a. Presault v. US
FACTS: RR track on the P property was turned
into a bike path and P sued.
HOLDING: whether, at the time a RR applies to
abandon its use of an easement limited to R
purposes, a taking occurs under an ICC order to
“railbank” the easement for possible future RR
use, and allowing in the interim for use of the
easement for trail purposes, is a question not
now before us. Occupation was a taking an
requires compensation.
6. Negative Easement
- the right of the dominant owner to stop the servient
owner from doing something on that servient land.
- English courts recognized four types: the right to
stop your neighbor from blocking your windows,
interfering with the air flowing to your land in a
defined channel, removing the support of your
56
building, and interfering with the flow of water in
an artificial stream.
- Judges were not disposed to permit the creation of
new types of easements, negative easements in
particular
- Traditional negative easements could arise by
prescription in England... American courts have held
that negative easements cannot be acquired by
prescription.
- In all American courts, a recording system existed
to protect purchasers against unrecorded claims
- American courts accepted the English restrictions on
creating new types of easements. Nonetheless, the
list of four is not necessarily closed in the US.
B. Covenants Running With the Land
1. Historical Background
a. Covenants Enforceable at Law: Real Covenants
- thwarted by the law courts’ refusal to recognize new
types of negative easements, landowners turned, to
the law of contracts.
- Bargaining among neighbors can serve to minimize the
harmful impacts (external costs) that arise from
conflicting resource uses.
- Where there is privity of estate, judges held, the
contract is enforceable against assignees.
- Spencer’s case laid down three propositions about
the running of the burden of covenants:
(1) a covenant relating to something not in esse
will not bind assignees of the covenantor
unless the covenantor expressly agrees to bind
successors.
(2) For the burden of a covenant to run, it must
touch and concern the land
(3) Must be privity of estate for a covenant to run
- In England, the courts decided that privity of
estate, required for the burden of a covenant to run
at law to successors, was satisfied only by a
landlord-tenant relationship.
- American courts developed the real covenant, a
promise respecting the use of the land that runs
with the land at law.
- Horizontal privity- privity between the original
parties
- Vertical privity- privity between promisee or
promisor and an assignee
57
-
-
-
-
The question of whether a covenant runs arises only
when a person who is not a party to the covenant is
suing or being sued.
Test for the running of a burden is traditionally
more onerous than a test for the running of a
benefit.
Restatement declared that there must be either a
mutual or successive relationship between the
promisor and the promisee for the burden of a
covenant to run at law. Went on to say that
horizontal privity is not required for a benefit to
run.
Privity requirement, though, continues to exist in
many states and it is often unclear whether the
courts are referring to horizontal or vertical
privity.
b.
Covenants Enforceable at Equity: Equitable
Servitudes
i. Tulk v. Moxhay
FACTS: Moxhay indicated an intention to build
upon an open ground, even though he was aware of
an original prohibitive covenant passed on by
Tulk, 40 years earlier, which forbade any
construction on the ground
HOLDING: Privity of estate notwithstanding, a
person who acquires real property with notice of
a restriction placed upon it will not be allowed,
in equity, to violate its terms. To hold
otherwise would make it impossible for a land
owner to sell part of it without running the risk
of seeing the part he retained rendered
worthless. At issue is not whether the covenant
“runs” with the land, but whether a party may
violate a contract entered into by his vendor by
using the land in a inconsistent manner. If
there was a mere agreement and no covenant, a
court would enforce it against a party purchasing
with notice; so long as an equity is attached by
an owner, no one purchasing with notice can stand
in a different situation than the original
purchaser.
NOTES:
(1) in 1881, it was settled that in England only
negative covenants were enforceable as
equitable servitudes.
58
(2)
Equitable servitude is a covenant respecting
the use of the land enforceable against
successor owners or possessors in equity
regardless of its enforceability at law.
Equity requires that the parties intend the
promise to run, that a subsequent purchaser
have actual or constructive notice of the
covenant and that the covenant touch and
concern the land
(3) Most recent cases support the property
theory that equitable servitudes are
negative easements. Facilitates the holding
that, after the original promisor has
conveyed the burdened land, the promisor
cannot be sued on the covenant in law or in
equity. The original promisor has lost
control of the land when she assigns her
entire interest and it would be unfair to
penalize her for the conduct of some future
owner.
(4) Even though an equitable servitude is a
property interest, it arises out of a
contract and many contract doctrines are
applicable to it.
2. Creation of Covenants- a real covenant must be
created by a written instrument signed by the
covenantor. It is an interest in land within the
meaning of the Statute of Frauds. A real covenant
cannot arise by estoppel, implication, or
prescription, as can an easement.
a. Sanborn v. McLean
b: Sanborn and McLean trace the titles to their
adjoining lots to the proprietor of the
subdivision. Residences are built on all of the
surrounding lots. Sanborn objected to McLean’s
erection of a gas station on her lot.
HOLDING: the doctrine of reciprocal negative
easements makes restrictions which are of benefit
to the land retained mutual so that the owner can
do nothing upon the land he has retained that is
forbidden to the owner of the lot sold.
In this
case, McLaughlin deeded lots with the restriction
that only residences be built upon them. Such
restrictions were imposed for the benefit of the
lands retained by McLaughlin to carry out the
scheme of a residential district, and a
restrictive negative easement attached to the
59
b.
lots retained. Since his was one of the lots
retained in the December 1892 and July 1893
deeds, a reciprocal negative easement attached to
the lot which later became McLean’s. Reciprocal
negative easements are not personal to owners but
are operative upon use of the land by any owner
having actual or constructive notice thereof. In
this case the reciprocal negative easement
attached to McLean’s lot may now be enforced by
Sanborn provided that had constructive knowledge
of the easement at the time of purchase. At the
time of purchase, McLean had an abstract title
showing the subdivision and the 97 companion lots
adjacent to his lot. He could not have avoided
noticing the strictly uniform residence character
of the companion lots and the least inquiry would
have revealed the fact that his lot was subject
to a reciprocal negative easement.
NOTES:
(1) reciprocal negative easements must start
with common owners. They cannot arise and
fasten upon one lot by reason of other
owners conforming to a general plan. Such
easements are never retroactive and as
demonstrated here, they pass their benefits
and carry their obligations to all
purchasers of land provide that the
purchaser has constructive notice of the
easement.
Neponsit Property Owners’ Association v.
Immigrant Industrial Savings Bank
FACTS: Neponist conveyed the land now owned by
the Bank to Deyer and wife by deed. That
original deed contained a covenant providing:
(1) that the conveyed land should be subject to
an annual charge for improvements upon the entire
residential tact then being developed (2) that
such charge should be a lien (3) such charge
should be payable by all subsequent purchasers to
the company or its assigns, including the
property owners association which might
thereafter be organized (4) and such covenant
runs with the land. Neponsit brought an action
based upon the above covenant to foreclose a lien
upon the land which the Bank now owns, having
purchased it at a judicial sale. The bank
60
appealed from an order denying their motion for
judgment on the pleadings
HOLDING: a covenant will run with the land and
will be enforceable against a subsequent
purchaser if: (1) the grantor and the grantee
intend that the covenant will run with the land;
(2) the covenant touches or concerns the land
with which it runs; (3) there is privity of
estate between the party claiming the benefit of
the covenant and the party who rests under the
burden of the covenant. In the instant case the
grantor and the grantee manifested their intent
that the covenant run with the land by so stating
in the original deed. The covenant touches or
concerns the land in substance no in form (i.e.:
the covenant alters the legal rights of ownership
of the land) by providing that the burden of
paying the cost of maintaining the public
improvements is inseparably attached to the land
which enjoys the benefits of such improvements.
the concept of privity of estate between the
parties usually requires that the party claiming
benefit from the enforcement of a covenant own
the property which benefits from such
enforcement. Although Neponsit, the corporation,
does not own the property which would benefit
from the enforcement, the corporation is acting
as the agent of the property owners and should
therefore be considered in privity in substance
if not in form. Since the covenant complies with
the legal requirements for one which runs with
the land and is enforceable against subsequent
purchasers, the order which denied the Bank’s
motion for judgment on the pleadings is affirmed.
c. Restatement Third of Property, Servitudes:
Modification or Termination of Certain
Affirmative Covenants
- a covenant to pay money or provide services
terminates after a reasonable time if the instrument
that created the covenant does not specify the total
sum due or a definite termination point
- a covenant to pay money or provide services in
exchange for services or facilities provided to the
burdened estate may be modified or terminated if the
obligation becomes excessive in relation to the cost
of providing services or facilities or to the value
received by the burdened estate
61
d.
Caullet v. Stanley Stilwell & Sons, Inc.
FACTS: Stilwell, a developer, contended that it
had an enforceable covenant restricting the use
of Caullet’s land.
HOLDING: Restriction on the use of r5oprety will
not be enforced unless their meaning is clear and
free from doubt. Here, the provision is
unenforceable b/c it is descriptive of neither
the type of structure to be built, the cost of
the structure, or the duration of Caullet’s
obligation. Further, the provision does not
satisfy the primary requirement of covenants
directly restrictive of tittle to land: that
they touch and concern the subject property. To
qualify as a covenant properly affecting the
property, the deed provision must define in some
measurable and reasonably permanent fashion the
proscriptions of and limitation on the uses to
which the premises may be put. Here, the
provision is a personal arrangement which is
designed to insure Stilwell a profit on the
erection of a dwelling on the land. Where, as
here, the burden is placed on the land, and the
benefit is personal to one of the parties and
does not extend to his or other lands, the burden
is generally held not to run with the land.
NOTES:
(1) English common law courts held that only
negative covenants, to the exclusion of a
affirmative covenants, were enforceable as
equitable servitudes. This was because those
courts treated equitable servitudes as equitable
interests analogous to negative easements. Thus,
only restrictive covenants were accorded status
as equitable servitudes.
e. Note: Defeasible Fees as Land Use Control
Devices
- defeasible fees may be employed to control land use.
A defeasible fee differs from a servitude in that
the remedy for its breach is forfeiture, whereas the
remedy for a breach of a servitude is damages,
injunction or enforcement of a lien.
- Infrequently used today to control land use except
as gifts for charitable purposes
3. Scope of Covenants
a. Hill v. Community of Damien Molokai
62
FACTS: Hill seeks to enjoin the further use of a
property in his neighborhood as a group home for
individuals with AIDS. Neighborhood covenant
provides that no lot shall ever be used for any
purpose other than single family residence
purposes.
HOLDING: the community is entitled to continue
operating its group home for individuals with
AIDS both under the Four Hills restrictive
covenants and under the Fair Housing act.
Accordingly, the trial court’s ruling is reversed
and the injunction is vacated.
NOTES:
(1) what constitutes a “single family” for the
purpose of restrictive covenants has been the
subject of considerable litigation when a group
home is involved.
b. Shelley v. Kraemer
FACTS: In the first case, Kraemer, owner of
property subject to a covenant restricting sales
to white sonly sued to prevent Shelley, an
African American, from taking possession of a
neighboring house in violation of the covenant.
In the second case, owners of a property subject
to a similar restrictive covenant sued to enjoin
a husband and wife, also African Americans, from
occupying the house they had purchased.
HOLDING: judicial enforcement of racially
restrictive covenants constitutes impermissible
state action in support of racial discrimination.
NOTES:
(1) a covenant with a racially discriminatory
effect may violate the federal Fair housing
Act, enacted as Title VIII of the Civil
Rights act of 1968. This act makes it
unlawful to refuse to sell or rent or
otherwise make unavailable a dwelling to any
person b/c of race, color, religion, sex,
national origin, familial status, or
handicap. Also prohibits the publishing or
printing of any statement indicating a
racial, religious, or ethnic preference with
respect to the buyer of a dwelling.
4. Termination of Covenants
a. Western Land company v. Truskolaski
FACTS: Western Land wanted to build a shopping
center near property owned by Truskolaski, who
63
argues that such construction would violate a
restrictive covenant.
HOLDING: A restrictive covenant is enforceable
so long as its provisions remain of substantial
value (can be accomplished and there is still a
benefit by enforcement)
NOTES:
(1) several states have now enacted statutes
which terminate restrictive covenants or limit
their application by requiring that they be rerecorded after a specified period of time.
Perhaps typical of the duration to be accorded
these covenants are provisions contained in the
statutes of Georgia (20 years) and Massachusetts
(30 years). In a few states, restrictive
covenants will not be enforced is the covenant
carries no substantial benefit, or where there
has been substantial compliance for a reasonable
period of time.
b. Rick v. West
FACTS: West, owner of a half-acre lot in a
residential subdivision, refused to consent to a
release of a covenant in her favor restricting
the lots to single-family dwellings, thereby
frustrating Rick’s plans to construct a hospital
in the subdivision.
HOLDING: courts will not engage in balancing of
equities but will enforce restrictive covenants
unless there is a substantial change of
conditions in the general neighborhood. West had
a right to continue to rely on the covenant.
NOTES:
(1) Massachusetts has a statute which requires
that a person seeking to enforce the servitude
show that the restriction actually benefits her.
However, damages are the only remedy that will be
rewarded is there have been changes in the
neighborhood which reduce the need for
restriction, or if continuation of the
restriction would impede reasonable use of the
land for purposes for which it is most suitable
or would impair the growth of the neighborhood.
5. Common Interest Communities
- the condominium form: very popular b/c of the
rising costs of single family homes, the
availability of shared amenities at a lower cost,
the tax subsidy to the owner-occupied housing, the
64
increasing affluence of apartment dwellers
permitting a greater proportion to invest in equity
ownership, the belief that real estate is an
inflation proof investment,
- each condo unit is owned separately in fee simple by
an individual owner. The exterior walls, the land
beneath, the hallways, and other common areas are
owned by the unit landowners as tenants in common.
Can be adapted to residential or commercial use.
- For a condo, the declaration of condominium must be
filed before the first sale is made, will provide
for an association of unit owners to make and
enforce rules, to manage the common areas, and to
set maintenance charges levied against unit owners.
a. Nahrstedt v. Lakeside Village Condominium
FACTS: P kept her three cats in her condominium
in violation of the CC&Rs, prompting D to assess
penalties against her increasingly large amounts.
HOLDING: the courts should leave the enforcement
of covenants and restrictions to homeowners
associations unless constitutional principles are
at stake, enforcement is arbitrary, it imposes
burdens on the use of the lands it affects that
substantially outweigh the restriction’s benefits
to the developments residents, or violates a
public policy. Individual unit owners must
relinquish a degree of freedom of choice that
they might have otherwise enjoyed in order to
promote health and happiness of the majority of
the unit owners. The reasonableness and
unreasonableness of a condo use restriction that
the legislature has made subject to section 1354
is to be determined not by reference to facts
that are specific to the objecting homeowner, but
by reference to the common interest development
as a whole.
NOTES:
(1) The Restatement draws a distinction between
direct restraints on alienation of property
and indirect restraints. Direct restraints
are valid if “reasonable.” Direct
restraints clearly interfere with the
operation of the free market economy.
Common types of these restraints include
prohibitions on transfer without the consent
of the Association, rights of first refusal,
and requirements that transfers be made only
65
to persons meeting certain eligibility
requirements.
(2) In direct restraints are invalid only if
lacking in rational justification, a less
demanding requirement. In direct restraints
include use restrictions or other
restrictions such as pet, paint color, etc,
that limit the potential market for the
property.
(3) Restatement draws a distinction between
regulations included in the deeds or
declaration of the common interest
development and the regulations subsequently
adopted by property owners associations for
community governance. A reasonableness
standard is applied to the latter
(4) The new Restatement sets the standard of
reasonableness: determining reasonableness
requires balancing the utility of the
purpose served by the restraint against the
harm likely to flow from its enforcement
(5) Business judgment rule: prohibits judicial
inquiry into actions of corporate directors
taken in good faith and in the exercise of
an honest judgement in the lawful
furtherance of corporate purposes.
Chapter 11: Legislative Land Use Controls: the Law of
Zoning
A. Introduction:
1. Historical Background
- from the end of the civil war to the beginning of
the twentieth century, city life changed more
dramatically than at any time since the founding of
the republic.
- Ideological roots are traceable to Ebenezer Howard.
Proposed resettling people in new towns in the
country where they would have ample space to live
healthy and useful lives. Uses of land would be
separated so one would not harm another.
- At the core of Howard’s scheme was wholesome
housing, each house with a small garden and set
apart from its neighbors to provide light, and air
and be protected from incompatible uses. The Garden
City would evolve into homogenous cities.
- American city planners were interested in the
principles underlying Howard’s ideal community and
turned them into the foundation for the modern city
66
planning: (1) separation of uses; (2) protection of
the single family home; (3) low rise development;
and (4) medium density population
- Frank Lloyd Wright envisioned the city of the future
as the extended city based on the automobile and
alternating urban and agrarian uses.
- Burnham helped fire up the beautiful city movement –
to beautify cities with great civic monuments and
public works. Within 20 years the movement ran out
of steam.
- LeCorbusier made observation that the Garden city
took up too much land... proposed the vertical
Garden City... Radiant City.
- Zoning laws spread rapidly in the early 1900s –
especially after the appearance of the Standard
State Enabling Act of 1922. With the spread of
zoning ordinances came constitutional attacks –
assertions that the new controls effected takings of
property without compensation or worked deprivations
of property without due process of law.
2. Village of Euclid v. Ambler Realty Co.
FACTS: Euclid zoned property of Amber Realty
in a manner which materially reduced its potential
value.
HOLDING: A zoning ordinance, as a valid exercise
of the police power will only be declared
unconstitutional where its provisions are clearly
arbitrary and unreasonable, having no substantial
relation to the public health, safety, morals, or
general welfare. Zoning ordinances, and all
similar laws and regulations, must find their
justification in some aspect of the police power,
asserted for the public welfare. Until recent
years, urban life was comparatively simple; but
with the general increase and concentration of
population, problems have developed which require
new restrictions on the use and occupation of
private lands in urban communities. There is no
serious difference of opinion on the state power to
avoid the nuisances which industry may cause in a
residential area. As for residential regulation,
many considerations point toward their validity.
Segregation of residential business and industrial
building makes it easier to provide appropriate
fire apparatus, for example. Further, it is often
observed that the construction of one type of
building destroys an area for other types. In
67
light of these considerations, the court is not
prepared to say that the end of public welfare here
is not sufficient to justify the imposition of this
ordinance. It clearly cannot be said that it
“passes the bounds of reason and assumes the
character of a merely arbitrary fiat.” The decree
must be reversed. No injunction may be had.
NOTES:
(1) landmark supreme Court decision on zoning
ordinances as valid exercises of police power.
Essentially, any zoning ordinance which is
tied to public health, safety, morals, or
welfare will be upheld unless clearly
arbitrary or unreasonable. So –called
Euclidean Zoning, which resulted from this
decision, usually consists in the division of
areas into zones, in which building use,
height and area are regulated in a manner
designed to guarantee homogeneity of building
patterns. All too often, however, zoning
operates not so much to protect the public as
to protect the vested interests in a
community. Building restrictions may all too
easily be used as an economic sanction by
which social segregation is perpetuated.
(2) Under Euclidean Zoning the uses permitted in
each district are cumulative; higher uses are
permitted in areas zoned for lower uses but
not vice versa. In an attempt to preserve
large tracts for future industrial use,
improving the fiscal base, some cities have
turned to non-cumulative zoning, prohibiting
houses and commerce in industrial zones.
(3) Zoning ordinances are routinely upheld in the
face of takings allegations, especially if
they are controlling nuisance-like conditions
or so long as they leave the property owner
with some reasonable use.
(4) Supreme court held zoning in general to be
constitutional, but added that concrete
applications of specific provisions could
prove to be arbitrary and unreasonable.
(5) Today, zoning is virtually universal in the
metropolitan areas of the US
3. The structure of Authority underlying zoning
a. enabling legislation
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all states have adopted enabling acts that delegate
zoning authority to local governments.
- Standard Zoning Enabling Act was adopted at one time
or another in all fifty states and is till in effect
in many of them.
b. The comprehensive plan
- a comprehensive plan is a statement of the local
government’s objectives and standards for
development.
- Plan is based on surveys and studies of the cities
present situation and future needs, the idea being
to anticipate changes and promote harmonious
development
- Courts don’t take the requirement too seriously...
the plan need not be written down, for many courts,
separate from the zoning ordinance itself.
- The emphasis has always been whether the zoning
ordinance is a comprehensive plan, not whether it is
in accordance with such a plan. Little more has
been required than that zoning be reasonable and
impartial.
B. The Nonconforming Use
1. PA Northwestern Distributors, Inc. v. Zoning
Hearing Board
FACTS: three weeks after P opened an adult book
store in Moon Township, the Board of Supervisors
adopted an ordinance restricting permissible
locations for book stores and allowing only 90 days
for nonconforming uses to either comply or shut
down.
HOLDING: A zoning ordinance which requires the
amortization and discontinuance of a lawful
preexisting nonconforming use is confiscatory and
violative of the state constitution as a taking of
property without just compensation. Contrary to the
appellate court’s interpretation, Sullivan is not a
correct statement of the Penn law regarding
amortization provisions. The usual presumption of
a zoning ordinance’s validity must be tempered by
the fact that the zoning involves a governmental
restriction on a property owner’s constitutionally
guaranteed right to use his property , except where
the use violates a law or creates a nuisance.
Municipalities lack the power to compel change in
the nature of an existing lawful use of property.
A lawful non-conforming use established in the
property owner a vested property right which cannot
-
69
be abrogated or destroyed. A taking under the Penn
constitution is not limited to actual possession or
seizure of the property. If the effect of the
zoning law is to deprive an owner of the lawful use
of his property, it amount to a taking for which he
must be compensated. In this case, the
amortization ordinance deprived P of the lawful use
of its property b/c it forced it to cease using
its property as an adult book store within 90 days.
Therefore, the amortization provision was
unconstitutional on its face b/c it effected a
taking of the P property without just compensation
CONCURRENCE: Although the amortization provision
in this case is unreasonable and must be struck
down b/c it failed to provide adequate time for
elimination of the nonconforming use, the per se
prohibition against amortization provisions
advanced by the majority is too restrictive.
Amortization provisions that provide adequate
notice to the property owner so that he is not
deprived of the property interest or its use are an
effective way to reconcile the community interests
with the business needs.
NOTES:
(1) Penn is part of a small minority of states
that forbid amortization ordinances
altogether. In most states, a requirement
that a non-conforming use cease within
certain time period does not constitute a
taking, so long as the time period is
reasonable. If the time period gives the
owner adequate time to make new plans, any
loss he suffers may be offset by the monopoly
position he occupies for as long as the
nonconforming business remains in the place.
(2) If nonconforming use is abandoned , it may be
terminated. Some ordinances go further and to
eliminate litigation over intent, the
continuation of a nonconforming use if it is
discontinued for any period of time.
(3) Courts approving an amortization provisions
tend to require a reasonable period for a
particular nonconforming use in question. In
practice, however there appears to be a
considerable deference to rough and ready
lines. For any given use, one can find cases
going either way. This kind of sloppiness
70
threatens to make amortization vulnerable to
challenge.
(4) Factors usually listed as relevant tot he
assessment of reasonableness of a particular
amortization period are the nature of the use
in question, the amount invested in it, the
number of improvements, the public detriment
caused by the use, and the character of the
surrounding neighborhoods.
(5) Related to the law of non-conforming uses is
the more general doctrine of vested rights.
In the case of non-conforming uses, a
preexisting operation is protected; plans to
engage in some particular use are
insufficient. In the case of vested rights
doctrine, a proposed use might be protected if
sufficient commitments have been made- plans
drawn, permits obtained, the site prepared,
construction begun – in reliance on existing
zoning requirements.
(6) Another theory is estoppel is sometimes
applied where developers rely reasonably and
to their detriment on the issuance of a permit
and proceed to make substantial expenditures.
Reliance, though, has to be reasonable.
C. Achieving Flexibility in Zoning- by binding limited
classes of uses into tightly drawn districts,
Euclidean zoning can work inequitable hardships and
promote inefficient patterns of land use; it can also
inhibit socially and aesthetically desirable
diversity. There must be a means for providing
flexibility in zoning. The power to regulate
flexibility can be the power to favor or disfavor for
illegitimate reasons.
1. Variances and Special Exceptions- Section 7 of the
Standard State Enabling Act authorizes appointment
of a board of adjustment that may “in appropriate
cases and subject to appropriate conditions and
safeguards, make special exceptions tot he terms of
the ordinance in harmony with its general purpose
and intent.
a. Commons v. Westwood Zoning Board of Adjustment
FACTS: Westwood refused Commons a zoning
ordinance variance, finding that the proposed
development of the property (a house) would
impact adversely upon the economic and aesthetic
qualities of the community and that a refusal to
71
b.
grant the variance would not impose undue
hardship.
HOLDING: a denial of a zoning ordinance must be
based upon sufficient findings on whether the
areas will be adversely impacted, and whether the
denial will work a hardship on the owner of the
property. In this case, the board failed to
consider the efforts made to abide by the zoning
ordinance such as the sale of the lot or the
purchase of the adjoining lots. Also, no
consideration was given to the hardship imposed
by the ordinance which rendered the lot virtually
undeveloped. As a result, the case must be
remanded for sufficient findings.
NOTES:
(1) in granting a variance, zoning boards may
impose reasonable conditions related to the
use of the property that minimize the
adverse impact of the use upon neighbors.
On the other hand, zoning boards may not
condition a variance upon use of the
property by the original owners only, as
this has no relation to ameliorating the
effects of the proposed land use and is
unrelated tot he legitimate purposes of
zoning. A variance must run with the land.
(2) Existing violations cannot be a basis for
further violations.
(3) Court looks to see if the hardship is selfimposed.
Cope v. Inhabitants of the Town of Brunswick
FACTS: D contended that it had the power to
grant zoning variances in the public welfare.
Cope sought a variance from a zoning ordinance
restricting the construction of apartment
buildings. A request was presented to Brunswick
which rejected it under its power granted by the
ordinance to reject variances which were not in
the public welfare.
HOLDING: A zoning ordinance may not delegate to
a local board a legislative authority. The
generality of the ordinance does not provide
sufficient legislative control over the conduct
of the local board. Thus the board is free to act
legislatively and such is impermissible
delegation of power. As a result, the ordinance
is invalidated.
72
NOTES:
(1) variance: administratively authorized
departure from the terms of the zoning
ordinance, granted in cases of unique
individual hardship, in which a strict
application of the terms of the ordinance
would be unconstitutional.
(2) an exception is a use permitted by the
ordinance in a district in which it is not
necessarily incompatible, but where it might
cause harm is not watched. Exceptions are
authorized under conditions which will
insure their compatibility with the
surrounding uses.
(3) The theory of special exception is clear
enough: practice under the theory varies.
There are efforts by zoners to use the
special exceptions as essentially a
discretionary device: listed uses will be
granted only I very general criteria are
mer. An alternative approach reduces
discretion by listing detailed criteria
regarding exceptions. If the proposed use
meets the criteria, an exception must be
granted.
2. Zoning amendments and the Spot Zoning Problem
a. Fasano v. Board of County Commissioners of
Washington County
FACTS: In 1959, the county commissioners adopted
a comprehensive land use plan for the County as
required by the Oregon statute. In 1963, they
adopted a new zoning classification, Planned
residential which provided for high density
multi-family development. A developer sought to
change a 32 acre parcel that was zoned for single
family residential to a P-R zone so that he could
develop a mobile home park. Fasano opposed the
change. The county commissioners approved the
change after a hearing. Fasano brought suit. The
trial court reversed the decision of the
commissioners. As appeals court affirmed. The
Board of county commissioners of Washington
County appeals contending that their decision was
valid, that it was not necessary to show a change
of conditions before a zone change could be
accomplished, and that the change was in
accordance with the comprehensive plan.
73
b.
HOLDING: A change in zoning must conform with
the comprehensive plan of land use. Judicial
review is not limited to a determination that a
zoning change is arbitrary or capricious. The
purpose of zoning ordinances is to implement and
carry out the comprehensive plan. Therefore, any
change in zoning must be proven to conform with
the plan. This proof, at a minimum should show:
(1) that there is a public need for the change in
question and (2) that need will be best served by
changing the classification of the particular
piece of property in question as compared with
other valuable property. The burden of proof
should rest on the party seeking change, and the
more drastic the change the greater the burden
will be. Here, the burden is not sustained. The
only evidence brought before the court is a
conclusionary report of the staff of the planning
department. Conclusion without facts is
insufficient to support change.
NOTES:
(1) The statutory requirements for the adoption
of the comprehensive plans were designed to
prevent haphazard piecemeal planning which
could greatly affect property owners within
an area. The object of these plans is to
promote appropriate use of the land
throughout a municipality. There is some
authority for the contention that a plan can
be portrayed by the zoning ordinance itself,
or as the end product of a package of zoning
ordinances.
Arnel Development Co. v. City of Costa Mesa
FACTS: Arnel sought to build apartments on his
land, which was properly zoned. A group passed
an initiative rezoning the property to prevent
the development. Arnel sued, contending that the
selective zoning was invalid. The trial court
upheld the ordinance. The court of appeals
reversed, holding that rezoning of specific small
parcels was judicial rather than legislative
matter. Costa Mesa appealed.
HOLDING: All zoning is legislative in nature.
It has long been settled that zoning, regardless
of the size of the parcel is not a judicial
function. None of the many precedents draws any
distinction between the size of the properties
74
involved. The sudden shift to judicial zoning
would cause undue confusion and lead to
unnecessary litigation. As a result, the
initiative effectively recognizes the property.
NOTES:
(1) the court rejected the landowner’s argument
that in a case involving such specific
parcel of land, the rezoning must be
adjudicatory to uphold due process rights.
If it is legislative in nature, no hearing
would be provided prior to a decisions being
made. The court reasoned that the public
hearing is inherent in the legislative
process and no rights would be prejudiced.
(2) Spot zoning means the improper permission to
use an island of land for a more intensive
use than permitted on adjacent properties.
Some courts use the term spot zoning to
describe certain sets of facts so that the
term is neutral with respect to validity or
invalidity. Other courts use the term spot
zoning to describe a set of facts where
zoning is applied is invalid.
(3) Spot zoning is invalid if: 1. A small
parcel of land if singled out for special
and pri9vilegded treatment; 2. The singling
out is not in the public interest but only
for the benefit of the landowner and 3. The
action is not in accord with a comprehensive
plan.
(4) Usually arises from legislative zoning
amendments, although administrative
variances and special exceptions are
sometimes invalidated by reference to the
same concept.
(5) The underlying concern in spot zoning cases
is that special favors have been granted in
response to bribes or more subtle influences
such as politics.
(6) The traditional reasonableness standard for
judicial review of legislative regulation of
economic activities – including zoning
regulations – is extraordinary permissive,
amounting to virtual deference on the part
of the courts. Zoning amendments must be
justified by showing a mistake in t he
75
original ordinance or a change in conditions
subsequent to its enactment
(7) Fasano illustrates a different approach to
the problem, rejecting the requirements of
mistake or change and substituting a more
intensive judicial review when zoning
amendments are of an essentially
adjudicative nature.
(8) In the case of a referendum, the local
governing body approves an ordinance and
then refers it to the electorate for final
decision.
(9) An initiative goes right from a qualifying
petition, initiated by citizens, to the
ballot. Arnel included a rezoning
initiative, and gave rise to the
legislative-adjudicative issue because
referendums and initiative are reserved fort
legislative functions.
D. Expanding the Aims (and exercising the muscle) of
Zoning.
- early objective of zoning were little more than the
control of nuisances, though in a comprehensive
fashion
- over the years after Euclid, the aims of zoning
gradually expanded, no doubt for a host of reasonspopulation, growth, etc
1. Aesthetic Regulation
a. State ex rel. Stoyanoff v. Berkeley
FACTS: Berkeley desired to build a home in the
City of Ladue which is one of the finer suburbs
of the city of St. Louis. The plans called for a
home of pyramid shape. A city ordinance
established an architectural board to ensure that
the new residences conformed to certain minimum
architectural standards of appearance and
conformity with the surrounding structures and
that unsightly, grotesque and unsuitable
structures detrimental to the welfare of the
surrounding property were to be avoided.
Berkeley’s application for a permit was denied.
HOLDING: The stabilizing of property values and
giving some assurance to the public that, if
property is purchased in a residential
neighborhood, its value will be preserved is a
legitimate objective for zoning ordinances.
Property use that offends the sensibilities and
76
b.
decreases the property values affects not only
the adjoining property owners but also the
general public as well. When the property values
are destroyed or seriously impaired the tax base
of the community is affected and the public
suffers economically as a result. Here, the
denial of the building permit for Berkeley’s
highly modernistic residence in an area where
traditional Colonial, French Provincial, and
Tudor styles of architecture are erected does not
appear to be arbitrary and unreasonable when the
basic purpose to be served is the generals
welfare of the persons in the entire community.
NOTES:
(1) courts developing the law of nuisance
declared an ugly sit a nuisance. Courts
early viewed zoning under the police power a
form of nuisance control. Naturally then,
by analogy tot he nuisance, they held that a
police power can be exercised to further
public health, safety, and general welfare,
but not for purely aesthetic purposes.
(2) Not until the 1950s did the courts begin to
accept that the legitimacy of zoning could
be based exclusively on aesthetic
considerations. Expanded the definition of
public welfare. As a result of this
judicial change of view, architectural
review boards have proliferated in many
states.
(3) Aesthetic considerations are an important
factor in historic zoning and historic
preservation legislation, and in these
contexts the courts have felt less
inhibition in admitting the legitimacy of
aesthetic objectives.
(4) Court here did not rest its decision on the
legitimacy of aesthetics as a zoning
ordinance, relying instead largely on
protection of property values.
Anderson v. City of Issaquah
FACTS: P owned property and applied to the City
for a land use certification to develop the
property. The property is zoned for general
commercial use ,but P desired to build a 6800
square foot commercial building for several
retail tenants. He submitted the project to
77
c.
several city departments and the process went
smoothly until the Issaquah Development
Commission approval was sought. Various building
design objectives were stated in the IMC and P
thought he complied, but was denied by the
Commission because his façade did not fit with
the concept of the surrounding area. P modified
the design with the advice of the Commission and
resubmitted the plan. He was denied again and
again until finally P filed suit.
HOLDING:
A statute which either forbids or
requires the doing of an act in terms so vague
that men of common intelligence must necessarily
guess at its meaning and differs as to its
application, violates the first essential of due
process of law. The purpose of the void for
vagueness doctrine is to limit arbitrary and
discretionary enforcement of the law.. Ordinary
citizen reading the design sections of the IMC
would get no guidance as to what the Commission
will and will not approve. Provisions in the
codes must be written in understandable terms
with clear guidance given to all. The land use
certifications were met except for those
provisions which are unconstitutional anyway.
Land use should be granted.
NOTES:
(1) architects felt they should be required to
express themselves without having to be
subjected to a standard of beauty.
(2) If the Anderson case had involved a dispute
between the property owner and an
architectural control committee by private
covenants, Anderson very likely would have
lost. Private architectural restrictions
are governed by a different standard than
public restrictions.
(3) No court has ever held that architectural
expression is protected by the First
Amendment, but it is a common view of
commentators that design regulation, because
it implicates expressive values, should at
least by subject to close scrutiny
City of Ladue v. Gilleo
FACTS: Margaret Gilleo owns one of 57 single
family homes in a subdivision. On December 8,
1990 she placed a sign on her front lawn that was
78
printed with the words “say no to the war in the
Persian Gulf, call Congress now.” After that
sign disappeared, she put up another one but it
was knocked to the ground. When Gilleo reported
these incidents to the police they advised her
that such signs were prohibited in Ladue. The
city council denied her petition for a variance.
The district court issued an injunction and
Gilleo placed the sign in her upstairs window.
The city responded to the injunction by repealing
its ordinance and enacting a replacement which
contained a general prohibition on signs and
defined them broadly. The court of appeals ruled
that the ordinance was unconstitutional b/c it
was content based restriction.
HOLDING: It is common ground that the government
can regulate the physical characteristics of
signs. Precedents in this area identify two
analytically distinct grounds for challenging the
constitutionality of a municipal ordinance
regulating the display of signs. One is that the
measure in effect restricts too little speech b/c
its exemptions discriminate on the basis of the
signs’ messages. Alternatively, such provisions
are subject to attack on the ground that they
simply prohibit too much protected speech.
Ladue prohibits too much speech by totally
eliminating a common form of speech. There are
no adequate substitutes for signs in
communication.
NOTES:
(1) government controls based on the content of
communication are said to be subject to
closer judicial scrutiny than controls that
simply regulate the time, lace, and manner
of communication.
(2) In recent years the Court has approved two
distinct approaches to control – in each
instance against strong dissents that the
zoning measures were obviously not contentneutral bc/ they imposed selective
limitations based exclusively on content.
Disperse or concentrate the activity to be
regulated.
2. Controls on Household Composition
a. Village of Belle Terre v. Boraas
79
FACTS: Belle Terre is a village on Long Island’s
north shore of about 220 homes inhabited by 700
people. Its total land area is less than one
square mile. It has restricted land use to one
family dwelling, exclusion lodging houses,
boarding houses, fraternity houses, or multiple
dwelling houses. Boraas and five other students
at State University at Stony Brook, who were not
related to each other by blood, adoption, or
marriage, rented a home in Belle Terre in
December 1971. When Belle Terre served the
owners of the home with an Order to Remedy
Violations of the ordinance, the owners plus
three other tenants brought an action under the
Civil Rights Act for an injunction and a
judgement declaring the ordinance
unconstitutional. The court of appeals held that
the law was unconstitutional and Belle Terre
appealed.
HOLDING: the concept of the public welfare is
broad and inclusive. The ordinance does not
burden any fundamental rights guaranteed by the
Constitution, nor does it inflict procedural
disparities on some but not others. Rather, this
ordinance is in the field of economic and social
legislation and will be upheld if it bears a
rational relationship to a permissible state
objective. A quiet place where yards are wide,
people few, and motor vehicles restricted are
legitimate guidelines in a land use project
addressed to family needs. The police power is
not confined to the elimination of filth, stench,
and unhealthy places. It is ample to lay out
some where family values, youth values, and the
blessings of quiet seclusion and clean air make
area a sanctuary for people.
DISSENT: the ordinance in this case
unnecessarily burdens the first amendment freedom
of association and the right to privacy. The
first and fourteenth amendments protect the
freedom to chose ones associates. Constitutional
protection is extended not only to modes of
association that are political in the usual
sense, but also to those that pertain to the
social and economic benefit of the members. The
choice of household composition companions
involves deeply personal considerations as tot he
80
b.
kind an quality of intimate relationships within
the home. That decision surely falls within the
ambit of the right to privacy protected by the
constitution.
NOTES:
(1) the Supreme Court in a later decision
invalidating an ordinance which defined
family to include no more than one set of
grandchildren, limited the holding of this
case: the ordinance of Belle Terre affected
only unrelated individuals. East Cleveland,
in contrast, has chosen to regulate the
occupancy of its housing by slicing deeply
into the family itself. The city undertakes
such intrusive family regulation that the
usual judicial deference to the legislature
is inappropriate.
(2) The ordinance has but a tenuous relationship
to the alleviation of the conditions
mentioned by the city. The Constitution
protects the sanctity of the family.
(3) Occupancy restrictions based upon biological
or legal relationships, the court said, had
no reasonable tie to the city’s objectives.
(4) The state constitution and other cases
endorsed traditional notions of family.
There is no doubt that there is a
governmental interest in marriage and in
preserving the integrity of the biological
or legal family. There is no concomitant
governmental interest in keeping together a
group of unrelated persons, no matter how
closely they simulate a family.
City of Edmonds v. Oxford House
FACTS: in the summer of 1990, respondent Oxford
house opened up a group home in the city of
Edmonds, Washington for 10 to 12 adults
recovering form alcoholism and drug addiction.
The group home is located in a neighborhood zoned
for single family residences. Upon learning of
the home, the city issued criminal citations to
the owner and a resident of the house. The
citations charged violation of the zoning code
rule that defines who may live in a single family
dwelling unit. The occupants of such units must
compose a “family” and family under the City’s
defining rule. Oxford houses houses more than
81
five unrelated persons and therefore does not
conform to the code.
HOLDING: discrimination covered by the FHA
includes “a refusal to make reasonable
accommodations in rules, pollicies, and or
services when such accommodations may be
necessary to afford handicapped persons equal
opportunity to use and enjoy a dwelling. To
limit land use to single family residences, one
must define family. Maximum occupancy
restrictions, in contradiction, cap the number of
occupants per dwelling, typically in relation tot
he available floor space or the number or types
of rooms. These restrictions ordinarily apply
uniformly to all residents of the dwelling.
Rules that cap the number of persons fall within
the excpetions to the FHA. Rules for
compositions to a household do not. Edmonds rule
was a rule for compositions and there is a
separate provision for the number of occupants.
NOTES:
(1) group homes is a generic term for any number
of small, decentralized treatment facilities,
housing for foster children, etc.
3. Exclusionary Zoning and Growth Controls
a. Mount Laurel (I)
HOLDING: Mt. Laurel must, by its land use
regulations, make realistically possible the
opportunity for an appropriate variety and choice
of housing for all categories of people who may
desire to live there, of course including those
of low and moderate income. It must permit
multiple family housing, without bedroom or
similar restrictions, as well as small dwellings
on very small lots, low cost housing of other
types, and , in general, high density zoning,
without artificial and unjustifiable minimum
requirements as to lot size, building size, and
the like, to meet the full panoply of theses
needs. In other words, the municipality must
zone primarily for the living welfare of people,
and not for the benefit of the local tax rate.
Under present NJ legislation, zoning must be on
an individual municipality basis, rather than
regionally. So long as that kind of binding
agreement under the present tax structure exists,
82
b.
all municipalities of the region must bear their
fair share.
Southern Burlington County NAACP v. township of
Mount Laurel (II)
FACTS: The NAACP sued Mount Laurel, contending
that the municipality’s zoning scheme violated
the NJ constitution by failing to provide for low
income housing outside depressed areas. The NJ
Supreme Court invalidated the ordinances and
remanded for further proceedings. The trial court
held that it was sufficient that Mount Laurel had
made a bona fide effort to comply with the
Supreme Court decision and upheld the new
ordinance enacted in response. The NAACP
appealed contending that a mere attempt to
provide such zoning did not discharge Mount
Laurel’s constitutional obligations.
HOLDING: Municipal land use regulations must
provide a realistic opportunity for low and
moderate income housing. Such obligation extends
beyond attempting to provide for such housing.
The housing must be in direct proportion to the
percentage of lower income residents in the city.
To reach this goal, an affirmative governmental
action may be required. The elimination of some
obstacles and the creation of new zoning
ordinances may be frustrated by other
restrictions which effectively deprive the poor
of adequate housing. Therefore, zoning schemes
which merely manifested an intent to abide by the
original supreme court holding are insufficient
to discharge Mount Laurel’s constitutional
obligations. Reversed and Remanded
NOTES:
(1) the rationale behind the case is that the
use of all land is controlled by the state.
The state has constitutional obligations to
all its residents whether rich or poor.
Municipalities, as state subjects, must set
aside a fair share of its land for low
income housing. They cannot allocate only
dilapidated land for the poor and retain
valuable land for the rich exclusively.
While this rationale appears clear in
theory, in execution it has proven very
difficult. The main difficulty is
developing an equitable formula for
83
(2)
(3)
(4)
determining “fair share.” Until a
definitive formula is developed, this will
prevent widespread application of this rule.
The straightforward way to achieve
relatively low taxes is to have a handsome
tax base, well to do residents, and low
demand for such public services as water and
sewer, schools, police, fire departments,
public assistance programs, and so on.
Translated into public policy, this means
measures to ensure a community of
substantial and desirable industrial issues
and expensive homes located ion a low
density manner. Residents will ne3cessarily
tend to have high incomes and as a result,
will probably be white.
There are a number of techniques people
might use to exclude people whose
characteristics would interfere with the
ideal picture
a. minimum housing cost and minimum floor
area: now regulated by housing codes
which establish minimum standards for
all housing within the municipality,
they cover required facilities and are
similar to building codes, but apply
only to housing.
b. Minimum lot size: have been upheld in
most cases, if they find rational
justification in the conditions of
particular community
c. Minimum set back requirements: have
been upheld b/c they increase light and
air, reduce danger form fire, and
advance aesthetic concerns. Have been
almost universally upheld.
d. Barring mobile or manufactured homes:
from residential areas or perhaps the
entire community were almost always
upheld in early cases. And even today
when manufactured homes must meet
federal safety standards, prejudice
against them exists. In a few states,
court appear to be standing up against
the prejudice.
It appears the idea behind Mt. Laurel was
essentially deregulation: remove obstacles
84
that local government had put in the way of
less costly housing and let the market
respond. Newly constructed housing, even of
modest residences, might be beyond the reach
of low-income people, but the increased
supply would let the used housing trickle
down to them at affordable prices. Things
did not work out that way, though, b/c
communities read Mt. Laurel as applying only
to developing communities.
(5) Mt. Laurel opinion confirmed a builder’s
remedy under which the trial court could
allow a developer to go forth with low
income project event though the municipality
had not granted a permit if the court found
that the municipality had not fulfilled its
Mount Laurel obligations
(6) An interesting feature of the Fair Housing
Act in NJ provides for regional contribution
agreements whereby suburbs, may, with
Council approval, compensate cities for
agreeing to absorb up to half of the
suburbs’ fair share obligation. This makes
use of the existing house stock and
contributions will make it possible to
rehabilitate substandard housing.
(7) Exclusionary zoning can be practiced
anywhere and not all state courts have
responded on the activist fashion of the NJ
Supreme court: some state courts still
presume ordinances to be constitutional.
Other courts adopt a middle ground by
maintaining a presumption of validity but
judging the rationality of the measure in
question by reference to the regional as
opposed to the purely local interests.
(8) In Massachusetts, an applicant can appeal to
a state housing appeals committee. The
committee may reverse the denial if it is
not consistent with local needs for low
income and moderate income housing.
(9) Connecticut has similar legislation....
expedited appeals.
(10) In Oregon a state land conservation and
development commission has authority to
require a municipality to plan for higher
residential densities and permit multiple
85
unit dwellings when its finds that the
municipality lags in meeting the housing
needs of the region.
(11) Inclusionary zoning consists of a number of
devices designed to require or encourage
developers to supply low income and moderate
income housing
c. Growth controls
- growth controls aim – normally anyway – to keep out
everybody; the idea is to stop or to slow
development
- timing controls required developers to accumulate
points before a project could go forth. An eager
developer could earn point faster by providing some
of the sewage systems, schools, roads, parks, etc
needed to develop. The court approved this scheme
as a means not as exclusionary, but to provide a
balanced community and efficient land use.
- The use of quotas was upheld as rationally related
to the social and environmental welfare of the
community
- Growth controls have proliferated over the last
decade
- Most studies find that they increase housing prices
E. Is Zoning a Good Thing?
- the free market pricing system for land use does not
take into account the external costs one development
may have upon others. Zoning intervenes to correct
the market’s failure to take account of these
externalities.
- Yet zoning is fraught with abuses
- Between the marked decentralization of the market
and the centralized control of development in
western Europe rest other methods, studied earlier,
like nuisance and covenants. Zoning is an American
invention, unknown in Europe, and European land use
controls may have illuminating lessons. In most
countries in Western Europe, land is completely
controlled by the state. The land owner has no
right to develop, only the right to continue the
existing use of the land.
The distinction between existing use value and
development value is a fundamental one in zoning.
Chapter 12- Eminent Domain and the Problem of Regulatory
Takings- taking property form owners and reallocating it to
its own governmentally preferred uses. The government’s
86
power of eminent domain is well beyond dispute, but there
are limitations. The Fifth Amendment enjoins, “nor shall
private property be taken for public use without just
compensation
A. The Power of Eminent Domain: Sources and Rationales
- the power of the government to force transfers of
property form owners to itself
- orig9ins can be traced back to ancient Rome and
English sovereigns enjoyed similar powers
- in early America, the power of the government to
take private property was recognized, though
compensation was hardly universal in colonial times.
Gradually, however, statutes came to provide for
compensation and some judges required it even in the
absence of legislation.
- By the time the US Constitution was to held to
require compensation by the states, they were
already providing it on their own – through
constitutional or judge made law.
- Various rationales for the taking power have been
offered over the years: sovereign states had
original and absolute ownership of property,
individual possession derived from grants from the
state, and as a remnant of feudal tenures.
- Posner sketches a fictional justification for the
taking power, a justification that stresses
efficiency:
 it is necessary to prevent a monopoly
 especially ion cases of railroads, or
pipelines b/c people owning the land in the
path will be tempted to hold out for a very
high price – a price in excess of the
opportunity cost of the land
 higher prices will encourage the RRs to
substitute other inputs for land they would
have bought. As a result of all of this, land
that would be more valuable to a right of way
company than its present owners will remain in
its existing, less valuable uses, and this is
inefficient
 if low transaction costs, the parties should
transact in the market
 if high transaction costs, the courts should
be allowed to shift resources
- private developers must get land without eminent
domain- use buying agents, option agreements, and
87
straw transactions on their efforts – apparently
often successful – to deal with the problem of
holdouts.
- Assembly through voluntary transactions is usually
an unattractive alternative for the government b/c
it often seeks to acquire larger, more sitedependent parcels than do private developers, and
b/c it would have greater difficulty maintaining
secrecy for effective use of assembly techniques and
the controlling opportunities for corruption that
would arise
- Posner also suggests an economic rationale for the
compensation doctrine: without it, the government
would have an incentive to substitute land for other
inputs that were cheaper to society as a whole but
more expensive tot he government
- In any world lacking compensation there is a fear
that the government will take the land and so under
investment of capital results
B. The Public-Use Puzzle (and a note on just
compensation)
- fifth amendment’s mention of public use is read to
mean that property may be taken only for such uses;
the government may not condemn for “private purposes”
however willing it may be to pay compensation for the
forced transfer. The reach of the power, then,
hinges on the breadth or narrowness of the meaning
attached to pubic use.
1. Hawaii Housing Authority v. Midkiff
FACTS: the state of Hawaii through its housing
authority, sought to redistribute land held in fee
simple from a few families to the population in
general. Condemnation proceedings were instituted,
and Midkiff and other fee holders sued, contending
the statute allowing for such eminent domain
exercise violated the just compensation clause of
the fifth amendment. The trial court upheld the
statute, while the court of appeals reversed. The
Authority petitioned the Supreme Court of the US
for writ of certiorari, contending that the statute
reasonably related to a legitimate purpose and was
constitutional.
HOLDING: the pubic use clause of the fifth
amendment does not proscribe the exercise of
eminent domain power where such is reasonably
related to a conceivable public purpose. The
purpose of the statute in this case was to allow
88
for more widespread land ownership. This in turn
would allow for a more diversified program of land
development and add stability to the state’s
economy. As a result, the statute clearly related
to a legitimate governmental interest, and it
therefore was constitutional.
NOTES:
(1) the greatest criticism of the result in this
case is that it sanctions the taking of
private property, albeit for just
compensation, in order to benefit another
private party. The traditional use of the
eminent domain power involves the ultimate use
of the land by the condemning governmental
entity. However, the police power of the
individual state is relied upon to justify the
condemnation of property in this and similar
cases, and so long as a governmental purpose
can be identified, the action will be upheld.
(2) The precise view of the “public use”
requirement has varied over time and according
tot he type of taking involved. There are two
basic opposing views of the meaning of the
phrase:
 the term means advantage or benefit to the
public (the so-called broad view)
 the term means actual use or right to use of
the condemned property by the public (the socalled narrow view)
the broad view has returned to favor.
(3) Berger suggested that one test for public use
focuses on the contemplated ends of an act of
condemnation. If the ends are sufficiently
public in one sense or another, the test is
passed.
(4) Another way to see if the use is pubic is to
focus on the means used to accomplish the
condemnation: (Merill) the courts decide if
the government may proceed with the police
power or if it must use the taking power.
(5) Merill thins condemnation through eminent
domain only when the costs are so high as to
frustrate voluntary transaction in the market
b/c sellers have the power to hold out. B/c
eminent domain entails costs that market
exchange does not - legislative authorization,
judicial proceedings, professional appraisals,
89
etc. the government will have a healthy
incentive to avoid eminent domain whenever
possible.
(6) Delegation of the power of eminent domain to
private corporations and individuals engaged
in public services is permitted and well
settled as acceptable.
2. Poletown Neighborhood Council v. City of Detroit
FACTS: Detroit planned to condemn a residential
neighborhood, clear the ;and, and convey it to
General Motors as a site for construction of an
assembly plant
HOLDING: condemnation for a private use is
forbidden, but governmental action of the type
contemplated here meets a public need and serves an
essential pubic purpose. The benefit of the
municipality invoking the power of eminent domain
is clear and significant and is a legitimate object
of the Legislature.
DISSENT: the transfer to GM is not incidental and
this case is altering the law of eminent domain
3. City of Oakland v. Oakland Raiders
FACTS: the owners of the Oakland Raiders
professional football team decided to move the
franchise to LA. Oakland thereafter sought to keep
the team by acquiring it through eminent domain.
HOLDING: the taking of the tam by the city would
violate the commerce clause and so the Raiders will
remain in LA.
4. Note: Just compensation
- compensation in the constitutional sense is not
always full compensation. The market value is not
the value that every owner of property attaches to
his property but merely the value the marginal owner
attaches to his property.
- Some owners have idiosyncratic values for the house
and are hurt when the government takes their
property and gives them just the market value in
return.
- Supreme Court has rejected the idea of including
personal value I the compensation formula
C. Physical Occupations and Regulatory Takings
- if the government wished to condemn private property
for public use, it must comply with procedure
designed to assure owners of due process.
 file a petition in court
90

notice to all persons with an interest in the
property
 trial where government has to establish
authority to condemn
 government gets permission to enter and
inspect the property
 government pays a deposit for the property
 pay compensation plus interest
- jury decides the amount of compensation an the court
decides necessity and public use questions
- the rules of takings have developed in stages
1. Rules of Decision (Before 1987)
a. Loretto v. Teleprompter Manhattan CATV Corp.
FACTS: NY enacted a statute which required
apartment house owners to provide tenants with
access to cable television reception. Loretto
brought a class action against D contending that
its placement of its cable television
installation equipment constituted trespass and
that the statute allowed for a taking of her
property without just compensation. The trial
court granted summary judgment for D, upholding
the constitutionality of the statute. The
appellate court affirmed, and Loretto appealed to
the US Supreme Court
HOLDING: Any permanent physical occupation of an
owners property which is authorized by the
government constitutes a taking of property which
requires a payment of just compensation. Any
occupation, no matter how slight, impacts on the
owner’s right to exclusive possession of his
property. In this case, the equipment occupied a
very small area of the property. Yet its
presence constituted a physical occupation and
thus necessarily must be classified as a taking
of property within the meaning of the fifth
amendment. Therefore, just compensation must be
paid.
DISSENT: the court goes against the established
precedent by recognizing a per se taking rule.
It has previously been held on many occasions
that each taking case must be considered on its
peculiar facts. A rigid per se rule finding that
a taking in every physical encroachment will
require compensation in situations not justified
91
b.
under previous interpretations of the Takings
clause.
NOTES:
(1) the court recognizes the fundamental
inconsistency with the elements of private
ownership presented by any physical
occupation of the property by a stranger.
When such an invasion is authorized by the
government, a compensable taking occurs.
The amount of money necessary to constitute
just compensation will vary with the case.
The court declined to rule on whether $1 per
unit payment was sufficient in this case.
(2) On remand, the ?court of Appeals sustained
the validity of the statutory provision
empowering the Commission to set
compensation for the takings in question at
$`. This was sufficient, they decided, b/s
the presence of cable would increase the
building value.
(3) The majority decide the case in terms of a
per se categorical rule: a permanent
physical authorization by the government is
a taking, period. There is no set formula.
(4) The distinction, in this case, is between
permanent occupations and temporary
invasions.
Hadacheck v. Sebastian
FACTS: Hadacheck (P) was convicted of a
misdemeanor for the violation of a Los Angeles
city ordinance making it unlawful for nay person
to establish or operate a brick yard or a brick
kiln within the city limits. P whose business
was established before the ordinance was enacted,
asserted that his business was not a nuisance as
defined under state statues. The enforcement of
the ordinance according to P amounted to a taking
of property without compensation, violating
guarantees of due process. The California
Supreme Court upheld the ordinance as a valid
nondiscriminatory regulatory measure.
HOLDING: the imperative necessity of the police
power precludes any limitation on its use when it
is not exerted arbitrarily. There must be
progress, and if in its march private interest
are in the way they must yield to the good of the
community. Even granting P’s business was not a
92
nuisance per se, the municipality found that
fumes and dust from the brick making plant had
occasionally caused sickness and serious
discomfort to those living in the vicinity. IT
may be that brick yards in other localities where
the same conditions existed were not regulated pr
prohibited, but it does not follow that they will
not be. That P’s business was first in time to
be prohibited does not make its prohibition
unlawful.
NOTES:
(1) the doctrines of eminent domain and police
power are distinct and separate powers of
the government. In eminent domain
proceedings, land is taken by the state b/c
it will thereby be more of a use to the
public. Under the police power, private
property rights re impaired by the state not
b/c they have become necessary or useful o
the public, but because there free exercise
is believed to be harmful to important
public interests.
(2) Case can be read to suggest that if
government action in question is depicted as
a nuisance control measure, then there is no
taking notwithstanding the loss worked by
the regulation. The underlying notion is
that the government is curbing a public bad
rather than expropriating a public good
(3) Under the police power, rights of property
are impaired not b/c they become useful or
necessary to the public or b/c of some
public advantage, but b/c their free
exercise is believed to be detrimental to
public interests; it may be said that the
state takes property by eminent domain b/c
it is useful to the public and under the
police power b/c it is harmful. Yet the
former recognizes a right to compensation,
while the latter principal does not.
(4) Though not completely without defenders, the
nuisance or public bad test has been rather
roundly criticized as a basis for deciding
when a regulation amounts to a taking
(5) The idea is that compensation is required
when the public helps itself to a good at a
private expense, but not when the public
93
c.
simply requires one of its members to stop
making a nuisance of himself.
Pennsylvania Coal Co. v. Mahon
FACTS: In 1878, D transferred certain real
estate property to Mahon (P) by a deed in which D
reserved the mineral rights on the property and P
waived all rights to object to or receive damages
for the removal of such minerals. In 1921, the
Penn legislature enacted the “Kohler Act” which
forbade the mining of coal in such a way as to
cause the subsidence of any human habitation.
When D decided to exercise its mineral rights
pursuant to the deed, P instituted an action for
an injunction on the grounds that the mining
would violate the Kohler Act by causing the
subsidence of his home. From a decree granting
the injunction, the D appealed, contending that
such an application of the statute would
constitute a taking without compensation contrary
to the Due Process clause.
HOLDING: private property may be regulated
pursuant to the police power of the state to
protect public health, safety, and moral; but if
the regulation goes as far as to destroy or
appropriate a property right, it becomes a
“taking” under the Fifth and Fourteenth
Amendments, requiring compensation therefor. IT
is well established, of course, that some
property rights must yield to the public interest
and the police power. Here, however, the limited
public interest in protecting P’s surface rights
does not justify the total destruction of the
mineral rights which D reserved in its deed to P.
AS such, the Kohler Act is unconstitutional
insofar as it fails to provide for compensation
fort he taking of D’s property rights. The
decree which was based upon it is accordingly
reversed.
DISSENT: no taking occurred here. Rather, the
state merely exercised the police power to
prevent a noxious use of the property. The
property remains in the possession of the owners.
NOTES:
(1) we have thus far considered two categorical
tests or per se rules of decision for taking
cases: permanent physical occupations are
94
d.
always takings; nuisance control measures
are never takings.
(2) Penn Coal is a classic statement of a
different sort of test: concerned with
differences of degree rather than
differences in kind, inquiring whether- on
balance- matter have gone “too far.” The
test says, in essence, that when a
governmental regulation of a use that is not
a nuisance works too great a burden on the
property owners, it cannot go forth without
compensation.
(3) Rule is usually referred to as the
diminution in value rule. But diminution
relative to what?
(4) Pennsylvania law recognizes three separate
estate in mining property: in the surface,
in the minerals, and in support of the
surface. Holmes saw the Kohler act as
purporting to abolish the third estate
entirely. Brandeis, in the dissent, on the
other hand, reasoned that the rights of an
owner as against the public are not
increased by divining up the interests in
his property.
Keystone Bituminous Coal Association v.
DeBenedictis
FACTS: in 1996, PA enacted legislation designed,
as was the Kohler Act, to control subsidence form
coal mining. The legislation, here called the
Subsidence Act, requires mine operators to keep
up to 50 percent of their coal in place and to
repair surface damage caused by subsidence even
if the owners waived their rights. Four mining
corporations challenged the constitutionality of
the legislation, claiming it was among other
things, a taking of their property.
HOLDING: court holds that Penn Coal does not
control this case. The character of the
governmental action involved here leans heavily
against finding a taking. The government acted
to arrest what it perceives to be a significant
threat to the common welfare. Unlike the Kohler
Act, the Subsidence Act does not merely involve a
balancing of private economic interests of coal
companies against the private interests of the
surface owners. The Penn legislature
95
e.
specifically found that public interests are
served by enforcing a policy that is designed to
minimize subsidence in certain areas. The
Commonwealth is acting to protect the public
interests in health, the environment, and the
fiscal integrity of the area. Under our system
of government, one of the state’s primary ways of
preserving the public weal is restricting the
uses individuals cam make of their property.
While each is burdened somewhat by such
restrictions, we, in turn, benefit greatly from
the restrictions that are placed on others. No
basis for treating the less than 2% of
petitioners coal as a separate parcel of
property.
Penn Central Transportation Company v. City of
New York
FACTS: NY’s landmark Preservation commission,
acting under the authority of the city’s
Landmarks Preservation Law, designated Grand
Central Terminal a landmark. The Terminal, owned
by the Penn Central Transportation Co. and its
affiliates, is one of NY’s most famous buildings.
Designation as a landmark resulted in
restrictions upon the use of the Terminal. In
particular, changes to the its exterior
architectural features had to be approved in
advance by the commission. In 1968, Penn Central
entered into a contract with UGP Properties to
construct a multi-story office building above
Grand central Terminal. After the Commission
rejected its application, Penn Central filed suit
alleging that the application of the law had
taken its property without just compensation in
violation of the Fifth and Fourteenth Amendments.
The New York ?Court of Appeals no denial of due
process, and the Penn central appealed.
HOLDING: A city may [place restrictions on the
development of individual historic landmarks
without effecting a taking requiring just
compensation. The focus is on both the character
of the action and on the nature and extent of the
interference with the rights of the parcel as a
whole.
DISSENT: The City of NY has imposed a
substantial cost o less than one tenth of a
percent of the buildings in NYC for the general
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2.
benefit of all its people. Its exactly this
imposition of general costs on a few individuals
at which the taking protection is directed.
NOTES:
(1) Keystone and Penn Central clearly reject the
idea of conceptual severance. The majority
opinion in Penn added something new to the
conventional collection of takings test, but
just what is less clear. The distinct
investment backed expectations formulation
is obviously drawn from Professor
Michelman’s essay on takings.
(2) There is some suggestion in case law that
distinct investment backed expectations –
and thus takings- are more likely to be fond
when regulations interfere with investments
that property owners have already made, as
opposed to regulations limiting possible
future investment opportunities.
(3) Transferable development rights (TDRs) like
those involved in Penn Central represent a
relatively new, and very controversial
approach to land use planning. The TDR
approach severs development rights from
other rights in land and treats them as a
separate item. Owners of the restricted
land are given TDRs that can be used for
development, beyond which would otherwise be
permitted on receiving lots or in so-called
transfer areas. Recipients of the TDRs may
sell their rights or use them on the land
they own. Provides some form of
compensation.
(4) TDRs do amount to just compensation, in
fact, even though the value of the TDRs may
fall short of the fair market value
ordinarily required in cases of
condemnation.
Matters of Remedy the remedy should be compensation. After all,
if the government takes property – condemns it
– under the power of eminent domain, the
obligation to pay just compensation follows.
 A suit for compensation would usually proceed
by way of a so-called inverse condemnation
action: the claimant rather than the
government institutes the suit, alleging that
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a.
a taking has occurred and seeking recompense
for it
 The remedy was routinely granted as to takings
by physical occupation (including the category
of loss of access, destruction of property, or
an actual transfer of title, possession, or
control to the government) but it was
typically denied as to regulatory takings.
Instead, the courts awarded declaratory or
injunctive relief invalidating the regulation
or its application
First English Evangelical Lutheran Church of
Glendale v. County of Los Angeles
FACTS: the church owned land downhill from land
owned by the National Forest
Service. A forest fire and subsequent flooding
on the National Forest induced Los Angeles to
enact an ordinance precluding building on church
owned land. The Church sued, contending that the
ordinance constituted a taking without just
compensation. The trial court ruled such an
ordinance constituted a regulatory taking which
until found to violate due process did not give
rise to the obligation to compensate. The court
of appeals affirmed, the California Supreme court
denied review, and the US Supreme Court granted a
hearing.
HOLDING: A landowner whose property is taken by
a land use regulation may recover for the time
before final determination that a constitutional
taking has occurred. Temporary takings which
deny a landowner all use of his property are not
different in kind from permanent taking for which
just compensation is mandated. The purpose of
the fifth amendment just compensation clause is
to prevent the government from forcing some
people alone to bear the burden. Thus, the
judgment is vacated and the decision reversed.
DISSENT: the decision invites useless
litigation. Only physical takings are
compensable. Regulatory takings are compensable
only in the extreme case. State remedies should
be exhausted before federal relief is obtained.
NOTES:
(1) this case overrules in part a decision of
the CA Supreme Court on this issue. In
Agnis v. Tiburon, it was held that
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(2)
(3)
(4)
(5)
(6)
(7)
(8)
compensation was not due until a
constitutional taking occurred. A
regulatory taking was not considered
intrusive enough to require compensation.
Although the US Supreme Court affirmed Agnis
on other grounds, it never reached the issue
presented here until this case.
The court found that the ordinance did not
work a taking b/c it did not deny all use of
the property and uses it did deny could be
constitutionally prohibited to protect the
public safety.
Eight states, after the case, had state
constitutions that required damages to be
paid when a regulation goes too far, and
seven required compensation for temporary
takings.
The cutting edge of the land use decisions
is found in the state supreme court where,
for a number of reasons, issue of local
government and if its regulation seem to be
better under stood than they are in
Washington DC
Cons of compensatory remedy: inhibits
community planning and chills exercises of
police power, usurps the legislature’s power
to make decisions about public expenditures,
P may recover a windfall if the regulation
is later repealed after compensation has
been paid for the temporary taking
Pros of compensatory remedy: regulatory
action can destroy use and enjoyment of
property just as effectively as physical
occupation or destruction, overzealous
regulation can also be compensable,
especially b/c invalidation of itself fails
to compensate for losses that were
wrongfully imposed
The threat of governmental financial
liability for unconstitutional exercises of
the police power would help produce more
rational land-use controls, ones that more
carefully weighed costs against benefits.
What is the measure of damages? There are
various possibilities, such as fair rental
value, option price, interest on lost
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profits, before and after valuation, and the
benefit to the government
(9) Inverse condemnation suits seeking
compensation for regulatory takings are
generally to be pursued in the first
instance in state courts. Constitutional
challenges in federal courts are not usually
ripe until a state denies compensation, b/c
states are free to take property for
legitimate governmental purposes, provided
that only they pay.
(10) The Tucker Act and the Court of Federal
Claims: the Tucker Act provides
jurisdiction in the US Court of Federal
Claims for damages claims against the
federal government founded on the
constitution, a regulation, or an express or
implied contract. IF a regulation works a
taking, then the claim for compensation is
founded on the constitution and within the
court’s jurisdiction. This is to provide a
forum for monetary claims against the
government and effectively move a large
number of takings cases against the federal
government into the court of Federal Claims
– a point that would perhaps be unremarkable
were it not for the fact that the court is
thought by some observers to have titled to
the right.
3. Rules of Decision (1987 and beyond)
a. Nollan v. California Coastal Commission
FACTS: The Nollans owned certain beach front
property. They applied for a permit to build a
residence upon it. The CA Coastal Commission
(D), finding that such a sue would impeded public
viewing of the beach, conditioned the permit upon
the Nollan’s granting of a public easement
permitting lateral movement along the Nollan’s
property to adjacent public beaches. The
Nollan’s challenged this as a deprivation of
property rights without due process. The trial
court agreed and enjoined the condition. The
court of appeal reversed. The US Supreme Court
accepted review.
HOLDING: A state may not condition a property
use on an act not addressing the problem caused
by the permitted use. A land use regulation does
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b.
not effect a taking is it substantially advances
legitimate state interests and does not deny an
owner economically viable use of the land. Thus,
when state finds a public interest and does not
leave the owner with useless property, no taking
occurs when a land use is prohibited. However,
this constitutional propriety disappears when the
condition substituted for outright prohibition
fails to further the end advanced as the
justification for the prohibition. When his
occurs, the prohibition no longer becomes a
vehicle for advancing a state interest, but
rather a manner of extorting a property right
without paying just compensation. Here, the
recognized public interest was preventing the
blockage of the beach from public view. The
condition, providing an easement for lateral
public access along the beach, does nothing to
alleviate this perceived problem. The conditional
use, therefore, fails to advance a state interest
and therefore constitutes a taking. Reversed
NOTES:
(1) The court was far from clear as to what sort
of nexus must exist between a condition and
the interest advanced by the original
prohibition. A tone point, the opinion
notes that a taking will occur is there is
utterly no connection, which implies only a
slight relationship being necessary. On the
other hand, language in the opinion speaks
of a substantial relationship being
necessary.
Dolan v. City of Tigard
FACTS: The state of Oregon enacted a
comprehensive land use management program in 1973
that required property owners in the area zoned
as Central Business District to comply with the
15% open space requirement and landscaping that
limited the total site coverage; including
structures and paved parking lots to 85% of the
parcel; required that new development dedicate
land for pedestrian and bike pathways; and
required in accord with a Master Drainage plan,
various improvements tot he Fanno Creek Basin.
Petitioner owns a [plumbing and electric supply
store located on Main Street in the City and
Fanno creeks flows along its western boundary.
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Petitioner applied to the city for a permit to
redevelop the site and her proposed plans called
for nearly doubling the size of the store and
paving a parking lot. The proposed expansions
and the intensified use were consistent with the
city’s zoning scheme. The city planing
Commission granted the permit application subject
to conditions imposed by the city’s CDFC:
sufficient open land for a greenway adjoining the
floodplain, and construction of a bike path.
Petitioner requested variances since the
dedication required 10%of her property and was
denied. The Land Use Board of Appeals assumed
the city’s findings about the impact of the
development were correct and affirmed b/c there
was a reasonable relationship between the
development and the requirements. The court of
appeals also confirmed and Petitioner kept
appealing
HOLDING: one of the principle purposes of the
takings clause is to bar the government from
forcing some people alone to bear public burdens
which, in all fairness and justice, should be
borne by the public as a whole. The public
access required of Petitioner would deprive
petitioner of the right to exclude others, one of
the most essential sticks in the bundle of rights
that are commonly characterized as property. No
doubt the prevention of flooding along Fanno
Creek and the reduction of traffic congestion in
the Central Business District qualify as the type
of legitimate purpose we have upheld. While the
city has alleged that the traffic would increase
and the floodplain is necessary, if the local
government cannot demonstrate that its exaction
is directly proportional to the specifically
created need, the exaction becomes a veiled
exercise of the power of eminent domain and a
confiscation of the private property behind the
defense of police regulations. Municipalities
must show a rough proportionality between the
required dedication and the impact of the
proposed development. The findings of fact that
the bike path OCULD offset some of the traffic
demand is a far cry from the finding that the
bike path WILL or is LIKELY TO offset some of the
traffic demand. No mathematical calculation is
102
c.
required, but the city must make some effort to
quantify its findings in support of the
dedication for the bike path beyond a conclusory
statement that it could offset some of the
traffic demand generated. It is also difficult
to see why a public greenway as opposed to a
private one is required in the interest of flood
control. Therefore, the judgment is reversed and
the case is remanded for further proceedings
consistent with this opinion.
NOTES:
(1) exaction’s of the sport at issue in Nollan
and Dolan are local government measures that
requires developers to provide goods and
services or pay fees as a condition to
getting project approval. Exactions quickly
became a common way of funding public
improvements and became so common and
troublesome that the Supreme Court
intervened.
(2) In Nolan the court held that there must be
some logical connection – some nexus –
between exaction and the regulation excepted
in exchange for it. In Dolan, the court
went further and held that even when a nexus
exists, there must also be some rough
proportionality between the thing exacted
and the development permitted in exchange.
(3) Impact fees are exactions too but they exact
money instead of goods.
Lucas v. South Carolina Coastal Council
FACTS: Lucas purchased residential lots for
$975,000 on the Isle of Palms, a barrier island
off the coats of South Carolina, on which he
planned to build single family homes. The Isle
of Palms development, of which Lucas was a coowner, was located on highly unstable ground,
prone to flooding and erosion. At the time of
the purchase, the state, county and town had not
imposed any restrictions on the residential use
of property. However, two years after P’s
purchase, but before construction, D enacted the
Beachfront Management Act, in an attempt to
counteract the critical erosion if the SC
Beaches. The Act prohibited, without exception,
the construction of any habitable improvements
seaward of the baseline connecting historical
103
points of erosion on the Isle of Palms. P'’ lots
were located within the restricted area. He
filed suit against D contending that the Acts’
ban on construction amounted to a taking of his
property without just compensation. He conceded
that the act was lawful exercise of SC’s police
power but claimed that the act rendered his
property valueless, entitling him to
compensation. The trial court agreed and ordered
South Carolina reversed ruling that when an
otherwise valid regulation respecting the use of
property is designed to prevent public harm, as
was this act, no compensation was owned. Lucas
appealed.
HOLDING: The state mist compensate a landowner
when a regulatory action denies an owner
economically valuable use of his land, unless
prohibited use of the land constitutes a nuisance
under state common law. Traditionally,
compensation has been required for two separate
categories of regulatory actions: those that
cause a physical invasion of private property,
and those that deprive a landowner of all
economically beneficial or productive use of the
land. However, there is also a long line of
cases denying compensation to owners whose
property is regulated to prevent a public harm in
which the law prohibits use without compensation.
The co9urt’s contemporary analysis is that there
is no taking if a land-use regulation
substantially advances a legitimate state
interest. Whether the regulation prevents a
harmful use can no longer be the basis for an
exception from the rule that total regulatory
taking must be compensated; if it were, no
compensation would ever be necessary, since most
regulations may be described as mitigating some
harm, depending on the observer’s point of view.
Instead, a better test is that confiscatory
regulations, i.e. those that prohibit all
economically beneficial use of the land, may not
be enacted without compensation unless the
relation serves to prohibit a purpose that was
already unlawful under existing nuisance and
property law. In this case, the act rendered
Lucas’ lots valueless by remaining that they
remain in their natural state. Therefore, D must
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d.
either identify their relevant common law
principles of nuisance and property that would
prohibit construction on the beach front property
or compensate him for the value of the property.
DISSENT: the court has consistently upheld
regulations that prohibit an owner from using his
property in a way that is harmful to the public.
P never challenged the legislature’s findings
that a building ban was necessary to profit
property and life and therefore, the lower court
correctly found no taking. The majority has
created a new rule and a new exception, based on
the trial court’s finding that the property had
lost all its economic value. There is no reason
to believe that the majority’s claim that the
new interpretation of the old common-law nuisance
doctrine will be any more objective or value-free
than reliance on legislative judgments of what
constitutes a harm.
NOTES:
(1) Lucas altered the nuisance exception. Court,
not legislature, now has the authority as to
what land use is injurious.
(2) The court noted that the Lucas regulation
was passed after the P’s acquired title and
this is important
(3) Generally speaking state courts appear to
reject conceptual severance; they consider
the impact of land use regulation on the
value of a property owner’s entire parcel as
opposed to its impact on just the regulated
part
(4) Not many court actually relied on Lucas...
courts rarely find the condition that all
economic use is gone
Notes: Academic Perspectives on Taking
105