Property Outline
Davis, Wilon, Buchweitz, Tajcher & Ayyappan
By Robert Wilon
I
Property Rights in General
A] Bundle of rights (non absolute) as opposed to Absolute rights
1)Right to use, exclude others, and transfer(Bundle)
2)No right to do as you please(pollute, light house on fire, play loud music)
II Acquisition and Conflicting Claims
A] Acquisition by Capture (Wild Animals)
1)Pierson V. Post (pg. 19)(two guys hunting a fox, 1 w/ hounds 1 w/out)
Issue: What act =’s possession of wild animals?
Majority: Actual Possession, or certain control through wounding/trapping
(pursuit alone-not ’nuff)
Dissent: only requires any reasonable prospect of capturing
Policy Issues:
a) First possession-capture animal it’s yours
b) Labor Theory- Locke- you work on it it’s yours
c) Rules (55 mph speed limit) v. Standards(drive w/ reasonable care)
-Majority gives a rule in possession-Dissent provides a standard
Rules: More specific, clearer, certain tf less conflict, cheaper and easier to
administer and enforce.
Standards: Adjust to society’s needs -> fairness and justice
d) Fairness (standards) v. Efficiency (Rules)
e) Legal Norms v. Social Norms (what’s the accepted rule amongst hunters)(Seinfeld)
- we want the two to coincide
2)Ghen v. Rich(pg. 26)(Whale Shooting)
Issue: Does common practice of lancing give Ghen entitlement to whale
Holding: Yes we defer to industry custom as long as:
1) custom embraces entire industry
2) custom is of limited application (not too vague & not all encompassing)
3) custom is fair and in social interest
Policy Issues: Group Welfare v. Aggregate Welfare(society)
GW= better for whale hunters if Ghen gets the $ for the whale he killed
AW= this policy could lead to over-hunting of whales and hurt the AW
3) Keeble v. Hickeringill (pg. 30)(Δ shot at decoy pond to scare ducks away)
Issue: Is a free animal on private property considered the prop. of the land owner?
Holding: Since the ducks are on his land he has some control but not full (awarded $ for
disruption but not for damages)
Policy Issues: Useful v. Harmful activity-here ct. allows for some constructive poss. in
Pierson/Post doesn’t- ct.s will differ depending on whether the outcome is useful or harmful(If the Def.
was Greenpeace and they were scaring ducks to save them from extinction(useful) the ct. may have
rejected constructive poss.)(flexibility in law)
4) Doctrines for Animals
a) Relativity of Possession- Landlord>Poacher> Anyone else(minimizes future conflict)
b) Habit of Return- If you capture wild animal and it escapes it rejoins the commons and is free to be
captured by others (not true of domestic animals)
c) Rule of Increase- offspring belong to female’s owner(even if males owner fed female)
Possession is 9/10 of the Law
B] Natural Resources
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1) Common Law-likens appropriation of gas and oil to wild animals-1st possessor could
deplete reservoir of neighbor-problem is w/ re-injectment which is trespass
2) Hammonds v. Central Kentucky (p.1 in SM)(Δ was re-injecting/storing gas under π’s prop.)
Issue: who owns gas after it’s re-injected?
Holding: Lower Ct. Gas was re-injected on purpose so we can’t compare to wild animal that
escaped so the gas remains in possession of the re-injector
Appellate Ct.- said it’s like an animal & goes back into the commons
3) Water- 3 types- Underground, Water Courses(lakes, rivers), Surface(runoff from rain)
a) Underground- apply rule of capture w/ reasonableness purpose limitation
b) Water Courses
1.Stratton v. Mt. Hermon Boys School (Δ diverted H20 to his other prop. off of stream)
Issue: Can riparian landowner divert H20 away from ripir. land if it doesn’t harm lower owner
Holding: Can use H20 in any reasonable way (even away from ripir.land) a.l.a. don’t harm other
riparian owners (π must show injury)(this rule used in the east-H20 is plentiful)
2. Coffin v. Left Hand Ditch (π collects H20 for irrigation using dam-Δ who was there 1st breaks the
dam)
Issue: What is considered reasonable use?
Holding: First appropriation if it’s for a Beneficial use-If use is reasonable can take measures to get it
(tf D allowed to take the water just had to pay for damages b/c should have sued instead of breaking
the dam (used in West)
East V. West
East-for use of rip. land you can do as you wish(Stratton only applies to diversion off of land)
West-even for use on rip. land you are limited to reasonable/beneficial use based on your neighbors
Policy Issues:
a) Tragedy of the Commons-Garret Hardin observed – rational behavior would lead to
the overuse of communal recources->to undesirable social results(overdrilling/no oil)
(i.e. 1000 trees for 100 ppl.- 1 guy cuts one down he has 10.99 everyone else is left w/ 9.99-if
it was private prop. if he cut down tree it’s his loss or the externality is internalized)
Solutions:
problems w/ solutions
Proportional Extraction-get whats under your share
Monitoring & enforcement- could lead to dispute
Consolidated management-all share in oil
Agency costs/coordination probs.-ppl. may cheat
Regulation by State or other Gov.
Corruption
State Ownership
Inefficient-no competition: Corruption
b) Demsetz- role of property law is internalize the external cost stemming from individual self
interest behavior
Hardin & Demsetz depict a self centered society who do anything for > profits- not necessarily true
c) Tragedy of the Anti-Commons -private prop. may give rise to inefficiencies which lead to
underuse & over-appropriation (patentee may overcharge for his invention-many ppl. can’t afford
it)
d) Charles Reich- Priv. Prop. helps establish: Independence, Pluralism & Dignity in soc.
e) Milton Friedman- Pr. Prop. is essential to political freedom and Democracy
Public v. Private prop.Public- desirable if there is abundance and if we wish to value sharing/community
Private- works better when scarce resources & when we want independence and liberty
C] Acquisition by Creation
1) Moore v. Regents of Univ. of Calif.- (pg. 66)(spleen used for cell line/big profits)
Issue: Is the taking/using of cells/tissues considered tort of Conversion
Holding: Supr. ct.- No, under traditional property theory you have no ownership after excision
Policy Issue: If P was given rights to his cells this would adversely impact scientific research
Intellectual Property- Book is not IP, story in it is
2) Cheney Bros. v. Doris Silk (pg. 60) (Δ copied the pattern designs of the π)
Issue: a: Does patent law protect non-tangible property?
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b: If not, can π get seasonal protection for designs even though they’re unpatentable?
Holding: No, because imitation is legitimate- if we restrict-> Monopolies-> prices go up
3) Smith v. Chanel (pg.63) (Δ’s ad claims it’s better than Chanel)
Holding: Ct. allows this bec. in public interest to support comparable goods for less(can’t use
name itself on the product -can’t defame original)
4) INS v. AP (pg. 62) (Δ took π news as its own)
Holding: Sup. Ct.- AP (π) has quasi prop. rights in to the news tf INS(Δ) can’t use it
Public Policy: Good example of Utilitarian theory v. Labor Theory (see below)
Policy Issues:
1) Labor Theory- entitled to the fruits of your own labor
Utilitarian Theory- Good for the public
a)Sometimes the two coincide sometimes they conflict- we want both an incentive for producers
to create(labor/producers) as well as wide dissemination and low prices(utilit./public)
b)Currently trend of legislators is to guard producers
c)other ways producers are naturally advantaged/protected from copycats
technology, advertising (name recognition), lead time(1st on market),contracts, trade secrets
2) Patent Law- protects technological & scientific inventions for 20 yr. Period
Copyright Law- protects works of art & other cultural work for life of author +75 yrs.
Trademarks-protects names of products as long as they are being used in commerce
-These rules are consistent w/ the Labor theory
3) Right to Publicity-celebs have property interest in their names, likeness, distinguishing characteristics
when used for commercial purpose
D] Chattels-(Acq. by creation, purchase,find & gift)-moveable objects
1) Creation- create something w/ raw materials
a) Law of Accession- if someone uses another’s raw materials to create something w/out permission, the
product goes to owner of materials
Exception: If maker adds a disproportionate value to the materials and had taken them in good
faith(by accident)the rule doesn’t apply & he just has to pay the value of the materials
2) Purchase
Bona Fide Purchaser for Value(BFPV)-a person who unknowingly buys a stolen good from a
Scoundrel
Hierarchy of claims of prop: Original Owner>BFPV>Scoundrel- this rule applies in all theft casesexceptions in non theft cases
Exceptions: in which cases BFPV > original owner>scoundrel
a) Voidable Title-if scoundrel gained possession through fraud or misrepresentation
b) Estoppel-owner entrusts goods to scoundrel who then sells it w/out permission in the ordinary
course of business (only ucc recognizes estoppel not common law)
Rationale-owner in exceptions could have better watched his possessions-he is Least Cost Avoider
3) Finda) Armory v. Delamirie (pg. 100)(kid found jewel, brought it to jeweler who took the jewels)
Holding: Finder prevails over all but true owner
Rationale: If finders were not protected they would not report found items to the police
b) McAvoy v. Medina (pg. 110) (pocketbook found in barber shop)
Issue: Who should keep an item found in a private place?
Holding: 1) Mislaid property-finder acquires no rights(if lady returns owner should have the bag)
2) Lost prop.- finder acquires a right to item except over true owner
3) Abandoned-finder keeps it over all
Bailment- exists whenever someone rightfully possess goods w/o being true owner-(created in 3 ways: find,
agreement &implication)
Finder = Bailee/entrustee- Owner=Bailor (i.e. parking garage) (Bailee has a duty of care- level varies)
a) Mutually Beneficial- baillee paid or benefited=ordinary diligence(shomer sachar)
b) Solely benefit bailor-lower level of care required, only liable for gross negligence(chinam)
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c) Solely benefit bailee- (lending something)= bailee has high level duty of care(shoel)
d) Involuntary bailment- bailee must give slight care (If guy leaves a note “watch my car” you should
lock the car)
4) Gift- Present voluntary transfer of prop. from one to another w/o consideration or payment
A) Inter vivos- living gift – irrevocable
Causa mortis- made in contemplation of immediate death- revocable if giver lives
1) Both types need:
a) Delivery-(manual/actual, constructive, or symbolic) (question of law)
b) Intent (question for the jury)
c) Acceptance-(can be presumed if it(gift) is beneficial
B) Newman v. Bost (170)(old man on death bed gives key to dresser to young “fiancée”)
Issue: What constitutes a giving?
Holding: The key given was to the bureau, but his intent (question of fact for jury) was not for
the insurance policy inside. Otherwise he would have given it to her manually (must be a
reason for constructive or symbolic giving i.e. heavy object)
C) Gruen v. Gruen (178) (painting from dad)
Issue: Can a donor retain a life estate in the gift w/o invalidating the gift?
Holding: Yes, title was transferred to son (through constructive delivery) son has present
interest - Possessory interest is in the future
E] Acquisition of Land-(by discovery) unique-value, status, yields resources, finite amt., permanent
1) Johnson v. M’Intosh (pg. 3) (π bought land from Indian tribe- Δ got it from English)
Issue: What constitutes acquisition of land?
Holding: Acquisition by Discovery and Europeans were first to discover Amer.- NA’s had
occupancy rights but no rights to transfer
a) Prof. Rose (pg.18)- Q: What about 1st possession? A: To Europeans, NA’s were just
occupants, not possessors- in fact NA’s did not believe much in possession of land +
possession belongs to cultivators(Europeans)
 Basically a Political Decision- judge had no choice in order to maintain established set of prop.
rights
2) Robert C. Ellickson Property In Land (SM 9)
3 types of prop. : Private(home), Group(CoOp) & Open access(Beaches)
Private Property: positives 1}Better when small events occur-2}eliminates externalities of free-riding
3}Low maintenance costs: negatives 1}Parceling/Fencing
Group Property: +’s 1} Better in large events 2}Better risk sharing mechanism 3}Economies of
scale- easier to deal w/ big problems- major quake buries a city->international help
III The Rights of persons who own land in Fee Simple
A] Blackstonian- Ownership 1) by a single individual 2) in perpetuity 3) of a territory demarcated
horizontally by boundaries drawn upon the land and extending from the depths of the earth to
heaven, 4) w/ absolute right to exclude, 5) use & abuse, 6) and transfer
Anglo-American Law – restricts on various social grounds
B] Encroachments
1) Pile v. Pedrick (SM18) (Surveying Mistake causes Δ to build 1 3/8” on π’s land)
Issue: Should π get injunction (removable=costly to Δ) or damages for the inch
Holding: Injunction granted- root of prop. law is if it’s yours you have exclusive rights to it
Modern View: Good Faith Improver Defense-denies injunctive relief & grants damages
2) Raab v. Casper (SM 19) (π warned Δ he was encroaching but Δ continued to build)
Issue: Should we apply Good Faith Improver defense & award damages or injunctive relief
Holding: Injunctive relief awarded because Δ was warned-he acted negligently not in good faith
Modern Law: Some states give π choice in encroachment resulting from good faith improvements:
1)keep house & pay it’s value or 2)sell encroached land to Δ
C] Right to Exclude
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A) Tresspass- If done as intentional tort usually punished severely
If done for important social goal courts often condone
1) Jacque v. Steenberg Homes (86) (mobile home delivery through π’s land)
Holding: Ct. awarded $1 in nominal damages $100,000 in punitive = the right to exclude
2) State v. Shack (87) (Government relief workers go on private prop. to aid workers)
Holding: Owner doesn’t have absolute right to exclude-Can’t bar access to Govt. services
3) Pruneyard Shopping Center v. Robbins (Mall sues kids who hand out political leaflets)
Issue: Free Speech v. Right to Exclude
Holding: Supr. Ct. says they can stay- limits right to exclude
Rationale: It doesn’t effect mall if they do so- owners can regulate manner & place but not
exclude completely-ppl. wont associate these views w/ the mall if they do mall can put up
disclaimers- Concurring view: if mall is forced to disclaim = violates 1st Ammend. of FS
IV Adverse Possession (AP)- allows trespasser to acquire title to another’s land if on the prop. for the
statutory period & satisfy the conditions below:
A] Five Conditions:
1) Actual Possession
a) must show he possessed the land & this is in order to ensure only productive occupiers would
get title
b) must show he used & maintained the prop.-courts often use the “neighbor test”
2) Continuous for the statutory period
a) Common Law: 20 yrs.
b) Eastern States: 15-20 yrs. (NY 10 yrs.)
c)Western States: shorter (i.e. California- 5 yrs. But must pay prop. taxes-unlikely)
3) Hostile (w/ a claim of right)
Some states require good faith, some require bad faith, but most require neither
4) Open & Notorious
a) Squatter must inform real owner it’s their land if not reasonably obvious
b) Professor Parchomovsky (“GP”)- makes more sense to use an objective standard
5) Exclusive of property owner himself
Relevant Cases:
Van Valkenburgh v. Lutz (120)-Ct. held despite the fact that the neighbors believed the Adverse
Possessor (“AP”) /Δ was the true owner, he could not get title because he used the π’s land as a junk yard
& didn’t use it for productive purposes (violated condition # 1a,b- lack of actuality)
Howard v. Kunto (143)- 3 property owners in a row each really owned the prop. to the left of the one they
inhabited- Kunto (Δ) claims AP- Howard (π) claims the Δ only used prop. in summer
Issue: What constitutes Continuous? (condition 2)
Holding: Continuous defined by Normal Use (Alaska summer only)Ct. Finds for Kunto the AP
Manillo v. Gorski (138) slight encroachment of staircase on π’s land and neither party knew
Issue: Does AP apply if possessor does not do it on purpose (issue of Hostility condition 3)
Holding: Depends on jurisdiction: here NJ Ct. held it was AP (in CT-it is AP / in ME not AP if
unintentional)
Morengo-case in which Δ used π’s cave w/o π’s knowing it was under his land- Ct. found for π
(condition 4 Open & notorious was not satisfied)
B] Reasons for allowing Adverse Possession:/ Policy Issues
1) Punishes lazy landowners
2) Provides an incentive to put land to good use-Efficiency
3) We want Prop. owners to be aware
4) Fairness- if you cultivate land for years you become attached to it (AKA Endowment Effect)
C] General Rules of Adverse Possession (AP)
1) Tacking -Successive occupiers may add all their periods to fulfill the statutory requirement as
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long as there is Privity of Estate = permission from the other occupiers **
2) AP’s prevail over true owners (if they meet the 5 conditions) even if there are multiple
owners (i.e. if during the statutory period the true owner sells the land if the 2nd
owner is “lazy” as well the AP wins) **
-AP, however, cannot defeat a future interest in the land
3) To stop AP, true owner should commence an action and prosecute
4) For AP to get title he must file a suit and win (this will give him full rights to exclude and
transfer the land)
5) a) General rule: AP gets only the part of the property he possesses
b) Exception: If AP has possession bec. of Color of Title(problem w/ the deed) then possessor
can gain title to entire property even if only occupied part of it
6) Disabilities: of the true owner stop the running time of the statutory period (i.e. minority,
Imprisonment, or mental illness)
a) Disability must be present when the trespass occurs to stop the running time
b) Time starts again when disability ends (In the case of a minor when he/she reaches 18)
7) Government: can’t AP government owned land
a) Rationale: land is owned to help the public-we don’t want state’s neglig. to hurt the public
b) Some states allow AP of St. land but extend the Statutory period
8) AP of Chattels
O’keffe v. Snyder (153) (paintings stolen out of gallery but not reported for 26 years. Found 4 years after
reported)
Issue: When does Stat. Per. begin? Time of theft or when thief or subsequent owner displays them
Holding: Trial Ct.-time of theft
Appel. Ct.-Notoriety requirement is satisfied when paintings are 1st displayed
Supreme Ct. of NJ- Stat. Period generally begins the date of the theft w/ 1 big exception
Exception: if owner exercises due diligence then he is entitled to Rule of Discovery-time starts
running only when owner discovers or should have discovered the identity of the possessor
(Ct.felt she was diligent and defeated the AP(Δ) based on the rule of discovery)
New York: has special rule regarding artwork that favors the true owner
**see your notes for good Hypos (pg. 32 in my notes if anyone wants a look see)
V
Possessory Estates
A] Present Estates – vest in their holders immediate possessory interest(as opposed to future estates)
4 groups-(1) Fee Simple “FS” (2) Life Estate “LE” (3) Fee Tail “FT”(4) Leaseholds
1) Fee Simple (absolute) – creates interest that most people associate with ownership
a) It has potential infinite duration, not limited by time (therefore never followed by future interest)
b) Traditionally created by conveying prop. “To A and his/her heirs”
1) Words of Purchase- describes recipient (To A)
2) Words of Limitation- describes right conveyed (his/her heirs) but doesn’t give interest in land
to heirs (A’s heirs may get land after A dies but not necessarily- i.e. if A gives it to someone
else or sells it b4 dying)
c) FSA is the default estate in case of doubt
1) White v. Brown (210)- Lide devised her home to White(π)“to live in & not to be sold” Brown
(Δ), Lide’s heir, claims it was just a Life Estate, π claims since unclear it is FSA
Holding: Since it wasn’t clear it defaults to a Fee Simple Absolute and goes to the π
d) FS is inheritable through:
1) Deceased’s will- those designated known as Devisees
2) If No Will, prop. is divided by laws of intestate- known as Heirs
a) State law controls who gets the prop. thus establishing the heirs
b) In most states-surviving spouse gets between 1/3 & ½
c) Per Stripe- if child of deceased had died b4 him, the share goes to the late son’s children
(the deceased’s Grand children) not to their mother (the deceased’s daughter-in-law)
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because there can be no heirs while the deceased is still alive so the late son never had a
claim while he was alive therefore his widow has no claim
d) Ancestors: relatives but indirect issue(whether they get depends on the specific case)
-general order: a)Devisee>b)heirs>c)spouse>d)per stripe>e)Ancestors
e) If person dies w/ none of the above, the property goes to the state
e) Restraints On Alienation(ROA)- aristocrats in 13th Cent. Europe, and beyond, wanted to keep their
land w/in their family only, and tried to restrict future generations from granting/selling it to people
outside their blood line
1) Types of Restrictions
a) Disabling- forbids grantee from transferring land
b) Forfeiture- more extreme- if grantee attempts to transfer prop. he will lose interest in the
land
c) Promissory- force grantee contractually not to transfer land & breach of promise may
lead to damages or injunctive relief
2) Why courts don’t like ROA’s / Policy Issues
a) They make prop. unmarketable preventing it from reaching it’s greatest value
b) Perpetuate concentration flow by preventing the rich from selling off their assets
c) Discourage improvements of land bec. owner knows he can’t sell & he can’t finance
improvements w/ a mortgage
d) Upset creditor’s expectations
e) Restatement prohibits absolute restraint but allows partial
2) Life Estates-(LE) Estate for life
a) General rules:
1) Grantor is granting prop. to the grantee for the life of X (for as long as X is alive)
a) X is usually the grantee himself (O to Jones for life)
b) Can be the life of a 3rd party (OJones for the life of Smith)(aka Per autre vie)
2) LE’s are always followed by a Future Interest
a) if it returns to the grantor it’s called a Reversion
b) if it goes to a 3rd part he/she is called a Remainder
Therefore any granting of a LE creates Shared Ownership- present and future
b) Rights and Duties of Life Estate Owners
1) Baker v. Weedon (219)( A dies & leaves his 3rd wife a LE of his farm, she wants to
sell bec. she can’t sustain herself off of the farm but could from the interest of the sale-A’s
kids from 1st wife have remainder interest & feel the value will go up soon & don’t want her
to sell)
Issue: Can a LE owner sell the prop. during his/her lifetime?
Holding: S. Ct. of Mississippi: Since remainders tried to get fair value for the land and
couldn’t, it wouldn’t be fair to sell it at a low price- the Ct. therefore compromises and sells
only a part of the land so the lady would have $ to live
Rationale: Must consider future owners and use other remedies to help LE owner*
2) LE owner can’t commit Waste and must make necessary Repairs
a) Can’t destroy the prop. or reduce the value of the prop.(can extract minerals if that
was being done at the time of the conveyance)
b)Must keep the prop. in good repair
c) Must pay taxes
General Rule: Whenever 2 parties have right to possess prop. together, either concurrently or
successively, neither has right to unreasonably impair the interest of the other
c) Trusts- Bec. Co-ownerships such as LE can be tricky, people now set up Trusts, which
avoid some of the problems associated w/ LE
1) Trusts separate legal title from equitable interest(ownership & management from benefits)
a) Trustee has legal title to the prop. but also has a fiduciary duty to manage land in a way
that benefits the beneficiary
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b) Ex: O conveys prop. to hold in trust - to pay A income for his whole life and upon A’s
death to distribute the principal to O’s children
Trustee could rent the prop. and give the $ to A and when A dies sell it and give the $ to
O’s kids
3) Fee Tail (FT)-A legal estate designed to maintain, in perpetuity, family ownership of land
a) Essentially a series of LE’s
b) If blood line ends (someone has no children) reverts back to grantor to keep w/in family
c) A FT owner can grant his interest to others but it reverts to his heirs upon his death
Common law: In 19th century-permitted FT holder to disentail by conveying a FS to another
Today: all but 4 states have abolished Fee Tail (even those that have it allow FT holder to convert
interest to a FS while he is alive)
If grantor tries to create a FT in a non FT state: ex: O to son A and his heirs (ahh) & if A dies w/o issue
to my daughter B ahh
Minority view: A gets a life estate and A’s heirs get a fee simple
Majority view1: A gets FS defeasable, if A dies w/o issue B gets a FSA
Majority view2: A gets a FSA and B gets nothing
4) Defeasable Estates (till now we’ve discussed FSA which had no contingencies)
Two types: 1) Fee Simple Determinable (FSD)
2) Fee Simple Subject to Condition Subsequent (FSSCS)
A Defeasable FS is a FS that may last forever or end upon occurrence of a future event
specified in the instrument.
-Difference between FSD and FSSCS is the words used to create them and how the interest in the
prop. terminates
a)FSD-created w/ words like “so long as” “while” “until” or “during
FSD- terminates immediately & automatically upon occurrence of a specified event
1) OA ahh as long as no alcohol is sold on land
a) If none sold A (ahh) keep it
b) If alcohol is sold: prop. automatically goes to the future interest holder (FIH)
If FIH is the grantor –ka possibility of reverter
b)FSSCS-created w/ words like “provided” “however, if” “but if” “on condition that”
FSSCS- Doesn’t terminate automatically when condition occurs, rather when the condition
occurs it gives the grantor or 3rd party the right to reenter or enter and claim possession.
It conveys an option that may be exercised- ka right of entry
c) Relevant Cases:
Mahrenholz v. County Board of School Trustees (Huttons give land to school for school
purposes only, possibility of reverter to them or their heirs)
Issue: Did the conveyance create a FSD or a FSSCS?
Practical Differences are:
1) Right of entry- is non-transferable during life (in Ill.) and Hutton’s heir had given the
remainder rights to the π while he was alive. If FSD, Huttons heir aquired the prop. as soon
as it was not used for school purposes and when he gave rights to π it was in FS
2) Statute of Limitations- FSD would be measured when event occurs. FSSCS is
measured when the future interest holder takes it as his(attempts to exercise right of revertor)
Holding: Lower Ct. dismissed π’s claim- Appelate Ct. reverses & remands saying the original
conveyance was a FSD bec. despite language used, that was the intentions of the Huttons.
Therefore it reverted as soon as the condition was fulfilled.
Lower Ct. says it doesn’t matter bec. storage of books is considered school use
Common Law: Future interest (such as possibility of revertor) were non-transferable
Today: W/ the exclusion of some States (Ill.) they are transferable
Q: How much leeway does holder of defeasable estate have? ex: Is selling food cooked w/ a drop
of alcohol considered selling alcohol?
A: In genral Ct.s are unsympathetic to Future Interest because they’re often unclear
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Some states try to get rid of future interests: Iowa-must file FI’s in public record
Illinois- such rights must be exercised w/in a certain time
Falls City v. Missouri Pacific Railway (245) City gives prop. to Railroad to use as its
headquarters only-they move headquarters and city wants it back
Holding: Ct. found for RR bec. the original deal was a “restraint on alienation” in that it limited the prop.
to an impermissibly small amount of people
Ink v. City of Canton (246) (Ink gives land to city for use as a park only-It’s a park for 20 years-state now
wants to build a highway on most of the land)
Issue: The highway department is compensating people for their land. Who should they pay Ink or the
State.
Holding: Ink gets the value of the land the State gets the value of the structures built on the land
B] Future Interests-confer rights to possession & enjoyment of prop. at some future time. Gives holder a
legitimate legal right
1) Future Interest in the transferor (slightly repetitive but helps make it all clear)
a) Reversion- grantor conveys a finite estate & expressley reserves the future interest in himself or
doesn’t say who will get the FI
b) Possibility of Reverter- Follows a FSD (if x happens the prop. will revert)
c) Right of Entry- follows FSSCS (if x happens I have a right to enter and take prop.)
2) Future Interests in Transferees (3rd party)
a) Vested Remainders- 3 conditions 1) holder of remainder has to be alive 2)ascertainable
3) no condition precedent in the conveyance.
If not all 3 it’s a Contingent Remainder
1) Indefeasable(akaVR absolute): satisfies all 3 conditions of VR and is indefeasable
2) Vested Remainder Subject to Open (VRSTO) a VR granted to a group of at least one person
or more who are either not alive or not ascertainable (ie OA & kids- if a child is already
born w/ possibility of more kids )
a) assured he will eventually get something
3) Vested Remainder Subject to Divestment (VRSTD) a VR which may be divested b4 it
becomes possessory or after (always followed by another future interest)
a) May not get anything
b) Contingent Remainders- Occurs when condition is part of the conveying phrase
If the condition proceeds the conveying phrase & is separated from it by a comma and
words “but if” it is a VRSTD (explained on pg. 263-264)
ex:1 OA for life, then to B ahh if B survives A, & if B doesn’t survive A, to C ahh(B has a CR)
ex:2 O A for life, then to B ahh, but if B doesn’t survive A to C ahh (B has VRSTD)
ex:3 O A for life, then to B ahh if she graduates from law school, but if B graduates from
business school then to C ahh(has elements of both CR & VRSTD)
VRSTD- is the default remainder
Practical Differences between CR and VRSTD:
1) VR automatically accelerates into possession upon the end of the finite estate
Ex: OA for life, then to B, but if B dies under 21 then to C
VRSTD- B gets it automatically when A dies when he’s 17 and we see if he hits 21
If it were a CR- B would not get possession until he hits 21
2)CR are subject to the Rule Against Perpetuities, VRSTD are not
*General rule Remainders never follow a FS interest, only LE and terms of years*
c) Executory Interest(EI)- Any future interest created in somone other than the grantor that is not a
remainder
2 types Shifting & Springing
1) Shifting –cuts short interest preceding it
Ex: OA ahh, but if B returns from Rome then to B ahh
2) Springing-exists when there is a gap betw. termination of the preceding estate & the vestee
Ex: OA for life then to B 30 days after funeral (O has title in between)
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3) Rules Furthering Marketability by Destroying Future Interests
Three Rules:
a) Shelley’s Case- (aka Merger Rule) 3 conditions: 1)if the same instrument 2)that creates a life estate
in a person 3) purports to create a remainder in persons described as his heirs (OA for life then to
A’s heirs) then the remainder becomes a remainder in the Fee simple absolute (A gets a FSA & can
do w/ the land as he pleases i.e. give it to someone other then his heirs)
This rule is abolished in most states
b) Doctrine of Worthier Title (Rule forbidding remainders to grantor’s heirs) 2 conditions: 1)if an
intervivos conveyance grants land to a person & 2) creates a future interest (a remainder or EI) in the
grantor’s heir, then no Future Interest is created in the heirs, and instead a reversion is given to the
grantor.
This rule still applies in most states but is now considered the Rule of Construction-the
difference is that now if you see such a conveyance the legal presumption is that the grantor
meant reversion unless evidence is brought to show otherwise (can bring evidence showing the
grantors true intent & rebutt the original rule)
c) Rule Against Perpetuities – Designed to defeat the control of the dead hand-Ct.s did & do
not want grantors to control land generations after their death. The effect is to strike down
certain (but not all) future interests that don’t satisfy its requirements- (grantors should decide the
fate of the land when it comes to people they know only, not future generations)
1) Classic Statement: “no interest is good unless it must vest, if at all, no later then 21
years after some life in being at the creation of the interest”
2) Simplified- The Rules
a) “No Interest” = rule only applies to CR,EI, VRSTO & repurchase options
b) “Vest, if at all” =must become possessory (must vest)
c) “21 years after life in being” refers to people who are alive & may affect the validity of
the conveyance
3) Bottom Line- a)If the interest necessarily vests, or necessarily does not vest w/in 21
years of the life in being, the rule does not apply & the conveyance is OK
b) if there is a chance (even slight) that it will not vest w/in the perpetuities period the RAP
applies & strikes down the conveyance
ex: OA for life then to A’s 1st child to reach 25 ahh –A has 2 kids: B is 20 C is 24.5
RAP strikes down the future interest because both B & C may die b4 25 and if A has
another kid it will take longer than 21 yrs.
ex: OA for life than to A’s first child to reach 21, ahh A has no children now
Future Interest is not struck down by the RAP because the relevant life is A therefore, must
be w/in 21 yrs. Of A’s death. i.e. If A has a kid & dies one day later it will still be w/in 21
yrs. of A’s death
4) Class Conveyance- if a conveyance is made to a group of people the rule requires the
FI of all members to vest w/in the time period
5) Repurchase Options- when grantor reserves a right to buy back the prop. at a said price if a
condition is violated or an asserted contingency happens
a) Central Delaware County Authority (CDCA) v. Greyhound corp. (pg.300)
(Greyhound gives CDCA right to use the land for public use and if used for non-public
purposes Greyhound reserves the right to buy back the land)
CDCA uses it for non public activities but claims RAP strikes the Repurchase option out of
the conveyance
Issue: Whether the RAP applies to Repurchase Options
Holding: It does (CDCA gets the land)- exceptions are 1) options to lessees and 2) When the
board of a condo reserves the right of first refusal
6) Create-Kill-Count Approach
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1- create a person eligible to claim the property
2- Kill everyone else
3- Count 21 yrs. from the moment of everyone’s death
If the interest is sure to vest or not to vest the RAP will not strike it down
(See page 35 in the outline for numerous examples)
d)Wait and See Doctrine-Many states abandon RAP in favor this rule (NY still goes w/RAP)
1) The idea is to wait and see if the future interest vests w/in the statutory period (ex post)
Three approaches:
a) Wait the perpetuities period then check if it vested or not
b) Wait 90 years and then check if it vested or not
c) Uniform Statutory RAP-(allows interest to vest if it does not violate common law RAPor
if it vests w/in 90 yrs. but is not adopted in many places)
VI Co-Ownership and Marital Interests- 3 Types:1)Tenancy in Common 2)Joint Tenancy & 3)Tenancy by Entirety
A] Tenancy in common (TIC)- Separate but undivided interests in the land. Each co-tenant has the right
to posses & use the prop. subject to the rights of the co-tenant (Both have full rights to entire prop.)
1) It may be created expressly (grant or will), or if 2 or more people inherit a piece of prop. it is a
TIC bec. TIC is the default conveyance.
2) Interests are transferable through either deed or will-therefore (tf) death of a tenant in common
does not terminate a TIC. (If A & B are TIC and A dies-A’s heirs & B are TIC)
3) Two ways to terminate:
a) Transfer: the entire interest to a 3rd party or one tenant’s interest to his co-tenant(if there were 2
tenants)
b) Partition: Divide the prop. (literally, or by selling it and dividing the cash)
B] Joint tenancy (JT)= a TIC with a right to survivorship- If A dies, his interest in the prop. goes to B
not A’s heirs or creditors.
1) To create a JT must fulfill 4 conditions:
a) Unity of Interest- the type, amount & duration of the interest must be identical
b) Unity of Title- Interest must be created at the same time and by the same instrument
c) Unity of Time- Interest should vest at the same moment
d) Unity of Possession- Joint owners must have = rights to use and possess the prop.
If one of these Unities is violated, the JT becomes a TIC
2) Two ways to terminate:
a) Mutual Agreement (basically a transfer) (Less Common)
b) Unilateral Conveyance- (If A conveys interest to C, C & B have a TIC not a JT)
1) If there are more than 2 JT’s only the portion conveyed is now TIC while the rest remains
JT (If A,B &C are JT’s & A unil. Conveys to X, B&C remain JT’s but have a TIC w/ X)
New York requires A to give B notice of the conveyance
3) Advantages of a JT:
a) Upon A’s death, the prop. will be transferred to B w/out the expensive cost of probating a
will
b) Protects the surviving joint tenant (B) from the claims of A’s creditors
4)
5)
GP: Today: Ct.s don’t like JT’s – If you want to create a JT, make it clear so it won’t be
interpreted as a TIC
Relevant Cases:
a)Riddle v. Harmon-(pg. 326) Husband and wife have prop. in JT. Wife wants to leave her half
to someone other than her husband- she executes a deed to herself granting herself the interestthe deed says its purpose is to break the JT-she makes a will leaving the prop. to X and she dies.
Issue: Can you convey to yourself?
Holding: You can convey to yourself, and sever a JT
- The “Riddle Rule” eliminates the risk of conveying to a third party and saves the extra
transaction costs
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Some States have not adopted the “Riddle Rule” and require a JT to convey his/her share of
the prop. to 3rd party known as (ka) a “strawman”
- Other States allow a JT to convey to themselves and other persons in order to sever the JT
(i.e. if A&B are JT’s B must convey to himself and C)
GP- To be safe, always use a trusted “Strawman”
b) Harms v. Sprague (332) John and William Harms (brothers) held prop. in JT. John executed
a mortgage to Sprague- John then died
Issue 1:Is a JT severed when less than all the Joint tenants mortgage their interest in the prop.?
Issue 2: Does such a mortgage survive the death of the Joint Tenant/mortgagor as a lien on the prop.?
Holding 1: Execution of a mortgage is not enough to destroy a JT. JT remains intact
William, tf, gets the prop. when John dies. (AKA Lien Theory)(This is the Majority view)
Minority view: Mortgage is considered a conveyance of title which severs the JT (Sprague would
get the prop. under this view (aka the Title Theory)
Holding 2: Upon the death of the mortgagor, the mortgage does not survive thus when John died, his
interest is automatically transferred to William.
-States are split on this issue- some say surviving tenant takes the whole interest but must pay the
mortgage
- Smart lender should make the tenant destroy the JT first
c) Tenhet v. Boswell (note 2 pg. 337) A & B own prop. in JT. A conveys a 10yr. Lease in the
prop. to C. After 5 yrs. A dies and leaves his prop. to D
Issue1: Did the lease sever the JT?
Issue2: Does the lease survive the death of the joint tenant lessor?
Holding1: The lease did not sever the JT(in this jurisdiction)
Depends on the jurisdiction:
1} In England & a few states- lease severs the JT
2} Most states- lease does not sever a JT (Tenhet)
3} Few states- If lessor/JT dies b4 term of lease is up the JT is broken, but if he lives through
the term of the lease the JT is resurrected
Holding2: In this jurisdiction the lease does not survive the death of the lessor/JT-lessee should
have checked if it was a JT
C] Tenancy by the Entirety (TBE)
1) Only available to husbands and wives
2) Very similar to a JT- requires the four unity conditions found in JT
3) But unlike JT, the husband & wife hold the prop. as one, and neither can act alone to partition the prop.
or defeat the right of survivorship of the other spouse by conveying to a 3rd party
4) Divorce terminates the TBE & absent an agreement stating otherwise, transforms it into a TIC
5) Only recognized in a minority of states
6) Creditors can’t reach TBE prop. (this is the major. rule-see Sawado case below)
D] Rights and obligations of Co-tenants (Co-T)
1) Partition- if one or both of the co-tenants wants to split the prop.
a) In Kind- Divide physically
b) By Sale- Sell the land and divide the proceeds
Delfino v. Vealencis (341)- π & Δ are co-tenants in a 20 acre piece of land. π wants to build a residential
development on all of the land and wants the land to be partitioned by sale. Δ has a garbage removal
business on his section and wants a partition in kind so he can maintain his business.
Issue: When the co-tenants disagree as to how to partition the land, which should be the default partition?
Holding: When geographically possible, land should be partitioned in kind (Default Rule).
In this case since the two sections of land were easily distinguishable they should be partitioned in
kind.
Exception to default rule 1) when can’t be physically divided 2) when partition by sale would better serve
the interests of both parties
In practice Ct.s often prefer sale of the prop. depending on the situation
-
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In some states co-tenants can waive their right to partition by sale-must be clearly expressed- helps avoid
abuse of stronger tenant
c) Policy arguments for each approach
In kind:
1) Attachment to the land- keeps present owners on their prop. encourages investment
2) Prevents abuse of stronger co-T (stronger one could wait for weak real estate market because
he will probably be the one bidding on the prop.)
By Sale:
1) Eliminates hold-out problem ??????
2) Facilitates future development
3) Prevent fragmentation of land  gives land greater value
4) Reduces administrative/court costs because ct.s don’t have to figure out how to divide the
land
2) Right of Possession
a) Spiller v. Mackerth (348) Parties owned prop. as TIC. The building was vacated by their prior
tenant, so Δ began using the prop. as a warehouse. π wrote a letter demanding Δ vacate ½ the
building or pay rent. Δ did neither.
Holding: In absence of an agreement to pay rent or a claim of ouster of a co-T(when co-T says by
using our space you have essentially ousted me), a co-T in possession is not liable to his Co-T for the
value of his self use and occupation of his prop. The letter was not enough to establish an ouster claim
because there must be an actual demand and a mention of an intent to use on your part (i.e. “I want to
use the premises”)
Rationale: Provides an incentive to use the property
Negative: To act on your right you must confront the other party which may lead to further
confrontation
3) Accounting
a) Swartzbach v. Sampson- Husband and wife (π) have prop. in JT. Husband leases the prop. to the
Δ (for use as a boxing pavilion) w/out his wife’s consent. She wants to cancel the lease
Issue: can a JT cancel a lease executed w/out her knowledge by the other JT?
Holding: No, a JT cannot cancel the lease (but she can get revenue from the lease) She also maintains
a right of possession and can t.f. request a partition from her husband
4) Contribution
a) Taxes and Mortgage payments are split- if one tenant pays more the other must reimburse
b) Maintenance and repairs- generally split but if one pays on his own the other tenant has no
obligation to compensate
c) Improvements- Again no reimbursement if one tenant decided to make improvements
General duty of good faith- not to commit waste
Equality of input/output ratio-if I pay 2/3 of the rent and roommate pays 1/3 I get more output i.e. bigger
room
E] Marital Property
1) 4 possibilities-depends on jurisdiction and or personal preference:1) JT/TIC 2) TBE 3) Separate 4)
Community
1 & 2 we’ve analyzed
a) Separate- originated in England-under the traditional system each spouse owned the prop. he/she
brought into the marriage, but during the marriage the husband has full control of his wife’s prop.now the husband doesn’t have full control during the marriage but they maintain separate title on
their respective stuff
b) Community- a.k.a the Continental System- treats the husband and wife as a single unit that shares
prop. equally-split 50/50 at termination of the marriage (8 states allow for Community option but
offer JT or TIC options as well-depends on the couple’s preference)
2) Rights of creditors and Relevant Cases
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a) Sawado v. Endo- π injured by the Δ in car accident. Δ owned prop. w/ wife in TBE. Δ conveys
the prop. to sons to shelter the prop.
Issue: Can the interest of the TBE be reached by creditors
Holding: No, π awarded damages but couldn’t recover from the TBE.
-Voluntary creditors should contract w/ both spouses
-Involuntary creditors (tort victims) get screwed because the law wants to protect the other/innocent
spouse
-New York-creditors can levy on spouse’s interest and collect from a TBE just like a JT
b) United States v. 1500 Lincoln Ave. (Pharmacy owned in TBE- husband sells drugs w/out
prescription (wife has no knowledge of these illegal acts) government sues to seize the prop.)
Issue: Should the government be treated differently than other creditors and be allowed to get the
prop. despite the fact that it is a TBE?
Holding: The government does get special treatment but the ct. limits it and holds that Mrs. B can use
the prop. during her life. If Mr. B dies 1st, she gets the prop. through right of survivorship. If Mrs. B
dies 1st , the government gets the prop.
Policy Issues: Pros and cons for giving the gov. special treatment
Pros- Redistribution of wealth and deterrence of future crime
Cons- Abuse of power
3) Termination of Marriage
a) DivorceUniform Marriage & Divorce act (1973)
Changed the definition of divorce from a fault system (needed a reason to divorce-adultery or
cruelty) to non fault system
MARRIAGE
DIVORCE
TRADITIONAL
MODERN
TBE
JT/TIC
JT/TIC
JT/TIC
JT/TIC
JT/TIC*
Separate
Title Holder
Equitable Distribution
* Divorce by itself does not sever the TIC but when a couple splits they may decide to do so
-Question is what is considered marital prop.?
-Generally, whatever was held separate b4 marriage remains separate, acquired during marriage is
marital prop. Ct.s are split concerning gifts, inheritances and bequests but majority consider them
separate prop.
-Marital prop. is split using equitable distribution
-Some states split all marital prop. in ½ and view home making as a job like any other
The Cases below not only illustrate what happens in cases of divorce but they flush out what is
considered marital prop. to begin with (i.e. a graduate degree).
In Re Marriage of Graham (379) Wife supports husband for six yrs. while he gets his BA & MBA. They
get divorced.
Issue: Is a master’s degree marital prop. subject to division by the court?
Holding: No, it is not prop. and can’t be divided but it is a factor to be considered in the division of the
prop.
GP- Ct. doesn’t have great reasoning and is very unconvincing-Yet this is still the majority opinion
Dissent: The most valuable asset acquired by either party was the MBA due to increased earning potentialGrounds of fairness-they don’t look at prop. but at the people involved
O’Brien v. O’Brien – similar facts as In Re Marriage of Graham
Holding: NY ct. disagrees w/ Graham decision and finds that a medical degree is marital prop. and is
subject to equitable distribution upon divorce- Extremely broad view of prop.(Minority view)
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Elkus v. Elkus- (NY Case) Similar situation as above but the Husband was an opera singer who made it
big years after he got married
Issue: Does the π’s (husband’s) career/celebrity status constitute marital prop. subject to equitable
distribution?
Holding: To the extent that the wife’s contributions & efforts increased the value of her husbands career,
she should be compensated for this increase. (An opera career is subject to equitable distribution)
b) Death of a spouse
1) Common Law- If wife died having given birth to some issue, the husband got a LE in her prop.
If he died 1st wife was given LE in 1/3 of the land owned by the husband (a.k.a the Dower)
-The Common Law still exists in 6 states today
2) Today most people have Wills
a) Elective Shares- If the surviving spouse is screwed in the Will, he/she can decline the
amount granted in the will and take a statutorily defined amount of the spouses prop.
(usually 1/2-1/3 of the prop.)
4) Community Property- The idea (mentioned above) that each spouse has an = share in the prop. acquired
during the marriage (8 states allow this type of policy)
a) includes all earnings and things bought w/ the earnings during the marriage-stuff from b4 the
marriage is separate prop.
b) Neither spouse acting alone can convey his/her share w/out permission, except to the other spouse.
To opt out of CP must have consent of both spouses
c) Assets that were brought w/ spouse from b4 the marriage but accrue during marriage(fruits of
separate assets)- States are split some consider these earnings CP some separate prop.
d) Personal injury damages (i.e. husband gets hit by a car)- some states say it’s CP -other states
differentiate between lost earnings/lost ability to work/hospital bills (all comm. expenses) and pain
and suffering (separate expenses)
e) Divorce1)CP is divided equally (default rule)
Common law- CP is divided equitably
GP- Judges have discretion to decide either way
2) Separate prop.- some states award it to title holder some apply equitable distribution
f) Death of a spouse
1) each spouse may devise in Will his/her own separate prop. and ½ of the CP
2) if no Will, there is no guarantee the surviving spouse will get ½ the separate prop. in most
states that have CP the CP will go to the spouse
G) Problems w/ CP
1) Mixing funds (i.e. apartment bought with both separate and comm. funds)a) Inception of Right Rule-classification of prop. is determined by the 1st payment
b) Time of Vesting Rule-classification of prop. is determined by last payment
c) Pro-Rata- pro rate the payments and divide the prop. accordingly
- If Comm. $ is spent on improvements there will be rights to reimbursement of other party
- Some states say separate $ added to something is considered a gift & should be split as CP
2) Migrating Couples- arises when the couple moves from common law to community law juris.
& vice versa- whichever juris. the prop. was bought in, is the law it falls under- gets messy to
figure what was bought where
3) Rights of creditors- Creditors may have rights to CP but there are many exceptions-very
complex and confusing (can’t reach separate prop. of the other spouse)
5) Contracts between spouses
a) most states allow couples to have pre-nup agreements but must be done in writing,w/ a lawyer or
notary public
b) In a few states, couples contract about spousal or child support and thus get around the above
mentioned rules
c) Pre-nups are not common bec. people don’t think they will get divorced
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d) Post-marriage contracts- most states don’t require writing
Marvin v. Marvin – (406) Couple lived together for 7 years w/out marring-they agreed that π would
stop working and act as a housewife and the Δ would support her-Δ wants to break up w/ the π
Issue: Should this type of an arrangement be treated like a marriage in terms of dividing the assets?
Holding: Yes, Ct. should check if there was an expressed contract -if not ct. should check the facts of
the relationship to see if there was an implied contract(in this case the ct. found an expressed contract
and awarded the π as if the couple had been married)
VII The Law of Landlord and Tenant
A] Buying v. Renting (Both have advantages)
Buying:
1) You own it-it’s yours- financial & psychological investment- you can use it as you please
2) Mortgage interest is tax deductable
3) Homestead exemption- in bankruptcy, your home cannot be taken away from you
Renting:
1) No prop. taxes
2) Commercial entities can deduct rent (from taxes) as a business expenditure
3) Don’t have to worry about maintenance
4) No Capital needed- some people can’t afford to buy a house
B] The Lease- 4 Types:
1) Term Of Years
a) Tenancy for a definite period of time w/ ascertainable beginning & end dates (created by
express agreement of the parties)
b) Common Law allowed for infinite amount of years-Today most states impose limits on the
duration of the lease (Ca- 51 yr. Limit on agricultural lease 99 yrs. for apt.’s)
c) Terminates automatically on the set date, t.f., no notice required
d) Death of Landlord (LL) or tenant has no effect on the lease
2) Periodic Tenancy
a) Lasts for a set time & renews automatically at end of each term
b) Thus Requires timely notice of termination- otherwise it’s renewed
1) Common Law- notice had to be given 1 period prior to termination for period leases less
than 1 year & 6 months prior for leases 1 yr. or more
2) Today- usually 30 days is enough
3) If you don’t give notice you could be liable for the time you were supposed to give
warning (i.e. 30 days worth of rent)
c) Death of Landlord (LL) or tenant has no effect on the lease
d) Usually created by agreement, but may be implied by the court if person pays rent & owner
accepts the $ despite any formal lease, or when tenant held over & the LL didn’t evict him
3) Tenancy at Will
a)
Terminable at will by either partythus lease lasts as long as both desire
b) Many states require timely notice
c) May be created expressly, but often occurs when parties fail to reach agreement but
nevertheless the tenant takes possession w/ the LL’s permission
d) No legal instrument  tenancy at will
e) If LL has the right to terminate, then the tenant automatically has the right as well (is vice
versa true as well see next case Garner v. Gerrish)
Garner v. Gerrish (421) – Donovan leased a house to Gerrish (Δ), lease said: “Gerrish has
the privilege of termination at a date of his choice.” Donovan dies, Garner(π) inherits the
land and wants to kick the Δ out.
Issue: Should the lease be literally construed to grant the tenant alone the right to terminate
at will, or is the LL accorded the same right by law?
Holding: A lease can grant the tenant alone a right to terminate at will just not vice versa.
Rationale: Tenant is seen as weaker party w/ less bargaining power
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4)
Not all juris. allow this, this is NY case
Tenancy at Sufference/ Holdovers
a) Created when a tenant remains in possession after termination of the lease
b) LL has options
1) Evict and collect for back rent of holdover period
2) Consent to holdover and create new tenancy which will be either Tenancy at Will or
Periodic Tenancy-expired lease will be renewed
c) Ct.s & legislators don’t like holdovers & often impose limitations such as requiring Tenancy
at will, some allow LL to charge 2x rent for holdover period
c) Crechale & Polles, Inc v. Smith (425) Smith (Δ), came to an end of a 5 yr. lease w/ π & was
set to move but his new building wasn’t ready, he sought & thought he had established a
month-to-month periodic lease. π sent him letter telling him to leave but does deposit a check
from the Δ. After 2 ½ months Δ leaves and pays for his x-tra stay at which point the LL (π)
doesn’t deposit these checks. π claims the original 5 yr. lease was renewed & since it’s a
long-term lease he is entitled to 1 yr. notice/compensation
Issue: Can a LL treat his former tenant like a trespasser & try to evict him & then change his
mind & say the contract was renewed?
Holding: No, the letter terminated the original lease & by accepting the check the π granted
a month-to-month tenancy
C] Delivery of Possession (one of the LL’s duties as seen below)
English rule: requires lessor to put lessee in actual/physical possession of the prop.
American rule: requires the lessor to give lessee a legal right of possession (not actual)
Hannan v. Dusch (459) Dusch (Δ) leased prop. to the π. When π gets there the previous tenants are still
there. π sues for damages under breach of contract.
Issue: Does the lessor actually have to deliver the prop. and ensure no squaters
Holsing: Under American rule, in the absence of an express term in the K the LL does not have to
physically hand over the prop. and t.f. has no duty to protect against wrongdoers-it’s the new tenants
responsibility.
Policy Analysis: 1) LL is better suited to handle this situation
2) LL is the Least-Cost Avoider – he can do things to avoid these problems like taking security
deposits
3) GP- English rule makes a lot more sense
4) Many states including NY have gone away from this type of decision and have laws that the
prop. must be fit/ready in the beginning of the lease
D] Selection of Tenants & Unlawful Discrimination
1) Federal Zoning Act of 1988-restrained power of LL to discriminate
a) § 3603(a) & (b) exempts religious organizations, private clubs & sale of a single family house
by owner if he has less than 3 houses, uses the exemption only once every 2 years, doesn’t
use a broker & doesn’t advertise
b) § 3604 (1) unlawful to refuse to sell, rent, or deny dwelling based on race, color, gender, age,
religion, familiar status or national origin( doesn’t disallow discrimination based on income/class
level- allows because LL to has right to assume ppl. will pay him)
(2) Unlawful to refuse services based on above categories (repairs)
(3) Unlawful to advertise in way that indicates preference
(4) Can’t say it’s been rented when it hasn’t been
(5) Blockbuster Clause- can’t trick people by telling them minorities are moving in you
better sell to drive down prices
can’t discriminate against handicapped people
b) Other sections disallow showing minorities only certain homes
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United States v. Starrett City Associates (Supplemental Material 63) (2nd cir.) Apartments in
low-income complex were not being shown to black people because Starrett wanted to maintain
integration. Conflict between integration and white flight
Issue: Can a private owner establish a quota system to maintain integration?
Holding: No, it is illegal, their motivation is immaterial
Dissent: Starrett was following the purpose of the Fair Housing Act- to eliminate segregation
Q:Is the purpose of the Act to eliminate segregation (dissent) or discrimination (majority)
3) Richard Muth- (article in the SM) Consumer Aversion Theory- Many white people have an
aversion to black people and are willing to pay more to avoid living together, t.f., government
legislation will not help problem of segregation
Landlord’s Duties/ Tenants Rights and Duties
Five Doctrines which Protect Tenants:
1) Quiet Enjoyment & Constructive Eviction – protects tenants against interference w/ their use or
enjoyment by the LL
a) Generally invoked as a defense after the LL sues the tenant for abandoning the prop.
Reste Realty Corp. v. Cooper (508) – π, the lessor, sued the lessee for abandonment. Lessee(Δ) had
abandoned the prop. because there had been flooding & other problems that remained unfixed for 2
years.
Holding: Quiet enjoyment is an implied covenant in every lease, & each tenant is entitled to that right
even if its not written explicitly in the lease. Violation of tenants right to Quiet Enjoyment is
essentially Constructive Eviction (CE)(can’t be contracted around)
b) Elements of a Constructive Eviction cause of action
1) Must show LL failed to perform a duty (repairs, utilities)
2) Substantial interference w/ the use & enjoyment of the leased premises
3) Tenant must give LL timely notice & reasonable time to repair b-4 he abandons
4) In most states must vacate the premises & terminate lease w/ in reasonable time (tricky
issue-see below)
-Actions of neighbors/3rd parties that offend tenants quiet enjoyment are not covered but if
the tenant notified the LL & he did nothing, LL may be liable
c) Partial Eviction
1) Actual Partial Eviction-(LL says don’t use part of the premises) Even if the tenant
remains, she doesn’t have to pay rent until she is allowed back
2) Constructive Partial Eviction- (1/2 the premises is not usable-ie leaks) If tenant stays she
must pay rent
d) Actual Full Eviction- Tenant (Δ) can either affirm the lease, stop paying rent & sue for
consequential damages or terminate the lease & sue for general damages
e) Constructive Eviction- Tenant must pay rent if she stays but is entitled to the damages (i.e. if
she pays $1,000/month but leak makes apt. worth $700 she only pays 700)
f) Condemnation- When the government takes the prop. because it needs it (i.e. highway)
Question: who does the gov. compensate?
A: If the gov. only takes part of the premises the tenant continues to pay full rent but is
entitled to her share of the compensation provided for by the government
If the gov. takes entire premises the lease is terminated
Notice: when there is partial eviction by the LL- the tenant can stay w/out paying but when the
government causes the partial eviction the tenant must pay in full & later be compensated by the
gov.
Reason: The gov. is like a legal trespasser and the LL has no duty to do anything about it
2)
E]
2)
Illegal Lease Doctrine- Applies & renders the lease void if the leased premises violate the
relevant housing code at the time the lease is made
Remedy: Tenant can w/ hold rent w/ out fear of eviction
a) If conditions become bad later on, after the lease is made, look for quiet enjoyment remedy
not Illegal Lease remedy
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3)
4)
5)
b) Minor technical violations do not render the lease illegal
c) If LL had no actual or constructive knowledge (no reason to know) it will not be considered
an illegal lease
Implied Warranty of Habitability (IWH)
Common Law: LL had no duty to ensure habitability or to make repairs (tenant was to inspect the
premises b4 the lease and check for himself
Today: under the IWH, LL does have a duty to ensure habitability etc. (t.f. tenant doesn’t have to
inspect, either way the LL is under the IWH, which can’t be waived)
Hilder v. St. Peter (519) tenant (π) sues LL (Δ) for damages because the LL never fixed the
premises as he had promised
Issue: Did an IWH exist in the oral rental lease?
Holding: Every lease has an IWH whether expressed or not- tenant cannot be considered to “have
assumed the risk” –if these standards are not upheld the tenant does not have to pay rent
a) 4 standards of proving breach1) non-compliance w/ the housing code
2) substantial non-compliance that effect habitability
3) non-compliance creates a presumption of breach, which the LL can rebut
4) Some States: standard is independent of housing code (can be violated despite not being
in violation of the housing code)
b) Remedies
1)Tenant can seek damages, injunctive relief (rare), or recission (terminate the K)
2)Rent application- Tenant can repair the problem & deduct cost from his rent
3)Rent W/ holding- can w/hold entire rent until problem is fixed & then abate the rent
proportionately after it is fixed
States split mostly between #2 & #3
c) IWH is different than quiet enjoyment because it does not extend to commercial leases and
does not require the tenant to vacate
1) GP- doesn’t think this is such a great idea-should extend to commercial leases
2) Charles Meyer-of Stanford U.-mandating this duty would hurt lessees as a group because
there would be a lot less commercial prop. to be rented & prices would shoot up
d) Chicago Board of Realtors v. City of Chicago (pg. 535) Chicago City Council enacted an
ordinance to codify the IWH and establish LL responsibilities & tenant rights
Issue: Whether this ordinance was Constitutional
Holding: Yes, it is Constitutional
Judge Posner: despite being part of the majority he warns that housing standards often hurt
tenants because the cost to keep up w/ legal standards is often passed along to the tenants or
the supply of housing goes down so prices go up. This hurts the poorer people more, because
middle-class people may be willing to pay for the better standards while poor people often
can’t afford high rents brought about by housing standards. (see Posner article SM 47)
Doctrine of Retaliatory Evictions (RE)
a) Common Law: allowed LL to evict tenant at will if tenant complained
b) Today: This is forbidden-a common safeguard is to create rebuttable presumption of
retaliatory purpose if LL seeks to terminate, increase rent, or decrease services w/ in
reasonable proximity to complaint by tenant-can be used to sue LL, or in defense to an
eviction
1) If tenant is in default-can’t raise this defense
2) Rule can be use by a commercial tenant but RE is not assumed as in non-commercial
leases
Tort Liability
a) Common law – LL not responsible for tenant’s injuries
b) Today- most states impose liability on LL for injuries to tenants resulting from breaches of
explicit contractual provisions and implied warranties
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1) especially when LL knew of a problem & didn’t tend to it
2) even in cases where LL tried to fix but did so negligently
3) In multi-unit buildings (apt. houses etc.), LL has a duty to keep common areas safe as
well (lobby, garage etc.)
F] Tenant’s Duties-LL’s Rights
1) Tenant’s Duties
a) Fulfill the express obligation of the lease
b) Not to commit waste or create a nuisance (both LL & tenant can be sued by 3rd party)
c) Repair-if tenant wrongfully created the defect (normal wear & tear is covered by LL)
d) Obey building & health codes
e) Vacate at the end of the lease term
Note: The lease is a contract, & various terms can be stipulated (i.e. no dogs allowed)
2) Landlord’s Rights
a) Collect rent
b) Security Deposit (SD)- at the time the lease is signed- LL compensates/protects himself for
damage tenant might cause
1) most states have limits on what LL can charge as a SD(usually 2 months rent) & demand
that LL keep these funds in a separate account that accrues interest for the tenant- but most
LL’s circumvent these laws & collect “Advanced Rent” which is really the same thing w/ a
different name to avoid the statutes
c) Self Help- In most states LL can’t force tenants out of the premises (can’t change locks, shut
off utilities, seize tenants possessions) but can reduce his services & use Summary
Proceedings to evict a tenant (see d) below)
d) Summary Proceedings a.k.a Unlawful Detainer-way to evict holdover or non-paying tenant
quickly
-3 step process devised to help LL’s evict holdover or non-paying tenants- burden is on the
LL to start the process
1) LL must provide tenant w/ notice demanding performance of duty (payment or vacate) –
notice required if the tenant is a holdover
2) LL brings a lawsuit- “unlawful detainer action”
a) Remedy sought: possession
b) Trial date is set: usually between 3-8 weeks
3) If LL prevails at trial he gets sheriff to evict the tenant
e) Holdovers- LL’s have 2 remedies
1) Terminate lease and regain possession through summary proceedings & get reasonable
rent recovery
2) Hold tenant over for another term w/ the same conditions as the original lease
Once LL chooses 1 of these options he must stick w/ it
f) Abandonment
1) Common Law- LL had 2 options:
a) Do nothing & sue the tenant for rent as it became dueb) Retake possession & re-let the premises at the tenant’s expense
2) Today- trend is to eliminate the LL’s choice & treat the lease like any other K and
impose a duty on the LL to mitigate the damages (try to re-rent)
a) Sommer v. Kridel – after lease is signed Δ breaks engagement w/ fiancée & lease
of their intended apt.- LL does nothing despite getting notice from Δ
Holding: LL must mitigate damages and try to lease to someone else
b) Burden of Proof is on LL to show he tried to re rent/mitigate
c) Standard on part of LL is Reasonable Diligence
d) Sommer is followed in 42 states (Not NY)
Trend: Another great example of the courts moving towards protecting the tenant
3) LL-Tenant Relationship-
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a) In the beginning they want to please each other bec. both fear the other will terminate the deal
(LL will lose a income- tenant will have to look for another apt.) In the middle, both
generally get along. In the end they generally get more nasty w/ each other
b) Welfeld-article in SM (pg.49)- LL’s get a bad rap- they’re really nice guys trying to make an
honest living. They don’t try to harass tenants just try to avoid vacancies. Tenants tend to
resent them because a good chunk of a person’s salary often goes towards his/her rent
G] The Problem of Affordable Housing
Many states have enacted Rent Control (RC) schemes
1st done during WWI, government tried to ensure that people wouldn’t lose their rentals or houses
2 phases:
1) Original-rent freezes
2)Current-rent stabilization
1) Rent Stabilizationa) -Base line rent is set by the market
-New Units are leased w/out restrictions for the 1st time, based on 1st time a scheme of rent
control is created
1) Generally rent is only allowed to increase w/ the rate of inflation
2) Most schemes allow LL to increase by a greater % if he is experiencing financial
hardship
3) LL can raise the rent if new tenant moves in
a) to avoid abuse by LL, many rent control schemes have provisions requiring good
cause for termination- so LL doesn’t throw tenant out to get higher rent
b) Radin Article- (in SM)
RC helps preserve the community- people will stay in apartment longer if it remains
affordable, this leads them to take better care of their apartments/neighborhood
H] Subleases and Assignments
1) Tenant can transfer his/her lease through one of three ways:
a) Assignment- when a tenant transfers the entire remaining interest in the lease(and the LL
has a revertor)
b) Sublease- when a tenant transfers just part of the interest (anything less than the remaining
interest)and then the interest reverts back to the original tenant
c) Partial Transfer (assignment)- when a tenant transfers just part of the rented prop. for the
entire remaining lease period
General rule: If the tenant retains a right of reentry, it’s a sublease
2) Restriction of Transfers
a) -Most states allow the LL to impose Restrictions of transfers
-12 states don’t allow Restrictions
b) American Book Co. v. Yeshiva University- YU wanted to block sublease of its building to a
planned parenthood center. Rider in the original contract said LL had to pre-approve sublease but
LL’s consent “should not be unreasonably w/ held”
Holding: General rule: If not stipulated it’s up to the tenant to sublease or not
Exception: If LL stipulates so in contract, his consent is required
Exception to exception-even if LL’s consent is required he can only w/hold
consent “reasonably” in these 4 circumstances: 1) Business reasons 2) Different
type of use 3)legality of proposed use 4)Nature of
occupancy(residentialcommercial)
Ideological difference does not count as one of these categories
VIII Title of Land
A] The Recording System
1) Public Records Office- where deeds, wills, mortgages, & liens are recorded
a) Helps determine who Fee Simple owner is and the state of the title (i.e. mortgages)
b) Not always perfect- so purchasers turn to private title companies for title insurance
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2)
Recording
a) Land title recording is mandated in all states
1) Maintained by County officials
2) Has copies of the land transaction documents (docs) in chronological order
b) Functions of recording
1) Protects interests of 3rd parties- future buyers, mortgagees etc.-allows them to check the
state of the title
2) Stores important land documents that may be used in the future
a) can store- deeds, wills, mortgages, liens & long term leases
b) can’t store-Adverse Possession, short term leases, easements (by
prescription, implication or necessity) are not recorded
If type A’s (deeds,wills etc.) conflict w/ type B’s (AP, Short term leases etc.)- Type B will win
over type A (i.e. you buy land that has a valid AP on it it’s the AP’s because type B’s win over
type A’s) Therefore, you must inspect the land b-4 buying it
c) Types of Indexes
1) Tract Index
a) organizes doc.’s by parcel I.D. # that is assigned to a particular tract
b) not available in many states despite being the most logical
2) Grantor/Grantee Index
2 Indexes:
a) Grantor-Lists chronologically and alphabetically all docs affecting title of land by
reference to the grantors name (move forward in time when checking)
b) Grantee- Same as Grantor’s index but by reference to grantees name(move back in
time when searching)
3) Title Search for buyer
a) Search the Grantee index 1st (because the seller is not a grantor yet)
1) Start with the name of the guy you are purchasing the land from and move back in time
2) Keep going back to the beginning of the list
b) Next search the Grantor index
1) Start w/ the 1st grantor & move forward in time until the guy who sold the land to your
grantor
B] Three Types of Recording Acts
- Different jurisdictions deal with problems that arise from recording, in different ways
1) Race Statutes
a) 1st to record wins
b) knowledge of prior transactions doesn’t matter (2nd guy wins if he records 1st)
c) often leads to inequitable results-potential for abuse
2) Notice Statutes
a) Second in time purchaser (B) prevails over previous buyer (A) if B purchases w/ out
notice/knowledge(B must be a BFPV) (i.e. if A didn’t record) even if B never records himself
b) Puts burden on 1st transactor to record
3) Race Notice
a) Second in time (B) prevails if he purchased w/out notice/knowledge and he (B) records first (New
York)
-Lawyer is liable for negligence if he does not record for his/her client
-See problems on pg. 677 for examples/practice
To get the prop.
Race
Notice
Race-Notice
1st purchaser Must
Record 1st
Record b4 2nd buyer purchases or show Record 1st or show that 2nd
that the 2nd buyer knew or had to know buyer had knowledge
2nd Purchaser Must
Record 1st
Not know of prior owner-did not have Buy without notice and
notice (actual or constructive)
record in good faith
C] General Problems that often arise from recording issues
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1) Bona fide Purchaser For Value (BFPV)/ Bona fide Creditor for Value (BFCV)
To be a BFPV you must satisfy 3 conditions:
a) Transact w/ the record holder or w/ his/her heirs or devisees
b) Have no actual or constructive knowledge of prior transactions
c) Provide value
-Anyone who buys from a BFPV is a BFPV themselves aka “The Filter Rule”
2) General Conveyances –Dealing w/ issue of knowledge of the 3rd party (BFPV)
a) Luthi v. Evans (658)
2/1/71 -Owens assigns to Tours her interests in oil and gas leases; the instrument specifies 7 tracts of
land plus contains a “Mother Hubbard” clause (general conveyance clause) which conveys to Tours,
Owen’s interest in Coffee County, but Kufhal is not specified b/c it’s not in Coffee County.
2/16/71 – Tours records
1/30/75 – Owens assigns to Buris her interest in Kufhal
Issue: Does Mother Hubbard clause give Buris ample notice-was he notified enough to inquire
further
Holding: No, MH clause is not enough notice- Buris wins the Kufhal property
-Need to specify the land so it can be identified by future buyers
Policy Issue: Parties to the contract could have avoided the situation by simply asking Owens to
specify all the properties(In this case the title searcher is not the least cost avoider)
b) Incorrect Indexing- accidentally not indexed at all or Indexed incorrectly(spelling error)
1) Q: If there is a conflict who should get the land?
A: First purchaser is still the Least Cost Avoider so the 2nd guy will get the land b/c the 2nd
guy is completely helpless
*** The script outline has the incorrect answer to this question on pg. 63- be careful
c) Delayed Indexing(when there is an administrative delay between recording & indexing)
1) Lewis v. Superior Court (pg. 697)
1/91- Lewis buys Shipley’s house w/ a contract
2/24/91- Fontana records a lis pendis against Shipley (notice of a law suit)
2/28/91- Lewis acquires title and records
2/29/91- Fontana’s recordation is finally indexed (An obvious mistake probably
jumps
out at all you calendar buffs(Yehuda)-just disregard for now)
Issue: What should be binding the date of the recording or of the indexing/who should bare
the risk of administrative delays?
Holding: For the 1st in time-indexing(when the paper work clears) is the decisive date
For the 2nd in time- recording (b-4 it clears) is the decisive date
Therefore, even though Fontana was the 1st in time, his recording does not matter and the date it
was finally indexed was after the 2nd in time (Lewis) had recorded- so Lewis wins
-States are split evenly on this issue-1/2 would allow Fontana to prevail
d) Formalities- B-4 recordation, recordee must get it stamped by a Notary Public
e) Misspelled Names1) Orr v. Byers (pg. 669)- Orr obtained a judgment against Elliott (2 t’s) however it was
recorded under Elliot (1t). The right Mr. Elliott transferred the land to Byers. Meanwhile,
the land became subject to Orr’s judgment lien.
Issue: Does misspelled name impart constructive notice?
Holding: No, Byers gets the land because it was impossible for him to find the lien that was
under the misspelled name- Orr was the Least Cost Avoider b/c he could have spelled the
name correctly in the first place
f)
Commercial Leases
1) Often the record of the original transaction has a very long contract that may have important
restrictions somewhere in the middle (i.e. no competition clause for a mall).
Q: Does a possible purchaser/competitor have to check the entire contract b-4 he signs?
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A: No, in most states not required to check the entire contract- to avoid this problem the original
parties should include any important info in the short memo that generally accompanies the
record
g) Issues that arise when parties don’t record
1) Waldordf Insurance v. Eglin National Bank (pg.706) – Bank tries to forclose on a prop. that
was already leased to a 3rd party but the lease was never recorded
Issue: Does possession put the Bank on inquiry notice
Holding: Yes, possession is enough to put the 2nd in time on notice
-This holding was heavily criticized
2) Gates v. Ulman (pg. 710 note1 )- The original lease was recorded but the lessees option to buy
was not. Ulman the subsequent purchaser, bought w/out looking further into the rights of the
lessee.
Holding: The subsequent purchaser (Ulman) wins because the option was not recorded. He was
not required to inquire further than the record
- Cases such as Martinique Realty Corp. have held otherwise so it is important to inspect the
premises and inquire into the tenants rights.
3) General Conveyances- dealing w/ the issue of Value added by the 3rd party (BFPV)
-Subsequent purchaser must provide value to be a BFPV
-Problem areas for Value requirement of a BFPV-(all will be explained below)
1) Donees- can’t be BFPV’s
2) Inadequate consideration
3) Installments & part payments
4) Judgments and Attachment Creditors
5) Purchasers at execution sales
a) Donees- can’t be BFPV’s because they don’t add value
b) Inadequate Consideration-Usually not a problem unless the sale price is way out of wack with the
actual value of the prop. (i.e $100 for a $100,000 apartment)
-A promise to pay is not enough
c) Installments & Part Payments
Daniels v. Anderson (695) 1977-Jacula contracts w/ Daniels (π) for land & gives him a
preemptive option on an adjacent piece of land but the option is not recorded. In 1985 Jacula
agrees to sell that adjacent piece of land to Zografos for $60,000. Zografos pays $30,000, then
learns about the option held by π, but continues to pay the rest of the money and records the deed.
Issue: At what point does the purchaser become a BFPV? Was Zografos A BFPV?
Holding: No, he wasn’t a BFPV because he had notice-but Daniels had to pay Zografos the full
purchase price
- States have developed Pro Tonto rules to solve similar problems to the one above
3 variances set out by the courts:
1) Award title to option holder (or any other interest) & have him/her reimburse the 2nd in
time for payments made b-4 he had notice
2) Divide the prop. in kind (award the buyer the portion he payed for)-very rarely happens
3) Award title to subsequent purchaser & have him/her reimburse the 1st in time
-This court went w/ option #1
d) Judgments & Attachment Creditors
In states that provide protection beyond value, judgment & attachment creditors who record
usually don’t have problems; they gave value in a prior transaction
e) Purchasers at Execution/Foreclosure Sales
- Always get a high degree of protection- otherwise people won’t buy at these auctions
therefore always considered BFPV’s
4) Chain Of Title-Problems- arise when there is a gap/delay in the chain of records
a) ex: pg. 685- #7
1st- OA who does not record
2nd- AB (B does record his own interest)
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3rd- OC (C records his interest)
Who wins the prop. B or C?
-C wins because his searched would not have uncovered B’s recordation because he searched
under O
-B’s title was considered Wild because it was a broken chain of title. B was the Least Cost
Avoider because he should have pushed A to record. To be a BFPV you must record the whole
chain if you were aware that it was not recorded.
(If you guys have questions remind me to see other examples on pg. 8 in my notes)
b) Gulette v. Daly (688) (see Ethan for proper pronunciation) Gillmore (a real estate sub divider)
conveyed tracts of land to various grantees (all w/ in the same development). Every deed, except
that of the Δ, had a restriction limiting the use of the tract to a single family home. Δ obtained a
building permit to build a complex w/ 36 apt. units- the other owners brought suit.
Issue: Is the Grantee (Δ) bound by a restriction in the deeds of his neighbors because they’re from
a common grantor? Are the other deeds in the Δ’s chain of title? Was he put on inquiry notice?
Holding: Δ is bound by the other deeds and did have an obligation to look at them-every recorded
deed from a common grantor gives constructive notice to future grantees in any lot of the
subdivision
-1/2 the states (including NY) would reject this holding and say it is not w/in his chain of title and
he, t.f. does not have to check
c) Marketable Titles (MT)- Roughly 20 states have enacted MT acts to limit title searches to certain
periods of time (between 20-40 years)
1) underlying idea is to protect people who have held the title for a long time
2) defines the root of the title as the most recent conveyance that predates the search date by a
certain amount of time-therefore must rerecord every period
d) The Torrens System
1) Judicial proceeding declares rights to a specific tract & a certificate of title is issued- state of
title is officially registered (like a car)
2) Very straight forward way of recording & a fund is collected in case an error is made by the
registrar (this does away w/ title insurance)
3) Was tested by many states but now is only used in a few states (offered in NY)
Reasons it failed in most states:
a) Title insurance co.’s & lawyers opposed it because they stood to lose
b) High set-up costs
c) Inadequate training for registrars lead to many mistakes
D] Title Insurance-(TI) Safeguards purchasers against risk of defective title. It guarantees that the insurance
co. has searched the public record & that there are no other defects but the ones that have been revealed. If there
are, the buyer is covered w/ insurance (the amount depends on the premiums)
1) What isn’t covered
a) problems arising from gov. action & regulation- housing code/zoning violations
b) easements
c) short term leases
d) Adverse Possession
-All are not found in the record and t.f. are not covered-Again- important to physically inspect the
prop. b–4 purchasing it.
2) No expiration date- coverage continues for as long as the ensured maintains interest in the prop.
(including heirs, devisees, & corporate entities)
a) ** keep in mind insurance does not run with the land. So, if A sells to B, B is not covered
3) Walker Rogge v. Chelsea Title & Guaranty co. (723)
Transaction # 1: AielloKosa (prop. has 12.486 acres according to Schilling survey)
Transaction # 2: Kosa Rogge(prop.has 19 acres according to survey done by Price Walker)
-Walker later realizes it’s really 12.4 acres, not 19, and sues Price Walker for the mistake claiming
they should be liable bec. when they did the search they found the original Schilling survey which had
the correct acreage.
25
Issue: Was the acreage covered under the title insurance policy?
Holding: No, Ct. found for the Δ saying title insurance covers problems w/ title not land size
Policy Issues: GP-Q: If the title insurance co.s have greater information why don’t we have them
cover physical defects in the title & allow them to charge more for this service?
-GP: At least warn landowners what they are not being covered for & give them the option to be
covered
Lick Mill Creek Apt.s v. Chicago Title Insurance co. (731)- π buys prop. that has hazardous waste
on it-sues Insurance co. for failing to make him aware because some health Dept. Board had a record
of this prop. being contaminated
Holding: TI company is not liable. The insurance is only on the marketability of the title, not
status/physical condition of the prop. (Ct. rejected the π’s argument that an according to an
environmental act the gov. could impose a lien on the prop. saying the potential for a lien is not a lien)
Rob Wilon- this fits into the line we drew above-if it’s in the record the TI co. is responsible-if not, not
IX The Law of Nuisance
A] Land Use Controls (LUC)- General Intro.
-LUC- deal w/ the problem of externalities
1) Under Blackstonian Absolute Rights- a prop. owner could use his prop. as he pleased, even if
detrimental to his neighbors- not true anymore
Q: is what exactly can one do on his/her prop.? What kind of externalities can you impose on your
neighbors?
2) LUC’s can be established privately (usually through contracts/tort actions) or publicly (zoning,
housing codes etc.)
a) The Judiciary, through case law, has established what one can & cannot do on his/her land
b) Scholars contend that judges have sought fairness & efficiency, riding the line between the
interests of the individual owner & that of the wider community
Morgan v. High Penn Oil Co. (741) (year 1953) 5 yrs. after π’s moved into their house the Δ began
to operating an oil refinery 1000 feet from their house. The refinery emitted nauseating gas & odors
that came onto π’s prop. & made them sick. π sued for injunctive relief and damages but was
restricted by the Ct. to sue for injunction only
Issue: Can a lawful activity, done on one’s own land, in a non-negligent way be considered a
nuisance?
Holding: Yes, The scope of private nuisance goes beyond negligence. Since the conduct was
intentional (knowing invasion was a certain result of their acions) the Δ is liable.
Prah v. Marretti – case in which ct. held even construction of an ordinary 2 floor building may
constitute a nuisance if it blocks the sun from reaching the neighbor’s houses
3) Private v. Public Nuisance- Both require Substantial Interference w/ use or enjoyment of the land
a) Private Nuisance- Requires either 1)intentional or unreasonable behavior or 2)nonintentional but negligent or reckless or abnormally dangerous behavior
i.e. Vibrations, destruction of crops, flooding or pollution, can also be disturbance of
comfort, convenience, or health of the occupant w/physical invasion like noise
b) Public Nuisance- General Community interest or public at large
1) The suit is brought by a public officer- (i.e. air pollution, raising vicious animals or a
whore house)
4) Intentional Nuisance- In these cases some courts have used the “Reasonable Standard” to see if
the activity passed the “Threshold of Liability” if so Δ liable, if not, not liable
2 Approaches:
a) Jost v. Dairyland Power Corp. (749) After determining the π had been substantially
interfered with, the court refused to consider the utility of the Δ’s conduct in finding for π
because it was intentional & the Δ crossed the threshold
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b) Restatement: Even if Δ has passed the threshold, the courts must consider the Δ’s activity &
balance the interests of the parties & other factors (i.e. utility of the Δ’s operation, magnitude
of the harm, cost of avoidance)(more of an economic based test)
B]
Nuisance v. Trespass
a) Trespass- Intentional tort that always gives rise to liability regardless of the amount of harm or
reasonableness of the activity (i.e. Jacque v. Steenburg the mobile home case (pg. 5 of this
outline/pg. 86 in casebook))
Nuisance- Often consider these factors (amount of harm etc.) when deciding a case
b) Why do they differ in the above mentioned respect?
1) Nuisance often affects many people, therefore transaction costs are high (i.e. can’t go doorto-door offering to pay people for imposing a nuisance on them)
2) Trespass is generally 1on1-I can offer a guy $10 to cross his land
C]
The Problem of Social Cost
The Q often arises who could avoid the cost better/ w/ greater efficiency (maybe Morgan could have
moved (in the above case) instead of forcing the entire factory to move)
1) Coase- In all nuisance cases finding for the victim imposes a cost on the nuisance causer
2) Calabrase- Inspired by Coase, he comes up w/ the Least Cost Avoider Analysis
3) Epstein- Theory of Causation- Who inflicts the harm on who?
- Under these 3 theories, there is no longer a wrongdoer and a victim. Both parties are equally
responsible for the harm, therefore, the liability should lie w/ the Least Cost Avoider (LCA)
D] Lateral & Subjacent Support
1) Common Law- Land Owner had a right to lateral (support from tracts surrounding it)& subjacent
support (support from underneath)
a) Lateral support-poses a duty on neighboring tract holders to provide the necessary, natural
support that the plot would need & receive under natural conditions. This did not include support
for artificial additions such as structures.
2) Modern Lawa) Lateral-Most states have laws that provide for support for structures-can’t excavate too close to
your neighbors prop.- If you do he can collect damages
b) Subjacent- Laws protecting the minerals found beneath one’s prop.
E]
Remedies for Nuisance
1) Estancias Dallas Corp. v. Schulz (753) Air conditioner of a apartment building was making a lot of
noise and disturbing the people next door. The initial cost of the AC was originally $40,000 and the
cost to change the AC would be $150,000. For π the damages were $10,000 & devaluation of their
prop. was $15,000
Holding: Ct. granted an injunction to remove the AC even though this violates the LCA theory of
Coase & Calebrase
Rationale: The Ct. assumed the two parties would get together & negotiate after the decision (keep in
mind that in this situation the π has complete bargaining power)
-Problem1:is the parties aren’t always so rational and the Δ may be forced out of business
-Problem 2: If there could be other future π’s the Δ won’t settle fearing future law suits(it may
just be worth fixing the AC if more people will sue after the original deal)
2) Boomer v. Atlantic Cement Co. (758) Vibrating cement plant that pollutes as well. It cost
$45,000,000 to establish the plant that employs 300 people. π’s are nearby landowners asking for
injunction. Actions of the Δ are clearly a nuisance
Issue: Does the disparity in the cost warrant only damages, as opposed to an injunction
Holding: Yes, permanent (past & future) damages awarded and if they don’t pay, the Δ’s will get an
injunction, but no automatic injunction. Damages are granted when the Δ’s operation is more valuable
than the π’s interest. Balancing of equities favored the Δ.
Dissent: Criticized the majority for changing the traditional rule granting injunctions to nuisance
victims. Said the decision gave Δ right to harm people for a fee. Now π has no incentive to fix the
problem (i.e. filters) bec. he has bought immunity
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GP-another solution could have been to award temporary damages and check back in 10 yearsproblem was ct. did not know much about pollution like we know today
Corpat Industries v. Con Ed.- Similar case as Boomer where Ct. found no nuisance t.f. no
liability/damages.
a) -GP- This problem can be solved by pollution regulation by the Legislature
-Reasons for bias against π’s in nuisance cases is because:
1) Ct.s often under value the interest of the π-law has problem w/ subjective value (i.e.
sentimental house)
2) Exact cost of pollution is hard to assess
3) Value of operation to Δ is generally very high
GP-t.f. Insurance or environment groups are the best way to fight industrial nuisances
3) Spur Industries v. Del Webb Development (765) Smelly cow feeding co. came 1st. Senior citizen
development (sun city) comes 2nd, & they expand towards each other. Developer sues for nuisance.
(For any questions about Sun City ask the girl whose grandmother lives there)
Issue: Should an injunction be granted to a π who comes to the nuisance? If so should the developer
be required to compensate the nuisance-causer for the move?
Holding: Yes, Injunction, but Del Webb must compensate the moving costs
-This case illustrates the reciprocal nature of nuisances
4) Calabresi-Melamed Property & Liability Rules
a) Injunction to π, property right to π (injured party) (Estoncias)(injunction)
b) Property right to the Δ (nuisance causer) (Corpat)(Δ is free to continue)
c) Liability rule to π (Boomer) (you can continue but you must pay)
d) Liability rule to Δ (Spur)
5) Nuisance laws has not helped the problem of pollution because it is too big a problem for the ct.s to
handle-it’s good for small cases of nuisance like neighbor who plays loud music-it’s up to the
legislators to attack the problem of pollution
Regulation & Incentive System
Regulation: Prohibits certain activities, requires technologies to limit/fix pollution-prescribes how
much & how to control
Incentive System: Charge a fee for certain activities so as to yield an amount of control
-sets or permits aggregate amount of pollution rights & creates trading options (set amt. Of
pollution per co.)
-newcomer will have to buy out another co.’s pollution rights
-enables industry to regulate itself
-creates incentive for the co.’s to come up w/ non-polluting technology
X Servitudes
Interests in land created by private agreements involving two or more parties that bind & benefit both
immediate parties & their successors
-involves at least two parcels of land
-purpose is to increase total value of parcels involved
-affect is to burden one parcel for benefit of another
2 Types: Easements & Covenants
A]
Easements(Easm)-give 3rd party right to use burdened land or prevent owner of burdened land from
using it in a certain way
i.e. “I give you a right to use my land in such and such way”
-generally seen with driveways, walkways or other public utilities
-Different than a Fee Simple interest in that Easements do not confer a right of possession
1) Affirmative Easements- Entitles its holder to do physical act on land of another
a) ex: right to build and use a way across B’s land
b) profit a pendre- a special type of Affirmative eas. which gives a right to sever & remove
something from the servient tenement (i.e. cut down trees)
2) Negative Easements- Entitles its holder to prevent owner (A.K.A Servient) from doing something on
the Servient’s own land
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3)
4)
5)
a) ex: If A has a negative easement on light from B’s prop.- A can stop B from building that would
block the light
b) Common Law: accepted air, light, lateral support, flow of an artificial stream- Now it’s much
broader
Easements Appurtenant v. In Gross
a) Appurtenant - Easm that benefits all owners of Dominant Parcel owner (It runs w/ the land)
-this is the default easm.
b) In Gross- Easm. That is personal to its holder-only benefits the party, person or entity to whom it
was granted (doesn’t run w/ the land-there is no dominant tenement)
1) At common law couldn’t transfer easm. in Gross- today you can if it is of significant value
Licenses- permission given by occupant of land to do some act on the land that otherwise would be
trespassing
a) Like easm. -difference is, a license is generally revocable at any time while easm.’s are
irrevocable and can’t be denied once granted
Exception1: when a license is coupled w/ an interest in land then can’t be revoked (turns into an
easement)
Exception2: when there is a negative reliance/estoppel-when licensee made expenditures in
reliance of the license
NY-Doctrine of estoppel doesn’t apply to licenses
How are Easm. created?
5 ways: (go into greater detail on each following this list)
1) Easements by Express Grant- Generally required to be in writing (usually in deed)
2) Easements by Implication- Part of land transfer-not expressly given
3) Strict Necessity- to prevent a piece of land from being land-locked
4) Easement by Prescription- Similar to Adverse Possession but don’t get FS right just a right
to use it as you have been
5) Easement by Estoppel- When revocable license becomes irrevocable
a) Easements by Express Grant (EG)
1) Willard v. First Church of Christ, Scientist (783)- McGuigan sold land to Peterson w/ an
expressed grant easm. on part of the land (easm. was that church could use the lot for
parking during church hours) Peterson then sold to Willard who claimed he didn’t know
about the easm. & sued to get rid of the easm.
Issue: Whether a grantor can reserve in a deed an easm. to a 3rd party
Holding: Allowed easm to be granted to a 3rd party based on intent & equity (because the
easm was reflected in the price)
2) Traditional rule was not to allow easm to a 3rd party just to the parties involved in the
transfer of the land because the 3rd party “is a stranger to the deed” NY-follows this
traditional approach
a) The way around this approach is for the grantor to grant the prop. to the church and
have the church grant it to the grantee; that way the church becomes a party
b) GP- The traditional approach doesn’t make much sense
b) Easements by Implication
1) Van Sandt v. Royster (795) 3 lots in a row are owned by 1 person- sewer drain runs
underneath all 3 lots. The Lots are eventually sold individually, each to a different owner.
(drain is not mentioned in the sales) Royster is a current owner of one lot-Van Sandt is the
owner of the end lot & Royster’s shit flows under his house. Van Sandt is trying to put an
end to this shit flowing.
Issue: Was there an easm by implied reservation?
Holding: Easm By Implication was created
Rationale: Original purchaser was aware of the sewer drain (t.f. π had constructive notice)
& an easm was necessary for the comfortable enjoyment of Royster’s lot
-Ct. sets up 4 requirements which must be met for it to be considered Eas by Implication
a) 2 or more parcels were once under common ownership
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6)
b) There was a pre-division use that extended to the servient tenant
c) Use (easm) was apparent upon reasonable inspection
d) Use (easm) is reasonably necessary
c) Easement by strict Necessity
1) Othen v. Rosier (802) Hill, a Common Grantor divides the land & sells to different people.
Othen is landlocked and needs to use a road through Rosier’s land to get to the main roadOthen sues for injunction to get a right of way
Issue: was there easement by necessity?
Holding: No easm exists in this case because the mere fact that Othen is landlocked doesn’t
give him an automatic right of way
Rationale: To get an Easement by Strict Necessity one must prove 3 things a)land was once
under common ownership b) Use is a necessity & c) the necessity existed at the time the land
was divided
– When Hill divided & sold the land, Othen had other ways out, so requirement C was not
fulfilled
– Not Easm by Prescription b/c earlier Rosier had given permission so it was a license not
an easm.
d) Easement by Prescription
1) These Easements mirror the requirements of Adverse Possession but you don’t get FS right
just a right to use it as you have been
a) Open & notorious b) Hostile c) Adverse w/ claim of right d) continuous & uninterrupted
e) exclusive
2) There is an assumption that use is adverse
3) Failed attempts to stop, gates, signs etc. do not stop the running of time- must commence a
law suit and pursue it
-Easm by Prescriptions- only apply to Affirmative Easements
e) Easement by Estoppel
- acquired when license becomes irrevocable
- usually happens when the party spends $ in reliance on a license
1) Holbrook v. Taylor (790) (year 1976)- Initially Holbrook gave Taylor permission to drive
through & maintain a road on his prop. & Taylor spends $100 to improve the road & also
spends money remodeling his house- They have a fight & Holbrook builds a fence- Taylor
sues
Holding: This is easm by estoppel because Taylor spent $ in reliance of the original license
-GP- Be careful when you grant a license
f) Other type of weird easements
1) Mathews v. Bay Head Improvement Association (815) Δ bought land close to the ocean &
effectively blocked/denied access to the public from getting to a public beach-π’s demanded
public access
Issue: Can public pass through Bay Head prop. to get to the public ocean?
Holding: Ct. said yes, and relied on a doctrine of public trust in allowing the public to go on
the Δ’s land-but eas. was not created
-didn’t use prescriptive easm b/c this would have been hard to prove
2) Conservation Easements- recent legal doctrines
a) Uniform Conservation Act 1981 (adopted by 17 states)
1) provides for + &- easements to protect natural, scenic, & open space values
2) Allows government or non government organization to hold an easement that
protects the environment (If you give the gov. an easm for this reason you often get a
tax deduction)
Scope of Easements
a) Generally: Look at how they were created
1) Expressed Easement- Look at the terms of the easement
a) must be clear when you create the easm
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7)
b) must keep in mind that circumstances may change
2) Implied Easement
a) Depends on prior use & similar uses the party reasonably expected
3) Prescriptive Easement
Scope must be consistent w/ though not identical to the use that gave rise to the easm
b) Brown v. Voss (832) 3 parcels of land A,B & C. A is owned by Voss, B & C are both owned by
Brown. The previous owner of Parcel B had an easm on A that ran w/ the land but he was not the
owner of C at the time(owner of C did not have an easm at that time) The question is now that
Brown bought & extended his house to C, does the easement extend to C as well?
Issues: Can a dominant tenement extend the easm’s scope to include an add’l parcel?
Holding: No, Since this easm is specific to a parcel of land, Brown can’t extend it to C but the
remedy given to Voss was only $1 because it didn’t effect Voss at all-he was just trying to bust
Brown’s Balls
c) 1) Restatement 3rd on Propery § 410- Ct. should permit changes necessary for normal
development of the Dominant estate
2) What if serviant land owner wants to slightly change the location of an easm i.e. move the
road over to build something
Majority view: Can’t do it
Minority view: Restatement 3rd § 408: Can do it, if it does not significantly lessen the utility
of the easm or frustrate its purpose
c) Miller v. Lutheran Conference (823) Eas. was granted to Frank & Rufus Miller to boat & fish
on a lake. Rufus dies & family wants to give his part of the easm. over to the Lutheran camp.
Issue 1: Does right to boat & fish also give a right to bathe?
Holding 1: Yes, original eas. was by expressed grant-bathing rights were gotten by prescription
Issue 2:Was the easm. in-gross assignable from the heirs to the church?
Holding 2: Yes, b/c the original parties in the grant said they could assign it
Issue 3: Was it devisable? Since the church will bring a much more intense amount of people
Holding 3: Ct. says the church has to come up w/ a plan of how they are going to use the lake
and Frank Miller will have veto power over any such plan-ct. is trying to avoid over appropriation
-Generally, the owner of the land can bar uses if they exceed the scope of the original eas.
Termination of Easements
a) Expiration- Easements for life of holder or term of years expire upon death of beneficiary or at
the pre-determined time. Eas. By necessity ends when the necessity stops
b) Release- Eas. holder can willingly sign a release to terminate his privilege (If Statute Of Frauds
applies it must be in writing)
c) Abandonment- Eas. is terminated when holder stops using & manifests an intention to abandon it
d) Termination by Estoppel- 2 Conditions:
1) Eas. holder presents an intent to stop using it &
2) A material change in his/her position by the serviant owner acting in reasonable
reliance of the eas. holders action. (like contracts)
e) Excessive Use- can lead to forfeiture in a few states (most states will just issue damages)
f) Merger- of the Serviant & Dominant lots under 1 owner stops the eas.
g) Prescription- Similar to Adverse Possession- Serviant owner can negate an eas. if it’s not used for
a statutory period
h) Condemnation- Eas.’s are terminated when government takes the serviant prop. by eminent
domain- but since eas. is a prop. interest, the eas. holder gets compensation from the gov.
B] Covenants (cov.) – a promise to do something or not to do something on a land
1) 2 Types: Real Covenants & Equitable Servitude
a) Real Covenants- Contractual promise that traditionally was enforceable only in a ct. of law –
remedy for breach was damages only
b) Equitable Servitude- Covenant created by operation of law- may arise even in absence of a
contractual agreement- remedy was traditionally injunctive relief
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2)
Examples of covenants: Conservation society may persuade owner of historical building not to alter it
or city may get promise from a land owner to keep land open for aesthetic purposes
Conditions for Real Covenants to be binding on successors
a) All Real cov’s must be in writing
b) Element of Intent-covenantor & ‘tee intended the burden/benefit to bind their successors- when
the cov, touches the land we assume intent
c) Must Touch & Concern the Land-must effect the parties entitlements as interest holders in the
land
1)Cov. affecting physical use of land are nearly almost considered touched & concerned
2)Cov. to repair or maintain land itself or structure on land will always satisfy this requirement
3)Cov. restricting competing business –Touch & Concern the land (most juris.)
-However many ct.s don’t love affirmative covenants (NY) & often use this requirement to find
that no cov. exists by claiming the cov. doesn’t T & C the land
4) Restatement 3rd §3.2-replaces T &C requirement w/ another test of enforceability against
successors- it focuses more on public policy issues & the standard is reasonbleness of the
covenant: uses 3 factors to determine reasonableness:
a) The purpose & goal of the cov.
b) The fairness of the arrangement
c) The degree of interference w/ personal autonomy
-the restatement suggests that cov.’s that impose unreasonable restraints on alienation & trade or
unconscionable covenants (such as discriminatory cov.’s) should not be enforced
d) Horizontal Privity- between the 2 parties : A_________B
1) exists when covenantor & ‘tee have simultaneous interest in the land, or
2) if a cov. is created simultaneously w/ transfer of an interest in land (i.e. I’ll give you this land
if you promise to cut the trees)
-Horizontal Privity requirement has become less important & is on it’s way out
e) Vertical Privity- between the original parties & their assignees
1) requires succession in estate between the original covenantor & ‘tee & their respective
assignees
2) For the Burden to run, the party against who the cov is enforced (covenantor) must take the
entire estate i.e. D must get all of B’s land for the benefit to run- assignee can get only part
of the land i.e. if C only buys ½ of A’s land
A_________B
A= Promisee B= Promissor
!
!
(Benefit side)!
!(Burden side)
C
D
3)
Equitable Servitudes
-Covenant that fails to satisfy 1 of the 5 requirements but is still enforceable in Ct. on
equitable grounds
-often prove to be confusing
a) Tulk v. Moxhay (863) Moxhay bought land in Leicester Square & knew there was a cov. to
maintain a garden on part of it. The cov., however, was not enforceable by law because it lacked one
of the five requirements.
Holding: Ct. held that the cov. was binding on Moxhay on equitable grounds b/c he knew of the cov.,
& paid less money for the prop. because of it
-General rule- To enforce a Equitable Servitude must find 3 things:
1) 3rd parties intended the restriction to run
2) Subsequent purchaser had actual or constructive knowledge
3) Restriction must Touch & Concern the land*
* keep in mind now we often replace T&C requirement w/ reasonableness tests as seen in the
restatement
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4)
5)
b) Sanborn v. Mclean (868) Original developer divided the prop. into 91 uniform lots. The 1st 21
lots were sold w/ a covenant restricting the use to residential purposes in the deed which was recorded.
The next lot sold was missing this covenant. The lot was sold a few times & eventually came to the
possession of Mclean who wanted to build a gas station on the lot.
Issue: Should Equit. Serv. Be imposed on every lot in the subdivision? Did Mclean have actual or
constructive notice of the restrictions?
Holding: Yes, Equit. Serv. should be imposed on all the lots. Mclean knew or should have known of
the restriction. By looking at the other lots he was effectively put on notice. This was the intent of the
original Common Grantor and although poorly executed it did exist in most of the other deeds.
1) GP-Is this fair? Maybe not-but keep in mind the other 90 lot owners who would have been
hurt by the gas station-the Mcleans could always sell the lot if they want
2) Better ways to add a restriction & avoid problems
a) Common grantors should prepare a declaration of covenants, conditions & restrictions
(CCR), record it on the Plat, & specify in every deed that the deed is restricted by the
recorded CCR.
GP-This is the best way to avoid problems b/c not all ct.s go along with the Mclean decision.
b) Defeasable Fees-conveys a lot as long as you do something-otherwise you forfeit the
prop.- Ct.s don’t like the harshness of forfeiture so it’s a risky option
Exclusive Covenants (EC)-Used to exclude certain groups such as minorities or group homes
a) Hill v. Community of Damien- Group home for AIDS patients. Community of Damien owned
the prop. and leased it to 4 AIDS patients. The neighbors sued claiming that a restrictive cov.
limited the prop. to single family use only
Issue: Is the operation of a group home for 4 unrelated individuals considered a residential use?
Can they be considered like a single family?
Holding: Ct. denies an injunction & says the 4 use it as a house so it’s residential- They rely on
an Alburquerque ordinance that says that a family is no more than 5 unrelated people.
GP- Strong public policy issues drove the ct. to this broad definition of family
- Applying this cov. probably would have violated the Fair Housing Act b/c despite lacking
discriminatory intent the restrictive cov. certainly had a discriminatory impact
- NY Ct. of Appeals did a similar thing but admitted that group homes were not families but
still struck down restrictions on public policy grounds
- Communities try to get around these type of decisions by enacting zoning laws (fret not we’ll
get to zoning soon)
Shelley v. Kraemer-U.S. Supreme Ct.- Landmark case- 2 black couples bought prop. in
communities where the deeds had covenants restricting sales to white people only. After
they bought prop., the neighbors brought suit.
Issue: Does judicial enforcement of the covenants violate the = protection clause of the 14th
Ammend.
Holding: The covenants themselves do not violate the 14th b/c they don’t represent state action,
but enforcement of the cov. by a court would be state action & thus violate the 14th ammend.
-Fair Housing act came later
Termination of Covenants
a) Expiration- same as by eas.
b) Express waiver or release
c) Changed circumstances
1) Western Land v. Truskolaski (907) Developer divides 40 acres of land & restricts it to
single-family dwellings. Highways are built & people start moving to Reno, Nevada.
Westernland wants to build a shopping mall
Issue 1: Can the restrictions be abolished b/c of the change in the community?
Holding 1: No, changes have not been that great, it’s still a residential area so the restriction
remains
Issue 2: Can a zoning ordinance override a covenant? (the town thought of rezoning)
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Holding 2: Nope! (“BOOP, it’s a contract”)
Issue 3: (Public Policy) Is efficiency the applicable test? The mall is worth a lot and is wanted by
the 95% of the community that doesn’t live right near the intended site
Holding 3: No, efficiency is not considered- aggregate welfare is not as important as the welfare
of the people w/in the subdivision
Rick v. West (912) similar facts as Western Land case above but here only one guy (West) wants
to keep the covenant restricting the use of the prop. to residential use.
Holding: Even one prop. owner can stop a substantial development project if there is a covenanteven if it is a socially beneficial project
-problem b/c 1 guy can spoil it for the rest of the bunch
-Solutions:
- Pay damages to the owner & let the area change
- Imply a time limit on covenants (Minnesota)
d) Abandonment – If too many violations occurred w/in a subdivision & nobody takes action to
enforce. (test-would average person reasonably conclude that the covenants were abandoned) it
becomes like a waiver
e) Merger-if all lots are under one ownership-it breaks the cov.
f) Condemnation-by the gov.
XI Common Interest Communities (CIC)-i.e. condos & co-ops
-30,000,000 people live in cic’s
pro’s:
-often cheaper than houses
-you get shared amenities at a lower cost(i.e. pool, gym or tennis court)
-Community life is nice in general-(i.e. young couples w/ kids)
A] Condominiums (condos)
1) Each unit owned in Fee simple by the individual owner
2) Each owner can get separate mortgage to finance the purchase of the unit
a) failure to pay mortgage does not affect other unit holders (different in co-op)
3) Common areas & exterior walls & hallways are owned by all residents as TIC
a)Owners association is responsible for maintaining common areas but has no prop. interest in
those areas
4) Each condo has a declaration that is filed & recorded b4 the first sale
a) Sets forth by-laws & provides for establishment of the owners association
b) Each person by accepting a deed becomes an association member, accepts the by-laws, & is
responsible for their share of maintenance fees that are assessed on a prorated basis(bigger
apts. Pay more)
5) Owner assoc. can change fees over time to perform its responsibilities
6) Most agreements contain a servitude that permits the association to enact new or ammend the by-laws
7) All unit owners must comply w/ rules imposed by original developers & the amendments passed by the
majority of the owners
Relevant Cases:
Pocono Springs Civic Association v. Mackenzie (916) Mack. Bought a lot as part of a CIC. They later
realize it has sewage problems & is essentially inhabitable but are still being charged association fees.
They are trying to abandon the land so not to have to pay these fees.
Issue: Can a resident of a condo negate his obligation to the assoc. by abandoning the prop.?
Holding: They have perfect title & can’t abandon it
Rationale: Tort Liability, If someone falls on the prop. we want someone to be responsible
GP- What they should have done was create a corporation, give the prop. to the corp. & go bankruptb/c as we know from our favorite novel (no Eric not “Private Parts”) Buffalo Creek “the educational
tool” Disaster it’s hard to pierce the corporate veil
Nahrstedt v. Lakeside Village Condo (921) When Nahrs. bought the condo she brought her 3 cats despite
the “no pets allowed” restriction. She claimed the cats were quiet & didn’t disturb anyone b/c they
remained in her apt. all the time.
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Issue: Does the restraint have to be reasonable in general or should they look at each individual case
independently (i.e. if the rule was designed to protect from nuisance of animals and her cats were not
bothering anyone they should be allowed to stay)?
Holding: Look at the prohibition in general/abstract b/c can’t go case by case-it would be
unreasonable- a restraint in the Declaration is struck down only if the burden it imposes will be
substantially outweighed by the benefit from removing the restriction - & obviously you can’t restrict
a person’s liberties or constitutional rights
Rationale: 1) She had notice-it was in the declaration
2) Market- many communities allow pets she could have gone there
Epstien- makes these two points & likens the declaration to mini-constitution that a person can
buy into or not-if you do you are bound by the rules
Portalla Hills Community Assoc. v. James
(928) Assoc. prohibits satellites-James puts one up
anyway, but it is not visible to other owners
Holding: Court looked at the reasonableness of this specific situation not just the prohibition in
general-found it would be unreasonable to enforce it in this case & allowed the satellite to stay
-This clearly contrasts the case above-Courts are schizophrenic-argue both side on the test
- Courts are more willing to intervene if restrictions were subsequently imposed as opposed to in the
original declaration
O’Buck v. Cottonwood Ct. upheld the assoc.’s right to switch from antenna to cable TV despite
opposition (found it was a reasonable switch)
Trustees of the Prince Condo v. Prosser – ct. ruled that an owner can’t refuse to pay fees even if he/she
has a meritorious claim against the assoc.
-above two cases depict how courts allow associations to adjust over time
B] CO-OPS
- Common in NYC & other large urban areas
- Different than condos
1) Building owned by non-profit corporation
2) Residents own shares in the corporation & vote on the Board of Directors
3) You are a unit/share holder not an owner
a) Therefore can’t mortgage one apt. just the entire building
b) If one tenant defaults on mortgage payments the others must pick up his share
-therefore must screen applicants carefully (w/out violating the Fair Housing Act)
4) Because owned by corp. it’s difficult for individual owners to get financing
5) Residents usually get long term renewable leases- but no fee simple
6) Premises maintained by management firm hired by the board
XII
Zoning
A] Introduction
1) Village of Euclid v. Abler Realty (950) (S. Ct. 1926) Ambler challenged a zoning scheme created by
the village. The scheme imposed size & use restrictions & divided the city into different districts.
Ambler’s lot was divided into 3 different use classes-It was, therefore, worth only 1/4 of its value if it
could be used for industrial purposes. He claimed the zoning scheme violated his 14th Ammend. rights
& his right to due process.
Issue: Is the ordinance a violation of the π’s constitutional rights?
Holding: Nope-Zoning is constitutional-t.f. the ordinance stands
Rationale: The complexity of urban life calls for land use controls- therefore, can zone to avoid
nuisance b4 it happens by separating industrial from residential
-Note, zoning rules at the time sought to protect single family homes-which all the Justices were a part of.
-Today zoning is commonplace and effects every city in the U.S.
2) This case introduced Cumulative (Euclidian) Zoning-permits higher use in lower use areas
i.e. can put a house in an industrial area but can’t put a factory in a residential area
Hierarchy-(from highest to lowest) ResidentialCommercialIndustrial
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Today- this is not generally permitted b/c ct.s fear nuisance suits even if house is built in an industrial
area
The Non Conforming Use-Retroactive Implications
B]
1)
C]
1)
PA Northwestern Distributors v. Zoning Hearing Board (1965) Shortly after the π opened an
adult bookshop, the town established a zoning ordinance that prevented such shops in that area. An
amortization clause gave business owners 90 days to comply. (relocate or change the nature of the
store)
Issue: Was this ordinance constitutional? Does the city have to compensate for the relocation?
Holding: Non conforming uses are vested prop. interests & although it’s OK to rezone, you must
compensate (This is a PA case-different in other states as in next case)
Concurrence: Don’t necessarily need compensation- amortization may work w/out compensation but
it must be reasonable under the circumstances and 90 days in this case is not reasonable-must give a
longer period o relocate
GP- loves the concurrence b/c compensation would be very expensive & impractical b/c it would be
passed along to the tax payer
Buzzetti v. City of NY (2nd Cir. 1998) 2nd circ. Upheld a zoning ordinance regulating permissible
locations of adult entertainment establishments. The Ct. basing their opinion on studies indicating that
the businesses lower the prop. value, & decrease the character of the community, gave the
establishments 60 days to relocate w/out compensation. (Bottom line- if you’re going to open a porn
shop do it in PA not NY)
The Scope of Zoning –originally was established to ensure adequate light & air, minimize risk of fire
& other hazards & to prevent overcrowding. Eventually it expanded to include areas such as aesthetic
zoning
Aesthetic Zoning (AZ)
a) Stoyanoff v. Berkeley (1012) (1970) Stoyanoff applied for a permit to build an unusual house.
The permit was denied b/c the city’s board did not approve the design. Soyanoff claims the aesthetic
rules are too vague & outside the scope of zoning regulation.
Issue: Does the legislation enable aesthetic zoning regulation? Is it allowed to do so?
Holding: Yes it does, Yes it can. The legislation protects the character of the community & its prop.
value which are legitimate grounds for zoning. This ct. establishes the right of local municipalities to
control architectural design.
b) Anderson v. City of Isaaquah (1020) Similar facts as in Stoyanoff (above) but after his original
plans were rejected Anderson drew up another set of plans which were also rejected by the
development committee. He asked for a concrete set of guidelines but none were ever given. After
spending $250,000 he appealed to the city council & lost
Holding: Aesthetic restrictions are allowed but they must be clear & can’t be arbitrary. Here, they
were unclear & the committee did nothing to illuminate them. The board must let the applicant know
exactly what to change in the design in order to comply w/ the guidelines
c)
d)
2)
Q: Should we require clear rules or vague standards
A: Vague standard of harmony would allow some non-uniformity but may be taken advantage
of as seen in the Anderson case (above)
Clear Rules- could lead to some hard core uniformity which could be very Blah.
Conflict between Aesthetic Zoning & Trademarks (i.e. if ordinance says only white signs what
does MacDonalds do w/ the golden arches
West Coast- AZ regulation can’t require alteration of trademarks
East Coast- AZ regulation may require trademarks to change/alter to fit w/in regulation standards
(following §1121 of the Lanham act)
First Amendment Considerations
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Q: Why does the community have a right to prevent someone from painting his house pink?
A: 1) No easy solution - 1st Ammend. rights don’t trump zoning laws, but they do lurk in the
background
2) Free Speech must give way to prop. value if guy could settle elsewhere
a) City of Ladue v. Gilleo (1031) An ordinance prohibited landowners from putting up signs other
than warnings or “for sale” signs. Gilleo put up sign protesting the Gulf War & it was taken down
Issue: Can a municipality regulate the content of signs (b/c some signs were allowed)
Holding: No, signs are protected speech - physical aspects may be regulated but not content. The
ordinance closes off a cheap & convenient means of expressing oneself for which there is no close
substitute
Linmark S Ct. struck down ordinance that prohibited all signs despite the fact that the municipality
had created the restriction on signs to disallow “for sale” signs to prevent white flight
GP- Selling a house is commercial speech not political speech & comm. Speech is not always
protected. Therefore, had the ordin. just disallowed “for sale” signs not all signs it may have been
upheld
Metro Media S Ct. struck down San Diego ordinance that permitted on-sight commercial signs but
prohibited off-sight commercial signs
Members of the City Council of Los Angeles v. Taxpayers For Vincent S Ct. upheld an ordinance
prohibiting posting of signs on public property. Since the ordinance was content neutral & promoted
public interest w/out unduly limiting free speech the ordin. was OK
3)
Controls on Household Composition
a) Village of Belle Terre v. Boraas (1042) (S Ct.) City ordinance limiting the properties to onefamily dwellings-“related persons or no more than 2 unrelated persons” Appellees, 6 unrelated
students living together, claim it’s unconstitutional b/c the term family violates the equal
protection clause.
Holding: Held it would not strike down reasonable economic & social legislation, only arbitrary
laws would be struck down. Ct. felt these types of boarding/frat houses caused more traffic, more
noise & less parking & t.f. found the ordinance to be reasonable
Dissent: uses strict scrutiny to find that the ordinance should be struck down
b) Moore v. City of East Cleveland (S Ct.) Ct. invalidated a single family restriction which
defined family as no more than one set of grandchildren-poor grandmother just wanted to live w/
her grandkids
McMinn v. Town of Oyster Bay NY court of Appeals invalidated ordinance that restricted
definition of a 1 family to any # of ppl. related by blood, marriage, adoption or no more than 2
ppl. that are not so related or over the age of 62
Baer v. Town of Brookhaven similarly struck down an ordin. that limited single family housing
to relatives & not more than 4 unrelated persons living & cooking together
***** Keep in mind the law generally in most states is still like Belle Terre, while CA & NJ have
joined NY in striking down these types of ordinances
c)
Group Homes-problem is if every city disallow them they will all be forced to one place
City of Edmonds v. Oxford House (OH) (1053)( S ct.)- City sought to close Oxford House, a
group home of 10-12 adults recovering from substance abuse, on the grounds that it violated its
definition of the one family ordinance. OH challenges claiming a violation of the Fair Housing
Act (FHA)
Issue: Can Zoning be used to override the FHA?
Holding: FHO prevails-zoning can’t override
Rationale: FHO accepts restrictions on maximum occupancy but does not preserve family
character concerns-here family definition rules were concerned w/ family living & not space for
living
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Oxford House v. City of St. Louis (1058 note 1) city ordinance defined family as no more than 8
unrelated ppl. living together. 3rd cir. felt this was a reasonable restriction.
Seemingly benign ordinances such as this are very detrimental to group homes
Michigan Protection& Advisory Service v. Babin (1059 note 2) 6th Cir. held that a group of
neighbors that pool financial resources together to prevent sale of prop. to group home did not
violate the Fair Housing Act & the owner didi not fit under the FHA
4)
Exclusionary Zoning (EZ) When municipality tries to use zoning to exclude low-income housing
- They fear decrease in prop. value, increase in social services & lower prop. taxes
- This perpetuates a vicious cycle b/c then poor ppl. can only move to bad neighborhoods
- Growth Controls-Similar to EZ but attempts to exclude anyone-evn rich ppl.-try to limit
growth in general
a) Southern Burlington County NAACP v. Mt. Laurel (1061)County enacts a zoning policy to
fend off risk of low-income housing.
The ordinance provides for:
1) 1/3 to industrial use
2) 1/3 for Cluster Zones & PUD’s (See the zoning handout for definition of these 2 tems)
Ensure high income ppl. by making big size minimums while limiting the # of
bedrooms per house (to prevent 3 related families from buying a big house and living in
it together)
Control the overall density which restricts the # of units you can put on the land
3) 1/3 for Retirement community
NAACP claims it’s unconstitutional
Issue: Can munic. Draw its zoning to exclude LIH?
Holding: NO, munic. Has a regional responsibility to provide all types of housing, including LIH,
unless they can prove particular circumstances that justify not doing so. As an exercise of police
power land use regulations must reach constitutional requirements of substantial due process & =
protection. Local zoning measures not only have to serve local welfare but that of all the citizens of
the state. Therefore, Ct. says they have to fix the zoning laws but does not mandate them to build
LIH-just Deregulation so developers can do so if they choose
GP-Ct. basically used strict scrutiny to get to this result
-Most other jurisdictions still use rational basis test & have allowed this type of exclusionary
zoning
Problem: No LIH is built despite the deregulatio
Mt. Laurel II Ct. extends the original ruling to all communities not just developing comm. and
says all munic. must take affirmative measures to attract developers to build LIH. Ct. also
established its power to overrule any permit decision it deemed improper.
b) Other Ways Municipalities Exclude Groups
1) Minimum Housing Costs (invalidated for the most part)
2) Minimum Housing Size (Ct.s are split)
3) Minimum Lot Size (most ct.s allow)
4) Set Back requirements (home must be set back off the prop. line) (many ct.s allow)
5) Mobile Homes Exclusion(many ct.s allow)
c) Inclusionary Housing-when municipalities force developers to provide LIH or provide
incentives to do so (such as charging fee for building High income housing)
-Not common at all
d) Tiebout Hypothesis-Maintains that municipalities compete among themselves to attract
residents. This competition creates a wide array of communities that cater to diverse preferences of
heterogeneous society-: “individual vote with feet”-if unhappy w/ what a community provides you
move
Only works if the following are present:
1) Infinite supply of communities/jurisdictions
2) Perfect Mobility
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4)
XII
1)
2)
3) Perfect Information
4) No Externalities
Doesn’t Realisticly Happen
e) Growth Controls-purport to restrict all residential or commercial development
- Adopted to preserve certain characteristics or features of a community
- or to prevent high taxes-(if rich ppl. comeprop. tax will go up)
- Munic. Sometimes use it to extract money from developers
Golden v. Town of Ramapo The town conditioned residential development on the existence of
adequate public facilities & infrastructure. The town developed an 18 yr. plan to provide these
facilities but permitted private developers to create/ pay for these facilities.
Holding: NY ct. of Appeals upheld this growth plan. The ct. held that inadequate resources
constitute a rational basis for requiring sequential development & timed growth. Basically found
that it was not a strategic plan to get $ from the developers but made it clear that if the restrictions
were absolute or permanent, they would be struck down
Is Zoning Necessary/ Desirable?
a) Law & Economic scholars oppose local intervention & prefer the market to take its course-they
believe anything can be fixed w/ nuisance laws & covenants
-they point to Houston, Texas where there was no zoning & it was like any other city
b) Opposition:
- point out that nuisance laws protects after-the-fact- where zoning laws nip the problem in the
bud (i.e. no commercial development)- nuisance law is too late (i.e. the cost to move a factory is
very high)
- Zoning has other goals besides economic-nuisance laws & covenants can’t deal w/ aesthetic
zoning
Eminent Domains (takings)
General Intro:
When private land use controls fail, the government (St. or Fed.) may & does intervene to improve the
workings of the market
- Gov. regulation of land is desirable when it prevents harmful 3rd party effects & when it can
help realize economies of scale (build infrastructure-roads/bridges etc.)
- Need gov. to intervene b/c if it was done privately we would have uncoordinated
development
- Gov. can intervene in one of two ways
-Eminent Domain- By Taking- but must pay compensation
-Zoning- Say land can only be used for a highway-may not have to compeasate
We’ll see below that whether the gov. acquisition of land is zoning or a taking will be key b/c
paying compensation is often in the balance
Constitutional Issues
a) 14th Amendment- Due Process Clause provides “nor shall the gov. deprive any person of life,
liberty or prop. without due process”
-Historically, it was seen as having two aspects:
1) Procedural- has been interpreted to require that none of the liberties listed be taken w/out
giving the affected individuals a fair opportunity to defend themselves
2) Substantive- has been interpreted to require that any gov. regulation or restriction affecting
life, liberty or prop. would advance some public interest-the means chosen to advance the public
interest would be reasonably necessary & not unduly burdensome
-Since the New Deal economic Substantive Due Process has been abandoned by the S. Ct. but state
courts still apply both
b) 5th Amendment-(Taking Clause) Eminent Domain= the power of the gov. to tranfer,
involuntarily, title from a private owner to itself
This is how it happens:
1) B4 invoking ED, the gov. will try to strike a voluntary deal w/ the prop. owner
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2) If not, the gov. will initiate a condemnation proceeding
3) Ct. will review & if allows the taking will come up w/ a value of the prop.
This power of the gov. is derived from police power, but is not unlimited:
1) Must be taken for public use
2) Just compensation must be rendered- this ensures that the gov. will use the prop.
efficiently
Cases that deal w/ issue of Public Use:
Hawaii Housing Authority v. Midkiff (1106) (S.Ct.) Hawaii wanted to distribute wealth b/c a
few owners owned all the prop. They pass a land reform act to take the land & give it to others
Issue: Is this a public use?
Holding: Yes, Ct. says they only have to check for reasonable behavior-it’s really up to the local
legislator-Doesn’t literally have to be for public use, just for a public purpose, & breaking up an
oligopoly is a public interest & therefore, fits under police power
Public Use Requirement is Minimal
Professor Berger: Exact meaning of Public use vacillated b/w 2 terms
a) Broadly-any use conferring benefit on public
b) Narrowly-only if public gets to use the condemned land
-S. ct. went w/ broad interpretation
Poletown Neighborhood Council v. City of Detroit (1116) Detroit wants to take land from this
neighborhood and build GM a plant in order to keep GM in the city
Issue: Is helping the local economy to be considered a public benefit enough to take private
prop.?
Holding: Yes it is a public benefit- not really helping GM just creating jobs for hundreds of
people
Dissent: Primary benefit was for GM- GM had engineered this move using its political power
GP- Doesn’t think this is what the framers of the amendment had in mind when they gave this
right to the gov.- Dissenters make more sense
City of Oakland v. Oaklad Raiders
Issue: may the city of Oakland condemn a sports franchise to keep them from relocating?
Holding: Maybe, Anything that promotes education, recreation or public enjoyment may be
considered public purposes
Other Solutions: 1) give munic. Right of 1st refusal 2) Give munic. Rights to the name
Just Compensation
a) Judge Posner: - the payment of market value prior to the taking
also get foreseeable damage to the remainder of the prop.
b) Don’t get compensation for personal/sentimental value, t.f. typically falls short of the
true value
-Endowment Effect- psychological phenom. of ppl. valuing assets they over market
value
- In Canada they pay above market value to compensate for this
c) When Fed. Gov. takes St. or city prop. it is required to pay Substitute Facility Cost (if
park is taken must pay the cost for new park)
Exception: U.S. v. 50 Acres of Land S. Ct. ruled that when market value is easily
ascertainable it should be the compensation measure even if Fed. Gov. is taking from
city or St.
3)
What constitutes a taking?
4 different Theories:
a) Physical Invasion- If gov. physically takes prop.Should get compensation
b) Diminution in Value-any gov. act that lessens the value of land Should get compensation
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c)
d)
a)
Balancing-allow taking w/ out compensation- if public gain is greater than the private loss
Harms v. Benefits- gov. can take w/ out compensation if its action prevents harm but if it confers
a benefit to the public
Physical Takings:
Loretto v. Telepromter Manhattan CATV Corp. S. Ct. –NY passed a law providing that
landowners must allow cable TV companies to install wires on their prop. for a $1 payment. Loretto
who bought the prop. not knowing about the wires later finds out & sues for compensation.
Issue: Does a permanent, physical occupation authorized by the gov. give rise to an obligation to
compensation?
Holding: Yes, any permanent, physical occupation is automatically a taking (per se rule-degree of
taking is not considered(degree only considered when assessing the damage). Ct. remands for
compensation. Regulation of prop. can be done w/ out compensation if it promotes public interest. If
the physical taking is temporary, there is a balancing test
-Brightline rule cuts administrative costs
-The court makes this distinction b/c permanent occupations are an especially severe intrusion on the
owner’s rights (right to exclude)
On remand NY ct. held one dollar was enough compensation
Dissent: Per Se rule is stupid(my language-not the dissent) There are certain regulatory measures that
are much more harmful to the rights of the property owner than a little wire like in this case.
Brightline rule of majority makes no sense.
-and wont cut administrative costs b/c need courts to decide how much compensation anyway
Flight Nuisance issuesIssue: When commercial airlines fly over your house-taking or not?
Holding: Washington case said if flight goes 1)directly over(otherwise no violation of prop.) 2)
causes noise and vibrations  BOOP it’s a taking
Yee v. Escondicto – Found that Rent Control is not a taking b/c it’s not a physical invasion
4) Regulatory Takings
a) Hadacheck v. Sebastian S.Ct. (1140) LA passes an ordinance prohibiting the manufacturing of bricks
in certain parts of the city. π, a brick manufacturer, had prop. in that part of the city which lay on a bed
of clay. He claimed it was a taking b/c it caused a huge diminution in value. He also claims disparate
treatment b/c othrs in rest of the city were allowed to remain open
Issue: Is this a taking to be compensated for?
Holding: No, it was w/in the police power of the city. It is never a taking if the regulation/ordinance
is reasonably regarded to be a nuisance control measure-t.f. no compensation
-keep in mind they apply a loose definition of nuisance don’t have to meet rigorous level of
public/private tort nuisance
Consolidated Rock co. v. LA π had a gravel pit on his prop. & similar ordinance as in Hadacheck
forbade him from opening a gravel business
Holding: Since the area near the pit was known for its clean air the ct. applied same rule as seen in
Hadacheck
Just v. Marinette County Also upheld Hadacheck in saying that an ordinance forbidding a developer
from building on Wetlands is not a taking b/c the restaurant would be a potential nuisance
-Since it is not really clear what is considered a nuisance or not, Case Law is allover the place on
this issue(as you will see by all the cases ) thisuncertainty b/c it’s hard to predict the outcomeon test argue both ways- i.e. if you consider it a nuisanceno taking (and vice versa)
Miller v. Scheene Ct. held a decision to uproot cedar trees to preserve apple trees was not a taking.
Empire Kosher The court held a poultry quarantine to stop the spread of influenza & protect the
industry was not a taking
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Mid Florida Growers Destroyed trees to prevent citrus canker & protect the citrus industry. The ct.,
ignoring Miller, said if destroy infected treesno taking, but if destroy healthy trees to stop
spreadmust compensate
PENNSYLVANIA COAL CO. V. MAHON- S.Ct. (1147) Pennsylvania Coal sold the surface land
to private owners but reserved the right to mine the coal underneath (right was in the deed along w/
warning that purchasers took the risk of subsidence-and waive damage rights). PA passed the Kohler
act, which forbade mining in a way that would cause subsidence (endanger houses from falling in)
thus taking the mining right away.
Holding: Holmes: It was a taking. When regulation effects a diminution of value of considerable
magnitude it must be construed as an exercise of Eminent Domain & t.f. a taking that must be
compensated for. According to Holmes there was no nuisance control in this case
Rationale: 1) Holmes saw the coal rights as a separate estate that was taken entirely(right to mine is
its own estate)-establishes Doctrine of Severance-If you can show that a right/estate was taken in its
entirety ct. will probably consider it a taking 2) No nuisance b/c the situation was private- the price of
the pprop. Sold probably reflected the risk
Dissent: Brandeis: Act curbed public nuisance so it’s not a taking. There was no considerable
diminution of value to the π b/c the overall value increased (the houses won’t fall down)
Plymouth Coal v. Pennsylvania Contrasts Penn. Coal decision- similar situation but the regulation
just required that they keep pillars underneath the houses un-mined
Holding: This regulation does not = a taking b/c 1) no great diminution in value 2) There was a public
risk 3) The regulation caused an average reciprocity (gave a benefit back to the prop. owner as wellprotected the mining employees)
-the benefit under average reciprocity does not have to offset the harm –can be marginal
Keystone Bitonimus Coal v. Debenedictus(S.Ct.) Coal co. is bound by an act that requires them to
keep 50% of the coal in the ground & to restore the surface wherever they dig
Holding: It’s not a taking- Ct. (Stevens) distinguishes from Penn Coal on 4 grounds
Legislation here:
1) protects the public at large-not just the homeowner(weak distinction)
2) aims to abet a problem “akin to a public nuisance” (weak distinction)
3) creates average reciprocity of advantage (Weak)
4) Does not create Considerable Diminution (b/c it only limits 50% of mining)
(also no problem of Holmes’ Conceptual Severance)
b)
Q: How do value considerable diminution?
PENN CENTRAL TRANSPORTATION (PCT) V. NY S. Ct. (1159)- NY passed a landmark
designation law that designated Grand Central Station a historical landmark-requires PCT to keep the exterior in
good repair & seek commission approval for any architectural changes. PCT sought to build a skyscraper on top
of the station-commission disapproves- so PCT sues claiming it’s a taking that deserves compensation
Holding: Ct. says no taking-t.f. no compensation- Ct. makes a mess of existing common law & creates it’s own
ad hoc test/ ad hoc inquiry into the facts in order to determine whether it’s a taking or not
-Ct. uses 3 factors: 1)Economic impact 2) Investment backed Expectations 3)whether there was a physical
taking (obviously not in this case)
-PCT had 3 arguments- Ct. disputed all
1) Conceptual Severance- of air space above building is a complete takingCt. says NOPE! (not BOOP)
Taking does not arise b/c you lost your air rights (only Holmes would buy this crap)
2) Diminution in Value- Losing millions of dollars of future rent from the skyscraper we want to buildCt.
answers threefold: a) you can still operate profitably(Michael Jordon’s steakhouse-Ms. Fong has been there
twice) b) No investment Backed expectations were upset in this case c) There’s Reciprocity of Advantage- b/c
now NY as a whole is nicer (tell that to the guy who’s losing millions b/c of this- GP: Ct. should have left this
out it sounds foolish)
3) Disparate Treatment Effect –  Ct. says They were not singled out for this measure just happens to be it
effects them more
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-Ct. admits it is ad hoc decision- basically comes to a conclusion then fits it into a rule/test or makes up a
new test
Ct. does award them Transfer Development Rights (they can build on their other properties even if violates of
other rules)
1st English Evangelical Lutheran church of Gledale v. County of Los Angeles (1168)(famous case
b/c it won the “longest case-name of the year award” back in ‘87) S. Ct. (1159) Ct. goes back to Holmes and
applies his Conceptual Severance Principle
Nolan v. California Coastal Commission (CCC) (1181)S. Ct. –Nolan bought the prop. between two
public beaches. He wants to knock down & rebuild a bungalow on this prop. & applies for a permit to do
so. Council conditions the permit on him allowing the public to move between beaches.
Issue: Does the exactment of an for access to a public beach = a taking?
Holding: YES- Scalia points out that-1) had he not requested a permit & they would have demanded
access from one beach to another it would be a physical taking which would get compensation 2) Does the
goal advance a substantial gov. goal 3)Creates essential Nexus test- even if it advances a substantial
government goal the means must fit the ends you are trying to promote - here the bungalow had nothing to
do with the public access it was just blackmail (Scalia also joins the ad hoc club and makes this new
requirement)
Dolan v. City of Tigard (1186) S Ct.- Dolan wants to expand her store and add a parking lot and
applies for a permit -the city claims since it is prone to flooding she must make a bicycle path on her prop.
and she must leave an open space
This makes no sense what does a bicycle path have to do w/ flooding? – That’s exactly her argument.
Issue: 1) Is there an essential nexus between the goal & the means
2) Are the conditions of the permit sufficiently related (rough proportionality between the
means and the end) (this fine-tunes Issue 1)
Holding: 1) Yes there is an essential nexus between the required dedications and the legitimate state
interest i.e. the bike path would alleviate the extra traffic her new store would bring but…
2) While the city could restrict development in a flood zone, the dedication of a FSA prop. as
an open space & the bike path were disproportionate to the cities interest in flood protection (if would have
asked them to build a flood wall it would have been ok)
This case put simply:
Difference betw. Essential Nexus and rough proportionality
EN = the nexus between the proposed dedication and the St. goal/interst (does her expansion warrant some
extra flood measures-ct. said yes)
Rough Proportionality = Could we accomplish the goal through less intrusive means? Did gov. go too far?
Ct. said yes It’s a taking
Lucy v. South Carolina (1198) S.Ct. – In 1986 Lucy bought 2 beachfront properties in SC for $975,000. In
1988 SC passes a law barring all dev. From beachfront prop.
Holding: Scalia adds a new per se rule: Wipeout- Holds if the prop. is rendered valueless (aka wipeout) it is
automatically a taking –says this applies in this case
On Remand: Ct. found it was a taking but just a temporary taking b/c the π could apply for a residential
building permit
This topic in case law is clearly a mess- just know the different rules the Ct. has used and apply them all
on the test.
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