Property
practice problems- future interests, concurrent estates (pg 353; went over in review
session), pg 629 & 638 (restrictive covenant problems)
Property, possession and ownership
Property- consists of a bundle of rights or expectations in a tangible or intangible thing
that are enforceable against 3rd parties, including the government
- Types of property:
o Real property- immoveable property (buildings, land, etc.)
o Personal property- moveable property (cars, clothes, etc.)
o Inchoate/intangible property- (life insurance, stocks, patents, etc.)
- Common attributes of property ownership:
o Possession, use, right to exclude others, alienation (right to give away/sell
property during your lifetime; usually includes power to destroy), descent
(right to give away property after death), and the right to divide up all of
these rights
- Critiques of property law:
o Efficiency arguments- private property maximizes wealth production
 Posner- If you have a private property regime, people who are
good at maximizing wealth will end up w/ the property.
 Also implied- Wealth maximization is a good thing (his
implied justice argument)
o Justice arguments- x is good or bad because x is a good or bad thing
 The notion of ownership of your organs is bad. You can’t put a
price on everything. Personhood requires that we put certain
things “out of bounds.” Ownership of our organs is out of bounds.
 Also implied- Having ownership of human organs reduces
personhood (her implied efficiency argument)
o Efficiency and justice arguments are not mutually exclusive.
o Sunstein- You can’t be free unless you have your own basic stuff and
don’t have to depend on gov’t. We should make sure everyone has basic
things.
- Judicial remedies for protecting property:
o In specie/replevin- action to recover the property itself
o Money damages- i.e., for damaged property
o Also Ejectment, conversion, trespass, nuisance, injunction, etc.
- Possession:
o Possession includes- (a) a physical relation to the object possessed, and (b)
an intention to control/exclude others (Popov v. Hayashi)
o Owner has possession or right to possession
o Owner can exclude others from use
o Owner has right of inter vivos and testamentary transfer
o Owner holds property subject to no superior right to possession in another
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o Popov v. Hayashi- court holds that possession requires possession and
control (not merely intent to control and attempt to stop momentum of the
ball); Popov had a pre-possessory interest in the ball
The law of finds
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Abandoned property- requires intent to no longer own
o First finder has an interest against all others, including former owner
o Innocent owner’s exception- innocent owner of property traceable to
illegal activities can remain owners against the gov’t (In Re Seizure of
$82,000- finder of drug money in car purchased from gov’t has interest
good against gov’t)
Lost property- unintentional, involuntary parting of property
o Finder has an interest that is good against everyone except true owner
(Ganter v. Kapiloff- court rejects “finder’s keepers”)
o Finder has the property, and has probably put in more effort to get it than
anyone else
o Often there are statutory periods in place- i.e., finder of lost property who
follows proper procedures may become owner after 1 year
Mislaid property- intentionally put somewhere and then failed to reclaim
o Finder acquires no rights in the property
o Usually no statutory period after which finder owns found property
o Owner of premises upon which property is found has an interest that is
good against all others except true owner
 Owner of premises has interest over the finder (Benjamin v.
Lindner Aviation- owner of plane where money was found has
interest over finder)
 Theory- thought is that true owner will return to the place where he
left it
Treasure trove- coins or currency concealed by owner; element of antiquity
o Finder has interest good against all others except true owner
o Courts have largely eliminated this category.
A finder’s rights may subject to claims of the landowner upon which chattel was
found
o Generally accepted that landowner owns and posses anything that comes
from his land, even if he has no knowledge of it
o Mislaid property- landowner prevails
o Lost property- finder prevails
o More public the place, more likely courts will give to finder (he put in
more effort than anyone else)
Prior possessor has interest against subsequent possessors (even if possession was
obtained illegally)
o Theory- promote stability
Finder vs. employer- If employee was acting w/in scope of employment when he
found, then the chattel is awarded to the employer
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o (Exception to the rule that those who put in more effort have an interest
against those who put in less effort)
o If employee shows he was acting outside scope of employment, he will be
awarded the chattel
Bailments (duties of possessors)
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Bailment- the rightful possession of personal property by one who is not the true
owner for a specific purpose, w/ an express or implied K that the property will be
returned when the purpose has been accomplished
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Whether there is a bailment: it is the element of lawful possession, however
created, and duty to account for the thing as property of another, that creates the
bailment, regardless of whether possession is based on a K (can be implied)
Elements that P must allege to recover under a bailment theory:
o (1) Express or implied agreement to create a bailment;
o (2) Delivery of the property in good condition;
o (3) Bailee’s acceptance of possession of property (actual or constructive)
o (4) Bailee’s failure to return the property or bailee’s redelivery of the
property in a damaged condition
o P may have an action for damages, conversion, etc.
o Finders are usually treated as bailee’s; “constructive bailees”
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If property is damaged, bailee (the D, not the P) has burden of proving that it was
not negligent and should not be liable (it was in bailee’s possession last)
In a normal tort claim, P has burden of proving that D acted negligently
P always wants a bailment; D never wants a bailment
Traditional rule- There are 3 levels of duty:
o (1) Bailments entirely for benefit of bailor; gratuitous bailment
 Ex.- bailor asks bailee to watch her car
 Bailee owes only a slight duty of care
o (2) Mutual benefit bailment; bargained for exchange bailment
 Ex.- railroad gets paid to ship something
 Bailee owes an ordinary duty of care
o (3) Bailments entirely for benefit of bailee; gratuitous bailment
 Ex.- bailor borrows a movie from bailee
 Bailee owes an extraordinary duty of care
 Minimal negligence will result in liability
Modern rule- one uniform standard
o Ordinary care (or reasonableness) standard is used, regardless of who
receives the benefits
o Bailee has burden of proving that it acted w/ ordinary care
o Peet v. Roth Hotel- court applies this reasonableness standard, where a
hotel employee agreed to take a guest’s ring and lost it
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The traditional and modern rule for bailments is essentially the same. If a court
uses the reasonableness standard, it will likely consider who is benefitting from
the bailment
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Valet parking- creates a bailment; street parking- no bailment; parking garage- in
between (Allen v. Hyatt Regency- court says a parking garage creates a bailment)
In general, exculpatory agreements for liability are effective w/ regard to
negligence, or for preventing categorization as a bailment, up to a point.
o General rule- You can waive yourself out of liability up to the level of
willful and wanton conduct. A waiver of liability will absolve negligence,
but not willful and wanton (or intentional) conduct.
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Public policy effects of bailments: incentive to keep things protected that are not
your; higher costs of insurance (i.e., for stolen cars from parking garages)
Adverse possession
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Adverse possession- the nonpermissive occupation of another’s land, which
possession, if continued for the period of the statute of limitations on actions to
recover land, will give the occupier the estate owned by the person then legally
entitled to possession
o Encourages productive use of land; there is a limited amount of land
o Adverse possession is constructive abandonment. In law of finds,
abandonment is actual. In adverse possession, abandonment is
constructive.
o Adverse possession does not run against the government.
o Disseisor- one who is or may be in adverse possession of another’s land
o Disseisee- the displaced owner
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Elements; possession must be:
o Actual
 Real possession
o Open and notorious
 Not hidden; patent
o Hostile
 Possessor must occupy w/o owner’s permission
 Permissive use (i.e., landlord/tenant) is insufficient
 Bad faith is not required
 Courts will not look into intent of the adverse possessor. What is
required is that the adverse possessor acts like an owner.
 Trespassers are assumed to be hostile
o Exclusive
 Possessor must exclude others as an owner would
o Continuous
 Continuous possession for the statutory period
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Possessor may leave but must continuously possess as an owner
would
 Continuous under the circumstances
 Alaska case- adverse possessors didn’t use property during
winter months, but no one else would have either since it
was way too cold
 Tacking- if S/L is 10 yrs, and A occupies for 7 and B for the next 3
(and A and B agree to want to adversely possess) then adverse
possession has occurred
o (The adverse possessor must use the land as a true owner would)
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If adverse possession has occurred, adverse possessor may be awarded the land,
or may be awarded the land provided he pays market value for it
Averse possession creates new title (title does not pass from the original owner)
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Adverse possession against a co-tenant
o For possession to be hostile, possessor must commit an ouster (ejecting the
co-tenant).
o Usually actual knowledge is required: i.e., writing a letter notifying cotenant that you are claiming the property
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Adverse possession of personal property
o Adverse possession is usually not applicable for chattels (hard to have
open and notorious possession)
o Adverse possession of chattels can occur if the facts show that all of the
elements are supported, but vast majority of adverse possession cases are
for real property.
Nuisance
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Nuisance- a non-invasive (not trespass) interference w/ the enjoyment of property
from outside the property
o Trespass (e.g., football through window)- P gets damages automatically
o Nuisance (e.g., smoke)- P must prove injury to be awarded damages
Nuisance is designed to prevent landowners from using land unreasonably so as to
interfere w/ neighbor’s right to enjoy their property
Damage must be material (e.g., physical, economic, or ecological effect)
o Whether something is a nuisance depends on its effect on a “reasonable
person”
A nuisance does not have to be illegal (compliance w/ regulations does not
preclude the finding of a nuisance)
Factors that may be considered: (Penland v. Redwood Sanitary Sewer Service)
o Location of the claimed nuisance (i.e., rural v. urban)
o Character of the neighborhood
o Nature of the thing complained of
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o Frequency of the intrusion
o Effect upon P’s enjoyment of life, health, and property
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Remedies- injunction or damages
o Courts may refuse an injunction where the hardship caused to D by the
injunction would “greatly outweigh” the benefit resulting to P
 Boomer v. Atlantic Cement- shutting down the cement plant would
have eliminated many local jobs (public policy)
o In some cases courts will allow D to pay damages to P to continue the
nuisance (Boomer v. Atlantic Cement); basically a servitude on P’s land
o Damages calculation- value of property before nuisance minus value of
property after nuisance
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Coming to the nuisance rule (coming to the risk) – If someone came to the
nuisance, courts will not recognize an action for nuisance by that person.
o If the nuisance was there when the person bought the land, then he came
to the risk.
o Spur Industries v. Del E. Webb- very rare case where a court enjoined a
nuisance despite P coming to the nuisance
 Arizona wanted to promote development, and purchaser of land
built a large apt complex next to an existing nuisance, so court
allowed P to pay D damages for cost of having to move (cost of
injunction); dangerous- seems to be taking private land for private
purpose
 Coming to the nuisance will almost always bar a P’s claim.
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Private nuisance- activity that invades the interest of a landowner (or tenant, etc.)
in freedom from unreasonable nontrespassory interference w/ his use and
enjoyment of his land
Public nuisance- activity that invades the public interest in freedom from activity
that endangers the health, safety, or property of a considerable number of people,
offends public morals, or interferes w/ the comfort or convenience of a
considerable number of people.
o Public nuisance actions- typically brought by public prosecutors or other
public officials, on behalf of the public
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Rights above and below the surface
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One important right of property ownership is the right to sever it.
Subjacent (below the surface) and superjacent rights (above the surface) in one’s
property can be severed and sold.
Subjacent rights
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Rights to valuable minerals beneath the surface of one’s land (subjacent rights)
may be sold (McCormick v. Union Pacific Resources)
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o This splits the estate in 2: a surface estate and a mineral estate
- Hypo: A owns surface estate and mineral estate, but B sneaks underground to get
to valuable minerals underneath A’s land in the mineral estate. C adversely
possesses A’s land. What estates can C claim?
o If A owns the entire estate but is not exploiting the mineral rights, then C
can claim A’s surface estate. C cannot claim A’s mineral estate, though.
Superjacent rights
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The old common law rule was the “ancient cone” of ownership: property owner
owns the cone of land from the center of the Earth out to the end of the universe
o No longer applicable
o Congress has placed navigable airspace above minimum altitudes of flight
in the public domain. (US v. Causby)
 Below the minimum altitudes, gov’t takes an easement because it’s
committing a trespass.
 Above the minimum altitudes, there is a nuisance analysis: actions
only allowed for actual damage.
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Whether landowner has a cause of action to prevent an occupant of nearby land
from blocking sunlight that reaches landowner’s land from nearby land (or
blocking landowner’s “view”)
o Generally, one may not gain a prescriptive right to light or a view.
o (Easements, restrictive covenants, etc. may be enforceable in certain cases;
But that would be based on the easement or covenant, not a prescriptive
right to light or a view)
Water rights
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3 general distinctions of types of water: (1) flowing (stream) water, (2) surface
water (precipitation that runs across land), (3) percolating (underground) water
Water rights are use rights (for flowing water and percolating water)
Flowing (stream) water
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Riparian doctrine
o Used in eastern 2/3 of the US
o Property that touches a water body is riparian to that water body
o All riparian properties get to share (reasonable) use of the riparian water
body.
 Those w/o riparian property have no rights to the water.
 Borough of Westville v. Whitney Home Builders- sewage treatment
plant was not trespassing because it was a riparian owner, and all
riparian owners have equal rights to the use of stream water
o Unity of title doctrine- If you buy a riparian property adjacent to your nonriparian property, that property becomes riparian property.
Appropriative doctrine
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o Used in western 1/3 of the US (much dryer)
o All areas that feed into a watershed are part of that watershed.
o “First in time, first in right”
 First people to make beneficial use of the water, once they obtain a
permit for it from the gov’t, get use of the water.
 Those w/o riparian property can use the water. Riparian rights
usually take priority over appropriated rights, but not always.
o Rights are determined by priority of beneficial use. If a later appropriator
comes along and will make a more beneficial use of the water, he can
displace an earlier appropriator but must pay compensation.
o Source of title doctrine- riparian property could never get larger, but it
could get smaller.
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Development of rule for stream water rights:
o Old English common law rule- “First come, first served”
o Developed into: natural flow theory- you can take a little bit of water, as
long as it doesn’t disrupt the water flow or quantity
o US has largely adopted: reasonable use doctrine
 Allows full use of stream water in any way that is beneficial to
riparian owner provided it does not unreasonably interfere w/
beneficial uses of others.
Surface water
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Unique situation- property owners want to get rid of surface water
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Development of rule for stream water rights:
o Old common law rule- common enemy doctrine:
 Landowners could do whatever they wanted w/ surface water w/o
regard to its effect on neighboring property.
 Problem- encouraged battles of ‘hydraulic engineering’
o Next alternative- civil law doctrine:
 Higher elevation tracts had an easement over lower tracts for
surface water that naturally flowed downhill. Those who increased
or interfered w/ natural flow of surface waters so as to cause an
invasion of another’s interest was liable.
 Problem- essentially shut down development, because
development usually requires some sort of drainage control
o Reasonable use rule
 Each landowner is allowed to make reasonable use of his land even
though the flow of surface water is altered thereby and causes
harm to other property. Landowner incurs liability only when his
harmful interference w/ flow of surface waters is unreasonable.
 Interference must cause demonstrable harm to be prohibited.
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Westland Skating Center v. Gus Machado Buick- court adopts the
reasonable use rule (one party builds giant concrete wall and other
party sledgehammers it)
Percolating water
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Old common law rule- everyone can take as much water as they want (even w/
malicious intent)
2 modern theories:
o Reasonable use doctrine
 Everyone can use as much as is reasonable
o Correlative rights doctrine:
 The rights of all landowners over a common basin or underground
reservoir are correlative (coequal), and one cannot extract more
than his share of the water where others’ rights are injured thereby.
 Each share is proportioned by amount of land owned.
Lateral support
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2 theories for the law of lateral support:
o Strict liability:
 Absolute duty for lateral support for a neighbor’s land in its natural
state (unimproved land). Strict liability applies.
 D may be liable absent a showing of negligence.
o General negligence:
 Duty of reasonable care for lateral support for a neighbor’s land in
its unnatural state (improved land). General negligence applies.
 D only liable if P proves D was negligent.
 Factors to consider under general negligence:
 Necessity of excavation
 Whether adequate notice was given to adjoining
landowners
 Whether reasonable precautions were taken to prevent
harm to adjoining property
 Whether competent workers were employed
 Whether proper instrumentalities were used
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Natural state of land is the state of land before any human improvement on the
property, not the state of land at the time of purchase (XI Properties v. Racetrac
Petroleum)
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Hypo: A builds a pool between A and B’s house. B’s foundation begins to
crumble. To recover, B must prove 1 of 2 things:
o (1) As a result of A’s conduct, B’s land subsided and would have subsided
in its natural state (w/o the weight of B’s house); or
o (2) A acted negligently
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Property transfers
Inter vivos transfer (during life)
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Most inter vivos transfers of property are for the entire property interest (fee
simple absolute estate)
Sale or gift
Most are by deed- grantor conveys property to grantee in writing
o Includes a description of what is being conveyed
o Must be signed and delivered to grantee
o Deed is not a K (grantor receives nothing in exchange)
o You buy a house- you will probably exchange both a K for sale and a deed
Involuntary inter vivos transfers- Eminent domain, adverse possession,
foreclosure, judgment after tax default, etc.
Transfers at owner’s death
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Transfers of property at death often given different property interests to different
people (“the dead hand”)
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Testamentary disposition- transfer by will
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Intestate succession
o Can apply to both real and personal property
o Intestacy- a set of default rules for transfer of property by one who dies
intestate (w/o a will)
 State statutes dictate how property will transfer in the absence of a
will
 Table of consanguinity (blood lines) – follow statute if provided
 In absence of a will, it is presumed that decedent would
rather have closer relatives get their property than further
relatives.
 If wife- wife gets all; if no wife but kids- kids get all; if wife and
kids- wife gets most, kids get some; if no wife or kids- living blood
relative (i.e., parents), or adopted relative
 If everyone renounces it (no one wants it), it can eventually go to
the government (e.g., debts)
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2 possible ways to transfer property at death:
o Per stirpes (“by representation”)
 Ex. – Bob dies, and leaves 3 children, 2 living. The dead child
leaves 2 living children.
 Bob’s 2 living children get 1/3, and Bob’s 2 grandchildren
of the dead child each get 1/6.
o Per capita (“by head”)
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Count up the number of potential takers and give everyone an
equal share
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Revocation of wills
o No written will may be altered by oral declaration.
o Statutes universally recognize revocation of wills by subsequent written
instruments
 Must be in writing, have a signature, attestation of witnesses, etc.
o 2 basic changes in circumstances that may revoke or alter a will absent an
express revocation- marriage and divorce
 In some states, a divorce creates a revocation of the will at law.
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Will substitutes
o Co-tenancies:
 If co-tenant dies, others can keep it.
o Tenancy by the entirety:
 If one spouse dies, property goes from joint tenancy to sole
ownership w/o will and cannot be undone.
 Spouse cannot try to give property to someone else.
o Trust
 Decedent transfers property to be retained by a trustee
 Ex. – decedent gives land to bank to hold until his son is of age to
claim it
Present and future estates
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Estate- an interest in land which (a) is or may become possessory; and (b) is
ownership measured in terms of duration
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Freehold estates- fee simple absolute, fee tail, defeasible fees (fee simple
determinable, fee simple subject to condition subsequent, fee simple subject to
executory interest), life estate
o Non-freehold estates- leases
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Fee simple absolute
o To “A and his heirs”
 A’s heirs have no interest. Heirs do not arise until A’s death.
o To “A, and his heirs and assigns”
o To “A”
o Carries all rights that can go w/ property
o Lasts for an unlimited duration; freely alienable, divisible, and
descendable
o No future interest created
o There is a preference at common law for fee simple absolutes (require the
least court attention; fully alienable)
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Fee tail
o “To A and the heirs of his body”
o Virtually abolished in the US (historically passed to lineal blood
descendants)
o The intention to create a fee tail will instead create a fee simple absolute
o Historically- future interests of a fee tail:
 Reversion in grantor
 Remainder in a 3rd party other than grantor
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Fee simple determinable
o “Blackacre to A, for so long as A uses Blackacre as a nature conservatory.
But if A uses Blackacre for any other use, then back to grantor”
o Can last forever, but there’s a condition. Upon occurrence of condition
there is a forfeiture.
o Future interest- possibility of reverter in grantor
 If condition is met, transfer is automatic
o No matter what is done w/ it, it will always be subject to the condition
o Green Tree Services v. Williams- banks should never allow anyone to use
a fee simple determinable, or anything other than a fee simple absolute, as
collateral for a mortgage
o If condition is met, and grantee collects rent from a 3rd party, grantor can
bring a cause of action for “mesne profits” against grantee to collect rent
(grantee’s continued possession is wrongful after the condition is met)
o Adverse possession clock starts right when condition is met
 In Re .88 Acres of Property- fee simple determinable; condition
was met (automatic reversion to grantor), but grantor did not
reclaim the property; after adverse possession period passed, the
county got the land, free of the fee simple determinable
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Fee simple subject to a condition subsequent
o “Blackacre to A, for so long as A uses Blackacre as a nature conservatory.
But if A ceases to use Blackacre as a nature conservatory, then grantor
may enter and reclaim”
o “To A but if x event occurs, grantor reserves the right to re-enter and
retake”
o Future interest- right of entry (power of termination) in grantor
 If condition is met, grantor has right to enter or retake (not
automatic)
o No matter what is done w/ it, it will always be subject to the condition
o Grantee still has right to be there until grantor exercises right of entry
o Holder of right of entry must exercise power of termination in a timely
manner
o If condition is met, and grantee collects rent from a 3rd party, grantor
cannot bring a cause of action for “mesne profits” against grantee to
collect rent until after right of entry has been exercised.
o Adverse possession clock doesn’t start until grantor enters and reclaims
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Fee simple subject to an executory interest
o “Blackacre to A so long as used as x, but if used for any other interest then
to B”
o “To A but if x event occurs, then to B”
o “To A for A’s life and then to B when B turns 30”
 If B is already 30 when A dies, then it’s a shifting executory
interest
 If A dies before B turns 30, it’s a springing executory interest; It
goes back to grantor during the open period
o Just like fee simple determinable, but if condition is met then the estate is
automatically forfeited in favor or someone other than grantor
o Future interest- executory interest in someone other than grantor
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Life Estate
o “To A for A’s life”
 When A dies, reversion back to grantor
 If A grants to B, then B has a life estate for the life of A
o “To A for the life of B”
 Life estate pur autre vie (for the life of another)
 If B dies first, then back to O
 If A dies first, then A could have transferred it intestate to A’s
heirs for the life of B
o “To A for life, then to B”
 B has a remainder interest
o Future interest- reversion in grantor, or remainder in 3rd party
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Words of purchase- identify the taker of the estate
o “To A”
Words of limitation- describe (delimit) the type of estate given
o “and his heirs”
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You can only transfer the interest that you have
Grantor must use the correct language in the grant (Wood v. Board of County
Commissioners- language of the deed trumps grantor’s intentions)
Conveyance by owner of a fee simple is presumed to transfer a fee simple absent
language to the contrary
A living person has no heirs. Heirs only arise at the moment of death.
Examples:
- “To A so long as used as a pub”; “To A until not used as a pub”; “To A during
use as a pub”
o Tend to be interpreted as a fee simple determinable
- “To A for church purposes”
o Language is insufficient; no possibility of reverter or right of entry
o Fee simple absolute; no defeasibility attaches
- “To A city for the purpose of creating a public park”
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o Language is insufficient; no possibility of reverter or right of entry
“To A used as a pub, but if…”
o Tends to be interpreted as a fee simple subject to a condition subsequent
“To A school district on condition that the premises be used for school purposes”
o Some courts- fee simple subject to a condition subsequent
o Some courts- find a covenant; just a promise, w/ no right of entry; owner
may have a lawsuit for damages or injunction requiring return of the land
“To B, and B covenants and agrees that the land will be used only for single
family residential purposes”
o Covenant
5 types of future interests
- Originally created in grantor
o Right of entry
o Possibility of reverter
o Reversion
- Originally created in one other than the grantor
o Remainder
o Executory interest
Remainders- 4 rules (If 1 of the rules is violated, then it’s an executory interest)
- (1) A remainder must be created at the same time as, and by the same instrument
that creates, the prior estate or estates.
- (2) A remainder may never follow a fee simple defeasible estate.
o (Remainders must follow either life estates or leasehold estates)
- (3) A remainder must not have the capacity to cut short the prior estate(s).
o It must take in possession only upon the natural termination of the prior
estate(s).
- (4) There must be no “built-in time gap” between the termination of the prior
estate and the remainder’s taking of possession.
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2 types of remainder:
o Vested remainder- a remainder that as it were has landed, or come to rest,
in the relevant party
 3 kinds of vested remainder:
 Indefeasibly vested remainder
o “To A for life, and then to B”
 Vested subject to complete divestment
o “To A for life, then to B, but if B ever joins the Air
Force, then to C”
o The condition subsequent could divest B’s interest
 Vested remainder subject to open
o “To A for life, then to the children of B”
o Rule of convenience- the class shuts when the gift
can become possessory
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o Here, the class stays open for A’s life, and when A
dies, the class closes
 “But if” – points toward a vested remainder
o Contingent remainder- a remainder that is not certain to come into
existence (not certain to come to rest) in any given set of parties, either
because no relevant parties exist yet, or there is a condition in the way
 A contingent remainder is not vested
 Not currently clear who (if anyone) will take
 A remainder is contingent if it has either of 2 characteristics:
 The taker of the remainder is unascertainable; or
o “To A for life, remainder to those children of B who
survive A”
 The remainder is subject to an unfulfilled condition
precedent
o “To A for life, and if B has reached 21 by the date
of A’s death, remainder to B”
 “If” – points toward a contingent remainder
15
16
Limits on transfer and alienation
The rule against perpetuities
- “No interest is good unless is must vest, if at all, not later than 21 years after some
life in being at the creation of the interest”
- Purposes of the rule:
o To prevent land from being off the market for an extended period of time.
If not for the rule, property would be inalienable; it would remain off the
market for long periods of time
o If grantor was crazy, he could make any ridiculous clauses that he wanted
(problem of the “dead hand”)
- Allows one to have some control of the things that they own, but not to make it
inalienable forever
3 types of direct restraints on alienation:
- Disabling restraint- grantor seeks to make transfer of the land literally impossible
o “Attempts to transfer Blackacre shall be void”
o Almost always held to be void
- Forfeiture restraint- grantor seeks to create an estate in grantee which either
automatically terminates upon an attempt to alienate or which is subject to a
power of termination held by the grantor in such event
o “Blackacre to A, but if A attempts to sell Blackacre, revert to grantor”
o A fee simple determinable, where condition is “any attempt to sell”
o Unlimited forfeiture restraint- usually void
o Forfeiture restraint limited in time or scope- can be upheld
 Alby v. Banc One Financial- forfeiture restraint measured by life
of grantor and expressly stating that interest would revert back to
grantor only if grantee encumbered (mortgaged) the property
 The forfeiture restraint is upheld; was a reasonable
restraint, not a direct restraint
- Promissory restraint- grantor seeks to create a contractual promise by grantee not
to convey an interest in land which grantee is receiving
o Unlimited promissory restraint- usually void
o If time or scope is limited- more likely to be upheld
 “To A, and any attempt to transfer during grantor’s lifetime will
require grantor’s consent”
Protection of future interests
Waste- an unreasonable use of the property by the owner of a possessory estate which
reduces the value of a future estate
- Future interest holder of a successive estate can bring a cause of action against
present interest holder for waste
- Life tenant is entitled to the use of property ultimately to be enjoyed by the
reversioner or remainderman, provided the use does not unreasonably reduce the
value of the future estate.
17
-
Equitable doctrine
Remedy- injunction or damages
Voluntary waste- overt acts by the interest holder which will have detrimental
effects on the interest
o Per se voluntary waste- removal of the actual substance of the state
(dismantling the land or the building on the land)
 Exception: open mine doctrine- if a mine is already open,
possessor of land can continue mining
o Doctrine of estovers- you can use on-site materials for on-site maintenance
purposes
 E.g., you can cut down trees for heat or to repair a hole in the roof
o Doctrine of emblements- you can harvest regularly that which is normally
harvested regularly, and take the profits (don’t have to give profits to
future interest holder)
-
Permissive waste- allowing the property to decrease in value by failing to make
reasonable repair (i.e., fixing a leaking roof)
o Breach of obligation to repair
o Does not require repair of catastrophic loss (i.e., losses from flooding)
o Normal depreciation- life tenant is not required to repair normal wear and
tear
o Life tenant would be required to fix a small hole in the roof
 Little effort required to keep the property air and water right;
failure to repair the small hole constitutes permissive waste
o Repair above the base wear and tear and below the catastrophic event is
required
-
Ameliorative waste- will make the property more valuable (and so should be
allowed)
o E.g., property is worthless to begin w/, and D materially changes the
property, resulting in an increase in value of the property
o Called ameliorative “waste,” but it’s actually necessary for some reason
o Exception to the waste doctrine
o Brokaw v. Fairchild- P, present holder of a life estate, was enjoined by
those who had a remainder future interest, from tearing down a house and
building an apartment complex.
 Just because it would increase the value of the property does not
mean it is permitted.
 A life estate is not ownership.
-
Mortgage hypo: Blackacre has a 25-year mortgage. Who should pay the
mortgage, present interest holder or future interest holder?
o Courts require present interest holder to pay the interest on the mortgage
(a rent equivalent), and require future interest holder to pay the principle
of each month’s mortgage (Because that’s what they’re getting,
eventually. They’re getting the principle).
18
-
Partition- splitting up the land evenly
o Division of concurrent estates
o Available only to concurrent interest holders, not successive interest
holders (would be inconsistent w/ the meaning of partition)
 Example- Co-tenants partition, splitting up the property 3 ways
equally to each co-tenant; or 1 of the 3 co-tenants buys out the
property and pays the other 2 for their share
-
Time value of money
o The right to receive a sum of money (or an asset w/ a monetary value) in
the future is not worth as much as the right to receive the same amount
today.
o Money has “time value;” if you have the money in hand, you can make it
work for you by investing it
o Hypo: You’re a future interest holder, and actuarially the life estatesman
has 8 years left to live. Blackacre in 8 years is mostly likely to be worth
$250,000. How much is your future interest worth right now at this
present moment?
 What one pays for Blackacre right now will be less than if they
paid for Blackacre in 8 years (i.e., accounting for inflation)
 If interest rate is 10%, then the present value would be about
$225,000. (10% of $250,000 subtracted from $250,000)
Concurrent estates
-
Whatever may be divided, right to possession is to be enjoyed concurrently
At common law- default was joint tenancy
Today- default is tenancy in common (because it’s the least restrictive)
-
Any co-tenant (concurrent interest holder) can sell that co-tenancy interest, but
they can only sell what they have
o Any co-tenant can petition for partition.
o The co-tenancy is an undivided interest in all of the property. A seller of a
co-tenancy cannot partition the interest and sell a portion of the property to
someone else. The co-tenant has an undivided interest in the whole
property. He does not have a full interest in any part of the property.
3 types of concurrent estates:
-
Tenancy in common
o “To A and B”
o “To A and B as tenants in common”
 A and B together enjoy an undivided interest in Blackacre
o Default tenancy; If a court is not sure what kind of tenancy it is, it will say
that it’s a tenancy in common.
19
o Free alienation
o Only requires unity of possession (not unities of time, title, or interest)
o No survivorship rights
-
Joint tenancy
o “To A and B, not as tenants in common but as joint tenants with the right
of survivorship”
o “To A and B as joint tenants”
o Exactly like a tenancy in common, except it includes a right of
survivorship
 Survivorship- if 1 party dies, remaining interest goes to surviving
party(s)
o If it stays a joint tenancy, the last survivor gets the fee simple absolute
o 3 joint tenants, and 1 dies: the 2 survivors then own 50% instead of 33.3%
o Transfer from A to x: it becomes a tenancy in common (right of
survivorship lost)
o 4 unities:
 Time- interest of joint tenants must arise at the same time
 Title- interest must arise by same title (same instrument)
 Interest- with identical interests (of equal size)
 Possession- with identical rights to possess the whole (all possess
property equally, and can use it at the same time)
 If any unity is missing, concurrent estate becomes a tenancy in
common (Crowther v. Mower)
-
Tenancy by the entirety
o “To H and W, husband and wife”
o “To H and W, husband and wife, and the survivor”
o “To H and W, husband and wife, as tenants by the entirety”
o A special kind of joint tenancy for married people
o When you marry you become 1 corporate entity
o Cannot be severed w/in the marriage; As long as you’re married you own
the relevant property as tenants by the entirety.
o Purpose- in states that have tenancy by the entirety, its purpose is to
provide the family home to the surviving spouse when the other spouse
dies
 Ensuring that innocent surviving spouse doesn’t lose the house due
to dead spouse’s debt
 If one spouse dies with debt, the surviving spouse is protected. A
bank cannot take the dead spouse’s interest in the property
(Coraccio v. Lowell Five Cents Savings Bank)
o Must have 4 unities
o Not severable
-
Most states say that a joint tenancy is independent from marriage (marriage not an
element of a joint tenancy as it is an element of tenancy by the entirety)
20
o Therefore it is not automatically destroyed by a divorce decree (as it
would be in a tenancy by the entirety)
o To destroy a joint tenancy there must be either explicit language in the
divorce decree, or a separate document destroying it.
-
Hypo: 2 people hold a joint tenancy and then get married.
o They do not become tenants by the entirety.
3 theories of who holds legal title when banks/mortgages are involved (states answer this
question differently):
-
-
-
Title theory- If you make a mortgage w/ a bank, then the title passes at the time
the mortgage is signed.
o Joint tenancy is severed at the time of the mortgage. It becomes a tenancy
in common. The bank has a tenancy in common interest (on what had
previously been a joint tenancy) at the time the mortgage is signed.
Lien theory- The mortgage creates a lien on the property for the bank. Title
passes at foreclosure.
o Title remains in property owner, and the bank has a lien that it can begin
to enforce if default occurs.
o Lien- a claim on a piece of property
o Only at the point of foreclosure does title switch hands. Only then is there
a severance of the joint tenancy. (no earlier than that; Brant v. Hargrove)
o In a lien theory state- if a bank becomes mortgagee for owner of a joint
tenancy, and that mortgager dies, the remaining owner would owe
nothing. Bank’s security for the loan would disappear.
Intermediate theory- Intermediate position that title passes at default (when person
fails to pay). When default stage is reached, then title passes.
o No severance as long as you keep paying
-
Joint bank accounts
o Essentially creatures of K’s
o Both parties contribute, and survivor gets at death;
 Or a pay on death account: account of one goes to chosen payee at
that person’s death (instead of becoming part of their estate)
-
In-tenants- those currently in possession
Out-tenants- have the right to use the property, but are not actually currently using
their possessory rights
3 common law causes of action brought by cotenants
-
Accounting- equitable action in which one cotenant seeks to have another state
the net income, rents, or profits for the property and give P his share
o Brought by out-tenants seeking to collect rents collected by in-tenants
21
-
Contribution- action in which one cotenant seeks reimbursement from other
cotenants for expenses in repairing, maintaining, or operating the property
o Brought by in-tenants
o Expenses subject to contribution: real property taxes, mortgage payments,
repair costs, insurance premiums, etc.
o Co-tenant who incurs expense for necessary preservation of property is
entitled to reimbursement from other co-tenants
 But a co-tenant who goes beyond preservation and develops the
property in someway is not entitled to reimbursement from other
co-tenants (Co-tenant cannot be “improved out of his interest in
the property”)
 Exception- House is sold for much more than it would have
sold for w/o the improvement. The co-tenant who paid for
the improvement may be entitled to increased sale value if
it can be attributed to the improvement.
-
Partition- action seeking to end the cotenancy when the parties cannot agree on its
operation or management
o Equitable action
o 2 types:
 Partition in kind- physically divides the property in kind (courts
usually prefer this method)
 Some properties cannot be partitioned in kind (i.e., a
narrow plot of land in a very urban area)
 Partition by sale- proceeds of the sale are distributed to reflect a
cotenant’s past efforts in improving the property (the more
common method)
Concurrent estates hypos
-
-
P and M are cotenants in Blackacre. M is in-tenant. P is out-tenant, but
contributes taxes. P has 2 kids, G and B. G and B hate M. P dies, and G and B
inherit P’s interest in Blackacre. They want to use Blackacre but don’t want to
deal w/ M. What can G and B do?
o They could buy M out.
o They cannot sue M to eject her for failing to pay for the cotenancy.
o They could partition (partition in kind or partition by sale).
o They could just use the property and deal w/ M.
Same facts, but P is still alive. M moves into an apt down the street and rents out
Blackacre to S. Then P dies, and G and B inherit P’s interest.
o G and B can bring a successful accounting action
 M cannot successfully argue that she is just substituting someone
into her cotenancy.
 Courts say that if cotenant rents out to a 3rd party, that is a profit
for which rent is due to the other cotenants.
22

-
-
Courts treat ‘use’ and ‘money generation’ are separate
categories
Same facts, but M invites S to live w/ her on Blackacre, and S does not pay rent.
G and B sue for accounting. What will their theory be?
o M is a cotenant and S is not a cotenant. There is a rental value for S, not
being a cotenant, staying there. G and B are entitled to ½ of that rental
value.
o M’s response- All cotenants have the right to live there, and all cotenants
have the right to bring their significant others to live there too. This is one
of the rights of being a cotenant.
M is an in-tenant, P is out-tenant, and M builds an addition on the house. Can M
make P pay contribution?
o No. M can improve the property, but P is not obligated to contribute to
that improvement. This is not repair (or preservation), but improvement.
P as a cotenant cannot be improved out of his estate.
-
Cotenant A can lease his cotenancy interest in the property w/o consent from
cotenant B, but Cotenant A cannot interfere w/ cotenant B’s interest in the
property (Carr v. Deking)
-
Partition by allotment- 1 cotenant buys out other cotenancies and becomes owner
in fee simple absolute
Parties can agree to owelty- money paid to even up a partition in kind
o The divided areas may not be equal in value
Agreements not to partition are held valid for a reasonable time
o If the agreement violates rule against perpetuities, then held void
-
-
A joint tenant or tenant by the entirety cannot benefit from murdering a cotenant.
Murderer forfeits his right to survivorship.
o Courts treat murderer as having pre-deceased the victim as a matter of law
(Lakatos v. Estate of Billotti)
o Slayer statutes- do not allow cotenants to benefit from voluntary
manslaughter.
 Most states do not include involuntary manslaughter, but some do.
Marital estates
-
At old common law:
o Dower- for widows
o Curtesy- for widowers
-
Hypo: In 1750 H and W are married. In 1760 Blackacre to H in sole name. In
1770 H sells Blackacre in sole name. In 1780 H dies.
o W may claim dower, a life estate in Blackacre. W gets the property back
from the owner for the rest of her life, and then it goes back to the new
owner after she dies.
23
o Property becomes inalienable for long periods (this is odd)
-
Forced share (elective share; augmented share)
o Over time, the forced share replaces dower and curtesy.
o Purpose- support surviving spouse out of decedent spouse’s estate
o Allows surviving spouse to claim a certain % of decedent spouse’s estate
(generally 1/3 to 1/2)
o Hypo: H dies and says that all of his goods in his will go to his secretary.
 The state will not allow this. A set % goes to W under the forced
share.
 Augmented share augments back into the estate for forced share
purposes all those devices used in order to avoid probate. So the
wife is still able to get a percentage.
-
Pre-nuptial agreement- document by which forced shares, intestacy, etc. are
signed away before marriage
o Courts uphold these agreements.
o They are K’s; subject to K law; consideration is agreeing to get married
-
Post-nuptial agreement- document by which these things are signed away after
marriage
o All states treat post-nuptial’s more carefully than pre-nuptial’s.
o One of the spouses usually has more knowledge of the marital funds after
they have been married. There is already a confidential and fiduciary
relationship, potentially putting the other spouse is a vulnerable position.
o Consideration is no longer ‘marriage’ (past consideration is no
consideration)
 Consideration is ‘not divorce’ – Courts are reluctant to view this as
valid consideration.
-
Community property theory (most states other than east coast use this theory)
o Based on the partnership theory: marriage creates a marital corporation.
There is marital property and separate property
 Marital property- the work product created by the marital
partnership during the marriage
 I.e., money earned during marriage
 The presumption is that a piece of property is community
property.
 Separate property- everything else
 I.e., property owned before marriage
 Spouse intending to keep separate property should keep
very good records of that to rebut presumption of
community property.
-
Homestead rights- created by constitutions and statutes
24
o Purpose- to assure a home for the family both during life of owner and
lifetime of surviving spouse
-
Modern spousal options (upon the death of a spouse)
o Will- spouse gets whatever is in the will
o Intestacy- surviving spouse has the right to claim a share (generally 1/3 of
spouse’s estate)
 Forced/elective share- If spouse isn’t satisfied w/ what was left,
they can take the intestacy option.
 If decedent’s will makes some provisions for spouse, spouse may
elect to “take against the will” – renounce whatever is given by
will and take intestate share
 Spouse cannot take what was assigned in will and elective share
25
26
Leaseholds
-
-
Leasehold- possessory, non-freehold estate; lessee has exclusive right to
possession; lessee’s estate is assignable (unless lease provides to contrary),
devisable, and capable of descent
Lease- documented by landlord & tenant to create a leasehold in the tenant
o A lease is both a K and a conveyance (property document)
Leasing (letting; demising)- the act of creating a lease
Ejectment- cause of action to get someone off of your land
o Landlord usually brings ejectment claim against tenant for failure to pay
rent
Leasehold vs. license
- Leasehold: tenant has exclusive right of possession of the property (Landlord has
lower standard of care)
o Common law rule- Landlord has no duty for patent (obvious) defects
- Licensor-licensee relationship (e.g., hotel): licensor retains some right to
possession (Landlord has higher standard of care)
o Licensee merely has K for use w/o a transfer in interest in land
- Factors to consider:
o Whether owner retained keys, had free access to the room, had right to
enter for repairs, lived in the building, posted a doorman or desk clerk,
provided meals, utilities, etc., held premises out to public
 Benham v. Morton & Furbish Agency- Court held a licensorlicensee relationship where it was a 2 week duration (weighed
more towards a license; not a lease)
 Concessionaires (i.e., renting a snack cart that moves around)licensor-licensee relationship
-
Rent presumption- reasonable rent is presumed due absent an explicit expression
that rent is not due
o Exception- express document stating that rent will not be due; a gift
o Once a rent is set, that’s the rent. T cannot pay a ‘reasonable rent’ after
rent is set (David Properties, Inc. v. Selk)
4 types of leaseholds
-
Tenancy for years
o Duration- for a fixed time (3 months, 5 yrs, etc.)
 Term may be subject to possibility of reverter, right of entry, or
executory limitation
o Creation- by agreement (written or oral)
 Subject to S/F requirements
o Termination
 No notice required
27




By expiration of stated period of time (most common); by
happening of stated limitation (right of entry); by expiration of
landlord’s estate
By surrender (T) plus acceptance (L)
By release (i.e., L conveys L’s interest to T)
By condemnation (by gov’t)
-
Periodic tenancy
o The 2 things you must know: (1) how often rent will be paid; and (2) how
much rent will cost
 Possible but uncommon to be subject to possibility of reverter,
right of entry, or executory limitation
o Duration- may run indefinitely until 1 party gives x amount of notice
 Most are month-to-month; could be a 6 month-to-6 month tenancy,
etc.
o Creation- by agreement (written or oral)
o Termination
 Most states require 1 month’s notice to terminate
 Courts are split on whether this means 30 days or the
remainder of current month + 1 whole extra month
 Year-to-year tenancy- by notice from L or T 6 months prior to end
of current period if tenancy is year-to-year
 Tenancy period < 1 year- by notice 1 full period prior to end of
current period
 Louisiana- can give notice at end of month unless there’s less < 10
days left of month (if < 10 days, then notice not effective until next
month)
 Most states- If notice served on 9/6, it would be effective on 10/31
(not 9/30); full month’s notice required
 Missouri (minority position) –must all be in 1 document that adds
up to full notice
 No appropriate termination, no appropriate detainer
-
Tenancy at will
o We know there’s a tenancy, but we haven’t identified how often rent is to
be paid, or the amount of rent to be paid
 Uncommon; mostly occurs w/ non-business people who are not
careful
o Must have a meeting of the minds; some agreement (This distinguishes
tenancy at will from tenancy at sufferance)
o Duration- No fixed term
 Tenancy at will exists until the periodicity and amount of rent is
established
o Creation- by agreement
o Termination
 By either party w/o formal notice
28


-
If L terminates w/o notice, T has reasonable time to vacate
By L’s conveyance of fee or T’s assignment of interest, or by death
of either party
Tenancy at sufferance
o Hanging out period while T holds over and L decides what to do
o Purpose- to eliminate adverse possession
 Must be on another’s property w/o permission for adverse
possession clock to start
 Tenancy at sufferance- T is on property in sufferance (L tolerates
it)
o Duration- until L demands possession or until L elects to have a tenancy
other than tenancy at sufferance
o Creation- By one entering into possession rightfully and retaining
possession wrongfully
 Really not a tenancy at all
o Termination
 Technically, there is no formal L-T relationship, so there is no
tenancy to terminate
 Wrongdoer (T) has possession, which cannot be defended against
any reasonable action of the owner in fee (L)
 L may terminate immediately w/o notice
 L may consider tenant as holding under a new tenancy for
additional period if he wishes
Statutory modifications
- Statute of Frauds
o Varies by state
o Leasehold should be in writing
 Exception- can survive w/o a writing if duration is < 1 year
o Hypo: Lessor seeks to create tenancy orally for a term longer than
permitted by appropriate statute.
 Agreement as to duration of the lease is void, but other terms of
tenancy are enforceable.
- The Uniform Residential Landlord and Tenant Act (1972)
o States what different tenancies are and what they become under certain
circumstances
o Many states adopting and implementing
o Applies to most residential leasing arrangements
 Does not apply to: certain public and private institutions (prisons,
hospitals, schools), K purchasers in possession, fraternal and social
organizations, hotels, residence as employee, condos, etc.
29
Landlord and Tenant Obligations
-
Lease sets out rules between L and T
Components of a lease: description of property, landlord’s obligation to fix things
that need repair and not to enter property unauthorized, tenant’s obligation not to
conduct illegal activities on property, etc.
o Courts will uphold some covenants and not others
Implied landlord covenants (contractual promises)
-
Covenant of power- power of the L to lease what the L says the L is leasing
-
Covenant of quiet enjoyment- keeps lessor out of property while lessee is leasing
o Lessee has exclusive possession as against lessor
o Covenant that L will put T in legal possession
 Whether T has actual possession does not relate to covenant of
quiet enjoyment
o Covenant is issued by L and runs only to L and those who could acquire
possession through L
o Applies to both residential and commercial leases
o Examples:
 L throwing a party on the property- violates covenant of quiet
enjoyment
 3rd party (i.e., neighbor) throwing a party on the property- does not
violate covenant of quiet enjoyment
-
Covenant of possession- 2 theories
o English rule- L has a duty to clear out anyone from the leased property,
and open up the place for the new T’s
 Majority rule in the US
 Relates to actual possession
 Fits people’s assumptions- What people assume when they rent is
that they will get a new, vacated place that they can actually move
into
 L is in better position than T to make sure property is vacated- L is
the party that’s already there. Until T begins the lease, T has no
underlying interest in the property.
o American rule- L puts tenant in legal possession and lets T work out the
rest
 By far the minority rule, even in the US
Duties (obligations) of the tenant (absent express terms)
- Duty to pay the rent
o Even if it’s just “a reasonable rent”
- No duty to occupy
o Usually it should not matter
30
o Certain situations where it might matter- e.g., T rents residential property
in suburbs, and neighbors complain that shrubbery on property is getting
out of control
o Exception- where a large store is leased in a shopping mall
 Usually involves a best efforts K- the only way for the K to have
consideration is if one or both of the parties have to give their best
efforts
 T has a duty to put forth “best efforts” in order to constitute
consideration and has a duty to occupy
 But must be explicitly stated in K
 Mercury Investment v. Woolworth Co.- court held no best efforts K
where L precluded itself from making a best efforts K in the lease
 Express provisions trump implied provisions
Traditional duties of fitness and repair of leased premises
-
Traditional common law rule- caveat emptor (“buyer beware”)
o T should have inspected property before signing lease to see what they
were getting. If T failed to notice something, “tough luck”
o L has no implied duty to repair
o T has duty not to commit or permit waste
o Traditional common law rules are still the primary rules for commercial
leases
 Use for commercial purposes varies greatly (doctor’s office,
business center, etc.)
o Caveat emptor has largely gone away in residential leasehold context
 Everyone can pretty much be assumed to use the property in
essentially the same way: T will live there (cook, sleep, shower
there, etc.)
-
Service Oil Co. v. White
o Rare exception to the rule of caveat emptor- latent (hidden) defects
o Commercial lease context
o Court finds against L. L and T agreed that property would be leased as a
gas station. L knew that it could not be used as a gas station, but leased it
to T as a gas station anyway.
 There is a latent defect here that interferes w/ T’s ability to use the
property as the T intended.
o (Court could have reached same result by using covenant of power: L
leased away property that L did not have; L did not have what L
represented that he had)
-
General repair clause- T agrees to keep property in good condition
Redelivery clauses T agrees to return property in exactly the same way that T
received it
(Must make sure that these 2 clauses match)
-
31
-
Where T agrees to keep property in as good a condition as received throughout
leasehold:
o Makes T liable for wear and tear
o Makes T liable for casualty
 Lightning strikes. T has obligation to build a new building that is
in the same condition as when first leased.
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Barash v. Pennsylvania Terminal Real Estate Corp.
o Court holds that merger clause in K invalidated prior oral promise to
provide sufficient ventilation in the building after 6pm
 Merger clause- states that the K is the entire meeting of the minds
of the parties. No oral agreements previous to signing have any
validity
o T claims he was actually evicted and partially constructively evicted
(temporally; from 6pm – 9am)
 Actual eviction- L physically removes T (i.e., changes locks)
 Constructive eviction- acts by L that substantially and materially
deprive T of use and enjoyment of property
 For constructive eviction to occur, T must actually vacate
 Partial eviction- can be partial actual eviction or partial
constructive eviction
Residential Warranty of Habitability
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Background rule was caveat emptor; development of the law in residential
leasehold context
Larger cities; slumlords renting to people in terrible conditions
Housing Codes develop- require minimal services and conditions on premises
o Way for T’s to vindicate their rights
o 4 minimum standards- structural elements (walls, roofs, floors, etc.),
facilities (toilets, sinks, stoves, outlets, etc.), services (heat, water,
electricity, sewage, garbage, etc.), and occupancy limits
o T’s complain to gov’t agency that sends out an inspector to review the
conditions and require L to fix substantial defects
o Problems: agencies are understaffed, bribed, etc.; usually T has no cause
of action to motivate L’s
Warranty of habitability- L has duty to provide premises sufficient for human habitability
at commencement of lease, and a continuing duty to maintain the habitability
- Starts around 1960’s
- Most states have an implied warranty of habitability
- Both a warranty (obligation to pay money if goods do not fully match what is set
out in warranty) and a K (obligation for specific performance; to continue keeping
premises habitable)
- States have materiality requirements (that violation relates to safety and sanitation
for human habitation)
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Does not apply to single family homes n most states (applies to multi-dwelling
units)
o Also does not apply to: certain public and private institutions (prisons,
hospitals, schools), K purchasers in possession, fraternal and social
organizations, hotels, residence as employee, condos, etc.
T must show that L had notice of defect and failed to repair w/in a reasonable
time
T can waive the warranty- If there is an express provision that T does not have a
warranty for habitability, then there is no warranty of habitability
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Hilder v. St. Peter- Vermont goes further than any other court in holding that the
implied warranty of habitability is irrevocable.
o T cannot waive the warranty, and warranty covers both patent and latent
defects
o Indirect result- rents will rise
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Effect of a violation of a Housing Code:
o At least evidence of breach of warranty
o In some courts a presumption of breach of warranty
o In some courts is conclusive on issue of breach of warranty
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Remedies for T’s for claims of breach of warranty of habitability:
o Termination (not usually T’s 1st choice; nowhere else to go)
o K damages (3 formulas)
 Agreed rent minus value of rented promises
 Value as warranted minus value as actually received
 Percentage reduction; how much premises are reduced due to
defective condition
o Rent withholding
 True rent withholding- goes into escrow to pay for repairs and then
surplus, if any, goes to L
 Offset rent withholding- T refuses to pay all or part of rent
 When L tries to oust him, T brings claim for damages for
breach of warranty
o Repair and deduct; T pays for repairs and deducts from next month’s rent
o Uniform Residential Landlord and Tenant Act (1972) - reluctant to give
T’s some remedies for fear of frivolous suits:
 Annoyance and discomfort damages, in addition to lost value
 Punitive damages
Retaliatory eviction
Retaliatory eviction- T complains to a gov’t agency about lack of habitability of the
leased premises, and L evicts T
- Flip side of constructive eviction
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Retaliatory eviction is an affirmative defense available to a T in a L’s action for
unlawful detainer (trying to clear a T wrongfully occupying premises of
leasehold)
5 requirements for retaliatory eviction (Restatement 2nd of Property; adopted in
Building Monitoring Systems v. Paxton):
o L has taken retaliatory action against T where L tries to terminate a
tenancy, jacks up price, or refuses to renew tenancy if:
o (1) There is a protective housing statute protecting proper conditions of
low income housing;
o (2) L is in business of renting residential property;
o (3) T is not materially in default in his obligations under lease at time L
acts;
o (4) L is primarily motivated in acting because T (either alone or through
participation in a lawful organization) has complained about a violation;
o (5) T’s complaint was made in good faith and w/ reasonable cause
Issue- How long is L barred from evicting T w/o there being retaliatory eviction?
o Building Monitoring Systems v. Paxton- L has burden of showing that he
has given T a reasonable opportunity to procure other housing
o Uniform Residential Landlord and Tenant Act- Evidence of a complaint
w/in 1 year before L’s conduct (eviction notice, increased rent, etc.)
creates a presumption that L’s conduct was in retaliation
 Once there’s a finding of retaliatory eviction, L cannot raise rent or
evict T until L shows that he is not acting in retaliation
 Puts L in very poor position; Hard to prove that malice has
gone away
Security deposits
Security deposit- T usually pays about 1 month’s rent, and L can keep the rent at the end
of the lease to pay for T’s damages
- Gives L fund-in-hand if premises are left damages, unpaid rent, etc.
- Security deposit regulations (by URLTA and other statues):
o L must give deposit back in full if premises are clean, undamaged, and
rent paid in full
o L must give itemized list of damages withheld to T
o If L inappropriately retains a security deposit, L must pay double the
deposit, and/or L must pay T’s attorney fees for legal action
o Amount of security deposit usually limited to 1 month’s rent
 Tenants can do more damage than 1 month’s rent
 This indirectly raises rents
Landlord tort liability
Where a T is physically injured on L’s property:
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Traditional rule- no tort liability for L, because L cannot be on the property (L
cannot be held liable for something that he cannot control; after exclusive
possession has passed)
o T has duty to maintain premises in a reasonably safe condition
6 exceptions to basic common law rule of L tort liability: (“3rd parties” = 3rd
parties who are not guests of the T)
o (1) Undisclosed dangerous conditions to L from T
 Latent defect exception (i.e., mold in the walls)
 What L knew, T could not reasonably have known
 Lasts until T is actually informed of the defect, or L is purposely
concealing the defect
 If L actively conceals defect, then L is liable until T
discovers defect or reasonable should have discovered it
 Unless L actively conceals something, T is expected to be
reasonable; Once T is aware, L is no longer liable
o (2) There’s a condition on premises that could harm general public that L
is aware of, and member of general public is injured
 L is liable
 Latent or patent defects
 3rd party here does not have exclusive possession of property as T
does; L is better party to bear tort liability
o (3) Where general public is invited onto premises
 I.e., general public invited to haunted house, and faulty wiring
burns everyone to death
 L is liable to those 3rd parties (members of general public)
o (4) T injured in a common area
 L is continually liable, throughout L’s entire lease, for injuries
occurring in common areas
o (5) T includes an ongoing covenant for repair in the lease, and L promises
to repair something but fails to repair w/in a reasonable time
 L is liable
 Borders v. Roseberry- no provision in lease for L to make repairs,
so L not liable
o (6) L starts to make repairs
 Once L starts to make repairs, then L is liable if injury occurs as a
result of faulty repair
Minority rule- to use an ordinary negligence standard for L’s tort liability
o If L’s conduct constitutes ordinary negligence, then L is liable
L tort liability in commercial context- no liability for L
o Very narrow exception: L tort liability for criminal activity occurring in
common areas- L may be liable under very specific circumstances
(criminal conduct is foreseeable, etc.)
Governmental activities in the housing market
Rent control
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Public policy: Rent controls have existed since 1970’s and are justified on the
ground that they are necessary to control rapidly rising rents, especially for lowincome T’s, during periods of great inflation
Gov’t must guarantee L’s a reasonable rate of return on their investments
o If not- this is a taking
Purpose of rent control- to stop excess profits by monopolies while also allowing
a reasonable rate of return on L’s investment; to provide the poor w/ secure
housing
Enacted under executive power of gov’t; police power
Takings Clause- private property should not be taken for public use w/o just
compensation
o “To bar gov’t from forcing some (private) people alone to bear burdens
which, in all fairness and justice, should be borne by public as a whole”
(Scalia)
Regulations against discrimination in housing
- Shelly v. Kramer (1948 US Supreme Ct case)
o 14th Amendment forbids gov’t from acting in discriminatory ways, and
courts are an arm of the gov’t
o US courts can no longer uphold racially restrictive covenants, or religionbased restrictive covenants, etc.
- Civil Rights Acts (Fair Housing Act)
o Prohibits discrimination in residential housing on basis of race, religion,
sex, national origin, etc. (w/ some exceptions for single-family houses)
 Later amendments add factors of age and handicap; sexual
orientation still not protected
 Later amendment creates exception for retirement communities:
They can discriminate on basis of age or family status.
Assignment and subletting
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Assignment- assignment of the entire remaining leasehold that the tenant has
o Assignment of the entire interest
Sublease- transfer of something less than the whole interest
o In all jurisdictions, the way to make sure you have a sublet is to make the
assignment at least 1 day shorter than the term of the lease that the T has
o I.e., T sublets his apt for a few months and then re-takes possession before
the end of the lease
Privity of estate- arises when one party transfers all of that party’s interest in an
estate to another party
o It means ‘taking an assignment’
o Where assignee takes assignor entire estate, assignee is in privity of estate
w/ assignor
o Where assignor conveys something less than assignor’s total interest, there
is no privity of estate between the parties
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Privity of K- exists between 2 parties who make a K w/ one another
-
Sublessor and landlord are in both privity of estate and privity of K
Sublessee and landlord are not in privity of estate or privity of K
Assignor and landlord are not in privity of estate (assignor transferred entire
interest to assignee) but are in privity of K
Assignee and landlord are in privity of estate, but are not in privity of K
Landlord must have either privity of estate or privity of K in order to sue a party.
Surety relationship is created between assignor and assignee
o For landlord, assignor and assignee are jointly and severally liable
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If lease contains no clause restricting right to do so, T is free to assign or sublet
Majority rule- clauses restricting power to transfer are generally enforced as
written, but they are not judicial favorites (restraints on alienation).
o These clauses will generally not be implied from other lease provisions.
o Clauses absolutely forbidding assignment or subletting are enforced.
o Clauses forbidding assignment or subletting w/o L’s consent: consent may
generally be withheld arbitrarily
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Majority rule- If an assignment is attempted but violates restrictions of the lease
(i.e., lease specifically says no assignments), the attempt to assign is valid and L
has a right to seek recourse (generally and preferably right of entry) or seek
damages form T that is attempting to assign
Minority rule- attempt of assignment w/o consent is void ab initio and as long as
assignment continues it is a continuing violation
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Hypo: T has 10 months left in lease and transfers all 10 months to A
o L and A are in privity of estate but not in privity of K
o L and T are no longer in privity of estate but remain in privity of K
o L and T are secondarily liable to each other
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Hypo: L leases to T, who assigns to A1, who assigns to A2.
o Can L proceed against A2, the direct wrongdoer?
 Yes, because of privity of estate.
o Can L proceed against T?
 Yes, because of privity of K. T is secondarily liable to L, while A2
is primarily liable to L.
o Can L proceed against A1?
 No. Privity of estate ended here when A1 assigned to A2. There
was never privity of K between L and A1 unless A1 expressly
assumed all promises in the original lease.
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Termination and eviction
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Fixed term tenancy may end:
o At the end of the fixed term
o By an eviction
o By the terms of the agreement
o By condemnation by the government
o Release of property to the T (never happens)
o Abandonment and surrender
Periodic tenancy may end:
o Termination w/ notice (usually once period’s notice)
Tenancy at will may end:
o L or T gives reasonable notice
Tenancy at sufferance may end:
o L tells T to get out (L not required to give T notice)
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A late notice of termination is effective at the end of the next month (Restatement
2nd of Property)
o Davidson v. Kenney- In Missouri, one notice must be perfect in itself to
serve as notice of termination (late notice of termination is completely
void)
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Unlawful detainer- action brought by L against T after T has completed a period
of lawful possession
Ejectment- action brought by L against T where T is kicked off of property
because T has no right to be there
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Summary eviction
- Old English rule- L may use minimum possible force to evict T (small minority)
- American rule- No force may be used by L. Instead we have a summary eviction
process. L must give T at least 5 days notice of the petition to go to court
- Summary eviction process prevents L from “taking the law into their own hands,”
because the court process is very speedy
o Notice of eviction proceeding is given, and then a few days later the
hearing takes place
o One party’s breach does not excuse other party (i.e., if L does not change a
light bulb, T cannot stop paying rent)
 Warranty of habitability- must be a material breach to violate the
warranty
- At common law L must reserve a right of entry in order to evict. W/o a right of
entry L would have to sue. (L’s want to reserve this right of entry)
- Forcible entry and detainer statutes- sought to protect T’s interest in not being
forcibly evicted
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Abandonment and surrender
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Abandonment- T leaves before end of lease w/o intent to return
Traditional rule of abandonment and surrender- L has 3 options where T
abandons:
o (1) Ignore and enforce the lease
 L brings T to court to require T to pay rent, either at the end of the
lease term every month that rent is not paid, or once at the end of
the lease
o (2) Re-enter and mitigate (mitigation of damages)
 L enters (cleans, etc.) and re-lets the property at a lower price
(because he has to get someone paying rent on the property
quickly)
 Old T owes difference between original rent paid by old T and
lower rent paid by new T
o (3) Re-enter and release T
 L releases T of his responsibilities, letting T off the hook (may be
in L’s best interest to do this)
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Public policy favors re-entering and mitigating over ignoring and enforcing the
lease
o Ignoring and enforcing lease does not encourage productive use of
property (may lead to damage, waste, vandalism, etc.)
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Majority rule- L has a default duty to enter and mitigate.
o If L cannot mitigate, L can collect the entire remaining rent of abandoning
T.
o If L does not mitigate, L is precluded from claiming that rent.
o In some states- the default rule may be trumped by express terms of the
lease
o Austin Hill Country Realty v. Palisades Plaza- L brought action against
T’s for anticipatory breach. Court holds that since anticipatory breach is a
K cause of action, K defenses (including failure to mitigate) comes w/ it.
 T’s have failure to mitigate as a valid defense against L. L reentered but failed to mitigate.
Fixtures
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Fixture- a chattel (piece of personal property) that is expected to be either
transferred to lessee as part of the leasehold, or transferred back to lessor at the
end of the leasehold
o Attached to real property (i.e., microwave, cabinets)
General rule- Nothing is found to be a fixture in personal property unless it would
hurt the personal property to remove it.
o T buys microwave and put it on countertop- T takes it w/ when he leaves
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o T buys microwave and drills it inter cabinetry- T has probably added a
fixture to L’s property (It would damage the property to remove it)
o Where T removes a fixture, he commits voluntary waste (even if T
installed the fixture himself)
The parties’ private agreement on the matter is binding (T should negotiate ahead
of time that “following installation is not to be considered a fixture)
If a chattel has been specially cast to fit the property or if it’s been affixed to the
property, then the presumption is that it is a fixture.
o Exception- trade fixtures; “not in the law of fixtures”
 Special rule for commercial property: Commercial T’s tend to
change the property a lot, so they can drill into the walls, add
fixtures, etc. These fixtures will be considered ‘trade fixtures,’ as
long as T returns the property in the same manner it was when T
took the property.
Condemnation of leased land
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“Taking” of land – government must pay just compensation (fair market value)
o Market value- what a willing buyer would pay a willing seller for the
property
Partial taking/condemnation
o Hypo: L rents out Blackacre to T and gov’t condemns part of it to build a
library. T should have an abatement (lowering) of his rent to the amount
he lost due to the condemnation.
 T’s compensation- L reduces T’s rent.
 L’s compensation- gov’t pays L
Complete taking/condemnation
o T’s compensation- absolved from obligation to pay rent
 T can claim “bonus” if T is paying less than the market rate and
can collect the discount from market for the rest of the rental
period
 Not very common
o L’s compensation- gov’t pays L
Well-drafted leases (especially long-term commercial leases) contain agreements
for division of condemnation awards.
Restrictive covenants (covenants running w/ interests in land)
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Servitude- a right to do something on someone else’s land w/o a possessory
interest
o A servitude burdens one estate and benefits another estate.
o Restrictive covenants and easements are both servitudes
Restrictive covenant- a promise not to do something w/ your own property that
runs to somebody else
o A covenant is a promise that implicates a property interest.
o Personal covenant- does not run w/ the land (runs w/ people)
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o With any promise- there should be 2 burdens and 2 benefits (each party
has a burden and a benefit)
o Covenant that runs w/ property- the covenant binds later purchasers of the
property, even if they didn’t agree (even if they weren’t parties to the
original agreement; in privity of K)
 Even where there is a sale of property, there are still benefits and
burdens on each side.
Ex.- Homeowner pays neighbor for neighbor’s promise not to obstruct
homeowner’s view of the ocean.
o Anyone buying neighbor’s property gets the benefit of buying at a lower
price, but also has the burden of not being able to block homeowner’s
view w/o there being an injunction against him.
Remedy for breach of a covenant running w/ land: injunction, damages, or both
What makes a restrictive covenant different from “regular” contractual promises
is whether is runs w/ the land.
Analysis for whether the covenant runs at law
(1) What is the covenant’s burden(s)? What is the benefit? (might be mutual ongoing burdens and benefits)
a. (Identify the promise. Identify the burdens & benefits on each side. If there are
none- there is no running covenant.)
(2) Is the burden associated w/ any property interest? The benefit?
a. (If not- there is no running covenant)
(3) Has there been a relevant transfer of property? (i.e., are the associated property
interests owned by parties other than the initial parties to the covenant?)
(4) Does the burden run? The benefit?
a. Is there intent?
i. (intent that the benefit and burden should run)
ii. (generally an inference of intent that it’s ongoing)
b. Does the benefit/burden touch and concern the associated property
interest?
c. Is there privity of estate between the current property owner and the
original covenanting party?
i. Is there vertical privity?
ii. Is there horizontal privity? [Not necessary (in some jurisdictions)
to be shown for the benefits of a covenant to run at law; only
universally necessary for burden to run (except in the few
jurisdictions in which horizontal-privity analysis has been
abandoned altogether)]
Touch and concern tests
(1) Unrelated/related/inextricably bound?
a. (general rule is that if you don’t need to be on the property to fulfill the burden,
then it doesn’t touch & concern)
(2) Effect on value of relevant property interest?
a. (generally T’s promises to repair touch & concern)
(3) Part of overarching land-use plan?
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a. (If you are restricted in your use of land, then it touches & concerns)
(4) Bigelow test (from Abbott): Are the party’s interests as an estate holder altered by
the covenant?
a. (not as a member of the community)
(5) Clark/layman test (from Abbott)
a. (Would a layman believe it runs?)
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Statute of frauds- will apply to restrictive covenants in general; must be a
document in writing
o This is really only true w/ covenants running at law, not w/ covenants
running in equity.
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Ex.- T promises L, by a term of the lease, to repair the leased premises, and then
passes the leasehold to someone else.
o T is burden & L is benefitted (Blackacre also benefitted)
o The leasehold is the property interest that is affected here. The duty
potentially runs w/ the leasehold interest.
o There must be a secondary transfer to a new party to worry about whether
the covenant runs at all. (If not, then the party made the original K and is
liable)
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pg 638: Following promises by L or T have been held to touch & concern (and
therefore run w/ the leasehold or the reversion or both, as the case may be)
o By T to pay rent or (in the case of a mineral lease) royalties
 A rent obligation always touches & concerns the land
 (L can try to include things as rent in the lease so that they touch
and concern)
o By T to pay taxes on the leased premises
 It is directly related to the property.
 Could argue that you don’t have to be on the property to pay taxes
on it, but generally it touches & concerns
o By L or T to repair the premises, or do, or refrain from doing, some other
act affecting the physical condition of the premises
o By L to provide services, such as heat, water, etc. to the premises
o By T not to assign or sublet, or not to do so w/o consent of L
o By L to renew the lease or convey the reversion to T
 Inextricably bound to the leasehold estate itself
Other examples- Do they touch & concern?
o T covenants to use the premises only as a carwash and for no other
purposes
 Yes- relates to use of the property
o T promises not to permit any illegal activity on the premises
 Yes- As soon as the premises are implicated, then the premises are
the only place where this could occur.
o T promises to paint the house
 Yes- You have to be on the premises to do it.
o T promises to (do something that cannot occur on the premises)
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
o
o
o
o
o
o
No- It does not touch & concern because it cannot occur on the
property.
T covenants to employ L as general contractor in the event the T remodels
the property
 Could be yes or no- Touches & concerns because you have to do it
there; but it’s irrelevant that they are in a L/T relationship
T covenants to insure the premises for L’s benefit
 No- L’s benefit is personal and doesn’t touch & concern the land
(unless there’s some obligation to use insurance proceeds to repair
physical damages)
L promises to refund security deposit
 Yes- duty to refund security deposit always runs
Covenant not to compete
 Can touch & concern
 Can be written so they don’t have anything to do w/ an underlying
piece of land
 Can also be written to run w/ the land: “I’ll sell you a grocery store
building, and I run an appliance store. You can’t put an appliance
store in that building for 20 years.”
 To run w/ the land these covenants should be limited
temporally & geographically.
T covenants to allow L to post political signs on the premises
 Probably yes
 Can only be accomplished on the property (but not obviously
directly connected to property interest)
L covenants to provide T a discount on insurance bought from L
 No- doesn’t have to do w/ the property
Privities
- If there’s a K between L and T, then there’s privity of K.
o There is always a K between L and T. They also have horizontal privity
of estate.
o Privity of estate- having the whole interest of the assignor (then there’s an
assignment)
 If a party has less than the whole interest, then it’s a sublease, and
there is no privity of estate
 Assignment- both vertical & horizontal privity
 Sublease- no vertical privity
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Horizontal privity of estate- occurs anytime there is a transfer of an estate in
property
o A document transferring an interest in property creates horizontal privity
o Horizontal privity is privity of estate between covenantor and covenantee
at the time the covenant was created
o Grantor grants to grantee- horizontal privity
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o Simultaneous privity- parties have simultaneous interest in the same parcel
of land and the covenant relates to those interests
 Ex.- A and B own adjacent parcels. A gives B a driveway
easement over A’s lot.
 Parties enter into a covenant dealing w/ the maintenance of
the driveway; both parties have simultaneous interests in
A’s lot and the covenant concerns one of the interests (the
easement)
o Instantaneous privity- covenant is conveyed at the time of deed
o 8 states do not require horizontal privity (including IL)
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Vertical privity of estate- created when the whole interest of the transferor is
transferred
o Assignment- creates vertical privity (sublease- no vertical privity)
 Makes assignee primarily responsible for the running covenants.
The assignor remains secondarily liable (surety)
 L may sue both assignee and assignor if he wishes.
o Sublease- does not create vertical privity
 Therefore running covenants do not run to sublessees
Vertical privity: at least 3 situations in which its absence may prevent
enforcement of the covenant:
o Transfer of less than predecessor’s full estate
 A owns Blackacre in fee simple absolute and transfers to A2 a
leasehold estate, life estate, defeasible fee, or another estate less
than fee simple. A2’s land is not bound by the covenant.
o Adverse possessors
 A and B enter into a covenant. Then A’s land is acquired by A2 by
adverse possession. A2’s land is not bound by the covenant.
o 3rd party beneficiaries
 A and B enter into covenant and it is stated that by A enforcing the
covenant against B, C’s land is benefitted
 Some courts allow this; others don’t
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3rd parties
o There may be 3rd party beneficiaries but not 3rd party burdenees
o Runyon case: Court held there were no 3rd party beneficiaries to restrictive
covenants
o Majority rule- If 3rd party beneficiaries are explicit, courts will enforce it
(must be a small list of 3rd party beneficiaries; not the whole state)
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Novation- an agreement to release
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Assumption- voluntary K’s under which assignee assumes all obligations of
assignor regardless of whether those obligations run with the land
o Does explicitly what running covenants do implicitly
44
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o I.e., “T2 agrees that T2 is liable for whatever T1 is liable for during the
leasehold” (promise by T2 to become personally liable on the lease
covenants)
For the L, assumption agreements are better than running covenants
o They can apply to all of T’s covenants, in the lease, not just those that
touch & concern the land
o An assumption agreement survives a reassignment by the assignee, while
running covenants do not.
 Running covenants do not if that state requires horizontal privity
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When you’re suing in equity rather than at law, you cannot sue for damages.
o Injunctive relief is often what is sought
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Ex.- T1 assigns to T2, who later assigns to T3
o If T2’s liability was based solely on the fact that T2 held the leasehold
estate (and hence that the burden of the rent and other covenants “ran to”
T2), then T2 could get rid of the liability by reassigning the estate to T3.
o T2 would still be liable for any unpaid rent or unperformed duties that
accrued while T2 had the estate, but not for any matters accruing after the
resassignment.
Ex.- Lease provides that L’s consent must be obtained for any and all
assignments. T1 assigns to T2, w/ L’s consent, although T2 does not assume T1’s
lease covenants. Now T2 assigns to T3 w/o obtaining consent. Is T2 still
released from any further liability?
o Majority rule- Yes, because even an unconsented assignment is still an
effective assignment. Assigning w/o consent may be a breach of original
lease covenant not to do so, but it still actually passes the estate to T3.
 L’s only remedies are a claim for damages (very hard to establish)
against T2 or a termination of the lease (not desirable for L- creates
a vacancy)
o Minority rule- No. The assignment is void ab initio.
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Ways for duties under an assumption to end
o By a natural termination of the property interest (end of the leasehold)
o T or assignee breaches a condition in the lease, allowing L to terminate it
o T becomes bankrupt, and bankruptcy court permits a rejection of the lease
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Assignments, subleases, and covenants:
o Assignments- If no horizontal privity required, covenants will touch &
concern and therefore run w/ the land
o Subleases- Benefits/burdens do not run w/ the land because there is no
privity (vertical or horizontal)
 Subtenant cannot get damages for breach of covenant made by L
because benefits don’t run (since transfer or full estate is not made
as it is in assignments)
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
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L cannot recover damages against subtenant for breach of covenant
made by original T because burdens do not run
 But subtenant has strong interest in upholding the
covenants because L can terminate the lease w/ original T
which terminates sublease as well
Sublessors/sublessees can still recover in equity (no privity
required); remedy- injunction
Exception where covenants that run are not enforced
o A covenant can begin to violate public policy if the surrounding area
changes in ways that are so radical in nature that the original purpose of
the covenant has been defeated (Tippecanoe)
o Generally, covenants that restrict business activity do not violate public
policy
Covenants at law between fee simple owners
Externalities
- Land generates externalities: economic benefits and detriments that fall upon
other nearby land owners
o Ex.- a run down house makes the property value of surrounding land
decrease; a luxurious house raises the value of surrounding land
- Coase theorem- If a group of landowners can and do negotiate a K restricting land
use to control the impact of externalities, the law should enforce it because it will
increase the overall wealth of society
o Ex.- Homeowners all pool their money to give to x so that x doesn’t build
something he wants to that will decrease the value of homeowners’
properties
o Homeowners pay less (strength in numbers) and x gets more
o This burden of not building runs w/ the land and is enforceable
- Where a covenant attempts to regulate externalities, courts will often try to
enforce it
- Where a covenant does not purport to regulate externalities, courts are much less
likely to enforce it
- Ex.- Cul-de-sac w/ 9 houses at $100,000. 1 property owner wants to put in a
Quick-E-Mart, which would increase that property value by $200,000 but
decreases the other houses to $80,000 because of traffic, etc.
o Before Mart: whole area = $900,000
o After Mart: whole area = $840,000
o There is a $60,000 interest in keeping it all residential. So each house has
to pay $12,500 to make up for the Mart staying as a house. Their
properties are then essentially $87,5000 (100,000 – 12,500).
o Could be the opposite also: Quick-E-Mart pays off other residents to allow
him to build the store
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Back-fence agreement- Contractual covenant between neighbors; no horizontal
privity because there is no exchange of property estates
o Just an agreement about property they already have
o Back-fence agreements do not run at law (but generally enforceable in
equity)
o For a back-fence agreement to run at law: Parties can sell the house to a
strawman w/ the covenant and then sell back to owners w/ the mutual
covenant
 This would satisfy the formal requirement of horizontal privity
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Covenants to pay money (other than rent)- usually arise w/ regard to condo fees,
homeowner’s association fees, etc.
o Covenant to pay money- an affirmative covenant (promise to do
something)
 Negative covenant- promise to refrain from doing something
o An affirmative covenant to pay money has to run at law (cannot run in
equity). In equity the remedy is an injunction, not damages.
 Cannot vindicate an affirmative covenant to pay money by an
injunction.
At traditional common law, traditional affirmative covenants to pay money other
than rent did not run. They were personal covenants because they did not touch &
concern the land
Ex.- All owners of single lots and timeshares are members of the homeowner’s
association, which owns the recreational areas. They all have easements on the
recreational areas. They collectively decide how it will be maintained, etc.
o They don’t have a license that can be revokes. They have an easement.
o Each owner is burdened by the obligation to pay money. Each owner is
also benefitted, because each has a property interest in the regulated
property, and each is a member of the homeowner’s association that owns
that property.
Ex.- Same facts, but owners have licenses to use the recreational areas, not
easements.
o Because owners have no easement rights in the amenities financed by the
paid money (merely have a revocable license to use the amenities), the
covenant to pay amenity fees does not touch & concern the land. The
covenants are personal covenants and therefore do not run with the land
Homeowner’s association- Developer buys a bunch of land and records for the
whole of the original property a set of CC&R’s (covenants, conditions, and
restrictions); bylaws
Unit owners have right to “opt out” of the association and by so doing, to avoid
paying dues
o Modern trend is to say that as long as it makes sense, the court will allow
the opt out.
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Types of owner’s associations
- Planned unit developments
o Benefitted/burdened land
o Affirmative covenants to pay assessments touch & concern: generally only
when unit owners have easements to use the common areas (they don’t
have to be gated communities)
- Condominium
o Individual unit owners own the interior of their own unit, and all unit
owners own the common areas as tenants in common.
- Cooperative apartment
o Everyone owned shares in the building. You owned the interior of your
unit as a shareholder, and you also owned the common areas as a
shareholder.
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49
Equitable servitudes
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Equitable servitude- a restrictive covenant that runs in equity
(reciprocal negative easement = implied covenant)
Remedies:
o At law- money damages available, and almost always an injunction as
well
o In equity- no money damages available
Backfence agreement- will not run at law, but because privity is no longer
required, if the other requirements are met there may be an equitable servitude
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Elements of an equitable servitude:
o (1) Intent to burden/benefit future landowners
o (2) Touch & concern the land
o (3) Actual or constructive notice
 Best way to give notice- Record the covenant in the deed (recorded
in the office of public records). Then anyone taking the property
has constructive notice that the covenant runs.
 3 ways to acquire notice:
 Actual notice- i.e., seller of land informs buyer before
closing that there is a covenant restricting its use
 Constructive notice- principle that documents in the chain
of title to a parcel of land that are recorded in the public
records are deemed to be notice to anyone acquiring the
land
o To be considered in the chain of title, the document
must be recorded in the office of the recorder of
deeds and must be indexed in that office in the
name of the owner of ht burdened land so that a
later title searcher can locate it
 Inquiry/appearance- Existence of some covenants may be
apparent from the appearance of the property
o This theory of notice is only applicable where
covenants are imposed in a relatively uniform
manner on many lots, so as to create a “common
plan or scheme”
o (no privity requirement; notice instead)
o (3rd party beneficiaries- in gross)
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As long as you’re willing to live w/ an injunction rather than money damages, you
can achieve restrictive covenants that will run, w/o having to worry about creating
horizontal or vertical privity.
o At law, neighbors would have to sell a property to each other and then sell
it back for the covenant to run
rd
3 party beneficiaries can gain enforcement of equitable servitudes (cannot sue at
law for violation of a covenant)
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o A 3rd party can enforce an equitable servitude as long as the burdened
party has notice of who the 3rd party beneficiaries are, and the world of 3rd
party beneficiaries is limited and coherent.
o Most jurisdictions require 3rd party beneficiaries to have some connection
to the land. (not requiring this allow dumb & frivolous lawsuits, and could
end the marketability of the burdened property)
o Some jurisdictions- 3rd party beneficiaries who have no attachment to
specific land are allowed to recover
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There are recording acts in all states that provide that if a covenant is not recorded
in the public records, a person who buys the land for value, and who has no notice
of the covenant, will take the land free and clear of the covenant.
o So the recording acts’ rules, which apply to covenants whether in law or in
equity, are almost identical to the court-made notice rule in equitable
servitude cases.
The covenant should expressly state what land is not only burdened but benefitted
by the covenant
o If burdened landowner were to begin negotiations w/ benefitted landowner
to modify the covenant or abrogate it, the only way for him to know who
to negotiate w/ is by giving him notice of what land is benefitted by the
covenant.
Common plans and schemes
- Tentative definition of a common plan- a group of lots or parcels that are
clustered nearby one another, and most or all of them are burdened by similar or
identical covenants
- Identifying the benefitted land
o If not w/in common plan of lots, then usually not held to be benefitted
o Where no express statement of benefitted land is made, and party
imposing the covenant continues to own some adjacent or nearby land,
only that land is usually treated by courts as benefitted
- Hypo: Development w/ 8 houses
o Developer should record a Declaration of CC&R’s for the whole property,
but things don’t always work out that way
o Developer sells lot 1 to buyer 1 on January 1, lot 2 to buyer 2 on February
1, etc.
 Lot 3 can enforce against lot 1. Lot 3 was still part of the
remaining property when lot 1 was sold.
 Lot 1 cannot enforce against lot 3. Lot 1 cannot enforce because it
was not part of the developer’s remaining property when lot 3 was
sold (“This is weird and stupid”)
o Here comes the common plan/scheme:
 The parties know who the members of the community or
subdivision are. The common scheme should put the purchasers
on notice. Everyone in the subdivision should be considered a 3rd
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party beneficiary. Everyone gets the same benefit from being
party of this community.
Negative reciprocal easements = implied covenants
o Implied restrictive covenant- one or more of the elements of an
enforceable restrictive covenant is missing (i.e., a writing). If there is no
writing, the courts in certain circumstances may imply one.
o Implied covenants are very rare and limited
o Implied covenants may be fair where all of the properties include pretty
much the same structures.
 In these cases, it would be a gross injustice not to imply the
restrictive covenant for the one person who did not have the
covenant in their deed.
 “Notice from neighborhood appearance”
 Courts seem to require that at least ½ of the properties must
have restrictive covenants for there to be notice from
neighborhood appearance.
o Statute of Frauds applies to restrictive covenants (creation and
conveyances of interests in land)
 They can be “implied” w/o a writing in the notion of estoppel
(reasonable, detrimental reliance by an innocent party)
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The declaration: a better method of imposing covenants
o Declaration of Covenants, Conditions, and Restrictions
o Developer prepares, signs, and records in the public records a declaration
of covenants.
 Essentially a statement of the covenants, but it has only one party
(the developer)
o Later, as individual lots are sold and deeds are executed, each deed will
contain a statement incorporating the declaration by reference and making
it part of the deed.
o Well-crafted declaration will specifically identify the burdened and
benefitted land, making unnecessary any reference to the “common plan”
concept for that purpose. Will also contain clear language concerning
intent to run, will spell out remedies for breach, and may include detailed
provisions for enforcement by an owner’s association.
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4 distinct uses of the common plan concept in subdivision covenants:
o (1) Common plan defines the extent of the benefitted land; land outside
the common plan isn’t benefitted
o (2) Common plan allows courts to include, as part of the benefitted land,
lots that had already been transferred by the developer to other owners at
the time the covenant was imposed on the burdened lot in question
o (3) Common plan allows courts to “imply” a covenant on a lot which had
no express covenant imposed upon it by the developer
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o (4) Common plan, as carried out by actual and visible construction of
houses or other improvements, gives notice of implied covenants to
persons who buy lots burdened by such covenants.
Managing covenants (interpretation, amendment, and termination of covenants)
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Covenants are narrowly interpreted.
o Courts don’t want to restrict use of land where they don’t have to. The
people writing the covenant had the opportunity to prohibit what they
wanted. They should have been clear about it.
o Traweek v. Lincoln- A covenant will only be given effect where the intent
of the covenant is clear and unambiguous.
 “No structure shall be erected, altered, placed, or permitted to
remain on any residential building lot other than one single family
dwelling, not to exceed two stories in height and appropriate outbuildings.”
 Court narrowly construes the covenant, ruling that it did not
prohibit Traweek from placing a mobile home on his lot
(covenant was ambiguous as to whether it allowed mobile
homes on residential lots in the subdivision)
o When drafting restrictive covenants, be specific and define terms (You
know that the covenants will be construed narrowly)
Covenants prohibiting construction vs. use
o When drafting, make sure you include both the terms “construction” and
“use” and define the terms. If you don’t clever people will get around the
covenant.
o “Construction” or “erection” vs. “use” or “purposes,” etc.
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If a whole town were restricted in using their properties only for use as ‘single
family homes,’ there would be no place for group homes for disabled people, etc.
o This brings up constitutional questions
o Some courts say these group homes are commercial activities; others say
they are residential activities
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2 standards by which restrictive covenants are judged by the courts
o Reasonable standard
 Minority rule today
 The court will independently review restrictive covenants to
determine whether the court thinks it is reasonable.
 Objector must prove that it is more burdensome than beneficial to
the affected properties (as a group) or violates fundamental public
policy
o Business judgment rule
 Very much the majority rule today
 As long as there is some rational basis for a given restriction, and it
does not violate the constitution, then the court will uphold it.
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

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Much more covenant-friendly; will uphold covenants more often
“As long as the covenantors thought it was reasonable, then it will
be upheld”
Waiver/abandonment/acquiescence- The idea that if nobody attempts to enforce
the covenants in the face of a substantial number of violations, the owners must
intend to give up their right to enforce.
o Ex.- A client comes to you and wants to enforce a covenant prohibiting
“additional structures” against neighbors’ kids’ play hut
 The argument is that if we let the kiddy hut stand, it’s a slippery
slope. If we allow this, then other violations (i.e., sheds and
detached garages) will also be allowed, because of the waiver
doctrine
o Waiver is determined by scale. There are slight violations and substantial
material violations.
 Pietrowski v. Dufrane- D argued that P was also in violation of the
covenants, so P waived the right to enforce the covenant
 Court rules that D did not waive the right to enforce. P’s
violation (building a shed) was a slight violation. D’s
violation (detached garage) was a material violation.
Changed neighborhood conditions
o Defense where D argues that numerous violations of the restrictive
covenant in a subdivision demonstrates a change in neighborhood
conditions (change in the character of the neighborhood), and this
constitutes an abandonment of the restrictive covenant
o The changed neighborhood conditions doctrine is a very hard argument to
make. D would have to show, for example, that the residential character
of the neighborhood is completely gone.
o If there is a changed character of the surrounding community, so that it is
now a very commercial area, that is irrelevant.
 CC&R’s only apply to the subdivision.
 Exception- Government takes some properties and builds an
elevated railroad running over and through the neighborhood.
 Courts have held that the character of the neighborhood in
this case has changed significantly. Even though there was
no waiver or abandonment by the landowners, the
neighborhood has changed.
 Landowners would argue that the government took the
benefit of the restrictive covenant (a property interest), but
the government would not pay for this.
Important to include provisions in the CC&R’s that allow for a voting waiver
procedure for voting on waiver or amendment of the covenants(i.e., 1 vote per lot,
and need 2/3 approval)
o If a voting mechanism is not included, then unanimous agreement to
waive or amend is required (usually at least 1 person will holdout)
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Theories for opposing enforcement of covenants
- Changed neighborhood conditions
- Waiver/abandonment/acquiescence
- Unclean hands
o P should be denied relief if P is also in violation of the covenants.
o Defense may fail because P’s violation is too minor or trivial, or because it
is a violation of a different aspect of the covenants.
- Express waiver or release
o If everyone who has the right to enforce a covenant expressly relinquishes
that right, the covenant is no longer enforceable.
- Laches
o The failure for an unreasonable time to assert a known equitable right, to
the prejudice of the person against whom the right might be asserted.
o If violation of the covenant is obvious and no action is brought for several
years, laches might be found.
 Key is to show that the delay as such has injured the violator.
- Estoppel
o Very difficult to satisfy requirements of the estoppel defense
o “For estoppel to have occurred, there must be evidence that P’s made a
false representation to D’s, that P’s knew the true facts, that D’s were
ignorant of the truth, that statement was made w/ intent that D’s act on it,
and that D’s did act on it”
o In most cases, there’s no evidence that P knew of the covenant and
represented that he would not enforce it. (silence during time of
construction isn’t enough)
- Merger
o If the same person acquires ownership of all of the benefitted and
burdened land, the covenant is extinguished
o The covenant will not be revived even if that person later sells some of the
land to others.
- Expiration
o A covenant may by its terms have a limited duration.
o (A covenant may state that it will terminate on the occurrence of some
stated condition in the future, much like a fee simple determinable)
- Taking in eminent domain
o Power of gov’t to take land plainly includes the power to disregard
preexisting restrictive covenants once the land is acquired.
o Gov’t might acquire a subdivision lot, restricted to residential use only,
and construct and operate a post office on it.
o Argument against compensation for benefitted landowners of the
covenants- Concern that landowners might enter into covenants in
anticipation of an expected taking by the gov’t to get compensation money
 Also, problems calculating damages
- Tax sales
o Most states have statutes that expressly or by judicial construction
preserve the covenants despite a tax sale. (may break down common plan)
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If original developer of the subdivision sells off all of the land, then he has no
more property interest and cannot sue to enforce covenants.
o If he retains some land, then he would presumably be able to enforce
covenants in court.
o A few courts have allowed developer to enforce equitable servitudes in
gross where developer gave himself these rights in the CC&R’s (very rare)
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Amendments: The courts defer to anything in the original bylaws in the
Declaration over anything agreed on later (any acts agreed upon by owner’s
association)
o If a later agreed on act is in violation of the original bylaws in the
Declaration, then courts will find that the act is void.
o If the amendments are uniform under a reasonable and rational standard,
then courts are more likely to approve them
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Architectural review boards- before any new buildings can go up, they need
approval of the architectural review board of the subdivision
Easements and profits
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Easement- a right to enter, but not to possess
Profit- a right to use, and to take something off of the estate (easement plus an
extraction right)
o Easements and profits are interests in land to those who hold them.
o They give the holder a right to use or take something from the land (not a
right of possession)
o Easements and profits are also a burden (encumbrance) upon another
person’s estate.
o Estates give rights of “possession.” Servitudes give rights of “use.”
o Ex.- easements for driveways, roads, rail lines, walkways, and pipe and
other utility lines
o Ex.- profits to remove from the soil substances like minerals, gravel, and
timber
o Easements & profits- the right to exclude others extends only so far as to
prevent their interference w/ the servitude’s particular purpose
o To determine if interest is an estate or servitude, courts look at the total
circumstances: labels the parties used, kinds of activities in which grantee
may engage, etc.
o Large majority of courts agree there can be a profit in fish and game, even
though the landowner does not own the wild creatures.
o Easements have a presumption of eternality.
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Easements & profits vs. licenses
- A license is terminable at the will of the creator landowner (license is a revocable
permission)
o An irrevocable license is really an equitable easement. (equitable because
there would be nothing written down; implied by courts)
o If a license is irrevocable, then it’s a property interest (not a license)
o IL court recently held that a Cubs season ticket holder held a revocable
license granted by the Cubs
o A license will become irrevocable (equitable easement) where:
 Intent to create a formal legal easement, plus failure of formalities,
plus reliance; or expenditure plus reliance; and
 Grantor has full knowledge that reliance will occur
- Easements & profits exist for a determinate time or “perpetuity”
o I.e., “an easement to hunt for 75 years” (“a license to hunt for 75 years”
would be an easement that was named wrongly)
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Easement appurtenant- has a dominant estate
o An easement or profit appurtenant is one whose benefits serve a parcel of
land. It serves the owner of that land in a way that cannot be separated
from his rights in the land.
o E.g., walkways, driveways, utility lanes
o Courts prefer to find appurtenant easements over easements in gross
because the scope is easier to identify
Easement in gross- does not have a dominant estate
o An easement or profit in gross is one whose benefits serve their holder
only personally, not in connection w/ his ownership or use of any specific
parcel of land.
(Easements and profits always have a servient estate, whether appurtenant or in
gross)
Easements- presumption is to find an appurtenant easement (easier to determine
what kind of a use right there is)
Profits- presumption is to find an in gross profit (profits tend to be in gross, either
for personal or commercial purposes)
Negative easements
- Negative easement is like an affirmative easement in that they both impose a
burden or servitude upon grantor’s land.
- Negative easement- gives its holder a right to require the owner of the burdened
land to do or not to do specific things w/ respect to that land but not to go upon or
use it (i.e., “scenic” and “conservation” easements)
o Easements of light, air, and view (turn out to be exactly like restrictive
covenants)
o Negative easements are just another way to enforce a backfence type
agreement (could use a restrictive covenant, equitable servitude, or
negative easement)
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Not clear whether “scenic easements” should be regarded as common-law
negative easements of prospect or as equitable servitudes
Conservation easement- nonpossessory interest of a holder in real property
imposing limitations or affirmative obligations the purposes of which include
retaining or protecting natural, scenic, or open-space values of property, etc.
o All states now have statutes authorizing conservation & preservation
easements
Grant and the effect of informal grant or license
- Most easements are created expressly by an instrument in writing (at common
law, called a grant)
- There remains a requirement of a written instrument for grant of an easement
- Granting an easement- giving an easement
- Reserving an easement- keeping an easement
- Drafting- instrument should say that grantor or testator “grants an easement (or
profit) for the purpose of x to the grantee”
o Avoid words of grant like “convey and warrant” or “quitclaim and
convey” (suggest estates in land)
o The thing conveyed should be described as an “easement” or “profit” or, if
in doubt, a “right to use” but never as a “strip of land,” “right of way,” etc.
Formation of easements
- Grant of an easement has to be more precise than grant of a fee simple interest
(easement is just for use of a certain location)
- The use is what is granted. The use must be described specifically (scope of the
easement- how it may be used, under what circumstances, etc.)
- Possible expiration (presumption is perpetuity)
- Should set out who will be responsible for maintaining the easement (i.e.,
permission to pave driveway, obligation to pave driveway)
Easements by implication
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Creation of easements by implication- Easements may be created in connection
w/ a written conveyance even though there is no express language to that effect.
The easement arises from the facts and circumstances surrounding the transaction
rather than from the language of the conveyance.
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3 doctrines of easements by implication:
o Easement implied from prior use (or “easement implied from a quasieasement)
o Easement implied from necessity (or “way of necessity”)
o Easement implied from a plat (a subdivision)
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Hypo: Owner of Blackacre sells front half of its property to Greenacre, and has
always used the part of the property conveyed to Greenacre to access the
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roadway, and owner of Blackacre was careless and forgot to expressly reserve an
easement.
o Good case for an implied easement by prior use: Prior use gave buyer
notice that seller would continue to use the driveway.
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If you can show prior use, then you don’t have to show absolute necessity.
General test for an implied easement by prior use- Is it reasonable to find an
easement by prior use under the circumstances?
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Majority (and traditional) rule for implied easements by necessity- No easement
by necessity to be found unless there is a true and absolute necessity to find the
easement.
o Some true necessity courts will even go as far as only finding true
necessity where the necessity was created by a party other than the person
seeking an easement.
o Traditional/majority rule- courts require strict necessity
o Minority rule- Some courts now allow reasonable necessity (Hurlocker v.
Medina)
Easement by necessity test (from Boyd v. Bellsouth Telephone)
- (1) Unity of title
o Cannot combine small parcels to make up one big parcel unless a
strawman is used
- (2) Severance of the title
- (3) Necessity of the easement
o Requires a showing of more than convenience
- Easement by necessity is based on the presumption that grantor intended grantee
of a landlocked parcel to have access to his property, a right recognized as
essential to the enjoyment of the land.
- Some courts allow easements by necessity but require compensation to be paid to
the servient tenement of the easement (for loss of use rights by the easement)
o Constitutional takings problem- Requiring a lot owner to give another lot
owner an easement w/ compensation seems to be a taking for private (not
public) use.
o Boomer v. Atlantic Cement- seems to be an easement to pollute w/
payment of compensation
Easement by pre-existing use test (from Boyd v. Bellsouth Telephone)
- (1) The dominant and servient tracts of land originated from a common grantor
- (2) The use was in existence at the time the original grantor severed the tracts
- (3) The use was apparent/obvious, continuous, and necessary for enjoyment of the
dominant tract.
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Easement implied from prior use, once established, becomes permanent.
Easement implied by necessity terminates once reasonable access to a public road
becomes available.
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o Easement by necessity ends when the necessity ends.
Easements by prescription
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“Prescription” is the word in the easement process that means “adverse
possession”
Prescription and adverse possession are essentially the same doctrine today. But
2 of the elements differ somewhat:
o Continuous- i.e., you don’t have to use a right of way for 17 years straight
 Continuousness is still relevant in prescription. You have to
continue to use the easement as a reasonable person would (just
like how a reasonable person would use the land for adverse
possession; not required during frigid winter months)
 Continuousness will help establish the scope of the easement (e.g.,
to be used twice a day, not to be used as a racetrack)
o Exclusive- This element is not relevant for easements by prescription.
To establish a prescriptive easement, P must prove use of the servient land that is:
o (1) Open and notorious
o (2) Over a uniform route
o (3) Continuous and uninterrupted for (statutory number of years)
 For wild/unenclosed lands, mere use is not generally sufficient to
give rise to presumption that the use is adverse (because owners
are not in position to detect trespassers)
o (4) Adverse to the owner of the land sought to be subjected
 Must be adverse/hostile use; not permissive use
o (5) With the knowledge of such owner at a time when he was able in law
to assert and enforce his rights
o (Drake v. Smersh)
Public prescriptive easements
- A public prescriptive easement arises in the people.
- In many states, a prescriptive easement may be obtained based on long continuous
use by the public.
- To establish a public prescriptive easement- public must show that the use and
enjoyment of the land was exclusive, adverse, continuous, uninterrupted, open
and notorious, and under a claim of right for the full prescriptive period.
- Once obtained, the prescriptive easement belongs to the public (not an individual)
- P must prove continuous use by the public in general, not use by the P itself or by
any individual member of the public.
o Hard to prove continuous use by the public; the public is a bunch of
people (Why is person A “the public” rather than simply “person A”?)
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Scope of easements
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Scope of an easement- how much use right is covered in the use (i.e., how often it
may be used)
Surcharging the scope- using more use right than is allowed (misusing an
easement)
Courts want easements to have a defined scope.
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Brown v. Voss- Court rules that using a driveway easement for an additional
adjacent lot owned by dominant landowner is a per se surcharge, even though as a
practical matter the easement is not being used any differently than it was before
o Generally, an easement appurtenant to one parcel of land may not be
extended by the owner of the dominant estate to other parcels owned by
him, whether adjoining or distinct tracts, to which the easement is not
appurtenant.
 In this case, extension of the use of the easement for the benefit of
a nondominant property constituted a misuse of the easement.
o Hypo: Original owners of lot B can use lot A to get to lot B. Someone
buys lot B and then puts up 6 condo units on lot B.
 This would not be a per se surcharge of the easement (unless the
easement said “lot B only to be used as a single family dwelling”),
but there would surely be a surcharge.
 Courts in their equitable powers would very likely find a surcharge
of the easement (driveway being used by 40 cars instead of 2)
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Normally it is a per se surcharge of an easement to add a parcel to the dominant
estate and then attempt to extend the benefit of the easement to the additional
parcel.
o This is the case even though there is no cumulative increase in the use of
the easement.
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Hypo: O grants D, an adjoining landowner, an “exclusive easement” for ingress
and egress and for the placement of utilities over O’s land.
o O, grantor of the easement, still has a right to use the right of way over his
own land.
o If the grantor were not able to use it, then the easement owner’s interest
would look very much like a fee simple (exclusive right to use and
possess), not merely a use right
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In the absence of explicit language to the contrary in the grant, what the courts
will find is a general easement.
o Where a general easement is found, courts will allow reasonable use based
on what they can determine from previous use.
o Reasonable use can adapt over time (Cameron v. Barton- court found
‘slaughterhouse use’ was generally the same use as ‘highway use’
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Hypo: Easement appurtenant to Blackacre states simply that it is “for roadway
purposes” or “an easement for ingress and egress from Blackacre.” Easement
holder now proposes to install utilities in the easement to service Blackacre.
Servient owner tries to prevent the installation.
o Courts have generally been inclined to favor such an expanded use of the
easement.
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Test for determining the scope of a prescriptive easement (Glenn v. Poole)
o To determine whether a prescriptive easement is overburdened the
factfinder must balance the prior use of the right of way established during
the prescriptive period against any later changes in the method of use that
unreasonably or unforeseeably interfere w/ the enjoyment of the servient
estate by its current owner.
o Overburdening may occur when the change in use manifests itself in some
greater independent burden on the servient estate, but a mere increase in
the volume of traffic does not constitute a per se overburdening.
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Responsibility to repair an easement:
o Default rule (absent expressions to the contrary) – Courts will assume that
the dominant easement holder has a responsibility to keep the easement in
sufficient repair to use it. (Pasadena v. California-Michigan)
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There is a presumption that easements are non-exclusive (easement holder’s rights
are not exclusive)
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Appurtenant easement passes automatically w/ dominant tenement (even if not
mentioned in conveyance)
Easement in gross is not transferable unless it is for commercial purposes.
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Hypo: A has an easement to lay pipe into a house. B wants an easement to run
fiber optics into the house. Who does B have to contact to get an easement?
o The landowner. All landowner has given is a non-exclusive easement to
the pipe-layer. Landowner can still determine what goes into landowner’s
house.
o Landowner has not given the holder of the easement the right to grant
away an easement on landowner’s land (easements are presumed to be
non-exclusive)
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Commercial easements are presumed to be transferrable/devisable
o If a water company has an easement, then it can transfer that easement for
water rights to one other company.
o The taker must take the same use of the easement
Traditional rule- “one stock” rule
o “The 2 assignees could not work severally, but together w/ one stock, or
such workmen as belonged to them both.” (pg 845)
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o Modern rule- As long as the actual activities for which the easement is
being used is not surcharged, then there is no surcharge.
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Massachusetts rule (MPM Builders v. Dwyer) – If following the old explicit scope
of an easement impedes development, as long as there is now a reasonably similar
easement, then the business wins.
o Minority rule
Wisconsin rule- If there’s an explicit description of the scope of an easement, then
that wins out. That’s what the easement says.
o Majority rule
Glosemeyer v. US (2000)
o RR companies had easements to cross Glosemeyer’s lands for railroading
purposes, but they didn’t own the land. Gov’t tries to transform the RR
easements into bike path easements.
o Scope of the easement: was this a taking?
o This is a specific easement (not a general easement) – specifically for RR
use.
o What the gov’t wants to do w/ these easements is not included in the scope
of these easements. If the gov’t wants to transfer the easements into
biking easements, this would be a different use of the easements, and
compensation must be paid for that.
Extinguishment of easements
Ways an easement may be extinguished
- Merger
o If dominant and servient estates merge, the easement is extinguished (You
can’t have an easement in your own property)
- Abandonment
o Actual, real abandonment (not constructive)
o Mere failure to use an easement over a period of time will not constitute
actual abandonment
o Submitting to certain things over time would seem sufficient (letting a tree
grow, or a deck to be built)
o Abandonment of a fee simple requires a writing, but abandonment of an
easement does not.
- Extinguishment by the end of a natural term
o “An easement for 15 years”
o Lessee gives an easement and lessee’s lease ends (Lessee can’t give an
easement in lessor’s interest)
- Estoppel
o Reverse of reliance to establish an easement
o Dominant owner says to servient owner, “I don’t need that right of way
anymore.” Then servient owner builds a pool over where the easement
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used to be. Then dominant owner sells to another, who looks at the deed
and says, “Hey, we have an easement”
 Analysis of reliance
Condemnation
o When servient land is taken under power of eminent domain for a purpose
which is inconsistent w/ the continued exercise of easement, the easement
will be extinguished.
Death of the person who has the easement
o For personal in gross easements, the natural termination point is the death
of the person who has the easement.
Release
o Easement owner decides to release the easement, and puts it in writing.
Prescription
o You can get rid of an easement by prescription.
o Hickerson v. Bender- Benders defeated an old easement by prescription.
They had built a wall, a deck, barbecue, etc. over where the easement used
to be.
Tax sale of servient estate
o The foreclosure will normally wipe out all interests in the foreclosed real
estate, even those created prior to the tax delinquency.
Mortgage foreclosure
o An easement is terminated when a senior mortgage is foreclosed.
Eminent domain
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Purpose of Takings Clause: “To bar gov’t from forcing some people from bearing
public burdens which in all fairness and justice should be borne by the public as a
whole”
Paying “just compensation”
o Gov’t is stingy about paying incidental expenses (i.e., moving expenses),
stingy about paying full market value for a property, etc.
Physical takings vs. regulatory takings
- Physical takings- Gov’t takes your property and turns it into a nature preserve
o Gov’t owes you the value of Blackacre
- Regulatory takings
o Gov’t sends you a letter and says you can no longer use your property for
hunting or fishing, and you have to shut down Blackacre estate, and you
essentially cannot use 80% of it.
 Whether cases like this should be counted as regulatory takings
 A “mess of balancing” to decide whether gov’t owes you any
money
o The only way you get compensation for a regulatory taking is if you are
deprived of 100% of the use of the property.
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The public use problem
- Background rule- Government should not take, even if it pays compensation,
except for public use.
- Originally this meant actual public ownership, but also gov’t purposes that were
privately owned (i.e., a privately-owned post office)
- Then common carriers were added. These are also considered a public use.
- Kelo case (2005) – If a state gov’t says there’s a public use, then there’s a public
use. (very controversial case)
o Supreme Ct permitted, as acceptable “public use,” the transfer of nonblighted property from private home owners and businesses to private
real-estate developers for resale to other private entities as part of a
“redevelopment plan.”
o Court held that economic development represented a sufficient public
purpose to permit a taking, and deferred, essentially completely, to
legislative declarations of public purpose.
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