PROPERTY
POSSESSION AND THE INTIAL ACQUISITION OF PROPERTY RIGHTS THE
RIGHT TO EXCLUDE
ACQUISITION BY OCCUPATION, “DISCOVERY,” AND CAPTURE
[1-12]
- occupation doctrine …the capture of an item is sufficient to gain possession, but the chase of
such an item is not sufficient to gain possession
-sometimes applies to wild animals, oil, gas resources, and sometimes water
-this goes against the principle of first in time
-in close cases, courts may look to customs or usages prevailing in the activity or trade
involved
(Ghen)
-malicious interference with a chase is not acceptable, but if the injury is a consequence
of fair competition then one may not be liable (Keeble)
-power to exclude (bundle of sticks), not achieved in Post
-creates incentive for competition
-accession doctrine…-the ownership of one thing sometimes depends on the ownership of
another…
-applies to hard rock minerals, and sometimes water
-ownership of animal may depend on whether or not it is on one party’s land
-rationale soli doctrine…constructive possession of animal
-rarely used doctrine
ACQUISITION BY CREATION
[12-14]
-labor theory…expenditure of work, time, and cost into creating property provides ownership
for the creator
-rewards labor and investment
-the absence of property rights can dampen production, but recognition of hem can create
costly monopoly power
-too many property rights (IP) can stifle competition
PROPERTY IN ONE’S OWN PERSON
[14-18]
Type of remedy
sought
Invasion of Personal
Property
Invasion of Real Property
Action for damages
Conversion
Trespass
Action for specific
relief
Replevin
Ejectment
-Conversion
-To establish a conversion, P must establish an actual interference with his ownership or
right of possession….Where P neither has title to the property alleged to have been
converted, nor possession thereof, he cannot maintain an action for conversion
1
-rejection of conversion claim pertaining to usage of biological materials
extrapolated from P’s body (Moore)
-decision rests on economic incentives (research), do not want to
commodify the body
THE RIGHT TO EXCLUDE AND ITS LIMITS
[18-21]
-the right to exclude (others from the use of your property), and the related right to include
(arguably the power to transfer)-- the power to allow selected others to enjoy the use of your
property -- together are necessary and sufficient conditions of transferability
-depending on what you are doing with your property, you may waive your right to
exclusion
-i.e. the ownership of real property does not include the right to bar access to
governmental services available to migrant workers and hence there was no
trespass within the meaning of the penal statute. (Shack)
-also, civil rights legislation forbids various forms of discrimination
- Some argue that limitations on the right to exclude can be defined by the reliance
interest in property
POSSESSION AND THE ACQUISITION OF PROPERTY RIGHTS IN OTHER’S
PROPERTY
FINDERS OF PERSONAL PROPERTY
[21-28]
-The finder of the lost property holds it, at least for a certain time, in trust for the benefit of the
true owner; thus he is a custodian, or “bailee” for the true owner. What is important for our
purposes here is that the finder has right superior to those of everyone except the true owner.
-prevents disorderly scrambles for possession
-this goes against the principle of finders, keepers
-Property ownership is relative
-Finder may have property right relative to third party but not to the true owner.
-jus terii (defense)
-in an action to recover real or personal property (either for specific relief or for
damages) a party will acknowledge that he or she is not the owner and thus isn’t
really the person most entitled to the property, but argues that opposing party
should not recover because the he also isn’t the owner.
- some courts conclude that concern about protecting the true owner A (when
and if s/he shows up) counsels against allowing B (the prior possessor) to
recover damages from C (the second possessor) in the first lawsuit-- but most
courts do not draw this conclusion. That is, in a damages context, the jus tertii
defense is sometimes treated as valid, though the majority rule is to the
contrary (we do not want to risk having C having to pay double damages). On
the other hand, almost all US courts would allow the non-owner/prior
possessor of land (B) to recover the land in an ejectment action against C.
-Analysis of finders cases
-Is the finder contending with an owner?...owner wins
-Is finder contending with subsequent possessor?...finder wins
-Is finder contending with premises owner?
-Is property lost or mislaid?
2
-Lost…
-if it is in or attached to the ground…premises owner wins (PO
constructive possession)
-On the ground…
-Finder is working for the owner…premises owner
-Anyone else…
-Open to public
-And owner doesn’t know its there…finder
-Bridges
-Closed to public (private)
-And owner does know its there…premises
owner
-SSW, Hannah
-Owner does not know object is there, finder
is meritorious, owner is not in possession of
land…finder (Hannah)
-Without one of these
factors…maybe premises owner
(although we do not have a case
here)
-Mislaid…premises owner
ACQUISTION BY ADVERSE POSSESSION
[28-46]
-AP both clears title of Owner and also grants title to Possessor
-we should always have one owner
-AP comes into play when statute of limitations (for trespass or ejectment) runs
-Once acquired, this new title “relates back” to the date of the event that started the
statute or limitations running, and the law acts though the adverse possessor were the
owner from that date.
-It is useful, in thinking about the law of adverse possession, to consider the doctrine from
different PERSPECTIVE: (1) the perspective of an owner of property who may lose it by
adverse possession, and (2) the perspective of a possessor of that property (not the owner), who
may be about to become the owner by adverse possession.
-review AP problem from side of perspectives of lax/non-lax owners and
diligent/non-diligent possessors
-policy rationales: punish owners, reward possessors, clarify ownership
-pragmatic rationales:
-SOL has run out and Owner cannot sue
-We do not want to create an incentive for self-help
- Possessor has the rights to the property against anyone except the Owner (jus
tertii)…once the Owner loses his right due to SOL, the Possessor gains all rights
and becomes the Owner.
-AP is usually used as a defense, but sometimes in declaratory judgment actions
-Five qualitative elements of AP:
(1) the possession must be hostile
-Hostility= lack of possession + lack of estoppel (i.e. cannot say “don’t worry
about me, I’m not an AP”)
3
-standards
-objective standard
-current standard
-state of mind is irrelevant
-good-faith standard (subjective test 1)
-aggressive trespass standard (subjective test 2)
-possession can start as hostile and become non-hostile
(2) it must be actual
-Possessor must be doing something that Owner can sue him for…Possessor must
assert actual possession by using land as a reasonable owner would
(3) it must be open and notorious
-Most courts are going to say that the test is actual or reasonable (constructive)
knowledge (in the exercise of due diligence) of AP
-minor encroachment may not suffice
(4) it must be exclusive
-Possessor must be the only one has been in possession
-if the ownership is collective it may indeed be enough determine the
ownership as exclusive
-must exclude as a reasonable owner would
(5) it must be continuous
-Possessor’s stream of possession cannot be broken by the owner
-it would not be considered discontinuous if a reasonable owner would not
have been continuous in a particular situation
-and one quantitative element…SOL (SOL runs when all 5 other elements are in place)
-the owner cannot break the possession of the possessor
-The claim of AP may continue unbroken by a succession of tenants and where this occurs
the adverse possession may be just as effectual as though the premises were held during the
whole period by one person. All that is necessary in order to make an adverse possession
effectual for the statutory period by successive persons is that such possession be continued
by an unbroken chain of privity between the adverse possessors.
-privity allows Possessor to tack on time of possession from previous Possessor (only
when transfer is voluntary)
-thus, if the transfer is not voluntary, the time cannot be tacked on by the
subsequent Possessor
-cannot tack if property was abandoned
-sometimes if original Possessor regains possession from third-party possessor, he
may be able to tack on the third-party possessor’s time of possession onto his own
claim for AP
-Possessor may be able to tack on time even if land changes the original Owner
devises his life estate
-Most American states say that if the SOL of has occurs entirely during the
life estate, the claim of the individual being granted remainder has not expired
-In sum, a change of ownership does not restart the clock. A change of
possessorship, if voluntary and intentional (thus establishing privity), does not
restart the clock. A change of possessorship, if involuntary, does restart the clock.
-to be a possessor requites that you act like an actual owner
4
-disability and AP
-Statutory provisions often are extended (“tolled” is the technical word) when the Owner
has a legal disability
-Disability must be present when the action accrues
-focused on “laxness” of owner
-owner + disability…owner with disability= 10 year toll (for example)
-you either get the full 21 year SOL or you get 10 years from the removal of he
disability, whichever comes later
-when a continuously disabled person dies, the heir inherits that owner’s
toll and may bring the action within 10 years of the end of the owner’s
disability or death
-when you have two disabilities when the claim accrued, you get the 10
year toll from whatever disability is removed later
ESTATES IN LAND
FEE SIMPLE
[47-50]
-The fee simple is as close to absolute ownership as our law recognizes. It is the largest estate
in terms of duration. It may endure forever.
-inheritance of a fee simples
-If a person dies intestate (that is, without a will), the decedent’s real property descends
to his issues, if no issues then heirs, if no heirs than a spouse, if not spouse then collateral
kin
-if no next of kind can be found, then the property escheats to the state
-fee simples absolute
-could last forever; present estate; inheritable; no conditions, it is absolute
-no limitations to inheritability
THE FEE TAIL
[50]
-A fee tail is an estate in land created by a conveyance “to A and the heirs of his body.” It is an
estate precisely tailored to the desires of the medieval dynasts. The fee tail descends to A’s
lineal decedents (“heirs of the body”) generation after generation, and it expires when the
original tenant in fee tail, A, and all of A’s descendants are dead.
-Fee tail is not really important today
-most states will give the grantor a fee simple if today he says “to A and his heirs”
TRANSFER VOCABULARY
[50-51]
-Property can be transferred either while the transferor is living (inter vivos) or effective upon
death of the transferor. Transfers in the second category – those effective upon death of the
transferor – can be done by will, or in the absence of a will (intestacy), happen by operation of
law. Each situation has its own special vocabulary:
-Transfers effective while the transferor is living (inter vivos)
-Real property (land and building) is granted or conveyed to grantee by a
written instrument called a deed
-Generally deeds are not used to transfer personal property inter vivos
-If personal property is transferred inter vivos by gift it is given to a donee
5
-Transfers upon death by operation of law in the absence of a will (intestacy)
-Real property descends to heirs
-Personal property is distributed to distributes
-Transfers effects upon death by will
-Real property is devised to devisees
-Personal property is bequeathed to legatees
OVERVIEW OF THE ESTATES SYSTEM
[51-54]
-Estate classification variables
-(1) how long it can potentially last
-(2) when it begins
-(3) how and by whom it is inheritable
-(4) whether there are conditions that must be satisfied in order to take possession of the
property (conditions precedent) and/or conditions that, if violated, cause the possessor to
lose the right to the property (conditions subsequent)
-A tip about nomenclature : Future interests must be created originally in either the grantor or
in a third party (that is someone other than the grantor and other than the grantee of the present
interest). If a future interest created originally in the grantor or in a third party is subsequently
transferred to the other kind of grantee, it still keeps its original label
LIFE ESTATES
[54-56]
-A conveyance “to A for life” gives a A a life estate that lasts for the duration of A’s life. A
can transfer his life estate to B, in which case B has a life estate pur autre vie – that is, an
estate that is measured by A’s life span, not B’s. If B dies during A’s lifetime, the life estate
passes to B’s heirs or devisees until A dies. Every life estate is followed by a future interest
– either a reversion in the transferor or a remainder in a transferee.
-Words needed to create life estate… “to A for life”
-O could also say “to A for the life of B”
-4 Attributes:
-duration: life of the person the estate is measured by
-cannot leave life estate to corporation
-inheritability: life estate is inheritable when it is a life estate pur autre view
-present or future interest: you can stack life estates
-to “A for life, then to B for life”
-to A…present estate
-to B…future estate
-conditions
-usually absolute
-but life estates can be conditional
-rare though because the interest is relatively short term
-Reasons for the life estate
-Person gets to control land after his death
-Reflects past institution of gender roles
-Husband often gave wives a life estate, but in essence took away the power to
dispose of it
-Relationship between AP and life estates
6
-ex: Suppose that O wishes his wife, W, to have the use of his land for the rest of her life
after he dies and wishes his son S to have the land after W dies. He devises a life estate to
W with the remainder to S.
-Now suppose that after O dies, W tires of the old place and moves elsewhere.
AP enters and possesses for the statutory period. Now W dies and S brings an
action of ejectment against AP. What result? Most courts hold in this situation
that S's action is not barred by the statute
-you cannot “devise” a life estate
WASTE DOCTRINE
[56-59]
-In the absence of any contract, express or implied, to use the property for a specified purpose, or
to return it in the same condition in which it was received, a radical and permanent change of
surrounding circumstances, such as is presented in the case before us, must always be an
important, and sometimes a controlling, consideration upon the question whether a physical
change in the use of the buildings constitutes waste.
-Two policies behind waste doctrine:
-(1) maintaining economic interests of future/concurrent owners
-the preservation of property for the benefit of the owner of the future estate
without permanent injury to it
-an improvement for one purpose, may be a waste for another
-(2) maintaining identity of the property
-somewhat obsolete… in the past, one concern was the present owner would not
be able to tell what property was his because land markers have been changed
(this is before the emergence of recording)
-Remedies in waste cases
-(1) injunction if you get there in time
-(2) damages if you don’t get there in time
-(3) if present owner commits waste, they forfeit the property to the future owner
-Two categories of conduct amounting to waste
-Affirmative waste
-Voluntary acts
-Permissive waste
-Failure to take responsible care of the property
DEFEASIBLE FEES AND ACCOMPANYING FUTURE INTERESTS
[60-63]
(1) Fee Simple Determinable
-Language: G grants “To A and his heirs so long as (or: while, until) the land is used for
school purposes” {+ optional (nonessential) addition: “if the land is used for other
purposes it shall revert to G and his heirs”}
-FSD + (optional and nonessential POR)
-A violation of the stated condition is said to automatically give the holder of the possibility of
reverter the right to possession of the property; the holder of the possibility of reverter does not
have to assert his/her right.
-Important: This means that if the holder of the P.O.R. takes no action to re-enter or
retake the land after the condition is violated and this goes on for the period of the statute
7
of limitations the P.O.R. expires and the fee becomes absolute by operation of adverse
possession
-associated future interest: in the above grant G has the “possibility of reverter”
(P.O.R.)
-POR-when condition is violated the property automatically comes back to the
grantor
-main attributes
-normally a present fee, but you could make it future
-could last forever as long as you keep to the conditions
-inheritable
-vested estate because there is no condition precedent, but you can lose it
-FSD can transferred inter vivos or by death by will or by intestacy
-most states allow transfer of the possibility of reverter inter vivos
(2) Fee Simple on Condition Subsequent
-Language: G grants: “To A and his heirs, but if (or: “provided that if”, or upon the condition
that if) the land is used for other than school purposes, G shall have the right to enter and
declare the estate forfeit.”
-associated future interest: in the above grant G has the “power of termination or “right of
entry” (ROE)
-FSCS + (“power of termination” or “right of entry”)
-A violation of condition is said to confer on the holder of the power of termination a
discretionary right to take back the land which has to be asserted to take effect. But there is
no fixed time limit for asserting this right of entry. The traditional view is that the statute of
limitations on an ejectment action to retake the property does not start running until the right
of entry is asserted. This means the statute of limitations on the action to recover the land
after a violation of the stated condition is less likely to run out than the statute of limitations on
the action to recover the land after a violation of the stated condition where the estate was a Fee
Simple Determinable.
-SOL runs only when the holder of the reversionary right has asserted that right and has
been refused
-Note that this means that if a condition has really been violated, and the Grantor is trying
to take the property back, and a lot of time has passed since the violation first occurred, it
is better for the grantEE if s/he can show that s/he had a fee simple determinable, and not a
fee simple on condition subsequent. This may seem counterintuitive, but is nonetheless
true. Students often reason that it is better for the grantee to have a fee simple on
condition subsequent, because that does not terminate automatically. But that doesn’t
matter once the grantor is trying to take the land back. As a practical matter, the main
difference that flows from the fact that a violation of the condition terminates the fee
simple determinable automatically is that the statute of limitations on the grantor’s right to
take it back is more likely to have run out
-grantor may often argue for FSD and grantee may argue for FSCS
-FSD…SOL starts running when the conditioned is violated
8
-FSCS…SOL starts running when the right of entry is asserted
(3) Fee Simple Subject to an Executory Limitation
-Language: G grants “To A and her heirs so long as (or while, until) the land is used for
school purposes; if the land is used for other purposes to the Greenspace Conservancy.”
-associated future interest: in either version of the above grant, the Greenspace
Conservancy has an executory interest
-FSSEL + executory interest
-A violation of condition is said to automatically trigger the executory interest at the time the
condition is breached even without any action by the holder of the executory interest. This
means that if condition is violated and the holder of the executory interest takes no action to reenter or retake the land for the period of the statute of limitations that interest expires and the fee
becomes absolute by operation of adverse possession
-if executory interest is transferred back to the grantor, it is still called an “executory
interest”
-You might think there should be a 4th kind of Defeasible Fee, but there isn’t. Let me
explain. If you think about it, the Fee Simple Subject to an Executory Limitation
(“FSSEL”) (#3, above) is a variation on the Fee Simple Determinable (“FSD”). They both
terminate automatically when the stated condition is violated, and they use similar
language. The difference is that when an FSD is created the associated future interest is
placed in the grantor; when an FSSEL is created, the associated future interest goes to a
third party.
-So what if G granted “to A and her heirs, so long as the property is used for school purposes;
if the land is used for other purposes the Greenspace Conservancy may enter and declare the
property forfeit.” G is trying to create an interest like a Fee Simple on Condition
Subsequent, but with the future interest in a third party. You’d think this would terminate
in the discretion of Greenspace, not automatically. That apparently is what G wants, but it
not what will happen. If G does this, G will create a FSSEL; Greenspace will get the
future interest, but it will take effect automatically if the stated condition is violated.
-Why? We are not respecting G’s intent.
-The short answer is that if we let Greenspace have a discretionary power to
take the property back after the condition is violated we would create a
serious Rule Against Perpetuities problem. So we treat this language as
creating a FSSEL even though that is not what G wanted, so far as we can
tell.
-Convenants distinguished
-Conditions imposed by the grantor in creating defeasible fees must be distinguished from
covenants (promises) made by a grantee. A condition is much more onerous than a covenant.
If a condition is breached, the land is or may be forfeited to the holder of the future interest.
A covenant is a promise by the grantee that a specified act will be performed. If a covenant
is breached, the promisee may sue for an injunction or damages.
-note: don’t forget that the present estate owner must still observe the waste doctrine (for
the future interest), along with the conditions of their estate if they exist
9
-note: there are defeasible life estates and defeasible leaseholds as well
FUTURE INTERESTS
[63-75]
-Future interests can only be created when there is a present interest less than a fee simple
absolute. So the present interests we have already met come packaged together with associated
future interests that “follow” the present interest.
-present interests: fee simple absolute (most impt estate by far); fee tail (obsolete), the life
estate; three kinds of defeasible fees; LL/T….the estate for years, the periodic tenancy;
the tenancy at will; the tenancy at sufferance
-Each of the defeasible fees has a particular accompanying future interest:
-the FSD is followed by a Possibility of Reverter;
-the FSCS is followed by a Power of Termination (or Right of Entry, another name for
the same thing)
-the FSSEL is followed by an Executory Interest
Catalogue of Future Interests
-future interests created initially in grantor
-Reversion
-a future interest created initially in a grantor who himself/herself starts off with
a vested interest and then transfers less than all of it to a transferee who also gets a
vested interest -- the reversion is the left over future interest
-following Life Estate or Fee Tail or Leasehold
-note: if O grants a life estate to A, and then a contingent remainder to B, O
implicitly retains a reversion, which takes effect if B does not satisfy the condition
imposed on his remainder.
-all reversions are technically vested
-Possibility of Reverter
-following FSD
-Power of Termination
-following FSCS
-future interests created initially in a third party
-Remainder
-is a future interest created in a third party, following immediately a present
interest (or another remainder)
-following a Life Estate or a Fee Tail
-These can be further classified as
-vested remainder
- A vested remainder is a remainder created in a specific
(ascertained) person and is not subject to any condition precedent
(pronounced pre-see-dent) other than the expiration of the
preceding estate. It is transferrable inter vivos by deed, upon
death by will, and upon death by intestacy
-the condition that you have to wait for the expiration of
the preceeding estate does not make the interest
condition
-contingent remainder
-A contingent remainder is remainder where the identity of the
10
person to take it is not definitely ascertained, OR where the right to
possession is made contingent on some event that must take place
in order for the grantee to take possession (a condition precedent).
In the heyday of the common law (“at common law”),
contingent remainders were transferrable by intestacy or by
will but not by deed. But almost all most US states now allow
these transfers
-executory interest
-If a future interest does not fit the definition of a remainder because the
interest does not follow the life estate immediately, then we call the interest
that results an executory interest
-following a fee simple subject to an executory limitation
-others that are a subtle variation on a contingent remainder (they would be
contingent remainders but follow a life estate after a gap in time, rather than
immediately)
-Executory interests either divest (that is, take away) some other interest in
another transferee, or divest the grantor at some point in the future after the end of
the present interest granted by the grantor.
-most (but not all) executory interests are also contingent
-why contingency matters
-Transferability: Under the traditional common law rules, contingent remainders could
not be conveyed inter vivos, while vested remainders could be. Both kinds of remainders
could be devised by will, or descend by operation of law to an heir in the event of
intestacy.
-Today this has changed in almost all states so that contingent remainders
can be conveyed inter vivos as well.
-Destructibility and Merger: Next, contingent remainders (but not vested remainders)
were subject to doctrines known as destructibility and merger at common law, which are
explained further below
-Perpetuities: Contingent interests, including both contingent remainders and executory
interests that are contingent, are, however, still subject to the rule against perpetuities.
Vested remainders (and all reversions) are not subject to the rule against perpetuities.
-examples…distinguishing vested and contingent remainders (p. 68)
-destructibility
-Under traditional common law rules, and today, contingent remainders are destroyed
and G’s reversion becomes absolute and possessory if the condition precedent isn't
satisfied, and cannot, in its nature still be satisfied, when the preceding estate expires.
-Such destruction is intentional in the sense that it appears to effectuate the
grantor's intent.
-counter-intentional destructibility
-At common law, that is under the classical common law rules, contingent
remainders were also destroyed if the condition precedent had not been satisfied
at the time of the expiration of the immediately preceding estate, even if the
condition is one that might, given its nature, still be satisfied in the future.
-this was done at CL in order to foster freer alienability of land
-today, the grantor takes an interim reversion if and when the life estate
expires before the condition has been satisfied. The reversion
11
continues until the condition is satisfied.
-most states have abolished counter-intentional destruction so
as the effectuate the original intention of the grantor
-within this context, the contingent remainder has converted into an executory
interest
-merger
-intentional (simple) merger
-i.e. G grants to A for life, and retains the reversion, but G subsequently conveys
the reversion to A
-counter-intentional (squeeze out) merger
-i.e. G grants to A for life, then to B if he shall have attained the age of 21, and
retains the reversion; G subsequently conveys the reversion to A
-no longer really exist
-CL allowed them to foster freer alienability of land by getting rid of a
contingent interest where possible; this was viewed as limiting the impact
of the dead hand of the past
-No longer exist in order to effectuate the apparent intent of the original
grantor
RULES AGAINST PERPETUITIES
[75-86]
-another doctrine designed to foster freer alienability of land
-RAP applies separately to uphold or invalidate each separate interest created by a grant,
rather than to determine the validity of the grant as a whole.
-RAP… A future interest (created in a person other than the grantor…not vested present
interests…when analyzing problem mention that the present interests there cannot violate RAP),
if it is to be valid, must be certain to vest, if it is ever going to vest, within a period equal to
21 years plus the duration of someone’s life who is alive at the time of the conveyance.
-RAP does not apply to vested interests
-policy behind the rule… so you could also think of the RAP as a prohibition on
creating perpetual uncertainty as to who will own the property
-Practical observation: When A FSSEL is created, placing the executory interest in a third party
(that’s what makes it a FSSEL!), the executory interest will usually violate the RAP if the
condition stated in the FSSEL is open-ended that is, perpetual in nature
-the remedy for an invalid Executory Interest following a FSSEL effectively turns the
FSSEL into an FSD followed by a POR.
-measuring lives
-Instead we can restrict our consideration of candidates for a validating measuring life to
the persons granted an interest in the property (either a future interest, or a present
interest) by the instrument that creates the contingent interest being tested under the RAP,
plus one more group of potential measuring lives.
-That additional group consists of another person or group of people expressly
named for this purpose in the instrument.
-note: When the language is contingent, but the condition has already been satisfied, the interest
is no contingent and thus RAP is not violated
-note: the law traditionally assumed that a woman could have children no matter what her age
12
-note: In property law, a child is considered as in being from the time of conception if later born
alive
RAP Problem-Solving Strategy
1) Is there a contingent future interest? -- that is, a contingent remainder or executory interest: If
so, go on; if not, there can be no RAP violation
2) Is every person who might ultimately satisfy the grant condition definitely a person alive at
the time of the grant? If not, skip to step 4; if yes, continue with step 3
3) Is the condition one that must be fulfilled within the grantee’s lifetime if it is ever to be
fulfilled?- If so, there is no RAP violation; if not, go on to step 4
4) Is the condition one the satisfaction of which will conclusively be determined within 21 years
of some other measuring life that is in being at the time of the grant -- usually the life tenant? If
so, there is no RAP violation; if not, the interest violates the Rule Against Perpetuities.
- What happens if the contingent interest is void?
-if the void interest is a contingent remainder and the previous interest is a life estate,
then grantor takes a reversion
-if the void interest is an executory limitation following a FSSEL phrased like an FSD
most courts will give grantor a possibility of reverter
-if the void interest is an executory limitation following a FSSEL phrased like an
FSCS, most courts will give the holder of the FSSEL an FSA
-You can derive these results for yourself, by looking at the original conveyance, and
literally crossing out the void interest.
Policy overview
-Pro: dead-hand control/intent of the original grantor
-Fee tail
-Contingent remainder
-Abolished destructibility
-Anti: Dead-hand control/pro-free alienating
-Fee tail…Abolition of the feel tail
-Contingent remainder…destructibility of contingent remainders & counterintentional merger
-Abolished destructibility….rule against perpetuities
CONCURRENT INTERESTS
[86-90]
-Exam tip: you can make just about any type of interest a concurrent interest
-Four “unities” were essential to a joint tenancy – time, title, interest, and possession
-Time
-The interest of each joint tenant must be acquired or vest at the same time
-Title
-All joint tenants must acquire title by the same instrument or by a joint
adverse possession. A joint tenancy can never arise by inestate succession or
other act of law
-Interest
13
-All must have equal undivided shares and identical interests measures by
duration
-Possession
-Each must have a right to possession of the whole. After a joint tenancy is
created, however, one joint tenant can voluntarily give exclusive possession to the
other joint tenant. (The unity of the possession is essential to a tenancy in
common as well none of the other three unities is.)
Tenancy in
Common (“TiC”)
Joint Tenancy
(with right of
survivorship)
(“JT”)
Tenancy by the
Entireties (not
recognized in all
states)
rt. of survivorship
no
yes--but can be
defeated by
unilateral
conveyance or
partition
yes--not easily
defeated
severable by
unilateral
conveyance (to
defeat the right of
survivorship)
(already
"severed")
yes: creates
tenancy in
common.
no
partitionable by
court without
consent of other
party
yes
yes
no
requirements
unity of possession
(undivided
common interests
in same property)
“four unities”:
unity of
possession, time,
title and interest
(see p. 276)
common law’s
constructional
preference
presumption
favored JT
four unities plus
grantees must be a
lawfully married
couple at the time
of the grant
divorce dissolves
into T/I/C; asset
distributable in
divorce proceeding
remarks
Language used
to create today
modern
constructional
preference
presumption favors
TiC
To A and B (as
tenants in
common)1
To A and B as
joint tenants
and not as
To A and B
(, husband and
wife) (as
1 Language in parentheses is desirable, but not essential
14
tenants in
common
tenants by the
entireties)
15
Joint Tenancy with right of survivorship
 you can convey property while you are living, but you cannot devise it or transfer it by will
UNLESS you are the last owner living (but it isn’t even a concurrent interest anymore
because you are no longer sharing it)
 moite…one’s share of a concurrent interest
 example
o A+B+C
 C….D
o (A + B) + D
 A + B are still joint tenants with right of survivorship
 D is not a joint tenant with right of survivorship
 Therefore, the survivor of (A+B) gets the entire 2/3 of property held between
the two of them, and D continues to hold the 1/3 conveyed to him
 You need the four unities…look above
 Language… “to A and B as joint tenants and not as tenants in common”
Tenancy in common
 There is a right of survivorship unless one of the concurrent interest holders makes a
unilateral conveyance or partition of his share
 Only one unity required: A and B must be given an undivided share in some piece of
property
 Tenancy in common is the default interest
Tenancy by the entireties
 Need four unities plus legal marriage
 Language: To A and B, husband and wife as tenants by the entireties
o Some jurisdictions assume the a concurrent interest will be held as a tenancy by the
entireties on the basis if the two people are legally married (even if they did not
specifically ask for it)
CONVEYANCING: INTENTIONAL TRANSFERS OF EXISTING RIGHTS IN REAL
PROPERTY
-What do you want your system of conveyancing to do?
-Provide a system of notice concerning property rights… “who owns what”
-Eliminate conflicting claims of ownership
-Make it difficult to inadvertently transfer property
-Make transfers possible without undue expense for the parties at interest
(buyers/sellers)
-Minimize transaction costs
CONTRACTS FOR SALE OF LAND
[90-92]
- Minimum elements of a real estate sales contract
-the purchase price and how it is to be paid, including mortgage financing
16
-a legal description of the property to be conveyed; a street address is NOT an adequate
description
-a description of the quality of title to be provided by the seller, and the evidence to be
supplied to document that the seller meets this standard, including any abstract of title to
be furnished, and title insurance to be available
-Warranties regarding the title provided by the seller, and any limitations or exclusions or
defects in the title to be provided
-Date of conveyance
-Provisions prorating responsibility for utility bills and property taxes
-Provisions allocating the risk of destruction of or loss to the property between the time
of contracting and the time of closing
-itemization of what is being conveyed along with the real estate
-the terms of any escrow arrangement
-provisions regarding the return of any deposit if the transaction is not successfully
completed
-the signatures of the parties
-In addition, the contract should be in writing
STATUTE OF FRAUDS
[92-96]
-Both contracts and deeds must be in writing
-Remember throughout these materials that sometimes property is transferred by deed
without the preliminary step of a real estate sales contract. Indeed, a valid deed is
sufficient to transfer the property, and in donative (non-sales) transactions, such as intrafamily transfers, a deed is likely to be the only document. In commercial transactions,
including sales of residential property, there ordinarily will be, first, a real estate sales
contract, and then, if the deal goes through, a deed
-Keep in mind that you want to separate deeds and contracts for real estate
-The SOF requirements for deeds and real estate contracts are different
-The statute of frauds as applied to real estate sales contracts typically requires, either that
the contract itself be in writing or that “some memorandum or note thereof” shall be in
writing. Not that much detail need be included in such a memorandum: (1) a
description/identification of the real estate involved, (2) the signature of the party against
whom the contract is to be enforced (the party to be charged), and (3) the price, if agreed on.
More information can be, and typically is included, but these are the key elements required to
satisfy the statute of frauds as it applies to real estate sales contracts.
-As for deeds, the typical requirement imposed by the statute of frauds is that any conveyance of
an interest or estate in real property (more than a relatively short term lease) be “made” in
writing. Key elements to be included in the writing are discussed in a subsequent portion of the
materials (for Assignment #23).
-For deeds, SOF cannot be a “memorandum”….conveyance must be “made” in
writing
-For deeds, only the signature of the grantor is needed
-exceptions to the SOF requirement for a writing as applied to real estate contracts
-part performance/estoppel
-Part performance
17
-Do not need detrimental reliance
-i.e. buyer going into possession
-Estoppel
-Need detrimental reliance
-i.e. detrimental reliance on the transfer of land going through
-two types of SOF cases
-technicality cases
-it is admitted that there was an oral agreement, but there is a question about
the paperwork
-cases where one party denies ever going into any kind of contract with the other
party
-two steps to SOF cases
-try and find some writing to satisfy SOF
-try to find some exception to the SOF if one cannot find a writing
-note: keep in mind the transfer of deeds to “straw” persons
MARKETABLE TITLE
[96-98]
-Defects making a title unmarketable
-Anything in the record chain of title indicating that the vendor does not have full
interest which he purports to convey may be a defect
-Encumbrances
-An outstanding mortgage or lien would be an encumbrance making the title
unmarketable
-However, the vendor has the right to pay off the mortgage at the closing,
out of the sale proceeds
-An easement will be a defect if it reduces the full enjoyment of the premises
-Similarly, privately-negotiated use restrictions (e.g. a covenant whose burden
runs with the land, to the effect that only residential structures will be built) can
be a defect
-Default rule: covenants (even if not violated) render titles
unmarketable
-Default rule can be overcome by a contract provision (as in
Lohmeyer)
-Violation of covenant (encumbrances of record)
overcomes contract (or assumption of noticeable defect)
and renders title unmarketable
-Most courts hold that violations of building codes are not encumbrances on
title, but a violation of a zoning ordinance usually is treated as an
encumbrance.
-Zoning ordinance does not render a title unmarketable, but a violation
of a zoning ordinance may
-zoning ordinances only render a title unmarketable if they
are violated, while covenants render title unmarketable
18
even if they are not violated
-Agreement
-But the parties may agree that certain kinds of defects will not constitute
unmarketable title. This agreement will normally take place in the contract of sale.
-Buyer on notice of defect
-Also, the buyer may be held to be on notice of certain defects, and therefore
held to have implicitly agreed to take subject to them (e.g. where a right of
way across the property is very visible to anyone who looks even casually at
the property)
-Sometimes if a physical inspection of the real estate would have put a
reasonable person on notice that a title may be unmarketable, then
courts will sometimes hold that the title cannot be held to be
unmarketable
-Time for measuring marketability
-Unless the contract specifies otherwise, the vendor’s title is not required to be
marketable until the date set for the closing. Thus the vendor may sign a contract to
sell property he does not yet own (or on which there are several defects in the title),
and the purchaser cannot cancel the contract prior to the closing date because of this
fact.
-If title is unmarketable, the normal remedy is rescission of contract and return of title to
the Buyer
-Remedy is not specific performance or equitable damages
-Unmarketable title is not so hard to establish and the damages are not so severe
-Defects might not make title unmarketable…but it may bring about other
problems…implied warranty of quality
IMPLIED WARRANTY OF QUALITY
[98-100]
-privity of contract is not necessary for a subsequent purchaser to sue a builder or
contractor under an implied warranty theory for latent defects which manifest themselves
within a reasonable time after purchase and which cause economic harm
-this evidences a movements away from the doctrine of caveat emptor
-limitations
-(1) latent defects which become manifest after the subsequent owner’s purchase
and which were not discoverable had a reasonable inspection of the made prior to
the purchase
-(2) latent defect must manifest in a reasonable time
-(3) P still has the burden to show that the builder caused the defect
-a warranty of quality is not normally implied where the seller is not a “merchant of
housing,” that is, a builder, subdivider, or commercial vendor. Suits against a person who
sells his home to another ordinarily must be based on fraud, misrepresentation, or failure
to disclose.
-implied warranties are usually limited to the original builders
19
DEEDS
[100-107]
-Deeds v. Contracts
-The deed typically replaces the contract as the embodiment of the parties’ relationship.
Under the doctrine of merger, most obligations imposed by the contract of sale are
discharged unless they are repeated in the deed. Thus, if the contract calls for
merchantable title, as embodied in a warranty deed, but the purchaser carelessly accepts a
quitclaim deed, the buyer will not be able to sue on the contractual provisions if the title
turns to be defective he is limited to the provision of his deed. Thus, the contract is
relevant only during the gap between its signing and the delivery of the deed.
-It is not so much that the deed and contract govern separate things, but that
they govern the respective rights of the parties for different intervals of time.
The contract governs the rights of the parties between the time it is signed and
the closing. The deed governs the rights of the parties thereafter.
-SOF
-1) names of the grantor and grantee, 2) language indicating a present intention to transfer
the land (not just a promise to do so in the future), 3) an intelligible/legal description of
the land involved and the estate granted, and 4) the signature of the grantor. Note that
the signature of the grantee is not required. However, as you will see later in the
semester, particularly in the units on easements and covenants, it is not unusual for a deed
to contain provisions whereby the grantee grants back to the grantor, some lesser interest
in the land that was conveyed. Many, if not all, states require the grantee to sign the deed
in at least some of those situations. So it is a good idea to have the grantee sign the
deed.
-The part performance and/or equitable estoppel exceptions to the statute of frauds
are applicable to the requirement that a deed be in writing (as well as to the
requirement that a memorandum of a land sale contract be in writing, covered in
the last assignment.)
Parts of a deed
-example on pages 514-515
-(1) premises clause
-the names of the grantor and the grantee
-verbs/words of conveyance, such as “grant” (These are often multiplied
unnecessarily, out of an abundance of caution. This was a legacy of a system in
which (formerly) there was a particular verb of conveyance that was appropriate
for each kind of estate in land. To make sure a grantor used the right one, often,
grantors used many or all of them.)
-an adequate geographical description of the land conveyed
-often times a statement of consideration is put forth
-no actual consideration needed, though
-(2) habendum clause
-generally starts with “to have and to hold”
-traditionally names the type of estate granted
20
-To deal with this possibility, the rule arose that in the event of a
conflict between the premises and the habendum clause as to the
estate granted, the habendum is allowed to modify the premises clause
description, but not to directly override it. Thus, if there is an
irreconcilable conflict between the two, the premises clause controls.
-warranties of title
 Please make sure to note the distinction between the three present
covenants (covenant of seisin, covenant of right to convey, and the
covenant against encumbrances), and the three future covenants
(covenant of general warranty, covenant of quiet enjoyment, covenant
of further assurances). While these are all traditional covenants, the
covenants of seisin, right to convey, against encumbrances and quiet
enjoyment are perhaps the most standard. In some states, a reference to
“the usual covenants” in a contract for the sale of land or even in a deed
itself will invoke these four covenants, but not the covenant of general
warranty or the covenant of further assurances.
 six express warranties
o (1) a covenant of seisin
 the grantor warrants that he owns the estate that he purports
to convey
o (2) a covenant of right to convey
 the grantor warrants that he has the right to convey the
property. In most instances this covenant serves the same
purpose as the covenant of seisin, but it is possible for a
person who has seisin not to have the right to convey (e.g.,
a trustee may have legal title but be forbidden by the trust
instrument to convey it)
o (3) a covenant against encumbrances
 the grantor warrants that there are no encumbrances on the
property. Encumbrances include, among other items,
mortgages, liens, easements, and covenants.
 The deed might say free of all encumbrances free of record,
not listed, etc.
o (4) a covenant of general warranty
 the grantor warrant that he will defend against lawful
claims and will compensate the grantee for any loss that the
grantee may sustain by assertion of superior title
 grantor will pay for litigation against meritorious claims
 i.e. claims of adverse possession
 if meritorious claim wins, there is an implied
indemnification of the buyer by the seller
 the seller will make the buyer whole
o (5) a covenant of quiet enjoyment
 the grantor warrants that the grantee will not be disturbed in
possession and enjoyment of the property by assertion of
21
superior title. This covenant is, for all practical purposes,
identical with the covenant of general warranty and is often
omitted from general warranty deeds.
o (6) a covenant of further assurances
 the grantor promises that he will execute any other
documents required to perfect the title conveyed
-when covenant is breached is important for SOL purposes
Types of deeds and the warranties of title
-three types of deeds: a general warranty deed, a special warranty deed, and a quitclaim
deed.
-A general warranty deed contains most or all of the traditional forms of warranties of
title and warrants against title problems, whether or not the grantor created them.
-A special warranty deed protects only against defects in title that the grantor created.
-A quitclaim deed, distinguished by the use of the verb of conveyance “quitclaim” does
not create any warranties (it disclaims warranties, in essence). If a deed does not
expressly contain any warranties, but does not use the quitclaim language, some states
will imply into the deed some of the standard warranties. The details of that practice will
vary from state to state. Some states refer to a deed without any express warranties as a
“bargain and sale deed.” As noted, however, some warranties of title may be read into
such a deed by operation of law. These labels have no bearing on whether warranties
about the physical quality of the property are to be read into the deed.
-Formalities at the end of a deed
-signature/testimonium clause
-grantor’s signature
-attestation by witnesses
-not required, but desirable
-certification of acknowledgement
-note: courts hold that until such time as one holding paramount title assert their right, there
can be no constructive eviction and, therefore, no breach of the covenant of quiet enjoyment.
(Brown).
ESTOPPEL BY DEED
$
[108]
Assume that: A who does not own Blackacre, grants Blackacre to B. Shortly thereafter,
O, who does own Blackacre, grants it to A. Under the doctrine of estoppel by deed, B
ends up the owner. As the casebook explains this result was originally based on the
existence of covenants of general warranty and/or further assurances in A’s deed to B,
but apparently this result no longer depends on the presence of that covenant.
-O…A….B
-A doesn’t own B before transfer
-A later buys land from O
-O’s title later flies through A straight to B
22
DELIVERY
[108-110]
-In order for a deed to effectuate transfer, the deed must be delivered either directly by grantor
to grantee, or by grantor to an escrow agent, who is instructed to deliver the deed upon the
occurrence of stated escrow conditions that are provided to the agent as instructions.
-Note that when the delivery is made through an escrow agent, the effective date of the
transaction for various purposes is said to relate back to the date of the delivery to the escrow
agent, even though the delivery by the agent to the grantee occurs, or was supposed to occur,
later. This relation back doctrine raises some difficulty in connection with the recording acts,
as we may see subsequently.
-once a dead is given to the escrow agent, the grantor cannot get it back as it is considered
“delivered.”
-If one wants to make an effective, but conditional, delivery, one normally must use an escrow
agent. In some cases a present grant of a future interest may accomplish what is wanted. But
where the escrow condition is delivery upon the grantor’s death, some states may hold that this is
an invalid substitute for a will.
THE RECORDING SYSTEM
[111-120]
-Provides a means to look into the records of the past and also gives an incentive to make a
recording of your own
-Recordings are made in the time between the signing of the contract and settlement
-Policies supporting the recording system (like AP)
-Penalize those who have not recorded
-reward those who have recorded
-this is not a system of equity, it is one of exceptions
-the system is structured for A to win, but provides for B to win under certain exceptional
conditions
-deeds do not have to be recorded
-Remember, always, that a recording act creates a defined exception to the common law
priority rule of “first in time, first in right.” Under the common law first-in-time rule, if O
conveys to A, and then conveys the same interest in the same property to B, A (not B) owns the
property. The common law rule remains the “default rule.” So unless the second-in-time
purchaser, B in this example, is protected by the applicable recording act, A wins out.
-If A “promptly records” then its property interest is secured
-“promptly records”…recording before another person closes on the same
property
Four Step Analysis
1) Is the first in time interest (A’s interest) one that is required to be recorded under the
applicable recording act?
-if not, the common law priority rule is unaltered and the first in time grantee (A)
prevails and the recording act analysis is complete; if, however, the first in time
interest was one required to be recorded, go on to step #2
-consider broad and narrow types of recording acts
-Whether a particular interest is required to be recorded is determined by interpretation of
23
the language of a recording statute. Some recording acts are narrow, requiring only
conveyances of a fee simple estate to be recorded, others are broad requiring all interests
in real property to be recorded. Note that this attribute of a recording act is independent
of its character as a race, notice or race-notice statute. See the examples of broad and
narrow coverage recording acts on page 5 of this handout.
2) Is the first in time interest (A’s interest) promptly recorded?
-If it is, the first in time, A, prevails; if it is not, go on to step #3
-We will see, in connection with our problems in this handout, that “promptly”
recorded means recorded before a competing conveyance can take place.
-Note that "chain of title" problems can enter at this step—in determining whether an
interests counts as recorded-- in cases with more complicated fact patterns.
3) Did the second in time (B) acquire his/her interest by purchase (rather than a gift) so as
to make him/her eligible for protection under the recording acts?
-Recording acts in the United States are interpreted to protect only second in time purchasers,
even if the language does not say so explicitly. Most of them do say this explicitly.
-If the second in time is not a purchaser, common law priority prevails: A, the first-in-time
wins; if, however, the second in time grantee (B) is a purchaser, go on to step #4.
-Second in time must be a purchaser, not a donee
4) Has the second in time (B) done the things necessary to beat out the first in time under
the particular kind of recording act in effect in the particular jurisdiction?
This is determined by 1) examining the particular recording act and determining what kind it is: a
“race statute,” a “notice statute” or “race-notice statute, and then 2) applying the applicable
requirements of the specific kind of recording act.
-If the second in time (B) has done all the things necessary to beat out the first in time,
under the applicable kind of recording act, the second in time (B) wins the priority contest;
but if the second in time has not done all that is required under the applicable statute,
common law priority still prevails and the first in time wins
Major Types of Recording Acts
-Note that differences between the 3 major kinds of recording acts matter only when, and if, the
recording act analysis comes down to step 4 of the 4 step analysis that I have outlined above. For
each type of recording act, I give sample language, a paraphrase, and some key observations
about which second-in-time purchasers win thereunder.
1. Race Recording Act
Sample Language:
All conveyances of any interest in real property shall be recorded in the
office of the county recorder in which the land is located. If two or more
24
instruments are presented for recording concerning the same land, they
shall take effect in the order of presentation for recording.
OR
Every conveyance of real estate within the state, which shall not be
recorded as provided in this section, shall be void as against any
subsequent purchaser from the same grantor, whose conveyance shall be
first duly recorded
Paraphrase:
No conveyance is valid as against competing purchasers for value unless and
until it is actually recorded
Key features:





If A (1) was supposed to record, and (2) did not promptly record, and (3) B is a
purchaser, (4) B wins if and only if B records before A
As long as B records before A does, in this situation, B wins even if, at the time B
purchases, B already knows about O’s prior conveyance to A.
Conversely, if B does not record before A does, B loses to A; the fact that B does not
know about O’s prior conveyance to A when B purchases does not help B.
Makes extra-record notice irrelevant; B can rely on the state of record title; if A
hasn’t recorded, B can buy the property and record it immediately and win
B can win even though he has reasons to know about A
o Incentivizes purchasers to record
o May have what many consider to be wrongful outcomes
o Do not exist in many states
2. Notice Recording Act (example: Florida statute on casebook p. 582; or see sample language
here)
Sample Language:
Paraphrase:
Every conveyance of real estate within the state, which shall not be recorded
as provided in this section, shall be void as against any subsequent purchaser
in good faith from the same grantor
An unrecorded conveyance of a kind that was required to be recorded is invalid
as against competing purchasers for value who take without notice
Alternative paraphrases of a notice statute using the term bfp (as defined on page 2 of this
handout):
An unrecorded conveyance of an interest that was required to be recorded is invalid
as against a subsequent bfp from the same grantor
or
25
No unrecorded conveyance of an interest that is required to be recorded is valid as
against a subsequent bfp
Key features: A second in time (B) who is a bfp beats a prior unrecorded deed (to A) even if
the bfp B does not record first--i.e., even if the first in time, A, records after subsequent
purchaser has purchased but still before the subsequent purchaser records
-under a notice statute, B does not have to win the race to record, B only must be a
bfp
-any of the 4 types of notice (LISTED IN CHART BELOW) may can
eliminate B’s identity as a bfp
-shelter rule…
-A person who takes from a bfp purchaser protected by the recording act has the same
rights as his grantor. This rule is necessary if the recording act is to give B the benefit of
his bargain.
-The shelter rule does not extend to B’s grantor, O, however. If O repurchased Blackacre from B,
O would not prevail over A.
3. Race-Notice Recording Act (example: California statute on casebook page 582 or sample
language here)
Sample Language:
Paraphrase:
Every conveyance of real estate within the state, which shall not be
recorded as provided in this section, shall be void as against any
subsequent purchaser in good faith from the same grantor, whose
conveyance shall be first duly recorded
An unrecorded conveyance of an interest that was required to be recorded is
invalid as against a subsequent bfp ---- if and only if the subsequent bfp
records before the prior purchaser does.
Comments:
To win, the second in time purchaser (B) must both be a bfp at the time of
purchase and s/he must also win the “race” to record first. Note that, if B
receives actual notice of the prior purchase by A after B purchased and before B
records the second in time bfp purchaser B prevails if s/he records first.
-if both criteria are not meet, we refer to the CL default “first in time”
- recording acts can be broad or narrow in their coverage—as to which first-in-time interests
are supposed to be recorded
- certain smaller “sticks” do not have to be recorded under the narrow statute that have to be
recorded under the broad statute
A “universal” recording act template: Distinguishing Race, Notice and Race-Notice
Recording Acts
The following is a template that can be adapted to produce a race, race-notice, or notice
recording act, depending on which of the two boldface inserts is included:
26
“Every conveyance of any interest in real property within the state, which shall not be
recorded as provided in this section, shall be void as against any subsequent purchaser (1) in
good faith from the same grantor, (2) whose conveyance shall be first duly recorded.”
Insert #1 is present in a notice statute and in a race-notice statute
Insert #2 is present in a race statute and in a race-notice statute
Only the race-notice statute has both inserts.
-structure of recording statutes
1) what types of transfers must be recorded
2) what types of subsequent purchasers that will void the interest of the first-time
purchaser
27
E. Types of notice
-notice is evaluated at the
time of purchase
(All of these kinds of notice
would render a second-intime purchaser NOT a bfp.)
record notice
non-record notice
actual notice
actual record notice
(second-in-time has checked
the records and learns of
prior conveyance to first-intime)
actual non-record notice
(e.g., second-in-time reads
newspaper account of prior
conveyance by grantor to
first-in-time)
constructive notice
constructive record notice
(second-in-time did not
check records, but should
have and if s/he had would
have learned of the prior
conveyance to the first-intime)
constructive non-record
notice--includes inquiry
notice
(second-in-time did not walk
past property; but if s/he had;
s/he would have seen sign
stating “Coming soon on this
site: the world headquarters
of the First-in-Time
Corporation)
(example of inquiry notice:
second-in-time did not walk
past property, but if s/he had
she would have found
property occupied by
someone other than the
second-in-time’s grantor, and
if the possessor had been
asked, s/he would have
explained that s/he had just
purchased the property from
the second-in-time’s grantor)
28
A hint about organizing your answers: If B is a purchaser, and there is a recording act, for each
of the 3 kinds of recording acts, you can make a table that tracks the factual variations as to
whether B is a bfp, and as to when B records. Each cell should record an answer saying who
wins, A or B. The tables should look something like this:
Race statute
B records before A
does (bef. Jan. 5)
B records after A does
(after Jan. 5)
B is a bfp
______ wins
______ wins
(Contrary to the
assumptions stated
above, A records
before B buys on Jan.
3)
_____ wins
B is not a bfp
______ wins
_______ wins
_______ wins
Assuming that B is a purchaser you should end up with 3 tables like this; one for each kind of
recording act. On the other hand, if B took by gift, OR if there is no recording act, you don’t
need this table.
-related problems on page 120.
CHAIN OF TITLE PROBLEMS
[120-130]
-Generally refers to the recorded sequences of transactions by which title has passed from a
sovereign to the present claimant
-It also has a more technical meaning: the period of time for which records must be
searched and the documents that must be examined within that time period
-a deed that does not name a grantee is a nullity, and wholly inoperative as a conveyance until
his name was inserted as grantee
-however, a deed which is a nullity when delivered because the name of the grantee is
omitted becomes operative without a new execution or acknowledgement if the grantee,
with either express or implied authority from the grantor, inserts his name in the blank
space left for the name of the grantee (Hughes)
-We ask whether the second-in-time purchaser acted reasonably in going ahead with
his/her closing in light of what s/he should have known if a standard title search had been
correctly performed prior to the closing. Usually, if the second in time acted reasonably,
the second in time will be given priority. If the second in time acted unreasonably in light
of what s/he should have known, the first in time will take priority.
-Title search
-What title search methodology tells you is how to work your way through title records in
order to locate conveyances that threaten the title to property that you are searching.
-The chain of title principle: a conveyance that cannot be discovered by the title search
methodology described here is said to be “outside the chain of title” and is to be treated as nonrecorded and thus not protected by the recording acts, even if it is, literally speaking, recorded.
29
-Under the traditional system, each deed is indexed twice; once alphabetically by the name of the
grantor (in “the grantor-grantee” index) and once according to the name of the grantee (in
“the grantee-grantor index”)
-constructing chains of title (in notes)
-check both the ascending and descending chains
-note: if X discovers that B has no title that shows up in the records –this break in the
chain of title—X is not acting reasonably in going ahead and purchasing from O. X will
not be protected by the recording act if X goes ahead with the purchase from O.
-note: The reason that this check must be made is that if there is such a side branch with
priority in time over any link in the chain of title leading to X, that person would be first
in time as compared to the grantee who leads to X. Moreover, if such a prior grantee
promptly recorded his conveyance (which is the only way he'd show up under the
described search methodology) he or she will also be entitled to priority under the
recording acts. If this happened, in short, O would be unable to give X a good
(marketable) title.
-Recap: It is generally said that a conveyance that cannot be discovered by this
search methodology is outside the chain of title and is to be treated as non-recorded
and thus not protected by the recording acts, even if it is, literally speaking,
recorded.
-shelter doctrine
-win a party falls under the shelter doctrine, every party in the chain below it also
falls under the shelter doctrine
-however, you have to keep in mind that other problems may arise aside from that
party faced in the original fork we are considering
LANDLORD AND TENANT
LEASEHOLD ESTATES AND CREATION OF LEASEHOLDS
[130-150]
-A term of years is an estate that lasts for some fixed period or for a period computable by a
formula that results in fixing calendar dates for beginning and ending, once the term is created or
becomes possessory
-no notice of termination is necessary to bring the estate to an end
-if T stays in place beyond the end, the holdover doctrine comes into play
-A periodic tenancy is a lease for a period of some fixed duration that continues for succeeding
periods until either the landlord or tenant gives notice of termination.
-I.e. “to A from month to month”
-Fixed start date, no ending date, continues in intervals
-The notice must terminate the tenancy on the final day of the period, not in the middle of
the tenancy
-Thus if a month-to-month tenant who began his tenancy on 1/1 decided on 3/20
to terminate, the earliest termination date would be April 30.
-You have to get at least a full month’s notice in regards to the period of
the lease
30
- A tenancy at will is a tenancy of no fixed price that endures so long as both landlord and tenant
desire
-If the lease provides that it can be terminated by one party, it is necessarily at the will of
the other as will if a tenancy at will has been created
-Normally both parties are given the ability to end the lease under a tenancy at
will
-Garneri seems to think otherwise (aberrant caselaw)
-Tenancies at Sufferance
-No one ever means to create a tenancy at sufferance. Rather this is the label we give
the interim state that exists when a tenant holds the lease property beyond the end of
his/her term. This behavior by the T creates a tenancy at sufferance only for the interim
period while the L is deciding whether to evict the tenant or treat the tenant as a holdover
tenant. As your casebook explains, p. 372, once the L opts to treat the tenant as a
holdover tenant, assuming that s/he is within his/her rights in doing so, either a
periodic tenancy or an estate for years is created.
-2 things to watch for:
-sometimes the agreement contains a provision determining actions to be
take if a tenant overstays
-sometimes it will be to collect double-rent
-often times, the L maintains a choice to charge double-rent
or hold T over for a new term
-Two situations in which holdover doctrine plays a role
-L may have another T coming in and does not want to allow the T to continuing staying
-sometimes, though, L may not have anyone coming in but is merely playing
“hard to get”
-L may not have another T coming in and is willing to allow the T to stay
-Jusifications for holdover doctrine
-implied-in-fact contract theory
-unjust enrichment
-in terrorem (incentive)
-Crechale… the court is of the opinion that once a L elects to treat a T as a trespasser and
refuses to extend the lease on a month-to-month basis, but fails to pursue his remedy of
ejecting the tenant, and accepts monthly checks for rent due, he in effect agrees to an
extension of the lease on a month-to-month basis.
-His acceptance of monthly rent created the month to month lease
-If the holding over isn’t voluntary, then the holdover doctrine doesn’t apply
-You must not be physically capable over leaving
-Leases and the Statute of Frauds
-Leases are generally subject to the statute of frauds that applies to deeds. All states
recognize an exception that permits shorter term leases to be made validly orally. But
the exact language of these statutory exceptions varies in ways that frequently
creates a trap for the unwary
-In some states the short term lease exception that allows oral leases applies to
leases of less than one year; in others it applies to leases of one year or less. The
details are critically important, as most leases, at least most residential leases, are
31
for exactly one year. So the validity of an oral one year lease depends on which
of these two approaches is taken.
-But there is another ugly complication. Some states have short term lease
exceptions –that is exceptions that allow oral short term leases—that cover leases
“of not more than one year from the making thereof.” This language might
make you think that a lease for exactly a one year term may validly be made
orally. But not so fast! Leases are almost always signed (“made”) on a date
before the start of the lease term-even if only by a few days. Those few days can
make all the difference under a statute of frauds worded as indicated in this
paragraph. For instance, a lease signed by LL and T on June 20, 2008, covering a
lease term from July 1, 2008 to June 30, 2009 is MORE than one year long from
the making thereof. So such a lease would have to be in writing, if the statute of
frauds uses the language described in this paragraph.
-Some states have the simpler rule that if an oral lease is made that is too
long to be valid under the statute of frauds it is simply cut back to an estate
for years of the longest permissible duration-often exactly one year.
Assignments and subleases
-Assignment: If there is an assignment T2 becomes liable to L for performance of the
obligations under the original lease; but T1 also remains liable to L for the obligations under the
original lease; also T2 is liable to T1. So the L can enforce against either T1 or T2. T1 can
enforce against T2.
-The only way to get T1 off the hook to L is an assignment to T2 accompanied by a
novation Ban agreement by L that expressly substitutes T2 for T1 as the person
responsible for performance of the obligations of the tenant under the original lease.
-Sublease: If there is a sublease, T2 ordinarily does NOT become liable to L for the obligations
under the original lease. T1 alone remains liable to L for the obligations under the original
lease. T2 is, however, liable to T1 for the performance of the obligations under the sublease.
-privity of estate/privity of contract
-Under an assignment, privity of estate with L is transferred from T1 to T2; but T1
remains in privity of contract with L. Accordingly both T1 and T2 are liable to L.
-There is still privity of contract between LL and T1
-Privity of estate has been extended down to T2…privity of estate is between T2
and LL
-Under a sublease, privity of estate and privity of contract remain between T1 and T2,
so only T1 is liable to L; T2 has privity of estate and privity of contract with T1 (not with
L) .
-LL and T1 still have privity of contract and privity of estate
-This is because the contract is between T1 and T2 and because T1 is T2’s LL
-Modern Rule from Nashville: Courts don't look at the language or technicalities of the
instrument as much as the intent of the parties in making the instrument. Intent is all that
matters in determining if it is a sublease or assignment.
-CL test…reversionary interest test
32
-The first (and most commonly used) approach is formalistic: an assignment
arise when the lessee transfers his entire interests under the lease – when, that is,
he transfers the right to possession for the duration of the term. If the lessee
transfers anything less than his entire interest (if two years remain on the lease
and the lessee transfers for a terms of one year) a sublease results. In the latter
case, the lessee is said to have retained a reversion the right to possession goes
back (reverts) to him at the end of the period designated in the transfer.
-An increasing number of jurisdictions now hold that an absolute bar to subleasing and
assignment is unreasonable and unenforceable. Moreover, these states tend to hold that
where L is given approval power over assignment and subleasing, permission may not be
withheld unless the L has a commercially reasonable basis for doing so. A commercially
reasonably basis for withholding approval of a proposed subtenant or assignee usually
would be any reasonable basis for thinking the proposed assignee or subtenant is not
financially responsible.
Landlord’s Remedies to Remove a Tenant in Possession who is in Default
-The common law allowed a landlord who was substantively entitled to recover possession to
do so by either of two procedures: 1) a self-help repossession, or 2) by filing an ejectment
action.
-often took too long and we no longer want to promote self-help
-modern… summary eviction statute
-First, they create the summary eviction procedure, intended to give the landlord a
quick way of recovering possession through judicial process. Quickness is achieved
by 1) accelerated timetables for pleading, 2) accelerated calendars for hearing such cases,
and 3) limiting the issues that can be litigated-especially the tenant’s defenses that can be
raised. The goal of making this accelerated summary eviction proceeding available
to landlords is to wean them away from using self help repossession.
-Second, such statutes typically limit the landlord’s right to use self-help
repossession. Most disallow use of forcible self-help.
-Where self-help repossessions are permitted, the issue may be whether the
creative means amount to the use of force, or of unreasonable force. Where selfhelp repossessions are not permitted, the question may be whether a termination
of services or removal of a door amounts to a self-help termination.
-when a LL has a right to recover possession
-CL…doctrine of independent covenants
-This means that neither party was allowed to withhold its own performance
(paying rent or providing services) of its own duties even if the other party was in
breach - unless the lease said otherwise.
-exceptions
-(1) lease expressly reserved the right to the L
-(2) forcible entry and detainer statutes (summary eviction statutes)
-(3) constructive eviction
-section below
-Landlord’s Options When a Tenant Abandons
33
-abandonment and mitigation cases often run together with holdover cases
-whether the LL has the right to holdover the T
-CL…three options
1. To accept the T’s "offer of surrender" that was considered to be implicit in the
tenant’s abandonment: This terminates the T's obligations under the lease.
However, the L can still recover rent that was due (or overdue) before the
termination. LL is free to relet the premises, but if s/he fails to get as good a rental
as the old tenant promised to pay, the old tenant is not liable for the difference,
unless the tenant had explicitly covenanted not to abandon.
2. To refuse the T’s surrender and to sue the tenant for the rent due, under the
lease. The LL was not obligated to mitigate damages at common law. The LL
could sue for the full rent due, but could only sue for sums of rent as they came
due. In other words, acceleration was not allowed, even if there was an
acceleration clause in the lease.
-two sub-options:
-with rent acceleration or without rent acceleration
-LL’s write into leases rent acceleration clauses that allow a
LL to refuse a surrender, not mitigate damages, and sue for
the full rent
3. The Landlord could agree to re-enter the premises and to relet them, but
without accepting the T's surrender. In this case the LL is viewed as reletting the
premises on behalf of the old tenant. Any rental revenue that the LL derives from
reletting will reduce the old tenant's obligation to the LL under the lease. The
existence of this option (#3), coupled with the immediately preceding one (#2)
meant that the LL could mitigate if s/he wished to when the tenant abandons, but
was not obligated to do so.
-if LL is only mitigating, rather than surrendering, than the T would be
liable for the difference (assuming that the rent had gone down)
-Sommer
- Court overruled old precedent and held that a LL does have an obligation to make
a reasonable effort to mitigate damages when a tenant abandons possession
-The court held that antiquated real property concepts which served as the basis
for the pre-existing rule, shall no longer be controlling where there is a claim for
damages under a residential lease. Such claims must be governed by more
modern notions of fairness and equity. A landlord has a duty to mitigate
damages where he seeks to recover rents due from a defaulting tenant.
-LL/T reform cases…moving from traditional principles to a new contract model
-The mitigation model is accepted for residential property in many Js,
but for commercial property the traditional rule of no duty to
mitigate exists in the majority of Js
-LL must use reasonable diligence in attempting to mitigate
-policy rooted in fairness and efficiency
34
RIGHTS AND REMEDIES ABOUT THE CONDITIONS OF THE PREMISES
173]
[150-
-Doctrine of independent covenants
-Promotes the use of the courts to settle LL/T disputes. One can sue for damages or
specific performance
-constructive eviction
-look in the section above
The Problem of Habitability and Maintenance
-Ts had limited rights at CL
-there were generally no implied warranties of habitability, or fitness for intended
use, and no implied covenant to repair and maintain. While this situation has
changed substantially with respect to residential leases in recent years in
most jurisdictions, it is unchanged with respect to non-residential leases in
most jurisdictions.
-habitability vs. fitness: We should use the term “warranty of habitability” to refer only to
leases of residential property, because habitability means suitability for residential purposes.
The analogous concept for leases of non-residential property is the “warranty of fitness for
intended use.” But as noted here, at common law, neither of these warranties was implied
into a lease.
-Exceptions: As noted, under the common law, there was generally no implied warranty of
habitability in residential leases and no implied warranty of fitness for intended use in
leases of non-residential premises. However, several exceptions were generally recognized:
-Latent defects: A landlord was generally held to warrant the absence of undisclosed
latent defects
-Short- term leases of furnished premises: Many courts did read an implied warranty of
habitability into short term leases of furnished premises.
-you cannot waive an implied or explicit warrant of habitability in a leaase
Tenants’ Duties regarding Maintenance: Not only did the landlord make no implied covenant
to repair and maintain, the duty to repair and maintain was placed on the tenant under the
common law rules.
-The basis for placing the obligation to repair on the tenant was the waste
doctrine that we covered when we talked about estates in land, especially the life
estate. Like the holder of a life estate, the holder of a tenancy has a present
interest, and the landlord has the future interest. Thus the tenant was required to
make sure that the use and condition of the premises was not altered during the
tenant’s occupancy.
-remember: the warrant of habitability does not apply here because the property in question is
not a residential lease
Constructive eviction
-a covenant of quiet enjoyment is implied in every lease and cannot be waived or
disclaimed
35
-The covenant of quiet enjoyment was breach when the landlord (or persons under his/her
control) took action that was either intended to drive the tenant out, or which had
the reasonably foreseeable effect of driving the tenant out
-also, inaction constituted constructive eviction when:
-inaction + affirmative duty to act (from lease or statute, but not from housing
code) + assimilated to quiet enjoyment + prompt abandonment by T
-usually required prompt abandonment by T
-usually employed as a defense, similar to AP
-sometimes used as a declaratory judgment
-only exception providing aid to T at CL
-provided means to break lease, not reduce or withhold rent
-Reform…three things done by Burt
-Allows T to sue LL
-Declaratory judgment
-Gives client a little extra time so that the T does not have to gamble
-At that time, if T guessed wrong, T is liable for the rent and the LL did not
have to mitigate at that itime
-Gives T time to abandon
-Provides that T has reasonable time to abandon after the suit is filed
-Provides a bit of a bright line rule for constructive eviction
-In cases of inaction, it defines more clearly “assimilated to quiet enjoyment”
-Burt test: Something the LL knew or should have to known to be
material to T’s enjoyment of the premises
-Note: you can read Burt more radically or not
-Reform…Reste
-Rule: any act or omission that challenges the use of the property constitutes a
constructive eviction
-Radical move: blending the first two categories of action that may constitute CE
into the one category of inaction that may constitute CE
-thus there would not have to be an independent duty when inaction is
being used to constitute CE
-However, most courts will look to Reste as having a holding related to latent defects or
the implied warranty of habitability rather than implying that action and inaction fall
under the same standard when evaluating CE
-Part of the reason of this is because the courts have found better way to
institute T’s rights
The Illegality Doctrine
-The illegality doctrine was another mechanism that was tried by tenants’ lawyers to acquire
leverage to force maintenance of the premises and establish broader rights and remedies against
the L. Review notes in the casebook carefully.
-a tenant under an illegal lease is a T at sufferance, and the LL is entitled to the reasonable rental
value of the premises, given their condition
-it does not apply if code violations develop after the making of the lease
-defects must exists at the moment of leasing
36
-Perhaps the most important contribution of the cases under the illegality doctrine cited in
the casebook is that they established a precedent for using the local housing code-where one
exists-as a benchmark for determining whether the condition of the premises are
acceptable in a dispute between landlord and tenant
-If you take into consideration that an illegal lease made it void (rather than voidable), the
illegality doctrine becomes a two edged sword in that LL or T could use it void the lease
IWH (post-Hilder)
-IWH covers all latent and patent defects in the essential facilities of the residential unit
(including common facilities)
-IWH cannot be waived by any written provision in the lease or by oral agreement.
-In determining whether there has been a breach of the IWH, the courts may first look to an
relevant local or municipal housing code; they may also make
-A substantial violation of an applicable hosing code shall constitute prima facie
evidence that there has been a breach of IWH
-In determining whether there has been a breach of IWH, courts could inquire whether the
claimed defect has an impact on the safety or health of the tenant
-In order to bring a cause of action for breach of IWH, the T must first show that he or she
notified the LL “of deficiency of defect not know to the LL and allowed a reasonable time
for its correction.”
-Because it is a contractual relationship between LL and T…
-The standard contract remedies of rescission, reformation and damages are
available to the T when suing for breach of IWH. The measure of damages shall be
the difference between the value of the dwelling as warranted and the value of the
dwelling as it exists in its defective condition. In determining the fair rental value of
the dwelling warranted, they may look to the agreed upon rent as evidence on this issue
-The court also found persuasive the reason that damages should be allowed for a T’s
discomfort and annoyance arising from the LL’s breach of IWH
-Another remedy available to the T when the has been a breach of IWH is to withhold
the payment of future rent
-T must show:
-(1) the LL had notice of the previously unknown defect and failed, within
a reasonable time, to repair it; and
-(2) the defect, affecting habitability, existed during the time for which
rent was withheld
-The T’s obligation to pay rent is contingent on the LL’s duty to provide and
maintain a habitable dwelling, it is no longer necessary for the T to first
abandon the premises; thus, the doctrine of CE is no longer a viable or
needed defense in action by the LL for unpaid rent
-of course, once the LL correct the defect, the T’s obligation to pay rent
becomes due again
-also, the court held that when the LL is notified of the defect but fails to repair it within a
reasonable amount of tie, and the T subsequently repairs the defect, the T may deduct the
expense of the repair from future rent…compensatory damages
37
-punitive damages can be awarded when the breach is so willful and wanton
or fraudulent as to make them necessary
-when a LL, after receiving notice of a defect, fails to repair the facility
that is essential to the health and safety of his or her T, an award of
punitive damages is proper
-T may withhold future rent, and may also seek damages in the amount of
rent previously paid
Rent abatement calculations
-FMV…fair market value
Formula 1: Abate (reduce) the rent by the amount of the leasehold rental rate minus FMV (as is).
This is mathematically and logically equivalent to abating the rental rate to FMV (as is) -this
approach can be very favorable to LLs
-pro-LL when unit was substandard at the start
-law and economics people would say that this is how it should be…people should get
what they paid for
-socially conscious people would think otherwise
Formula 2: Abate the rental rate by the amount of the FMV (as warranted) minus FMV (as is) this approach can be very favorable to tenants
-law and economics people say that this will reduce the supply of affordable housing
Formula 3: % abatement of actual rent: abate to: FMC (as is)/FMV (as warranted) times rental
rate
-this approach also favors T, but not as much as Formula 2
The Debate over the LL-T Reforms (1960s/1970s)
-Law and economics approach says that this extension of T’s rights will disincentivize LL’s to
keep up their property…often times LL’s will be so burdened as to abandon
Recap
 EXAM NOTE: no Js extends the IWH to commercial leases
 Right and Remedies
o Independent covenants
 Damages
 Assuming that you have a right
 Termination/rescission
 But only if its CE
 Injunction
 Housing code enforcement
 If possible
o Dependant covenants (we do we add)
38



Damages
Termination
 Without CE
 We have lowered the standard
 Injunction
 Rent abatement
 Rent withholding
 Repair and deduct
EXAM NOTE:
o Does J follow traditional or modern common law?
o Does T have a right?...remedies
o Do we look to the longer IC list or shorter DC list?
LAND USE CONTROLS AND THEIR LIMITS
COMMON LAW LAND USE CONTROLS: THE LAW OF NUISANCE
[172-188]
-An important question that courts ask in nuisance cases is who got their first? Who is
rocking the boat, trying to change the neighborhood?
-Nuisance
-An interference with use and enjoyment of land, in order to give rise to liability,
must be substantial; it must also be either intentional and unreasonable, OR the
unintentional result of negligent, reckless, or abnormally dangerous activity
-Note: intentional fault under nuisance just means that you intended to do the
activity, not intended to do the harm
-Unreasonableness tests
-(1) Jost…whenever you cause substantial harm to your neighbor
-Deciphering simply whether D is injuring P
-(2) R…Weigh the equities
-Aimed to figure out overall social benefits
-factors
 the extent and character of the harm to the plaintiff,
 the social value of the plaintiff’s use,
 the suitability of the plaintiff’s use to the particular location, and
 the burden on the plaintiff of avoiding the harm
against
 the social value of the defendant’s activity,
 the suitability of the defendant’s use to the particular location, and
 the burden on the defendant of preventing the harm.
-(3) Alternative R test
39
-D’s conduct is unreasonable when D comes out on the short end of the balance of
equities, OR if your are causing substantial harm to P and D can pay P without
knocking himself out of business
-Another consideration that is sometimes said to form part of the reasonableness inquiry
concerns the relative chronological priority of the initiation of the plaintiff’s use and the
defendant’s use.
-Trespass v. nuisance (similar, but different)
-Trespass…physical invasion of the land
-Nuisance…interference with the use and enjoyment of the land
Remedies in nuisance cases
-In thinking about liability and remedies in nuisance cases there are three variables that might be
considered important: fault, efficiency, and transactions costs
-Coase’s v. Rabin…remedies
-Professor Coase in effect says we should forget about fairness, and have the court enjoin
the result that produces the more efficient solution to each land use conflict.
-focus: efficiency and transaction costs
-Professor Rabin’s solution attempts to decide what the fairest outcome is, and still reach
the efficient result.
-focus: efficiency and fairness
-fairness assessment is based on first in time principle
-Professor Coase would undoubtedly point out that Rabin’s solution might be tripped up
by transactions costs, especially where there are multiple plaintiffs. Plaintiffs may not be
able to agree on paying the defendant, even when in would be in their collective best
interest to do so. So Rabin’s approach sometimes fails to achieve efficiency.
-Rabin would counter that Coase’s approach sometimes achieves efficiency at the
expense of fairness.
-The difference between a private nuisance and a public nuisance is generally one of
degree. A private nuisance is on affecting a single individual or a definite small number of
persons in the enjoyment of private rights not common to the public, while a public nuisance is
one affecting the rights enjoyed by citizens as a part of the public. To constitute a public
nuisance, the nuisance must affect a considerable number of people or an entire community or
neighborhood.
-Then, the difference between public and private nuisance lies in the interests
protected: public nuisance protects public rights; private nuisances protects rights
in the use and enjoyment of land
-In private nuisance cases, only owners of the land can bring suit
-In public nuisance cases, any citizen suffering special (greater) damages can
bring suit
-“coming to the nuisance”
-though there are cases to the contrary, the prevailing view is that moving into the
vicinity of a nuisance does not completely bar a suit for damages or injunctive relief, but
it is a “relevant factor” (much like when an area is zoned for the activity in question or
has come to be commonly used for such an activity).
40
-A conventional view of long standing held that nuisance claims could be resolved in one of
three ways: abate the activity in question by granting the P injunctive relief (Morgan;
Estancias); let the activity continue if the D pays damages (Boomer); let the activity
continue by denying all relief (the converse of the first alternative); abate the activity if the
P pays damages (Spur…converse of the second alternative).
-note: granting an injunction may simply provide a means for private bargaining between the
parties
COMMON LAW LAND USE CONTROLS: EASEMENTS
[188-217]
-an easement…an interest in land, not held at the sufferance of the grantor, that does not
give a general right to possession, but which confers on the easement holder the right to use
property that is possessed by someone else for a specified purpose, or the right to restrain
the use of the possessor in some respect.
-not freely revocable
-either permanent or for a term of years, etc.
-owner of the property is passing one of the bundle of sticks to another person
-use is for a specified purpose
-O has the right to use the property granted as an easement so long as he does not
interfere with the specific purpose granted
-notes on easements
-Every easement has a servient estate: the property that is subject to, or burdened by, the
easement
-the burden of an easement is always tied to a servient estate
-the burden of any easement transfers along with a servient estate
-Easements that we call appurtenant also have a dominant estate: the property whose
owner gets the benefit of the easement. Thus an appurtenant easement is one whose
benefit is tied to the ownership of a particular dominant estate.
-the benefit of an appurtenant easement will transfer with the dominant estate
-An easement in gross does not have a dominant estate; rather the benefit of such an
easement is personal to the beneficiary of the easement.
-the benefit of an easement in gross usually will not transfer
-The burden of any easement (whether appurtenant or in gross) normally transfers
along with ownership of the servient estate.
-The benefit of an appurtenant easement transfers along with the ownership of the
dominant estate.
Types of easements
-An easement must be either affirmative or negative. The difference is explained next:
-affirmative easement: An affirmative easement is one for which the dominant party has
the right to make a specified use of the servient estate (or -less commonly- a right to use
the dominant estate in a manner that would otherwise be a nuisance to servient estate)
-negative easement: A negative easement is one for which the dominant party has the
right to restrain or restrict the burdened party's use of the servient estate in some respect
-An easement must also be either appurtenant or in gross. The difference is explained next:
41
-appurtenant easement: An appurtenant easement is one that complements a particular
dominant estate; the easement is wedded to the dominant estate, and is transferred along
with it
-easement in gross: An easement in gross is one the benefit of which is not tied to a
particular dominant estate. Traditionally the benefit of an easement in gross was not
transferrable at all; today transfer is sometimes allowed
-Methods (7) of creation of easements
(1) an express (written) grant -which is subject to the statute of frauds. An easement may
either be expressly granted by itself or together with the grant of some other interest (usually a
fee simple). For instance, A might sell B in fee simple the back half of a larger lot that A owned
in fee simple, including in the grant an easement to use a driveway across the front half of the
property, the fee of which A retains.
-can be an easement just of itself or it can be an easement that comes with a fee
(2) an express (written) reservation: If A sells B the front half of a larger lot that A had owned,
thus keeping the back half for herself, A would normally want to expressly reserve (that is
retain in the deed) the right to use the driveway across the front half in order to access the back
half. Note that common law courts often conceptualized a reservation as two transfers folded
into one document: first A grants B the front half of the lot and then B grants back to A the
easement to use the driveway.
-Some of the practical consequences of creating an easement by reservation are:
-First, easements by reservation are subject to the statute of frauds, just like easements
by grant. But the statute of frauds requires a deed to be signed by the grantor. If one
considers the reservation of an easement to consist of these two steps, in this example B
(as well as A) must sign the deed because A is granting B the fee, and then B is
granting A the easement.
-Generally speaking, English courts have accepted this rationale and require B (as well as
A) to sign the deed to make an easement by reservation valid under the statute of frauds,
but most American courts have not accepted this doctrine.
-Second, in construing (the scope of) an ambiguous conveyance/deed, the
constructional preference is said to normally favor the grantee. But-I hope you can
see this coming now- if an easement by reservation consists of a grant of a fee by A to B,
and the grant of an easement by B back to A, which party, A or B, is considered “the
grantee” for this purpose when there is a dispute about an ambiguous easement?
Arguably A is the grantee of the easement. Most states appear to reject this reasoning.
However, California appears to accept this reasoning.
(3) an express (written) exception: A third way that you could create an easement was by
“express exception.” At common law A could grant B the front half of his property, excepting
the use of a driveway crossing the front half so as to get to the back half-which A retained.
Sometimes when one carves out an exception from a grant, that means the grantor, A, retains the
fee of the driveway, but in other instances it is held that, A is just retaining an easement.
42
-if you do not honor the additional rules (double signing, structure of the agreement)
related with reservations, then reservations and exceptions are in essence the same
-When A retains an easement by exception, this looks almost like an easement by
reservation.
-Perhaps the only difference was that the common law did not think of this transaction as
a grant from A to B followed instantly by a grant of the easement by B back to A. Rather
the common law envisioned that A kept the easement all along.
-What difference, if any, does it make whether an easement is created by exception as
opposed to a reservation? Quite possibly it makes no difference at all today. But the
strange rules that apply to easements by reservation (i.e., that A must sign the deed; that
the constructional preference favors A) discussed above, that some jurisdictions
recognized, did not apply to easements created by exception.
-In order to create an easement by exception instead of by reservation, the common law
said there had to be a “pre-existing quasi easement.”
-So, you ask, quite understandably, what in the world is a “pre-existing quasi-easement”?
Believe it or not, this is worth learning.
-A pre-existing quasi-easement is something that would be an easement, except
for the fact that the same person owns the dominant and the servient rights. Say
A owns a large tract of land, which has road access on the north side, only. While
A owns the whole large tract, A uses a certain driveway to access the south half of
the property from the road on the north side. So, the driveway is in place even
before the property is split up for sale. Then, if A sells the north half to B, and
keeps the south half, A can retain an easement in the driveway by exceptionbecause there was a pre-existing quasi-easement.
-On the other hand, if the driveway was not in existence before A sold half
the land to B, or if A had not been in the practice of using the driveway to
access the back half of the land, then A could reserve an easement over
the front half of the property, but could not create the easement by
exception.
-If we no longer apply special rules to easements by reservation-and many states no
longer do-there would appear to be NO reason to continue to observe a distinction
between easements created by reservation and easements created by exception.
That said, some states may nonetheless make this distinction.
-note: easements must be recorded
(4) Easement by estoppel
-oral grant/license + estoppel
(5) Easements by prescription
(6) Easements by Implication from Necessity
1.
easements by grant implied from necessity
2.
easements by reservation implied from necessity
(7) Easements by Implication from Prior Use
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3.
4.
easements by grant implied from prior use
easements by reservation implied from prior use.
Licenses and Easements; Easements by Estoppel
-Easements normally are perpetual. However, they can also be made defeasible, or granted for
life, or for a term of years.
-A license is a like an easement, but instead of having some assured duration, is revocable at the
will of the grantor. A license can be given orally or in writing.
-exceptions when a license isn’t revocable
-(1) when a license is coupled with an interest
-(2) a license that becomes irrevocable under the rules of estoppel
-A license can become irrevocable if a person puts work into a
property or relies on the use of the property for sufficient time
with the servient estate's consent.
-Oral conveyances become enforceable due to detrimental reliance
-a license that cannot be revoked is treated as an easement in R
-The doctrine of estoppel may also be used to make a valid and enforceable easement in a
situation where there is an oral grant the language of which would create an easement, but for the
fact that there is no writing satisfying the statute of frauds. In these cases estoppel merely
makes up for the lack of a writing. It is probably fair to say that in many cases of easements
created by estoppel, it is hard to be sure whether the parties intended to create an oral easement
that would be irrevocable except for the failure to comply with the statute of frauds, or whether
they intended a revocable license.
Easements created by prescription
 Creating an easement by prescription is a variation of adverse possession
o Prescription has the same 5 qualitative elements and the same one quantitative
element as AP
o The party that is subject to the easement would have the same amount of time to bring
a trespass or ejectment action
 Key point: same amount of time for AP
o how do the doctrines differ at all?
 Actual, exclusive, continuous, hostile, open and notorious
 Is the defense is prescription, the party does not have to show that they
possessed the land like an owner of the land, but rather as if they were a user
of the land
 If owner keeps coming onto the property, then it may not be
continuous enough for AP, whereas someone using the property as an
easement may remain continuous enough
o We have in effect lowered the bar
 The bar is also lowered for the exclusive element
 Hostility is presumed in AP and it is not presumed in easements
 Open and notorious
44

Hostility and open/notorious are harder to fulfill in AP than in easements,
and exclusive and continuous are easier to fulfill in easements than in AP
 Prescriptive easements come into to play when it is a use for a
particular purpose
-From an advocacy point of view, whenever you spot a potential case of adverse possession,
you should consider the alternative possibility that the facts establish a prescriptive
easement if they don’t establish adverse possession.
-The time period for prescription and adverse possession should always be the same.
Why? Because the time period for either one is simply the period of the statute of
limitations on the owner’s claim for ejectment or trespass (which will be one and the
same.) Adverse possession and prescription are alternative defenses that a
possessor/user could raise where the owner brings an ejectment or trespass claim.---it is pretty common for those claiming an easement to assert a variety of alternative
theories as to how the easement could have come into being
Easements by Implication from Necessity and Easements by Implication from Prior Use
1.
2.
3.
4.




easements by grant implied from necessity
easements by reservation implied from necessity
easements by grant implied from prior use
easements by reservation implied from prior use.
Implied easements doctrines are safety doctrines that come into play when people do not do
what they are supposed to do
Drawing on assignment 36 sheet
These doctrines are meant to be implied-in-fact doctrines
Its not about whether one needs the easement now, it is about the need for the easement
at the moment of severance
1. Easements by grant implied from necessity
(1) the dominant and servient properties were formerly one property owned by the same
person
(2) the two properties were subsequently split into separate ownership
(3) the act of splitting the properties is what created the need for the dominant property to
have an easement over the servient property
(4) the dominant property has a strong need for the easement because it lacks other access to the
property.
2. Easements by reservation implied from necessity
(1) the dominant and servient properties were formerly one property owned by the same person
(2) the two properties were subsequently split into separate ownership
(3) the act of splitting the properties is what created the need for the dominant property to have
an easement over the servient property
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(4) the dominant property has a very strong need for the easement because it lacks other access
to the property.
-“strict necessity”
-An easement of necessity endures only so long as it is necessary
3. Easements by grant implied from prior use
-the test of easements implied from prior use is essentially the same as the test for easements
implied from necessity. But we add one element: the pre-existing quasi-easement, and we
soften one element: the showing of necessity required.
-Thus the elements for an implied grant of an easement from prior use are:
(1) the dominant and servient properties were formerly one property owned by the same person
(2) there was a pre-existing quasi-easement
-evidence of intent
-“easement” was in use prior to the spitting of the land
-can’t be technically called an “easement” because the servient and dominant
properties were one
(3) the two properties were subsequently split into separate ownership
(4) the act of splitting the properties is what created the need for the dominant property to have
an easement over the servient property
(5) it will be significantly more advantageous for the dominant property to have the use of an
easement over the servient property because other access to the dominant property is excessively
expensive or inconvenient.
-strong preference rather than strict necessity
-what was the person who bought the land with the easement thinking
-did they factor the easement into their purchase, then they probably have
a good case
4. Easements by reservation implied from prior use
(1) the dominant and servient properties were formerly one property owned by the same person
(2) there was a pre-existing quasi-easement
(3) the two properties were subsequently split into separate ownership
(4) the act of splitting the properties is what created the need for the dominant property to have
an easement over the servient property
(5) it will be very significantly more advantageous for the dominant property to have the use of
an easement over the servient property because other access to the dominant property is
excessively expensive or inconvenient.

Sliding scale
o Implied reservation with no pre-existing use…hardest argument
o Implied grant with a pre-existing use…easiest argument
-note: pretty much all implied easements are appurtenant
46
-for an easement to be implied, the necessity of the easement must be great and this
generally comes from the fact that the estates are adjacent
-note: if arguing for an implied easement, might as well thrown in a claim for prescriptive
easement
Transfer of Easements
-The benefit of an appurtenant easement transfers along with a transfer of the dominant
estate.
-you can split up the dominant estate, but not too much because it would otherwise
exceed the intended use of the easement
-There is no per se rule forbidding such subdivision, but the rule is that the subdivision
cannot materially increase the burden that the easement places on the servient estate.
Such an increased burden is known as “surcharging” the servient estate.
-this can be exempted if the owner gives his express permission to transfer
-At common law, the benefit of an easement in gross could not be transferred. Some
jurisdictions held that an attempt to make such a transfer destroyed the easement.
-Most jurisdictions today allow transfer of the benefit of the easement in gross, but recognize a
class of easements in gross that are not transferrable (personal easements in gross) and a class
that is transferrable (commercial easements in gross). Most probably have a presumption that
the easement in gross is commercial and thus transferrable.
Scope of the easement
-Most disputes about the scope of an easement are resolved by construing the language that
created the easement. (Note that implied easements --for which there is no such language-tend to be narrowly construed.)
 Scope of easement cases
o Qualitative
 You are using this easement for an unintended purpose
 Presault
o Quantitative
 You have divided the easement up to much
 The easement is being used too intensively
 Qualitative and quantitative easements usually concern issues with
regards to reading the language of the scope of the grant
o Geographic
 You are using this easement to benefit the wrong property
 Brown
-The scope of an easement may be...adjusted in the face of changing time (tempora
motondo) to serve the original purpose, so long as the change is consistent with the terms of
the original grant (can't convey more interest in property than you have
Termination of Easements
$
Release: requires an express written surrender of the easement by the dominant party;
47
this is essentially the dominant party “giving” the easement back to the servient party in
whose hands it “merges” back into the fee simple that the servient party holds
$
Expiration: If an easement is created for a finite time period or for the life of a person,
it terminates automatically at the end of that time period.
$
If an easement is made defeasible (like the easement in Willard, for instance) it
expires when the stated condition is violated.
$
$
Note however, that courts are reluctant to hold that a perpetual and
nondefeasible easement is terminated just because the primary
motivation for creating the easement seems obsolete.
Thus one sometimes has to distinguish between cases, like Willard, in
which the easement is expressly made defeasible (it is granted “to run with
the land only so long as the property for whose benefit the easement is
given is used for church purposes” (p. 672)) and cases like First National
Bank v. Raphael-the note case mentioned directly above-in which the
easement was not expressly made defeasible but it apparently had a
limited purpose. Another lesson to learn from this is that it usually is a
bad idea to state the purpose of granting an easement or another
interest in property unless one actually wants to make the granted
interest defeasible or create some kind of covenant restricting the use
of the property. More on this point in connection with the Preseault case.
$
Merger: If the same party comes to own the servient and dominant estate, the easement
merges out of existence
$
Condemnation/Exercise of the power of Eminent Domain by a governmental entity:
The exercise of the power of eminent domain by a governmental entity to take the
servient estate will also destroy the easement if the government’s use of the servient
estate is inconsistent with the use of the easement by the easement owner. If this
happens, the owner of the easement is entitled to just compensation for the taking of
his/her easement by the government entity.
$
Estoppel: Where the servient owner takes action inconsistent with the continued
existence of the easement while acting in reasonable reliance on a statement by the
dominant party encouraging or allowing that action B the easement is lost. For example:
the easement holder says “I won’t be needing your driveway anymore, I’ve built my own
driveway to reach the public road.” If the servient owner then starts to build a swimming
pool that requires elimination of the driveway, the easement over the driveway is
terminated. It appears that these are cases in which there would be termination by
release, except that the purported release is oral and thus not enforceable under the statute
of frauds. The detrimental reliance by the servient party makes an “oral release”
enforceable, however.
48
$
Prescription: No matter how the easement was originally created (whether by
prescription or otherwise-that is, by any other method), if the servient owner prevents
usage of the easement for the period of the statute of limitations the easement is
terminated by prescription. Note: the period of the statute of limitations for this purpose
(only!) usually will be different than the time period that applies to create an easement by
prescription (which is the same as the period for adverse possession). The reason is that
the relevant statute of limitations in the present situation is the statute of limitations on a
claim by an easement holder to enjoin interference with the easement. That is usually
shorter than the statute of limitations on an ejectment or trespass action by the owner of
a fee estate. Bottom line: the period of time for prescription to create an easement is
typically longer than the period of time for prescription to terminate an easement.
-losing an easement is a lesser interest than an ejectment or trespass action, thus
the shorter SOL
$
Abandonment: Termination by abandonment is discussed in Preseault. As indicated
there, mere non-use does not usually establish abandonment. Usually some act that
indicates an intent to abandon is required. Note that this means that an oral statement of
release-which would not be enforceable because of the statute of frauds - becomes
enforceable when there is an action by the dominant party indicating an intent to
abandon.
Negative easements, including Conservation Easements
-A negative easement gives the dominant owner the right to preclude the servient owner from
acting in a particular manner on his/her own land
-what really distinguishes a negative easement is that the dominant party has no right to
use the servient estate; s/he has only the right to preclude the servient owner from using
the land in a certain respect.
-English courts recognized light, air, and support negative easements
-conservation easement…this is an easement in gross that can be given to a public body or
a private conservation organization that bars development of the servient estate except as
specified in the granting deed.
-because of doubts about the validity and transferability of negative easements in
gross at CL, statutes have been enacted in almost all states authorizing
conservation easements
-CEs are perpetual in duration, are transferable, and can be in gross
-i.e. novel easements in some Js in US
-solar easements
-conservation easements
-agriculture use easements
-there are significant exceptions to the fact that you cannot create new
negative easements, but they are sanctioned by legislation
-Remember that in the United States almost all courts hold that a negative easement cannot
arise by prescription.
-solutions: zoning, nuisance, covenants/equitable servitudes
49
COMMON LAW LAND USE CONTROLS: REAL COVENANT AND
EQUITABLE SERVITUDES RUNNING WITH THE LAND
[217-246]
-Today, in most states, the only difference between a real covenant running with the land
and an equitable servitude is the remedy sought
-If the plaintiff seeks damages (legal relief) then the plaintiff must show that the “law
rules” or “legal rules” for covenants running with the land have been satisfied.
-If the plaintiff seeks injunctive relief, then the plaintiff must show that the “equity rules”
for equitable servitudes have been satisfied.
-Note that, in this context, the opposite of “legal” is “equity” (not “illegal”)
-almost all modern litigation seeks equitable relief
-Diagramming/Diagnosing Cases
-Assn. 39/page 743
-Your objective is to determine who is trying to enforce against whom.
-if there is a promise/reciprocal promise situation, the promisor/promisee
are determined by who is trying to enforce against whom
-also, we must consider what damages they want
-this will determine if we are going the law or equity route
-lastly, we must consider who are we dealing with (original promisor, etc.)
-you often will have to do four distinct analyses: to determine 1) whether the burden
runs and 2) whether the benefit runs under the law rules for a damage claim; then to
determine 3) whether the burden runs and 4) whether the benefit runs under the equity
rules for injunctive relief.
-Terminology
-If the burden and/or benefit runs (whichever is involved in a particular case) under the
law rules, we say that there is a valid and enforceable real covenant or covenant
running with the land.
-If the burden and/or benefit runs (whichever is involved in a particular case) under the
equity rules, we say that there is a valid and enforceable equitable servitude.
-Thus the very same promise may very well create both a real covenant and an
equitable servitude, and will do so if the promise runs with the land in both law and
equity.
-Accordingly, it is better practice to say that a promise is “enforceable as a real
covenant” or “enforceable as an equitable servitude” or both-instead of saying that
the promise IS one or the other or both.
-Requirements for a burden, or a benefit, to run with the land in an action for damages- in
other words, at law.
(1) the promise (between original promisor and original promisee) must be in writing
-general
(2) the intent of the original parties to the covenant must be that the burden or benefit (or
both) of the promise (whichever the case involves) run with the land
-side-specific
(3) the burden, or benefit (or both) of the promise (whichever the case involves) must
50
“touch and concern” the land-must affect the use or value of the particular land that is
burdened or benefitted
-side-specific
(4) there must be horizontal privity between the original promisor and promisee under
one of four tests that different jurisdictions apply (see below)
-general
51
(5) there must be vertical privity between the original promisor and the successor,
between the original promisee and the successor, or both (whichever the fact
pattern involves)
-side-specific
(6) there must have been notice at the time of purchase to the successor on the
burden side for the burden to run;
-a successor on the burden side is bound even if s/he had no notice if the
successor took by gift or devise or inheritance instead of purchase;
-notice to the successor is not required on the benefit side for the benefit to
run with the land
Notes on these elements
-Intent
-The intent for the burden to run is very commonly explicitly stated (e.g., “this
covenant shall bind successors, heirs and assigns”).
-The intent for the benefit to run is too often left unclear. To make this intent
explicit, the deed should state something like “this covenant shall inure to the
benefit of successors, heirs and assigns.”
-Touch and Concern
-the basic idea is that the burden, or benefit (whichever is at issue) of the promise
must affect the use or the value of the land . On the burden side we are looking
for promises that limit the use of the land; on the benefit side, we are looking for
promises that enhance the value or enjoyment of the land.
-Horizontal Privity
-The requirement of "horizontal privity" governs the relationship that is required
to exist between the original promisor and the original promisee in order to give
rise to a real covenant that can run with the land. The whole idea of any
horizontal privity requirement is that the original promisor and promisee have to
have some relationship in addition to that of promisor/promisee in order for them
to have the capacity to enter into an agreement affecting their respective property
rights that may run with the land.
-Unlike all of the other elements, the horizontal privity requirement is not
side-specific. Instead it governs the relationship that must exist between the
original promisor or promisee.
-Historically, four different versions of this requirement have been employed
at different places and times. They are listed in the order running from most
restrictive to least restrictive. Each successive test broadens the class of
relationships that will be held to constitute horizontal privity:
(1) The English test: This is the oldest and most restrictive version of the
horizontal privity requirement. It dictates that horizontal privity exists
only when the promisor and promisee are respectively landlord and tenant
or reversioner and holder of a life estate. [Note that in these cases the
promisor and promisee simultaneously own interests in the same property;
one holds a present interest and the other a future interest.]
52
(2) The Massachusetts test: This test is satisfied whenever the English
test is satisfied but it also is satisfied whenever one of the original parties
holds an easement in the other's property. [Note that this is another
instance in which the promisor and promisee simultaneously own interests
in the same property.]
(3) The Successive Interests test/First Restatement of Property test:
This test is satisfied whenever the Massachusetts test (or English test) is
satisfied and in addition it is satisfied whenever the promisor and
promisee are grantee and grantor on a conveyance of property that
accompanies the creation of the promise. [Note that this test is satisfied if
the promisor and promisee are the successive owners of interests in the
same property, as well as when they are simultaneous owners.]
(4) The abolitionist position: Under this test no special relationship other
than that of promisor and promisee is needed to give rise to a covenant
that can run with the land. (Of course, under this approach, if any of the
first three tests is satisfied, the covenant is permitted to run with the land,
because some kind of horizontal privity is present. But this test says that
even if there is no relationship between the promisor and promisee other
than the promise itself, the covenant can still run with the land because
horizontal privity is not required under this approach.)
-The successive interests test is probably the most commonly applied
test. But the Third Restatement adopts the abolitionist position: that
horizontal privity should not be required, so this may be the trend.
Most importantly, you will see that horizontal privity is not required
for a benefit or burden to run under the equity rules.
-Vertical Privity
-Generally, the traditional understanding was that for there to be vertical
privity, the successor had to have the same estate, or a closely related one
(“an estate of the same potential duration”) as the original party to whom
s/he is the successor.
-someone who is merely renting or has a short term interest in the
property, does not suffer the burden or get the benefit associated with the
land
-Some courts use a more relaxed test of vertical privity on the benefit side
-Under this approach, as long as D gets some interest in the originally
benefitted land that B held, D is in vertical privity.
-note: an adverse possessor is not in vertical privity with the original promisor
(therefore, a burden will not run against an adverse possessor)
-AP does not begin to run against either a real covenant or an equitable
servitude until the promise (between the original promisee and the original
promisor) is breached
-Notice
53
-Note that notice to the successor on the benefit side is not required for the benefit
to run.
-Traditionally, notice was not required for a burden to run at law-this element was
introduced by the equity courts. See Tulk v. Moxhay
-Because states all have recording acts, and because a covenant is an interest in
land that is required to be recorded to be valid against a subsequent purchaser
under most recording acts, most states hold that the burden does not run against a
subsequent purchaser, unless the purchaser has either record or non-record notice
of the existence of the promise (at the time of purchase). But a donee, devisee, or
heir takes subject to the covenant, even without notice.
-example: Assn. 40 (Tulk)
-Summary of the equity rules
(1) the promise must be in writing
(2) the original parties must intend the burden or benefit (or both-whichever is involved)
to run with the land
-A benefit can be subdivided so long as each subdivision is touched and concerned
(with regards to the original land’s benefit and burden)
(3) the burden or benefit or both must touch and concern the land on the respective side
(4) the successor must be in vertical privity with his/her respective predecessor
under a relaxed test (The successor need only own some interest in the originally
burdened or benefited land.) (Your casebook says that there is NO vertical privity
requirement (p. 748); but don’t take this literally. In fact, the casebook says all
subsequent owners and possessors on the burden side are bound—but that IS a vertical
privity requirement, although it is not as strict as the legal requirement for vertical
privity.)
(5) horizontal privity between the original promisor and promisee is not required;
thus the original parties need not have had any special relationship above and
beyond being promisor and promisee
(6) for the burden to run against a successor who is a purchaser, the purchaser must
purchase with actual or constructive notice of the promise. There is no notice
requirement on the benefit side.
-Note: the existence of a common plan of restrictions may provide the required
notice for the burden to run, and may also substitute for a writing in the burdened
party’s chain of title.
-There are very few damages cases today because you can always get the injunction
and then negotiate for money
54
Common plans of restriction
-common plan of restrictions…situations in which the same restrictions are put on each
lot of a development
-uses (listed below and on Assn. 40 back page)
1. everyone who is subject to the restrictions should be able to enforce against
all the other people who are subject to the same restrictions
2. the burden was placed on a lot where the restriction is not in the chain of
title
3. using the common plan as evidence that the benefit was intended to run
backwards
-implied reciprocal servitude
-Most of the cases in which courts find a covenant does not touch or concerns land
involved monetary obligations and tying arrangements. Although the results are
not always predictable, almost all cases approve monetary obligations in a common
interest community.
-Special defenses
-(1) Circumstances are sufficiently changed so that the Ps no longer have the
right to enforce the covenant
-Most Js says that not only must the change be extreme, but also that the
restricted area has already been changed to some degree
-the original purpose must be frustrated
-(2) Abandonment argument
-In order for community violations of a restrictive covenant to constitute
abandonment, they must be so GENERAL as to frustrate the original
purpose of the agreement. The court found that the violation of the ONE
house was too sporadic and isolated to constitute general consent.
-these kinds of restrictions tend to have a perpetual life time
-does not violate RAP because RAP is concerned with future owners, and
that is not at issue here
-in a sense, these kinds of restriction substitute for future interests
-in this way, we see that if you use proper legal construction, you cannot create a
perpetual restrictions
-In common interest communities, any requirement of horizontal or vertical privity is met
because the original purchasers are all in privity with the developer and subsequent
purchasers are in privity with the original purchasers. Any requirement that a covenant
touch and concern the land is usually satisfied. Negative covenants restricting use are
almost always held to touch and concern, as are affirmative covenants to pay dues to a
homeowners association. But, because the rules of a common interest community and
the powers of the homeowners association can adversely affect the interests of individual
members, courts have been called upon to determine whether individual members shall
be protected from imposition by those who control the association. The emerging issue is
by what standard the common interest communities’ rules and regulations should be
judged.
-restrictions passed under the common interest’s original declaration are given
more deference than those passed subsequently
55
-Restrictive covenants enforced by the state are discriminatory and violate the 14th
Amendment, thus they should be overturned
(Shelly)
LEGISLATIVE/ADMINISTRATIVE LAND USE CONTROLS: THE LAW OF
ZONING
[246-259]
Key provisions of the Standard State Zoning Enabling Act

Section 1, the “General Purposes” for zoning: to protect the public health, safety,
morals, general welfare. Note what is missing from this list that you might
have expected to find here: aesthetics. As we will see in Asst. #44, whether
zoning may effectuate purely aesthetic objectives is controversial.
-these limitations are reflective of the constitutional limitations under the
substantive due process clause
$
The types of regulation permitted include regulation of lot size, setbacks, height,
use, and density.

Section 2, establishes a norm of uniform districts –with separate district for
different types of functions. Thus zoning is implemented by placing these
districts onto a map.
-often times there are issues at the boundaries
-there is a norm of uniformity and a norm of separation
On the other hand, this norm of “segregation” of uses is undermined by what is
known as “cumulative” zoning—the common practice of allowing “higher
uses”—such as residential use—in “lower” use districts, such as industrial use
districts. (Such mixing of uses is not allowed in higher districts—no factories in
residential areas.)
-you can put residential uses in commercial and industrial zones
-residential zones are the only pure zones
-you can out commercial uses in industrial zones
-you can only put industrial uses in industrial zones

Section 3: Restates in detail the purposes of zoning: again note that aesthetic
objectives are not permitted purposes. Appears to allow “fiscal zoning”—zoning
designed to maximize the property taxes that the municipality takes in.

Section 5: Creates a mechanism for Amendments to allow some flexibility in the
operation of the zoning system.

Section 7: Creates a Board of Zoning Adjustment, which hears appeals and also
grants variances to provide additional flexibility where strict application would
produce hardship
-when you get turned down by the zoning board for a variance, then you
go to court
56
-Elements of a constitutional ordinance: (Euclid)
-(1) rational relationship with the municipality’s public health, safety, morals,
general welfare.
-(2) serves as a reasonable means of achieving this measures
-The standard of a review for a zoning ordinance is deferential in that the
government gets the benefit of doubt
-Ordinance must appear clearly arbitrary, and unreasonable to be struck
down
-There must not be any rational relationship between the
zoning ordinance and the municipality’s public health, safety,
morals, general welfare.
-There is a very strong presumption of municipal autonomy, but in some
cases a particular municipality is doing something so at odds with the
public interest that the court will strike it down
-zoning ordinances provide for restriction where nuisance law and restrictive
convenants often proved unenforceable
-Perhaps a majority of jurisdictions today accept aesthetics as a legitimate police
power goal in itself. But a good number still waffle on the issue, and a few are
opposed to aesthetic regulation.
-aesthetics + property value = permissible regulation
-Mt. Laurel
-zoning that was formerly upheld as a reasonable means to achieve permissible
(Local) ends is now subject to invalidation because it directly frustrates what
would be in the interest of the broader community. (Changes the frame of
reference!)
-So the court holds that once a developing community has been shown not to have
accommodated a range of housing types AND THAT THE MUNICIPALITY’S
ZONING HAS ERECTED BARRIERS TO INCLUSION OF ALL
HOUSING TYPES AND SOCIAL GROUPS, IT IS PRESUMPTIVELY
UNCONSTITUTIONAL
-Role of fiscal considerations/motivations: essentially the court says that
while it had previously upheld fiscally motivated zoning, and it is still a
legitimate objective in zoning, it cannot justify exclusionary zoning (comes
close to rejecting fiscal motivation as a permissible kind of zoning)
-remedies
-the first decision mostly mandated elimination of barriers
-the second decision translates this into a mandate to create low and
moderate income housing
-this approach has not really caught on in other states
57
TAKINGS AND PUBLIC USE
EMINENT DOMAIN AND THE PUBLIC USE LIMITATION
[260-266]
Kelo
 Only a “public purpose” is required
o Stevens began by saying that the requirement of public use did not mean that
the property had to be made open to, or used by, the public at large. All
that was required was that there be a “public purpose” behind the taking.
Furthermore, the concept of “public purpose” was to be broadly defined,
reflecting the Court’s “longstanding policy of deference to legislative
judgments in this field.”
 Application
o Stevens then quickly concluded that New London’s plan here met the
requirment of public purpose. The city’s economic development plan was
“carefully formulated,” and “comprehensive in character.” The city believed
that the plan would create new jobs and increased tax revenue.
Therefore, Stevens concluded, it easily met the requirement that it serve a
public purpose.
 For all practical purposes, the public use provision no longer meaningfully binds
government.)
o “public use” is redefined as “public purpose”
PHYSICAL OCCUPATION TAKINGS AND REGULATORY TAKINGS
288]
[266-
Inverse Condemnation
-In one category of cases, it was recognized fairly early on that, when the government
seizes or occupies an owner’s property, the owner may bring a claim against the
government asserting the right to be paid just compensation. Such cases are called
“inverse condemnation” cases. Inverse, meaning backwards, refers to the fact that
the owner is suing the government. By contrast in a classic eminent domain case,
the government sues the owner -or more precisely, the land itself - in an in rem
proceeding.
-This first category of inverse condemnation cases has not provoked much
controversy. For in these cases the government has essentially grabbed your
property, without having used the proper legal procedures. So the only thing
novel about “inverse condemnation” cases in this first kind is the procedure:
the owner sues the government.
-You will note, however, that one of the two per se rules, the one that comes from
Loretto v. Teleprompter Manhattan CATV Corp., deals with a category of
cases that might well be regarded as a halfway point between classic inverse
condemnation cases and typical regulatory takings cases.
-One other basic point should be mentioned in this introduction. The Fifth
Amendment takings clause is directly applicable only to the federal government.
58
But the Fourteenth Amendment, which applies to the states (and thus to local
governments which are regarded as parts of the states) provides: “Nor shall any
State deprive any person of property without due process of law.” Like many other
protections in the Bill of Rights amendments to the Constitution, the requirement of
just compensation for governmental takings has been applied to the States through
the Fourteenth Amendment. Chicago, Burlington & Quincy Ry. v. Chicago (1897)
Loretto
 Permanent occupations of land by such installations as telegraph and telephone
lines, rails, and underground pipes or wires are takings, even if they occupy only
relatively insubstantial amounts of space and do not seriously interfere with the
landowner's use of the rest of his land.
o Per Se bright line rule: Any permanent physical occupation by the
government is always a taking no matter how small
 Does not apply to temporary physical occupations
 If Loretto added anything new, it is the distinction between
permanent occupations, as to which the finding of a taking
necessarily follows, and the temporary invasions that the
Court says calls for a balancing process
o Balancing process…the severity of the interference
with the owner’s use as opposed to the countervailing
governmental interests
o The Court feels this rule is right because it offends the right to exclude
 It aides in avoiding line-drawing problems
o It doesn’t matter if the government has a good reason
 In this respect, the government is treated like a trespassing neighbor
Hadacheck
 A second categorical rule
o Recall the categorical (or per se) rule of Loretto: If government action is
seen to work a permanent physical occupation, then a taking ALWAYS
follows (nuisance controls aside). The Hadacheck line of cases stands for
another categorical rule, one that cuts in the opposite direction and holds
that nuisance control regulations are NEVER takings.
 “nuisance exception”

However, because most regulations will not fall under the categorical rules, we
will have to apply a balancing test
PA Coal
 PA Coal limits Hadacheck in the sense that if the diminution of the property is
great, there must be just compensation even if the taking of property is done
through an exercise of police power motivated by ensuring the public interest
o Police power regulation is not immune from the takings analysis
 There are exceptional cases where a large diminution of value does not require
just compensation
59
o i.e. when you blow up a house to stop a fire
 there is some category of extreme cases where destruction of
property may not constitute a taking because there is a greater
interest in maintaining the public interest
 Holmes wants to narrow and restrict the idea that if there
is a really strong justification for regulation, that even a
large diminution of value may not stop regulation
maintaining public interest

Takings tests
o We have thus far considered two categorical tests or per se rules of decision
for takings cases:
 Permanent physically occupations are always takings
 Nuisance-control measures are never takings
o PA Coal is the classic statement of a different sort of test, softer around its
edges, concerned with differences of degree rather than differences in kind,
inquiring whether – on balance – matters have gone “too far.” The test says,
in essence, that when governmental regulation of a use that is not a
nuisance works too great a burden on property owners, it cannot go
without compensation.
Penn Central
 There is no single factor that determines a taking…balancing test
(factors)…where we are
o (1) Extent of the economic impact of the regulation
 This is measured by the nature of the expectations that one had
 What did you invest, when did you invest it, and what were the
expectation when you did that
o (2) Strength of the government’s purpose (moving from public down to
private)
 preventing nuisance
 preventing other harm
 exacting a public benefit
 rearranging property rights
 acquiring resources
o (3) Miscellaneous
 Regulation that applies to few is likely to be a taking, regulation
that applies to more is less likely to be a taking
 Singling out
 High degree of singling counts in favor in finding a taking
 Is there reciprocity?
 Does the regulation help the people being regulated?
 High degree of reciprocity counts against finding a taking
 Qualitative restriction
 The more expansive the restriction, the more likely it is
viewed to be a taking
60

Are residential and commercial uses protected differently?
o A covert factor that may be hiding is that we are more protective of
residential properties than commercial properties
Lucas
 in essence, if there is a really large economic diminution there is a taking unless
there is an really large nuisance
 The unit problem
o Penn Central says do not employ conceptual severance and that we must look
to the unit as a whole (as it would be traded in the marketplace)
o State law matters in figuring out what the appropriate unit is
 You cannot look at a the regulation of a novel aspect of a parcel of
property as a taking, but you can look to a traditional aspect of a parcel
of property as a taking
 The Court’s new categorical rule as developed in Lucas
o Land use regulations that prohibit all economic uses of property are
takings unless the prohibited uses are common law nuisances
 If you don’t use Lucas or Loretto, then you use the balancing test set forth in
Penn Station
Palazzolo
 The SC held that the subsequent buyer may proceed with the suit just as the
original owner could have. A contrary rule, the Court held, would enable the
state in effect “to put an expiration date on the Takings Clause.” This ought not
to be the rule, the Court continued, because “future generations, too, have a
right to challenge unreasonable limitations on the use and value of land.”
 You cannot lose a takings claim simply because the regulations were there first
 No geographical severance
Tahoe-Sierra
 the Court concluded that the adoption of a categorical rule that any deprivation
of all economic use, no matter how brief, constituted a compensable taking
would impose unreasonable financial obligations upon governments for the
normal delays involved in processing land use applications.
 Tahoe rejects the idea of temporal conceptual severance
o The Court says that they do not do conceptual severance
 This might not be entirely true…kind of wishy washy
EXACTIONS

Exactions…local government measures that require developers to provide goods and
service or pay fees as a condition to getting project approval
Nollan
 The “substantially advance” requirement
61
o First, in Nollan, the SC required that the means chosen by the government
(the land-use regulation) “substantially advance” the governmental objective
being pursued.
o there had to be an “essential nexus” between the permit condition exacted
by the city, and the “legitimate state interest” being pursued
Dolan
 The “rough proportionality” requirement
o Then, in an even nmore striking use of rigorous review, the Court held that
when a city conditions a building permit on some “give back” by the owner,
there must be a “rough proportionality” between the burdens on the public
that the building permit would bring about, and the benefit to the public from
the give back. This “rough proportionality” standard was announced in
Dolan.
o there must be a “rough proportionality” between the trade-off demanded
by the city and the burden to the public from P’s proposed development.
The Court found that the city here had not satisfied this requirement.
o There must be some rough proportionality between the size of the
problem that the development is making and the size of the exaction
imposed

Two-step test
o An exaction can only be upheld if it is a logical response that is calculated
to alleviate a particular problem caused by a development, and the scope
and size of the exaction must be roughly proportional to the scope and
size of this problem created by the development
o two-prongs
 (1) essential nexus
 (2) roughly proportional
FLOW CHART
Takings analysis flow chart
 Loretto comes first because it is the most categorical rule of all
o The weasel word in there is permanent
 Does not have to be physically permanent…look to Nolan, the
permanence applies to the on-going liability
 Everything thereafter focuses on regulatory analysis
 Is the economic value of the property wholly destroyed?...Lucas
o Unit…how something is bought and sold in the marketplace
o Consider what a state considers to be a unit
 Nuisance exception
o If the regulation simply prohibits something that would not be permissible
under state property law, including the law of nuisance, then you are allowed
to destroy the value of someone’s property
 Whole bottom half of the page is the Penn Central analysis
62

o The rearrangement of private rights without a purpose. PA Coal.
Does regulation deprive owner of a reasonable return on investment
o Diminution of value
o Unit…how something is bought and sold in the marketplace
o Low restriction of use…Hadacheck (you only cannot do this one thing)
o High restriction of use…Mount Vernon parking case
RETURN TO THE BIG PICTURE



[289]
Why
o
o
o
o
o
God’s will/morality/natural law
Reduce disputes
Reward labor, investments
Defend expectations
Increase efficiency
 Internalizing costs and benefits
o Protect autonomy
What
o Power to exlude
o Power to transfer
o Right to compensation
o Freedom from discrimination
o Right to enjoy the profits of your labor/investment
o Right to exclude: privacy
Short Summary
o Larger questions
 What is property? Why is it desirable? Why is it undesirable?
o Retain perspective on big picture questions
o Property rights serve human interests
63