SOURCES OF PROPERTY
Section 1: First in Time: acquisition by discovery, capture, creation
Acq by Discov: Johnson, discov gives rights re: euro pwrs, conq gives rights re: native am (controv but gives ct desired outcomes)
Acq by Capture: issue: first in time? Labor theory: how much work makes it yours vs. functional acct: goal is more dead foxes.
Factors helpful establishing ‘certain control’:
(1) pursuit (must be max possible) (Pierson-fox,no; Ghen-whale,yes);
(2) marking/wounding (Ghen; Popov, yes);
(3) enclosing (ie-fence/net) Pierson dicta.
Popov: both have rights (1st : pre-posses, 2nd: control) 50/50 split (labor theory)
Keeble: protect business; no malicious interference (functional account)
Acq by Creation:
(1) copyright: artistic expression (only exact); long time period. (AP: reap what u sow) (Univ Pictures: play into movie, Derivative Use Righ
(Grokster: enabled copying, distinguish w/ Xerox)
(2) patent: protects idea itself, but shorter period. (Chakrabarty: allowed patent bioengineered organism)
(3) trademark: no copying, even for fair use/parody. (Vanna: maj: Locke; dissent: fair use! – sees as ©case)
Organs not property:
Colavito: donee sues for 2nd kidney. human organs can’t be property
Moore: spleen, conversion (all future profits). H: removed tissue not alienable (waste statute, incentivize research, morality-slippery slope)
Right to Exclude: Most important right. Very strong protections. (takings cases)
Exclusion fundamental: Jaque, mobile home delivered across land after owner said no; ct awards damages even if no real damage to property
Limit on right to exclude: State v. Shack, owner can’t exclude human rights workers. Right to exclude may not be used to harm others
Section 2: Subsequent Ownership
ACQ BY FIND: Goal: return property to its true owner (TO). If true owner unknown, first finder always wins (F1 holding in constructive trust)
Finder is first in time (dominant title to everyone except true owner): Armory v. Delamirie, kid found jewel, goldsmith pocket. H: kid has title
Landlord vs. Finder Claims: Goal: return to true owner; incentivize good behavior.
Factors: Dropped (to LL) vs. put (to F1); Relationship btwn owner & finder: if F1 employee, prop to LL; Abandoned (to F1); (4) buried (to LL) vs.
on top surface (to F1).
Ideal system: LL holds for short period, if TO doesn’t show up, F1 gets 80%, LL gets 20%.(Hannah v. Peel)
McAvoy, purse on table in shop. Purse to LL b/c put not dropped – true owner likely to come back and retrieve.
ADVERSE POSSESSION (AP): 4 requirements:
(1) Actual entry: using property like real owner would, reasonable observer would think you own it. (Van Valkenberg: garden, shack. Ct wrong)
(2) Open and notorious:sufficiently visible to put true owner on notice (Kunto: summer usage)(Manillo: steps, small encroach req actual knowlg)
(3) Adverse & Under a Claim of Right: 3 standards: bad faith, good faith, & objective (mental state not impt - Manillo). Depends on jurisdiction.
Color of Title: requires defective deed/title, can lead to possession of whole property, including unused area (Kunto).
Color of right: no deed required, but only piece actually occupied can be AP’d.
(4) Continuous for a statutory period: may occupy for entire statutory period,
Tacking: Regular OR temporal (connect time periods) (Kunto: temporal summer usage enough to satisfy requirement)
Disability: prevents AP from running. Types: minor, prison, insane. R: 21 from entry or 10yrs after end of disab-whichever longer. No tacking.
Justifications: Earning theory: focus on use and improvement.
Sleeping theory: focus on inaction of TO (let old claims die. Mental state of AP doesn’t matter – protect your prop).
Calabresi: Remedy options under Tort Liability and Property Rules: property – all or nothing; tort liability: split
GIFT: three requirement: donative intent, delivery, & acceptance
Delivery requirements: (1) manual, (2) constructive, (3) symbolic . Manual best, constructive (keys) or symbolic (letter) also ok (if intent clear)
Newman v. Bost: old case, maid, insurance policy. Outmoded requirement of manual delivery when possible. Ct fears fraud, hurts man’s agency
Gruen: modern rule: symbolic delivery valid even when manual deliv possible if good evidence of intent (letter) and acceptance (psyched)
Types of Gifts:
(1) inter vivos: gift made while in good health. Once given and accepted, cannot be revoked;
(2) wills: must be in writing, can be revoked before death, subject to strong legal safeguards.
(3) causa mortis – oral promise of gift when death near, revocable if lives, ct skeptical
SECTION 2: DIVIDING PROPERTY
Co-Ownership (Concurrent Interests) 3 types:
1. Tenancy in Common: alienable, descend/devisable , no right of survivor; creditors can get; partition by sale or in-kind (preferred) (Delfino)
2. Joint Tenancy: alienable, but also creates right of survivorship (so not descend/devisable). 4 unities: time, title, interest, possession.
Severance (reverts to TIC): Strawman no longer required (Riddle); Creation: 4 unities + must buy from 1 owner; creditors: can get
during life, not after death (instantly becomes property of survivor);
3. Tenancy by Entireties: JT+marriage; severance: only by divorce; creditors: cannot get at even during life (b/c neither can unilaterally sell)
Ouster: T1 can use whole w/o paying rent unless T2 can show “ouster” (denial of physical occupation) (Spiller). Can also be done by AP, but hard
Unilateral Lease: allowed, does not sever, but T2 has remedies (1) accounts paid (1/2 actual rent), (2) ouster (1/2 fair market value);
(3) partition in-kind or by-sale (undervalue?); (4) contribution (taxes easy, repairs as credit only)
MARITAL PROPERTY SYSTEM
Separate property system: each person owns (1) property owned before marriage, (2) property earned after marriage.
Exceptions: (1) Death: minimum 1/3 for surviving spouse (support theory); (2) Divorce: equitable division of property (partnership theory)
Partnership Theory: equitable division: 50% split of prop owned during marriage.
(Elkus, singer – hubby gets share in future earnings) (Graham, MBA not marital property).
Support Theory: rehabilitative alimony- focus on maintain livelihood (time limited).
LEASEHOLDS
1. Term of years: automatically terminates w/o notice required
2. Periodic Tenancy (mo/yrly): either party can terminate; automatically renews unless notice given (halfway thru prior period)
3. Tenancy at will: no fixed time, but both parties must agree to terminate; (Garner: attempt to create tenancy at will, but w/ termination
power only for lessee. Ct H: life estate determinable, based on contract principles, rather than property formality (numerous clausus)
Holdovers: when tenant stays past lease, LL has 2 options:(1) trespasser & evict (no rent, but damages possible), (2) holdover for new lease term
Policy: (pro tenant) holdover is harsh punishmt for overstaying tenants, but good for incomng tenant (helps ensure apt is delivered empty)
Court wary of holdovers: Crechale: LL tried to evict, then accepted check. H: can’t do both, treats as approval of periodic term, not holdover.
Defaulting Tenants (in violation of lease terms): self help (lockout) never allowed for eviction, only allowed if tenant abandoned property (Berg)
Fair Housing Act: cannot discriminate based on race, color, religion, sex, familial status or national origin; (exceptions for: single-family house or
apt building w/ owner living in unit. Still cannot used ‘bad words’ in advertisements b/c concerns about signaling)
Landlord-Tenant Duties: LL no obligation to deliver premises empty. Legal right to possession only, not actual possession (Hannan v. Dusch –∏
must sue holdover tenant, not LL) Note: LL liability depends on what prevents possession – liable for natural character of prop (e.g., landlocked)
Subleases & Assignments
Sublease: T1’s grant to T2 less than full term of lease; privity of estate does not exist; LL can sue T1 but not T2, unless T2 accepts terms and
conditions of head lease in K (privity of contract).
Assignment: T1 grants entire remainder of lease to T2; LL can sue T1 (privity of K); or T2 (privity of estate) – more remedies for LL
Ernst v. Conditt: LL can sue both T1 & T2 b/c assignment – note: called “sublease” in K, but really assignment b/c of length.
Kendall v. Ernest Pestana: Denial of permission to sub or assign cannot be arbitrary. T1 should get profits when mkt rises (pro-alienability)
Landlord Duties: Tenant’s Rights & Remedies
Implied Covenant of Quiet Enjoyment (ICQE): constructive eviction = permanent condition making property unusable; tenant can move out,
claim constructive eviction and stop paying rent.
Elements of constructive eviction: (1) permanent (periodic okay-eg flooding) (2) latent/patent (3) reasonable time claim) (Reste Realty.)
Strong but narrow remedy: drastic measure – prop must be unlivable; tenant must leave – if wrong, may be liable for back rent (note – should
seek declaratory judgment).
Implied Warranty of Habitability: residential lease must meet minimum standards.
Elements for cause of action: LL on notice and failed to repair within reasonable time, and defects occurred during time frame of rent reduction
(1) latent/patent doesn’t matter;
(2) non-waivable – no bargaining around;
(3) tenant can reduce rent w/o leaving (safer remedy b/c worst outcome is paying back-rent, unlike possible double rent pay in ICQE)
(4) remedies available: rescission (cancel K), damages (rent refund), reformation (reduce rent going fwd).(Hilder: ct reduced rent to $0)
Policy: May increase quality, but at cost of higher rent;operates like a tax on LL. Rent control(stabilizes rent at cost of quality&invstmnt
decrease)
Section 3: RESTRICTIONS ON THE USE OF PROPERTY: Reciprocal, Private, Public
RECIPROCAL RESTRICTIONS: Restrictions on land use that seek to protect neighbors (contextual – relates to what is nearby
NUISANCE: land use that substantially interferes w/ another’s use and enjoyment of property w/o physical trespass. Must be continuous,
intentional (unreasonable and should have known). Inherently reciprocal, involves conduct not inherently wrongful.
1. Common Law Approach: (1) is it unreasonable and substantial burden? (2) remedies available: usually injunction, ct may factor in value to
public of defendant activity. (Morgan v. High Penn Oil Co., ct grants injunction and ignores social value of oil refinery) (Estancias, centralized AC.
Ct ignores cost of injunction to D; note ct preference for injunction, allows P to price nuisance)
2. Restatement Balancing Approach: (1) balance harm to neighbors vs. benefit to public and actual defendant. (2) injunction still favored, but
ct may award damages to nuisance maker. Property rule (parties price injunction) vs. Liability rule (ct prices injunction by setting damages)
(Boomer, cement factory. Ct grants injunction that can be vacated if damages paid; ct prices injunction itself) (Spur Industries, feed lot in desert,
new housing approaches. Ct grants injunction, but development must pay for relocation b/c (1) public benefit, (2) came to nuisance).
PRIVATE RESTRICTIONS: Servitudes (easements + covenants) that run with land to successive owners
EASEMENTS
1. Easement by Implied Grant: when four prong test is met, 3d party purchaser has easement (for purchaser) (Van Sandt – apparent & intent)
2. Easement by Implied Reservation: when four prong test is met, original owner has easement (for original owner)
(1) single owner – “quasi easement”; (2) apparent and continuous use; (3) reasonably necessary; (4) intent of original parties.
3. Easement by Estoppel: allowed temporary use (permission/license) + expenditure in reliance + bad faith sitting on hands (Holbrook)
4. Easement by Prescription: adverse/hostile + open/notorious + continuous + exclusive
5. Easement by Necessity: must be strictly necessary to access landlocked parcel + must be from common owner + last plot sold bears easement
Othen: invalid b/c prescription(non-exclusive- gen use of road & permissive, not adverse);necessity(didn’t show strict necessity -less convenient)
Public Trust Doctrine: public owns ocean and low water beach; automatic easement for access (Bay Head)
Scope of Easement Cannot Expand: can’t use for additional parcels or structures (Brown v. Voss) Note, additional room okay; horse  car okay
Negative Easement: prevents your neighbor from doing something on their land that interferes with yours.
Categories: Light, air, water, support, views, solar, conservation
Conservation Easement: separating off development rights and conveying to 3d party – usually govt, non-profit enviro protection group.
Benefits: cheaper for protectors than buying land outright, permanent protection. Problems: tax revenues decreased, non-profits can’t afford
to enforce, no centralized records or planning. Marlborough, VT, future town can’t change mind – anti-democratic? – trag of anti-commons
COVENANTS (K that run with the land)
Real Covenant: (only $ damages) 6 elements: writing, notice, touch & concern, horizontal privity (no longer required), vertical privity
Equitable Servitude: (flexible cov; injunction): writing, intent to bind successor, touch & concern, actual or constr. notice (Tulk; Leicester Sq.)
Covenants through implication: (exception to writing requirement):
(1) notice: actual or constructive (inquiry) at the time of purchase,
(2) common owner originally (eg-developer)
(3) most lots burdened at time of sale of questioned lot
(4) owner intended to burden all (advertisements, oral promises to original buyers). (Sanborn, gas station in subdiv.; ¼ burdened; H: inj)
Changed Condition Doctrine:
Restatement: (1) change makes purpose of servitude impossible, OR (2) servient estate not suitable for uses
Common Law: (robust)(1) purposes of restriction must be thwarted, AND (2) covenant must not have substantial value to covenant holders
Western Land v. Truskolaski, tenant on edge of subdivision seeks to build mall, claims area now more commercial. H: purpose still
tenable, covenant still valuable. Ct avoids Border Lot Problem;
Rick v. West, failed suburban development, but one holdout won’t let developer change to hospital. H: cov still valuable and purposeful
Common Interest Communities (developer response to strictness of covenants). 1) condo: fee simple ownership, not liable for default of other
tenants. 2) coop: tenants own stock/lease, liable for overall mortgage  one tenant default effects all.
PUBLIC RESTRICTIONS
ZONING: systematic govt scheme to regulate land use (main public alternative to private land restrictions).
Constitutional limits: (Takings/DPC) Zoning laws are constitutional as long as within general bounds of reasonableness and rationality (Euclid)
Prior Non-Conforming Use: sometimes pure grandfathering, more often amortization (grace period in which to cease non-conforming use
Amortization:
Maj view (Sullivan): ok if public benefit > harm to non-conform user (otherwise violates DPC); usually 2-6yrs (implicit compensation)
Minority view: unless nuisance, prior non-conforming use is grandfathered in (PA Northwestern: porn shop; H: grandpa, not amortize)
TAKINGS “Nor Shall Private Property be Taken For Public Use Without Just Compensation”(5th Amendment)
CONDEMNATION/EMINENT DOMAIN: Requirements = Just Compensation & Public Use (5th Amendment)
Courts very deferential to legislative determination re public use
Kelo: revitalization of neighborhood, Pfizer, not blighted: Policy: Right Wing (For: let govt assemble for efficiency and growth; Against: protect
private property); Left Wing (For: central planning & devlopmnt; Against: protect poor against the govt/corp power). Thomas: slum clearance
REGULATORY TAKINGS: Does reg take enough to require compensation under 5th Amend?
Analysis
Step 1: “Per se” Rules
1. Harm Prevention: harm prevention is never a taking. Includes actual nuisances and also harms that do not rise to the level of nuisances.
Courts give much deference to legislatures’ use of police powers (Hadacheck).( Notes: Harm prev outweighs permanent invasion if both tests
satisfied. Harm prevention is in the ‘eye of the beholder’ (Scalia) characterize as benefit to avoid per se rule.)
2. Lucas Total Wipe Out: if regulation wipes out total value of property it is a taking, unless the use is a common law nuisance or violates
another background principle of law (Lucas). (Note: address conceptual severance in order to apply (Penn Coal) – denominator tricks.)
3. Permanent Physical Invasion: Any permanent physical occupation of property by regulation amounts to taking (Loretto) (Notes: Address
possible purposes for rule – protect (1) right to exclude third parties, or (2) right to use property as desired.)
Step 2: If no per se rules apply, then Penn Central Three-Factor Test
1. Diminution in value: below 60% left or no taking
2. Distinct investment backed expectations: how much and whether reasonable
3. Character of regulation: if a regulation looks like an expropriation, then more likely to be a taking.
*remember: reciprocity of advantage applies at end and may make it not a taking even though seems to satisfy the three elements.
Cases
Hadacheck: non-nuisance brickyard violates new LA zoning regs. H: harm prevention never a taking
Lucas: erosion regs ban development. Scalia: total wipeout of prop = taking, requires compensation. (unless prop principle C/L nuisance)
Penn Coal: Kohler Act bans mining under buildings, Penn Coal had such rights. H: Act takes all of mining rights, goes too far and is a taking
requiring compensation. Note – conceptual severance…denominator tricks
Penn Central: Landmarks act, grand central, air rights. Claim: Act is total wipeout of air rights. H: (1) court rejects conceptual severance – whole
parcel is denominator. (2) TDRs mitigate loss  diminution less than 60%  no taking.
Palazzolo: P owns large parcel (mostly wetlands), regulation prohibits developing wetlands. H: (1) no total wipeout b/c some value left. (2) fact
that he purchased after regs past factored into analysis, but not dispositive
Loretto: NY law required LL to permit cable wires to run over property. H: physical occupation always a taking.
Tahoe Sierra: new planning agency imposes 3yr development ban while it decides on overall plan. H: no total wipe out b/c temporal conceptual
severance rejected.
Academic Perspectives on Takings
Epstein: takings clause should apply more broadly, govt should be forced to internalize cost of regulation. Only exception equals reciprocity of
advantage.
Public Choice Theory: govt is political, not economic. Affected landowners very vocal, but public benefit diffuse, no voice. Govts will
inefficiently under-regulate.
Kaplo: Paying compensation for takings is like offering free insurance from regulatory change – takings clause shouldn’t be too robust will
otherwise result in inefficient use of land.
Krier: middle ground. Payments to LL effected by regulation should be optimized to produce efficient incentives, not based on technical takings,
likewise of payments by govt. disaggregate efficiency and justice.
Michelman: Start with assumption of efficient regs. To decide whether govt should pay, compare demoralization costs and settlement costs.
1.
Demoralization: internal emotional cost inflicted both on burdened owner and others
2.
Settlement: cost of figuring who to pay and how much and how much compensation to provide
3.
If settlement costs > demoralization cost = no compensation
4.
If demoralization costs<settlement cost = compensation
Fischel: takings protection should be strongest when actors have weak political voice (e.g., out-state developers working in small towns)
Digan: define denominator to include all person’s wealth; therefore, regulations more likely to be takings where inflicted on poor
Serkin: Search for unified view of Takings Clause is in vain because different depending on nature of property and government. Level and
nature of government significant: smaller governments internalize more cost than do larger governments (Epstein’s view does not properly
account for the difference)
General Property THEORIES and CONCEPTS
Blackstonian (absolutist) property-sole & despotic dominion. Bundle of Rights: right to sell, give away, exclude*, possess, lease, use and devise.
Externality (Demsetz): cost imposed on other that can be ignored by cost imposer|
Utilitarian Goal: Maximize goal of entire society
Tragedy of Commons: too many owners  aggressive use of land/free riders  inefficient over-use|occurs when mix communal land w/ priv
interests of that land|private interests benefit from that land, yet use of comm land has no priv detriment. Tragic b/c potentially preventable
Ways to regulate: regulation on commercial land use, privitze land (both salmon+land), communalize, change human nature
Tragedy of Anti-Commons: too many ppl have the right to use a common resource  inefficient under use of resource (extrm right to exclude)
Demsetz: origins of private prop (ie-fur trade).
Coasean: if no trans costs, initial allocation doesn’t matter  goal of prop regime is to minimize trans costs
Calebresi: property vs. liability rules. Prop is all or nothing, liability allows damages to soften blow. Four possible outcomes.