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BASIC THEORIES
I.
What is property?
a. Property is whatever interest in a thing—whether tangible or intangible—that is protected against
invasion by others by the legal system of the society. That means that the study of property is not the
study of the relationship of a person to a thing called property, but is the study of the relationship
between people with respect to things we call property.
b. Bundle of Rights – the right to possess, the right to use, the right to exclude, and the right to transfer
c. Three core elements:
i. The right to exclusive possession
ii. The right to exclusive use
iii. The right to dispose or transfer
II. Blackstone – Occupancy Theory/Principle of First in Time
a. Originally, property rights were transient
i. Pick up a bunch of apples, as soon as you put them down and walk away, others can pick them up
b. But because avarice eventually led to scarcity, the institution of private property became necessary to
preserve peace.
c. Taking possession of an unknown thing is the only way to acquire ownership of it
d. “The notion that being there first somehow justifies ownership rights is a venerable and persistent one.”
e. Whatever a person has taken possession of is that person’s property
i. Institution of property was an agreement among men legalizing what each had already grabbed,
without any right to do so, and granting for the future, a formal right of ownership to the first
grabber
ii. In fact, the “own” which property laws protect is whatever an individual has managed to get a
hold of, and equality of right, applied to property, means only that every man has an equal right to
grab.
iii. As a result of this agreement, which, by a remarkable oversight, puts no limit on the amount of
property any one person may occupy, everything would soon pass into private ownership, and the
equal right to grab would cease to have any practical value.
f. Leads to productivity because creates scarcity of resources
g. [Note: This line of thought runs through the Acquisition by Capture]
h. Challenge:
i. Not many things left to grab—no longer an equal right to possess them
III. Locke –Labor Theory
a. So what if someone possesses something first; why should else be obliged to respect that claim of the first
possessor?
i. Locke reasoned that the obligation “was imposed by the law of nature, and bound all men fast
long before mere human conventions had been thought of.”
b. We have no inherent right in land. All we own is our bodies. Mixing labor with something unowned
makes it yours and establishes your right to it.
c. If you take your labor and mix that with some common property, your right to that property must be
greater than anyone else’s right to that property.
d. Law of Accession – when one person adds to the property of another: by labor alone
e. Challenges:
i. Multiple people can contribute labor
ii. Law of Accession
IV. Benthem – Utilitarianism
a. Property is a human construction that depends solely on societal needs *
i. BY CONTRAST: Natural rights theory insists that property is independent of any of society’s
declarations.
b. The greatest good for the greatest number (in the aggregate)
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c. We protect other’s possessions because we desire the same protection of our own possessions
i. Result of scarcity; must protect what we possess
d. Property law is a social construct—people create property law in order to arrange their affairs—we should
judge property rights by happiness/utility (social effects)
e. Majority *
V. Demsetz - Economic Efficiency
a. Property is economically efficient (efficient response to scarcity)
i. Efficiency is utilitarian
ii. Externalities are internalized
1. This makes production more efficient
b. If everything is unowned, or owned communally, under conditions of scarcity people will unduly deplete
the resource because the individual gain from depletion is greater than the individual cost. Yet, from
society’s perspective, the aggregate gains from depletion are less than the total cost. To an individual,
these additional costs are external. Property helps to internalize these costs so that individuals make
economically efficient judgments.
c. Externalities: costs that are produced by an activity but not borne by the person reaping the benefits of the
activity. Internalized when property rights are created.
i. Externalities are reciprocal; they arise from interactions or conflicts among people in the use of
resources.
d. Tragedy of the Commons: dilemma arising from situation in which multiple individuals, acting
independently, and solely and rationally consulting their own self-interest, will ultimately deplete a share
limited resource even when it is clear that it is not in anyone’s long term interest for this to happen.
e. Tragedy of the Anti-Commons: people cannot use a resource, so it is wasted
i. Problem aggregating all of the rights to get things done (transaction costs)
ii. An anti-commons refers to property which a number of people control, and thus many people
have the right to exclude others or to veto a transfer.
iii. The antithesis of a commons, which is property for which on one has the right to exclude *
iv. An unanimous consent requirement in a common interest community illustrates property whose
use and transfer is subject to approval by multiple parties
f. Free Rider: one that takes advantage of something in common that he doesn’t have to pay for
g. Private Property: right to exclude others, internalizes cost
i. The owner enjoys both the benefits and the costs—they have to account for costs (make
better/more efficient decisions)
ii. Transaction costs reduced—will not need to negotiate
VI. Coase – Transaction Costs
a. In a world without transaction costs, it does not matter to whom you assign property rights. Resources
will be put to an efficient use in any event.
b. The person that values the resources most will automatically acquire it
POLICY CONCERNS
I.
II.
III.
IV.
V.
Reward productivity and foster efficiency
Create simple, easily enforceable rules
Create property rules that are consistent with societal habits and customs
Produce fairness in terms of prevailing cultural expectations of fairness
Private property is essential to political freedom (alienability)
POSESSION
I.
First Possession
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a. The common law gives preference to those who convince the world that they can catch the fish and hold
it fast. This may be a reward to useful labor; but it is more precisely the articulation of a specific
vocabulary within a structure of symbols understood by a commercial people. It is this commonly
understood and shared set of symbols that gives significance and form to what might seem the
quintessentially individualistic act: the claim that one has, by “possession,” separated for one’s self
property from the great commons of unowned things.
b. Acquisition by Capture
i. Unowned property that is captured becomes the property of the capturer through actual
possession
ii. Wild Animals (farae naturae) – usual method of acquiring property in an animal is to actually
capture it (dead or alive)
1. Pierson v. Post – P pursued a fox on an unowned beach. During his pursuit, D (knowing
that P was in pursuit) intercepted the fox, killed it and carried it off. Court held that
pursuit is not enough to show possession must have actual possession of the animal.
a. The pursuer:
i. Manifests an unequivocal intention of appropriating the animal to his
individual use
ii. Has deprived him of his natural liberty
iii. Brought him within his certain control
iii. Constructive Possession
1. Things on your land are yours because you have an interest in them. A trespasser, who
captures a wild animal on the land of another, has no rights against the owner, even
though landowner never had possession or control.
iv. Oil/Gas –Usually Treated The Same As Wild Animals
1. Classified as wild animal because it has the power and tendency to escape without the
volition of the owner.
a. The resources have a fugitive character because they wander from place to place.
i. Oil and gas once under the land of A might migrate to space under the
land of B as the result of natural circumstances or because B drops a well
and mines a common pool beneath A’s and B’s land. The oil or gas
mined by B may even have been placed in the pool by A (gas and oil
extracted elsewhere are often reinjected for storage or secondary
recovery).
b. The resources:
i. “Belong to the owner of the land, and are part of it, so long as they are on
or in it, and are subject to his control; but when they escape, and go into
other land, or come under another’s control, the title of the former owner
is gone. Possession of the land is therefore not necessarily possession of
the gas. If an adjoining, or even a distance, owner drills his own land,
and taps your gas, so that it comes into his well under his control, it is no
longer yours, but his.”
ii. When they escape or are restored to their wild and free state, the
dominion and individual proprietorship of any person over them is at an
end and they resume their status as common property.
c. Policy Concern:
i. Denies society at large the benefits of economical underground storage.
v. Escapees and Domesticated Animals
1. When a wild animal escapes—it is unowned. It belongs to the next first possessor.
2. Domesticated animals are not wild, so they continue to belong to their prior possessor
when they wander off.
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a. A wild animal becomes domesticated when it demonstrates a propensity to return
home.
vi. [You cannot acquire possession to a federally protected animal]
c. Acquisition by Creation
i. A person acquires right to something by creating it
1. In accordance with Locke’s Labor Theory, if you create something then it is yours to
exploit because the foundation of proprietary rights is the expenditure of labor and
money.
2. The assertion that if you create something—if in that sense you are first in time—then
that something is most certainly yours to explit.
ii. Intellectual Property
1. Exclusivity: key issue because some argue that information can be used by many people
at once, thus the owner should not be able to insist on exclusive possession
a. Many people can use the same piece of information *
b. Granting exclusive rights to information does not necessarily promote a market
economy. Competition depends on imitation.
i. The public as a whole may be better off, as long as this freedom to
imitate does not destroy the incentive for people to come up with new
devices.
2. Monopoly
a. The point of monopolies is to promote creative activity; the point of the limits is
to advance competition (which in turn facilitates consumption by holding down
prices).
3. Law of misappropriation – the branch of unfair competition law that protects new ideas—
tries to answer the question of when imitation is permissible and when it is not because it
will destroy the incentive to create
4. International News Service v. Associated Press – P claimed that D was pirating its news.
Court held that there is no property right in the news itself, but there is a property right in
the literary form because of the labor put into it. Exception to normal rule that property
can be imitated.
a. There is quasi-property in the news that survives publication as between
competitors appropriating it for profit, not to the public at large
b. Publici juris – public domain/of public right
c. Information – multiple people can use it at the same time, no worry of overusing
the information (won’t deplete)
5. Absent Statute – No Intellectual Property, imitation is fine
a. Cheney Brothers v. Doris Silk – P copied popular designs of D. P asked for
protection only during the season in which it debuted. Court held that a man’s
property is limited to the chattels, which embody his invention; others may
imitate these at their pleasure. (Ok to copy and undercut price)
6. Smith v. Chanel – P copied D’s perfume and used their name to advertise that its price
was lower, but the product was equivalent to the un-patented item. Court held that they
were allowed to copy product and claim that it was cheaper because this stimulates the
economy.
iii. Copyright
1. Applies to:
a. Original works of authorship
b. Fixed in tangible medium of expression
2. Expression of ideas in books, articles, music, or artistic works
3. Protected as soon as set down in tangible medium
4. Generally lasts 70 years after death of creator
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5. Subject to “fair use” (e.g. can quote something that is copyrighted)
6. Fact/Expression Dichotomy
a. Feist v. Rural – Feist did not copy anything “original” by taking 1,309 names,
towns and telephone numbers from Rural’s white pages. To qualify for
copyright, information must be original to the author, and meet a minimum
standard of creativity. Facts are not copyrightable, but assortments of facts
are so long as they are compiled or arranged in an original or creative
manner. The court held that Rural’s white pages did not meet the minimum
standard of creativity.
7. Idea/Expression Dichotomy
a. Baker v. Seldon – Seldon featured a condensed ledger in his books. Baker sells
the ledger from Seldon’s books. The court held that the description of the art in
the book lays no foundation for an exclusive claim to the art itself (ideas cannot
be copyrighted).
8. Merger or Idea/Expression Inseparability
a. Morrissey v. Proctor & Gamble – P alleged that D copied their sweepstakes
entry. The court held that where there is only one or but a few ways of
expressing an idea, courts may find that the idea behind the work merges
with its expression with the result that the work is not copyrightable.
9. Conceptual Separability
a. Brandir v. Cascade Pacific Lumber Co. – The court held that the P’s ribbon bike
rack is not copyrightable because the utilitarian function cannot be separated
from the aesthetic value of the rack.
i. Denicola Test:
1. If design elements reflect a merger of aesthetic and functional
consideration, the artistic aspects of a work cannot be said to be
conceptually separable. Conversely, where design elements can
be identified as reflecting the designer’s artistic judgment
exercised independently of functional influences, conceptual
separability exists.
ii. Policy:
1. Court concerned with copyright capturing functional things
10. Infringement
a. Elements
i. Copyrightable subject matter
ii. Copying
1. Literal, or
2. Access and substantial similarity
iii. And improper appropriation
1. Are the works “substantially similar” – with respect to the
protected expression – in the eyes of an ordinary or reasonable
observer? Did the accused infringer substantially appropriate the
protected expression?
2. Nichols v. Universal Pictures – P sued D for copyright
infringement of her story. However, the court held there was no
copyright infringement because the stories are different, and the
only commonality is that both are marriage comedies about
conflicts between Irish and Jews. Copyright of a literary work
is not limited to the text, but centers on the substance of the
characters and sequences of events.
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a. 1) Identify the protectable expression by separating out
the unprotectable: ideas, stock characters, facts, themes
b. 2) Articulate what is specific and original, and present
this to the factfinder
b. [Scope limited by copying element, people that independently create works are
NOT liable for copyright infringement]
11. Fair Use
a. Limits exclusive rights by allowing others to use copyrighted material “fairly”
b. Factors:
i. The purpose and character of the use, including whether such use is of
commercial nature or is for nonprofit or education purposes
ii. The nature of the copyrighted work
iii. The amount and substantiality of the portion used in relation to the
copyrighted work as a whole; and
iv. The effect of the use upon the potential market for or value of the
copyrighted work
c. Policy:
i. Life + 70
ii. Advances knowledge
iii. Enriches public while protecting author
iv. Prevents excessive litigation
d. Harper & Row v. Nation Enterprises – Court evaluated the “fair use” factors and
held that the Nation’s use of Ford’s manuscript did not constitute “fair use.” (1) It
was for profit, (2) the manuscript had not been published, (3) the appropriated
text was focused on the most interesting sections of the article, (4) there was an
actual effect on the market (Time did not pay its second installment).
iv. Patents
1. Elements:
a. Patentable subject matter
b. Novelty
c. Utility
d. Non-obvious
2. Cannot patent: laws of nature, physical phenomena, or abstract ideas
3. Lasts for 20 years from the date of original application; not renewable
4. 101 - Inventions Patentable:
a. Whoever invents, discovers any new and useful process, machine, manufacture,
or composition of matter, or any new and useful improvement thereof, may
obtain a patent therefore, subject to the conditions of this title.
5. Policy:
a. Incentive to invent, encourages people to come up with new useful ideas and
information
b. Incentive to innovate
i. Refers to the act of perfecting something for commercialization
c. Encourages the disclosure of reporting technological advances
d. Encourages investment in research and development
e. Once expires, in the public domain
6. Living Things
a. Diamond v. Chakrabarty – Living things are patentable if they are the result
of human innovation (bacteria that breaks down crude oil). The court
interpreted the patent statute broadly.
7. Purified Substance
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a. Parke David v. H.K. Mulford – A purified substance is patentable if it is novel,
non-obvious and has utility.
8. Processes
a. Diamond v. Diehr – Taking a law of nature, and applying it to a useful
process such as curing rubber is patentable. Process of curing rubber uses a
computer and equation as part of the process. Simply because non-patentable
material (equation) is used as part of the process does not necessarily mean the
process as a whole cannot be patented. Patent laws are read broadly.
9. Experimental Use Doctrine
a. Madey v. Duke – Duke infringed on Madey’s patent, and the experimental use
doctrine did not apply because Duke received commercial benefit from the
infringement.
10. Human Body Parts
a. Moore v. Regents of University of California – Moore consented to having his
spleen removed. However, his doctors did not tell him that his cells were unique
and would be of great scientific value. The doctors created a new cell lines from
his spleen tissue. The court held that a claim for conversion does not lie for the
use of Moore’s body tissue.
i. Policy:
1. Court does not want to disincentive medical research
II. Subsequent Possession: Finders, Adverse Possession & Gifts
a. Acquisition by Find
i. Policy Objectives:
1. To restore the property to the true owner
2. Reward honest finders
3. Deliver the reasonable expectations of landowners
4. Discourage trespassers and other wrongdoers
5. Encourage the productive use of found property
ii. General Rules
1. True owner of property does not lose title by losing property. Owner’s rights persist even
though the article has been lost or mislaid (true owner’s rights always trump)
2. A finder does not have absolute rights, but the first finder has greater rights than all other
subsequent finders. A finder’s title is good against the whole world except the true
owner, prior finders, and (sometimes) the owner of land where an object is found.
a. Even when property is stolen, the thief has possessory interest over subsequent
finder
b. Armory v. Delamirie – Chimney sweep found a gem and took it to a jeweler for
appraisal. Jeweler’s apprentice removed gem and refused to return it (offered
money in return, which Sweep did not accept). Court awarded damages,
measured by the finest stone that would fit the setting, unless the original stone
could be produced, saying that the finder had a property interest above all other
except the true owner. Prior possessor has the superior right.
i. Replevin: Cause of action to obtain the return of the actual good, not for
damages.
ii. Trover: Cause of action for damages resulting from D’s conversion of
chattel. The plaintiff waives his right to obtain the return of the chattel
and insists that the defendant be subjected to a forced purchase of the
chattel from him. If the defendant loses, he must pay money damages to
the plaintiff. The measure of damages is the value of the chattel at the
time the conversion occurs or the value of the plaintiff’s interest.
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iii.
iv.
v.
vi.
vii.
1. Problem of Double Payment: D will pay P for chattel, but if the
true owner comes back to claim it, will have to give it up.
iii. The meaning of true owner depends upon who the other claimants are.
Title, or ownership, is relative: B can have title as against C but not as
against A.
Abandoned Property
1. Property to which the true owner has voluntarily given up any claim of ownership
2. Generally, a finder of abandoned property acquires title
a. Exception: when found by a trespasser, owner of land may have a better claim
3. Bridges v. Hawkesworth – Someone found a parcel in a shop, court decided finder of the
parcel (not the shop owner) should be entitled to it because the parcel was abandoned not
mislaid.
Lost Property
1. Property that the owner accidentally lost
2. Generally finder acquires possession
Mislaid Property
1. Property which the owner placed somewhere with intention of returning for it, but cannot
now locate
2. Mislaid property generally goes to the owner of the land on which it was found over the
finder
3. McAvoy v. Medina – A pocketbook was mislaid in the shop, which was found by a patron
of the store. Court held that property left accidentally in a shop is mislaid, and therefore
the owner of the premises has a right in the property.
a. From the point of view of social policy the shopkeeper ought to be preferred to
the customer, as in that event the article would be more likely to get back into the
possession of the real owner.
Lost/Abandoned/Mislaid:
1. General Rule: A finder of property acquires no right in mislaid property, is entitled to
possession of the lost property against everyone except the true owner, and is entitled to
keep abandoned property.
a. HOWEVER, exceptions consider the location of the property.
i. Embedded in the soil or not?
ii. Found in a public place, or a private one?
Finder vs. Landowner (owner of the locus in quo) - Lost/Mislaid
1. Trespassing finders of lost property lose against property owner
2. Agents/Employees – older cases tend to find that employee finders must surrender the
find to their employer
a. Stafford v. Water – D, an employee found rings while cleaning P’s pool. Court
held that employer was entitled to what the employee found in the pool.
3. Invited Guests – usually must surrender found property
4. Private Home – finder does not have possessory rights
a. Exception:
i. Absentee Owner – not in possession of the home
1. Whether the homeowner was in constructive possession of the
home
a. Hannah v. Peel – Hannah finds brooch in Peel’s home.
Court found that Hannah is entitled to the brooch
because Hannah was not in possession of the home at the
time of the find.
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5. Embedded Objects – when property is embedded is or under the soil, it is awarded to the
landowner, on the rationale that the landowner’s expectations of owning things in the dirt
itself are especially strong
a. Constructive possession *
b. Elwes v. Briggs Gas – Boat is found under the mines and minerals, lessors have
rights of ancient boat instead of finders.
6. Public Places
a. Lost property found in public goes to the finder
b. Mislaid property found in public places goes to the landowner
i. See McAvoy v. Medina above
b. Adverse Possession
i. Limit on the right to exclude
ii. Cannot AP the government
iii. Policy
1. Possibility of old claims
2. Encourages people to make investment in productive use of real property
3. Reward-we want to encourage people to put wild resources to productive use
4. Punish-sleeping on rights/ignoring real property—obligation to be attentive/supervise
5. Moral – relationship to objects in the real world helps define our autonomy/personhood—
develop with a resource/connection becomes important in understanding an individual
iv. Elements – if all 4 satisfied + expiration of SOL, automatically becomes owner
1. Actual Entry
a. AP depends on the SOL running against a cause of action, and the entry creates
the cause of action for trespass and thereby triggers the statute
b. Also, helps to stake out what the AP might end up claiming
c. Possessor must actually, physically take possession of owner’s land, excluding
both the public and the owner
i. If sharing, the owner might not realize that AP was claiming ownership
against him
d. Van Valkenburgh v. Lutz – D built path to travel across lot behind his house. Had
also built a shed and small residence on lot, and had a vegetable garden. P bought
property 25 years later, and tried to kick D off. NY law required that without a
color of title, there must be proof of actual occupation including cultivating or
improving the land, or protecting land by a substantial enclosure.
2. Open & Notorious
a. Entry sufficiently open and notorious so that a reasonably attentive property
owner would be put on notice that someone is on their property.
i. Reflects the sleeping principle underlying AP  to penalize the
negligent and dormant owner for sleeping upon his rights
b. Readily visible to any inspector of the property
i. The true owner would know of the occupation if he visited his property
ii. Open and notorious occupation constitutes notice to the owner that his
rights are being violated
iii. Aimed at constructive not actual notice; the test of notoriety is objective
 if an ordinary person would have notice, then the owner is regard as
knowing what should have been known
c. There has to be a chance for the owner to know the adverse possession is
happening (don’t need actual notice)
i. Boundary Disputes:
1. Some jdxs hold that encroachment by one neighbor onto the land
of another are not open and notorious if the encroachment is of a
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small area and is not clearly an encroachment. Statute of
limitations does not begin to run until owner has actual
knowledge.
2. Manillo v. Gorski – D, in process of doing construction on his
home, created a staircase that went over onto neighbor’s
property. Claimed adverse possession because had been on the
land for over 20 years. Court found that when the encroachment
of an adjoining owner is of a small area and the fact of an
intrusion is not clearly and self-evidently apparent to the naked
eye, the encroachment is not open and notorious.  owner needs
actual knowledge.
3. Continuous
a. Continuous but not literally constant –permitted to come and go in the ordinary
course, given the nature of the property in question (being on a farm most of the
time; using the summer fishing camp for regular summer fishing trips)
b. Adverse possessor must occupy without interruption
c. General Rule: The sort of entry and possession that will ripen into title by AP is
use of the property in the manner that an average true owner would use it under
the circumstances, such that neighbors and other observers would regard the
occupant as a person exercising exclusive dominion.
d. To determine what is continuous, look to how the land is customarily used
i. Howard v. Kunto – D’s house was situated on a lot not described in the
deed. Deed referred to a different lot directly west. Lot was used only as
a summer home, but that was the customary use of the land. Court said
possessor could tack onto possession of previous adverse possessors.
e. Tacking:
i. Suppose, for example, that X buys certain property described in a deed
from the seller, who as it happens had also (but unknowingly) adversely
possessed a strip adjacent to the described land. If the evidence shows
that the deed to X was intended by the parties to convey not only the
described land, but also the adversely possessed strip, is X allowed to
“tack” that strip onto the land described in the deed?
1. Yes. Howard v. Kunto – relying on the intentions of the parties
in privity with one another, extends this to situation where the
deed describes none of the land in question, such that there is
nothing onto which the adversely possessed land can be tacked.
ii. Another tacking issue arises when land is adversely possessed by a series
of people, no one of whom occupies the land for the statutory period,
though all of them taken together do. May the bits of time of each
possessor be tacked together? Is privity required?
1. Adding the time period of possession of the previous possessor
to your own possession; only allowed when there is privity
2. If you leave under duress, and return, then full period is the
statutory period plus the amount of time that you were
involuntary gone from the property.
f. Privity: voluntary transfer from first possessor to the second possessor
g. Ouster: if an AP is ousted from possession by a 3rd party, 3rd party may not tack
because there is no privity
i. The ousted possessor can tack her new possession onto her old
possession but cannot take credit for occupation by the third party. For
the duration of that third party’s occupation, the limitations period is
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tolled, or suspended. The effect is that for the possessor to acquire title,
she must occupy for the limitations period plus the period of third-party
occupation.
h. Taxes: most western states require adverse possessors to prove that they have
paid the property taxes on the occupied property for the duration of the
limitations period.
i. Statutory period – the period of time beyond which the owner of land can no
longer bring an action for trespass (usually between 6-10 years). Once statute is
up, adverse possessor automatically has right of title.
j. [NOTE: If the AP abandons the property—leaves with no intention to return—
before the statute has run, the statute stops, a new entry is required, and the whole
process must begin anew.]
k. ALSO, interruption by the true owner before the statute has run—say by bringing
a successful ejection action against the AP, or by re-entering the property. In the
case of successful ejectment action, the lawsuit interrupts the period of
possession even if the owner does not thereafter actually oust the AP, who must
start all over.
4. Adverse/Hostile/Claim of title/Claim of right
a. Claim of Title – treating the land as your own
i. Three states of mind:
1. Good Faith – requires that the adverse possessor think that the
land is his/her own
2. Hostile – requires that adverse possessor knows the land does not
belong to him/her, and tries to adversely possess it to make the
land his/hers
3. Objective – state of mind does not matter
a. What did the possessor do?
b. Courts examine:
i. Lack of permission (occupation is not
subordinate to the owner’s title)
ii. Occupier’s acts and statements objectively
appear to be claims of ownership
b. Adverse and Hostile to true owner’s interest
i. If they admit to the owner that they know it belongs to the owner, then
there is no AP because the owner does not know to eject the trespasser.
c. Maine Doctrine to Boundary Disputes (minority approach):
i. Occupier is not possessing adversely if she occupied under a good faith,
but mistaken, belief that the land is hers, but she would not have
occupied if she had known the true facts
d. Connecticut Doctrine – Mistake does not matter; only the assertion of the act
v. Under Color of Title
1. Claim founded on a written instrument (a deed, a will) or a judgment or decree that is for
some reason effective and invalid
2. Some faulty document giving title to land is involved
3. Advantages:
a. Constructive possession – Actual possession under color of title of only a part of
the land covered by the defective writing is constructive possession of all that the
writing describes.
i. Amount that you are taking isn’t determined by how much you use, but
by what the written document says that you own.
ii. Exceptions:
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1. If two people have deed to property and both are using a portion
of it, adverse possessor only gets what he is using
2. If adverse possessor has a faulty deed that covers 2 plots owned
by 2 different people, but is only using one of them, will only get
the plot he is using, because the other guy does not have notice
(not open/notorious)
b. Might have a shorter statute of limitations or less elements to prove, or more
ways to prove those elements
i. Van Valkenburgh v. Lutz – required to show that they had substantially
enclosed or cultivated/improved the property which they wouldn’t have
had to show if it was under color of title
vi. Doctrine of Agreed Upon Boundaries
1. If neighbors come to an agreement in a dispute over where the boundary is, if one party
relies on it the court will hold them to that agreement
2. If one owner acquiesces in a known encroachment for an indefinite but long time, the
acquiescence is evidence of an agreed boundary
3. Equitable Estoppel: If one neighbor does or says something that causes the other
neighbor substantially to rely on the first neighbor’s action, the first neighbor is estopped
from denying his statements/actions
vii. Defense of Disability
1. Minor, imprisoned, of unsound mind
2. The disability has to exist at the time the adverse possessor enter the property; it is
immaterial otherwise.
3. If there is a disability at the time of entrance, it extends the statute of limitations
4. Cannot tack disabilities
viii. Adverse Possession of Chattels
1. Possession must be hostile, actual, visible, exclusive and continuous
2. Usually a shorter statute of limitations
3. O’Keefe v. Snyder – O’Keefe had a painting stolen. Years later, it appeared for sale in an
art gallery. Gallery owner argued that previous owner had acquired title by adverse
possession. Hinged on whether the possession was open and notorious.
a. Four Potential Rules:
i. Strict Application of SOL of 6 Years
ii. Adverse possession – open and notorious
iii. Discovery Rule (majority rule): statute of limitations does not begin to
run on the owner of stolen goods as long as the owner continues to use
due diligence in looking for them. Cause of action accrues when owner
first knows or reasonably should know through exercise of due diligence
where the stolen goods are.
iv. NY Rule (Traditional Rule): statute of limitations does not begin to run
on the owner of stolen goods until the true owner knows who has the
goods and makes a demand for return of the goods is rejected.
c. Acquisition by Gift
i. Voluntary transfer of property (no consideration, no K)
ii. Elements:
1. Intent to presently transfer property interest
a. Gruen v. Gruen – P’s father gifted a painting to him for his birthday in a letter,
but only transferred title to him. Father wanted to retain possession until his
death. Test: whether the maker intended the gift to have no effect until after
maker’s death, or whether he intended to transfer some present interest.
b. May be shown by oral evidence
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c. Keep in mind: The death of a donor cannot be a precondition to the validity of a
causa mortis gift because such a condition indicates a lack of a present intent to
give the gift. *
2. Delivery of gift from donor to donee
a. Traditional Rule: If an object can be handed over, it must be.
b. Requires objective acts
c. Methods of delivery
i. Actual: physically handing over gift
ii. Constructive: handing over something which is representative of or gives
access to the gift if the property is immovable (keys)
iii. Symbolic: give symbol of the gift (usually a writing)
d. Function of Delivery:
i. Evidence of intent to make gift
ii. Evidence of acceptance
iii. Protects people from saying things they do not mean
1. A donor will part with possession of an object only if she truly
wishes to give it
e. Inter Vivos Gift – gift made during the life of the donor, when donor is not under
any threat of impending death. Once made irrevocable
f. Causa Mortis Gift – made in expectation of impending death
i. Substitute for a will
ii. Elements of Gift are more strictly enforced
1. More careful because by passing the statute of frauds/wills
iii. Revocable if the person does not die
1. Some jdxs require asking for it back, others just get it back
g. Newman v. Bost – Housekeeper claimed she was entitled to bedroom furniture,
piano and bureau, which held an insurance policy. Court held that handing key to
bureau was constructive delivery to the bureau itself, but not to the insurance
policy because it could have been practically handed to the housekeeper. If
something can be physically delivered—it must be.
h. Gruen v. Gruen – see facts above. Upon father’s death, wife claimed that no
delivery of painting had been made to son, therefore no valid gift. Court held that
valid gift had been made because right to title (non-possessory legal interest) was
given, but possession was retained (in a life estate). No delivery was required.
3. Acceptance
a. Seldom at issue
b. Courts presume acceptance upon delivery, unless a donee expressly refuses a gift
c. When the gift is of value to the donee, the law will presume an acceptance on his
part
POSESSORY ESTATES & FUTURE INTERESTS
I.
Basics
a. Definition: legal right to occupy the land immediately (in contrast to future interest where your present
right to possess is sometime in the future)
b. Land can be passed by intestacy statutes, will, will substitutes, trusts
c. Vocabulary
i. Heirs – people who receive property under state intestacy statutes (when there is no will); can’t
have heirs until you die
ii. Issue – lineal descendants
iii. Ancestors – by statute, parents usually take as heirs if decedent leaves no issue
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iv. Collateral – blood relatives who are neither issues nor ancestors
v. Escheat – when there is nobody to receive the property, it goes to the state
vi. Words of purchase – words describing the person or persons who are the takers of the estate
vii. Words of limitation – words limiting the duration of the estate
viii. Alienation – owner can convey the entire fee simple to another person
d. Rules of Construction
i. Try to convey the largest estate unless a contrary intention appears (presume fee simple)
ii. Try to determine testator’s intent
1. White v. Brown – Jessie Lide’s handwritten will stated: “I wish Evelyn White to have my
home to live in and not to be sold.” The court relief on three statutes to presume that
Jessie meant to give Evelyn a fee simple absolute, there being no “clear evidence” to the
contrary. One statute stated a common presumption that every grant or devise of real
estate shall pass the entire interest of the grantor or testator unless there is clear evidence
to the contrary. The second statute stated a presumption that a will conveys the entire
interest of the testator in the testator’s real property unless there is a contrary intention in
the will. The third statute created a presumption against partial intestacy, which is what
would happen if Jessie Lide’s will were read as creating a life estate in Evelyn White,
because Lide did not devise the remainder that would then exist; such remainder would
pass to her heirs in intestacy. The court treated the “no sale” restriction as an invalid
attempt to restrain alienation of a fee simple absolute rather than clear evidence of a life
estate.
a. GIVE EFFECT TO THE GRANTOR!
i. Look at the language (number one priority)
ii. Look at the surrounding circumstances
iii. Disabling restraint – usually invalid
II. Fee Simple Absolute – estate of potentially infinite duration
a. Creation
i. Modern Rule: not necessary to use words “and his heirs”
1. The grandest estate possible, most complete property, goes on forever
2. Theoretically lasts forever
a. To A and his heirs
b. To A
c. To A in fee simple
d. To A forever
e. All to A
f. [To A and the heirs of her body]
i. Fee tail language interpreted as fee simple
3. Presumption of a fee simple over other estates without something to indicate that another
estate is being created
a. Easier to administer, marketability, efficiency
4. Creates a perpetual estate
a. Estate continues after death original owner (fee simple held by A until conveyed,
and if not conveyed, held by devisees or heirs)
b. Potentially infinite duration
c. No limits on inheritability
d. Cannot be divested
b. Conveyability
i. Transfer- owner can transfer interest to another person and fee simple continues with new owner
ii. Devise – under modern rule, owner can devise his fee simple to anybody he wants or split it up
with parts adding up to a fee simple
iii. Inheritance – when owner of a fee simple dies intestate, heirs inherit it through intestacy statutes
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1. Usually part is reserved for surviving spouse, and the rest is distributed between the
children (with parents as heirs absent spouse/children, or collateral kin if no parents)
III. The Finite Estates
a. Life Estate
i. Definition
1. A possessory estate that expires upon the death of a specified person
2. Always followed by some future interest (either a reversion or a remainder)
ii. Creation
1. To Andrew for life
2. To Andrew for the life of Beta
iii. Types
1. For Life of Grantee
a. Expires upon death of life estate holder
b. This is the usual life estate
2. Pur Autre Vie
a. Measured by the life of someone other than the owner of the life estate
b. Expires upon the death of somebody besides the estate holder
c. Created either by measuring it by a third party’s life OR when life estate is
conveyed (then it is measured by original grantee’s life)
iv. White v. Brown –
1. Three types of disabling restraints:
a. Disabling restraint – withholds from the grantee the power of transferring his
interests
b. Forfeiture restraint – provides that if the grantee attempts to transfer his interest,
it is forfeited to another person
c. Promissory restraint – provides that the grantee promises not to transfer his
interest
v. Conveyability
1. Transfer ONLY
b. Term of Years
i. Creation
1. To Andrew for 50 years
2. To Andrew from Sept. 1, 2007 to Aug. 31, 2057
ii. Conveyability
1. Transfer
2. Devise
3. Inherit
IV. Fee Simple Defeasibles
a. Fee Simple Determinable
i. Automatically ends at the happening or non-happening of an event
ii. Created by:
1. The language of a fee simple
2. Limited by language that shows intent to terminate automatically:
a. So long as
b. While
c. Until
d. During
e. Unless
iii. Future Interest
1. Possibility of reverter held by the grantor (or his successors)
iv. Conveyability
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1. Transfer
2. Devise
3. Inherit (subject to conditions)
b. Fee Simple Subject to Condition Subsequent
i. May end at grantor’s election on happening/non-happening of event
ii. Created by:
1. The language of a fee simple
2. Limited by language that shows intent not to terminate automatically:
a. But if
b. Provided that
c. Provided however
d. On the condition that
iii. Future Interest:
1. Right of reentry/power of termination held by the grantor (or his successors)
iv. Conveyability:
1. Transfer
2. Devise
3. Inherit (subject to conditions)
c. Fee Simple Subject to Executory Limitation
i. Looks like either a FSD or FSSCS except that the future interest is NOT in the grantor
ii. Future Interest
1. Executory Interest
a. Springing
b. Shifting
2. Conveyability:
a. Transfer
b. Devise
c. Inherit
V. Future Interests
a. Who holds the interest:
i. Grantor
1. Reversion
2. Possibility of reverter
3. Right of reentry
ii. Transferee
1. Remainder
2. Executory Interest
b. By what possessory estate they follow:
i. Fee simple absolute
1. NO future interest
ii. Finite Estates
1. Reversion (grantor)
2. Remainder (transferee)
c. Fee Simple Defeasibles:
i. FSD  possibility of reverter
ii. FSSCS  right of reentry/power of termination
iii. FSSEL  executory interest
d. Remainder
i. Vested
1. Born
2. Ascertainable
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3. There is no express condition precedent in (a) the clause creating the remainder or (b) the
preceding clause
ii. Contingent
1. Any other kind of remainder
VI. Rule Against Perpetuities
a. Purpose: trying to keep control from reaching too far in the future (dead hand control)
b. No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the
creation of the interest
c. Applies to:
i. Contingent Remainders – may vest yet still not become possessory until a future date
ii. Vested Remainders subject to partial divestment/subject to open – class gifts
1. The class must close or completely vest
iii. Executory interests – must become possessory
d. Steps:
i. Determine if RAP applies
1. Is it a contingent remainder, vested remainder subject to partial divestment or
executory interest?
2. If yes, then can the given interest vest at some time after the “lives in being plus 21
years”?
3. If yes, then the remainder is invalid, it is crossed out and interests are reclassified without
the remainder included
ii. RAP Reform: many states have mediated RAP by:
1. Cy Pres: Reformation- changes the will to give effect to what the grantor wanted
2. USRAP – wait and see approach – see if it might vest anyway within the 21 years of life
in being
a. Or, some states just give a 90 year vesting period, void if not vested by then
CO-OWNERSHIP & CONCURRENT INTERESTS POST MIDTERM
I. How do you divide up ownership of property at the same time?
II. Partition – serves to sever co-tenancies so as to move in the direction of individualized ownership
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III. Concurrent Interests:
a. Tenancy in common – separate, undivided shares of property where each owner has a distinct share and
the right to possess the entire property
i. Conveyable through all 3 methods (by will or deed)
ii. Majority rule is that when ambiguous, the court will favor a tenancy in common over a joint
tenancy
iii. No survivorship rights
iv. Ex: T devises Blackacre to A and B. A and B are tenants in common. If A conveys his interest to
C, B and C are tenants in common. If B then dies intestate, B’s heir is a tenant is in a tenant in
common with C. Each tenant in common owns an undivided share of the whole.
b. Joint Tenants – each owner has a distinct share but also owns an undivided whole and has right to possess
the entire property
i. By a legal fiction, joint tenants together are regarded as a single owner; each tenant is seised per
my et per tout (by the share or moiety of the whole). In theory then, each owns the undivided
whole of the property; this being so, when one joint tenant dies nothing passes to the surviving
joint tenant or tenants. Rather, the estate simply continues in survivors freed from the
participation of the decedent, whose interest is extinguished.
ii. MODERN RULE: You can create joint tenancies in unequal shares if you want—give effect to
the grantor (ex: 75%, 25%)
1. Cases of ambiguity presume tenancy in common
iii. Right of survivorship – avoid probate
1. Probate = the judicial supervision of the administration of the decedent’s property that
passes to others at the decedent’s death. The probate court appoints an administrator or
executor who collects the decedent’s assets, pays debts and taxes, and distributes or
changes title to the property to the beneficiaries. A joint tenancy passes probate because
no interest passes on the joint tenant’s death.
2. One’s interest is terminate upon death – cannot pass interest in a joint tenancy by will
c. 4 unities
i. Time – acquired or vest at the same time
ii. Title – by the same instrument or by a joint adverse possession
iii. Interest – equal undivided shares
iv. Possession – must have right of possession of the whole
d. Joint tenants can be created even if the unity of “interest” is not met and property will be divided
according to the allocated share if it requires judicial partition
e. Creation of Joint Tenancy
i. Today, a tenancy in common is presumed if there is a conveyance or devise to two or more
persons. Today, however, husbands and wives are presumed to take either as tenants by the
entirety or joint tenants.
ii. Evidence Sufficient to create joint tenancy:
1. The modern presumption of tenancy in common can be overcome only by a clearly
expressed intention in the grant itself.
f. Severability of Joint Tenancy
i. Any of the unities can be broken unilaterally and that, then, creates a tenancy in common with the
remaining joint tenants
1. Straw man, Trust Method, joint tenants agree to sever, declaration of election to sever
2. UNILATERAL SEVERENCE:
a. Riddle v. Harmon – Common law regarded a conveyance of an interest held by a
person to himself as an empty act, devoid of legal effect. Thus, to convert a joint
tenancy into a tenancy in common, the joint tenant would have to employ a straw
man, to whom the severing conveyance would be made and from whom a
reconveyance would be made. Here, the court held that Frances Riddle could
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validly sever the joint tenancy with her husband by a voluntary conveyance
from herself as joint tenant to herself as tenant in common with her husband.
Frances’s deed made plain that her intent was to sever the joint tenancy; the
reasons for refusal to recognize a conveyance from self to self were archaic and
rooted in livery of seisin.
i. Joint tenant can unilaterally convert a joint tenancy to a tenancy in
common by conveying to one’s self.
ii. Removes antiquated, symbolic procedure of using straw man toward
Intent Test.
iii. COMPARE: Tenancy in common cannot be severed by unilateral action
of one spouse. Joint tenancy gives the spouses assurance that the survivor
will take the property, unless both spouses act to destroy the survivorship
rights.
iv. Potential Problems:
1. The husband never knew that the joint tenancy was severed; as a
result, his interest would pass at his death through intestacy or
residual clause of his will
2. An unscrupulous hypothetical Frances could sever the joint
tenancy by executing a deed, not recording it, and telling a trust,
but equally unscrupulous, beneficiary of her will of the deed’s
existence, but then wait to see whether her husband dies first, at
which point the severing deed would secretly be destroyed; if
Frances were to die first, her devisee would produce the deed.
3. MORTGAGE:
a. Harms v. Sprague – John and William Harms owned a farm as joint tenants. John
mortgaged his interest to Carl and Mary Simmons in order to secure a loan made
by them to John’s friend, Charles Sprague. Later, John died while the loan was
unpaid. The court held that (1) there was no severance, and (2) William oened the
farm in entirely free of mortgage to Carl and Mary Simmons. The court reasoned
that the mortgage burdened only John’s interest and that because John’s interest
died with him, leaving only the previously unencumbered interest of Willaim and
the surviving title, the mortgage died with John. Mortgage does not destroy the
joint tenancy – lien disappears with the death of the joint tenant. Court takes a
very formalistic approach to the traditional question whether a mortgage severs a
joint tenancy, with much turning on the difference between the title theory and
lien theory of mortgages. A more functional approach considers the likely intent
of the party giving the mortgage. Since a mortgage, as opposed to a conveyance,
is an ambiguous sort of conveyance in this respect, it would seem to follow that a
mortgage, absent any other evidence of intent, should not work a severance. Does
the mortgage survive since it did not sever the joint tenancy?
i. Even though there was a default, because brother died, his interest in the
property extinguished and so lien did not hold
ii. There must be an actual severance of joint tenancy, not the potential for
severance—a lien does not transfer title to the lien holder but merely
gives the potential for such transfer
iii. Lien theory – in putting a lien on a property, a future interest is created
but that future interest will not vest until death. At death, however, the
interest is extinguished and so there is no lien on the property b/c the
future interest does not hold. [MAJORITY]
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1. When giving a lien, you are not divested of title but only give
someone the right to divest you of title upon the happening of
some future event, default.
iv. Title theory – by giving over a mortgage, you’re giving over a legal title
– voluntary conveyance.
1. Therefore, joint tenancy is severed, becomes a tenancy in
common and lien remains attached to the share of the tenancy in
common.
v. Criticism:
1. Penalizes the unsophisticated lender (because a savvy lender will
never lend to a single joint tenant on the strength of the joint
tenancy interest as security for payment of the loan) and delivers
a windfall to the surviving joint tenant.
g. Sharing Benefits/Ouster – Relations Among Concurrent Owners
i. “Two men cannot plow the same furrow” –So how should the inherent conflict of reciprocal
rights be resolved?
ii. Partition
1. Concurrent owners might decide for any number of reasons to terminate a co-tenancy. If
they can agree on a division of the property or the proceeds from its sale, no problem
arises; the termination can be accomplished through a voluntary agreement.
2. But in the not unlikely event that such an arrangement is impossible, recourse to the
equitable action of partition is necessary. The action is available to any joint tenant or
tenant in common.
3. The court will order either:
a. Physical division of the property
i. Partition in Kind  the preferred method
1. Courts will order unless the party can prove either:
a. That physical partition is impossible or extremely
impractical
b. That physical partition is not in the best interest of all the
parties
i. Economic costs (or gain) involved in physical
partition, but also the more subjective costs
imposed on a tenant in possession by ordering
partition by sale.
b. Sale and division of the land and proceeds
i. Partition by Sale  not favored by courts
1. Rural undeveloped land is the most likely candidate for physical
division
2. After the sale, the net proceeds are divided among the co-owners
in proportion to their ownership interests
3. In the absence of express evidence in title of unequal shares,
courts employ a rebuttable presumption that each co-owner is
entitled to an equal share of the proceeds.
c. Delfino v. Vealencis - Helen Vealencis owned 20.5 acres in CT, as a tenant in
common with the Delfinos. Helen lived on a portion of the property and operated
a garbage-hauling business from there. The Delfinos wished to develop the
property into single-family residences and so demanded partition by sale even
though the property was capable of partition in kind. Although the evidence
suggested that the total value of the property would be maximized by sale and
development, the court held that it was not in the best interest of all parties
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(including Helen) to sell the entire property. The value to Helen of continued
possession (secured by physical partition) was sufficient to convince the court
that partition in kind should be ordered.
i. Courts favor partition in kind over by sale.
1. By Sale  provides for an emergency, when a decision cannot
be well made, in any other way.
a. Only when two conditions are satisfied:
i. The physical attributes of the land are such that a
partition in kind is impracticable or inequitable
ii. The interests of the owners would better be
promoted by a partition by sale
b. The burden is on the party requesting a partition by sale
to demonstrate that such a sale would better promote the
owners’ interests.
iii. Rents, Profits & Possession
1. Each co-owner has the right to possess the entire property, and no co-owner may exclude
his fellow co-owners.
a. Exclusive possession by one co-owner – because each co-owner has a right to
possess all of the property, exclusive possession by one co-owner is
presumptively valid. If it is pursuant to an agreement of all co-owners it is
conclusively valid. If not by agreement, the cotenant in exclusion possession has
the following obligations to his cotenants:
i. Rental value of exclusive possession:
1. Two views:
a. No liability absent ouster or special duty – the majority
rule is that a cotenant in exclusive possession has no
liability for her share of the rental value of possession
unless [MAJORITY]:
i. The other cotenants have been ousted
ii. The cotenant in possession owes a fiduciary duty
to the other cotenants
iii. The cotenant in possession has agreed to pay
rent
b. The cotenant in exclusive possession is liable to
cotenants out of possession for their share of the fair
rental value of the occupied premises, unless there has
been an agreement among the parties to excuse the
tenant in possession from this obligation [MINORITY]
2. Ouster:
a. Occurs if the tenant in exclusive possession either:
i. Actually prevents or bars physical entry by a
cotenant
ii. Denies the cotenants claim to title
b. Two Circumstances:
i. AP – asserts complete ownership and deny the
co-tenancy relationship
ii. Co-tenant responsible for rent, refusing a
demand of other co-tenant for use and
enjoyment of land.
3. Spiller v. Mackereth – Spiller and Mackereth owned a
commercial building as tenants in common. Spiller took
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possession of the entire building and used it as a warehouse.
Mackereth demanded that he vacate half the building or pay rent.
Spiller did nothing, and Mackereth sued for the rental value of
half the building. The court reversed an award of rent, reasoning
that Spiller had neither denied that Mackereth was an owner of
the building nor prevented Mackereth from actually moving in
and taking possession. Mackereth’s demand that Spiller vacate
or pay rent was insufficient to trigger ouster, she needed to prove
that she “actually sought to occupy the building but was
prevented from moving in by Spiller.”
a. No evidence to show that Spiller refused entry to
Mackereth. He had the right to use of the whole property
so long as it didn’t prevent others from use. The locks
were not an indication because used to protect what was
inside the building.
b. Majority/Minority
i. Majority – encourages partition, moving
ownership back into the hands of individual
owners and moving away from fractional
ownership
ii. Minority – discourages partition and maintains
split ownership leading to the tragedy of the
commons
c. RULE: When a cotenant is in sole possession of
concurrently owned property, the majority holds
that, unless there has been an ouster, the cotenant in
possession does not have to pay a proportionate share
of the rental value to the cotenants out of possession.
ii. Rents From Third Parties
1. A cotenant who receives rents on the property from a third party
is obligated to account to his cotenants for those rents. If the
rents or other income received by a cotenant are greater than the
cotenant’s share, he is obligated to pay the excess to the other
cotenants.
2. Swartzbaugh – John and Lola Swartzbaugh owned in joint
tenancy a 60-acre walnut orchard. John leased four acres to Sam
Sampson, a boxing promoter, who constructed a boxing pavilion
on the site. Lola did not join in the lease; indeed, she objected
vehemently to the boxing pavilion. Lola sought to cancel the
lease made by John, and the court denied her claim, reasoning
that a lease by a single joint tenant to a third-party “is not a
nullity but is valid...contract in so far as the interest of the lessor
in the joint property is concerned.”
a. Non-lessor joint tenants do not have an action to cancel
the leases made by the lessor joint tenant.
b. Lease does not destroy a joint tenancy – there’s always a
way out—action for partition.
c. The joint tenant has the right to lease or mortgage
interest in property even if the other tenant objects.
Other joint tenants are entitled to a portion of the rent. If
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other joint tenant ousted, then can get fair market value
for his share of the rent.
d. Remedies Available to Ms. Swartzbaugh:
i. Partition – she could bring an action to partition
the entire 60 acres or to partition the fraction
leased to Sampson for the duration of the lease.
If she brought an action to partition the fraction
leased for a five-year term, with an option to
renew for an additional five year, and the court
ordered sale of the leasehold term, how would
the court divide up the proceeds of the sale?
ii. Ouster—Another remedy would be to enter, or
try to enter, into possession with the lessee. If
the lessee resists, the remedies of an ousted
cotenant are then available. She could recover
from the lessee one-half the reasonable rental
value of the leased land. [Only if the lessor cotenant was renting out for BELOW the fair
market value*]
iii. Accounting – She could sue her husband for an
accounting of the rents received by him.
iv. Death - Lola could hope for her husband’s
death, which would terminate Sam’s leasehold
because Sam had only leased John’s interest,
and John’s interest would expire at his death.
TITLE ASSURANCE
I. How current owners can obtain assurance that they actually have good title to the land they purchase
II. 3 Types of recording acts:
a. Race – give priority to the title claimant who first records his deed
i. As between two grantees to the same property, the earliest to record prevails. Hence there is a
race to record first. It does not matter that the first person to record had notice of a prior
unrecorded conveyance.
ii. The reason for ignoring such notice is that making the record dispositive obviates the need to rely
on extrinsic evidence about notice, which may be unreliable. Most jdxs regard the equitable cost
of the race statute as too high, because it permits a later grantee to prevail over a known earlier
grantee so long as the later grantee is quicker to record.
b. Notice – give priority to the bona fide purchaser who lacks notice of a prior unrecorded deed
i. Address the inequity in permitting a later purchaser to prevail over an earlier purchaser when the
later purchaser knows of the prior purchase. They do so by providing that a subsequent bona fide
purchaser without notice of a prior unrecorded transfer prevails over the prior purchaser who has
failed to record. And this is true even if the subsequent purchaser has failed to record.
1. Ex: “No conveyance is valid against any subsequent bona fide purchaser who has no
notice of the conveyance, unless the conveyance is recorded.”
c. Race-Notice – give priority to the bona fide purchaser who lacks notice of a prior unrecorded claim only
if the bona fide purchaser records first
i. Protects a more limited class of subsequent bona fide purchasers who lack notice of the prior
conveyance: It protects only those subsequent bona fide purchasers who lack notice and who
record before the prior purchaser.
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1. Ex: “ No conveyance is valid against a subsequent bona fide purchaser who has no notice
of the conveyance and who has recorded his conveyance first.”
ii. Virtues:
1. Encourages recording
2. Eliminates disputes over which of two conveyances was first delivered
d. NOTE: Sometimes a straight application of recording acts WILL NOT decide who gets title to the
property. At that point, employ the judge-made law (see below).
III. Recording
a. Creates a system for placing conveyances in a public record, and then stipulates who has priority in the
event of a conflict.
b. A deed is valid without a recording, but an unrecorded deed is likely to lose out to a recorded deed if both
deeds are from the same grantor to the same property.
c. Grantor-Grantee Index
i. An alphabetical record of all grantors and all grantees, by surname, is maintained in separate
volumes. The typical entry will contain the date, the name of the grantor (or grantee, as
appropriate), the other party to the transaction, a brief description of the property and the
instrument, and a citation to the precise location in the public records of a complete copy of the
instrument.
ii. Title Searching
1. The searcher begins by looking back in time through the grantee index to find the
transaction by which the present owner acquired title, then searches the grantee index
further back to find the transaction by which the present owner’s grantor acquired title.
This process continues until an adequate root of title has been found (usually a title
transaction far enough back in time to cut off any prior claims by a statute of limitations).
Then the searcher will turn to the grantor index and search forward in time, beginning
with the initial grantor, to see if any owner ever conveyed her interest prior to the grant
that appears to make up the chain of title traced backward in time.
d. Tract Index
i. Every transaction pertaining to a particular parcel is entered in one location, instead of
chronologically by grantor and grantee. Tract indexes are most common where property has been
platted by map into various blocks and lots within blocks.
e. Consequences of Recording:
i. Provides constructive notice to the world of a conveyance
ii. Even if a later purchaser fails to consult the record, he is charged with knowledge of its contents
iii. Race-Notice  recordation cuts off the possibility that either a prior unrecorded purchaser or a
later purchaser would prevail.
iv. Notice  recordation provides constructive notice, thus preventing later purchasers from
prevailing
f. When is an instrument recorded?
i. Mother Hubbard
1. A variation on the improperly indexed instrument is an instrument that accurately
describes one parcel, Blackacre, and also includes “all other land owned by the grantor in
the county.” The recorder can only record this instrument by reference to Blackacre,
because it is an unreasonable burden on the recorder to search the records to identify all
of the other property owned by the grantor. These clauses are void against later
purchasers of the grantor’s property (other than Blackacre) because a diligent searcher of
the index (with respect to a parcel other than Blackacre) will never locate any reference
to the mother hubbard clause.
2. Luthi v. Evans – The court held that the omnibus clause in the Owens-to-Tours
assignment did not give constructive notice to later purchasers of Owen’s interest in the
Kufahl lease. It was not reasonable to expect a title search to locate and read every other
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conveyance ever made to Owens at any time conferring an interest in oil and gas lease in
Coffey County, Kansas. That would be a monumental task, greatly increasing the time
and expense of title searches, which Kansas’s recording act did not contemplate.
g. Scope of Protection
i. Invalid Conveyance – although recordation creates a presumption of validity, if in fact the
instrument was invalid (forged or never delivered), recordation does not make it valid
ii. Interest in land created by operation of law – only apply to conveyances (deeds, mortgages,
grants, contracts) and liens created by operation of law (judgments). They DO NOT apply to
interests created by the operation of law, such as adverse possession, prescriptive easements, or
implied easements. Even though such interests are not of record, they are still valid and
enforceable against subsequent purchasers.
iii. Bona Fide Purchasers – one who gives valuable consideration to purchase the property and is
without notice of a prior unrecorded deed or conveyance.
1. Race acts protect BFPs only to the extent that they record first
2. A donee does NOT receive protection because he has not given value
3. Shelter Rule – the protection given to a BFP extends to all takers from the BFP, even if
such a taker knows of a prior unrecorded conveyance. This rule is necessary to give BFP
the full value of his purchase in reliance on the records. Part of that value is the ability to
transfer good title to others.
IV. Notice
a. To be protected under a notice or race-notice statute, a purchaser must be without actual notice or
constructive notice of any prior unrecorded interests at the time the purchaser pays the consideration
i. Actual – real, actual knowledge of the prior unrecorded transaction. Evidence beyond the record
is necessary to prove actual notice.
ii. Constructive – there are two forms:
1. Record notice – the entire world, specifically including a subsequent grantee, is charged
with constructive notice of the contents of the record. If an instrument is validly recorded,
every subsequent grantee has constructive notice of it, and so cannot be a BFP.
a. Wild Deeds – Outside the chain of title
i. If a complete stranger to the record chain of title records a conveyance,
the conveyance does not give constructive notice, because it is not within
the chain of title.
ii. Board of Education of Minneapolis v. Hughes – In Minnesota, a racenotice state, Hoerger conveyed a lot to D&W, who did not record. D&W
then conveyed the lot to Board of Education, who did record, after which
Hoerger conveyed the same lots to Hughes, who lacked notice of the
conveyance from Hoerger to D&W. Hughes recorded. The court held
that Hughes prevailed over the Board of Education because the
conveyance from D&W to the Board was outside the chain of title and
did not impart constructive notice. At the time Hughes purchased from
Hoerger, a diligent title search would reveal Hoerger to be the record
owner. Even though the deed from D&W to the Board was recorded first,
it would appear to be a deed made by a complete stranger to the chain of
title. A diligent searcher would have never found the D&W-Board
conveyance.
b. Deeds from common grantor – Reciprocal implied covenants restricting land use
may be implied by a developer’s conveyance of property subject to express
covenants burdening the developer’s retained land, but such a covenant does not
appear in the chain of title of the retained land, if it is conveyed without the
implied covenant being made express.
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i. Guillette v. Daly Dry Wall – Gilmore, a developer and subdivider,
conveyed a lot to Guillette under a recorded deed that restricted the lot’s
use to a single-family residence, and recited that “the same restrictions
are hereby imposed on each of [the] lots now owned by seller.” This was
effective to impose the single-family residence use restriction on all of
Gilmore’s remaining lots. Later, Gimore conveyed a restricted lot to
Daly under a recorded deed that made no mention of any restrictions.
Daly obtained a building permit to construct 36 apartment units on the
lot. Other owners of the lots in the development sought to enjoin Daly
from violating the single-family residence use restriction. The court held
that Daly had acquired the lot with constructive notice of the restriction
even though the restriction was not in the chain of title from Gilmore to
Daly.
1. The Guillette rule requires a purchaser to expand his search of
title to include all conveyances made by the grantor of other
adjacent property he owned, in order to be certain that the
grantor did not burden his remaining property with a use
restriction contained in a deed to a third party.
c. After-acquired title
i. Suppose that the grantor conveys title twice, once before acquiring it and
once afterward to a person without actual notice of the prior conveyance,
and both conveyances are immediately recorded.
1. The majority rule is that the first conveyance does not impart
constructive notice because it is not reasonably to expect title
searchers to search the records for the time period prior to the
grantor’s acquisition of title on the off chance that the grantor
might have conveyed his title before he received title
2. Inquiry notice – in most jdxs, a subsequent purchaser has an obligation to make
reasonable inquiries and is charged with knowledge of what those inquiries would reveal.
a. Record reference to an unrecorded instrument – if a recorded instrument refers
expressly to an unrecorded instrument, a purchaser is under obligation in many
states to inquire about the substance of the unrecorded instrument to which the
record refers
i. Harper v. Paradise – Susan Harper conveyed her Georgia farm to Maude
Harper for life, remainder to Maude’s children. The deed was mislaid
and thus not recorded. In 1928, Susan having died, Susan’s children
executed and delivered a quitclaim deed to Maude by which they
conveyed any interest they might have in the farm to Maude. The 1928
deed, which contained a recital that it was “to take the place of the deed
made and executed by Mrs. Susan Harper during her lifetime,” was duly
recorded. Through a succession of recorded conveyances, title to the
farm was vested in the Paradises. Upon Maude’s death, her children sued
to recover possession. The court held that the Paradises could not rely on
a Georgia statute protecting the title of innocent purchasers from heirs or
apparent heirs who lack actual notice of prior claims, because the recitals
in the 1928 deed made specific reference to an unrecorded deed. Georgia
is a race-notice state, and the court concluded that the recitals to the 1928
deed placed a duty upon subsequent purchasers to inquire of Maude to
determine the details of the unrecorded deed referred to in the 1928 deed.
Thus, the paradises had constructive notice of the prior claim when they
acquired title and so lost.
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b. Possession – most states impose a duty to inquire of whoever is in possession of
the subject property
i. Waldorff Insurance & Bonding – Choctaw Partnership, a developer, built
a condo complex secured by a recorded mortgage, later assigned to Eglin
National Bank. Then Choctaw sold Unite 111 to Waldorff but the sale
was not recorded. Waldorff moved in, then moved out but kept
furnishings in the unit and asserted exclusive possessory rights to the
unit. Choctaw then executed and delivered a deed Waldorff, who
recorded. Eglin later sought to foreclose on Unit 111. The court held that
because Waldorff was in possession, Eglin was on inquiry notice that
Waldorff might have a prior unrecorded claim.
c. Character of Neighborhood
i. Sanborn v. McLean – see below
d. Immediate grantee of a quitclaim deed
PRIVATE CONTROL OF LAND USE
I.
Easements – allow a person to use the land of another (distinct from a freehold estate which gives its owner the
right to exclusive possession of one’s own land)
a. Ambiguous Grants
i. Most courts employ a rebuttable presumption that an ambiguous grant conveys an easement
ii. This is supported by economic reasoning—it minimizes the transaction costs of uniting
ownership of efficiently usable parcels
iii. Presault v. US – the court of appeals affirmed a trial court’s determination that the original
interest was an easement because Vermont law stipulated that railroads acquiring rights of way
acquired only the smallest interest in land necessary to accommodate their limited interest in
creating a rail transport corridor. The difference between an easement and a fee simple was
significant: A fee simple in the railroad would mean that the abandoned rail corridor remained the
railroad’s property and that it was validly conveyed to Vermont; an easement raised issues of
whether it was abandoned (and thus title reverted entirely to the owner of the fee) or, if not,
whether the public trail use was consistent with the scope of the easement for rail transport.
b. Policy in favor:
i. Contractual aspects – burdened land is sold for less
ii. Certainty in purchasing – want to be sure court will enforce if you buy
iii. Encourage productive use of land
c. Four types:
i. Appurtenant – RUNS WITH THE LAND.
1. Benefits the owner of another parcel of land. The benefited parcel is called the dominant
estate (or the dominant tenement), and the burdened parcel is called the servient estate (or
servient tenement). An easement appurtenant passes with the dominant estate whenever
the dominant estate is transferred to a new owner. The easement right is incidental to, or
appurtenant to, the dominant estate.
2. Courts generally will identify an ambiguous easement as appurtenant
3. Encourages efficient use of the land
ii. In Gross – RUNS WITH THE PERSON.
1. An easement that is designed to deliver a personal benefit, rather than to benefit the
landowner, is an easement in gross. They are not attached to, or appurtenant to, any
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parcel of land. They create a personal right to use the servient estate, but that right may
be assigned if the parties so intended.
iii. Positive vs. Negative
1. Affirmative – an easement granted by the servient owner giving the easement holder the
right to enter or perform an act on the servient land
2. Negative – confers only the right to prevent specified uses of the servient estate
a. Blocking light
b. Blocking air flow
c. Removing supports
d. Blocking water
d. Profits a prende – the right to take a natural resource or crop from the land of another
i. Common law courts preferred to construe profits as in gross because the right conveyed has
substantial economic value by itself and thus is most efficiently utilized if it is easily transferrable
by itself, rather than as an adjunct to some unrelated property
e. Licenses
i. Permission to enter the licensor’s land
ii. May be oral or written
iii. Revocable at any time unless the licensor makes it irrevocable (expressly or by his conduct)
iv. License vs. In gross?
1. The difference is that an easement may NOT be revoked and continues to bind successors
to the servient estate who have notice of it, while a license is revocable and binds only the
licensor so long as it remains alive
2. Courts prefer to construe ambiguous cases as licenses
f. Irrevocable Licenses
i. 3 ways:
1. Intention – if the licensor expressly makes the license irrevocable
2. Equitable estoppel – if a licensor grants a license on which the licensee reasonably relies
to make substantial improvements to property, equity requires that the licensor be
estopped from revoking the license.
a. Holbrook v. Taylor – Holbrook permitted Taylor to use a roadway across his
property in order for Taylor to reach his own property. With Holbrook’s
knowledge, and without any objection, Taylor used the access road to construct a
substantial single-family residence. Holbrook later blocked the road with a steel
cable strung taut across it. The Kentucky Supreme Court held that Holbrook was
equitably estopped from revoking the license.
3. Duration – a license made irrevocable through equitable estoppel continues to exist as is
needed to prevent unjust enrichment, which generally meant that the license exists until
the value of the reliance expenditures has been exhausted. Where valuable improvements
have been made, this might well be at least as long as the useful life of the improvements,
and some courts have hinted that such a license must last forever.
ii. Easement Compared:
1. As easement is of indefinite duration and can continue forever. An irrevocable license
may last for a shorter period, but an irrevocable license might last as long as an easement.
iii. Policy:
1. In favor?
a. It is unfair for the licensor to stand by and watch the licensee expend
considerable money and effort in reliance on the license, then to rescind the
license. The licensor is in the best position to prevent these reliance expenditures.
2. Against?
a. Estoppel penalizes the “good neighbor” who fails to say no until the
improvement is completed. The landowner who freely gives permission and is
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loathe to be a “bad guy” is the one who bears the cost of an irrevocable license
imposed on his land. On this theory, the licensee should pay to the licensor the
value of the irrevocable license (measured by the damage to the licensor’s land
resulting from irrevocability).
iv. License “coupled with an interest”
1. When a license is tied together with some other legally recognized interest, the license is
irrevocable until the other interest is vindicated.
g. Creation
i. Grant/Express – in writing, must satisfy the requirements of the SOF
1. Deed or grant
2. Signed by the grantor
3. Life estate or fee simple
4. Reservation – grantors sometimes convey land and, in the same deed, purport to
“reserve” an easement in favor of the grantor or a third party
a. In favor of grantor
i. Common law judges invented the fiction that the grantee, by accepting
the deed, had granted an easement back to the grantor.
b. Grant to a third-party (modern rule)
i. This rule is especially peculiar because a real covenant can be created in
favor of a third party. A minority of modern courts have ruled that
easements reserved in favor of a third party are valid.
ii. Willard v. First Church of Christ Scientist
1. McGuigan owned lots 19 and 20, was a member of the church
across the street. Permitted the church to use lot 20 for parking.
She then sold lot 19 and 20 to Peterson, who subsequently sold
them to Willard. However, the deed from Peterson to Willard did
not contain notice of the church parking, although the deed from
McGuigan Peterson did. The court held that the primary
objective in construing a conveyance is to give effect to the
intent of the grantor (McGuigan).
iii. GIVE EFFECT TO THE GRANTOR’S INTENT.
ii. Estoppel
1. An irrevocable license, the functional equivalent of an easement, can be created by
estoppel
iii. Implication
1. Two circumstances:
a. Implied from Prior Use. Where property has been divided by a common owner,
and, prior to the division, one portion of the property has been used in an
easement-like fashion for the benefit of another party of the property.
i. Common Owner – prior to the division, the quasi-servient state and the
quasi-dominant estate must be owned by the same person
1. When the common owner divides the property by selling one
part to another person, an easement from prior use may be
created.
2. If the owner and grantor retains the quasi-servient estate (the
burdened part), the implied easement is by implied grant.
3. If the owner and grantor retains the quasi-dominant estate (the
benefited part), the implied easement is by implied reservation.
ii. Reasonable Necessity – the prior use must be reasonably necessary for
the use and enjoyment of the “quasi-dominant estate”
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iii.
iv.
v.
vi.
vii.
1. The easement must be reasonably necessary for the owner of the
dominant estate to use and enjoy her property. It ensures that the
easement was likely intended to continue after division.
2. One corollary implication is that an easement implied from prior
use can only be appurtenant. Courts tend to find reasonable
necessity if it would be costly or difficult to use the dominant
estate without an easement, or if the price for either the dominant
or servient estate reflects the existence of an easement.
3. Most courts today require reasonable necessity for easements
implied by grant and for easements implied by reservation.
a. Van Sandt v. Royster – Bailey owned three adjoining
lots. She built a house on one of the lots and ran an
underground sewer line across the other two lots to a
municipal sewer. Later, she sold all three lots to separate
owners under deeds making no mention of the sewer
line. The new owners connected their homes to the
sewer line. Van Sandt, the downstream owner, sued to
enjoin Royster from continuing to use the Bailey sewer
after it flooded his basement. The court held that an
easement by reservation implied from prior use had been
validly created by Bailey when she conveyed title to
each of the two downstream lots.
Continuous Use – the prior use must be continuous, not sporadic
1. The use must be such that both parties intended for it to
continue. Continuous use does not mean that it must be used
constantly; rather it means that the easement must be embodied
in some permanent physical alteration.
a. Ex: an outdoor concrete staircase serving Parcel A, but
located entirely on Parcel B, is permanent (and thus
continuous) even though it is not in constant use.
Intended continuation – the parties must intend, at the time of division,
to continue the prior use
1. Many of the other elements are proxies for this element because
parties rarely provide express evidence of their intentions. The
price paid is helpful to this issue because parties who intend for a
quasi-easement to continue are likely to settle on a price that
reflects the value (And detriment) of the easement.
Existing Use At Division – the prior use must be existing at the time of
division, a requirement implied by the element of intended continuation
Apparent – the prior use must be apparent, which does not necessarily
mean that it is visible
1. Van Sandt v. Royster – Although Bailey’s private sewer line,
crossing the two lots she sold without reference to any easement,
was underground, the court held that the sewer line was apparent
because later buyers should have inferred the existence of some
sewer by noting the existence and operation of plumbing
fixtures, and could have employed a skilled plumber to detect the
actual location of the sewer.
[Scope] – the scope of the implied easement includes not only uses
known or discoverable at the time of severance but also those uses that a
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party might reasonably have foreseen that the other party would have
expected to be included in the implied easement.
b. Implied from Necessity. Where property has been divided by a common owner
in such a manner that an easement for access is necessary.
i. Only when a common owner divides his property in such a way that one
of the resulting parcels is left without access to a public roadway. An
easement for right of way between the landlocked parcel and the public
road across the owner’s remaining parcel is then implied, either because
the parties must have intended this result or because it is economically
efficient and socially beneficial to create an easement for access.
ii. ONLY permitted for right of way –ingress and egress between the
landlocked parcel and a public road.
1. Elements
a. Common Owner – can only be created over property
owned by the person who also owned the landlocked
parcel and who divided the property to create the access
problem.
i. In cases of multiple division, an easement by
necessity is created at the moment a parcel is
landlocked, and thus the easement burdens the
last parcel split off by the common owner—the
parcel that completed the landlocking.
ii. Othen v. Rosier – Hill owned a large parcel of
land in Texas, which he sold in bits and piece
over time. One of those parcels was landlocked,
and title to that parcel was eventually acquired
by Othen, who habitually used a roadway
crossing Rosier’s land to reach a public road. To
prevent erosion, Rosier built a levee that
impounded water, making the roadway
impassable at times. Othen sued Rosier to enjoin
further interference with his right of way, which
Othen contended was implied by necessity. The
court upheld the determination that no easement
by necessity had been proven across Rosier’s
land because there was no proof that when Hill,
the common owner, had conveyed the Rosier
property to Rosier’s predecessor in interest it
was that conveyance that landlocked the Othen
parcel. Rather, it appeared that at the time Hill
had conveyed the Rosier parcel, Hill owned
other land (never identified by Othen) that was
contiguous to both the Othen parcel and a public
roadway. Othen had an easement implied by
necessity across some property, but it wasn’t
across Rosier’s property.
b. Necessity at severance – NOT prior use – must exist at
the moment that the property is divided. No prior use is
needed to establish an easement by necessity. The
necessity of access is present the moment the parcel is
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landlocked, though the practical need may lie dormant
for years.
c. Duration – An easement by necessity lasts as long as
the necessity exists. If the necessity is removed (perhaps
by creation of a new public road that provides access),
the easement is terminated.
d. Location – Once the servient estate is identified, the
owner of the servient estate is permitted to select a
reasonably convenient location for the easement, on the
theory that the servient estate owner can best minimize
the damage to the servient estate.
c. Prescription
i. Analogous to adverse possession. Easements are not possessory interests,
so an easement cannot be acquired by adverse possession, but adverse
use for a sufficient period of time can ripen into an easement by
prescription.
ii. May be appurtenant (as when one homeowner acquires a driveway
easement over his neighbor’s land) or in gross (as when repeated hunting
or fishing create a prescriptive easement in gross in favor of the hunter or
fisher).
iii. Elements
1. Prescriptive Period – the same as the limitations period
applicable for adverse possession
2. Adverse use under a claim of right – The use of another’s land
must be adverse and not with permission of the owner.
a. If a use is permissive, it can never ripen into a
prescriptive right, no matter how long the use goes on.
However, a permissive use can become adverse if the
user does things that are inconsistent with mere
permission and that give the owner notice of the user’s
claim of right.
b. Similarly, an adverse use can be rendered non-adverse if
the owner of the burdened estate grants permission for
the use.
c. Use of easement by necessity after it has terminated is
likely adverse and may ripen into an easement by
prescription. Use of an easement by necessity is by right,
and thus not prescriptive, but if the necessity ends, the
easement by necessity terminates. Further, use of the
terminated easement is adverse, unless permission for
the continued use is granted.
3. Open and Notorious Use – the adverse use must be conducted
so that the use may be discovered by any reasonable inspection.
It may not be carried on in secret or carefully concealed.
4. Continuous Use – Satisfied if the adverse user continually
asserts her claim of right by making whatever use is consistent
with the nature of the claimed easement, even if that use is
periodic or episodic. It does not mean that the adverse user must
use the property constantly.
a. If the adverse use is interrupted, the prescriptive period
starts over (lawsuit, notice).
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5. Exclusive Use – Shown simply by claiming an easement from
one’s own use, and not in common with the public or somebody
else. Thus, even in the case of the common driveway, each
neighbor’s use is “exclusive” in this sense.
a. Othen v. Rosier – The court rejected Othen’s claim for
an easement by prescription because Othen used the
roadway in common with Rosier.
h. Scope of Easements
i. How extensively and intensively may the easement holder use the easement?
1. Manner + Frequency:
a. May be adjusted with time to account for original purpose
i. Change is consistent with original grant
ii. Follows from natural development of dominant estate (foreseeable at
time of grant)
iii. Does not do unreasonable damage to the servient estate
ii. To what degree may the owner of the servient estate use or interfere with the easement?
iii. Parties intentions control – Identify and uphold the parties’ intentions
1. How the easement was created
a. Grant
i. The express language of the grant control insofar as it may be
dispositive, but extrinsic circumstances often must be consulted
b. Implication
i. The scope depends on the reason for the implication
1. Prior use – construed the same way as easements by grant
2. Necessity – exactly congruent with the necessity: no more, no
less
c. Prescription
i. Because they come about by a particular long-standing adverse use by
one party alone, there is no reason to assume that any greater or different
use was intended by the parties.
2. How conditions have changed to affected the originally intended use
3. What changes in use were reasonably foreseeable by the parties
4. What changes are necessary to achieve the intended purpose of the easement
5. Whether a change use imposes an unreasonable burden on the servient estate
iv. Change in location of easement
1. If an easement specifies a specific location, or one has been agreed to by the parties’
conduct, the location is permanently fixed unless the parties agree to a change.
a. This rule does not prevent some modification to the easement that impose no
additional burden on the servient estate.
v. Enlargement of the Dominant Estate – an easement cannot be used for the benefit of land that
is not the dominant estate
1. Brown v. Voss – The court held that although the appeals court was correct to conclude
that any physical enlargement of the dominant estate is wrongful, an injunction should
not issue because there was no evidence of irreparable harm to Voss from the
enlargement. There was no increase in the volume or type of traffic or other increase in
the burden placed on Voss’s servient estate. Accordingly, the court sustained the trial
court’s award of $1 in damages to Voss. The usual remedy for an easement for the
benefit of a non-dominant estate is an injunction to prevent the use, which leaves the
parties free to reverse this outcome, if they wish, by private bargain. This approach drags
into court the private bargaining that otherwise would occur post-injunction in the form
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of argument over the amount of damages and also over the relative equities of an
injunction.
i.
Termination
i. Expiration – an easement created by grant may expire by its terms
ii. Merger – If the easement holder also acquires title to the servient estate, the easement is
extinguished because an easement exists only in land owned by somebody else
1. The easement holder must acquire the entire servient estate for merger to extinguish the
easement. If only part of the servient estate is acquired, and use of the easement still
burdens the other party, the easement is not extinguished.
iii. Actions of the easement holder
1. Release – generally, must be written because it affects an interest in real property and so
is within the scope of the SOF
a. An oral release is valid, through equitable estoppel, when the servient estate
owner relies on it to his substantial detriment
2. Abandonment – if the easement holder manifests a clear and unequivocal intention to
abandon the easement. Mere nonuse will not suffice.
a. Established by acts of the easement holder that clearly and unequivocally
establish either a present intent to relinquish the easement or a purpose
inconsistent with its future existence.
b. Presault v. US – The Railway had removed all of the tracks, switches, and other
railroad equipment from the section in dispute. The court ruled that the Railway
had abandoned its easement. The easement holder’s conduct manifesting an
intent to abandon can be affirmative or negative.
3. Alteration of the dominant estate
a. If the dominant estate owner alters the dominant estate so that the easement may
no longer be used, the easement is extinguished
iv. Cessation of Purpose – if the purpose of the easement has completely ceased, the easement is
extinguished
1. Easements by necessity – terminates when the necessity is eliminated because its purpose
has ceased
2. Easements by estoppel – terminates when the licensee has reaped the full value of the
expenditures made in reliance upon the license. At that point, its purpose has ceased to
exist.
3. Extrinsic changes that vitiate purpose – if acts of third parties completely vitiate the
easement’s purpose, the easement is extinguished
4. Accidental destruction of the servient estate – if the servient estate is accidentally
destroyed, the easement is extinguished
v. Actions of the servient estate holder
1. Intentional destruction of servient estate
2. Prescription
II. Real Covenants
a. A promise about land usage that runs with an estate in land, meaning that it binds or benefits subsequent
owners of the estate. A promise to use land in a specified fashion is affirmative; a promise not to use land
in a specified fashion is negative.
i. If one party breaches a covenant made with another person—even if it concerns land usage—the
issues presented are purely a matter of contract law. Property law becomes involved only when a
covenant about land use is sought to be enforced wither by or against a successor to the estate in
the land benefited or burdened by the covenant.
ii. There are two principal remedies for breach of a promise:
1. Damages – legal remedy
2. Injunction –equitable remedy
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iii. If your client wants damages for breach of a covenant about land usage, she must prove that the
covenant is an enforceable real covenant. If she cannot do that, the same promise might still be
enforceable as an equitable servitude, but the only remedy then available for breach will be an
injunction.
iv. Compared to easements
1. Affirmative easements confer rights to use another’s land; real covenants do not. Real
covenants are not promises that land will be used, or not used, in specified ways.
Negative easements, however, are very much like real covenants. A right to an
unobstructed view over your neighbor’s land (a negative easement) is functionally
identical to a promise by your neighbor not to obstruct your view (a real covenant).
v. Compared to equitable servitudes
1. An equitable servitude about land use that is enforceable in equity against successors to
the benefited or burdened estate in land.
b. Creation
i. Only by a written instrument
ii. May NOT be created by implication or prescription
c. Enforceability by or against successors
i. The elements necessary to enforce the burden of a real covenant against a successor to the
burdened estate are more difficult to establish that the element needed to claim the benefit of a
real covenant by a successor to the benefitted estate.
ii. Elements
1. Intent – intent the burden (or benefit, both) to run.
a. Almost always satisfied by an explicit statement in the covenant that it binds
“successors, heirs, and assigns.”
2. Horizontal privity – privity of estate between the original parties is required for the
burden to run, but not for the benefit to run.
a. Only a few relationships satisfy this technical term and concept.
3. Vertical Privity – privity of estate between the original promisor and the successor to the
burdened estate is necessary for either the benefit or the burden to run, but the definition
of vertical privity is more easily met for benefits to run than for burdens to run.
a. Harder to establish for the burden of a covenant than it is for the benefit of that
covenant
i. Burden – it is necessary to prove that the successor acquired the exact
same estate in land owned by the original contracting party. If something
less than the original promisor’s estate is conveyed, the burden does not
run.
ii. Benefit – will run to a successor of some interest in the benefited estate
b. Adverse Possessors – benefits of affirmative covenants run to adverse possessors
who have acquired title, but adverse possessors who have not yet acquired title
may only enforce affirmative covenants:
i. To repair, maintain, or render services to the benefited property
ii. That confer benefits that may be enjoyed by the possessor without
diminishing the value of the covenant to the true owner and without
materially increasing the burden of performance on the burdened party.
c. Third-Party Beneficiaries – two parties may enter into a covenant about land use
that imposes mutual benefits and burdens but also explicitly benefits a third
party’s estate.
i. Neponsit v. Emigrant – the court held that an HOA that did not succeed
to any estate of the benefited promisee was able to enforce the benefit of
such a covenant on the theory that it was the corporate agent of the
owners of benefited estate.
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1. Do you need privity on the benefitted side?
a. Some courts say YES. Neponsit grapples with this issue.
4. Touch and Concern – the substance of the promise must touch and concern the
burdened land and, in most states, the benefitted land as well. Courts look at the effect of
the covenant.
a. Neponsit v. Emigrant – As part of a planned development, the developer sold lots
subject to a covenant to pay money annually to a homeowners’ association for
the purpose of maintaining private roads and sidewalks owned in common by all
lot owners. In holding that the covenant touched and concerned the burdened
estate, the court concluded that the covenant “affects the legal relations—the
advantages and the burdens—of the parties to the covenant, as owners of
particular parcels of land and not merely as members of the community in
general.”
b. Negative Covenants – almost always touch and concern because their nature is to
restrict land use.
c. Affirmative Covenants – courts are more reluctant to enforce because may
require continuing judicial supervision and impose large (and sometimes
crushing) obligations on successors to the covenant. An affirmative covenant that
fails to address the economic external costs of land use is almost certainly one
that does not touch and concern land.
i. Covenants to pay money:
1. The most common is one requiring payment of fees to HOA for
the maintenance of common areas and facilities. These
covenants are generally held to touch and concern land so long
as the services produced by the payment enhance the value of the
burdened land. This is virtually always the case when the
payments maintain common streets, sidewalks, elevators, or
other “essential” attributes of the development.
2. Neoponsit v. Emigrant – the court held that a covenant to pay a
fee to maintain common facilities touched and concerned the
burdened property because the effect of the covenant was to
impose burdens and advantages on estate holders in their unique
capacity as landowners rather than as members of the general
public.
d. Termination
i. Duration – endures for so long as the parties who created it intend it to endure
ii. Merger – if the same person acquires title to the burdened land and all of the benefited land the
covenant—whether a real covenant or an equitable servitude—is extinguished by merger. It
cannot be revived but must be created anew.
iii. Eminent Domain – the government takes the burdened land for a purpose inconsistent with the
restrictive covenants.
iv. Express waiver or release – if all the holders of the benefit of a covenant expressly release the
covenant, it is extinguished. If all the benefit holders expressly waive the covenant to permit a
specific nonconforming use, the covenant remains alive to bar other nonconforming uses.
v. Expiration of the covenant – covenant sometimes have a defined life span, and when its defined
life has expired, the covenant is extinguished.
III. Equitable Servitudes
a. A covenant about land use that will be enforced in equity (by an injunction) against a successor to the
burdened estate who acquired it with notice of the covenant. A covenant need not meet all of the criteria
of a real covenant to be enforceable as an equitable servitude. Covenants are more commonly enforced
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as an equitable servitude because they are easier to enforce by or against successors, and most people
prefer enforcement of a covenant by an injunction than by damages for its breach.
b. Differences b/n Equitable Servitudes and Real Covenants:
i. Remedy:
1. Real covenant = damages
2. Equitable Servitude = injunction
ii. No privity needed:
1. Neither horizontal nor vertical privity is needed for either the benefit or burden of an
equitable servitude to run to successors in the burdened or benefited estates.
iii. Creation:
1. Equitable servitudes may be created by implication in many jdxs. A real covenant can
only be created expressly in writing.
c. Origins:
i. Tulk v. Moxhay – Tulk sold Leicester Square to Elms, who promised for himself and his asssigns
not to build on Leicester Square. With knowledge of the covenant, Moxhay purchased Leicester
Square from Elms and then proposed to build on the Square. Under English law, the burden of the
covenant would not run, because horizontal privity was lacking, so Tulk sought and obtained an
injunction. The Chancellor reasoned that it was highly unfair for Moxhay to purchase Leicester
Square knowing of the covenant (and probably paying less because of its existence), only to
ignore it with impunity. Because the covenant was intended to bind successors, its substance
touched and concerned the land, and Moxhay had notice of it, it was enforceable in equity against
Moxhay.
d. Creation:
i. SOF requires that they be created in a writing signed by the promisor
1. Major exception:
a. Negative equitable servitudes can be created by implication when there is a
common scheme of residential development
i. Where a real estate develop sells lots in a subdivision on the promise that
all the lots will be burdened with the same use restriction and later fails
to carry through on the promise to burden all lots
ii. Sanborn v. McLean – McLaughlin subdivided a tract of land in Detroit
along Collingwood Avenue into building lots and started to sell them
under deeds that restricted use to single-family residences. Later,
McLaughlin sold some lots without those restrictions, including Lot 86,
which eventually was acquired in 1910 by McLean. In the 1920s, as
autos became more commonplace, McLean started to construct a
gasoline filling station on Lot 86. His neighbors sought to enjoin this use
as a violation of an implied negative equitable servitude. The court
agreed that an injunction was proper, reasoning that because the initial
restrictions imposed by McLaughlin, the developer, were “for the benefit
of the lands held by McLaughlin to carry out the scheme of a residential
district,” an implied reciprocal servitude burdened McLaughlin to carry
out the scheme of a residential district, and that servitude was equitably
enforceable against McLean, who was on inquiry notice from the
uniform residence character given the lots.
iii. As in Sanborn, courts sometimes call the covenant so implied a
reciprocal negative easement, although the term implied reciprocal
covenant is more accurate. Whatever the label, it is:
1. Reciprocal – the common scheme contemplates covenants
burdening all lots for reciprocal benefit
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2. Negative – it restricts land use rather than requiring affirmative
acts or use
iv. Elements
1. Common scheme of development
a. The development must be uniform character and
recognizable as such by purchasers.
b. When does the scheme begin? Four factors:
i. Advertisements mentioning the reciprocal
covenants
ii. Use of a map showing the entire development as
a sales aid in conjunction with sales of burdened
lots
iii. Representation to buyers that all lots will be
similarly burdened
iv. Sale of a significant number of lots with a
common use restriction (Sanborn – 21 lots of the
98 were sold with single-family residential-useonly restrictions before the lot at issue in the
case was sold without such a restriction, yet the
court ruled that a common scheme had been
created.
c. No covenants on lots before the common scheme begins
i. If a developer conveys land without use
covenants before the common scheme begins, no
reciprocal covenant will be implied. The land is
simply not part of the common scheme, and so
there is no basis for finding an implied
reciprocal covenant.
b. Negative covenant –courts will imply reciprocal covenants only when the
substance of the covenant is negative—limiting the use that may be made of the
property rather than requiring some positive act on the part of the owner of the
burdened land.
e. Enforceability by or against successors:
i. Elements
1. Intent – if the parties expressly or impliedly intended for the covenant to run to benefit or
burden successors, the equitable servitude created by the covenant will run
2. Privity not required – neither horizontal nor vertical privity of estate is required for
either the burden or benefit of an equitable servitude to run
3. Notice – a purchaser who pays real value for an estate and has no notice of the servitude
at the time is not bound by the servitude. Notice can be actual or constructive.
a. Constructive – most often comes through the record, but can also be the product
of circumstances that should trigger inquiry on the part of the buyer, inquiry that
would real servitude
i. Record Notice
1. Guillette v. Daly Dry Wall – Gilmore subdivided a tract and
imposed single-family residential use restrictions on several lots.
In a deed to Guillette, Gilmore recited that the servitude created
was thereby imposed on Gilmore’s remaining lots. Later,
Gilmore sold one of those lots to Daly without any servitude.
Daly’s direct chain of title went from himself to Gilmore to
Gilmore’s predecessor. No servitude was in any of those deeds.
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Nevertheless, the court held that Gilmore’s deed to Guillette was
in Daly’s chain of title. The effect of this rule is to require
purchasers of property to search the records for all possible
grants of other property owned by each grantor in the chain of
title, on the possibility that there might be some servitude created
in a deed outside the direct line of ownership.
a. Most jdxs reject on the ground that it imposes
“intolerable” burdens on title searchers.
b. Actual notice – actual knowledge of the servitude is actual notice.
4. Touch and concern
a. The substance of the covenant must touch and concern the benefited or burdened
land.
f. Termination
i. Because equitable servitudes are enforceable in equity, the following equitable defenses, if
proven, will effectively extinguish an equitable servitude by blocking its enforcement
1. Changed conditions within the affected area
a. A covenant will no longer be enforced in equity if conditions have so radically
and thoroughly changed within the area affected by a covenant (usually a
subdivision) that the covenant can no longer achieve its purpose
b. Courts are split on whether the changed circumstances operate to extinguish the
covenant entirely or merely bar its enforcement in equity. The modern trend is to
extinguish covenants entirely when changed circumstances have been proven.
2. Changed conditions within the surrounding area
a. The nature of the character of the surrounding area has so changed that it would
now be inequitable to enforce the servitude. It is necessary to establish that the
extrinsic changes in the neighborhood have been so pervasive that all of the
benefited lots have lost the benefit of the covenant at issue.
b. Western Land v. Truskolaski – Western Land subdivided 40 acres of rural land
southwest of Reno, burdening all of the lots with restrictive covenants limiting
use to single-family dwellings. By 1969, Reno had grown up around the
subdivision, bracketing it with high-traffic volume boulevards. Western Land
proposed to use 3.5 acre undeveloped site at one of those busy intersections for a
shopping center, but the homeowners sought and obtained a trial court injunction
preventing Western Land from violating the covenant. The court upheld the
injunction because the covenant continued to be of a real and substantial value to
the residents of the subdivision.
3. Abandonment
4. Equitable Estoppel – if the party trying to enforce a covenant has made knowingly false
representations to a defendant ignorant of the true facts, intending and inducing the
defendant’s reliance on the misrepresentation, he will be estopped from enforcing the
covenant.
5. Laches – the unreasonable failure to assert a known equitable right, coupled with some
prejudice to the defendant—will bar enforcement of an equitable servitude.
6. Unclean Hands – the equitable notion that P must not be guilty of the conduct of which
he complains may bar a person from enforcing a reciprocal servitude if guilty of the same
violation.
7. Balance of Hardships – A court may deny injunctive relief if the hardship imposed by
the injunction is very large in relation to the benefits produced.
IV. Common Interest Communities
a. Condominiums
i. Owned individually
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ii. A condominium development will have a recorded master deed in which the use restrictions that
pertain to each unit are recited; thus, any purchaser of the condo unit has constructive notice of
the covenants.
1. Courts divide as to the degree of deference to be given to these covenants.
2. Nahrstedt v. Lakeside Village – The recorded master deed to Lakeside Village, a condo
development, recited that no animals shall be kept in any unit. P purchased a unit and
moved in with her three cats. The HOA demanded their removal and assessed fines
against P, who then sought to prevent the association from enforcing the covenant on the
grounds that it was unreasonable. The court held that the restriction was reasonable
because it did not violate a fundamental public policy and was not wholly arbitrary and
did not impose a burden that far outweighs any benefit.
b. Cooperative Apartments
i. Owned by a corporation
ii. The individual apartments are occupied under long-term leases by people who acquire ownership
of shares of stock in the apartment corporation and thus, acquire the right to occupy the
apartment. Because the nature of a cooperative apartment is that each owner-lessee is obligated
for a portion of the entire cost of owning the building, and one owner’s financial failure imposes
immediate burdens on the others, the financial fate of a cooperative apartment owners is far more
interdependent than that of condo owners. Courts are willing to permit the directors to deny
ownership to anyone for any reason except violation of civil rights laws.
PUBLIC CONTROL OF LAND USE: ZONING
I.
Basics
a. Zoning is the use of governmental power to regulate land use.
i. Objectives:
1. To prevent incompatible uses from occurring
a. Reducing the need for nuisance law
2. To increase property values generally by minimizing use conflicts
a. Increasing the property tax base
3. To channel development into patterns that may serve larger social goals
b. Zoning is the use of public power to impose uniform results that might otherwise be accomplished in
more piecemeal and selective fashion by private bargains
c. Constitutional validity:
i. Village of Euclid v. Ambler Realty Co. – Euclid, Ohio adopted a comprehensive zoning ordinance
that restricted the permissible uses of property, limited the height of structures, and imposed
minimum lot-size requirements for certain types of structures. The court upheld the validity of the
law against a due process and equal protection challenge. The law’s objective—minimizing land
use conflicts to prevent nuisances from ever occurring—was a legitimate exercise of the state’s
inherent police power because its content was neither unreasonable nor arbitrary.
1. Zoning is facially OK.
2. Essentially a nuisance, noxious use prevention for land use planning. *
3. Separating different uses that might come into conflict is a legitimate reason for
exercising the police power.
d. Statutory Schemes
i. The point of zoning is to separate land uses and regulate the density of use within use districts.
This can be done by cumulative zoning or mutually exclusive zoning.
1. Cumulative
a. Spectrum from “higher” to “lower”
b. The least dense single-family residential use is the highest use, proceeding
downward to more dense residential, light commercial, heavy commercial, and
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industrial. The idea of cumulative zoning is that all uses at the level of the zoned
district and higher will be permitted.
2. Mutually Exclusive
a. Permits some uses and excludes all others within the zoned area
b. Most often used with respect to industrial or heavy commercial districts.
Residential use is often barred in such districts, partly to dampen use conflicts,
partly out of public health concerns, and partly to preserve space for industrial
users.
c. Zoning laws may be partly mutually exclusive and partly cumulative.
3. Density Zoning
a. Zoning laws also seek to control the density of occupation within any given use
district. This is usually done through a wide variety of limits on the size or height
of structures, their location upon their site, and the functional uses created within
the structure.
b. Supplement use controls; they are not generally considered an alternative to use
controls
II. Authorization for Zoning
a. Enabling Legislation
i. Usually, the power to adopt zoning laws is reserved to the state government. A state’s legislature
must enact legislation authorizing local governments to adopt zoning laws. In general, a local
zoning law is void unless it is in conformity with the state’s enabling act—the law authorizing
localities to engage in zoning.
b. Comprehensive Plan
i. The Standard Act (the common enabling act) requires that zoning decisions be made “in
accordance with” a comprehensive plan for land use in the locality, which is intended to be a
general guide for overall development of a locality.
ii. Zoning laws are the specific means of implementing the vision of the comprehensive plan.
III. Statutory Discretion and Restraint
a. Communities are dynamic. Appropriate land usage should change as the underlying economic and social
conditions dictate. Zoning responds to this fact in several ways:
i. Tolerating the continued existence of land uses existing prior to adoption of the zoning law
ii. Providing for amendment of the zoning law
iii. Conferring discretion on administrators in the applications of the zoning statute
b. Nonconforming Uses
i. When zoning is introduced, some existing land uses will not be in conformity with the uses
permitted under the new zoning law. These nonconforming uses are permitted to exist because
their immediate abatement would amount to either a taking of property without just compensation
or an unreasonable exercise of the zoning power. However, nonconforming uses may be, and
often are, eliminated gradually.
ii. Forced phase-out
1. The zoning law may specify a period after which the nonconforming use must cease. This
so-called amortization period will vary, depending on the investment of the
nonconforming use. The period must be long enough to avoid a successful charge that the
forced phase-out amounts to an uncompensated taking or denial of substantive due
process. Majority rule = valid if reasonable period.
a. Factors:
i. Nature of the use
ii. Character of the structure
iii. Location
iv. What portion of the user’s total business is affected
v. The salvage value
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vi. The extent of depreciation of the use
vii. Any monopoly or other advantage conferred on the user by reason of the
foreclosure of similar and competing uses
b. PA Northwestern v. Zoning Hearing Board – Moon Township, Pennsylvania
adopted a zoning ordinance extensively regulating the location of stores vending
pornography, the effect of which was to make illegal the store operated by PA
Northwestern. The ordinance permitted Northwestern 90 days in which to cease
operations. The court held that the amortization and discontinuance of a
lawful pre-existing nonconforming use is per se confiscatory and violative of
the Pennsylvania Constitution. A concurring justice thought that the ordinance
was void because the amortization period was unreasonable—it did not provide
adequate time for elimination of the non-conforming use.
i. Could NOT amortize non-conforming use out of existence
c. No expansion
i. Typically, zoning ordinances stipulate that the nonconforming use may
not be expanded beyond the precise boundaries of the existing use. Thus,
a successful and growing business located as a nonconforming use will
be forced to move to expand. A new occupant will be required to
conform to the zoning law.
d. Destruction or abandonment
i. If the nonconforming use is destroyed or abandoned, permission to
continue the nonconforming use terminates. Any replacement structure
or new use must conform to the current zoning law.
ii. Abandonment usually requires proof that the user has voluntarily
intended to abandon the nonconforming use, but some ordinances
supplement abandonment with a bright-line rule that discontinuance of
the nonconforming use for a specified period terminates permission for
the use.
iii. Administrative discretion
1. Variances
a. Every zoning law establishes a zoning appeals board of a board of adjustment,
usually a group of people appointed by the local executives who are authorized to
grant variances from the zoning law in the interest of alleviating practical
difficulties or unnecessary hardships.
b. Two types:
i. Area – those awarded to alleviate siting problems
1. Setback requirements
2. Minimum yard area
ii. Use –those permitting an otherwise prohibited use
1. Multiple-family residence in a single-family residential district
c. The theory is that they should be granted when compliance with the law would
impose such extreme burdens on the owner that application of the law might be
unconstitutional or otherwise invalid.
d. It is an administrative safety-valve to avoid judicial determinations that the
zoning law is invalid as applied to the particular circumstances.
e. Standard
i. Undue hardship – neither created by nor peculiar to the owner
2. Exceptional Uses
a. Uses permitted by the zoning law but which might impose material external costs
on neighbors
b. Standard
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i. Compatibility with existing uses
ii. In furtherance of public health, safety and general welfare
c. Cope v. Inhabitants of City of Brunswick – Brunswick zoning law permitted
apartment houses in suburban residential zones only as an exception granted by
the zoning board. The zoning board refused to grant an exception for a 48-unit
apartment complex proposed to be located in a suburban residential zone. The
law permitted exceptions that did not adversely affect the health, safety or
general welfare of the public and would not alter the essential characteristics of
the surrounding property, but the zoning board thought that the apartment
complex would produce adverse effects and alter the essence of the surrounding
property. The court held that the zoning law was an impermissible delegation of
legislative authority to the zoning board because the quoted standards refer only
to the same general considerations which the legislative body was required to
address and resolve in enacting the ordinance. The court’s view was that the
ordinance embodied a determination that an apartment building was generally
suitable for location in a suburban residential zone and that the quoted standards
gave the zoning board no lawful basis for determining that a particular location
was unsuitable because of the existence of certain characteristics which rendered
the general legislative determination inapplicable.
3. Spot Zoning
a. A zoning amendment that delivers special private benefits (and no public
benefits) to a small, discrete parcel of land and is not in conformity with the
comprehensive plan.
b. A zoning amendment that delivers special private benefits to a small, discrete
panel, produces little or no public benefits, and is inconsistent with the
comprehensive use plan is presumed to be invalid spot zoning. The burden then
shifts to the government to prove that changes bear a substantial relationship to
the general welfare of the affected community.
4. Floating Zones
a. A use designation not attached to any particular land until a landowner seeks to
have his land designated as the recipient of the floating classification.
i. Ex: Because it desire to encourage the responsible disposal of toxic
waste, the city of Ford Cove creates a floating zone, designated TWC,
dedicated to toxic waste collection and shipment to a disposal facility.
The floating zone specifies the criteria that any land must meet to receive
the TWC designation: a site of at least half an acre, no residence,
schools, office buildings, churches or retail establishments within 1,000
yards, and drive-through vehicle access. The OBJECTION to floating
zones is that they violate the comprehensive plan. The comprehensive
plan is supposed to inform people about the future direction of land use,
but a floating zone can conceivably land anywhere, thus undermining
the predictive value of the plan.
5. Conditional Zoning
a. Sometimes a developer wishes to use land in a fashion not permitted by the
zoning law, and requests rezoning in exchange for the creation of a servitude
burdening the land that is intended to eliminate or dampen the negative
externalities of the proposed use.
i. Ex: A developer wishes to build townhouses on land zoned for “fully
detached single-family residences.” The developer offers to cluster the
townhouses in a portion of the site shielded from view form neighbors,
and covenant that the undeveloped portion of the site will remain
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undeveloped forever. Upon execution of the servitude, the land is
rezoned. In essence, imposition of the servitude of the condition of
rezoning.
b. Criticisms:
i. Illegal spot zoning – some say it is illegal spot zoning, but the servitude
partially offsets the claim that an individual parcel is receiving a special
benefit, thus suggesting that conditional zoning ought to be assessed by
the same standards applicable to any zoning amendment.
ii. Invalid disposal of police power – this claim is that governments may not
bargain away their legislative power, but the municipality is not
precluded from changing the zoning use at some time in the future if
public welfare so requires.
iii. Ultra vires –enabling acts typically do not expressly authorize the
attachment of conditions to zoning amendments, but neither do they
forbid the practice.
iv. Waiver of restrictions-some object that conditional zoning amounts to a
waiver of governmental ability to restrict use of the affected land any
further, an argument resting on the assumption that conditional zoning
amounts to a binding K between the landowner and the city preventing
future zoning restrictions. Most courts reject this claim, reasoning that
the only bargain is imposition of a servitude in exchange for an
immediate rezoning, thus leaving the government free to change the
zoning classification in the future.
6. Cluster Zoning – to zone particular area for a particular use at a specific level of density
and occupation, but confer upon zoning administrators discretion to decide exactly how
that use and density will be achieved.
a. Usually not problematic so long as it is in conformity with the comprehensive
plan
c. Limits on Zoning
i. States possess an inherent police power
1. The power to achieve the people’s vision of public welfare, as communicated through
government agents, but the power is limited.
a. Must conform:
i. To the US Constitution
ii. To valid federal law preemptive of local zoning law
iii. To the relevant state constitution
iv. To State law, particularly the state’s zoning enabling act and judicial
doctrines developed to curb unreasonable and arbitrary exercise of police
power
ii. Zoning for Aesthetic Objectives
1. Architectural Review
a. The conformity of the proposed structure to the existing character of the
neighborhood
b. The likelihood that the proposed structure will not cause substantial depreciation
of neighboring property values
c. Courts link aesthetics + property value + general welfare
d. Stoyanoff v. Bekeley – The affluent St. Louis suburb of Ladue enacted an
architectural review ordinance designed to preserve property values and maintain
Ladue’s conventional neo-colonial architectural aesthetic sensibilities. Stoyanoff
proposed to build a pyramid, flat-topped residence. The proposal was rejected,
and Stoyanoff attacked the validity of the entire scheme as unauthorized and a
45
violation of due process if within the otherwise permissible scope of the police
power. The court upheld the Ladue law, reasoning that architectural review is for
the general welfare and thus authorized by the enabling act. The rejection of the
design was reasonably related to preserving land values and the prevailing
aesthetic sense of the community. The court emphasized the probable adverse
effect of the design on property values, an effect that, if true, is merely the
market’s expression of prevailing aesthetic sensibilities.
e. Anderson v. City of Issaquah – Anderson wished to construct a retail commercial
building site, but under an Issaquah ordinance he needed the approval of his
design by the Development Commission. The Commission was charged by the
ordinance to approve designs compatible with neighboring structures,
harmonious in texture, lines, and masses with building components of
appropriate relationships using harmonious colors and lighting. Anderson
proposed an off-white stucco structure with a blue metal roof. The Commission
told Anderson the color was wrong and that the design was not compatible.
Anderson then modified the design, but the Commission told him that the
building did not deliver the right feeling, and that it was not in harmony with the
certain feeling you get when you drive along the Boulevard. The court ruled that
the denial had deprived Anderson of due process because the statute, both written
and as applied, required persons of ordinary intelligence to guess at its meaning
and differ as to its application.
2. Free Speech
a. Zoning laws that regulate speech in a content-neutral fashion are invalid if they
are either:
i. Broader than reasonably necessary to achiever a significant government
purpose other than speech regulation
ii. So restrictive that they fail to leave open ample alternative channels of
communication
b. City of Ladue v. Gilleo – In order to minimize visual clutter, Ladue banned all
signs except for sale signs, business or home identification signs, and a few other,
but forbid Gilleo’s “For Peace in the Gulf” sign. Even though Ladue’s regulation
was content-neutral, the court voided the Ladue’s ordinance because it near-total
prohibition on signs failed to leave open enough alternative means of
communication. A narrower prohibition of signs—one that left open ample
alternative channels of communication—would likely have been valid.
iii. Exclusionary Zoning
1. All zoning is exclusionary in that it seeks to exclude unwanted uses, but sometimes
zoning is used to exclude unwanted people.
a. A typical example is a zoning law that, in the interest of preserving open space,
aesthetics, and high property values (with its corollary high tax base), requires a
minimum lot size of two acres. The result is a landscape of expensive homes
occupied almost entirely by affluent owners. The poor (often disproportionately
composed of racial minority) are excluded.
b. HOWEVER, excluding the poor, even if done unintentionally, does not trigger
any presumption of invalidity under the federal Constitution.
i. The exclusion is rationally related to the legitimate objectives of
preserving open space, aesthetic, and high property values, and is thus
valid. States, however, remain free to interpret their own constitutions
and enabling acts to ban actions permitted under the federal Constitution.
2. Southern Burlington County NAACP v. Mount Laurel –A zoning law in effect excluded
all multi-family residential dwellings and mobile homes, and required minimum lot and
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dwelling sizes for single-family residences that were sufficiently large that low-income
persons were effectively excluded from Mount Laurel. The court ruled that the New
Jersey constitution and the state’s enabling act both required that local zoning further the
“general welfare” and that Mount Laurel’s failure to accommodate the housing needs of
poor people was contrary to the general welfare. The court’s opinion was that a
developing community expanding in size and population could not adopted land use
regulations that make it physically and economically impossible to provide low income
housing in the municipality.
a. Remains a minority view—most states hold that so long as zoning law does not
exclude people on a suspect basis (e.g., race), it need only be rationally related to
the legitimate state interest to be valid. Thus, when minimum lot sizes are
rationally related to legitimate local interests, they are upheld.
TAKINGS
1. Basics
a. The eminent domain power: All governments in the US have the power to take private property for public
purposes, but that power (the eminent domain power) is limited by the US Constitution, state
constitutions, statutory law and judicial decisions. The US Constitution’s Fifth Amendment provides that
“private property [shall not] be taken for public use without just compensation.” This is often called the
“Takings Clause” or the “Eminent Domain Clause.”
b. All property protected: The Takings Clause protects all property, no matter whether it is tangible or
intangible.
c. Applies to all governments: The Takings Clause applies to the states as well as the federal government.
The substance of the Takings Clause is “incorporated” into the Fourteenth Amendment’s Due Process
Clause, which is applicable to the states. The Clause surely applies to governmental action taken by the
legislative or executive branches. There is more uncertainty about the degree to which judicial action
might constitute a taking.
d. The purposes of the Takings Clause:
i. Prevent forcible redistribution of property
1. Prevents forcible redistribution of property by stipulating, through just compensation
requirement, that when governmental power is used to take private property, the public
pays the property owner the value of the property taken.
ii. Takings permitted only for public benefit
1. The public use requirement of the Takings Clause was designed to prevent any taking,
whether or not compensated, that forces a transfer of property from one private person to
another with no public benefit in the forced transfer. Governmental power to take
property may only be exercised for public benefit.
e. The Principle Issues:
i. Public Use
1. Is the governmental taking of property for public use? Governments sometimes take
private property and convey it to another private person in order to reap some alleged
collateral for public benefit.
ii. Regulatory Takings
1. At what point does a governmental regulation of property (restricting its use, possession,
or disposition) become so burdensome that it is a de facto taking of property, which
triggers the constitutional requirement of just compensation?
iii. Just Compensation
1. It is well settled that the private property owner is entitled to the fair market value of the
taken property—the price that a willing buyer and a willing seller would agree upon.
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f.
2. Fair market value includes any reasonable expectations that a buyer may have about
possible future uses. An owner is not entitled to additional value that is subjective and
peculiar to the owner (e.g., sentimental value). If there is no practical market for the
property, any fair valuation method can be used.
iv. Constitutionally Noncontroversial Takings
1. Most governmental takings of property are not constitutionally controversial. When a
government condemns private property for a new public road, it is clearly doing so for
public use and will admit that it is obligated to compensate the private landowners. The
only issue is the amount of compensation. Constitutional issues arise if the government
denies that it has taken the property or if the taking is arguably not for public use.
The Public Use Requirement
i. Constitutional Text: “nor shall private property be taken for public use, without just
compensation.”
1. No governmental seizure of private property may occur, even if just compensation is
paid, unless it is for a public use.
ii. Meaning of Public Use
1. Literal: limits government power to take private property to instances where the property
will actually be used by the public
a. Park, school, road, military base, post office
2. SC Interpretation = “Public Purpose”
a. So long as the taking is rationally related to any conceivable public purpose
b. Reductive to whatever the legislative believes is conducive to the “public
welfare”
c. Kelo v. City of New London – New London, CT decided to condemn a number of
private residential properties in the Fort Trumball area of the city in order to
assemble a 90-acre tract for an integrated redevelopment plan. Significant portion
of the property were to be conveyed to private developers to construct: (1) a
small urban village, consisting of shops, restaurants, and a waterfront hotel, (2)
80 new residences, (3) office and retail space, and (4) a marina, parking, and
water-dependent commercial uses. The court had ruled in Berman v. Parker that
an “urban renewal” scheme in which blighted property was condemned and
transferred to a private developer was a public use. In Hawaii Housing v.
Midkiff, the Court had upheld as a public use the forced transfer of fee titles to
long-term lessees of the ground on which their residences were located, given
that only “22 landowners owned 72.5% of the fee simple titles” to land on Oahu,
the most heavily populated Hawaiian island. Hawaii’s desire to eliminate “the
perceived social and economic evils” of this “land oligarchy” was “rationally
related to a conceivable public purpose.” Despite these precedents, the
landowners contended that condemnation of non-blighted property for purely
economic development purposes was not for a public purpose. The Court rejected
that argument concluding that so long as the condemnation was part of a
“comprehensive development plan” that had been subject to “thorough
deliberation,” the Court would defer the to the judgment of government officials.
In short, and with these additional caveats, the taking was rationally related to a
conceivable public purpose.
i. Petherbridge: You CANNOT engage in private taking—clearly not
literally correct because that is what occurred in Kelo. Court does not
explain what a private-to-private taking is supposed to be. They have
reserved the possibility that there could be such a thing and that would
somehow not rise to the level of public use. Constitution bars this.
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ii. Kennedy concurred because there was no clear evidence that this taking
was primarily to benefit a private party, with only “incidental or
pretextual public benefits.”
1. Stricter standard of Rational Basis
2. “A court applying rational-basis review under the Public Use
Clause should strike down a taking that, by a clear showing is
intended to favor a particular party, with only incidental or
pretextual public benefits, just as a court applying rational basis
review under the Equal Protection Clause must strike down a
government classification that is clearly intended to injure a
particular class of private parties, with only incidental or
pretextual public justifications.”
iii. O’Connor Dissent:
1. Noted that the Court had upheld taking for later transfer to
private persons only when the sexiure was to cure a public harm.
By contrast, the taking in Kelo involved only incidental public
benefits and raised the possibility that anyone’s property could
be taken so long as the government could offer some plausible
possibility that the new private user would make it more
economically productive.
2. Points:
a. The Sovereign may transfer private property to public
ownership—such as for a road, a hospital, or a military
base.
b. The Sovereign may transfer private property to private
parties, often common carriers, who make the property
available for public use—such as with a railroad, a
stadium, or a public utility.
c. Removing some affirmative public harm
iv. Thomas Dissent:
1. Does not believe that the government should affirmatively
remove public harms; however, agreed with the first two points
in the O’Connor dissent.
g. Regulatory Takings: How Much Regulation of Property Is Too Much?
i. At some point, government regulation of property becomes so extensive that it amounts to a de
facto taking, even though the government denies that it is taking the property. But WHEN?
1. Pennsylvania Coal – the Court declared that “while property may be regulated to a certain
extent, if regulation goes too far it will be recognized as a taking.”
ii. The Per Se Rules:
1. Permanent Possession – when a government regulation permanently dispossesses an
owner of her property, the regulation is a taking.
a. Real Property – as applied, a taking has occurred if a regulation produces a
permanent physical occupation of all or part of the property. Temporary
occupations are not per se takings.
i. Loretto v. Teleprompter – New York requires landlords to permit cable
television operators to install cable facilities on their property. Loretto, a
landlord, claimed that the forced cable installation was a taking of her
property, even though the physical occupation consisted entirely of a
half-inch-diameter coaxial cable along the roof and descending to the
apartments within, together with associated small directional taps and
junction boxes for the cable, most or all of which were on the roof of the
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building. The Court agreed, ruling that a “permanent physical occupation
authorized by government is a taking without regard to the public
interests that it may serve.” The Court reasoned that the permanent loss
of ability to exclude others was especially destructive of property
expectations—“the character of the invasion is qualitatively more
intrusive than perhaps any other category of property regulation.”
b. Personal Property – a taking has occurred when governments, by regulation,
confiscate personal property.
i. Ex: Florida law provided that the interest earned on private funds
deposited into court in interpleader cases must be turned over to the state.
The court held that a taking had occurred because the property owner had
been permanently dispossessed.
c. Physical invasion distinguished:
i. A physical invasion of property by government that is not permanent,
and that does not permanently deprive the landowner of the right to
exclude others, is not a per se taking but must be assessed under the
balancing process that applies to claims of regulatory takings that cannot
be disposed of under the categorical rules. However, when government
action strips all utility from an owner’s possession, the action may be
treated as a government invasion of property that constructively
dispossesses the owner.
1. Ex: Government aircraft continually flew over Causby’s land at
low altitude, thus making his property virtually unusable. The
Court held that a taking had occurred, because Causby’s loss was
“as complete as if the US had entered upon the surface of the
land and taken exclusive possession of it.”
2. Nuisance Abatement – if a government regulates property to abate activities that are
common law nuisances, there is no taking, even though the regulations might bar all
economically viable uses of the property.
a. Theory: Ownership of the property never included the right to inflict nuisances,
so nothing has been taken by forbidding what was never lawful.
b. Origin:
i. Originated in cases that sought to distinguish between regulations
designed to prevent harmful (or noxious) uses and those designed to reap
a public benefit. Only the latter were said to be takings.
c. Hadacheck v. Sebastian – In the 1890s, Hadacheck acquired rural land outside of
Los Angeles that was ideal for brick-making because of the extent and fine
quality of the clay deposits. Hadacheck invested heavily in machinery and
equipment and developed a thriving brick business. Eventually, the city grew out
to his brickyard and kiln, and Los Angeles enacted an ordinance forbidding his
continued operations, on the grounds that the continued activity was annoying
and inconvenient to his newly arrived residential neighbors. Because the
ordinance allowed Hadacheck to remove his clay (but not to make bricks), there
was no taking, said the Court. The Court never expressly declared that
Hadacheck’s brickyard was a nuisance, but was persuaded that Los Angeles
was seeking to regulate a “noxious use,” even if it might be lawful.
d. Lucas v. Coastal Council – South Carolina prohibited any development of
Lucas’s beachfront lots on the Isle of Palms in order to protect its ecologically
fragile barrier islands. The South Caroline Supreme Court ruled that the
legislation was not a taking, but the Supreme Court reversed and remanded the
case to determine whether the law simply abated a common law nuisance.
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Regulation of private property is no taking if the regulations “do no more than
duplicate the result [obtainable by private properties]...under the State’s law of
private nuisance, or by the State under its complementary power to abate public
nuisances.” Even if a regulation forbids the only economically viable use of the
property, it does not “proscribe a productive use that was previously permissible
under relevant property and nuisance principles.” A government desire to
“prevent harm” is not, by itself, enough to trigger per se validity because “the
distinction between ‘harm-preventing’ and ‘benefit-conferring’ is in the eye of
the beholder. After Lucas, regulations that address “harms,” but which are
not common law nuisances, are evaluated under the balancing tests. There is
no per se insulation of such regulations from the Takings Clause.
3. Loss of All Economically Viable Use – if government regulation leaves the owner with
no economically viable use of his property, and the regulation does not abate a common
law nuisance, a taking has occurred.
a. Rationales:
i. The severity of such regulations impeach the usual assumption that
government regulation of property if for the advantage of everyone,
including affected property owners
ii. The effect of these regulations is to achieve public benefits by imposing
the costs of such benefits entirely upon affected property owners.
b. Lucas v. South Carolina Coastal Council – South Carolina’s Beachfront
Management Act forbade the construction of “any permanent habitable
structures.” Assuming that this rendered the property “valueless,” as the trial
court had concluded, the US Court held that a regulation that deprives a
landowner of all economically viable use results entirely from abatement of a
common law nuisance (which would make the regulation a per se non-taking).
The Court justified the rule partly because “total deprivation of beneficial use is,
from the landowner’s point of view, the equivalent of a physical appropriation,”
and partly because such regulations “carry with them a heightened risk that
private property is being pressed into some form of public service under the guise
of mitigating serious public harm.”
c. Partial Destruction – “Conceptual Severance”
i. The loss of all economically viable use rule applies only to a regulation
that strips the owner of all economically viable use of the entire property.
If a regulation operates to deprive the owner of all economically viable
use of only part of his property, the question of whether or not the
regulation is a taking will be decided by the balancing tests.
1. Tahoe-Sierra Preservation Council v. Tahoe Regional Planning
Agency VS. Lucas
a. Tahoe recognizes time as yet another dimension by
which you can define the scope of the property right.
This is the DENOMINATOR problem  what is your
property? How do we define property?
i. Majority argues that time is part of property, it’s
not just acreage. Fee simples can go on forever.
So, if that’s true  how can you ever have a
TOTAL wipeout? There is no way to say that all
of the economic value is gone, if we are going to
consider the value of that land FOREVER.
ii. Counter (Lucas): For all practical purposes, it
is not obvious or foreseeable when the owner
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will ever use this land again in his lifetime,
whereas the moratorium will lift at some point.
b. Penn Coal – support estates taken because you cannot
mine under the houses. Majority ignored that 98% of the
coal was still available.
i. Dissent argues for parcel as a whole. The ONLY
coal the company could not mine was under the
public buildings.
iii. Balancing Public Benefits and Private Costs
1. If the per se rules do not resolve the issue of whether a regulation is a taking, courts
weigh the public benefits achieved by the regulation against the private costs imposed. A
regulation is not a taking if it substantially advances a legitimate state objective. To
determine whether this test has been met, at least the following conditions must be met:
a. Public benefits from the regulation must outweigh the private costs of the
regulation
b. The regulation must not be arbitrary
c. The property owner must be permitted to earn a reasonable return on investment
in the property
2. Origins:
a. Pennsylvania Coal Co. v. Mahon – Pennsylvania’s Kohler Act prohibited
underground coal mining that would cause surface subsidence, but only where
the surface and the underground coal were owned by two different people.
Mahon, owner of the surface, had expressly assumed the risk of subsidence when
he purchased his property, but he invoked the Kohler Act to restrain the owner of
the underground coal, Pennsylvania Coal Company, from further underground
mining. The Court recognized that “property may be regulated to a certain
extent” but added that “if regulation goes too far it will recognized as a taking.”
The Court voided the Kohler Act because it went “too far”—it destroyed the
economic viability of Pennsylvania’s Coal property, the underground coal the
Kohler Act required to be left in place. The law made “it commercially
impracticable to mind...coal,” a result with “very nearly the same effect for
constitutional purposes as appropriating or destroying” the right to mine coal.
Brandeis dissented on the ground that the Kohler Act prohibited “noxious use”
and that the diminution in value was not absolute—the appropriate measure
should not be in the decline in value “of the coal alone, but the value of the whole
property.”
i. Petherbridge: Seminal case for recognizing a possibility of a regulatory
taking. Statute was unconstitutional and the government has NOT
compensated.
b. Brandeis Dissent:
i. Average Reciprocity of Advantage
1. Between the owner of the property restricted and the rest of the
community in order to be valid without compensation
2. Suggests that a regulation must bestow some public benefits,
some of which should be enjoyed by the affected landowner
c. Conceptual Severance
i. How should the court measure the effect of the regulation?
1. On the parcel as a whole?
2. Or only on the portion of the property affected?
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ii. Parcel As A Whole - Brandeis argues that the appropriate measure was
the effect the regulation had on the entire property interest held by
Pennsylvania Coal.
iii. The problem of conceptual severance can occur in several different
dimensions. Although it is usually thought of as a physical or
geographic problem, it can also be a functional problem, or a temporal
problem.
1. First English – compensation is required from the moment the
regulation is first effective, even if it is later rescinded.
Regulatory takings, however short their duration, require
compensation, but the case did not decide whether a temporary
loss of all economically viable uses constitutes a taking.
2. Tahoe-Sierra v. Tahoe Regional – An interstate regional agency
controlling land use in the Lake Tahoe basin adopted a
moratorium on any development of certain properties in the
basin. The moratorium was intended to halt all development until
a land-use plan could be put into effect that permitted
development in a manner that would not contribute to the
continued degradation of the water purity of Lake Tahoe.
Affected property owners asserted that the moratorium denied
them all economically viable use of their property and, under
First English, they were entitled to compensation for the
duration of the moratorium. Not so, said the US Court. The
Court declared that the effect of the regulation on the value of
the parcel must be considered with respect to the “parcel as a
whole” and that it was improper to sever the time the fee simple
absolute title was subject to a moratorium from its otherwise
infinite duration. If the moratorium had been a permanent ban on
development that resulted in loss of all economically viable use,
it would have been a taking, but this ban was merely temporary.
Left unanswered were such questions:
a. How long must a temporary moratorium last before it
becomes “permanent”?
b. If conceptual severance is improper for temporal losses
of all economically viable use, why is it proper for
permanent losses of only one function, as in Loretto?
3. Contemporary Balancing Test
a. Penn Central – The US Court upheld New York’s Landmarks Preservation Law.
As applied to Penn Central, the law prevented Penn Central from building an
office tower over Grand Central Station but left Penn Central with the economic
return from the terminal building and “transferable development rights” –the
right to develop other properties in the vicinity owned by Penn Central more
intensely than New York’s zoning law would otherwise allow. The Court
admitted that the balancing test was an “essentially ad hoc, factual inquiry” that
turned on a number of factors:
i. The economic impact of the regulation on the claimant
ii. The extent to which the regulation has interfered with distinct
investment-based expectations
1. Concept has proven enigmatic
53
2. Might refer to an interest in a distinct property interest (e.g.,
Penn Coal’s interest in its support estate, a property interest
totally wiped out by the Kohler Act)
3. OR it might mean a financial interest in a larger estate that is
much diminished, though not totally eliminated
4. [Note: the phrase is suggestive of inherent limits –if either
“investment” or reasonable “expectations” are lacking, there
might be no protected interest at all]
5. Palazzolo v. Rhode Island – From 1959 to 1978, a Rhode Island
corporation, owned a 20-acre parcel that was mostly a salt marsh
wetland. During that period, various new regulations were
adopted that effectively barred development of the wetland, but
permitted construction of one large residence on an upland
portion of the property. Upon dissolution of SGI in 1978, title to
the parcel passed to Palazzolo, the sole shareholder of SGI, who
sought approval to develop the parcel more intensively. Upon
denial of his plan, Palazzolo brought suit, contending that Rhode
Island had taken his property. The Rhode Island Supreme Court
ruled that the use restrictions in place in 1978, when Palazzolo
acquired title, were part of the “background title” he had
acquired, and thus he could not assert that there was a taking.
The US Court reversed that ruling, and reasoned that such a
rule would immunize extreme and unreasonable regulations
against future attack, would be capricious (e.g., older owners or
those with the will and means to hold property for a long time
could challenge regulations, but younger owners or those who
have recently arrived in a locality and acquired property could
not), and would deny to in-place owners the ability to transfer
to other the same title they had. The Court also concluded that
the regulation did not deny to Palazzolo all economically viable
use of his property but remanded the case for a determination of
whether, under the Penn Central test, the regulations constituted
a taking.
a. Petherbridge: Addresses whether someone has a distinct
investment-backed expectation based on how restricted
when he/she came into ownership. Restrictions when
you come into ownership DO NOT have a big impact on
investment-backed expectations BECAUSE treats old
and new owners differently, and affects the value an
owner can sell her/her parcel for.
iii. The character of the government action
1. More easily found a taking when the interference with property
can be characterized as a physical invasion by government than
when interference arises from some public program adjusting the
benefits and burdens of economic life to promote the common
good
SUMMARY OF TAKINGS FACTORS
More likely to be held to be a taking
requiring compensation
More likely to be held a legitimate
application of the police power NOT
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Character of Government Action
- A forced permanent physical
invasion of property (Loretto; Causby)
-Extraction of a benefit for the good of
the community or forced transfer of
property rights from A to B
Economic Impact
-The regulation denies the owner any
economically viable use of the land
(Lucas)
-The regulation destroys almost all the
value of the property in a manner
unjustified by a sufficient public
interest
Interference with Reasonable
Investment-Backed Expectations
-It infers with vested rights, such as
investments based on reasonable
reliance on prior regulatory approvals
or laws unless those regulations can be
justified as preventing a nuisance or
other harm caused by the property use
-It interferes with an existing present
use of the property
requiring compensation
-Regulation of property use in a
manner that achieves an average
reciprocity of advantage (Euclid).
-A limitation on property use designed
to protect the community from harm
or to respond to negative externalities
(Hadacheck)
-A choice between incompatible
property interests
-The regulation leaves the owner with
an economically viable use of the land
or a “reasonable return on the owner’s
investment” (Penn Central)
-The diminution in value, even if
great, is justified by a sufficiently
strong public interest in protecting the
public from harm (Hadacheck)
- It imposes an opportunity loss—
preventing the owner from realizing
the benefits of the contemplated future
use (Penn Central)
-The change in the law is one that
could or should have been anticipated
such that the owner’s reliance on the
continuation of prior law was
unreasonable
-The regulation of a contractual
relationship rather than a forced
transfer of property interests from one
person to another
iv. Exactions: Conditional Burdens
1. Governments frequently regulate land use by requiring landowners to obtain a permit for
use. A typical example is a building permit.
a. The regulation requiring a building permit is not problematic, so long as the
condition of obtaining the permit is compliance with reasonable health and safety
standards or the like.
b. Problems occur when the government imposes as a condition to the obtaining of
a building or other use permit some condition that could not independently be
imposed without compensating the landowner.
c. May the state condition the grant of a building permit on the landowner’s consent
to what would otherwise be an uncompensated taking? There are two dimensions
to this problem:
i. Essential Nexus:
1. Is a condition that, standing alone, is a taking rendered valid and
not a taking if it is substantially related to the purposes of a
valid land-use regulation?
2. A condition that would be a taking, if imposed in isolation, is not
a taking when attached as a condition of issuance of land use
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permit under an otherwise valid regulation only if the
government can prove the condition is substantially related to
the government’s valid regulatory objective.
3. Nollan v. California Coastal Commission – Nollan owned a
beachfront lot along the Southern California coast on which was
a dilapidated cottage. Nollan’s lot extended to the mean high-tide
mark along the beach, a point some distance seaward of a
concrete retaining wall on his lot. He sought approval from the
California Coastal Commission for permission to demolish the
structure and construct a new, somewhat larger, residence
consistent in size and design with the neighboring houses. Preexisting regulations of the Coastal Commission forbade
construction on Nollan’s site if the structure would impede
public access to the public portion of the beach (seaward of the
mean high-tide mark) or would promote congestion on the
beach. The Commission refused to grant Nollan a permit unless
he consented to a recorded easement that would permit
unrestricted public use of Nollan’s beachfront lying between his
retaining wall and the mean high-tide mark. Nollan refused and
brought suit, contending that the easement condition was a
taking. The US Court agreed with Nollan. The Court assumed
that the underlying regulation-prohibition of beachfront
construction when it impedes public beach access or promotes
beach congestion—was valid (although it did not so decide), but
concluded that the condition imposed for a permit to build—
Nollan’s grant of a permanent right to the public to use the
private beach portion of his lot—“utterly failed to further the end
advanced as the justification for the prohibition.” The Coastal
Commission had failed to prove that the easement-for-publicaccess condition substantially advanced the purposes of the preexisting regulations of coastal construction; thus the easement
condition was simply “an out-and-out plan of extortion.”
ii. Rough Proportionality:
1. The second issue posed by the problem of exactions, or
conditional burdens, is whether the government can impose a
condition to a land use permit that is disproportionate to the
impact of the proposed use on the activity that the government
sought to regulate in the first place.
2. Even if it satisfies the “essential nexus” text, it is a taking unless
the government proves that the nature and scope of the
condition are roughly proportional to the impact of the
proposed development on matters that the underlying
regulation addresses.
3. Dolan v. City of Tigard – Dolan wished to expand her plumbing
and electrical supply store in a fashion that was consistent with
the city’s zoning law. The site fronted a street and backed up
against Fanno Creek. Although a portion of the site was within
the 100-year flood plain of Fanno Creek, none of the proposed
new construction was within that flood plain. The city
conditioned a building permit upon Dolan’s agreement to
dedicate to public use the entire portion of her lot within Fanno
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Creek’s flood plain and to dedicate an adjacent additional 15foot strip as a pedestrian bike pathway. The US Court held that
this constituted a taking. The Court concluded that the conditions
satisfied the “essential nexus” test of Nollan because the
prevention of flooding and the reduction of traffic congestion
were legitimate public purposes of the underlying regulation and
the required regulations were substantially related to those
purposes. However, the city had failed to prove that either
required dedication was even “roughly proportional” to the
impact of Dolan’s development on the legitimate public purposes
of preventing flooding and reducing traffic congestion. While a
band on development in the flood plain was valid, the city was
unable to prove why a public greenway, as opposed to a private
one, was required in the interest of flood control.
iii. Essential Nexus & Rough Proportionality
1. The tests are cumulative, not alternatives *
2. Each test must be satisfied for an exaction to be valid without
compensation. If a condition if a taking by itself, the condition
cum regulation is a taking unless the government can prove:
a. The condition is substantially related to the
government’s valid regulatory objective
b. The nature and scope of the condition are roughly
proportional to the impact of the proposed development
3. Logical order  first, establish that the condition would be a
taking if imposed independently  second, prove that such a
condition satisfies the “essential nexus” text  third, show that
such a condition exacts concessions that are roughly proportional
to the development’s impact.