Chapter 22
Land-Use Control
and Real Property
Chapter Objectives
1. Distinguish between different types of
possessory ownership interests in real
property.
2. Identify three types of nonpossessory
interests in real property.
3. Discuss how ownership interests in real
property can be transferred.
4. Indicate what a leasehold estate is and
how a landlord-tenant relationship
comes into existence.
5. Outline the rights of property owners
concerning the use of their property.
2
The Nature of Real Property
Real property (also called real
estate or realty) is immovable.
Real property includes land,
subsurface and air rights,
plant life and vegetation, and
fixtures.
3
Case 22.1 New England Telephone
and Telegraph Co. v. City of Franklin
New England Telephone and Telegraph Co.
(NETT) and other telephone companies filed a
lawsuit against the City of Franklin and other
municipalities, challenging the cities’
property assessments. The plaintiffs argued
that their equipment was personal property
and therefore should not be taxed. The
courts ruled that the equipment was not a
permanent fixture and should not be taxed.
Intent is an important factor in determining
whether an item is a fixture, yet how can a
court objectively decide whether someone did
or did not intend an item to be fixture?
4
Ownership of Real Property
Ownership of property is an
abstract concept that cannot
exist independently of the legal
system.
Property ownership is often
viewed as a bundle of rights.
5
Ownership in Fee Simple
Fee simple absolute
 The most complete form of ownership
Fee simple defeasible
 Ownership in fee simple that can end
if a specified event or condition
occurs
6
Life Estates
An estate that lasts for the life
of a specified individual;
ownership rights in a life
estate are subject to the rights
of the future-interest holder.
7
Future Interests
A residuary interest not granted by the
grantor in conveying an estate to another
for life, for a specified period of time, or
on the condition that a specific event
does or does not occur.
The grantor may retain the residuary
interest (which is then called a
reversionary interest) or transfer
ownership rights in the future interest to
another (the interest is then referred to
as a remainder).
8
Nonpossessory Interests
An interest that involves the
right to use real property but
not to possess it.
Nonpossessory interests
include:
 Easements
 Profits
 Licenses
9
Transfer of Ownership
Ownership of real property can
pass from one person to
another in a number of ways:
 Deed
 Will or inheritance
 Adverse possession
10
Deeds
When real property is sold or transferred
as a gift, title to the property is conveyed
by means of a deed.
A warranty deed warrants the most
extensive protection against defects of
title.
A quitclaim deed conveys to the grantee
whatever interest the grantor had; it
warrants less than any other deed.
A deed may be recorded in the manner
prescribed by recording statutes in the
appropriate jurisdiction to give third
parties notice of the owner’s interest.
11
12
Will or Inheritance
If the owner dies after having
made a valid will, the land
passes as specified in the will.
If the owner dies without
having made a will, the heirs
inherit according to state
inheritance statutes.
13
Adverse Possession
When a person possesses the
property of another for a statutory
period of time (3–30 years, with 10
most common), that person
acquires title to the property,
provided the possession is actual
and exclusive, open and visible,
continuous and peaceable, and
hostile and adverse (without the
permission of the owner).
14
Leasehold Estate
A leasehold estate is an interest in real
property that is held only for a limited
period of time, as specified in the lease
agreement.
Types of tenancies relating to leased
property include the following:
Tenancy for Years
Periodic Tenancy
Tenancy at Will
Tenancy at Sufferance
15
The Doctrine of Adverse Possession
Public policies help resolve boundary
disputes as fair as possible.
The Doctrine of Adverse Possession helps
determine ownership rights when title
property is in question. It also furthers
the policies of rewarding possessors for
putting land to productive use, keeping
land in the stream of commerce, and not
rewarding owners who sit on their rights
too long.
16
Types of Tenancies
Tenancy for Years
 Tenancy for a period of time stated by
express contract.
Periodic Tenancy
 Tenancy for a period determined by the
frequency of rent payments; automatically
renewed unless proper notice is given.
Tenancy at Will
 Tenancy for as long as both parties agree;
no notice of termination is required.
Tenancy at Sufferance
 Possession of land without legal right.
17
Landlord-Tenant Relationship
Landlord-tenant relationships
have become subject to
specific state and local
statutes and ordinances as
well.
18
Creating the
Landlord-Tenant Relationship
The landlord-tenant
relationship is created by a
lease agreement.
State or local laws may dictate
whether the lease must be in
writing and what lease terms
are permissible.
19
Case 22.2 Osborn v. Kellogg
Kristi Kellogg, her daughter, and her African-American
boyfriend, James Greene, attempted to lease half a house.
The house was owned by Keith Osburn and Pam Lyman.
Kellogg was refused on the grounds that there were too
many people, Greene’s income was too low, and Greene did
not provide references. Half the house was later rented to
the Li family with five family members, and the other half
to the Suggett family with three family members. Both
families had less income than Kellogg and Greene, and did
not provide references as Kellogg and Greene did. Kellogg
filed a complaint with the Nebraska Equal Opportunity
Commission (NEOC) against Osburn and Lyman.
What if the Osburn and Lyman discriminated against
Kellogg not because her boyfriend was African-American
but because they disapproved of cohabitation by unmarried
couples? Should this form of discrimination be
permissible?
20
Rights and Duties
The rights and duties that arise
under a lease agreement generally
pertain to the following areas:
Possession
Use and Maintenance of the
Premises
Rent
21
Possession
The tenant has an exclusive right to
possess the leased premises, which
must be available to the tenant at
the agreed-on time. Under the
covenant of quiet enjoyment, the
landlord provides that during the
lease term neither the landlord nor
anyone having superior title to the
property will disturb the tenant’s
use and enjoyment of the property.
22
Use and Maintenance
of the Premises
Unless the parties agree otherwise, the
tenant may make any legal use of the
property.
The tenant is responsible for any damage
that he or she causes.
The landlord must comply with laws that
set specific standards for the
maintenance of real property.
The implied warranty of habitability
requires that a landlord furnish and
maintain residential premises in a
habitable condition.
23
Case 22.3 Schiernbeck v. Davis
Linda Schiernbeck rented a house from Clark
and Rosa Davis. Schiernbeck noticed a
smoke detector missing and claimed she told
Clark Davis about it. Davis did not recall the
conversation but admitted he gave her a
detector. Schiernbeck was later severely
injured in a fire and filed a suit against the
Davises alleging negligence and breach of
contract. The court ruled in favor of the
Davises.
What is a landlord’s ethical duty with respect
to keeping rental premises “fit for human
habitation”?
24
Rent
The tenant must pay the rent as
long as the lease is in force, unless
the tenant justifiably refuses to
occupy the property or withholds
the rent because of the landlord’s
failure to maintain the premises
properly.
25
Transferring Rights to
Leased Property
If the landlord transfers complete title to
the leased property, the tenant becomes
the tenant of the new owner. The new
owner may then collect the rent but must
abide by the existing lease.
Generally, tenants may assign their rights
under a lease contract to a third person.
Tenants may also sublease leased
property to a third person, but the
original tenant is not relieved of any
obligations to the landlord under the
lease. In either case, the landlord’s
consent may be required.
26
Land-Use Control
The Law of Torts
 Owners are obligated to protect the
interests of those who come on the
land and those who own nearby land.
Private Agreements
 Owners may agree with others to
limit the use of their property.
27
Police Power
A state can regulate the use of
land within its jurisdiction.
A state authorizes its city or
county governments to
regulate the use of land within
their local jurisdiction.
28
Government Plans
Most states require that local
land-use laws follow a general
plan.
29
Zoning Laws
Laws that divide an area into districts to
which specific land-use regulations apply.
Districts may be zoned for residential,
commercial, industrial, or agricultural
use.
Within all districts there may be minimum
lot-size requirements, structural
restrictions, and other bulk zoning
regulations.
A variance allows for the use of property
in ways that vary from the restrictions.
30
Case 22.4 Allegheny West Civic Council, Inc.
v. Zoning Board of Adjustment of the
City of Pittsburgh
Irwin Associates applied for a variance to
use a contaminated lot of land that was
zoned for residential use as a parking lot.
The Zoning Board granted the variance
that was opposed by the West Civic
Counci,l and the Council appealed to the
state court which upheld the Board
decision. The case was appealed to the
state supreme court.
What might have happened to
neighboring property values if the
variance had not been granted?
31
Subdivision Regulations
Laws directing the dedication
of specific plots of land to
specific uses within a
subdivision.
32
Growth-Management
Ordinances
Limits on, for example, the
number of residential building
permits.
33
Limitations on the
Exercise of Police Power
Due process and Equal Protection
 Land-use controls cannot be arbitrary,
unreasonable, or discriminatory.
Just Compensation
 Private property taken for a public
purpose requires payment of just
compensation.
 “Taking” for a public purpose includes
enacting overly burdensome regulations.
34
Case 22.5 Shemo v. Mayfield Heights
Michael Shemo and Larry Goldberg owned an
undeveloped 22.6 acre parcel of land in Mayfield
Heights, Ohio. The property was “U-1” for singlefamily homes when the Mayfield Heights City Council
enacted an ordinance to rezone the property “U-2-A”
for cluster single-family homes. Shemo and Goldberg
filed a suit to invalidate the ordinance and have the
property rezoned “U-4” to permit retail and
warehouse use. They also made proposals to help
improve traffic flow and limit access from their
property. The court declared the ordinance
unconstitutional.
To what extent do you think that Shemo and
Goldberg’s proposals—to replace and widen the
commercial driveway, install a traffic light, and limit
access to the residential streets to emergency
vehicles—affected the outcome of this case?
35
Eminent Domain
Condemnation power
 Governments have the inherent
power to take property for public use
without the consent of the owner.
Limits on the power of eminent
domain
 Private property taken for a public
purpose requires payment of just
compensation.
36
Land-Use Regulations and the Takings Clause
Several cases have been brought by privateproperty owners who allege that
environmental regulations limiting their
control over their own land essentially
constitute a taking of private-property rights
in the public interest.
“When a government body, such as a city or
state government, imposes limitations on
private land owners’ rights in order to
preserve environmental resources and
habitats for endangered species, the private
landowners should be compensated for such
a ‘taking’ of their property.” Do you agree
with this contention? Why or why not?
37
Eminent Domain in Germany
The German constitution first
affirmatively establishes the right of the
government to take private property for
public use with some payment to the
landowner.
Private-property owners have a duty to
use their property for the public good.
Why might a government choose not to
pay its citizens for property that is taken?
38
For Review
1. What can a person who holds property in fee
simple absolute do with the property? Can a
person who holds property as a life estate do the
same?
2. What are the requirements for acquiring property
by adverse possession?
3. What is a leasehold estate? What types of
leasehold estates, or tenancies, can be created
when real property is leased?
4. What are the respective duties of the landlord
and tenant concerning the use and maintenance
of lease property? Is the tenant responsible for
all damages that he or she causes, intentionally
or negligently?
5. What limitations may be imposed on the rights of
property owners?
39