Real and Personal
Chapter 8
Law of Property
• Oldest part of
common law
• Concepts from
common law
developed in England
from 12th to 16th
• Right guaranteed
and protected by
• Real Property:
immovable (i.e. land)
• Personal Property
(chattel): moveable
(i.e. furniture and
• Contract law is used
to make
arrangements about
the property use.
Real Property
• Land
– under - oil, minerals
– attached - buildings,
• Property - “legally
protected expectation
of being able to use a
thing for one’s
• Governmental regs.
may restrict property
owner’s land use (i.e.
Endangered Species
Act re: rare plants and
animal protection)
Ownership of Land
• Deeds
– most common way to transfer ownership
– quitclaim deed vs. warranty deed
– ID original owner, describe land, ID new owner, &
state that the ownership is being transferred,
possibly subject to certain conditions
• Titles
– comes from receipt of valid deed; is means by
which owner has legal possession of the property
– “formal right of ownership”
• Titles are recorded by state officials (usually county)
Forms of Ownership
• Fee Simple - indefinite time
and right to dispose of it
• up in the air “to the skies”
(but airplanes can use it)
• down to the core “to the
center of the earth”
– these rights can be sold
– subsurface mineral rights
often legally separated
• Can be inherited,
transferred, sold in part, or
sold in whole (entirety)
Forms of Ownership
• Joint tenancy
– Each tenant has same interest in undivided
possession of property
– Right of survivorship – if one tenant dies,
ownership passes to other owner
• Tenancy in Common
– Each tenant (owner) has undivided interest in
– If one tenant dies, that interest passes to
• Life Estates
– have use of land for life of “tenant for life”- but
can’t ruin it!
Evolving Property Law:
• Not seen much before 1960s
• Fee simple estate applies
• Living space in building is owned
in fee simple (numerous
conditions attached)
• BUT land building sits on, as well
as elevators & lobbies, are held in
common (for condo owners) by
another person (business)
• Most states have statutes to
simplify the legal process of
modern living arrangements
consistent with traditional
property law.
• Property law adjusts to modern
• Servitudes
– property requirements imposed by an owner
– positive and negative requirements
– easements and covenants most important
• Easements
– right to enter land of another and make use
of it or take something
– example: sidewalks, utilities
• Adverse possession is a form of easement
International Perspective:
“Insecure Property Rights”
• In U.S., property ownership provides strong rights. Not so in
other parts of the world.
• In many countries, farmers do not own land they farm; city
dwellers do not own land under the houses they have built.
• Philippines: 1/3 of ag land and 43% of dwellings have title
• Peru: 81% of farmed land isn’t owned; only half of urban
dwellings have clear title
• Haiti: 97% farm land used but not owned
• Egypt: 92% of urban dwellings and 83% of farms are “unowned”
• Theory is that the persistence of poverty in such countries
reduces the chance to capitalize on the value people place in
farms and houses. Without secure property rights, economic
progress is enjoyed mostly by those who live in the formal
economy and can sell property or obtain a mortgage on it.
Adverse Possession
• Must be:
– Actual - does in fact
possess property
– Open - visible so owner is
on notice
– Hostile - without consent
of owner
– Exclusive - not shared with
others who have no right
– Continuous - goes on
without major interruption
– And - State law may
require payment of taxes.
Moran v. Sims
• Sims owned property surrounded by Morans.
• Deed to Sims’ property first recorded in 1985,
but property had been in the family for over 50
• Sims built a home in 1991.
• Access to Sims property was by driveway
across the property bought by Morans in 1996.
• Sims asked the court to grant him an
• Trial court held that Sims has a prescriptive
easement; allowed use of driveway on Moran’s
• Morans appealed.
Moran v. Sims
• HELD: Affirmed. Adverse possession proven.
• Use of the property was
– Open and visible: Sims used the driveway since
– Hostile: No proof Morans consented (as owners)
for Sims to use drive
– Claim of Ownership: Sims bought gravel for drive &
hired it spread
– Exclusive: Driveway used by Sims family & those
they permitted to use it
– Peaceful: No evidence of dispute of use of driveway
– Continues/Uninterrupted for over 10 years: Deed
recorded in 1985; property in the family for 50
• Covenants or Covenant Running With
the Land
– Not actual legal interest in an estate
– More like a contract with an estate
– Most residential subdivisions have
– Tool for developing real estate
– Goes with the estate from owner to
• “Covenant runs with the land”
Powell v. Washburn
• 1988, Washburn, real estate developer, recorded
Declarations of Covenants, Conditions and
Restrictions (CC&R) for Indian Hills Airpark, an
aviation-related community.
• Referenced incorporation of the La Paz County,
Arizona, zoning ordinances
• Zoning permitted 3 residential uses: mobile or
manufactured homes, constructed homes, and
hanger-houses (homes incorporating an airplane
• In 1996, County amended ordinances to permit
use of recreational vehicles (RVs) as residences.
• In 2002 Powell sued Washburn requesting
injunction against use of RVs as residences
within the Airpark.
Powell v. Washburn
• Trial Court held CC&R did not permit RVs as
• Appeals court reversed. Decision appealed to
Arizona supreme court.
• HELD: Vacated the decision of appeals court,
and affirmed the trial court
• No RV’s permitted as residences
• Look at the intention of the parties that
created a restrictive covenant
• The plain intent of the CC&R’s was to limit
residents to mobile or manufactured homes,
constructed homes or hanger-homes.
Landlords & Tenants
• Landlords and
– rented property is
called a leasehold
– landlord has
interest of some
– tenant possesses
estate for a fixed
period or at will as
determined by
Can be commercial or residential
ID parties
Describe premises being leased
State how long in effect
– But can be month to month
• State how much rent is to be paid
• Usually also:
who pays utilities, taxes, insurance
where/when rent is paid
terms of damage deposit
who is responsible for
– subleasing
– termination provision
Rights/Duties of a
• Right of possession
during lease
• Can exclude other
• Landlord must make
essential repairs or
may have
constructive eviction
• Can’t:
– abuse property
– remove valuable
– be nuisance to
– engage in illegal
activities on
See Issue Spotter:
“Would Tighter
Leases Help?”
Nielson v. Gold’s Gym
• Peterson signed with Nielsen to lease “premises”
in a strip mall for a gym for 3 years at $0.85
annually per square foot.
• Nielsen was still building at the time of lease.
• Contractor told Peterson it would cost $168,000
to improve the building shell for the gym.
• Peterson discussed with Nielsen who would pay
for the interior improvements.
• Couldn’t reach agreement. Peterson walked
away. Nielsen leased to another party.
• Nielsen sued for $112,000 for breach of contract
& loss for renting space for less than Peterson
had agreed to.
• Trial court held lease was unenforceable for lack
of agreement of the nature and extent of the
property to be leased.
Nielson v. Gold’s Gym
• HELD: Affirmed. Lease is unenforceable for lack
of mutual assent of terms of who will pay for the
• Building was a shell when lease was signed.
• Not clear from lease who would pay for
• No evidence of industry standards of who would
be responsible for payment in this situation.
• Costs of improvements would have consumed
more than half of rents over the lease term.
• Payment for improvements is not essential to
every commercial lease agreement.
• HOWEVER, here it was an essential part of the
bargain to be reached.
• Missing term creates an ambiguous lease and no
mutual assent by the parties.
Public Control of Real
• Eminent Domain
– Government can force sale of property or
granting of easement without consent of owner
– 5th Amendment requires “just compensation”
• Police powers
– Control land use with regulations (i.e. zoning)
– Is there compensation? Yes, but when property
loses value, compensation may not appear to be
“just” to an owner.
– See Macon-Bibb County Planning & Zoning
Comm. v. Vineville Neighborhood Assn.
Macon-Bibb County Planning & Zoning
Comm. v. Vineville Neighborhood Assn.
• Zoning Commission rezoned property so
developer could build a shopping center.
• Residential area, Vineville, bordered 10-acre
piece of land.
• Residents, opposed to development, sued the
• Trial court held that neighborhood association
had standing to challenge zoning action.
• Trial court held that Commission had abused
its discretion in re-zoning decision.
• Developer and Commission appealed.
Macon-Bibb County Planning & Zoning
Comm. v. Vineville Neighborhood Assn.
• HELD: Reversed. No substantial damages to a
substantial interest in the zoning decision by the
• Two steps to standing: 1) aggrieved must have
substantial interest in zoning decision and 2) interest
that could suffer substantial injuries.
• Mere increase in traffic congestion is not a substantial
interest to appeal from.
• This development is an inconvenience of urban living.
• Mere result of normal urban growth and development.
• To stop this kind of rezoning would slow, if not stop,
the necessary growth of modern cities.
• The rezoning decision by the Commission stands.
Developer can build a shopping center.
Torts Against Property
• Trespass to Land: Unauthorized intrusion that interferes with
another’s peaceful enjoyment of their property
• Private Nuisance: interference with use & enjoyment of land
– Destruction of crops, causing health risks from pollution,
throwing objects on the land, using the neighboring house
for drug deals
• Public Nuisance: Interference with a right held in common by
general public
– Illegal gambling, bad odors, obstruction of a highway
• Trespass to Personal Property: Interference with the right of an
owner to the exclusive use and enjoyment of property
• Conversion: Unlawful control of another’s personal property
• Misappropriation: Invasion of property rights such as
trademarks or trade secrets
Smith v. Kulig
• Kulig owns building with apartments on second
• Street door to apartments locked; only tenants
and their guests can access. Back of building is a
fire escape.
• Tenants are not to use fire escape unless an
• “No Trespassing” signs posted on fire escape.
• Smith visited Wolf at his apartment in the
• Smith went out on the fire escape; some bolts on
fire escape detached from wall; Smith fell to his
death. Estate sued Kulig.
• Trial court dismissed, holding Smith was a
trespasser. Appealed.
Smith v. Kulig
• Held: Affirmed. Wrongful death action dismissed
with prejudice.
• Trespasser is a person who enters or remains on
premises without privilege or consent.
• Building contained no trespass signs, as did door
leading to and from fire escape.
• Ladder to the fire escape had No Trespassing sign.
• Smith did not have the right to use fire escape as
entry or exit to building – there was no emergency
situation here.
• Landowner does not owe duty to trespasser other
than not harming him in wanton or willful manner.
Atkinson v. City of Pierre
• Tour Ice produced ice at its plant in business
district of Pierre for years. Trucks pick
up/distribute from plant.
• Atkinson moved into apartment across street
from ice plant.
• Complained to Tour Ice and city – got
• Sued for nuisance. Couldn’t tolerate noise level
from operations.
• Trial Court held for defendants. Atkinson
Atkinson v. City of Pierre
• HELD: Affirmed. Business is not a
private nuisance.
• There were no other complaints from
any other residents near the plant.
• City has authority to declare what
constitutes a nuisance.
• City’s decision that Tour Ice’s operation
was not a nuisance was reasonable.
Issue Spotter: “Protecting
Company Property”
• Problems with theft of
company property
Reams of paper
More expensive items
It all adds up
• Can a policy that informs
employees that taking
supplies is theft of
company property and
subject to dismissal?
• Do we have to notify
employees of this policy
at all?
Torts Against Property
• Is a person harmed on the property a
trespasser or an invitee?
• Customers are invitees, not trespassers
• What duty of care must property
owners take to insure safety on their
• In business, a common, major tort is
premises liability.
Premises Liability
• Accidents that result from negligence of
the business
• Common are “slip-and-fall” cases
• Duty to keep premises reasonably safe
under the circumstances
• However, if a danger is obvious, people
have a duty to protect themselves
• See Campisi v. Acme Markets, Inc.
• See Issue Spotter: “Duties to Elderly
Campisi v. Acme Markets, Inc.
• Blind employee worked at Acme grocery store.
He was walking in the store, using his white
aluminum cane.
• Campisi, walking down another aisle, rounded
the corner; tripped over cane; suffered injuries.
• She sued Acme for premises liability based on
Acme’s negligence. She argued that Acme should
post a sign that it had a blind employee, then
customers would be more cautious.
• Jury awarded a verdict for Campisi. Trial Court
granted Acme judgment notwithstanding the
verdict. Campisi appealed.
Campisi v. Acme Markets, Inc.
• HELD: Affirmed. Verdict in favor of Acme.
• Businesses owe invitees high duty of care for
known or reasonably foreseeable risks or
• HOWEVER, customers must be aware of
sudden occurrences in shopping markets –
shopping carts, other customer’s foot,
someone’s cane or obstacles when exiting an
• Customers have duty of ordinary care that
include looking what is in the aisles.
• No award to Campisi.
Premises Liability
• Accidents that result from negligence of the business
• Common are “slip-and-fall” cases
• Not providing sufficient security to prevent crimes
from occurring on the property
– Problems are especially in high crime areas
– Issue: Owner “knew or should of known” of
problem in the area
– Issue: Did owner act “reasonably” to protect
– Owners may protect themselves: lighting, safety
patrols, posters, warnings
• In Stewart v. Federated Department Stores, court
upheld $1.5 million verdict in favor of heirs of woman
who was robbed and murdered in parking garage of
Bloomingdale’s department store
Erichsen v. No-Frills
Supermarkets of Omaha
• Erichsen went grocery shopping at No-Frills
one morning.
• Returned to her car, she was assaulted,
beaten, robbed, and drug over one mile
hanging from the car of the assailant. She
suffered serious injuries.
• Sued No-Frills and owner of center for
negligently failing to warn of criminal activity.
• Said defendants failed to protect her from
foreseeable criminal activities (10 criminal
events within 16-month period).
• Trial court held defendants did not violate duty
of care to Erichsen. She appealed.
Erichsen v. No-Frills
Supermarkets of Omaha
• HELD: Remanded back to trial court for further
• Property owner is not an insurer of safety UNTIL he
knows that acts of 3rd persons are occurring or could
• If owner has “reason to know, from past
experience” that there is danger, he has a duty to
take precautions, e.g. warnings, servants to offer
• One incident does not constitute notice of criminal
activities that were foreseeable.
• However, here there were prior criminal events in
the area.
• Erichsen can go to trial with facts of the case
against defendants.