PROPERTY by alicejenny


                                 SPRING 2003
       The sale of land is ordinarily a 2-step process: 1st a contract of sale is signed by
       the buyer and the seller. Then, after a couple of months of more, the closing takes
       place. At the closing the seller delivers a deed to the buyer, and the buyer hands
       the seller a check for the purchase price. This two step process is necessary
       because the buyer, after signing the contract buy before paying the purchase price,
       needs time to check out the seller’s title, arrange for financing and take steps to
       move into the premises. You will always have two things in writing – the
       contract and the deed.
           a. The Land Sale Contract
                    i. It is a contract + special bilateral executory contract
                   ii. It has:
                            1. Special statute of frauds (writing + minimum terms)
                            2. Remedy presumed – specific performance
                            3. Promises marketable title – implied or expressly
                            4. Immediate legal consequences in the form of equitable
                                conversion. (as soon as the LSK is signed the buyer is
                                treated as the owner and faces risk of loss).
    HICKEY v. GREEN (575)
           o Facts: This is a case of three different land transactions (Green and
               Hickey, Hickey and the buyer of his house, and Green and the 2nd
               purchaser). The first check between Hickey and Green was not valid
               under the Statute of Frauds because Hickey had not filled in the pay to
               line. Since Green didn’t sign or endorse the check it was not binding. The
               second two agreements were valid under the Statute of Frauds
           o Holding: Judge Cotter found an exception to the Statute of Frauds in the
               form of promissory estoppel and held that there was reasonable reliance
               by Hickey on the contract and that only through enforcing the contract
               would the parties be in the same condition as they would have been if the
               contract was carried out. Here since specific performance was possible
               Hickey just got the land – if it was not possible then he would have gotten
               compensatory damages as well. CA courts would NOT likely find the
               same way because they are more reluctant to pull things out of the Statute
               of frauds.

           b. Marketable title
                 i. Definition: A title not subject to such reasonable doubt as would
                    create a just apprehension of its validity in the mind of a
                    reasonable, prudent and intelligent person, one which such
                    persons, guided by competent legal advice would be willing to take
                    and for which they would be willing to pay fair value.
         ii. It is an implied condition of a contract of sale that the seller must
             convey to the buyer. It demonstrates that the seller has the full
             right to convey the land and they are conveying it without
             mortgages or encumbrances. No land will every be perfect with
             absolute ownership – so marketable title is effectively the best title
             you can get.
        iii. It is called marketable title because it is a title that a reasonable
             person would be willing to pay for. There is an implicit promise of
             a land sale contract.
   c. Hierarchy of title
          i. Clear record title – always marketable and better than marketable
         ii. Marketable title – in the middle. It is not the best, but better than
             unmarketable insured title.
        iii. Insurable title – this is often not marketable and title companies
             will often insure land even when they have no clue if the title is
             good or not.
        iv. Quick Claim Deed – here there are no assurances of insurable or
             marketable title.

  o Facts: P entered into a contract with D to buy lot 37 of the Berkley Hills
    addition. A zoning violation made the contract invalid, and D volunteered
    to buy the necessary land around the property to eliminate the problem,
    but P refused and brought suit to rescind the contract and demand money
    back. There were two marketable title problems 1. to build two story
    houses only, and that the building must be set back.
  o Holding: The title was held unmarketable because the violations could
    subject Lohmeyer to litigation. The violation of the two ordinances
    exposes the party holding lot 37 to the hazard of litigation and makes such
    title doubtful and unmarketable.

  o Facts: This is a case of whether title by adverse possession is marketable.
    P contracted to sell and convey to D a residential property. Purchasers
    refused to go through with the sale because they said there were defects in
    the title and misrepresentations on the part of the sellers. If there was
    dispute about the validity of the title the sellers could have brought an
    action to quiet title – but this would take longer than the time before the
    closing – so the buyer would be unsure of his title and that is not good.
  o Holding: The sellers could have quieted title, or believing the title to be
    marketable despite imperfections, enter into a contract for sale hoping to
    convince the buyer of the same.
       d. Clearing title
               i. This is the seller’s obligation to make sure that the title is good and
                  clear before the closing and can be done through
                      1. Actions to quiet title (in rem, quasi in rem)
                      2. Purchasing the outstanding interest
       e. Remedies for breach of LSK
               i. Specific performance
              ii. Rarely – benefit of bargain damages
             iii. In CA – consequential and punitive damages
       f. Doctrine of Equitable Conversion
               i. When a LSK is signed land ownership changes
                  AUTOMATICALLY by operation of law
              ii. Results:
                      1. Risk of physical loss on purchaser
                      2. Seller holds personal property and purchaser owns real
       g. Merger
               i. After the deed is delivered, the seller has no continuing liabilities –
                  their promises are satisfied in the LSK
              ii. CAVEAT EMPTOR – buyer beware – do not take the deed if you
                  have doubts about it
       h. Buyers Protection Measures
               i. Required Disclosures
              ii. Warranties of quality
       i. Closing
          At closing the title passes if the deed is validly executed and delivered.
          Valid execution requires a writing signed by the grantor containing an
          adequate description of the parcel. Valid delivery requires intent by the
          grantor to immediately part with the legal control. When title passes the
          LSK is extinguished by merger into the deed. The only basis for suit by
          buyer after the title passes is an express covenant if any in the deed. There
          are six possible ones (Seisin, Right to convey, Against Encumbrances,
          Quiet Enjoyment, Warranty, Further Assurances)
               i. 4 Post Sale Liabilities
                      1. Collateral Obligations – ie fixing the roof
                      2. Disclosure Obligations – seller doesn’t disclose something
                          they are required to
                      3. Warranty of Fitness – this applies so far only to builders
                          and contractors. LEMPKE v. DAGENAIS – similar to
                          implied warranty of habitability from Landlord-tenant law.
                      4. Title Warranties in Deed – these substitutes for marketable
                          title promises are implicit in all LSK
 o Facts: P discovered that the house he had contracted to purchase was supposedly
   possessed by poltergeists and commenced the action to rescind the contract for
 o Holding: Seller had a duty to disclose this to any potential buyer – it can’t be said
   that the house was being turned over empty either. The court does not apply
   caveat emptor here because even if P had done a little more investigation about
   the house it is not certain that this latent defect could be discovered. This case
   announces a requirement of the disclosure and the courts belief that sellers are
   bound to a duty of good faith and fair dealing when disclosing information about
   their homes.
 o Facts: The Davis’s entered into a contract to buy the Johnson’s home. The
   Johnson’s knew that the roof leaked, but said there were no problems with the
   house. After the Davis’s made a $31,000 deposit the Johnson’s vacated the home
   and after rain, the Davis’s saw the flooding and brought action for the recession of
   the contract and return of their deposit.
 o Holding: The affirmative representation that the roof was sound was dales
   representation and entitled the Davis’s to rescind. Shows that the trend is to
   restrict caveot emptor. The court rescinds the LSK and returns the deposit +

    A deed is just a piece of paper which is said to be a conveyance and not a
    contract. It is not about the price – the delivery of the deed transfers the title and
    the contents of the deed are a memorial of that transfer. It has a dual quality of
    bring a mode of transfer and a memorial of the transaction. Court WILL NOT
    add to the terms of the deed – even through parole evidence. Deeds are usually
    signed by the grantor and not the grantee. There are always three dates required:
    signed, delivered and received.
        a. Three Types of Deeds
                 i. General Warranty Deed: warrants title against all defects by
                ii. Special Warranty Deed: Warrants against the grantors own acts
               iii. Quitclaim Deed: Contains no warranties of any kind.
        b. Classification of Deeds:
                 i. By nature of title warranties, and extent of title warranties
        c. Present Title Warranties:
                 i. Representations about the land title
                ii. Covenant of seisin ( I own and am in possession)
               iii. Covenant of the right to convey (I have the power to convey title)
               iv. Covenant against encumbrances (I have not encumbered the land
                     title with interests less than a fee such as leases, servitudes, etc)
 o Facts: In 1978 D’s brother divided the lot into two and constructed homes on
    each half. In 1984 the land was transferred to D by quit claim deed. In 1985 D
    transferred property to P by warranty deed. When P sought to renovate the land
    he found out that he was violating the tidal land statute and then brought suit to
    seek damages for breach of warranty against encumbrances and misrepresentation
o Holding: Defendant ends up winning because this is not an encumbrance. The
   title involved in marketable title is different than that involved in a covenant
   against encumbrances. Key – do an environmental study before accepting a deed
   like this because regulatory problems are not protected by the covenant against
        d. Future Title Warranties – promises not to interfere in the future
                 i. Covenant of warrant – will defend against superior title claims
                ii. Covenant of Quiet Enjoyment – no disturbance of possession by
                    paramount title. This is identical to the covenant of general
                    warranty and often excluded
               iii. Covenant for Further Assurance – will execute documents to
                    assure and perfect the title conveyed.
o FACTS: Doffing gave a mortgage to Gray, and title (subject to mortgage) to
   Rockefellor. Gray foreclosed, and the property was bought by Connelly (did not
   take possession). Connelly then gave a general warranty deed for $4000 to Dixon
   (no possession). Dixon gave a special warranty deed to Hansen and Gregerson
   (no possession). Rockefellor then asserts his paramount title.
o HOLDING: Rockefellor is found to be the owner. The foreclosure sale was
   invalid and void, and the sheriff’s deed to Connelly should be vacated and set
   aside, and upon the cross-petition of Hansen & Gregerson entered judgment
   against Connelly on the covenant of seizing in his deed with interest.
        e. Patent Transfers
                 i. Patent transfers are simple and are based on a nationwide federal
                    registration system.
                ii. Two kinds of transfers:
                        1. Assignment: transfers all ownership of the patent
                        2. License – gives particular rights of usage
o Facts: Before leaving Diamond, Dr. Welter assigned all his patent rights to
   Diamond Scientific. Later his company then sued him for infringing upon their

        f. Delivery of Deeds:
               i. Doctrine of Relation Back: When the grantor of a deed
                  irrevocably delivers the deed into escrow this is constructive
                  delivery to the grantee. Therefore, the date of the transfer of the
                  title is counted as the date of the grantor’s delivery into escrow.
        g. Bad Deed:
               i. Forged and Stolen deeds are void. If you deliver a deed to the
                  escrow agent and it gets stolen it can be recorded but it will not be
                  effective. There are NO bona fide purchasers of a stolen deed.
              ii. Fraud – deeds procured by fraud that are delivered are voidable
                  BUT NOT void. If it is voidable and you don’t do anything about
                  it and the deed gets recorded you lose title to the property. A
                   defrauded deed must be acted upon before a bona fide purchaser
                   steps in and takes good title away from you.
                       1. It is important to know the date of delivery in these cases.

 o Facts: The plaintiff is Maurice’s estranged wife and she wants all the property to
   go to her. He is trying to avoid probate and keep the property from his wife. So
   he deeded it to John with the condition that John’s death before Maurice would
   make deed one ineffective, but that deed was destroyed in a fire. The issue was
   whether that second deed was delivered.
 o Holding: The second deed was found to be delivered to Maurice – it is valid and
   effective. You can’t set up a transfer that will pass at ones death because that is a
   will and is invalid. He could have prevented this confusion by setting up either a
   trust or a joint tenancy with the right of survivorship in himself and John.
 o Facts: In this case the husband left the deed with the wife and she recorded it –
   the court was willing to undue this thought because it was not something that was
   meant to be recorded.
 o Holding: Delivery is more about intent than about the location of a piece of paper
 o Facts: There are 6 nieces and nephews that claim the land should be divided
   among them but Jay says that the land should be his because his uncle wanted him
   to have it. There was a deed, and it was handed over and then given back and
   placed in a security box
 o Holding: This is not enough. The delivery was not valid because when you
   deliver the deed you must have the intent to transfer the interest at that moment.
   The uncle’s interest was not to transfer the property at that time and therefore the
   deed was not valid.

        h. Categories of Land Transfers
               i. Commercial – for consideration
              ii. Donative – without consideration
                      1. Gifts (inter vivos)
                      2. Wills (testamentary)
             iii. Transfers by operation of law: No consideration or donative
                  intent. Often without paper at all. This includes imminent domain
                  or adverse possession.

      a. Three main types:
             i. Mortgages – a bilateral arrangement between the mortgagor
                (borrower) and the mortgagee (lender)
            ii. Deeds of Trust – the most common kind of secured lending in CA.
                This is trilateral – you need a borrower, a lender, and a trustee of
                deed of trust
             iii. Installment Land Contracts
      b. How Security Interests Affect Land Title:
               i. Encumbrances: These are a contingent interests.
              ii. Detract from marketability
             iii. Security interests are valuable property in themselves
             iv. The land satisfies the debt if the debt is not paid.
      c. The Paper Trail:
               i. Note: A promise to repay the indebtedness. This is not a security
              ii. Security Agreement/Mortgage: This says if you don’t pay the loan
                  the land is accountable for the debt. It personifies the land and is
                  usually for very significant borrowing.
      d. Buying Land with a Mortgage on it:
               i. With an Assumption of the Mortgage: The security interest is on
                  the land. You are not only accountable to having the land taken
                  away if the mortgage is not paid, but you also agree to pay the
                  bank back the money. If the interest rate in the original mortgage
                  is low you would do well to take the property and assume the
              ii. Subject to the Mortgage: The security interest is on the land. Here
                  you are not personally responsible for the repayment of the loan.
                  You are better off taking land this way unless the interest rates
                  have risen sharply.
      e. Foreclosure: This is usually for failure to repay a debt. It will satisfy all
          or part of the debt.
               i. Process:
                       1. Borrower defaults on the Note of Security Agreement
                       2. Creditor serves notice of default
                       3. Equitable right or redemption – you have the right to try to
                           clean up your act and pay the money due.
                       4. Foreclosure sale – this closes the equitable right of
                       5. Statutory Right of redemption – This is not in all states –
                           this says that even after the foreclosure sale the defaulting
                           mortgagor can come back with the money and by the
                           property back from the purchaser. If this exists in your
                           state and you buy foreclosed property you may have to wait
                           several years to see if they can come up with the money.
o Facts: This was a foreclosure sale, but it was not a judicial one, but a sherrif’s
  sale. The sale was not well advertised and the bid on the property was only for
  what the debt was even though they knew that the property was worth more than
  that because they sold it the next day for more money. This means that the
  debtors couldn’t get that extra money that was over their debt back.
   o Holding: The borrower had the right to have their equity protected. The bank is
     accountable to the mortgagor and the mortgagee though good faith and fair
     dealing and as a matter of law. There are strong public policy reasons here.

          a. Recording Systems
                  i. Title assurances – assurances of the best status of the property that
                     you can get
                 ii. Property Descriptions
                iii. Land records: Bona fide purchasers and Constructive/Record
          b. Six Tools of TITLE ASSURANCE
                  i. Marketable promises in LSK
                 ii. Title Searches
                iii. Warranties of Title in Deeds
                iv. Title Insurance
                 v. Title Registration – if available – there are few states that have this
                     practice. CA used to but does not anymore
                vi. Site Visit – go out and look at who and what are on the land. If
                     you do all six you have a chance of getting good title to the land.
          c. Land Description – to have title you are going to need to have good land
                  i. Government Surveys – sections and quarter sections
                 ii. Metes and Bounds – this happens more on the East Coast although
                     some property in CA has this as well. Here they take a monument
                     and step the boundaries off in relation to that monument
                iii. Tract Indexes – lots and parcels. Must of the property in SF is
                     based upon this. A city can have both metes and bounds, and tract
          d. Transfers of Land Ownership (title transfers)
                  i. There are three important dates:
                         1. Execution of the deed
                         2. Delivery of the deed
                         3. Recording of the deed
          e. Title Searching:
                  i. Grantee-Grantor Index: The point of this index is that you start
                     with the grantees and search back through the grantors and then
                     search forward through the grantees
                 ii. Grantee Index: Goes backwards in time to see from whom your
                     seller took title from. You want to go back to the ROOT OF
                     TITLE – and depending upon the statute of limitation and the
                     customs of the area in which you are doing the search this could be
                     any length of time.
              iii. Grantor Index: This searches forward in time
       f. Bona Fide Purchaser
                i. A purchaser for consideration ($$$) who has no actual notice of
                   competing earlier claims and no constructive notice of earlier
                   competing claims (eg from land records)
               ii. A grantee for consideration can receive good title without
                   encumbrances from a grantor who has not title or title subject to
                   encumbrances. This is why with a fraudulently procured deed you
                   can get a BFP to own the land.
 o Facts: Kansas says that the oil and gas lease takes “ownership” to the oil and gas
   under the land. Owens assigned the same interest twice. The first assignment is
   from Owens to Tours which included a Mother Hubbard clause (a coverall) the
   second assignment was from Ownes to Burris and assigned him the Kufhaul
   lease. Issue becomes whether Burris was a BFP?
 o Holding: Yes, he was a BFP because he had no constructive notice from the land
   record. The court held that searching the Mother Hubbard clause was not part of
   the responsibilities of the title search and that although this leaves Tours at a
   disadvantage the court emphasizes that the duty should be on the owners to make
   sure that the descriptions and land records are accurate.
 o Facts: There was a judgment lien against William Elliott which was written as
   William Elliot and indexed as William Elliot and William Eliot.
 o Holding: Here the court did not apply idem sonans – they hold that the spelling is
   material in determining whether the judgment lien is on the property.

        g. Recording Acts:
           The key for exams is to be able to recognize what type of recording act it
           is and what is required of the BFP. You want to be able to determine who
           has a better claim to the land. To qualify as the BFP will mean different
           things under different statutes.
        h. Types of Recording Statutes:
                 i. Race: Here you want to get the deed registered 1st.
                ii. Notice: To be a BFP you just must NOT know of previous
                    transactions and that you are the last purchaser
               iii. Race-notice: Here to be BFP you need to have recorded 1st and no
                    have known about prior purchasers through constructive or actual
                    notice. CA is known for this.
        i. Chain of Record Title:
                 i. INFORM: inform prospective purchasers about potential
                    competing claims
                ii. LIMIT: limit what prospective purchasers and title searchers have
                    to work about if they do accept the deed at closing.
               iii. WILD DEED: this is a recorded deed that is not findable.
o Facts: For timeline see notes 2/20. This is a statutory action to quiet title to land.
   There were two deeds. The first had an error in it and so Herbert ripped it up and
   made a new identical deed. The dispute is over whether that deed is valid.
o Holding: The deed was not sufficient to create constructive notice in the records.
   The court says that because the Caroline to Smith deed was a “recorded
   unrecordable deed” Smith has nothing to deed to Seale and therefore Fredrick’s
   deed is better
o Facts: Hoergar sold the same piece of property twice. The Board of Education
   ends up with a wild deed where there is no way of searching the record to find the
   problems. This dispute is whether the first purchaser, Hughes, or the second,
   Duryea and Wilson (who sold to P) have the better title.
o Holding: Deed became operative after Hughes filled in his name, and since that
   was after D&W got the property, Hughes became a subsequent purchaser who
   recorded first and therefore had better title.
o Facts: The recorded deed in the lot of a subdivision refers to a recorded plan
   which contains restrictions “imposed for the benefit of other lots.” A later deed
   from the same grantor refers to the same plan, but not the same restrictions. The
   grantee took the property without notice of the restrictions and claims that he is
   not bound to them because they were not in the deed or its chain of title
o Holding: D should have looked at the referenced restrictions before purchasing
   the property. If he had done a property search he would have found all Gilmore’s
   other deeds which included the restrictions. If you are dealing with a common
   grantor you must search every deed out to see if there are mutual restrictions upon
   your lot.

      j. BFP Rules from Recording Acts
               i. Protection is available for both the BFP or a purchaser from a BFP
                  under the Shelter Rule (686)
      k. Between the Grantor and the Grantee of the deed
               i. BFP rules do not apply. Grantee does not need to record, or even
                  be in good faith to prevail over the Grantor
o Facts: Daniels contracted to buy two lots from Jacula along with the option that if
  an adjacent lot became available they would have the right of first refusal to it.
  The contract of sale (where this agreement was located) was not recorded and the
  deed did not mention it. The Jacula’s contracted with the Zografos to buy a piece
  of adjacent property for $60,000. The Daniels had not been notified. Before they
  made their final payment, the Zografos were notified of the condition and the
  Daniels sought specific performance of the preemptive option
o Holding: The court applies the pro tanto rule and ordered the Zografo’s to convey
  the land to the Daniels and the Daniels to pay the Zografo’s the full purchase
  price. Because the Daniel’s had put the Zografo’s on actual notice – they had the
  right to take the deed from them.
 o Facts: The Lewis’s contracted to buy a residence from the Shipleys, but before
   they acquired title Fontana Films recorded a lis pendens against Shipley. It was
   recorded but not indexed until the day after the Lewises acquired title. When they
   were later served by the Fontana lawsuit they brought this action to remove the lis
   pendens and clear the title.
 o Holding: Unlike in Daniels even though they hadn’t finished paying before it was
   possible to find out about the lis pendens the court doesn’t apply this. We don’t
   want to discourage people from not paying cash.

       l. Inquiry Notice:
               i. Hints of earlier competing claims recorded in the chain of title.
                  These are the physical facts of use and possession – who and what
                  is on the land.
HARPER v. PARADISE – Race-notice statute: Subsequent purchaser is protected
                                  against a prior unrecorded instrument only if they
                                  are without notice of the prior instrument, and
                                  record before the prior instrument is recorded.
o FACTS: In 1922 there was an original deed from Susan – Maude for a life estate
   with Maude’s named children and a remainder to Maude for life remainder to her
   kids. This deed was lost. In 1927 Susan dies, and in 1928 her heir’s record the
   instrument that said that Susan gave the land to Maude but that deed was lost.
   The land was later foreclosed on Maude and went to Thorton, and there was a
   series of conveyances ending with Paradise. In 1957 the 1922 deed is found and
   recorded, and in 1972 Maude dies, and the children’s remainder vests in
o HOLDING: The Children claim that Paradise only bought a life estate and that
   when Maude died the land became there’s. The court says that the Paradise
   brothers couldn’t begin to adversely possess the land until after Maude had died,
   and this hadn’t happened, so the land went to the children.

o Facts: Waldorff entered into an agreement with Choctaw for condo 111.
  Choctaw executed a note and mortgage and included condo 111. Waldorff later
  wrote off Choctaw’s debt to them in exchange for the execution of a quitclaim
  deed to 111. A year later the bank foreclosed on Choctaw and this case was
  brought to determine who had ownership of 111.
o Holding: Choctaw being relieved of their debt was adequate consideration for
  unit 111 and although it would have been more difficult it would not have been
  impossible for the bank to walk on the property and determine the statute of 111.

      a. Who cares about Title Assurance?
            i. Purchaser of the Real Property: They don’t want to take title to
               something that is not good
               ii. Seller of Real Property: The LSK obligated them to deliver
                   marketable title at closing
              iii. Lender/Mortgagee: Land title is security for loan and it must be
              iv. Owner of Real Property: Avoid loss of ownership to holder of
                   better title or encumbrance

o Comments: Waldorff’s deed prevails over that of the bank because the bank had
  inquiry notice. What you don’t know will hurt you here and you can’t be a BFP if
  had you gone onto the land you would have been put on notice about the
  condition of unit 111.

       b. Title Registration
               i. In most states this is a thing of the past, but we think it may be
                  back in the future
              ii. In the future this will likely all be done on computers and it will be
                  different from the Torrens system
       c. Title Insurance:
               i. Limited financial protection against knowable risk. This insures
                  what you would have found if you did a title search. This gives you
                  more than title assurance and other warranties. It is a way of
                  backing up your title and filling in the holes to protect yourself.
                      1. Exclusions: Government and environmental regulations.
                          Often you can buy a binder which gets rid of these
                          exclusions but it would cost about 99% of the cost of the
                          land and is not worth it.
                      2. Exceptions: Recorded interest. Includes names problems,
                          encumbrances, competing records, utility easements, KEY
                          – read the fine print.
              ii. Two kinds of Insurance
                      1. An owners policy
                      2. A mortgagee/lender police – where a percentage of the loan
                          is paid to the insurance company.
             iii. Organizing the Difference
                      1. Title Warranties: These warrant against recorded and
                          unrecorded interest – such as adverse possessors. They are
                          limited and usually have a short statute of limitations.
                      2. Title Registration: This would supplant title insurance.
                          Most people look to see if the cost of registration is less
                          than the cost of insurance and if it is they adopt title
                      3. Title Searches: These give you protection against things
                          that you can find on the title, but not against those things
                          that are recorded but should not be.
   o Facts: Aiello sells 12+ acres to Kosa using the Shilling Survey, Kosa then using a
      different survey (the Price-Walker Survey) sells 18+ acres to Walker Rogge.
      Walker then has a survey done and discovers that the property is only 12+ acres.
   o Holding: The title insurance company gets off the hook here. The court held that
      the title search was only for Chelsea’s benefit and not that of Rogge and that he
      should have at the least walked on the land and done a site visit and then he would
      have known that he was getting 12 and not 18 acres.
   o Facts: This case shows that environmental problems are not protected by your
      title insurance. It is not a title problem, only an economic problem and if you
      want to be protected against environmental problems you should get
      environmental risk insurance as well.

        Land use law is made up of nuisances, servitudes and regulations. All three
operate simultaneously and independently to control land use. Any one oft hem can
determine the lawful or unlawful use of land.
        Nuisance law exists as part of tort law and property law. You always have a right
        not to be “nuisanced” upon and you have a duty to not use your land in a way that
        interferes with other’s use of their land.
            a. Nuisance Law is reactive:
                     i. It deals with conflicts between neighboring land uses after they
                        have occurred
                    ii. Does not prevent nuisances from occurring.
                   iii. You have to wait for the conflict before you can do anything.
            b. AKA the Tort of Un-Neighborliness
                     i. It is measured by the neighborhood
                    ii. By what is reasonable for neighbors to do to each other
                   iii. It is not fair to commit nuisance upon your neighbors
                   iv. It is hard to predict what the court will say is unreasonable.
            c. Nuisance Law’s Golden Rule
                     i. Sic utere tuo ut alinum non laedas – use what you have so that
                        another’s is not harmed
                    ii. In CA it is Civil Code section 3514: “One must use his own rights
                        as not to infringe upon the rights of others”
            d. Three Categories of Nuisance:
                     i. Public Nuisance: Usually results in abatement of fines.
                    ii. Private Nuisance: Usually looked at as part of a tort analysis, may
                        result in tort damages and injunction
                   iii. Mixed Nuisances: Partially private and partially public. Much of
                        nuisance in CA is done this way.
       e. Externalities
                 i. Most nuisances deal with externalities
                ii. It is something you do on your property that has a consequence to
                    your neighbors
               iii. These depend upon if what your neighbor is doing is a reasonable
                    use for their land.
       f. Tort Liability Analysis – the THRESHOLD TEST
                 i. Must show substantial harm to P caused by interference with the
                    use of P’s land – no harm – no nuisance
                ii. The threshold is that you can’t come into court without substantial
               iii. There must be a causal chain (Substantial harm to P Interference
                    with P’s use of land  intangible consequence
                    EXTERNALITIES  D’s unreasonable use of land)
               iv. This is usually solely economic damages
                v. Must show substantial harm + Causation.
       g. No Economic Damage (Economic Loss Rule)
                 i. Recovery of purely economic damages in absence of either
                    personal injury of property damage is not allowed.
                ii. There must always be an actual out of pocket loss - not just
                    devaluation of land.
       h. Restatement 2nd Torts – Analysis of Nuisance Law
                 i. Balance the gravity of the impact of P’s rights vs. the Utility of D’s
                    continuous activity.
o Facts: P owns land where they have their dwelling house, a restaurant and trailer
   accommodations. They supplement their income by taking in lodgers. D operates
   an oil refinery which is about 1000 feet from P’s property. P’s evidence shows
   that during the week the refinery emits such nauseating gasses and odors that it
   substantially impairs the use and enjoyment of their land.
o Holding: There is sufficient evidence to establish the existence of an abatable
   private nuisance and entitle the plaintiffs to injunctive relief. Here there was a
   sufficient causal chain – there was no other possible cause for the gases. Usually
   the first user of the land wins because they are acting like everyone else in the
   neighborhood – when the oil refinery comes in they are creating a nuisance and
   being un-neighborly.
o Facts: P brought this suit to get D permanently enjoined from running the air
   conditioning unit and tower on their property (the yuppie apartment complex)
   which was adjacent to P’s residence.
o Holding: Based upon the evidence and the nuisance that the Schultz’s suffered
   they were entitled to the injunction. The Schultz’s were there first. There was
   substantial harm (couldn’t have normal conversations or use backyard), there was
   a causal chain (without air conditioning unit the Schultz’s could use their land)
   and when balancing the equities the interest of the private home is much higher
      than the interest of this yuppie apartment complex where the tenants can just
      move elsewhere.

         i. Potential Nuisance Remedies
                  i. Damages
                 ii. Injunction: (abatement) this is a permanent remedy to a nuisance.
                     Courts will not usually award permanent damages (let the dog bark
                     and get paid $50,000)
                iii. Self Help: Most common nuisance where this is popular is the dog
                     barking nuisance. You can self help by suing your neighbor if the
                     dog barks, but you can’t self help by killing the dog.
   o Facts: D owns a cement plant near Albany – these are actions for an injunction
     and damages by the neighboring land owners alleging injury to property from dirt,
     smoke and vibrations coming from the plant.
   o Holding: The court opted to grant the injunction conditioned upon the payment of
     permanent damages to the plaintiff’s which would compensate them for the total
     economic loss to their property present and future caused by D’s operation. Here
     when doing the balancing the court recognizes that they can’t simply put the
     cement company out of business because they provide substantial employment to
     the entire community. However, the property owners have a right to enjoy their
     property as well, so they come up with this solution.
   o Facts: Spur and his feeding lot had been on the property first. As P’s housing
     development expanded it got closer to D’s property and because a nuisance to the
     residents and Dell brought this suit.
   o Holding: Here there is both a public and a private nuisance. The courts recognize
     that they need to eliminate the nuisance but also not harm Spur so they hold that
     Webb must indemnify Spur for the reasonable amount of the cost of moving or
     shutting down.

       a. Servitudes: The use of land counts for 90-98% of the value of the land.
       b. Catalogue of types of servitude interest in land:
               i. Licenses
              ii. Easements
             iii. Profit
             iv. Real Covenants
              v. Restrictions
             vi. Equitable servitudes
       c. True Servitudes:
               i. Only the following are TRUE servitudes: Easements, profits, Real
                   covenants, restrictions and equitable servitudes
               ii. A license is not a servitude because it doesn’t have the capacity to
                   succeed. It is only a one time relationship and it is not engrained
                   into the land title. They are permissive and revocable. Servitudes
                   are not revocable.
        d. Easements
           Interests in land that are usually written down and subject to the statute of
           frauds. Most easements are written and created in deeds. They are
           supposed to be in writing but there are numerous exceptions (estoppel
           rules and by implication or prescription). Easements last as long as the
           land does.
                i. Benefit or burden land title as appurtenances or encumbrances
               ii. There is usually a dominant and a servient estate (there is always a
                   servient estate)
        e. Types of Easements
                i. Appurtenant – presumed if there is a dominant estate
               ii. In Gross – Benefits not a piece of land, but attached to a person or
                   an entity
              iii. Positive (affirmative) – makes use of the servient estate. These are
                   the most common.
              iv. Negative – restrains the use of the servient estate
        f. Unwritten Easements:
                i. Easement by estoppel
               ii. Implied Easement
                       1. Implied from prior use
                       2. Implied By necessity
              iii. Prescriptive easement

o Facts: Genieve McGuigan owned lots 19 and 20. Peterson bought 19. When he
   sold to Willard he sold both 19 and 20 even though he didn’t own them. He then
   went to McGuigan to buy 20. It was subject to an easement for parking during
   church hours. Willard received the deed 10 days later and although it was
   mentioned that the lot was used for church parking, there was no mention of the
   easement clause. Willard filed an action to quiet title.
o Holding: The easement is appurtenant and positive. Willard has a good argument
   because in CA you are not allowed to make a 3 way deal in one instrument and
   you should do it through two separate deeds (one to the church and one to
   Peterson). Here the court ignores this and says that there was substantial evidence
   that the deed intended to convey the easement to the church. They balanced the
   injustice which would result from refusing to give effect to the grantor’s intent
   against the interest of Willard.
o Facts: Plaintiffs had used the road at all times prior to 1965 including when they
   were building their home. In 1970 D asked P to pay $500 for the road and P said
   no, D then erected a steel cable across the road to prevent use and constructed no
   trespassing signs. P then brought this case.
o Holding: The easement had been established by estoppel. This keeps Taylor from
  preventing them from using the road. The use of the road up to this point shows
  the approval or tacit approval and this can not be revoked. This does not have the
  permanence of a written easement and can expire when the reasons for
  recognizing the easement are gone.
o Facts: This is a positive appurtenant easement. This was an action to enjoin D
  from using and maintaining an underground lateral sewer through and across P’s
  land. When D refused to cease draining their sewage across P’s land the lawsuit
o Holding: An easement by implication was created here and D could continue to
  drain his sewage across P’s land. Key is that there was a common grantor and the
  easement was established when she used the other properties for the sewer line
  and then subdivided them. She had used one part of the land for the benefit of the
  others and created a quasi easement. This is not an easement by necessity
  because it is not the only way to deal with the sewage. This is not an easement by
  prescription because it is hidden.

        g. Licenses:
           Licenses come about because someone doesn’t have a signed writing. If
           you give permission to cross your backyard, but don’t write it down – this
           is likely a license.
                 i. The lack of a signed writing may cause easements to fall into
                ii. These are NOT a servitude because they neither benefit nor burden
                    land title
               iii. It is Oral and AUTOMATICALLY REVOCABLE.

       h. Unwritten easements come in Categories
                i. Easements by estoppel (Holbrook)
                      1. Executed parole license
               ii. Implied easements
                      1. Easements from prior use – this is always the better
                          easement to have. It doesn’t end when necessity does – this
                          only requires some necessity
                      2. Implied by necessity – this requires strict necessity.
             iii. Prescriptive easements (most common non-written easement)
              iv. Public Trust rights
o Facts: Othen must cross someone’s land to get to the highway and this case arose
   when the road he has been using (which he claimed he had rights to by easement
   of both necessity and prescription) was threatened by the creation of a levee by
   the Rosier’s with flooded the roadway.
o Holding: Othen had neither type of easement. This is not an easement by
   estoppel – he wasn’t maintaining the road. It wasn’t by necessity because he had
   other ways to get off the land. We can’t show that the previous owner Hill used
    this easement in the same way so there is no easement by prior use. It is also not
    prescriptive because there is no evidence of the use being adverse. Rosier did not
    stop Othen from using the land.

        i. Beach Use Cases
           Most in CA are dealt with through the CA coastal commission – however
           only recently has this been declared to be an illegitimate state body.
               i. Key parts:
                      1. State Sovereignty – out 3 miles from the mean high water
                      2. State Sovereignty – foreshore (between high and low water
                          line) Public trust – issue of Matthews case
                      3. Beach – dry sand – this can be private property but the
                          issue is to what extent it has public trust rights.
                      4. Uplands – above the line of vegetation – private property

o Facts: Matthews becomes the only moveant and asserts that D denied the general
  public its right of access to the ocean during the summer months by restricting the
  access of the dry sand to Bay Head residents and guests only.
o Holding: The court found for P against the association. They found that all
  citizens have the right to use the foreshore and that without a way to access it –
  that is meaningless. The activity of the association was found to be similar to that
  of a municipality and thus must be opened to the public at large. Anytime that
  you own land adjacent to water you have to put up with the public making use of
  the surrounding dry sand beach. It’s not written on your land title because it
  existed before your land title existed.

        j. Scope and Transfer of Easements:
               i. Scope = particularities of use: how, where, when and why
                  explains what is happening on the servient estate.
        k. Scope of POSITIVE appurtenant easements:
               i. Time/duration: often meant to exist for only a limited time
              ii. Types of uses: what kind of easement is it – a right of way? For
                  what purpose
             iii. Intensities of uses: the way the scope is limited – how many
                  people can use the easement
             iv. Location of the use: Placement of the easement (geographically)
              v. Size of the use area: how big the easement is – 12ft
             vi. Property benefited: It is for the benefit of one particular lot and not
                  to any neighboring ones as well.
        l. Scope of NEGATIVE appurtenant easements:
               i. Courts are against this because it is talking about the non-use of
                  part of your land. The cure is real covenants and equitable
       m. Misuse:
                i. Exceeding the scope of an easement results in misuse and/or
                    trespass liability
               ii. Misuse no longer results in forfeiture, but now the courts provide
                    for trespass liability (Brown v. Voss)
       n. Scope of Easements in GROSS
                i. Personal Easements in Gross: Use only by the named easement
                    holder – you can not sell this, and it is assumed to die with you.
                    No transfer, and no division
                        1. The only type of these we still see are hunting rights.
               ii. Commercial Easements in Gross: People always want to try to
                    categorize their easements in gross as being commercial.
                        1. You don’t have to have an interest in personal property
                            located on the servient estate.
                        2. These are more flexible because they are usually
                            transferable and divisible/ but limited to the “one stock”
o FACTS: This is the case with the crazy Pocono Pines Ice Company and Frank
   and Rufus Miller. The court breaks it down into three issues:
       o Whether Frank’s 1899 fishing and boating easement is transferable?
       o Was the fishing and boating easement extinguished by transfer of ¼
       o What about the bathing (swimming) easement?
o HOLDING: The court says that (1) is transferable, commercial due to the interest
   of the various Pocono’s companies and the fact that it is transferable. (2) The
   court doesn’t want this to be divided due to the “one-stock” rule, (3) when Frank
   gave Rufus the rights to bathing even though he didn’t have them, this became a
   prescriptive easement and in the deed this gave Rufus color of title. Because they
   own the lake as a partnership in the company, they both get the bathing rights.
BROWN v. VOSS (833)
o FACTS: P owned a parcel and had access to it through an easement on a parcel
   owned by D. When P bought more land, he began developing a single family
   residence on it, and using the easement to access that parcel as well as the first. D
   barred P’s use and blocked the road. P sued for removal of the obstructions and
   an injunction against D. Question became to what extent the holder of an
   easement can traverse the servient estate to reach not only the dominant estate, but
   a contingent parcel when those parcels are used in such a way that there is not an
   increase burden on the servient estate.
o HOLDING: The P was denied the injunction. RULE: an easement appurtenant
   to a parcel of land may not be extended by the owner of the dominant estate to
   other parcels whether adjoining or distinct tracks to which the easement is not
   appurtenant. However, Voss can’t block the easement because Brown is still
   using it to get to the initial parcel. The court BALANCES THE EQUITIES and
    sees that there is no more relative harm being done by the extra use of the
        o This would be different if they were going to develop 100 lots that all
            needed to use the easement instead of just one.

       o. Easement Duration: Easements last indefinitely unless limited by a stated
       p. Terminating Easements:
                i. Some end by merger (when one person has ownership of the
                   dominant and servient estate)
               ii. Some end when need for easement is gone.
              iii. Some are terminated by release or abandonment
              iv. Public trust easements (Bayhead) are almost impossible to
       q. 5 Categories for terminating easements:
                i. SELF-LIMITATIONS: Easement ends on its own terms. These
                   can be limited time or purpose.
                   EASEMENT: (recordable in land records)
                       1. Merger – merging of dominant and servient estate
                       2. Release – Dominant estate deeds back the easement to the
                           servient estate
                       1. Abandonment: More than non-use of the easement is
                           required for abandonment. There must be an overt action
                           or evidence that the easement will never be used again
                           (taking up railroad tracks)
                       2. Prescription: Servient estate owner’s prescripts back the
                           right of way. They block the right of way and make it
                           impossible to use the easement. If you do this for the
                           prescriptive period the easement will no longer exist. Also
                           difficult to establish.
                       1. Self-limitation: If you have an easement for stairs, and the
                           building burns down, you no longer have an easement to
                           use them. When the purpose of the easement is no longer
                           there, the easement doesn’t exist
               v. MISUSE AND STATUTORY STANDARDS: Misuse no longer
                   terminates easements.
       r. CAL law – Civil Code Section 811 says that the only ways to terminate an
           easement under CA law are: Merger, destruction of servient estate,
           incompatible acts, and disuse of prescriptive easement.
 o FACTS: P claim to be the owners in fee simple of the land where the railroad
   tracks formerly ran. They claim that after the tracks were abandoned, the land
   reverted to them, and that the Rails to Trails act is unconstitutional because it took
     their land from them without compensation. The court looked at whether the
     initial type of right the railroad had (easement or fee simple). They decided that it
     was an easement (this in only in VT, in CA railroad tracks are held in fee
     simple….anywhere else this would have been a fee simple)
   o HOLDING: The act did equal a taking, and they were awarded $234,000 plus
     interest from the time the government opened the trail. The government argued
     that even though it was an easement, the easement had not ended because it was
     for transportation and this was what was happening on the trail. The court held
     that the pulling up of the ties and rails was evidence of abandonment and that it
     was reabsorbed by the servient estate and the government must now compensate
     them for the new easement.

           s. Negative Easements
                  i. These are not often recognized because they suppress the use and
                     development of the servient estate.
                 ii. English Common Law Categories: Not to block or destroy
                        1. Windows
                        2. Air flow
                        3. Support
                        4. Water flow

  1. Do you have a use right?
          a. If it’s a right of way = easement
  2. So you have an easement – is it appurtenant or in gross? Positive or negative?
          a. If it can be appurtenant it WILL be appurtenant
          b. Most use rights will be positive. If it looks negative the law is unlikely to
              recognize it.
  3. Is it for PROFIT?
          a. Is the easement owner going to take something (oil, hay, gas) from the
              servient estate?
          b. Appurtenant or in gross?
  4. Is there a License?
          a. If there is nothing in writing and you don’t have something that looks like
              an easement, you default into license. You want an easement, because
              licenses can be revoked.
          b. You can tell it’s a license because it is oral, revocable, and never
          c. You default into the license if you can’t prove an easement.

   C. LAND USE PROMISES: Real Covenants, Equitable Servitudes, and Common
         a. Real Covenants: Come with damage remedies at law. These are treated
              as contracts and you can get damages for breach of that contract.
         b. Equitable Servitudes: These are generally not enforceable with damages.
              They are enforceable only through injunctive remedy. They run with the
            land as obligations and agreements by the virtue of notice. You are bound
            to these through notice of the servitude. (Tulk v. Moxhay)
                  i. Are in writing b/c of Statute of Frauds
                 ii. Most of notice will come from Land record
       c. Restatement 2nd lumps the two together and holds that they are all
            enforceable under the rules of equitable servitude – but also allows
            damage remedies.
       d. Language of Covenants
                  i. Instead of “servient estate” – “Burdened Land”
                 ii. Instead of “dominant estate” – “Benefited Land”
                iii. If the burden or benefit is in gross – be alert for problems. Most
                     will be appurtenant. Most in Gross will not run with the land.
       e. Traditional Criteria for succession: (not important for exam)
                  i. Mutual intent
                 ii. Touch and concern
                iii. Privity, privity, privity
       f. Modern Approach (important for exam)
                  i. Intention Rules!
                 ii. Provided there is no “notice”
TULK v. MOXHAY (864)
 o FACTS: In 1808 P sold land (Leicester Square) to Elms with a deed including
   limitations that he could not build upon the land and must keep it in good shape.
   D got the land from Elms, but that deed contained no similar covenant and he
   purchased with notice of the covenant in the deed from 1808. D wanted to build
   upon the square and P filed for an injunction.
 o HOLDING: The injunction was granted and affirmed. You don’t want people to
   sell their land to make restrictions disappear. Moxhay was liable for the promise
   to leave the garden open because he knew about the restriction (had actual notice)
   when he bought the property. The equitable principle of the privity of contracts
    you knew about it, you’re stuck with it.
       o This is not a negative easement because it was not one of the recognized
       o It is not a real covenant because of the horizontal privity
       o It is not a plain old contract because the contractual promises are only
            between the initial parties.
 o FACTS: McLean owned property and started to build a gas station on it. They
   and the contractor were enjoined by P. P claims that the gas station would be a
   nuisance per se and that it is a violation of the general plan fixed for the use of the
   lots of the street for residential purposes only.
 o HOLDING: D is enjoined from building the gas station. There is a reciprocal
   negative easement on the land because the land all came from a common grantor
   and the easements arise out of the benefit accorded by restricting the land sold by
   the grantor. Although D’s actual title does not mention the restrictions, all the
   other deeds out of the common grantor do, and the McLeans’s can't be BFP’s
   because they could have found out about the restriction by looking at the other
    deeds. Even though there was no formal common plan, one existed by the way in
    which the subdivision developed. It is important to look at what the true intention
    of the McLaughlin’s (common grantor) was.
        o This case is not even law in Michigan anymore – its just good to think

       g. Common Interest Developments Combine Varieties of Servitudes
                i. Use Rights – easements and
               ii. Use Promises – real covenants and equitable servitudes
              iii. The essence of the common interest development is the
                   COMMON PLAN. Most take the form of the subdivision map and
                   use of rights and easements as well as agreements.
              iv. Usually contain promises, covenants, and equitable servitudes – all
                   restrictions (like a charge for maintenance). These are all
                   affirmative obligations attached to each unit.
       h. California CC&R’s
                i. Covenants – real covenants
               ii. Conditions – Conditional fees
              iii. Restrictions – equitable servitudes
o FACTS: Depression case. In 1911 P stipulated that all land he owned be
   developed as a residential community and filed this with the county office. In
   1917 P conveyed the lot to the Dryers along with the covenant that they would
   pay $4.00 each year for the maintenance. The Dryers then sold the land to D. D
   refused to pay the maintenance charge. and P brought this action to foreclose a
   lien upon the land
o HOLDING: The court found that the covenant was a restrictive covenant that
   touched and concerned the land, and that there is privity of estate between D and
   P. Because you need a piece of land to hold the benefit – the court says that the
   property owners association is acting for the property purchasers and acting on
   their behalf – and that there is vicarious vertical privity because the owners
   association is a stand in for the individual various owners.
o FACTS: An example of a covenant the court will NOT enforce. D conveyed the
   land to P for $4000. The deed included a covenant that the grantors (a contractor)
   be given the right of first refusal to build the original dwelling on the premises.
   After negotiations fell through between D and P this suit was brought. Because
   this agreement did not state a time by which the building must occur it is void by
   the Rule against Perpetuities
o HOLDING: The court found that this was not an enforceable covenant. D had no
   claim, right or interest in the land, D had no cause of action against P by virtue of
   the contract, and the clause was null and void. There was a personal nature of the
   promise made, but this is not an enforceable covenant. RATIONALE: The
   meaning was not free and clear of doubt, the covenant does not touch and concern
   the land, and the burden is personal so it does not run with the land.
       o Stillwell could have accomplished what he wanted to do by:
              Using an option of 1st refusal that if land is ever build on - that he
                 would have the right of 1st refusal to build
              Make it a conditional fee... “But if the land is ever building on
                 without using Stilwell as contractor, the land reverts to Stilwell.”

       i. Servitudes
               i. Enforcement:
                      1. Created:
                      2. Scope: specific nature of the rights and agreements
                      3. Terminated: Ended, expired or no longer enforceable.
       j. Covenants
          There are lots of limitations on the enforcement of covenants. Some of
          these limitations and difficulties have to do with the creation and some
          with the transfer of that covenant to a future owner. MUST LOOK AT
          BOTH: whether it is enforceable at the time of creation, and at the
               i. Scope of Covenant
                      1. Can be illegal
                      2. May be narrowed because it is against the public policy
                          favoring the transferability of land, or favoring free market
                          competition, or against public and constitutional policies
                          outlawing discrimination.
              ii. Common Reasons why a covenant will not be enforceable
                      1. Enforcing party does not hold the benefit – you must be the
                          owner of the benefited estate or you have no reason to seek
                          to enforce the covenant.
                      2. The covenant was not validly created
                      3. It is unreasonable to attach it to the land title or it is against
                          public policy
                      4. Enforcement would be an unconstitutional state action
                          (involving in the courts in any discrimination action makes
                          it a constitutional issue)

o FACTS: The community was providing housing to people with AIDS and other
   terminal illnesses. When the leased the house in Albuquerque in a residential
   neighborhood the neighbors felt that the value of their property was going down
   and that having a group home violated the restrictive covenant of the planned
   community and they sought to get an injunction.
o HOLDING: The community was entitled to continue operating its group home
   under the restrictive covenant and under the Fair Housing Act. On the Single
   Family Use Covenant the court held that this community was acting in a single
   family manner. They shared their meals together and there is also public policy
   that encourages the incorporation of group homes into such residential
   communities. Under the FHA argument you are entitled to make a reasonable
   accommodation and the court feels that not enforcing the covenant is a reasonable
   accommodation because it is not an undue hardship. Counting AIDS as a
   disability also set precedence that the court would look upon AIDS as a
   recognized disability covered by the FHA.
 o FACTS: In 1911, 30 of the 39 property owners agreed that they would not sell or
   rent to non-whites for 55 years. In 1945 the Shelly’s (black) bought property in
   the area, and the trial court found they had no knowledge of the restriction. In
   1945 the other property owners brought suit and argued that the agreement was
   effective and that enforcement of it violated no constitutional rights because it
   was a private agreement.
 o HOLDING: The 14th amendment prohibits judicial enforcement of restrictive
   covenants based upon race of color. The covenant itself is legal, but when they
   take it to the courts for enforcement it violates the 14th amendment. KEY: when
   courts decide to issue an injunction this is a state action and therefore they can not
   issue an injunction which is discriminatory
       o Even though these types of racial restrictions still exist in deeds you can
            now go to the courts and record the removal of the restriction.

        k. Terminating Real Covenants
                i. Self Limitations
               ii. Waiver by all benefit holders (requires 100% agreement – unless
                   in CA where this is 51% plus court approval). This is the reaction
                   of other residents to what individual lot owners do to violate the
                   covenant. If they are seeking to enforce the covenant – this is
                   NOT waiver.
             iii. Doctrine of Changed Circumstances: The circumstances have
                   become so different from the time the covenant was created that it
                   is no longer enforceable. It can still appear on the land title but it
                   is not enforceable. This is more than just years passing – there is
                   no longer any pattern of use agreements that make this contractual
                   system make sense. It is close to the doctrine of impossibility. It
                   applies ONLY to covenants and sometimes equitable servitudes
                   (BUT NOT TO EASEMENTS)
              iv. Statutory Limits:
                       1. On Duration: Most common is 30 years – and if you want
                           the covenant to continue you have to reinforce it every 30
                       2. On Remedy: this is the MA approach
                       3. Marketable Title Acts: If this applies it is in addition to
                           more particular statutes.
               v. Bankruptcy: Because covenants are in the nature of contractual
                   rights they are subject to release with bankruptcy. When
                   subdivisions go through bankruptcy the easements are not released,
                   but the covenants are.
 o FACTS: Case was brought to prevent appellant from constructing a shopping
   center in the subdivision. Over the years as Reno had expanded the area around
   the subdivision had become more commercial, but not the subdivision itself.
   Appellants argue that such substantial changes have occurred that the covenant is
   no longer enforceable.
 o HOLDING: The court holds that there is not sufficient evidence to eliminate the
   restrictive covenant. The Subdivision owners are still benefiting from the
   covenant and thus the circumstances have not become so different from the time
   the covenant was created as to find it unenforceable. The benefit is still of
   substantial value to the benefited land. It is only changed conditions if there is
   NO MORE benefit in the covenant to the owners of the homes…it only cares
   about changes within in the subdivision itself
RICK v. WEST (916)
 o FACTS: Rick owned the land which was subdivided and contained the covenant
   restricting the land to single family use. West bought land in 1956. The land was
   rezoned in 1957 as industrial, but West would not release her covenant. When
   Rick sought to sell the land to the hospital West refused again to release the
   covenant. P sued claiming that the covenant was no longer enforceable because
   of changed conditions.
 o HOLDING: The restriction is not outmoded and when it affords real benefit to
   the person seeking to enforce it (West) no pecuniary damage award can be given
   in lieu of enforcement. Cardozo - No balancing of the equities can ever put Rick
   in a greater position than West. Covenants will remain enforceable unless you
   come up with VERY STRONG reasons why they shouldn’t be. This shows that a
   minority of 1 can bring down the entire deal if they want the covenant to remain.
 o FACTS: D bought the land and then found that it was not suitable for
   development. They tried to abandon it by turning it over to P, and P did not want
   it back. They offered it to P as a gift, didn’t work. They stopped paying taxes
   and let the county try to sell it, didn’t work, they signed a statement declaring
   their intention to abandon the land, didn’t work, and they didn’t accept mail
   regarding the property. This case was brought to get them to pay back association
 o HOLDING: Appellants intent to abandon the land didn’t matter – the law states
   that real property can’t be abandoned and D must pay the back association fees.
   They still have perfect title to the land because it had never been bought or sold.
   The burden of landownership runs with the land title and remains with the title
   owner until it is transferred to someone else.
        o Solutions: they could have deeded it to someone judgment proof, or filed
            for bankruptcy.

D. PUBLIC LAND USE REGULATION (Police Power and Zoning)
     a. Common Interest Communities: These are communities that run as
        somewhat private governments. There are separately owned units, with
              reciprocal use rights or agreements, and usually a homeowner or unit
              owners association.
         b. Owners Association:
                   i. Corporate entitle or limited liability company
                  ii. Established in a declaration and charter (from state)
                 iii. Has the power to enforce: Original covenants in declaration and
                      By-laws. Covenants in the original declaration are weightier than
                      those bylaws adopted by the association on a majority vote.
         c. Types of Common Interest Communities:
                   i. Subdivision: Almost always individually owned lots with SFR on
                      them. Almost always residential in nature
                  ii. Condominium: May look the same as subdivision, but the
                      residences are not on individual lots. There are no lot lines. The
                      ground is owned in common, only the interior walls are owned in
                      private (aka Flying Freehold). Zero Lot line development pattern.
                 iii. Cooperative: Here you don’t own any real estate but you own
                      shares in the cooperative. Everyone is liable for the upkeep of the
                      cooperative. People here are more closely tied, because they are
                      all responsible. If you want to buy into a cooperative you want to
                      know how credit worthy all other people are. These were
                      established as a method of discrimination, but not discrimination
                      rights apply to them as well.
   o FACTS: All residents are subject to the same CC&R’s and this included a pet
     restriction. When P bought a unit in 1988 she moved in with her 3 cats. When
     the association found out, they asked her to get rid of the cats, and then assessed
     fines for the time she remained in violation of the restriction. P brought the suit to
     claim that the restriction was unreasonable, and that she hadn’t known about it
     when she bought the unit.
   o HOLDING: The pet restriction is enforceable. Allowing litigation of this sort
     would be a waste of $ and make CC&R’s useless. The standard is that the
     servitude is enforced if it is not unreasonable – and this is not unreasonable.

           d. When is a Servitude Unreasonable?
                 i. When it violates public policy
                ii. Fails to relate to the burdened land
               iii. Restrictions on the burdened land fail to benefit the benefited land

ANALYSIS RECOMMENDATIONS: Look at the servitudes field in general. The only
way to see if there is a servitude is to look for burdened estate. If you cant find burdened
land look for a lease or something. Once you find the servient estate you look to see if
someone has the right to use the land – this leads to positive easement or license. You
are not likely going to find negative easements. If you see something that looks like a
negative easement it is going to be a building restriction and then a covenant. If you have
an affirmative covenant they are going to look at the reasonableness and see if it is
             Lease power – the power of the government to engage in:
                  i. Police power
                 ii. Zoning and rezoning (non-conforming land uses)
        f. Government Regulation of Land use:
             Purpose of the government land use regulation is to foster Stability and
             Compatibility of land uses:
                  i. Control undesirable changes in land use
                 ii. Prevent conflicting land uses
        g. Legitimacy of Government Land use Regulations: Must be:
                  i. Reasonable
                 ii. Serve the General Welfare (public interest of the whole
                iii. Not violate the Constitutional guarantees (prevent taking without
                      just compensation, personal expression, etc)
                    BY AND LARGE will not be found unconstitutional as long as it is
                    reasonable and comports with Constitutional guarantees
        h. POLICE POWER
                  i. Inherent in State Sovereignty
                 ii. Delegated to the local government (municipalities) generally
                      through statutes at the state level (Zoning Enabling Act)
        i. Inherent Sovereign Powers of Government
                  i. Tax
                 ii. Take (condemnation) – the power to take private property and
                      make it public property with compensation
                iii. Regulate (police power) – the is not exercised by the police, but
                      the planners and legislative parties of the municipality
        j. Types of Zoning Use Regulations
                  i. Zoning ordinances – most common: usually a map and text
                 ii. Comprehensive plan – usually imbedded in the zoning ordinance
                      or is separate about the various land uses in a municipality
                      (Important in CA)
                iii. Subdivision ordinances
        k. CALIFORNIA Land Use Regulations
                  i. General Plan (comprehensive plan)  controlling document
                 ii. Zoning Ordinances (map and text)
                iii. Subdivision Ordinances
o FACTS: Appellee is the owner of 68 acres of land, and after the zoning ordinance
   it fell into 3 different zoning categories. The ordinance is assailed on the grounds
   that it is a derogation of the 14th amendment and that it deprives appellee of
   liberty and property without due process of the land and offends provisions of the
   state of Ohio.
o HOLDING: The ordinance is not an invalid exercise of authority – all other
   provisions should be dealt with on a step by step basis. Euclididian Zoning
  arouse out of this case which is: Comprehensive, proactive (future orientated),
  uniform and cumulative.
      o Proactive: Future orientates. Zoning regulations regulate future growth
          and development. The purpose is to avoid getting conflicting uses next to
          each other
      o Uniform: Within a given zone or zoning district all uses are to be
          uniform. This creates the homogeneity of American cities and suburbs.
      o Cumulative: You can have higher uses in lower or more industrial use
          zones. This is ok.
o KEYS: Zoning is usually lawful unless arbitrary and unreasonable, there is a
  arbitrary and unreasonable or doesn’t serve the general welfare it will be upheld

        l. Zoning Changes
               i. When the municipality changes (when more people need job, etc)
              ii. When the general welfare changes (when welcoming oil refineries
                  into town has polluted the air, and now you need to clean that up)
             iii. Most land has been zoned and rezoned numerous times
        m. Non-Conforming Uses:
               i. Pre-existing (before zoning)
              ii. Lawful
             iii. Allowed to continue for a time, although amortization may be
             iv. Most non-conforming uses tend to be required to end in a
                  reasonable time (5 years is common here) in CA the period used is
                  in relation to taxes.

 o FACTS: P opened an adult bookstore, having gained all the appropriate permits
   and certificates, and 4 days later the Moon Township board published their
   intention to rezone the city ordinance to regulate “adult commercial enterprises.”
   On May 28 (24 days after P purchased) they adopted the ordinance and gave him
   90 days to move. P brought suit.
 o HOLDING: The amortization period here was unconstitutional on its face for this
   non-conforming use. This was not a comprehensive rezoning; it was a targeted
   reaction to a new and offending use. The amortization and discontinuance of a
   lawful pre-existing nonconforming use is per se confiscatory and violation of PA
   Constitution. It is unconstitutional because it is confiscatory, there is no time to
   recoup their investment – this is the MINORITY APPROACH.

        n. Administrative Law Concepts
               i. Deference (by court to local decision)
              ii. Delegation ( from one part of government to another)  from city
                  to local agencies (planning commission)
             iii. Discretion (range of available choices) – In CA there is wide
                  discretion to the police power.
        o. ZONING:
                 i. Inherent police power – delegated through the Zoning enabling
                    Act. It divides the power between the Zoning board of
                    adjustment, the planning commission and the Zoning
        p. Variance v. Special Exception: Both are seeking a change in use from the
                 i. VARIANCE: Request that the terms of the ordinance must be
                    changed for you. You NEED to allege that the variation you are
                    seeking is not your fault, and the ordinance is making it so you
                    can’t use your land at all. This is an argument of UNIQUE
                    HARDSHIP. 3 Characteristics: Unique hardship, not self
                    imposed, allowing variance is not detrimental to the general
                ii. SPECIAL EXCEPTION: This is a request that you can build on
                    your property something not allowed by the ordinance. This is
                    always a kind of use forecasted in the ordinance (school, church,
                    etc). In CA and most places this is a conditioned exception and we
                    call them conditional uses and you get a Conditional Use Permit or
                    a CUP.
o FACTS: The lot is not large enough to build a house on. The Common’s have
    owned the property since 1920’s and the ordinance was adopted in 1947. This
    was not a non-conforming use because they hadn’t yet used the land. The
    Common’s are plaintiffs here because they want to sell the land and the LSK is
    contingent upon the variance. The Common’s claim that they tried to buy the
    required land from neighbors and no one would let them – they have to allege that
    this is an undue hardship, and that allowing the variance won’t change the
o HOLDING: The court finds that the board was wrong in not allowing the
    variance, but they don’t award it, and instead send it back to the board of zoning
    adjustment. Here they are just serving as a safety check for a board that is not
    elected and otherwise has no way of being regulated.
Use Variances have now been outlawed in CA, but not site variances

o FACTS: P is trying to build 8 apartment buildings in a suburban residential zone.
   The board decided that the application for special exception was not met under
   criteria #’s 2 and 4.
o HOLDING: The court decided that #’s 2 and 4 were unconstitutional and since
   those were the only 2 requirements not met by Cope, the permit should be
   awarded. The criteria were unconstitutional because they were, 1) arbitrary and
   unreasonable, 2) gave too much discretion to the ZBA, and 3) the remedy is to
   allow the building
       q. Rezoning: Legislative changes in zoning map or text
                i. Downzoning: Reactive or preemptive, restricting to a less
                   intensive use (PA Northwester)
               ii. Upzoning: permitting a more intensive use (City of Rochester)
              iii. Spot Zoning: This can be downzoning or upzoning. It is when
                   there is a little spot of commercial property in a sea of residential
 o FACTS: This is an issue of spot zoning. Here the PLV rules because there is
   wide discretion in local legislature, deference by the court, and no subdelegation
   by the local legislature.
 o HOLDING: The court upholds the rezoning because it is NOT spot zoning. This
   is an example of Zoning Creep. When there are similar zones nearby and the
   more intense use is swallowing up the less intensive use. The court says that the
   City of Rochester has this discretion because they were elected, and if they get it
   wrong, they won’t get voted in next time.

  A. Eminent Domain and Inverse Condemnation – the power to take
          a. The government can take private property and transfer it to the
                   i. Private property
                  ii. Taken
                 iii. Public Use
                 iv. Just Compensation – usually measured by fair market value of
                      the property if you had a willing buyer and a willing seller.
          b. The power to do this is inherent in the sovereignty of every state – this
              also happens in other countries.
          c. Private property can be any type of property (real, personal, and
              intellectual) – anything owned can be condemned. When you are
              looking to see if something has been taken there is a transfer from
              private property interest to government property. The government
              doesn’t have to take the entire property – they can take only a portion,
              and condemnation is concerned with ONLY that portion.
          d. It must be used for PUBLIC PURPOSE – anything as broad as the
              general welfare.
o FACTS: Hawaii enacted the Land Reform Act in 1967 to try to get some of the
  land away from the few owners, and redistribute it to those people who were
  currently leasing land. They created this mechanism for condemning residential
  estates and then transferring ownership back to the lessees. When Appellee’s
  land was to be divided, they did not comply, and brought this action requesting
  the act be declared unconstitutional and its enforcement enjoined.
o HOLDING: The court found that the act is constitutional and compared it to
  BERMAN v. PARKER where there was a purchase of land to redevelop slum
  areas – the act was a comprehensive approach to correcting market problems.
    This shows that you can take private property as the government and then resell it,
    the fact that it ends up in private hands again does not mean that it violates the
    public use right. Must look at the ENDS and the MEANS and here there was a
    valid purpose served and just compensation provided, and the act was not
    unconstitutional. The courts don’t really have a role in 2nd guessing the
    legislature when they use condemnation power so long as they can come up with
    SOME public purpose.

           e. Inverse Condemnation – when the Government has already taken, but
                not paid
                     i. Action by a property owner for the just compensation after the
                        government has taken their private property
                    ii. This assumes that the government has acted for a public
                   iii. It is a cause of action – not an inherent power of government.
 o FACTS: Loretto bought the building and didn’t know that the previous owner
   had granted D permission to install cable on the building. In 1973 NY State
   enacted 828 so that landlords could not interfere with the installation of cable TV
   on their premises. They saw a public purpose in bringing cable TV to the masses.
   P brought this class action alleging that D and their installation was trespass and
   that relying on 828 there was a taking without just compensation.
 o HOLDING: The Supreme Court agreed that this was a valid regulation, but
   because it frustrates the property rights compensation should be paid. A
   permanent physical occupation is always a taking, and is always due just
   compensation. They know that this is a permanent occupation because it has
   taken away Loretto’s right to exclude (a basic stick in her property bundle). The
   basic rights of property are to POSSESS, USE and DISPOSE of your property
   however you want, and 828 interferes with all of these.
       o Blackmun disagrees and holds that you should apply the balancing test –
           you must look at all the circumstances and put together an estimation if it
           is really a taking, and then pay just compensation
       o Marshall responds by saying that this is easier than a balancing test
           because it is a bright line rule, and clearly shows when the government
           should pay and makes the results easier to interpret.

    B. Regulatory Taking of Real Property
          a. Assessing the reasonableness of Government land use Regulations:
                   i. Generally speaking, land use regulations are going to be held
                      valid because there is a strong deference on the part of the
                      courts not to mess with what the legislative body decides.
          b. Reasonableness Analysis: If a land use regulations goes wrong – it
              will do so in one of these three ways:
                   i. ENDS – public purpose(s). Is the regulation really helping the
                     ii. MEANS – Type of regulation and how well it really serves the
                         public purpose. Does it solve the problem it is supposed to
                    iii. IMPACT – Consequences for the property owner. Regulations
                         must be reasonable in ALL three.
             c. Limitations on Land Use Regulations:
                      i. Internal Limitations:
                             o Constraints in the Enabling Act
                             o Public Interest Justifications – general welfare (no spot
                                 zoning, etc)
                             o Appropriate procedure
                     ii. External Limitations:
                             o Statutory Limitations – you can’t use regulations to
                                 discriminate, etc.
                             o Constitutional Limitations –
                                     a. 1st amendment right to freedom of expression,
                                        association, religion
                                     b. Equal protection – no racial discrimination, etc
                                     c. Takings – Right not to be deprived of
                                        property without just compensation or
                                        without due process of the law.
             d. Four Key 20 Century Land Use Regulation & Taking Cases (US
                Supreme Court)
 o FACTS: 1915. P owned a brick making business in LA and had been there for
    many years. As the city expanded it ate up his property and then he was
    convicted of a misdemeanor for violating an ordinance that made it illegal to
    operate a brickyard within the city limits. P wants the ordinance to be found in
    violation of the state constitution and the 14th amendment.
 o HOLDING: The ordinance was not a violation of the state constitution or the
    14th amendment. These targeted ordinances were very popular in the late 19th
    century, and it was lawful because it was a lawful exercise of police power, the
    court saw the operation as noxious so they could eliminate it without it being a
    taking, this serves a public interest in protecting the citizens of LA. This was just
    a result of the growing development of LA and the price you pay for
    development. There is a HIGH Presumption of legislative validity – regulations
    are going to be found legal unless really really unreasonable, and here he could
    still take his clay and make the bricks elsewhere.
 o FACTS: 1922. The Kohler Act (1921) prevented mining within 150 feet of an
   improved property belonging to another person. There are various estates at issue
   – the surface estate, the support estate and the mineral estate. This took away the
   coal company’s rights to mine the underground land.
 o HOLDING: The act can not be sustained as an exercise of police power so far as
   it affects the right to mine coal where that right has been reserved. The act is a
   taking of the coal company’s surface estate without due process or just
   compensation. There are no facts that make the risk so dangerous that they should
   give P more property rights than he bought (he only bought the rights to the top of
   the land).
 o COMMENTS: The case gets sent back for more opinion because there was no
   discussion about the effect of this on public land. Here the Mahon’s are
   dismissed because there is no public interest, if it was a public road and there was
   a public interest you would balance that public purpose against the harm to
   regulate – and it may lean towards the act being valid. When regulations go too
   far they become takings  when they extinguish all value to the other party it
   seems to be sufficient to require that the ordinance be invalidated or the party be
 o FACTS: 1978. P’s property was declared a national landmark and they lost some
   rights to their property and they are also required to do maintenance and keep the
   exterior in “good repair” and must have any alterations approved by the
   Commission. Union General Properties wants to develop an office building
   above Penn central and will pay buco bucks for it. They submitted 2 designs to
   the Commission, both were shot down, and instead of seeking judicial review they
   filed this suit.
 o HOLDING: The restrictions did not constitute a taking, they are related to the
   general welfare and they not only permit reasonable beneficial use of the property
   to P, they afford P other opportunities to enhance that site and other property as
   well. Look at the 3 balancing concerns: 1) economic impact on claimant, 2)
   extent to which regulation interferes with an investment backed expectation, 3)
   character and extent of government action.

                    i. Regulation must substantially advance legitimate state interests
                   ii. Regulation must not deny an owner economically viable use of
                        his land
          f. Reasonableness Balancing Factors
                    i. Economic impact on claimant
                   ii. Extent regulations interfere with the reasonable/distinct
                        investment backed expectations
                  iii. Character and extent of government actions.
 o FACTS: Lucas bought two lots not in critical area, but later after the passing of
   the Beachfront Management Act Lucas can’t build on the land. The Act as
   imposed on Lucas was held invalid unless just compensation was paid.
 o HOLDING: In the end the state bought the lots from Lucas and then had to sell
   them to a developer because they were in financial trouble. The reason the lots
   were held to have no value to Lucas was based upon the stipulation made by the
   council. If this stipulation would not have been made it is likely that the Act
   would not have been found invalid because even though he couldn’t build on his
   land he could still do other things with it.
  1) Categorical Takings
        a. Permanent physical occupation (Loretto) – ALWAYS a taking
        b. Denial of all economically beneficial use is a taking, unless non-use is
            justified based upon background principles of state property law (common
            law nuisance, land title limitations)
  2) Non-Per Se Takings:
        a. Ad hoc balancing factors under Penn Central – Always unique
            circumstances. Economic impact on claimant, investment backed
            expectation, character and extent of government action.
  3) Never a Taking:
        a. Abate or prevent nuisance (Hadacheck)

   o FACTS: P took on investors and they bought property, they couldn’t decide how
     to develop the land and eventually broke apart and P bought out all the interest
     and receives title in 1978. By that point a wet land regulation had been placed
     upon the land, and the stat said he should have known about the regulation before
     he got the land and he is not a BFP because there was notice.
   o HOLDING: When he got the land in 1978 he did not have any real expectation
     that he would be able to develop upon the land. He has no expectation – but he
     has the right to sue if the regulation when it was adopted had regulated the land
     into inutility or non-use. Because of the WHOLE PARCEL RULE – and the fact
     that he could still build upon a portion of his property, it had not been regulated
     into non-use and the regulation was valid.

     C. Regulatory Taking of Intellectual Property (Trade Secrets)
  o FACTS: Some crazy pesticide company that makes Round-up sues because over
     time with the changing regulations, their trade secrets were not kept private and
     they see them as regular property and that this constitutes as a taking and they
     deserve just compensation.
         o The date pre-1972 – no argument because there was no investment backed
            expectation that it would be kept private.
         o After 1978 – no argument because you knew you could send in your trade
            secrets or not, and if you sent them you knew there would be exclusive use
            for 10 years, and then limited use for 5 more.
         o Between 1972-1978 – this was a taking during this period because they
            were assured of the protection f their trade secrets, and they were told that
            if the EPA used their data that they would be compensated.

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