CHAPTER 8
REAL AND PERSONAL PROPERTY
REAL PROPERTY—Real property is land, things under land such as oil and minerals, and things attached to land, such as buildings and natural vegetation. Personal property consists of tangible items that can be moved, including chattel, such as clothing, books, cars, and things that may be represented by pieces of paper, such as stocks and bank accounts. Property is a protected expectation of being able to use a thing for one’s advantage. The ability to use and control property determines most of its value. One could own two similar plots of land, but if one was subject to many restrictions and the other was not, there would be very different interests in the property. Ownership does not mean unrestricted rights to property. The right of the sovereign to impose limits on land use is an ancient part of property law, as are the rights of other persons not to have property used in an offensive manner to create a nuisance. Historical Origins—Property law comes to us from England, where it developed starting about a thousand years ago. The king owned all property initially and granted knights and others in favor tenancies in land. While those were rights to the land and its income for life (usually subject to assorted taxes), it soon became custom that tenants could pass on property to their heirs and the land holders became the owners. By the time feudalism disappeared, before the settlement of North America by Europeans, the right to individual ownership was well established. Deeds and Titles—Deeds identify land by legal description and name the owner(s) and, when transferred, the name(s) of the new owner(s). Titles, which usually accompany deeds, are the forms that are used to recognize formal ownership of land. Titles are registered and recorded by state officials, usually county recorders. The titles indicate who owns property and what liens, such as mortgages, exist as claims against the property. Fee Simple—Property is referred to as an estate: ―an interest in land which (a) is or may become possessory and (b) is ownership measured in terms of duration.‖ One may have land now, have a right to become its owner in the future, or may have limited control for a set period of time. Ownership must pass to the control of others at death. Fee simple is the most common form of real property ownership—the right to exclusive possession of a piece of land for an indefinite time and the right to dispose of the land as the owner chooses. Fee simple usually also means ownership of
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minerals and oil under land, but those rights may be sold separately of the surface and most are. Fee simple means ―ownership‖ of air above the surface, but not an absolute control of the air, as others may transmit signals that pass through airways and planes may fly at reasonable altitudes above fee simple land. Forms of Ownership–Numerous forms exist. Usual ones are tenancy in common, an undivided interest that passes to the estate of each owner, and joint tenancy, which is similar but ownership passes to other owner on death. Other holding possibilities include life estates. Evolving Property Law: Condominiums—Condos are an example of how property law evolves to fit the needs of society. Fee simple estates can be boxes up in a building that is owned in common with other condo owners. Most states have various property statutes that clarify how certain property law rules are to function, but, in general, estate owners have broad rights to innovate. International Perspectives: Insecure Property Rights In most poor nations, few people can have title to urban or rural land. In most countries, a majority of the land is untitled. It is often used–farmed or houses built on it–but the users do not have security; the state can evict them at any time. This is a major reason for poverty in those countries, as it discourages investments and makes the occupiers of land, usually the poor, unable to capitalize the value of the land they occupy and may use to earn a living. Servitudes—These are a large category of negative and positive requirements on property owners. Most are adopted voluntarily by owners but can impact future owners who may not be so keen for the servitude, but the servitude may be tied to the property and cannot be avoided. Covenants and easements are the major categories of servitudes. Easements. Are rights to enter property owned by (and in possession of) another and make some use of it or take something from it. Easements look much the same as a deed; the give legal specifications to the easement rights, such as the right to drive across land, build sidewalks, use a water well or install utilities. A profit is the right to remove valuable assets from land, such as minerals, oil or trees. Once granted, easements may not be interfered with by the person in possession of the estate, unless willing to bargain for a change in the easement status. Adverse Possession. (easement by prescription) is use of another’s land without permission. Conditions are: 1) actual--the adverse user in fact uses or possesses the property; 2) open--the use is visible so the owner is on notice; 3) hostile--the use is without permission of owner; 4) exclusive-the use is not shared with others; 5) continuous--the use must be without major interruption for as much time as required by law to obtain title by adverse possession. States have statutes of limitations to govern this. CASE: Moran v. Sims CASE: Powell v. Washburn Landlord and Tenants—As society becomes more mobile, tenancy, a possessory estate interest, has become more common. A leasehold gives a tenant certain occupancy and use rights of the property; the landlord has the right to reclaim the property in the future. Unless prohibited by the lease, a tenant may sublease part or all of the leasehold.
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Leases—An agreement that creates a leasehold in an estate and contains covenants (conditions), such as rent payment requirements and restrictions on property use. State statutes help govern tenancies. Rights of a Tenant—A tenant has a right in the property rented, including the right to exclude the landlord, with certain exceptions, such as enter to make needed repairs. State laws often give landlords other entry rights, such as for periodic inspection. Landlords are also expected to make needed repairs in a timely manner. If the premises become unlivable, the tenancy is broken and the tenant may leave. Duties of a Tenant—A tenant may not abuse the property so as to affect it beyond the lease term. There is a duty to report problems to the landlord and not let them get worse and cause damage, such a leaking roof. Tenants may also not be a nuisance to neighbors or engage in illegal acts on the premises. International Perspective: Americans Crossing into Mexico for Land An estimated one million U.S. citizens live in Mexico; the number has been rising steadily. Mexican property law is very different from U.S. law and people get tripped up. Foreigners may own land only in certain locations; elsewhere they can only have a fifty year use right in trust. A non-trivial number of Americans have paid for property only to learn they did not have title. Mexican attorneys must be hired to help ensure due diligence. Commercial Leases—Unlike landlord-tenant leases, which tend to be short and be controlled by state statute, commercial leases are usually lengthy and highly particular. Most refer to terms used by the Building Owners and Managers Association or other common parlance. There are terms of art to be mastered. Who is responsible for what can vary widely and presumptions cannot be made, as is true in residential leases. CASE: Nielsen v. Gold’s Gym Issue Spotter: Would Tighter Leases Help? Landlords have dealt with such problems a long time and do what they can such as collect large damage deposits and the last month rent in advance. They can also run credit checks on prospective tenants. But it the rental market is competitive, landlords cannot demand too much in up front cash. A common lease term is for the tenant to be liable for costs of enforcing the lease. But most people who trash an apartment and skip out without paying are pretty much judgment proof. Quick, decisive action can also help–knowing exactly what steps to take to force eviction. PUBLIC CONTROL OF REAL PROPERTY—State (and local) statutes modify the common law of real property. Some laws concern registration and proof of title and the recording of liens, but governments have substantial power to take and regulate private property. Eminent Domain—Governments have always been presumed to have the power of eminent domain to take private property for public purpose. The 5th amendment requires just compensation, so fair market value is paid when governments take land for building highways, schools and such. Governments may also use eminent domain to buy property that is used to benefit private parties, such as railroad rights-of-way and utility easements.
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Police Powers—This is a broad category to regulate property to promote the ―general welfare,‖ which is very broad. Health and safety measures are traditional, but environmental controls and many other things fall under this rubric that gives governments great regulatory powers that impacts on the value and use of property. CASE: Macon-Bibb County Planning and Zoning v. Vineville Neighborhood TORTS AGAINST PROPERTY—Wrongs directed against property rights and interests, both real and personal property. Again, there must be an intent to do the act that leads to the tort, even if the intent was not to commit the tort itself. Trespass to Land—The tort of unauthorized intrusion by a person or a thing on land belonging to another. A defense is unauthorized entry to protect property or persons from danger. Mistake is not a defense, such as someone who thought it was ok to go hunting on someone else’s property. There does not have to be damage to the property, such as a trespass from shooting a bullet across property. CASE: Smith v. Kulig Nuisance (Private and Public)—A private nuisance is an activity that substantially and unreasonably interferes with the use and enjoyment of land; public nuisance is interference with a right held in common by the public. Nuisances can be physical—smoke, noise, odors, or other offenses that impair the tranquil enjoyment of property. It may be barking dogs next door, drug dealing next door, or obnoxious activities. CASE: Atkinson v. City of Pierre Trespass to Personal Property—Intentional and wrongful interference with possession of personal property of another without consent. This tort deprives the owner of the use of property for a time. In most states, innkeepers have a privilege to keep the personal property of guests who have not paid their bills. Issue Spotter: Protecting Company Property If employees steal anything it is theft of company property (conversion). They do not need to be told of this fact, but if employees are on notice about such behavior, then there is even less justification for it. Any policy should be enforced consistently to avoid possible claims of discrimination in treatment of employees, but they can be disciplined or fired and the police can be notified. Conversion—Intentional and unlawful control or appropriation of the personal property of another. Important factors are the extent of control, the length of the control, the damage to the property, and the damage caused to property owner. Mistake, such a good faith purchase of stolen goods, is not a defense. Misappropriation—Intellectual property, such as trade secrets, are protected by tort law. The theft of such property may be called misappropriation. Damages and injunctions are usual remedies requested. This will be covered under intellectual property in Chapter 9. TORTS AGAINST PROPERTY OWNERS—Owners of business property generally invite people to come on the property to possibly buy from the business. As such, there is an obligation to take certain measures to protect those who enter the property,
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Premises Liability—Slip and fall suits, where patrons are injured on businesses property, have long been common. In most cases, the business has failed to keep the property safe for those who are invited on the property and expect the merchant to use reasonable care. More recently, premises liability for those who suffer criminal attacks on business property has become more common. In a recent case in Connecticut, Bloomingdales paid $1.5 million to the heirs of a woman who was murdered in a store parking garage that had no security even though it was in a high crime area. CASE: Campisi v. Acme Markets Issue Spotter: Duties to Elderly Customers In the case in question, Gibson v. Metropolitan Opera (841 NE2d 747) the NY Court of Appeals held that the opera house had no duty to stop a frail patron from trying to take his seat without an escort. The patron could have requested an escort, and one would have been provided, but there was no duty for the Met to have escorts insisting to escort every frail looking or disabled looking person to their seats. The court noted that in such negligence matters, one balances the reasonable expectations of the parties and society in general, the risks involved, the number of incidents, etc. As the number of aged increase, this will become a more common issue and will have to be dealt with by businesses—think of people getting on an off airlines and the time and staff required to help the disabled and elderly—that will rise significantly in coming years. As a problem becomes more common, the law tends to move in favor of taking more steps to provide added safety. CASE: Erichsen v. No-Frills Supermarkets of Omaha Issue Spotter: Protecting Customers’ Kids The cases are all over the place in this area. But since litigation is common, and since injuries do happen, the owners of stores have an obligation to reduce the possible severity of injuries, such as by having rounded corners and other construction features that reduce the limit of damage suffered. Such attention to detail will not only reduce the number of incidents, but also show good faith by the store to take steps to protect customers.