Free Law School Outline - Baumann Property Class Notes Fall 2001

Property -- From Colette's Notes Possession: one can make an unowned thing owned Armory v. Delamirie (10-103) Protection of possession, order of time - Plaintiff - chimney sweeper's boy, defendant - goldsmith - Form of action: get the money - Does court inquire whether boy is a thief? No. - 3 points: - Finder doesn't acquire absolute property, but ownership until or if ever the rightful owner claims it - Defendant was found to be in neglect - Defendant had to pay in full for the best jewels - "The finder is good against the whole world but true owner..." - Trover: a common law actionfor money damages resulting from the defendants conversion to his own use of a chattel owned or possessed by the plaintiff Hannah v. Peel (103) - Defendant -- Major Peel, Plantiff - Duncan Hannah - Hannah found brooch, gave it to peel to keep until rightful owner, Peel sold it. Bridges v. Hawkesworth - Plaintiff: Commercial traveller, defendant: partner in Byfield & Hawkesworth. - Parcel was found on property "Reason for rules" - Evolution -- how did law develop? - Possession/Firstness/Why do we protect ownership? What is property, who defines it...? - Dispute among people and same material object. "Many sticks in a bundle" -- each stick has a different claim - Ownership is a bundle of sticks, not an absolute concept, many restrictions - Ex: ownership of a car - Context makes sticks vary Property: the relationship among people with respect to resources - Enforcers: the law, through the state, the police Robert Hunt: determine the (x) of the individual to the community with respect to things We encourage productivity, ownership based on solely "use" -- use of resources Ownership minimizes disputes v. sharing a common property Sources of the law: U.S. Constitution, Federal/State Government, Individual Rights Federal Statutes: Laws passed by congress State Constitutions: State structure, can add rights, not subtract State Statutes: landlord/tenant law, adverse possession, finders keepers--all state statutes. - Rules of law - judicial opinions - cases from the common law - how can the rules apply to subsequent cases To choose a rule that applies to your clients' case--you need to find out the *rationale* behind the rule, understand the reasons How do you distinguish facts? - Critique the rules by understanding the rationale - Know both or identify each sides reasons - State the rule as *broadly* as possible and as *narrowly* as possbile Legal question plaintiffs arguments & defendants argue. - Personal property - tangible, movable, patents, etc. - Real property - land and materials attached Rationale for property on or in someone else's building - to return to true owner - they may come back for it - to promote honesty - leave it with the finder What do different rules promote? For Tuesday: -& Why decisions? What are the implications? What would happen if the decision was reversed -- Armory v. Delamirie? -& Read Hannah v. Peel - Go over questions at the end Rusty Russell T 617-868-7499 (Home-preferred number) T 617-373-3493 Office: 29 Cargill Hours M 2:15-4:30, F 10:15-12:00 Assistant: Sabina Connolly Course Book: D & K Course Pack: Reader Mention of SJC case in today's Globe: adoptive parents want name on birth certificate, no opposition, judge rules Mass. Law prohibits this. Never calls on people unprepared (i.e., doesn't use Socratic method). Doesn't appear to call on people near edge of room. Introduction to concept of property: protection, by the state, of a claim to valuable resources. Pierson v. Post Post was chasing fox all day with dogs, 'at least minute' Pierson killed fox and kept it. Names reversed since Pierson is appealing judgement ('plaintiff in error') and Post is 'defendant in error'. Earlier, Justice Court found in favor of Post on grounds of trespass. Appeals courts almost never acts without action of parties. Pierson filed motion 'certiorari' -- requests supreme court to issue a writ of certiorari ordering lower court to reverse decision. Trespass is form of action developed by English courts, different from trespass qcf (land trespass). Need to fit facts into recognized forms of action: specific violations. Trespass on the case is broader form of action; intended to encompass wrongs not addressed by other actions. Form of action in common law for recovery of damages for injury resulting to party as a result of act of another, unaccompanied by direct and immediate force. Similar to generalized tort. Over time, picked up negligence aspect. Thus, now, generalized tort with negligence of duty of care. Holding of court was to reverse judgement, in favor of Pierson. Property of wild animals (ferae naturae) can only be had by occupancy. In this case, that means possession. Legal standard for possession--unequivalent intent to possess and physical control (render escape impossible). Discussion of unequivalent intent--is this a useful concept in determining ownership? This is subjective standard. Puffendorf, et al, are legal scholars, going all the way back to Roman law. -& E-mail Rusty to have lunch on Tuesday (or future Mondays) Property - Baumann |Finder's Rule| Why do we protect ownership at all? |Armory v. Delamirie| (p. 100) Poor boy, chimney sweep action is seeking to recover money for jewel ("trover"). -* Court is protecting possession--first in time matters, possession matters. Simple standard, easy to decide. - Deciding case based on who is before court, neither of which is true owner. -! "First" finder has property right against all but 'rightful owner'. - Second finder has claim over third finder, etc.. - Why do we protect first possession? - Deterrent against theft. - Keeps object from being hidden, promoting honesty and openness. - How and who decides what is first, and how and who decides what is possession? - What are damages? - Money damages = full value of excellent jewel, not counting probability of jewel being claimed by true owner. - Too hard to put value on claim from true owner or 'real value'. -* If true owner appears, who gets money/jewel? - True owner (or prior possessor) prevails - Boy disappears with money, true owner appears, goes after goldsmith - Don't want double payment. - Goldsmith could pay twice, and then have suit against boy. - Who should bear risk of chasing boy? -* Virtually impossible to protect possession, protect true owner. - Subrogation (sp?) theory says original owner should be protected, in this case, goldsmith assumes risk. - If you don't protect true owner, you might make people less careless with their property, harder to recover. -* Bailment: bailor brings property to bailee - Modern law is that bailee needs to take reasonable care with property - Customer (bailor) brings clothes to dry cleaner (bailee), dry cleaner sends it to cleaning plant - Cleaning plan loses clothes, pays damage to dry cleaner, dry cleaner goes out of business. - Bailor is 'true ower of jewel', bailee is finder, boy, 'involuntary bailee'. - But, it his case, bailor exercised some judgement in chosing dry cleaner. -* Differences between 'true' bailment (dry cleaning example) and involuntary bailment, which is 'accidental' -- no agreement/arrangement between bailor and bailee. -! Label 'bailor/bailee' does not always help that much; usually applied and interpreted to get desired result. - General standard today is 'reasonable care' for bailee. - Do you want to favor true owner or wrong-doer in finder's law? -! Prior possession is protected, regardless of how the prior possessor acquires property. - If you purchase from thief, you bear risk, since you deal directly with seller, rather than true owner who had no dealing with thief. On the other hand, you could make argument to respect market transactions and true owner loses out. |Hannah v. Peel| (p. 103) -* Very bad opinion, bad use of precedent. - Holding does not help much. - Facts: Peel owns property, never lived there. Hannah finds broach in window frame, gives to police. Owner never found, police give broach to Peel, property owner. Peel sells broach; Hannah is suing for damages. - What result would promote honesty? Don't want to set up disincentive for finder to report found goods to police. - On the other hand, simple rule would suggest owning real estate includes owning everything in it. -! Goal: expedite return to true owner. -* Could serve this goal by returning to locus of loss, i.e., property owner where property was lost. -* Alternatively, want to reward finding and reporting, so let finder keep property if true owner does not appear. - Focus on what you want to accomplish rather than 'possession' or 'no possession'--maritime law provides for 'salvage reward' for finding sunken ship. Common law tends to focus on 'possesion' vs. 'no possession'. - Why do we protect true owner? - Productivity |Using_Precedent| Armory v. Delamirie w/ respect to Hannah v. Peel Distinction: in Armory v. Delamirie, dispute is between finder and someone finder gave property to; in Hannah, dispute is between finder and owner of Real Estate where property was found. Goldsmith's claim is weaker than Major Peel. Peel has stronger expectation as landowner of entitlement than goldsmith. Goldsmith is wrongdoer. Peel also has greater chance of returning broach to true owner than goldsmith. -& Take close look at cases refers to in Hannah v. Peel. How did court use precedents? -& Examine reasoning of court in decision. -& Johnson v. Macintosh - What issues does the court avoid and why? - Did Justice Marshall hold that the Indian had been conquered? - What rights did the Indians retain? - Why weren't the Indians first possessors? Congress frames issue in Hannah v. Peel as "possession/no possession" rather than getting to underlying issues. Avoids possibility of 'compromise solutions' that might accomplish underlying aims. - How does court use precedent in Hannah v. Peel? - Far better arguments exist for Major Peel than for the Goldsmith in Armory v. Delamirie. - Bridges v. Hawkesworth: Bridges is commercial traveller, finds parcel in shop of Hawkesworth, brings it toowner of shop. Parcel is filled with money, leaves it with shop owner for three years, advertises parcel, no one claims it, Bridges returns and demands money. Court rules for Bridges as original finder of lost property; shop owner has no claim. - Arguments for and against rewarding finder vs. property owner: want to reward finders for honesty, yet want to make sure property can get back to true owner (locus of loss). - Lost vs. Mislaid: difficult distinction, particularly hard to tell by finder. -* With private property, you have different expectations. Peel's house is his property, shop is somewhat more public. - Yet, Peel never lives in home. - Landlord issue--landlord has given up possession of property and may not have claim to found property. - Elwes v. Brigg Gas Co: Historic boat discovered in soil of leased land. - South Staffordshire Water v. Sharman: possessor of loan is generally entitled, as against the finder, to chattels found on the land - Sharman was employee, on premises for specific business purpose. - Supreme Court is not explicit in giving reasons for their decisions, were not trained to think that policy and law were intertwined. Tended to think of law as mathematical/scientifically-based. - Judge does not explain how facts are like or dissimilar to Hannah v. Peel; dismisses some and accepts others. -* What are expectations of control over property? Depends on facts of case, seems to be crucial to determine possession, which justifies particular result. -* Other concern is returning to true owner, promoting/rewarding honesty. - Judge's opinion (109): - Judge writes that brooch was 'lost in ordinary meaning of term' and 'lost for a very considerable time' -- hinting that the true owner is unlikely to return. - Plaintiff handed brooch to commanding officer--'commendable and meritorious'--wants to reward honesty. - Since Peel never moved into house, he has less expectation. - According to Court's reasoning, prior owner (who lived in house, before Peel acquired property) should have possession - Different goals (honesty, expectations, true owner) frequently conflict, thus judge needs to weigh and decide. - Between honesty (of Hannah) and expectations (of Peel) judge chooses to reward honesty. - Issue of unwanted property--environmental contamination, bomb, etc.. Different rules apply. - *Constructive possessor*, court is trying to justfy its action, e.g., if finder is trespasser, then owner should get property. Right to exclude from property is very important. - Adverse possession--after statute of limitations, you no longer have claim on property. Rewards ownership to possessor after a certain period of time. - McAvoy v. Medina: distinction between lost and mislaid. If lost, the finder gets property, if mislaid, shopkeeper gets it. Medina is not generally required to do anything to find true owner of lost property, absent any statutory authority. -& Friday: Johnson v. M'Intosh, Tee-Hit-Ton case, maybe Pierson v. Post (see questions from yesterdays) Possession and persons, initial ownership. How does someone become owner of something in the first place? Doctrine of Discovery and Related Doctrine of Conquest. All turn on principle of 'first in time.' Very difficult to generalize about Native American land systems. Two generalizations: - Land is spiritual, Not possible to 'own' land - Many tribes developed systems of property for sharing. Understood borders of property similar to system of sovereign states. Families could be assigned property, but assignment was not irrevocable, and various uses could be assigned to different parties: to hunt, to fish, to plant trees, etc.. Rights were generally 'rights of use' rather than 'ownership.' 15 million native inhabitants, shrunk to 200,000 by 1910. As if all of U.S. were reduced to size of Cleveland. Representatives of colonial governments often declared themselves 'owners' or 'sovereigns' over vast tracts of land. In theory, all land was supposed to go to colonial governments. In practice, both governments and individuals negotiated with tribes, with each other, etc., to acquire property. Tribes didn't see transfer as permanent, understood it as granting temporary 'rights of use' to accomodate situation. After revolutionary war, federal government distributed land to inhabitants. Johnson v. M'Intosh Plaintiff purchased property from Indian Tribe, defendant received land from government. Requests ejectment of defendants. Although plaintiff got property first, Indians don't have ownership over land as conquered people and thus don't have power to convey. Reasoning of judge: - European powers have 'pre-emptive right' to purchase or conquer land. Only U.S. Goverment has right to convey title, but doesn't necessarily say tribe has to get off land. Calls Indian rights 'right of occupancy', 'title of occupancy', etc., while goverment has 'absolute title', etc.. Wants to allow multiple interests on same piece of property, but is not terribly specific. Perhaps trying to protect tribes 'paternalistically', since individual deals were often very unfair, tribes might do better negotiating with goverment. -* Property is defined by State. Political power defines what property is, and property ownership conveys power. There are abstract principles of justice, yet judge says they won't address them--'this is the court of the conqueror'. In later decision, Justice claimed the only way nation can claim property by conquest is in 'just war' initiated by Indians. Goverment subsequently ignored Marshall's decision. (big discussion over whether Marshall made the right decision) Quitclaim deed: Giving up whatever interest you have in a property. Possibly Indians could have transferred quitclaim deed. Tee-Hit-Ton Indians v. United States Indians argue that taking of land for agricultural purposes in Alaska constitutes unconstitutional taking without payment under Fifth Amendment. Justice holds that tribe does not hold property interest as Fifth Amendment. Does not appear Reed used Johnson v. Mcintosh correctly: land was not taken by conquest or paid for, so by what right does U.S. take land? Tribe argues they have some property interest--'rights of occupancy'--regardless of congressional decision. Supports his argument by saying tribe is small in numbers--utilitarian argument. Constitution does not grant you right to keep your land, nor 'replacement value', nor 'personal value', just 'market value' of land. Would Court's criteria in Tee Hit Ton be applied to another group of people? Moving from Discovery to Capture... - Important for fishing, oil, etc.. Pierson v. Post - Supposedly unowned land - Pierson claims that he found fox and thus has first possession -claim of first possession -* Theory of plaintiff's case = possession was wrongly interfered with - Either have to kill, capture, mortally wound, etc.. to have possession of animal - No controlling precedents--no cases in New York where land was not owned by anyone - Doctrine of 'stare decisis' -- lower courts must follow higher courts or legislature - Until fox has been deprived of its 'natural liberty', it is not possessed. Need to kill it. Creates nice, clear, rule. - Judge claims rule will 'preserve the peace'. But may disagree with local sportsmen rules--essentially gives permission to interfere with other people's hunting. - Decision promotes competition for better capture methods. Both majority and dissent agree that hunting is a public good, a worthwhile endeavor; want to promote public policy objective of getting foxes killed. - May result in less litigation although not necessarily 'more peace'. Promotes 'efficient hunting'. - Court declares certain, clear rule. Disadvantage: does not allow for context. - Livingston's dissent: rule might interfere with overall goal--why would you chase a fox all day if you know you might lose it? On the other hand, people might have to get much better at fox hunting, promoting *more* aggressive capture. - Livingston promotes rule based on 'reasonable prospect' for capture. Ghen v. Rich - Custom is that he who kills whale gets whale, finder gets some fee for reporting discovery. - Finder auctioned whale, whale-killer suing buyer - Should courts defer to custom? - Swift v. Gifford: Custom should apply if generally applies to whole industry. - If we require people to capture whales, not just lance them, we might recover more whales, bring down prices, result in fewer needlessly killed whales. Keeble v. Hickeringill - Cited in Pierson v. Post - Plaintiff used decoys to attract waterfowl, defendant fired guns to scare birds away. Was standing off plaintiff's land, does not kill ducks. - Does this constitute malicious interference with trade? - Keeble does not own wild animals but has 'constructive possession' of them. Purposefully built decoy pond to provide ducks, Hickeringill in impeding this useful end. - Hickeringill not providing useful assistance because he is not bringing ducks to market. - Different from Pierson v. Post -- doctrine that you 'own wild animals on your land'. *BUT* -- Hickeringill was not based on constructive ownership but upon on interference with trade. Pierson v. Post misinterpreted Keeble v. Hickeringill. - Even if Pierson v. Post had correctly interpreted Keeble v. Hickeringill because Pierson killed fox--engaging in 'public service'--which Hickeringill was not doing. -* Labelling something ownership or not, possession or not, is filled with value judgments. Today, court might rule in favor of person scaring away animal, recognizing conflicting values. -& Read rest of Acquisiton by Capture for Wednesday and beginning of Acquisition by Capture Constructive possession... Late for class (9:05am). Case of bird sanctuary where hunters are scaring birds away from sanctuary and then shooting them. Does Audobon society have possession of birds? Before leaving property, after leaving property? Label of 'constructive possession' will be used to justify sanctuary's right of possession. Constructive possession is not based on particular facts so much as court's desire to rule for a certain party. Relativity of title--first trespasser would have right against second trespasser for 'found' property. Cannot generally trespass to recover your property--government discourages self-help. Discussion of 'problems' on page 35. Animus Rivertendi--wild animals who have habit of return, considered to be possession of owner (does not apply to domesticated animals.) Society values keeping of pets, thus pet owner will have greater claim in example cases. 'Rule of Increase' -- mother of offspring always gets animal, footnote on P. 35. 'State does not stand in same position as a wild game reserve--...[no one] has title to wild animals until capture...' quote from douglas v. Seacost Prods., Inc., -- suggesting that ownership is a fiction Oil drilling case--trespass Why is trespass bad idea? - Want to protect people's investments (vs. productivity) - No one would put labor into property if anyone could take what was on property Mineral Rights Example - 1920's supreme court ruling that state requiring pillars to remain in order to preserve surface constitutes taking and state needs to pay mineral rights owner (coal company) for coal they aren't able to mine - 1980's ruling changed decision, saying state has police powers to require pillars of coal Rule of Capture Example - Person pumps out gas, stores it in underground caves - Court rules that gas can be taken, 'once you have put it back in ground, anyone can take it' -- analogous to wild animals. - Railroad Commission case takes opposite opinion Water Cases - p. 38 - A and B both appropriating water from stream (A was first). Using Pierson v. Post, whoever appropriates water gets it, even if other was there first. - Better decided legislatively; courts prefer 'either-or' situations, legislature can regulate how scarce resources are shared/allocated. Why do we have property, why do we discourage trespass? - Most people accept Dempsest (sp?) model; we need not accept it, but need to realize how widely held it is - Model of 'Tragedy of Commons' -- gained popularity in 1960's - Original applied to Population Growth rather than Property - Image regime of communal property - Everyone can use resources - No one can exclude anyone else from using resources - Contrasted with private ownership and state ownership - Communal ownership involves a lot of external costs - Example of 1000 trees and 100 people - If person cuts down tree and uses it, he gains a tree and it costs him 1/100th of value of tree - Before cutting tree, he has 1/100th interest in 1000 trees, after he has 1 tree and 1/100th interest in 999 trees. - Gains more than he loses. - Communal ownership works in abundance; if there is no market for property, people won't keep appropriating property unless there is some scarcity to create a market. - People acting in their own self-interest will not act in interest of community at large Review of 'the tragedy of the commons' Community as a whole loses future value of tree--'externalities' are not taken into account. Too difficult to reach agreement over saving trees so they are worth more in the future; transaction costs might be greater than what is saved. Solution: divide up property and distribute between all parties, so if individual cuts down tree and sells it, he absorbs all the costs. Forces 'internalization' of some of the external costs, but not all of them. Problem with trespass: creates more externalities. investment. Need to protect Prohibition of trespass allows people to invest less in security, promotes voluntary transfer of property. Belief that those who value property the most will end up with property. Makes assumptions about initial distribution of wealth. Rather than having courts or some other entity decide value/distribution of property but allows markets to decide. Law and Economics - "Fancy cost-benefit analysis" - Attempt to internalize externalities - "Most efficient result is the most preferable result" - Problems - Ignores uneven distribution of wealth - Puts dollar value on everything, weak ethical framework - Cases where someone might 'value' something more but not be able to afford it (e.g., medicine) Acquisition of Property Rights Through Creation - Property Rights in 'Intangible Assets' - Copyrights, patents, trademark law - Copyright: protects works of authorship--writings, choreography - Patents: invention - Trademark: corporation's investment in their 'name' - Theoretical underpinnings very similar to that of traditional property - Rewarding creators, protecting creator's interest, while dealing with everyone else's interest - Issue of intellectual efforts relying on previous efforts - Locke's Labor Theory: you own your own body, i.e., your labor - Basic Questions - What property interests do you have in what you create? - What are the limits to property and creations? - What about monopoly? Unfair competition? Cheney Brothers - Plaintiffs want protection of their design during the season - Court reasons they don't have protection--does not matter if protection is limited - Copyright and patent laws should be dealt with in legislature International News Service AP - Supreme Court is only dealing with news/information--these facts only - If we don't protect news, no one will go into business, Supreme Court would ruin business--empirical guess. Yet, garment industry survived after opposite ruling in Cheney. - Highly criticized case--Douglas Baird, well known critic. - Enough other incentives: 'lead time advantage', exclusive markets - Genome--can people patent a piece of the genome? Patent office is currently allowing patents. Smith v. Shinell - Not only can you can copy competitor, but can use competitor's name ("better than Shinell") - Public benefit of lower price What sort of competition is productive, what sort is not? Field largely controlled by legislation, very hard for courts to take into account all the factors. Moore - Do you have property in your body parts? In your cells? Is this the same thing? - Should you be able to control disposition of your cells? Should you have right to sell them? - Can someone else have a property interest in your cells? - Many different causes of action, different theories, need to prove different facts - Key Cause of Action: Conversion -- needs to prove property interest -& Think about privacy argument--is there a better way to distinguish privacy cases? -& How do various judge use statute? Compare different treatments of statute. -& What does court conceive of as interests of Moore worth protecting? Next: Shack, Adverse Possession Continuing on Moore lymphokine case... Informed consent--can only recover for damages to patient, not for gains to doctor. Property Interests You Can't Sell - Children, embryos - Licensed IP - Body (prostitution) Jacque v. Steenberg Homes and State v. Shack - Court doesn't require you to show there is *no* other way -* Property right is not absolute - Court does not want this to be constitutional issue so issue cannot be appealed to U.S. Supreme Court - Broad statement of holding: property rights cannot be used to injure rights of others; property rights are not absolute. - Narrow statement: health care workers have right to trespass in order to deliver services under government programs. - "Property serves human values" -- whose values? -& Questions for adverse possession on Friday: - What are the purposes served by each of the doctrinal requirements for adverse possession? - Why do we have doctrine of adverse possession? What ends does it serve? - Should get to Lutz case (p. 120) - Which requirement for adverse possession to Lutz fail to meet? - What do you think about decision? Adverse Possession Doctrine allows someone to acquire full ownership in piece of land if nonowner possesses property for long enough period of time. How is property transferred - Signed by seller - Filed in registry of deeds True Owner = Person in Registry of Deeds (Owner of Record) Elements of Adverse Possession - Entry and Possession - Open and Notorious - Exclusive - Continuous - Adverse, hostile, under a claim of right - Statutory Period Adverse possessor can file lawsuit against true owner--asks court for declaratory judgment that adverse possessor has become true owner True owner might sue adverse possessor--claims adverse possessor is a trespasser, should be ejected; adverse possessor can claim that he is adverse possessor and statute of limitations has expired. In adverse possession, period of time has run out--essentially consequence of statute of limitations. Period in East 10-20 years, West generally less, California only 5 years but stricter requirements. Cannot have adverse possession against the government Why have adverse possession? - Keep land productive - Expectation - Punish owner - Clear title of ownership--otherwise, claims and evidence get stale Two philosophies of adverse possession: - Adverse possessor has 'earned' land - True owner has 'slept' on his duty Lutz v. Van Volkenberg (P. 120) - How did Mr. Lutz fail to meet requirements for adverse possession? - No evidence that Lutz had actually improved the land. - Statute requires land to be 'cultivated' or 'improved' (or enclosed)--how New York defines 'possession' and 'occupation' requirement - Need to have enough occupation and possession for landowner to know there is a trespasser. - Deed does not guarantee against 'off-record' risks--buyer needs to go and check for adverse possessor - Adverse, hostile, claim of right, claim of title (not same as 'color of title') -- frame of mind requirement - Mr. Lutz didn't 'think' he owned property, made statement in other lawsuit. Dissent suggests statement was after statute of limitations, therefore is not binding. - Court is incoherent on 'good faith' requirement--one building Lutz doesn't think is on his land, other building he thinks it is, in neither case is adverse possession requirement met. Adverse possessor needs to give notice that they are trespasser--has to be hostile or adverse to interests of owner. How to interpret hostile? - "I know it's not mine, and I don't care." Would reward knowing trespasser. - Good faith occupant--person who made mistake in thinking property was theirs. Rewards honest/good faith by mistaken trespasser. - Current doctrine requires possession to be non-permissive "objective criteria" - In practice, courts almost never give property to knowing trespasser Modern View: State of mind is irrelevant, permission or non-permission is all that matters Occupation by someone who is not true owner is presumed to be permissive unless adverse possessor can prove occupation is non-permissive Alternatively, court could assume any occupation by non-owner is nonpermissive and owner has to prove occupancy was permissive Second assumption is more commonly used by courts, yet most courts don't give property to knowing wrong-doer. - Color of Title (p. 136) -- written instrument - Example, person gets forged deed or seller is mentally incompetent, easier for possessor to perfect adverse possessor claim--sometimes statute of limitations is less, requirement for 'open and notorious' is less, area may be expanded Problems: - O owns and has been in possession of 40 acre farm property, Z conveys property to A, A improves property for statutory period of time. A brings a claim to evict O for constructive adverse possession--i.e., done under 'color of title'. A can only get adverse possession of what A actually actively occupies and possesses, since O has been living there as well. - Two contiguous lots, owned by x and y, neither one is in possession of their lot. Invalid deed from Z to A, A enters lot 1 (owned by x). After statutory period of time, A sues X and Y to clear the title. A has no claim against Y--he may have color of tile, but Y could not have ejected A since A was not on Y's property. -& Next class: Manella v. Gorsky (finish up Adverse Possession on Monday), pay attention to problems _Mannillo v. Gorski_ (p. 138) Plaintiff argues that defendant did not have 'hostile' intent since defendant did not know they were encroaching. New Jersey court abandons Maine Doctrine in this decision, but is not sure about 'open and notorious' requirement. Needs to be 'open and notorious' to give true owner chance to eject adverse possessor. Who has burden of knowing where boundary is? - Generally only a question in 'close' cases--encroachment. cases, it should be clearer. In other Encroachment keys will frequently result in forced sale or encroacher pays damages but does not have to tear down encroachment. Court sets up standard of 'actual knowledge'--this could be very difficult standard for adverse possessor to meet. Problems (p. 142) "A" has become true owner, thus "B" has no claim anymore. Estoppel: if other party relied on statements by first party to their detriment, party may not be able to reneg on their statements. Matter of equity. Needs to be actual investment on party who relies on representation other party made. _Howard v. Kunto_ (p. 143) Everyone's deed is off from their possessors. Howard argues that summer house does not constitute continuous possession. Court rejects this theory, since houses were only summer houses, and summer occupancy is sufficient to put true owners on notice. Occupants were acting like owners act. Kunto need to argue theory of tacking--previous 'adverse possessor' time must be tacked on to Kunto's possession, since Kuntos have only lived there for short period of time. To permit tacking, court requires *privity*: voluntary transfer of interest. In England, privity is not necessary for tacking; makes it easier for squatters to claim land. In U.S., squatters would not to voluntary transfer interest from one squatter to the next squatter, in order to have adverse possession. Not notorious, at least not under Mannillo standard. In fact, one survey even gave different result. Yet, this court has no problem with open and notorious standard. Howard also essentially denies hostility, which in Lutz (New York) case would deny claim, but this court doesn't care (Washington). ... Doctrine of adverse possession could be used to support urban homesteading programs Tacking Problems (p. 149) 1. No privity, no voluntary transfer, thus tacking does not occur and statute of limitations has not run 2. B gets property for life, and then property goes to C. A has been on property for 16 years. Once adverse possession begins against true owner, possession continues to run, even if true owner changes. C could have purchased life interest from B and then have possessory interest in order to eject A from property. C could also sue B for waste--B is putting C's future interest at risk. 3. If adverse possessor enters against someone who has less than complete ownership, possessor only gets interest that life interest holder has. If A enters after O dies and B has life interest but not complete ownership, A only has possession as long as B is alive and has interest. No tacking in this case. Doesn't seem to make a lot of sense. Disabilities (p. 151) Cases where true owner may have some good reason why they didn't eject adverse possessor within statute of limitation: - Minor - Unsound mind - Imprisoned In sample statute you would get ten extra years before statute runs out. Cannot tack disabiliies. Disability must exist at time of cause of action occurred--when entry was made. 1. (a) H has until 2005 to eject A. Ten year statute of limitation only begins when disability ends (when insane O dies). Wouldn't it be better to have guardian appointed for people who are disabled and eliminate need for disability statute? -& Will go over rest of disability problem and O'Keeffe case, supplement problem, and gifts in Wednesday's class Adverse possession of chattels/"Theft" _O'Keefe v. Snyder_ (p. 153) What is period of statute of limitations? - Trial Court rules to measure from date of theft - Appellate Division rules to require Adverse Possession in order to exercise statute of limitations defense - Possession needs to be open and notorious -- very difficult standard to meet - Supreme Court comes up with discovery rule involving 'due diligence'--needs to show that true owner made reasonable effort to find property. If there is no due diligence, statute of limitations starts running from moment of theft. Puts burden on owner. - Under New York (?) rule--where Guggenheim is, statute of limitations starts running the day the true owner has knowledge of location of stolen art. Very generous to true owners/artists. - Court is trying to tell art industry to set up registry in order to track stolen art, make it easier to demonstarte 'due diligence' - Becomes question of fact: what is *reasonable* due diligence? - To replace, this is. _Rosenbergs in Supplement_ Rosenbergs have claim that property was lost before WW II - Under straight statute of limitations, no claim to property - Under O'Keefe 'due diligence' test, did exercise due diligence, very hard to find, would have satisfied requirements - In New York Guggenheim rule, statute wouldn't start until owners located property, favors owners, would have claim - Under O'Keefe appellate rule, would have to determine how open and notorious was possession by museum? Should the rosenbergs have known about it? _Gifts_ (p. 168) - How do 'clear' requirements give courts so much discretion in determining gifts? - Why is delivery required, and what do we mean by delivery? - How are delivery and intent related? - We require physical delivery to make vivid and concrete to donor the significance of act. Evidentiary issue is easily resolved. - Usually presume acceptance--inquiry is usually about intent and delivery. - Constructive or symbolic delivery - Symbolic: Could I give you 'a written instrument of gift'? - Constructive: I give you the keys to my car, and say, "I'm giving you my car". - How do we know if formal requirements are met? grasp reasons for formal requirements. Problems (p. 169) Courts don't always 1. Clear statement of intent, physical possession has already been delivered, one could be satisfied that gift was intended. -& Read through Gift Cases and Estates and Land Gifts problems continued... Gifts might fail by attempt to get around formalities of will; testimentary disposition. No delivery, no intent to make a present transfer, doesn't qualify as gifts. Could make present gift of future interests, but in last part of problem 1 doesn't qualify for this. 3. If something can be handed over (delivery) it must be. Classical doctrine says delivery of symbolic instrument of gift doesn't qualify if the delivery of gift itself can be done. 4. Both brother and sister had access to box for whole life; brother acts like owner, doesn't give up dominion and control. Clipping coupons indicated that he still have dominion. Document that looked like will but was not legal will actually weakened Joan's case. _Newman v. Bost_ (p. 170) Supreme Court of North Carolina, 1898 Van Pelt tells Julia Newman he wants to give her everything in the house, points out various things. Claims insurance policy etc. were gifts causa mortis. Causa mortis gifts are conditional gifts--if you don't die, there is no gift. Newman wins all claims at trial, at appellate level loses some things--gets some furniture, new trial on piano, but not proceeds on life insurance policy. Constructive delivery of contents of drawer by handing over the key, which includes the policy. Court is concerned with *intent*--did Newman know policy was in bureau? Distinguishes facts of Thomas v. Lewis from this case since key in that case was to a lockbox, intent to give contents is clearer; when handing over keys to bureau intent to transfer documents within bureau less clear. Court will recognize constructive delivery but not symbolic delivery. Only way to give intangible is through written instrument of gift. _Notes and Problems_ (p. 177) 2. Probably 'good enough' constructive delivery of content. Intent is clear. 3. Court might say box is small enough to be handed over. Traditional ('sticky') court would insist on actual delivery rather than constructive delivery when actual delivery is possible. _Gruen v. Gruen_ (p. 178) Court of Appeals of New York, 1986 Father wrote letter to son (student) 'giving' him painting, but possession never transferred. Stepmother argues that there was no delivery. Son would argue there was a present interest delivered by letter--i.e., son gets remainder interest of painting. Father retains 'present possessory interest' = life estate. Unambiguous statement of intent on part of father to give painting to son not to stepmother. Father retained life estate and gave future interest immediately to son. Actual delivery and return would be silly formalism. Father could do many things with painting during his life. could sell life estate to someone else. _Systems of Estates_ (p. 185) Feudal landholding arrangements help gain understanding of where we are now, how law changes to accommodate economic and cultural depends. Dispells idea that 'land ownership was once absolute and now is not.' Land was viewed much more as object in commerce in U.S. than in England. Way of thinking about property not as concrete objects but as abstractions. Creative core of real estate law--how can you conceive of owner-occupied affordable housing without some abstractions? Limiting interests (rather than 'fee simple'), new ways of owning and holding property require creative abstractions. Co-operatives, timeshares, condominiums, large real estate developments (ground leases, etc..). Need to learn language of ownership to address these underlying issues of distribution, inheritance, etc.. Property is 'alienable' -- can be sold, as well as inheritable. Not always true historically. Will look at how vision has changed since feudal times. In feudal times, property was kind of 'social glue', set up hierarchy, 'Godgiven'. Defined by relationship to land. Americans tend not to view land and inheritance as vehicle of social motion, tend to think of education, professional degrees, etc.. Thomas Jefferson questioned inheritably in letter to James Madison: "...Dead have neither power nor rights over Earth..." Question of control from grave over land. English property rights were neither inheritable nor saleale. This would have changed social order--wealth was transmitted in very specific socially acceptable ways. Not until 1540 could owners leave property to whom they chose. When William the Conqueror came to England and won, divided up land. Gave men estates in exchange for services--"knight's services." Men got fee from land, owed King certain number of days of year to defend England. Could For example, subinfeudate to others. Poor peasants at bottom were allowed to use and farm land in exchange for services rendered to people above them (as before William). Could not sell interest, only could subinfeudate. Could not substitute interest. Had rights of Lordship, marriage of children. Conceived of as very temporary arrangements--if service was not rendered, Knight would lose land. Not ownership but *tenure*. Within 200 years temporary relationship became permanent relationship, could begin to transfer interest or pass interest on in socially prescribed ways. Eventually other kinds of payments other than Knight's service became acceptable; this allowed transfer and inheritance to gain ground. 1290 could transfer interest, 1540 could inherit as chosen. Until then, could only pass on to eldest male son (primogeniture). Providing knights as not very effective for protection; in 13th century changed to require money instead of knights for protection, later became more like taxes. By subinfeudating to monastery, monastery never died, many of feudal incidents no longer required. 1290 statute was passed forbidding subinfeudation; you can only 'substitute'. Attempt to preserve feudal rights/feudal 'incidents'. Turned out to be death blow to feudalism, as allowed property to be alienable and inheritable. O to A and his heirs. "To A" are considered words of purchase, "and his heirs" limits, what kind of estate you have. Rule of primogeniture required only eldest son to require property; but once property was alienable could give property to someone other than eldest son. Wanted to develop device to keep property in family. "A to B and heirs of his body with wife to be X." Land can only go to descendants. Courts construed rule that B could alienate his property once he married. New statute was passed to restrict property to direct male descendents--"fee tail". Land was source of power and families wanted to keep control over it. Most of land in England was thus entailed. *Fee Simple Absolute*: Any property transfer without any restrictions. Owner can sell property, give it away, by will or intestate. No one other than owner has legal right to obtain ownership of property in the future. Historically, you could only create fee simple absolute with "O to A and his heirs." Now assumption is that owner intends to transfer everything he has, i.e., fee simple absolute. _Problems_ p. 202 1. A has life estate. Today we would assume B has a fee simple absolute, but in 1600 all B would have a remainder (life interest) but when B dies property goes back to O or O's heirs. 3. B has no real interest; transfer grants A specific sort of title that would permit her to pass it on to children but children have no interest. _Problems_ p. 204 2. B2--eldest's son's eldest's son would get property in 1800. 3. Under fee simple absolute, property will escheat to the state. 4. Property reverts to state. 5. Cannot create new sorts of estates. Could have given life estate to granddaughter, remainder to someone else. Or, could have given life estate and gave option to sell fee simple to someone else. Or, could create trust (modern way). Need to fit within existing categories. _Fee Tail_ Mostly abolished in the United State. Had drastic effect on marketability and alienability of land. Allowed people to accumulate land in families. Some states recognize fee tails but with limits: estates are disentailed when sold, or fee tail is only recognized for one generation. _Problems_ p. 209 3. B had fee tail; property can only pass to her issue. Would need to have disentailed property; could have sold it, or transferred it back and forth to 'straw'. By conveying "to A and the heirs of her body", property is conveyed as succession of life estates to issue of A." 4. C owns property, since A disentailed property by conveying it during his life time. In other states that allow fee tail for one generation, have to wait to see if A has issue at death, if yes then C's interest becomes absolute. _Life Estates_ p. 210 Reversions and Remainders "O to A for life" - If property goes to O when A does, *reversion*. - If property goes to third party, *remainder*. - Since two people share an interest in life estate, there are limitations on what you can do--doctrine of waste. _White v. Brown_ p. 210-211 Supreme Court of Tennessee, 1977 - Questions is whether life estate has been passed on or fee simple absolute. - If life estate holder and remainder interest agree, they can sell fee simple absolute. - If White is only life estate holder and fee simple is sold, White only gets value of property for her life (actuarial tables). - Court relies on statutes to hold that 'greater estate' was intended to be conveyed, that 'same interest' was intended, etc., unless other intent in stated. Law has strong policy against restraints on alienation. _White v. Brown_ p.210 (continued) Supreme Court of Tennessee 1977 - If conveyance is fee simple, White will get 100% of sale of house (restriction on alienation is not valid), if it is life estate, she will get 39% based on her age. - Can't restrict alientaion on fee simple, but can on life estate, so court might want to interpret inheritance as life estate in order to give meaning to "my house will not be sold." _Baker v. Weedon_ p. 219 Supreme Court of Mississippi 1972 - Weedon wants land to be sold so she can get life estate share and survive - Remaindermen claim property is not deteriorating; there is sufficient income from land to cover taxes and thus court should not intervene unless there is waste. Remaindermen also believe property will be worth much more in several years, want to wait to sell it. - Remaindermen's argument lacks some logic: they claim that property is currently worth $168,000 and will be worth $300,000 in four years. But-real estate market reflects speculative value of land. If land will be worth $300,000 in four years that would be reflected in the current price of the land. This would represent 19% return on investment, which might have been true in New Jersey but probably wasn't the case in Mississippi. - Court rejects 'economic waste' standard. - Court adopts instead 'best interest of all parties' standard. Standard usually adopted when children are involved. - Court rules that some of the land can be sold to cover Weedon's 'reasonable needs'. - No 'real waste'--waste would be doing something to decrease the value of the property - Modern way would be some kind of trust - Cannot cut spouse out of will by statute -* Ameliorative waste: in England, a court might consider something to be waste to grant an injunction to stop an activity that is increasing the value of the land. Thought is that you keep property as it is. Modern idea (in America) is that waste only exists if value of property is decreasing, since property is thought of more as investment. Ameliorative waste is archaic concept in U.S., generally not recognized by courts. Exception might be important historic home. Cases where interests are more remote--future interests are not as certain. _Defeasible Fees_ p. 229 - Estates and law that are created by language sufficient to create fee simple followed by some kind of provision for defeasance if something happens for property to go to someone else. Usually uncertain whether defeasance will occur. - Cases - Fee simple absolute - Fee simple determinable - Fee simple subject to condition subsequent - Fee simple limited to executory determination - For determinable and subject to condition favors person making estate, executory determination favors third party - Fee simple determinable terminates automatically when certain condition is met. - Fee simple subject to condition subsequent gives someone option when condition is met. - Defeasability -- makes someone vulnerable to claims of waste and effects relationship with creditors - Certain conditions won't be recognized by courts due to public policy considerations - Fee simple determinable - O grants to A so long as the property is used for residential purposes. As long as used for... while used for... unless used for non-residential purposes, etc.. - When condition in violated, property automatically reverts to grantor. - Fee simple subject to condition subsequent - Future interest is *right of entry* or *power of termination*. - If condition is broken, grantor O must do something to assert their rights. - O to A on condition that property be used for residential purposes. In the event ... O has right of entry. Provided that property is used for... -* "Magical Words" _Mahrenholz v. County Board of School Trustees_ p. 231 Appellate Court of Illinois 1981 - Original owners gave 1.5 acres of 40 acre state to School Board to be used for school purposes only and to revert back to grantor if not. - Land is transferred twice, school stops using land for classes. - Court does not examine whether land is being used for school purposes. - Harry Hutton, heir of original owners, sold his interest to Mahrenholz. What is this interest? - If conveyance was fee simple determinable, Harry automatically has fee simple absolute to convey to Mahrenholz. - If conveyance was fee simple subject to condition subsequent, cannot convey power of termination under Illinois unless Harry re-enters property. Harry did not exercise power of termination (did not reenter property) and this power cannot be conveyed. - Depending on what sort of conveyance it was, Mahrenholz will or will not have any property. - If he had a fee simple absolute, he could not have released condition. If condition were broken, Harry then has fee simple absolute, would not be enough to release condition, would have had to convey land to school. - Adverse possession difference under two conditional fee simples - Under fee simple determinable, adverse possession statute of limitations begins as soon as condition is violated - Under fee simple subsequent to condition subsequent, adverse possession begins when person reenters. - Court might rule that right to reentry is waived if period is long enough, or right to reenter is estopped by promise, laches--so late that it is unfair. - Court concludes that this is fee simple determinable by citing a bunch of cases. Problems: Property conveyed so long as no alcohol is sold, then original owner has right of re-entry. Not clear whether this is fee simple determinable or fee simple subject to condition subsequent. Also not clear if complementary glass of champagne and alcohol used in cooking constitute violation. Property conveyed 'for church purposes'--church discovers oil on land and starts drilling. Condition was not violated because condition did not say 'for church use only'. Issue of waste: the more remote the possibility of the future interest becoming possessory the less likely a court is to rule in favor of future interest. _Mount Lodge Case_ - Strong bias against restricting alienability of land - Toscanos deed land to lodge with two conditions - For use and benefit of second party only - If there is sale or transfer by second party, lot reverts to first party. - Court voids second restriction as absolute restriction on alienability. - First restriction court rules as valid. - Doesn't matter in this case if it is fee simple determinable or fee simple subject to condition subsequent. - Does use restriction effect alienability? - Does this restrict buyers? Could buyers only buy land if lodge remains tenant? - What effect does restriction have on improvements? Would a bank lend money to do improvements? - Courts tend to look more favorably on use restrictions when they involve charitable purposes. "Dead Hand of Past" -- how much power are we going to give to ancestors to control what we are doing now? Presumption against forfeiture Some jursidictions will uphold personal use restrictions, but most generally won't. Equitable servitude and covenant are preferable devices now; more flexible devices. _Concurrent Estates_ Two people can have joint ownership of property--share undivided possessory interest in whole thing. In condominium common areas, have shared possessory interest with other condo members. Not different type of estate--'sit on top of' other fundamental type of estate: e.g., life estate, fee simple absolute, fee simple determinable. Want to pass on land to children - Could divide property up into equal parts - Difficult to make sure it's fair, parts might not be of equal property - Property might be small, not worth dividing - Could be divided up subsequentially rather than concurrently - First one child, then the next, etc.. - Last might have to wait a long time to get property - Joint Tenants vs. Tenants-in-common - Used to be joint tenants was preferred category, now tenants in common is - Joint Tenancy - Right of survivorship--if land is given to A, B, and C, and A dies, property goes to B and C. - Possible for one joint tenant to defeat survivorship; can convey his interest in someone else, new person becomes tenant in common, no longer right of survivorship - 'Metaphysical result' for ending joint tenancy - "Unities were broken" - Unity of possession, interest, time, and title - Unity of possession: Each joint tenant must have undivided interest in whole thing (common to all forms of concurrent ownership) - Each person in ownership has undivided right to use whole property - Unity of time: you and other joint tenant had to acquire at same time - Unity of title: must have been same instrument - Unity of interest: needs to be same portion (e.g., 1/2) of same interest (e.g., fee simple) - Absence of any of these unities makes it a tenancy in common - Tenancy by the Entirety - Must be married couple - Also has survivorship - Cannot sever estate alone (unlike Joint Tenancy) - Tenancy in Common - Cotenancy in which none of the unities need to be present *except* unity of possession (common to all cotenancies) - Preferred construction--if in doubt, it is a tenancy in common. Common areas of condominiums. P. 324 - O conveys blackacre to A, B, and C. A conveys interest to D. B dies intestate, leaving H as his heir. D and C split property. When A conveys to D, cuts off right of survivorship to his interest. D becomes tenant in common. B and C are joint tenants, so when B dies, interest in conveyed to C by right of survivorship. Co-ownership Issues _Riddle v. Harmon_ p. 326 Court of Appeal of California, First District, 1980 - Wife conveys share of property to herself in attempt to sever joint tenancy. - Courts have been reluctant to impose notice requirement of severing joint tenancy - Why shouldn't person be able to terminate joint tenancy in will if they can do it while alive? - Might complicate probate. _Harms v. Sprague_ p. 332 Supreme Court of Illinois, 1984 - Issue: was joint tenancy severed when one joint tenant mortgages interest, and does mortgage survive death or mortgagor as a lien? - Court holds mortgage operates a lien; not a transfer of title, therefore no severance. Joint tenancy survives mortgage. - Even in a 'title theory' mortgage state, joint tenancy should still survive. Under this theory, when you mortgage property, you are actually conveying title to bank, which only becomes good if person defaults on mortgage. - Lien: bank has security interest in property, able to foreclose. - Conclusion: if bank wants both lien to survive death of joint tenant, needs to get signature of both joint tenants. - Court dismisses statute (p. 336) with no apparent reason other than Simmonses' lawyer didn't raise the issue early enough. _Questions_ p. 337 - A and B in joint tenancy, A leases to C, wills all property to D. dies before lease expires. - Does lease sever joint tenancy? Probably not. - Standard practice in long term lease to search title, C should know property is held in joint tenancy, in commercial lease, should have known this and had both A and B sign lease. - Thus C probably does not have lease, and D does not get property. A _Delfino v. Vealencis_ p. 341 Supreme Court of Connecticut, 1980 - Parties are tenants in common. - Plaintiff Delfinos want court to order sale of property (partition by sale). They intend to purchase all of property--essentially buy out Helen Vealencis' portion. - Defendant Vealencis wants land physically partitioned (partition in kind). - Lower court ruled that land could not be partitioned. Partitions would make it difficult for Delfinos to do residential subdivision development. - Standard used for partition by sale: - Physical attributes make partition impracticable/inequitable - Interest of owners would better be promoted by sale - i.e.: if whole is worth significantly more than parts separately, court will usually order sale - Court will not look at 'intangibles' -- value of having homestead across from partition; value of continuing business in long-term location, etc.. Problem 5. 348 Partition Action - Distinction between outright prohibition on partition (=alienability) and conditional prohibition. Former is unreasonable restriction on alienability. _Spiller v. Mackereth_ p. 348 Supreme Court of Alabama, 1976 334 So. 2d 859 - Issue is whether there was a physical ouster. - For adverse possession claim, there must be proof of ouster as well as claim to sole ownership. - Ouster rule tends to promote partition _Swartzbaugh v. Sampson_ p. 352 Court of Appeal of California, 1936 11 Cal. App. 2d 451, 54 P.2d 73 - When people lease out property, don't usually intend to cut off survivorship. - Wife wants to cancel lease - Court rules she cannot because lessee stands in place of husband; gives him all rights of lessor (husband) - Wife needs to exercise ownership rights - Options - Could wait for husband to die and then eject lessee - Could seek partition in kind or partition by sale, or partition the leasehold - Partition leasehold: get physical partition in kind of lease property for term of lease - This would cut off her right of survivorship to leased property for time of lease - Partition sale of leasehold: public auction of ten year lease term - Collect rent: construct ouster, seek damages of half reasonable rental value--this could be more than what property was rented for based on market price. - Could acquiesce to lease, then would get half of rental income - If property had been community property or tenancy in the entirety, husband could not have leased out land without consent of wife. _Sawada v. Endo_ p.363 Supreme Court of Hawaii, 1977 57 Hawaii 608, 561 P.2d 1291 - Endo liable for injury to Sawada, has no insurance. - Endos convey property held in entirety to children. - Sawadas claim conveyance is fraudulent; only fraudulent if Sawadas could have gotten to property held in entirety. - Court found plaintiffs could not have gotten Endos' property, so conveyance was not fraudulent. - Important to protect family home - If creditor could get at property held in entirety, could claim Mr. Endo's share, thus putting Mrs. Endo in relationship with creditor as joint tenants. If husband dies (and creditor is corporation), other tenant (Mrs. Endo) gets whole property. If wife dies, creditor gets whole property. Dower rights -- problems, p. 395 1. (a) A and B should have had O's wife make release of dower. (b) No, W has no dower. (c) C's widow has good dower interest, A's wife has good dower interest. For C's widow depends on type of tenancy. -& Problem on P. 396, next class _Problem_ p. 396 - Son only gets $60,000 _Mortgages_ - Early common law mortgages resembled 'pawn shop' transaction - If you don't pay, land is gone from you forever, and thus 'dead' (=mort). - Rather early on, courts of equity intervened because of basic unfairness. Mortgage became conveyance on fee simple to lender on condition subsequent. If B loans A money, A conveys property to B and his heirs subject to condition that if A repays B by certain date ('law date'), A could re-enter and reclaim property. - Lender gets legal title to property - Property could pass by will - B received more than he was after, which was just security on loan - Church prohibited usury, mortgage system got around this. - Later on, custom developed to leave borrower in possession of property - Gradually become a promise that lender would reconvey land back to borrower upon repayment of loan. - Courts of chancery (equity courts) stepped in and gave borrower reasonable time before they would lose property forever after non-payment. 'Equitable right of redemption' -- have historical right after default when you could still pay back loan and recover property. - Lender can go into court to foreclose right of redemption; foreclosure proceeding cuts off borrower's equitable right to redeem property. - When lender forecloses, lender gets property, but property can be worth much more than the debt, regardless of how much has been paid off or value of property. - In early 1800's, requirement developed that there needed to be a judicial sale of property, and any moneys in excess of the debt would return to borrower. - Judicial sale is 'part and parcel' of mortgage law now. If sale is not judicially supervised, it is still highly regulated ('power of sale' sales). _Example_ P. 635 - Buyers get deed, and then there is a series of mortgages on property, sequence of liens. Default on primary mortgage. Bank forecloses, sells house for $50,000. Bank gets 100% of proceeds. If more is available, proceeds will be distributed to other lenders. Anything left over is returned to borrower. - Mortgage Market - Highly standardized - Once a bank makes a mortgage, they usually don't hold it forever; usually sell on nationally mortgage market, through institutions such as Fannie Mae or Freddie Mac. - Keeps cash in bank, could be more or less of face value of market - Not a lot of variety in terms, because terms are dictated by national market. Allows money to flow more evenly through country. - This is called secondary market, not to be confused with secondary mortgage. - Security for mortgage can be leasehold or fee simple - Leasehold = interest in property, can act as security - Even in states that call mortgage title, still acts as lien on property. _Murphy v. Financial Development Corp._ p. 637 Supreme Court of New Hampshire, 1985 126 N.H. 536, 495 A.2d 1245 - Plaintiff claims defendant acted in bad faith, difference in fair market value and what defendant bid on property at foreclosure sale. - When bad faith is shown, should go with fair market value. Under due diligence, just need to get 'fair price', not necessarily fair market value. - Critical fact: day of sale, turned down offer, knew property was worth more. Murphys had a lot of equity in property, much more than they owe. - Defendant could have 'upset price', minimum bid could be appraised amount. Usually mortgages have a 'due on sale' clause--immediately owe outstanding balance when house is sold. _Landlord/Tenant Law_ p. 417 - Outline - Background Information on Leases, types of leases - Access to housing/Fair Housing Act/discrimination - Possession - Sub-leasing and assignment - Tenant's duties and defaults/landlord's duties and defaults - Dramatic change in rights of tenants over short period of time - Significant erosion of common law rules and doctrines, substantial amount of law reform - How have these changes effected the Housing Problem? - To avoid church's prohibition of interest, leases were used as lending device, but as mortgages developed, leases were used less and less. - Sale lease-back--sell building and lease it back. - Lease was way to get poor to work land. Non-free-hold estate-tenants right was completely unprotected originally. - Eventually, landlord was conveying limited possessory interest in land. Present possessory interest is held by tenant and landlord holds reversionary interest. Traditional law developed on this concept of conveyance; thus landlord-tenant law is part of property law rather than contract law. - Because property was conveyance, courts tended to see covenants as independent: if one party fails to uphold its duty, the other party still has to exercise its duty. Over time, this has changed to be more reciprocal. - Under common law, landlord had almost no duties, since it was looked at as a conveyance. Most leases were for agrarian property. - Shift over time from agrarian concept to more urban concept->commercial, residential leases. Many of the ideas you still see might have made sense when lease was for farm. - Relationship heavily regulated by statute, both federal and state. - Lots of procedural statutes--how to evict tenant, requirements for forming a lease - Substantive requirements: housing codes, standards for housing - Four kinds of leasehold interest - Tenancy for term of years - Period tenancy - Tenancy at will - Tenancy at sufferance (not really a tenancy at all) - Principle distinction among tenancies relates to whether notice is needed to terminate the tenancy by either party, and the type at which that notice has to be given - If you don't terminate properly, you are responsible for many things in lease. Determines rights of landlords and tenants. - Tenancy for term of years - Fixed beginning and fixed ending, doesn't have to be for years - No notice to terminate - Even though lease ends on fixed date, lease can provide conditions for early termination. - e.g., non-payment of rent. - Alienable, divisible, and descendable. - Lease is part of estate, can leave it to someone else. Can sell lease to someone else. - Works as an interest in property, like a fee simple interest. - In most states, cannot have term of years for more than a year unless you have a written lease. - Periodic Tenancy - Continues to be renewed unless landlord or tenant gives a notice to terminate - Can possibly be of infinite duration, but require minimum notice to terminate - Usually notice to terminate is statutorily defined, thirty days (e.g.) for one year lease (six months under common law). - If you fail to give proper notice, you are responsible for an additional period of lease. - Tenancy at will - Under common law, no notice is required from either party. Most states require some notice, often based on period of time for which you pay rent--if you pay monthly rent, you may have to give one month notice. - Potentially infinite duration - If one party dies, lease ends. - Even under common law, exceptions existed for no notice. For example, exception to harvest crops already in ground. - Tenancy at sufferance - "Holdover" tenants - Like trespasser. Entered property legally but stayed over past legal limit. - Can be treated as trespasser or as periodic tenant. _Problems_ p. 421 Exercise: help out family with housing issue. Break up questions within TA group, write out answer. Exercise will be available outside room 65 (Sabina Connolly's office). Will meet with Property TA's to discuss answers. _Landlord-Tenant law_ - Historically, relationship involved conveyance, similar to a fee, explains why landlord had no responsibilities originally. - Because this was not originally contractual, one side could fail to fulfill responsibilities and other side would still be required to perform. - Over time, relationship has become more contractual, but not entirely _Garner v. Gerrish_ p. 421 Court of Appeals of New York, 1984 63 N.Y.2d 575, 473 N.E.2d 223 - Tenant received lease stating "privilege of termination of agreement at adate of his own choice." - Under common law, if tenancy in at will of one party, then it is also at will of the other party - Interpreting as tenancy-at-will frustrates intent of agreement, which was drafted by landlord - Tenant argues this is a life-tenancy-determinable, thus it is a freehold rather than a nonfreehold estate. Life estate in terms of length but not other factors. - Rather than trying to fit lease into a particular cubby-hole, court tries to interpret intent of lease agreement. _Problems_ p. 424 - Lease for duration of war. - "Procrustean" What type of tenancy? _Crechale & Polles, Inc. v. Smith_ p. 425 Supreme Court of Mississippi, 1974 295 So. 2d 275 - Court is reluctant to impose unwilling tenancy when there is an alternate way to make the landlord whole. _Problems_ p. 431 - What constitutes a lease?? - Look at intent of parties, facts _Discrimination_ p. 434 - Picture of 'no rules' --> 'fair housing act' wrongly presented in book - Used to have many regulations *enforcing* discrimination--racial zoning, racially restrictive covenants - Lots of land racially controlled - To get Federal Housing Insurance in deed from 1930's-1950's required racial restrictions - December 1865 - Needed a 'labor contract' -- black codes -- could be arrested for not having labor contract - Congress passed §1981 and §1982 - §1982: cannot discriminate in selling, leasing, holding of property - After 14th amendment, §1981 and §1982 were re-enacted. - Statutes had very little practical importance until 20th century civil rights movement, starting in 1948. - Initially considered to only apply to public discrimination, not private discrimination. - Plessy v. Ferguson: recognizes 'separate but equal'. Took 'guts' out of §1981 and §1982. Racial zoning was not violation because people were being treated equally--races were equally prohibited from selling property to other race. - Beginning in 1917, opponents of segregation began long effort to obtain fair housing laws. - Buchanan v. W...rly? - Decided not as civil rights case, challenging racial zoning in Louisville, Kentucky. White seller entering into contract to black buyer; seller then refuses to go through based on Racial Zoning. Court strikes down Racial Zoning on basis of 'freedom to contract' (now discredited theory). Conservative theory prohibited denial of rights to dispose of property. Housing Discrimination Continued... History of discrimination--federal government played large role in enforcing segregation. Government insured bank loans with racial restrictions. Concerted effort by civil rights organizations to 'get at' these covenants. In 1948, Shelly v. Kramer recognizes that enforcement of racial restrictions is state action. Congress passes Fair Housing Act; Supreme Court decides Jones v. Mayer. Jones v. Mayer decided §1982 applied to housing. As much as 72% (at least 50% of the time) when seeking housing, will encounter discrimination with realtors. Interplay between Fair Housing Act, 1982, State Statutes, Local Ordinances, etc.. Title VIII = Fair Housing Act (Title VIII of Civil Rights Act), as opposed to Title VII = Employment Provision. _Problems_ p. 438 3. "Furnished basement apartment in private white home." - 'Honest bigot' -- easy case - Exemption from Fair Housing Act for owner occupied housing -refusal provision (actual denial because of race). Advertising is not exempt, however. - Advertising does not violate §1982, but refusal to rent *does* violate §1982. - Penalties: used to be limitations on Fair Housing Act damages, no limits on §1982, in 1988 FHA was amended to lift limits. Standard for prima facie case is different. - §1982 only covers race, not handicap or sex, etc., FHA does not contain sexual preference... Need to be in protected category to have a case. - Supreme court interpreted §1982 to mean what race meant in 1866-included National Origin (i.e., 'German Race', etc..) Difficult question is one of _proof_--what evidence do you need to establish discrimination, and which party has burden of proof. Disparate treatment model & disparate impact model. Disparate treatment -- e.g., you keep coming back to see apartment and agent is not there, finally come back and apartment has been rented to someone else. "I individually have been subject to discrimination." Disparate impact -- a facially neutral rule that has a disparate impact on basis of protected class. "I only rent to people w/ professional degrees." Has disparate racial impact ('classic impact case'.) Question is how much motivation must you prove, and how do you find evidence for motivation? - First landlord has 'professional' policy, has no idea that it is discriminatory, just think it is nice. - Second knows it is discriminatory, but does not have policy for that reason, just wants classier building. - Third adopts policy *because* he wants to discriminate. - How do you establish what someone's intent is? see what is in people's minds. Subjective. Can't What is prima facie case for disparate treatment? - Must prove that you are member of protected class - Applied for and otherwise qualified to rent or purchase property - Rejected - Opportunity to purchase or rent remained open to a non-protected person At trial, defendant simply needs to articulate a non-discriminatory reason for action. Plaintiff has opportunity to prove that reason given was 'pretextual', essentially requiring plaintiff to prove racial motivation. Need to send in testers to prove disparate treatment. Original act sought conciliation with landlord or realtor. and attorney's fees are substantial. New act, damages Disparate impact model--what must plaintiff prove? - Facial neutral rule that has a disproportionate impact - E.G.: Will not rent to anyone who does not earn $50,000. Could be justified if this is commensurate with rent, even if it has a discriminatory impact. Does not get at issue of intent. - Intent is complicate & different element. - Not clear how much intent is needed in prima facie case. - Civil rights group will not bring case unless it is clear that race is involved. - Arlington Heights case: claim that zoning is exclusionary. Made it to supreme court on constitutional claim. Supreme Court ruled, to prove constitutional claim, need evidence of racial intent in prima facie case. - Could not impute racial motivation in zoning practices. Very difficult to bring claim against public entity for facially neutral practice. - How much burden is present *defines* substantive right. Examples of disparate impact: - Need to be family member of someone working at Hospital to work at hospital - Need to have medical degree to work at hospital - Both have disproportionate impacts, second is justified for other reasons, first probably can't be. _Soules v. U.S. Department of Housing & Urban Development_ (p. 439) US Court of Appeals, 2nd Circuit 1992 967 F.2d 817 - Plaintiff makes prima facie case, as described above under disparate treatment - Defendant makes answer: need quiet for elderly residents; was out of town; plaintiff had bad attitude. - Plaintiff needs to prove defendant's order was pretextual, that defendant didn't want to rent to her because she had a child. - Court rules that you need to interpret preference about children in context of noisiness. - Not sufficient evidence to overturn Administrative Law Judge's decision. - Court accepted non-discriminatory reasons proffered by defendant. - Choice of model (disparate treatment vs. disparate impact) to some degree effects results of case. This may not have changed the result of *this* case. -& Will finish discrimination assignment--Ronk & two cases in supplement on Monday (Arlington Heights) on Monday. _Bronk v. Ineichen_ (p. 448) U.S. Court of Appeals, 7th Circuit, 1995 54 F.3d 425 - Complaint based on landlord's unwillingness to allow them to have a 'hearing dog' - Fair Housing Act: need to show that dog is (1) reasonable accomodation and (2) necessary to use and enjoy dwelling. This test *only* applies to handicap discrimination. - Wisconsin Statute requires credential for animal, very specific/precise. - Madison Statute requires proof that animal has passed course of training, but does not refer to accreditation. - Defendant responds dog is not certified dog. - Case is remanded because trial court judge may have given inaccurate directions by conflating different bases for action. Plaintiff could succeed under one statute but not others. - Under FHA, just need to show animal's necessity, does not require credentials or training necessarily. - Defendant could have motioned for summary judgment on state and local claims based on lack of credentials if Landlord had indeed asked for credentials. _Problems_ (p. 454) - Numerical limitations. Plaintiff could claim 'facially neutral rule with disparate impact on families with children." - Discriminatory intent very hard to establish in this sort of case. - Defendant then needs to show 'legitimate business interest' in rule. - Landlord will claim numerical limitation keeps up property value. - Yet to be really determined whether numerical limitation is discriminatory. - Landlord demands sexual favors. Not enough to say gender discrimination. Can claim she has different terms and conditions of rental (3604 (b): "to discriminate against any person in the terms, conditions, or privileges of sale of rental of a dwelling, or in the provision of services or facilities in connection therewith, because of...") (p. 456) - Protected categories--income/wealth are not protected categories. Impact alone is not sufficient to prove FHA case. _Hanson v. Veterans Administration_ (supplement) - Issue is whether Veterans Administration underappraised properties, thereby hindering Veterans ability to afford houses because government would not insure to the 'full' level. - VA has statutory defense: statute does not cover appraisals only sales or rentals. - Court rules that that appraisal is part of transaction and thus is covered. - Discussion of intent vs. effect--"could prove intent on the basis of significant effect." - Plaintiff uses statistical report to try to prove effect, to prove that there is a racial practice in underappraising that is not random. - Defendant calls expert to challenge plaintiff's statistical analysis. - Use very narrow definition of discrimination--'what defendants did'. _Metropolitan Housing Development Corp. v. Village of Arlington Heights_ (p. 62 supplement) US Court of Appeals 7th Circuit (1977) - Federal subsidized private low-income housing development needs zoning change to build - Constitutional equal protection claim--disaffirms lower court cases that suggest public entities need to act affirmatively to counter discrimination. Plaintiffs must prove motivation in order to make 14th amendment housing discrimination claim. Thus, plaintiffs lose constitutional claim but remand fair housing act claim. - Criteria for Fair Housing Act Claim: - How strong is showing of discriminatory effect - Evidence of discriminatory intent (not as strong as constitutional standard in Washington v. Davis) - Defendant's interest in taking action - Whether plaintiff is being blocked by defendant or seeks to compel defendant. - Show Impact - Minorities on waiting list are disproportionate to population, people eligible for affordable housing - Intent -- difficult to show, particularly if there are not other developers who are 'similarly situated' or zoning change made in order to block development - What does court mean by 'acting within their legitimate authority' with respect to Village?? - Nature of Relief--court's comfort level with different remedies. - Majority opinion requires town to provide other available sites as defense; concurrence would require plaintiffs to prove there was no other site. - In the end, Arlington Heights allowed housing to be built outside of Village and then incorporated land. - Sometimes Courts will require more intent with private defendant than with public one. _Hannah v. Dusch_ (p. 459) Supreme Court of Appeals of Virginia, 1930 154 Va. 35, 153 S.E. 824, 70 A.L.R. 141 - Under American rule, tenant has 'right to possession' not necessarily 'actual possession'. Thus tenant has right to force holdover tenant out. - Only issue before court is delivery at beginning of lease. - Arguments for 'English Rule' - Landlord has all the information, would be first witness under American Rule suit - Landlord has security deposit as leverage - Landlord is in better position to know status of apartment. - Court uses 'American Rule' - "Landlord didn't do anything wrong" -- putting label of wrongdoer on tenant begs the question. - Imposes cost of eviction on new tenant and not on landlord. - English Rule could handcuff landlord--might only be sure that he could lease apartment if apartment were vacant first (uneconomic). - Could include in lease provision for rule of delivery--"let them figure it out for themselves." - What power does tenant has to negotiate? - If landlord accepted rent from prior tenant and 'renewal of lease' can be proved, new tenant could have action against landlord even under American rule. _Problems_ (p. 464) - 1. Tenant could find out parcel was inaccessible--not same issue of inequal information (whether prior tenant will stay on). Element of 'concealment' on part of landlord by not telling tenant about lack of access. Lawyer might say: "English rule doesn't apply here because landlord has delivered possession." - Could argue 'possession is meaningless without access.' _Assignments and Subleasing_ (p. 465) - Leasehold interest can be transferred unless prohibited by lease. This is either an assignment or a sublease. - Assignment conveys all of tenant's remaining property interest. Transferring tenant does not retain any future rights to enter property. - Under sublease tenant retains some future interest or some right to control property in future. - Traditionally, under assignment, new tenant (assignee) is responsible to landlord for most/all undertakings in original lease. Landlord can sue assignee directly for beach of covenants. - *Privity of estate*: if there is privity of estate between landlord and assignee, this allows landlord to sue assignee directly. - When landlord and tenant enter into lease, there is both privity of estate and privity of contract. - Both signed document, dealt directly with each other -> privity of contract. - When lease expires, property reverts to landlord (landlord has future interest) -> privity of estate. - When tenant assigns interest to someone else, no privity of contract between landlord and new tenant. - Can landlord sue on privity of estate? - Yes, under assignment, because prior tenant has assigned all interest to new tenant and not retained any future interest, so property reverts to landlord directly. - No, under sublease, no privity of estate or privity of contract. - Exception: if sub-tenant assumes all obligations of lease (must be express, not implied), then landlord may be able to get at sub-tenant on theory of third-party beneficiary (in most jurisdictions.) - Landlord can always goes against original tenant. - In assignment case, although there is no longer privity of estate between landlord and tenant, there is still privity of contract. In this case landlord can go after either original or new tenant. _Ernst v. Conditt_ (p. 465) Court of Appeals of Tennessee (1964) 54 Tenn. App. 328, 390 S.W.2d 703 - Court believes critical issue is whether lease was sublease or assignment. - Conditt argues he was sub-tenant, cannot be sued directly. - Court was mistaken in difference, will get to this letter. - How to figure out whether this was sublease or assignment - Duration of transference - Examine intent of parties - Court rules that, even though stated intent was 'sublease', that transfer was assignment, because there was no future interest for original tenant (Rogers). - Transference stated that Rogers would still be liable, but he would be responsible regardless of document, since original tenant is always responsible. - Since there is express assumption by Conditt, could have used thirdparty beneficiary theory (not mentioned by court). - When court mentions privity of contract, it means privity of estate. Example: landlord rents to physician, part of transaction is that physician agrees to provide medical care for family, this would *not* be transferred to sublettors or assignees. Non-compete covenant--courts are split as to whether this is transferred with leasehold interest. What happens when landlord transfers interest? - Is transferring fee interest of lease, e.g., interest subject to lease - Privity of estate no longer exists in this case - Privity of contract still exists -- still have contractual right against original landlord. - Usually provision in lease "if landlord sells building contract is transferred." _Problems_ p. 470 - 2.a. Landlord leases to tenant for 3 years for $300/month, one year later T 'sublease, transfers, and assigns' to T1 for 'a period of one year from date.' - Sublease because interest reverts back to original tenant after one year for one more year. - Landlord still has privity of estate and of contract with original tenant, thus may sue original tenant for rent. - Unless there is express promise to assume all responsibilities of original lease, landlord cannot get at sub-tenant, because there is no third-party beneficiary. - T could go after T1 on privity of estate and privity of contract. - Could try to evict non-paying sub-tenant, since lease is broken for failure to pay rent. May be statutory remedies for sub-tenant eviction. _Kendall v. Ernest Pestana, Inc._ (p. 473) Supreme Court of California, 1985 40 Cal. 3d 488, 709 P.2d 837, 220 Cal. Rptr. 818 - Court rules that original landlord does not have right to tenant's sublease at greater rent than original. - Reasonable restrictions on commercial lease: - Competition issues - Tenant can only transfer 'what he's got' -- e.g., if lease specifies tenant can have 'restaurant with twenty tables and service bar', that is his interest in real estate and what he can transfer. _Problems_ p. 481 - Should Kendall standard be imposed on residential leases? - Not as much--'free alienability goal' does not apply as much to residential - Yes--bargaining power is stronger in commercial - More subjective criteria come into play with residential leases--particularly with owner-occupied building, more of a personal relationship with tenant. - New York Co-ops are notoriously restrictive about lease transfers, courts have been relatively generous to co-ops in restrictions. - "Green Card" movie -- person needs to get permission from co-op board _American Book Company v. Yeshiva University_ (Supplement) - Proposed transfer of leasehold interest to Planned Parenthood; University finds it incompatible with its philosophical beliefs; Court rules that this is not a reasonable restriction -- 'subjective'. - Must be commercially justifiable reasons. - Position wasn't totally consistent--medical school had similar activities. - Concerned that lease is being changed by new landlord. - Under this decision, might not be able to refuse to lend to neo-Nazi organization. _Problems_ p. 483 - Historically, landlord had no duty to try to mitigate his losses; now he does. Not reasonable to expect taking tenant from another building landlord owns to count as mitigation. Not actually damages, but losses. - Jurisdiction follows majority rule--lease may terminate if tenant transfers without necessary consent. Rule only applies to assignment, not to subleases. Can tenant transfer interest for remaining interest less one day, then becomes sublease. - Court allowed this--bias for alienability. - Rule in Dumpor's Case--once a landlord has consented to one assignment, he consents to all further assignments (i.e., cuts off all subsequent consent). _Berg v. Wiley_ (p. 484) - Issue of remedies - Historically--if one party breached, the other party is still required to perform - Landlord took over possession, entered with sheriff, etc. - Self-help issue--question of whether action was 'peaceable' -& Sommer, Hilda Cases for Monday _Serreze v. YWCA of Western Massachusetts, Inc._ 572 N.E.2d 581 (Mass.App.Ct. 1991). - Statute (FN2) does not necessarily restrict to landlords/tenants. "Lessor" and "occupant". Cannot use self-help, have to abide by summary eviction statute. - Discussion of policy issues _Sommer v. Kridel_ (p. 494) 74 N.J. 446, 378 A.2d 767 (Supreme Court of New Jersey, 1977) - Issue of whether landlord has duty to mitigate damages - Traditional common law rule: not landlord's responsibility to mitigate damages. Tenant is responsible for rent until termination of lease. - Law reform: landlord does have duty to mitigate. - Enormous revolution in landlord/tenant law, made mostly by lawreform lawyers and judges. - Focuses more on lease as contract--rather than historical concept of lease as conveyance - Doesn't make sense for landlord to leave property empty - Has to use reasonable diligence to mitigate damages - Could be hiring realtor - Advertising in newspaper - Burden of proof on landlord (as practical matter) - Restatement view: duty to mitigate will increase vacancies since tenants will break leases more easily. Opposite reasoning could be used as well. - Should landlord be able to write into lease provision waiver of prohibition against self-help or of mitigation duty? - Inequality of bargaining power: should not be negotiable _Landlord's Remedies_ - Eviction: how landlord gets someone out of property, regains possession - Back Rent: suing for money - Could sue for both (back rent and eviction) - Abandonment and Surrender - Tenant says "I surrendered the lease, and landlord accepted surrender." - Gave up possessory interest, wrote letter, no response, thus claim that surrender was accepted. - Claims no more liability. - Landlord could elect to not accept surrender, but could 'rent on tenant's account'. - If landlord can re-rent property, tenant could be liable for difference in rent if rent is lower. - If new tenant does not complete term, original tenant could be liable for remainder period. - If landlord rents for higher amount, tenant might get difference. - Could sue for 'anticipatory breach' - Landlord attempts to prove what damages will be, based on differential between lease rent and current fair market value _Landlord's Duties_ - What courts read into lease, even if it is not explicitly there - Covenant of 'quiet enjoyment': landlord implicitly promises not to disturb tenant's quiet use of property. - Historically, tenant had all responsiblities unless express agreement in lease. - Beginnings of tenant's rights: constructive eviction. Defense of constructive eviction: tenant argues that quiet possession is so substantially interfered with that it amounted to eviction. Can stop paying rent and move out. _Reste Realty Corp. v. Cooper_ (p. 508) Supreme Court of New Jersey, 1969 53 N.J. 444, 251 A. 2d 268 - What are exceptions to common law 'no duty' rule that Court could have used? - Tenant leased office space, water leak from outside, landlord dies, new landlord never fulfills promise to resurface - Landlord wants back rent, historically only defense is 'constructive eviction'. - Landlord contends flooding is not permanent interference with use; court responds that continuous is enough, even if it's not constant. - Common law exception of 'reliance': exception when landlord explicitly promises to do something and fails to do it. - Under common law, could be 'latent defect'. - Court is given definition of 'quiet enjoyment' new life in this circumstances--which renders premises substantially unuseable for the purpose for which they were leased, broadening of 'quiet enjoyment' and of 'constructive eviction'. - Landlord also has duty to abate nuisances. High standard for nuisances. - Implied warranty of habitability--applies only to residential leases. _Exceptions to No Duty rule_ (p. 516) - Short term, furnished premises - Landlord has duty to put apartment into 'tenantable' condition - Might not expect tenant to do repairs for short period of time - Latent defects - Inspection by tenant won't reveal latent defects, landlord has duty to tell tenant - Common areas - Which tenant could be responsible? Landlord needs to keep common areas in good repair. - Nuisances - Landlord has best ability to correct. Could file lawsuit to get nuisance abated. _Problems_ (p. 518) - Tenant is abortionist, been targeted by protesters. Landlord has done nothing despite tenant's request. What arguments could be made that landlord has a duty? - Quiet enjoyment - Common area - Central issue is how much control does landlord have? - Public authority will not act unless landlord calls to request action - Effects suitability for which premises were leased _Implied Warranty of Habitability_ (p. 519) - How did major law reforms effect housing situation? Have they made housing more or less available to poor people? Why is implied warranty not raised often? Measure of damages. Can you rent nearly unhabitable apartment for low rent? Then raise implied warranty? How does court assess damages in Vermont case? Should we allow waiver of provisions? -& Should get through p. 779, first three cases Covenant of quiet enjoyment 'stands on it own'--can be breached without necessarily constituting constructive eviction. Limited remedy. _Reste_ case (p. 508) greatly expands constructive eviction, consonant with changes occurring in landlord-tenant law at the time. Exceptions to 'no duty' rule: - Latent defect about which landlord failed to inform Had to be constructive eviction to be sufficient to refuse to pay rent, otherwise you could sue for damages _Problems_ (p. 517) - Neighboring tenants party loud, is landlord responsible under quiet enjoyment? Courts found duty in lease language. _Implied Warranty of Habitability_ (p. 519) - Historically, landlord had no duty regarding condition of premises, unless you bargained it into lease. - Under common law of covenants, failure of landlord to maintain premises did not allow tenant to withhold rent. - Only way out was for tenant to show constructive eviction and risk having to move out. - Most states have repudiated this approach (of lack of duty to repair and that covenants of lease are independent) _Hilder v. St. Peter_ (p. 519) Supreme Court of Vermont, 1984 144 Vt. 150, 478 A.2d 202 - Classic 'slum' case - Suing for breach of implied warranty of habitability, seeks damages - No duty rule was product of history, circumstances have changed, tenants are in disadvantageous position for making repairs - How to prove unhabitability? - Begin with code - Need to put landlord on notice, give them reasonable opportunity to repair - Needs to be substantial code violation--not every violation is breach of implied warranty. Not every breach of implied warranty need be code violation either. - Tenant damages - Difference between property as warranted and property as it exists - Rent is assumed to be as if property were in good condition, even if it weren't - Slum apartment 'can't have a fair market value'--more of a 'black market', people are desperate. Doesn't want to have implied waiver of warranty. - Premise of implied waiver is unequal bargaining power - Don't want to have externalities associated with substandard properties _Servitudes_ - Devices which have enormous public impact - Can seller get buyer to agree to certain restriction when conveying property? - E.g., can only build 2 bedroom house; cannot cut down any trees; etc.. - Can restriction bind subsequent landowners? - Private Land-use Controls, with large public impact - Categories: Easements, real covenants, and equitable servitudes - Smaller: profits and licenses - Property is conveyed by written deed, recorded at registry. - Should be able to go to registry and find out restrictions on land. Some things are not recorded, i.e., adverse possession, forged deeds ('offrecord risks'), mentally incompetent - Possible remedies for not discovering restrictions: Can get title insurance; certain warranties in deed; lawyer who did title examination. - Written and occasionally unwritten servitudes - Late 19th and through 20th century--rapid uncontrolled industrial and urban development - Zoning did not come into existence until 1920's - Bind land and succeeding landowners to condition - Issues - Creating servitudes--formality v. informality - When will courts simply strike down restrictions (race) - How do we decide whether restrictions bind succeeding landowners? - How to terminate restrictions? -& Read Pazolt + Sheftel (supplement) after Matthews (casebook) -& Finish Van Sandt, read Othen v. Rosier _Willard v. First Church of Christ, Scientist_ (p. 783) Supreme Court of California, 1972 7 Cal. 3d 473, 102 Cal. Rptr. 739, 498 P.2d 987 - Easements - Willard has to allow church to park there - Church can be charged for upkeep, but Willard cannot charge church members to park in lot - Dealt with deed creating an easement ('express easement') _Holbrook v. Taylor_ (p. 790) - Other ways to obtain easements - When will courts imply easements when there is writing? - Holbrook deals with two possible doctrinal reasons for recognizing easements - Roadway, plaintiff let several people use land. Defendants built house, used roadway to build house. Plaintiff eventually told defendant they wanted payment for use of road. - Two theories - Prescription - Estoppel - Prescriptive easement: not valid because easement was permissive (Holbrook allowed Taylor to use land). - Easement by estoppel: because owner has allowed machines, etc., on the road, has seen improvements on property, but has taken no action, then he is prevented from taking action. - Starts with license--permission to use property, completely revokable. - If someone continues to use property, and they invest in property, license can be come irrevokable (estoppel). - Under this theory, might not be able to build second house. Great split in authority as to whether to recognize easement by estoppel - Shepard v. Purvine: in accord with Holbrook - Henry v. Dalton: Rhode Island, complete opposite. Don't want to burden land with unrecorded restrictions. (minimize off-record risks). - Why not say there is an easement and force Taylor to pay for it? - Easement is limited to use Taylor has made--i.e., if Taylor built more houses, etc., Holbrook could take action (if he doesn't, easement by estoppel may increase in scope). _Van Sandt v. Royster_ (p. 795) Supreme Court of Kansas, 1938 148 Kan. 495, 83 P.2d 698 - Another doctrinal basis for recognizing easement without document - "Quasi-easement" - Plaintiff has sewerage in his basement, trying to get owners of adjacent properties to stop using sewage line. - Defendant's continued use is justified that easement was implied when properties were divided--was in common ownership. "Quasieasement" because you can't really have an easement outside your own property. - Court recognizes big difference between easements recognized by grantors and easements recognized by grantees. Grantor has ability to write easement into deed. - 'English rule' -- will not recognize easement by grantor unless it is of absolute necessity. Many courts follow this rule because they are reluctant in case where grantor could have included an easement in the deed when selling property. - Reverse situation, where grantee is claiming an easement against property owned by grantor, courts are much more willing to recognize. _Van Sandt v. Royster_ (p. 795) Supreme Court of Kansas, 1938 83 P.2d 698 - Needs to consider whether easement was reasonable necessary when land was severed_Van Sandt v. Royster_ (p. 795) Supreme Court of Kansas, 1938 83 P.2d 698 - Needs to consider whether easement was reasonable necessary when land was severed - Quasi-easement--can't have a real easement across your own property - Original grantor could have made provision in sale for easement; grantee could not have. Thus, quasi-easements are usually found in grantee's favor. - "Off record risks" -- did Van Sandt have notice or inquiry notice of sewerage problem? _Problem_ (p. 802) - 3. Church is grantor, could have included easement in deed - Is parking necessity? Maybe, depending on zoning. - Buyer of lot is on inquiry notice--registry would show prior express notice for parking easement - Questions - One lot? - Necessity? - Notice? _Othen v. Rosier_ (p. 802) Supreme Court of Texas, 1950, 226 S.W.2d 622 - Two different kinds of implied easements - Othen claims easement by prescription or by necessity for access across Rosier's property - Othen failed to show that there was no other way out at time land was severed; thus cannot show easement by necessity - Quasi-easement would have been lower standard of necessity: reasonably necessary at the time. Texas follows rule "will only follow quasi-easement when it's strictly necessary"--does not follow Van Sandt rule. Also will have problem of when easement was apparent. - Court does not recognize prescriptive easement because it was not adverse/hostile (gate), and that Othen was not only person using easement. - Road was not constant; court believes this bars prescriptive easement. - Some states have mechanism to force sale of easement for landlocked property - Could this be easement by estoppel? - Texas refuses to recognize easement by estoppel, despite improvements made by Othen _Matthews v. Bay Head Improvement Association_ (p. 815) Supreme Court of New Jersey, 1984 469 U.S. 821 (1984) - Claimants want public access to beach--public trust doctrine - _Avon_ extends public trust doctrine to recreational activities, for publicly owned beaches - _Matthews_ extends to 'right to reasonable access', right to cross privately held property - If right had been established by statute, would have been 'taking' - Associations looks more like municipality than purely private owner; court leaves open possibility that rule could apply to private ownership. _Pazolt v. Marine Fisheries_ (supplement) - Plaintiff was harvesting between high and low water mark, claiming public trust. - Opposite attitude to New Jersey court: looks at historic activities within Public Trust Doctrine--fishing, clamming, but not cultivation of shellfish. Reads historical trust more literally. _Miller v. Lutheran Conference & Camp Association_ (p. 823) Supreme Court of Pennsylvania, 1938 331 Pa. 241, 200 A. 46, 130 A.L.R. 1245 - Frank and Rufus have explicit easement for fishing and boating and prescriptive easement for bathing. Rufus dies and passes easements to heirs. - Easement without dominant estate = easement in gross (e.g., utility lines, cell towers on churches). - Court rules easements in gross are assignable: - Intention of both parties - Must have commercial nature - Rejects old doctrine, says easements are transferrable - How do you control use for tenants-in-common? - Court uses 'one stock' rule--must be used in entirety and not separately. Can't do anything without permission of other person. _Easements, licenses, and leases_ - Example: Baumann lets motorcycle gang use garage. - They pay--looks more like a lease; regularly, more leaselike. - If longer than a year, would have to be in writing to be a lease. - How limited use--if it is only to park motorcycles, looks more like easement or possibly license. - Revokable? Looks more like license. - The more 'possessory' it looks; the more defined in terms of physical location; the more it looks like the transfer of a possessory interest (lease), whereas if it is more 'can bring motorcycles in and out' = about use = easement or license. - If it is non-exclusive, looks more like license--more and more motorcycles using space. - Easement would be transferrable (license is not transferrable), lease could be transferred as well - Lease gives 'tenant' more process rights. _Brown v. Voss_ (p. 832) Supreme Court of Washington, 1986 105 Wash. 2d 366, 715 P.2d 514 - How did Brown's lawyer convince court that easement went to another parcel? - Discussed in law review article. - "Formalistic approach": got damages of $1 (they 'won'). -& Through p. 871 for Friday _Presault v. United States_ (p. 842) United States Court of Appeals, Federal Circuit, 1996 100 F.3d 1525 - First need to determine whether easement or fee simple; court determines it is an easement, despite warranty deed - Then needs to figure out whether use is in scope of easement - There is no dominant estate--railroad has right-of-way unrelated to any property (easement in gross, not appurtenant easement) - Trail doesn't have anything to do with 'enterprise' of railroad - Even if trail was within scope of easement, was it abandoned?? - Tracks were removed - Ultimately depends on underlying common law if right-of-way is easement or fee simple How to get rid of easement? - Abandon it - Servient estate could purchase easement back (through the market) - Merger--purchase the dominant estate - Could be lost by prescription (right to use has been violated for statutory period of time) _Equitable Servitudes and Real Covenants_ - Law is in great state of flux - Covenant Examples for 'Upper Class Neighborhoods' - Forbid uses -- e.g., separate business and residential - Limited to single family - Style--couldn't be 'modern' - Minimum cost - Contractual in some sense, but also goes with the land - Courts unwilling to recognize these limits as easements, so developed new body of law of equitable servitudes and real covenants - Restatement propose we merge easements, equitable servitudes, and real covenants, as promises on land; simplify law - Relatively recent devices--started in 19th century with industrialization - Real Covenants and Equitable servitudes developed under two separate English systems, thus have different rules - Both relate to underlying promise - Real Covenants has many more requirements for court to enforce - Remedy - Damages for breach of promise: real covenant - Injunction: equitable servitude (could be same promise) - Horizontal Privity/Vertical Privity - Benefit/Burden - Need to ask whether burden ran to successor and/or whetehr benefit runs to successor - For real covenant, to make burden run, need intent for burden to run to successor. Statement of assignment, binding. - Promise must touch and concern the land. (very controversial-restatement would abandon this requirement for 'publicy policy'.) - Third requirement is horizontal privity (between promiser and promisee). - Historically, courts would only recognize privity between landlord and tenant. - Now in America, grantor-grantee relationship is considered sufficient for privity. - Could use straw to create grantor-grantee relationship. -& Tulk v. Moxhay, look at questions after cases, Sanborn v. McLean, Naponsit Review of horizontal/vertical privity. Running in Real Covenants... Historically, courts required strict vertical privity for burden to run, but had more relaxed rule for benefit running. Running in Equitable Servitudes... Courts were much more relaxed. For burden: needed intent to bind successors; promise must 'touch and concern' land; remote party needed to be informed of covenant. For benefit: needed to own property that was intended to benefit. If only seeking injunctive relief, do not need privity. Still find some cases where courts will find some amount of vertical privity for both benefit and burden to run. New restatement of property does away with privity requirements and recommends merging real covenants and equitable servitudes; not many courts have adopted this standard. _Problems_ (p. 861) - (1) A can only sue C unless A and B were in horizontal privity; would need to have had straw transaction to have horizontal privity. C could sue A because there is sufficient vertical privity for benefit to run (and A is original promising party with burden). - Adverse possessor and lessee do not inherit burden since they are not in vertical privity. _Tulk v. Moxhay_ (p. 863) Court of Chancery, England, 1848 2 Phillips 774, 41 Eng. Rep. 1143 - Charles Tulk conveys Leicester Square Garden to Elms. - Maintain garden--affirmative. Keep garden open, no buildings-negative. Inhabitants of Leicester square should have access to garden-easement in favor of third party. - Elms conveys to Moxhay with deed not mentioning covenant, but Moxhay knows of covenant. - Tulk is seeking injunctive relief on promise to not build. In England, cannot sue for Real Covenant because there is no horizontal privity (only present in landlord-tenant relationship). - Injunction in granted on the basis of notice. _Sanborn v. McLean_ (p. 868) Supreme Court of Michigan, 1925 233 Mich. 227, 206 N.W. 496, 60 A.L.R. 1212 - No restriction appeared in chain of title to lot 86 - When original owners convey out lots, they impose restrictions, but never imposed restrictions on their own property. Would not have found any restrictions on lot 86 either in its own chain of title, or in chain of title of other lots. _Nahrstedt v. Lakeside Village Condominium Association, Inc._ Supreme Court of California, 1994 8 Cal. 4th 361, 878 P.2d 1275, 33 Cal. Rptr. 2d 63 - Court doesn't want to limit what 'private governments' can do too much because the market demands these kind of restricted housing. - Note 3: 'business judgment rule' -- requires bad faith for rule to be struck down. Courts have been very deferential to co-op boards. Co-ops as different from condos. Co-ops - Don't actually own your unit--own shares in corporation that own building - You get lease from corporation - If one unit doesn't pay lease, corporation still has to pay mortgage. Thus group is quite financially interdenpendent. - In condo, you have deed to each unit. If you fail to pay, your bank will foreclose on your unit. - Co-op board can be 'crazy' but can't violate Fair Housing Act. _Takings_ - Public land-use controls (v. servitudes--private land-use controls) - Government can protect public 'health safety and welfare' - Speed limits, building codes, environmental controls, etc.. - When government enacts police power provision that has a 'disproportionate' effect--how do we assess scope of police power, and what are limits on government's exercise of police power? - Unconstitutional takings - 5th amendment prohibits government from taking property without just compensation - Doesn't mention state governments, but supreme court (using 14th amendment) has said that 5th amendment applies to states - Substantive due process analysis _Euclid_ case -- upheld zoning -- legitimate exercise of police power What is zoning? - Divides land up into districts and restricts use of each district - Zoning is 'cumulative'--generally allows 'lesser uses' (like pyramid) - New York was first city in US to be zoned--didn't want immigrants working in factories to appear in tonier neighborhoods - Model Zoning Ordinance--still basic scheme for Zoning - Original zoning people thought they could come up with plan and it would be fixed forever time - Now pretty much 'deal-making' approach - Some states struck down as unconstitutional--not legitimate use of police power - Other states--good idea to segregate uses _Village of Euclid v. Ambler Realty Co._ (p. 950) Supreme Court, 1926 272 U.S. 365 - Unusual zoning arrangement - Vision: segregation of uses - Hierarchy of uses--some uses are better than others - Claim: zoning is unconstitutional--plaintiff won't be able to sell land at value expected - Not contesting ordinance as applied to his property, but ordinance itself - Did not seek relief from ordinance; variance, etc. "Necktau" -- Cambridge/BU Bridge case -- Zoning challenge as applied to parcel - Legitimate public benefit--planning--does more than separate industry from residences. Also keeps out apartment houses--has idyllic view of neighborhood, court analogizes between apartment houses and nuisances. - Which children to protect--those that live in single-family houses (note on p. 949) - Did not have confront segregation of single-family from two-families - Economic discrimination not protected by law - Euclid analysis as 'roadmap to the future'--what became problems with zoning - How to find out if new idea passes constitutional scrutiny - Meaning vs. Application - Meaning of Constitution doesn't change, Application may change. - Court doesn't closely examine decisions made by localities - Takes extremely deferential position - Makes analogy to nuisance law (will haunt us until current times) - Certainly a stretch to say apartment houses are nuisances - Essentially, municipalities can take into account own interests without looking at region, etc.. - Preservation of property values for single-family home is legitimate use of police power - Sutherland: Laissez-faire judge, "true lockenarian" Are there limits on how far the police power can go in Zoning? 5th amendment: government cannot take property for a public use without just compensation. 'Public use' broadly defined, includes government taking private property and giving it to another entity. Courts have been very deferential to local and other governments. 5th amendment is only limitation on federal power. At end of 19th century, supreme court decided that 14th amendment includes 5th amendment, thus binding states to 5th amendment. Does state regulation = taking of property? Essentially same regulations being applied to state and federal government. In 19th century, there would only be a taking if the government acquired your property--no sense of taking by regulation. _Loretto v. Teleprompter Manhattan CATV Corp._ (p. 1124) Supreme Court of United States, 1982 458 U.S. 419 - Statute requiring landlords to allow cable connections - Court holds that as long as 'physically takes up space' then it becomes a taking--attempt to come up with bright line test. 'Permanent physical occupation'. - Not a balancing test--not going to balance strength of public interest with intrusion; not going to look at economic impact (could increase property value, still doesn't matter) - Makes distinction between permanent and temporary invasions of space - Physical invasions have always been recognized (e.g., airplane flying overhead) - Some rules exist on landlords which don't amount to takings--e.g., requiring mailboxes, smoke detectors, etc.. Landlord owns mailboxes, smoke detectors, unlike cable installation, which landlord does not own. - Dissent does not see difference between regulatory controls and 'takings'. - Ends up awarding just $1 since cable boxes increased property value. _Note 5: Rent Control Issue_ (p. 1139) - Landlords were not allowed to evict rent controlled tenants. Court finds that since landlord initiated landlord-tenant relationship and tenant is already in property, situation is not controlled by _Loretto_, even though the economic impact to landlord is much greater than the cable box in _Loretto_. _Hadacheck v. Sebastian_ (p. 1140) Supreme Court of United States, 1915 239 U.S. 394 - Zoning-like restriction--certain districts of city cannot have a brick yard. - Owner claims very valuable clay area, purchased land because he could have brick yard. Worth $800,000 for brick making but only $60,000 for residential purposes. - Effect of ordinance is to take property without just compensation - 'Equal protection' type claim--being treated unfairly with respect to other brick yards. Court dismisses this claim--government doesn't have to be all-inclusive. Can regulate only one part of evil without violating equal protection, approach some of problem without approaching all of problem. - Court rules that this is not unconstitutional taking--does not deprive him of clay deposits, could transport it elsewhere. Plaintiff claims this makes it uneconomical and thus cannot make bricks. - Court is essentially deferring to legislative body, saying brick yard is 'nuisance-like'. Court does not want to balance pros and cons of brick yard, but deferring to legislative judgment. Question harm prevention v. benefit acquisition? When government says you can't build in wetlands or beach, which category? States generally develop their own bodies of law after Hadacheck--supreme court does not rule again until 1987. Example case on 1146 characterizes as harm prevention rather than benefit acquisition wetlands protection. _Pennsylvania Coal Co. v. Mahon_ (p. 1147) Supreme Court of the United States, 1922 260 U.S. 393 - Court is very activist in 'takings' interpretation, even though it is known as very conservative court. Cannot revert to historical interpretation. - Statute required company to leave enough coal in place to leave surface subsidence. - Court found statute to be unconstitutional. Holmes claim benefit is purely private--serves no public purposes. For benefit of one house, thus private. - Government should have purchased 'support estate'--government is acquiring the support estate, thus amounts to unconstitutional taking -without compensation. - Measure of economic impact: right to coal itself is right to mine it. Holmes looks at value of pillars of coal, whereas Brandeis looks at value of home as well. - Issue of 'total taking'--how much segmentation to allow when calculating value of taking. Issue with coastal development and other contexts. - Why is this not controlled by Hadacheck? - Use v. possession - Anti-majoritarian view - 'Progress'--refusal to see coal-mining as nuisance while willing to see brick-yard as nuisance. - Very hard to make distinction between harm prevention and benefit acquisition - 'Reciprocity of advantage/benefit' - Even though you are restricted, you are getting some of the benefit of others being restricted. - e.g., all mine owners share benefit of mine-safety law which requires keeping some coal in place. - Brandeis: harm prevention --> doesn't matter if there is reciprocity of advantage - Basic 'fairness': is it fair to impose this burden on a private landowner? - Efficiency concern: if government had to pay for benefit, would they have enacted statute? - Remedy in Pennsylvania Coal was invalidation--took until 1987 to have remedy be compensation -& Read keystone _Keystone Bituminous Coal Association v. DeBenedictis_ (p. 1157) 480 U.S. 470 470 (1987) Harm prevention vs. benefit acquisition. For benefit acquisition must be paid for. _Penn Central Transportation Co. V. City of New York_ (p. 1159) 438 U.S. 104 (178) - City declared Grand Central Station as landmark, Penn Central had to get New York City's permission to do anything. Penn Central claimed landmark law was taking. - NYC creates landmarks building-by-building, rather than 'historic districts' - Possible to transfer developmen rights--if landmark status restricts your ability to build higher where you already would be able to, you can transfer this increased height permission to somewhere else - Challenging landmark law both 'on its face' and as applied to this building. - How do we figure out 'if regulation went too far'? - Economic impact - Look at property as a whole, not just particular segment - Interference with reasonable investment-backed expectations--what does this mean?? - Fluid, open-ended idea _Palazzolo v. Rhode Island_ 121 U.S. 2448 - Recent supreme court case (this year) - Claim was that since land owner knew about regulation when he bought property on wetlands, his expectations would have been adjusted accordingly... Supreme Court rejected this reasoning, this does not preclude constitutional challenge. TDRs as 'funny money'. Pennsylvania Supreme Court has held its Historical Preservation Law to be unconstitutional. 'Equal protection'-like claim. Fairness and justice: party can't be singled out to pay for public benefit _Penn Central_ is basis for doctrine, essentially saying 'decide on case-bycase basis', fluid standard: nature of government action (is it invasion, nuisance-prevention, etc..), economic impact, investment-backed expectations. -& Nollan and Dolan Recommended: Read full text opinions of _Nollan_ and _Dolan_ cases Extreme deference--rational basis review. Under equal protection clause, if government is making distinction on race-very high level of review. If distinction is based on categorizations such Real distinction? as 'optometrist/opthamologist' etc, very low standard of review--legislative discrimination must just be rational. High level of review for gender as well. Are property rights being elevated to level of 'fundamental' right--e.g., 1st amendment right? Two pieces: - How deferential should courts be to legislatures? - Federalism--where is line between property rights being defined as matter of state common law and state legislation and how much should be 'federalized'/'constitutionalized'? Issue of Remedies - Example: city imposes one year building moratorium, landowners sue, in month 11 landowners win. What should remedy be? - Until 1987, remedy was invalidation. After 1987, Supreme Court decides there must be remedy of compensation for temporary taking. - Mere diminuition in value is not taking. - How to determine damages? - Look at value of 'option' on land; rental value; return on property for that period of time. Example situation: - People form community, one house per acre (private group) - One person wants to put two houses on acre. Private group says pay $150,000 instead of $100,000. Property owner says fine, because value of land goes up to $300,000. - Fine for private group, what about if government does it? _Nollan v. California Coastal Commission_ (p. 1181) Supreme Court of United States, 1987 483 U.S. 825 - Nollans owned small structure on coast, fell into disrepair. Nollans applied to Coastal Commission to build larger structure. Commission would permit structure if Nollan granted easement on coastal land--allow people to pass through (between public beaches). - Nollans not singled out--part of CCC program to give access to beach in exchange for building larger buildings. - Scallia used close scrutiny--surprised Coastal Commission who was expecting 'rational review' standard, strikes down law - Could be explained 'heightened level of scrutiny when actual land is being extracted'--limited to physical occupation cases - What kind of physical intrusion would be allowed after _Nollan_? - Coastal Commission denies building at all. - If House blocks view of beach, could extract permanent viewing access. Physical invasion is allowed when it directly alleviates impact of what Nollans want to do. - Not enough of a nexus between construction and easement. - Scallia makes analogy between shouting fire in a crowded theater - Sees developer as victim of very open-ended process Penn Central--could commission restrict Nollans to the current size of their property? Five part test out of _Nollan_: - Could government have forbidden use to begin with (could government have denied Nollans right to expand their bungalow)? - Would this have been a taking? - Identify adverse effects of denial of permits - Match exaction to those adverse effects - Case by case close scrutiny - Changed burden of proof to regulator to prove tight nexus _Dolan v. City of Tigard_ (p. 1186) Supreme Court of the United States, 1994 512 U.S. 374 - Need to prove a closer connection with bike path/traffic congestion relief--city needs to prove reduced traffic would be trips actually going to store - Unlike standard used in "_Penn Central_" case: - Look at nature of government's action - Economic effect--investment backed expectations of landowners - Court reasons that 'overall legislative scheme' justifies lesser level of scrutiny than specific judgment. - In this case there is a requirement to deed property unlike Penn Central - Legislative scheme v. specific judgment is very thin distinction. - "Rough proportionality" standard _Lucas v. South Carolina Coastal Council_ (p. 1198) Supreme Court of the United States, 1992 505 U.S. 1003 - South Carolina prevented Lucas from building seaward of a particular line - Claims that, even in case of harm prevention, if regulation wipes out all value to property, still constitutes taking. - Court tries to narrow scope of earlier case as only attempts to define police power, rather than addressing compensation issue - 'Total wipeout' issue - Was there really no value to property? Probably could have found people to buy property. - South Carolina Supreme Court had found property was valueless - Does this undermine _Penn Central_ or _Keystone_? - Issue of severance - "Nuisance" exception - State can take legislative action if it can prove that regulation was just effectuating a common-law nuisance - _Lucas_ rule would apply to complete wipeouts--_Penn Central_ would apply to other cases - Relies on some sort of 'expectations' argument to base constitutional argument Mean shore line Equitable Servitudes v. Real Covenants - Differences is in remedy - Need horizontal and vertical privity for real covenants (to be enforceable monetary damages) - Now require strict vertical privity for burden of covenant to run - Equitable Servitude (injunction) -- lesser requirements Courts will look at intent Notice issue -- what is your duty to go and look? Strict vertical privity: need to succeed to exactly the same estate _Mahrenholz_ - Cannot convey a future interest in Illinois Appurtenant easement -- attached to neighboring land, dominant estate has easement over servient estate Easement in gross -- unrelated to property -- e.g., utilities, railroad Joint tenancy v. tenancy in common -- no difference in possessory interest, just in right of survivorship (difference in unities). Problem with notice -- gambling about who will die first in case where you don't show deed unless the other person dies first -- requirement to be recorded. Tacking issue Two types of discrimination - Disparate treatment, disparate effects - Need to show that non-discriminatory reason was pretextual (discriminatory intent) -- individualized model - Facially neutral rule with disparate effects -- Arlington Heights -refusal to rezone - Need 'some evidence' of racial intent Statute of Limitations - Some ambiguity with disabilities - Does period begin to run when disability ends, or if normal statute of limitations is not over at that point? Usually courts pick up whichever is longer. Civil Rights Act §1981-§1982: - Give basic civil rights to former slaves - Limited to race - Very specific: right to convey, property rights, etc. - Covers both private and public discrimination. 14th amendment - Civil War amendment to rectify pre-civil war inequities. Body of doctrine extended from equal protection clause. Much broader scope than Civil Rights Act. - Only applies if there is State Action. Fair Housing Act - Different standards of proof. - Covers private acts of dicrimination. If State Action, Supreme Court has said you need to prove some intent. Examples: - Landlord 1 has no idea policy is discriminatory. - Landlord 2 knows it is but is not implementing it for that idea. - Landlord 3 knows it is and is doing it for that reason. Under discriminatory effect doctrine, only 2 and 3 would be liable, and possibly only 3. Not sufficient to say 'it violates fair housing act' -- need to explain *how* For example, in running housing only for women, could say it is providing services rather than housing. Assignment v. Sublease If there is privity of estate property reverts to landlord after sub-tenants lease expires. Looks more like sublease if sub-tenant pays greater amount to original tenant who pays original rent to landlord. Privity of Estate/Privity of Contract vs. Horizontal/Vertical Privity of Real Covenants/Equitable Servitudes English courts only allowed real covenants between landlords and tenants to run to successors. Strict vertical privity is different from privity of estate. Privity of estate in landlord-tenant relationship or tenant-subtenant relationship essentially means estate reverts back to other. Strict vertical privity means succeeded to an identical interest. Benefits that could be 'enforced by conservation law foundation' or 'audobon society' or 'mayor' = benefits in gross. Doctrine: burden does not run if benefit in gross. e.g. _Neponsit_. _Sanborn v. McLean_ -- holding valid restrictions not in chain of title or in chain of title of other lots. P. 890 Problem #4 _Nolan_ and _Dollan_ put into question whether communities can demand exactions such as affordable housing in return for additional height. Privity Review: Horizontal Privity requirement -- not as strong now, since can be created through straw if grantor/grantee relationship is recognized as horizontal privity. Vertical privity requirement -- burden: some kind of vertical privity needed for equitable servitude; strict vertical privity needed for real covenant. For benefit to run -- somewhat unclear. More relaxed. Modern rule -- if you own a piece of property that is intended beneficiary, then benefit should run. Restatement allows benefits in gross. Delivery requirement for gifts Problem 1 (45 mins) What advice to give KIC concerning lease with sound school and sound school's arrangement with MMM? - Sound school has assigned its lease to MMM. - Intent (no evidence of intent to return) - Duration (full remainder of lease) - Privity of estate between sound school and MMM, thus MMM is primarily and directly liable to KIC. - Does reduced rent make any difference? Probably not. - *No* privity of contract betwen KIC and MMM, since there is no *express* assumption - Example: lease provides provision for tenant physician to provide services, does not run with lease if it is assigned. - No cases on this point, though? Just _Ernst v. Conditt_ and _Kenall v. Pastana_ - KIC can sue both Sound School and MMM. Still in privity contract with Sound School. - Lease provided that KIC retained right to evict Sound for any material breach of lease agreement--so does this run with the assignment? If so, KIC can evict MMM. Unlikely that affirmative covenant--to provide free concert--would run with assignment. - Another possibility (dubious): KIC could terminate Sound School's lease (for breach) therefore MMM's lease would cease to exist. Sound School can only transfer what it's got--remainder of 20 year lease with provision for eviction. - Covenant issue--probably only original seller could pursue this. But burden should only run if there is privity of estate, no privity in this case (did not get same interest). Problem 2 (75 mins) What claims does AAU have over MMM? Specifically: AU does not derive income from MMM's operation; parking enterprise; presidential correspondence Doug Dig found. Lease Issue Analogous to _Swartzbaugh v. Sampson_ Cannot cancel lease AAU can get 1/2 rent and accept lease AAU can try to possess space currently occupied by MMM, get ousted, then sue MMM for 'reasonable rental value' --would be much more than MMM is currently paying sound school for lease In some jurisdictions, a lease will sever joint tenancy (minority rule) Could also seek to sell share of property, might result in partition in kind or partition by sale -- but wouldn't this return the partition to the grantor's heirs? In this case it's not really an option. Could seek to partition leasehold interest and sell at a public auction--MMM would be likely to purchase leasehold interest Parking Enterprise Could sue for ejectment No prescriptive easement or adverse possession since statutory period is 15 years--has only been ten years. Also, easement may be 'permissive', so statutory period would only start to run when possession becomes adverse. Easement by Estoppel Since MMM has invested in property, improved it, then AAU might be barred from taking action under easement by estoppel theory. _Holbrook v. Taylor_ would allow unrecorded easement by estoppel, but _Henry v. Dalton_ is opposite--does not want to burden land with unrecorded restrictions. Depends on which way jurisdiction rules. Argue that it is a revokable license and not an easement by estoppel. Sale of Correspondence _Hannah v. Peel_ and _Armory v. Delamirie_ Finder has rights superior to everyone except true owner. Has title against property where item is found. _South Staffordshire Water Co. v. Sharman_ -- MMM has right to property found by DUG, because DUG was hired for specific business purpose of excavation. But AAU can not exert similar claim over MMM. Probably just out of luck on this. True owner is unlikely (impossible to return), no reason to give it to AAU for that reason. Actually better chance of finding it in museum. Statue for action to recover lost personal property has expired anyway. Problem 3 (75 mins) What claims could Millie's heir, the mayor, HUG, or citizens group have? - Could try to enforce contrct as real covenant for failure to have concert - Equitable Servitude - Does not 'touch and concern' the land, though - Benefit should run to Millie's heir. Burden--no need for vertical privity because same land-owners, although you could not go after tenants or assignees. - Would be hard to assess monetary damages. Problem 4 (45 mins) Can HAUS restrict use of playground and eligibility of housing to families with young children? - Housing - No civil rights act claim (race, intent, impact or treatment) - No Title VIII claim (racial discrimination only) - No FHA act--only prohibits disrimination *against* people with children. No protected class being adversely affected. - Okay with deed (fee simple determinable) 'so long as used for for benefit of children' - Playground - Could there be an implied easement for use of the playground? - Would have to be 'easement in gross' - unlikely to be enforced - Easement by necessity, might argue that grantor intended easement but left it out of deed by accident--i.e., that Mille intended property to be accessible to *all* children, not just ones living there. Hard to prove, since playground didn't exist. - Necessity argument: inefficient to not have everyone use playground (?) - Or public easement--could acquire easement by prescription but statute of limitations has not run out Property -- From Colette's Notes Possession: one can make an unowned thing owned Armory v. Delamirie (10-103) Protection of possession, order of time - Plaintiff - chimney sweeper's boy, defendant - goldsmith - Form of action: get the money - Does court inquire whether boy is a thief? No. - 3 points: - Finder doesn't acquire absolute property, but ownership until or if ever the rightful owner claims it - Defendant was found to be in neglect - Defendant had to pay in full for the best jewels - "The finder is good against the whole world but true owner..." - Trover: a common law actionfor money damages resulting from the defendants conversion to his own use of a chattel owned or possessed by the plaintiff Hannah v. Peel (103) - Defendant -- Major Peel, Plantiff - Duncan Hannah - Hannah found brooch, gave it to peel to keep until rightful owner, Peel sold it. Bridges v. Hawkesworth - Plaintiff: Commercial traveller, defendant: partner in Byfield & Hawkesworth. - Parcel was found on property "Reason for rules" - Evolution -- how did law develop? - Possession/Firstness/Why do we protect ownership? What is property, who defines it...? - Dispute among people and same material object. "Many sticks in a bundle" -- each stick has a different claim - Ownership is a bundle of sticks, not an absolute concept, many restrictions - Ex: ownership of a car - Context makes sticks vary Property: the relationship among people with respect to resources - Enforcers: the law, through the state, the police Robert Hunt: determine the (x) of the individual to the community with respect to things We encourage productivity, ownership based on solely "use" -- use of resources Ownership minimizes disputes v. sharing a common property Sources of the law: U.S. Constitution, Federal/State Government, Individual Rights Federal Statutes: Laws passed by congress State Constitutions: State structure, can add rights, not subtract State Statutes: landlord/tenant law, adverse possession, finders keepers--all state statutes. - Rules of law - judicial opinions - cases from the common law - how can the rules apply to subsequent cases To choose a rule that applies to your clients' case--you need to find out the *rationale* behind the rule, understand the reasons How do you distinguish facts? - Critique the rules by understanding the rationale - Know both or identify each sides reasons - State the rule as *broadly* as possible and as *narrowly* as possbile Legal question plaintiffs arguments & defendants argue. - Personal property - tangible, movable, patents, etc. - Real property - land and materials attached Rationale for property on or in someone else's building - to return to true owner - they may come back for it - to promote honesty - leave it with the finder What do different rules promote? For Tuesday: -& Why decisions? What are the implications? What would happen if the decision was reversed -- Armory v. Delamirie? -& Read Hannah v. Peel - Go over questions at the end Rusty Russell T 617-868-7499 (Home-preferred number) T 617-373-3493 Office: 29 Cargill Hours M 2:15-4:30, F 10:15-12:00 Assistant: Sabina Connolly Course Book: D & K Course Pack: Reader Mention of SJC case in today's Globe: adoptive parents want name on birth certificate, no opposition, judge rules Mass. Law prohibits this. Never calls on people unprepared (i.e., doesn't use Socratic method). Doesn't appear to call on people near edge of room. Introduction to concept of property: protection, by the state, of a claim to valuable resources. Pierson v. Post Post was chasing fox all day with dogs, 'at least minute' Pierson killed fox and kept it. Names reversed since Pierson is appealing judgement ('plaintiff in error') and Post is 'defendant in error'. Earlier, Justice Court found in favor of Post on grounds of trespass. Appeals courts almost never acts without action of parties. Pierson filed motion 'certiorari' -- requests supreme court to issue a writ of certiorari ordering lower court to reverse decision. Trespass is form of action developed by English courts, different from trespass qcf (land trespass). Need to fit facts into recognized forms of action: specific violations. Trespass on the case is broader form of action; intended to encompass wrongs not addressed by other actions. Form of action in common law for recovery of damages for injury resulting to party as a result of act of another, unaccompanied by direct and immediate force. Similar to generalized tort. Over time, picked up negligence aspect. Thus, now, generalized tort with negligence of duty of care. Holding of court was to reverse judgement, in favor of Pierson. Property of wild animals (ferae naturae) can only be had by occupancy. In this case, that means possession. Legal standard for possession--unequivalent intent to possess and physical control (render escape impossible). Discussion of unequivalent intent--is this a useful concept in determining ownership? This is subjective standard. Puffendorf, et al, are legal scholars, going all the way back to Roman law. -& E-mail Rusty to have lunch on Tuesday (or future Mondays) Property - Baumann |Finder's Rule| Why do we protect ownership at all? |Armory v. Delamirie| (p. 100) Poor boy, chimney sweep action is seeking to recover money for jewel ("trover"). -* Court is protecting possession--first in time matters, possession matters. Simple standard, easy to decide. - Deciding case based on who is before court, neither of which is true owner. -! "First" finder has property right against all but 'rightful owner'. - Second finder has claim over third finder, etc.. - Why do we protect first possession? - Deterrent against theft. - Keeps object from being hidden, promoting honesty and openness. - How and who decides what is first, and how and who decides what is possession? - What are damages? - Money damages = full value of excellent jewel, not counting probability of jewel being claimed by true owner. - Too hard to put value on claim from true owner or 'real value'. -* If true owner appears, who gets money/jewel? - True owner (or prior possessor) prevails - Boy disappears with money, true owner appears, goes after goldsmith - Don't want double payment. - Goldsmith could pay twice, and then have suit against boy. - Who should bear risk of chasing boy? -* Virtually impossible to protect possession, protect true owner. - Subrogation (sp?) theory says original owner should be protected, in this case, goldsmith assumes risk. - If you don't protect true owner, you might make people less careless with their property, harder to recover. -* Bailment: bailor brings property to bailee - Modern law is that bailee needs to take reasonable care with property - Customer (bailor) brings clothes to dry cleaner (bailee), dry cleaner sends it to cleaning plant - Cleaning plan loses clothes, pays damage to dry cleaner, dry cleaner goes out of business. - Bailor is 'true ower of jewel', bailee is finder, boy, 'involuntary bailee'. - But, it his case, bailor exercised some judgement in chosing dry cleaner. -* Differences between 'true' bailment (dry cleaning example) and involuntary bailment, which is 'accidental' -- no agreement/arrangement between bailor and bailee. -! Label 'bailor/bailee' does not always help that much; usually applied and interpreted to get desired result. - General standard today is 'reasonable care' for bailee. - Do you want to favor true owner or wrong-doer in finder's law? -! Prior possession is protected, regardless of how the prior possessor acquires property. - If you purchase from thief, you bear risk, since you deal directly with seller, rather than true owner who had no dealing with thief. On the other hand, you could make argument to respect market transactions and true owner loses out. |Hannah v. Peel| (p. 103) -* Very bad opinion, bad use of precedent. - Holding does not help much. - Facts: Peel owns property, never lived there. Hannah finds broach in window frame, gives to police. Owner never found, police give broach to Peel, property owner. Peel sells broach; Hannah is suing for damages. - What result would promote honesty? Don't want to set up disincentive for finder to report found goods to police. - On the other hand, simple rule would suggest owning real estate includes owning everything in it. -! Goal: expedite return to true owner. -* Could serve this goal by returning to locus of loss, i.e., property owner where property was lost. -* Alternatively, want to reward finding and reporting, so let finder keep property if true owner does not appear. - Focus on what you want to accomplish rather than 'possession' or 'no possession'--maritime law provides for 'salvage reward' for finding sunken ship. Common law tends to focus on 'possesion' vs. 'no possession'. - Why do we protect true owner? - Productivity |Using_Precedent| Armory v. Delamirie w/ respect to Hannah v. Peel Distinction: in Armory v. Delamirie, dispute is between finder and someone finder gave property to; in Hannah, dispute is between finder and owner of Real Estate where property was found. Goldsmith's claim is weaker than Major Peel. Peel has stronger expectation as landowner of entitlement than goldsmith. Goldsmith is wrongdoer. Peel also has greater chance of returning broach to true owner than goldsmith. -& Take close look at cases refers to in Hannah v. Peel. How did court use precedents? -& Examine reasoning of court in decision. -& Johnson v. Macintosh - What issues does the court avoid and why? - Did Justice Marshall hold that the Indian had been conquered? - What rights did the Indians retain? - Why weren't the Indians first possessors? Congress frames issue in Hannah v. Peel as "possession/no possession" rather than getting to underlying issues. Avoids possibility of 'compromise solutions' that might accomplish underlying aims. - How does court use precedent in Hannah v. Peel? - Far better arguments exist for Major Peel than for the Goldsmith in Armory v. Delamirie. - Bridges v. Hawkesworth: Bridges is commercial traveller, finds parcel in shop of Hawkesworth, brings it toowner of shop. Parcel is filled with money, leaves it with shop owner for three years, advertises parcel, no one claims it, Bridges returns and demands money. Court rules for Bridges as original finder of lost property; shop owner has no claim. - Arguments for and against rewarding finder vs. property owner: want to reward finders for honesty, yet want to make sure property can get back to true owner (locus of loss). - Lost vs. Mislaid: difficult distinction, particularly hard to tell by finder. -* With private property, you have different expectations. Peel's house is his property, shop is somewhat more public. - Yet, Peel never lives in home. - Landlord issue--landlord has given up possession of property and may not have claim to found property. - Elwes v. Brigg Gas Co: Historic boat discovered in soil of leased land. - South Staffordshire Water v. Sharman: possessor of loan is generally entitled, as against the finder, to chattels found on the land - Sharman was employee, on premises for specific business purpose. - Supreme Court is not explicit in giving reasons for their decisions, were not trained to think that policy and law were intertwined. Tended to think of law as mathematical/scientifically-based. - Judge does not explain how facts are like or dissimilar to Hannah v. Peel; dismisses some and accepts others. -* What are expectations of control over property? Depends on facts of case, seems to be crucial to determine possession, which justifies particular result. -* Other concern is returning to true owner, promoting/rewarding honesty. - Judge's opinion (109): - Judge writes that brooch was 'lost in ordinary meaning of term' and 'lost for a very considerable time' -- hinting that the true owner is unlikely to return. - Plaintiff handed brooch to commanding officer--'commendable and meritorious'--wants to reward honesty. - Since Peel never moved into house, he has less expectation. - According to Court's reasoning, prior owner (who lived in house, before Peel acquired property) should have possession - Different goals (honesty, expectations, true owner) frequently conflict, thus judge needs to weigh and decide. - Between honesty (of Hannah) and expectations (of Peel) judge chooses to reward honesty. - Issue of unwanted property--environmental contamination, bomb, etc.. Different rules apply. - *Constructive possessor*, court is trying to justfy its action, e.g., if finder is trespasser, then owner should get property. Right to exclude from property is very important. - Adverse possession--after statute of limitations, you no longer have claim on property. Rewards ownership to possessor after a certain period of time. - McAvoy v. Medina: distinction between lost and mislaid. If lost, the finder gets property, if mislaid, shopkeeper gets it. Medina is not generally required to do anything to find true owner of lost property, absent any statutory authority. -& Friday: Johnson v. M'Intosh, Tee-Hit-Ton case, maybe Pierson v. Post (see questions from yesterdays) Possession and persons, initial ownership. How does someone become owner of something in the first place? Doctrine of Discovery and Related Doctrine of Conquest. All turn on principle of 'first in time.' Very difficult to generalize about Native American land systems. Two generalizations: - Land is spiritual, Not possible to 'own' land - Many tribes developed systems of property for sharing. Understood borders of property similar to system of sovereign states. Families could be assigned property, but assignment was not irrevocable, and various uses could be assigned to different parties: to hunt, to fish, to plant trees, etc.. Rights were generally 'rights of use' rather than 'ownership.' 15 million native inhabitants, shrunk to 200,000 by 1910. As if all of U.S. were reduced to size of Cleveland. Representatives of colonial governments often declared themselves 'owners' or 'sovereigns' over vast tracts of land. In theory, all land was supposed to go to colonial governments. In practice, both governments and individuals negotiated with tribes, with each other, etc., to acquire property. Tribes didn't see transfer as permanent, understood it as granting temporary 'rights of use' to accomodate situation. After revolutionary war, federal government distributed land to inhabitants. Johnson v. M'Intosh Plaintiff purchased property from Indian Tribe, defendant received land from government. Requests ejectment of defendants. Although plaintiff got property first, Indians don't have ownership over land as conquered people and thus don't have power to convey. Reasoning of judge: - European powers have 'pre-emptive right' to purchase or conquer land. Only U.S. Goverment has right to convey title, but doesn't necessarily say tribe has to get off land. Calls Indian rights 'right of occupancy', 'title of occupancy', etc., while goverment has 'absolute title', etc.. Wants to allow multiple interests on same piece of property, but is not terribly specific. Perhaps trying to protect tribes 'paternalistically', since individual deals were often very unfair, tribes might do better negotiating with goverment. -* Property is defined by State. Political power defines what property is, and property ownership conveys power. There are abstract principles of justice, yet judge says they won't address them--'this is the court of the conqueror'. In later decision, Justice claimed the only way nation can claim property by conquest is in 'just war' initiated by Indians. Goverment subsequently ignored Marshall's decision. (big discussion over whether Marshall made the right decision) Quitclaim deed: Giving up whatever interest you have in a property. Possibly Indians could have transferred quitclaim deed. Tee-Hit-Ton Indians v. United States Indians argue that taking of land for agricultural purposes in Alaska constitutes unconstitutional taking without payment under Fifth Amendment. Justice holds that tribe does not hold property interest as Fifth Amendment. Does not appear Reed used Johnson v. Mcintosh correctly: land was not taken by conquest or paid for, so by what right does U.S. take land? Tribe argues they have some property interest--'rights of occupancy'--regardless of congressional decision. Supports his argument by saying tribe is small in numbers--utilitarian argument. Constitution does not grant you right to keep your land, nor 'replacement value', nor 'personal value', just 'market value' of land. Would Court's criteria in Tee Hit Ton be applied to another group of people? Moving from Discovery to Capture... - Important for fishing, oil, etc.. Pierson v. Post - Supposedly unowned land - Pierson claims that he found fox and thus has first possession -claim of first possession -* Theory of plaintiff's case = possession was wrongly interfered with - Either have to kill, capture, mortally wound, etc.. to have possession of animal - No controlling precedents--no cases in New York where land was not owned by anyone - Doctrine of 'stare decisis' -- lower courts must follow higher courts or legislature - Until fox has been deprived of its 'natural liberty', it is not possessed. Need to kill it. Creates nice, clear, rule. - Judge claims rule will 'preserve the peace'. But may disagree with local sportsmen rules--essentially gives permission to interfere with other people's hunting. - Decision promotes competition for better capture methods. Both majority and dissent agree that hunting is a public good, a worthwhile endeavor; want to promote public policy objective of getting foxes killed. - May result in less litigation although not necessarily 'more peace'. Promotes 'efficient hunting'. - Court declares certain, clear rule. Disadvantage: does not allow for context. - Livingston's dissent: rule might interfere with overall goal--why would you chase a fox all day if you know you might lose it? On the other hand, people might have to get much better at fox hunting, promoting *more* aggressive capture. - Livingston promotes rule based on 'reasonable prospect' for capture. Ghen v. Rich - Custom is that he who kills whale gets whale, finder gets some fee for reporting discovery. - Finder auctioned whale, whale-killer suing buyer - Should courts defer to custom? - Swift v. Gifford: Custom should apply if generally applies to whole industry. - If we require people to capture whales, not just lance them, we might recover more whales, bring down prices, result in fewer needlessly killed whales. Keeble v. Hickeringill - Cited in Pierson v. Post - Plaintiff used decoys to attract waterfowl, defendant fired guns to scare birds away. Was standing off plaintiff's land, does not kill ducks. - Does this constitute malicious interference with trade? - Keeble does not own wild animals but has 'constructive possession' of them. Purposefully built decoy pond to provide ducks, Hickeringill in impeding this useful end. - Hickeringill not providing useful assistance because he is not bringing ducks to market. - Different from Pierson v. Post -- doctrine that you 'own wild animals on your land'. *BUT* -- Hickeringill was not based on constructive ownership but upon on interference with trade. Pierson v. Post misinterpreted Keeble v. Hickeringill. - Even if Pierson v. Post had correctly interpreted Keeble v. Hickeringill because Pierson killed fox--engaging in 'public service'--which Hickeringill was not doing. -* Labelling something ownership or not, possession or not, is filled with value judgments. Today, court might rule in favor of person scaring away animal, recognizing conflicting values. -& Read rest of Acquisiton by Capture for Wednesday and beginning of Acquisition by Capture Constructive possession... Late for class (9:05am). Case of bird sanctuary where hunters are scaring birds away from sanctuary and then shooting them. Does Audobon society have possession of birds? Before leaving property, after leaving property? Label of 'constructive possession' will be used to justify sanctuary's right of possession. Constructive possession is not based on particular facts so much as court's desire to rule for a certain party. Relativity of title--first trespasser would have right against second trespasser for 'found' property. Cannot generally trespass to recover your property--government discourages self-help. Discussion of 'problems' on page 35. Animus Rivertendi--wild animals who have habit of return, considered to be possession of owner (does not apply to domesticated animals.) Society values keeping of pets, thus pet owner will have greater claim in example cases. 'Rule of Increase' -- mother of offspring always gets animal, footnote on P. 35. 'State does not stand in same position as a wild game reserve--...[no one] has title to wild animals until capture...' quote from douglas v. Seacost Prods., Inc., -- suggesting that ownership is a fiction Oil drilling case--trespass Why is trespass bad idea? - Want to protect people's investments (vs. productivity) - No one would put labor into property if anyone could take what was on property Mineral Rights Example - 1920's supreme court ruling that state requiring pillars to remain in order to preserve surface constitutes taking and state needs to pay mineral rights owner (coal company) for coal they aren't able to mine - 1980's ruling changed decision, saying state has police powers to require pillars of coal Rule of Capture Example - Person pumps out gas, stores it in underground caves - Court rules that gas can be taken, 'once you have put it back in ground, anyone can take it' -- analogous to wild animals. - Railroad Commission case takes opposite opinion Water Cases - p. 38 - A and B both appropriating water from stream (A was first). Using Pierson v. Post, whoever appropriates water gets it, even if other was there first. - Better decided legislatively; courts prefer 'either-or' situations, legislature can regulate how scarce resources are shared/allocated. Why do we have property, why do we discourage trespass? - Most people accept Dempsest (sp?) model; we need not accept it, but need to realize how widely held it is - Model of 'Tragedy of Commons' -- gained popularity in 1960's - Original applied to Population Growth rather than Property - Image regime of communal property - Everyone can use resources - No one can exclude anyone else from using resources - Contrasted with private ownership and state ownership - Communal ownership involves a lot of external costs - Example of 1000 trees and 100 people - If person cuts down tree and uses it, he gains a tree and it costs him 1/100th of value of tree - Before cutting tree, he has 1/100th interest in 1000 trees, after he has 1 tree and 1/100th interest in 999 trees. - Gains more than he loses. - Communal ownership works in abundance; if there is no market for property, people won't keep appropriating property unless there is some scarcity to create a market. - People acting in their own self-interest will not act in interest of community at large Review of 'the tragedy of the commons' Community as a whole loses future value of tree--'externalities' are not taken into account. Too difficult to reach agreement over saving trees so they are worth more in the future; transaction costs might be greater than what is saved. Solution: divide up property and distribute between all parties, so if individual cuts down tree and sells it, he absorbs all the costs. Forces 'internalization' of some of the external costs, but not all of them. Problem with trespass: creates more externalities. investment. Need to protect Prohibition of trespass allows people to invest less in security, promotes voluntary transfer of property. Belief that those who value property the most will end up with property. Makes assumptions about initial distribution of wealth. Rather than having courts or some other entity decide value/distribution of property but allows markets to decide. Law and Economics - "Fancy cost-benefit analysis" - Attempt to internalize externalities - "Most efficient result is the most preferable result" - Problems - Ignores uneven distribution of wealth - Puts dollar value on everything, weak ethical framework - Cases where someone might 'value' something more but not be able to afford it (e.g., medicine) Acquisition of Property Rights Through Creation - Property Rights in 'Intangible Assets' - Copyrights, patents, trademark law - Copyright: protects works of authorship--writings, choreography - Patents: invention - Trademark: corporation's investment in their 'name' - Theoretical underpinnings very similar to that of traditional property - Rewarding creators, protecting creator's interest, while dealing with everyone else's interest - Issue of intellectual efforts relying on previous efforts - Locke's Labor Theory: you own your own body, i.e., your labor - Basic Questions - What property interests do you have in what you create? - What are the limits to property and creations? - What about monopoly? Unfair competition? Cheney Brothers - Plaintiffs want protection of their design during the season - Court reasons they don't have protection--does not matter if protection is limited - Copyright and patent laws should be dealt with in legislature International News Service AP - Supreme Court is only dealing with news/information--these facts only - If we don't protect news, no one will go into business, Supreme Court would ruin business--empirical guess. Yet, garment industry survived after opposite ruling in Cheney. - Highly criticized case--Douglas Baird, well known critic. - Enough other incentives: 'lead time advantage', exclusive markets - Genome--can people patent a piece of the genome? Patent office is currently allowing patents. Smith v. Shinell - Not only can you can copy competitor, but can use competitor's name ("better than Shinell") - Public benefit of lower price What sort of competition is productive, what sort is not? Field largely controlled by legislation, very hard for courts to take into account all the factors. Moore - Do you have property in your body parts? In your cells? Is this the same thing? - Should you be able to control disposition of your cells? Should you have right to sell them? - Can someone else have a property interest in your cells? - Many different causes of action, different theories, need to prove different facts - Key Cause of Action: Conversion -- needs to prove property interest -& Think about privacy argument--is there a better way to distinguish privacy cases? -& How do various judge use statute? Compare different treatments of statute. -& What does court conceive of as interests of Moore worth protecting? Next: Shack, Adverse Possession Continuing on Moore lymphokine case... Informed consent--can only recover for damages to patient, not for gains to doctor. Property Interests You Can't Sell - Children, embryos - Licensed IP - Body (prostitution) Jacque v. Steenberg Homes and State v. Shack - Court doesn't require you to show there is *no* other way -* Property right is not absolute - Court does not want this to be constitutional issue so issue cannot be appealed to U.S. Supreme Court - Broad statement of holding: property rights cannot be used to injure rights of others; property rights are not absolute. - Narrow statement: health care workers have right to trespass in order to deliver services under government programs. - "Property serves human values" -- whose values? -& Questions for adverse possession on Friday: - What are the purposes served by each of the doctrinal requirements for adverse possession? - Why do we have doctrine of adverse possession? What ends does it serve? - Should get to Lutz case (p. 120) - Which requirement for adverse possession to Lutz fail to meet? - What do you think about decision? Adverse Possession Doctrine allows someone to acquire full ownership in piece of land if nonowner possesses property for long enough period of time. How is property transferred - Signed by seller - Filed in registry of deeds True Owner = Person in Registry of Deeds (Owner of Record) Elements of Adverse Possession - Entry and Possession - Open and Notorious - Exclusive - Continuous - Adverse, hostile, under a claim of right - Statutory Period Adverse possessor can file lawsuit against true owner--asks court for declaratory judgment that adverse possessor has become true owner True owner might sue adverse possessor--claims adverse possessor is a trespasser, should be ejected; adverse possessor can claim that he is adverse possessor and statute of limitations has expired. In adverse possession, period of time has run out--essentially consequence of statute of limitations. Period in East 10-20 years, West generally less, California only 5 years but stricter requirements. Cannot have adverse possession against the government Why have adverse possession? - Keep land productive - Expectation - Punish owner - Clear title of ownership--otherwise, claims and evidence get stale Two philosophies of adverse possession: - Adverse possessor has 'earned' land - True owner has 'slept' on his duty Lutz v. Van Volkenberg (P. 120) - How did Mr. Lutz fail to meet requirements for adverse possession? - No evidence that Lutz had actually improved the land. - Statute requires land to be 'cultivated' or 'improved' (or enclosed)--how New York defines 'possession' and 'occupation' requirement - Need to have enough occupation and possession for landowner to know there is a trespasser. - Deed does not guarantee against 'off-record' risks--buyer needs to go and check for adverse possessor - Adverse, hostile, claim of right, claim of title (not same as 'color of title') -- frame of mind requirement - Mr. Lutz didn't 'think' he owned property, made statement in other lawsuit. Dissent suggests statement was after statute of limitations, therefore is not binding. - Court is incoherent on 'good faith' requirement--one building Lutz doesn't think is on his land, other building he thinks it is, in neither case is adverse possession requirement met. Adverse possessor needs to give notice that they are trespasser--has to be hostile or adverse to interests of owner. How to interpret hostile? - "I know it's not mine, and I don't care." Would reward knowing trespasser. - Good faith occupant--person who made mistake in thinking property was theirs. Rewards honest/good faith by mistaken trespasser. - Current doctrine requires possession to be non-permissive "objective criteria" - In practice, courts almost never give property to knowing trespasser Modern View: State of mind is irrelevant, permission or non-permission is all that matters Occupation by someone who is not true owner is presumed to be permissive unless adverse possessor can prove occupation is non-permissive Alternatively, court could assume any occupation by non-owner is nonpermissive and owner has to prove occupancy was permissive Second assumption is more commonly used by courts, yet most courts don't give property to knowing wrong-doer. - Color of Title (p. 136) -- written instrument - Example, person gets forged deed or seller is mentally incompetent, easier for possessor to perfect adverse possessor claim--sometimes statute of limitations is less, requirement for 'open and notorious' is less, area may be expanded Problems: - O owns and has been in possession of 40 acre farm property, Z conveys property to A, A improves property for statutory period of time. A brings a claim to evict O for constructive adverse possession--i.e., done under 'color of title'. A can only get adverse possession of what A actually actively occupies and possesses, since O has been living there as well. - Two contiguous lots, owned by x and y, neither one is in possession of their lot. Invalid deed from Z to A, A enters lot 1 (owned by x). After statutory period of time, A sues X and Y to clear the title. A has no claim against Y--he may have color of tile, but Y could not have ejected A since A was not on Y's property. -& Next class: Manella v. Gorsky (finish up Adverse Possession on Monday), pay attention to problems _Mannillo v. Gorski_ (p. 138) Plaintiff argues that defendant did not have 'hostile' intent since defendant did not know they were encroaching. New Jersey court abandons Maine Doctrine in this decision, but is not sure about 'open and notorious' requirement. Needs to be 'open and notorious' to give true owner chance to eject adverse possessor. Who has burden of knowing where boundary is? - Generally only a question in 'close' cases--encroachment. cases, it should be clearer. In other Encroachment keys will frequently result in forced sale or encroacher pays damages but does not have to tear down encroachment. Court sets up standard of 'actual knowledge'--this could be very difficult standard for adverse possessor to meet. Problems (p. 142) "A" has become true owner, thus "B" has no claim anymore. Estoppel: if other party relied on statements by first party to their detriment, party may not be able to reneg on their statements. Matter of equity. Needs to be actual investment on party who relies on representation other party made. _Howard v. Kunto_ (p. 143) Everyone's deed is off from their possessors. Howard argues that summer house does not constitute continuous possession. Court rejects this theory, since houses were only summer houses, and summer occupancy is sufficient to put true owners on notice. Occupants were acting like owners act. Kunto need to argue theory of tacking--previous 'adverse possessor' time must be tacked on to Kunto's possession, since Kuntos have only lived there for short period of time. To permit tacking, court requires *privity*: voluntary transfer of interest. In England, privity is not necessary for tacking; makes it easier for squatters to claim land. In U.S., squatters would not to voluntary transfer interest from one squatter to the next squatter, in order to have adverse possession. Not notorious, at least not under Mannillo standard. In fact, one survey even gave different result. Yet, this court has no problem with open and notorious standard. Howard also essentially denies hostility, which in Lutz (New York) case would deny claim, but this court doesn't care (Washington). ... Doctrine of adverse possession could be used to support urban homesteading programs Tacking Problems (p. 149) 1. No privity, no voluntary transfer, thus tacking does not occur and statute of limitations has not run 2. B gets property for life, and then property goes to C. A has been on property for 16 years. Once adverse possession begins against true owner, possession continues to run, even if true owner changes. C could have purchased life interest from B and then have possessory interest in order to eject A from property. C could also sue B for waste--B is putting C's future interest at risk. 3. If adverse possessor enters against someone who has less than complete ownership, possessor only gets interest that life interest holder has. If A enters after O dies and B has life interest but not complete ownership, A only has possession as long as B is alive and has interest. No tacking in this case. Doesn't seem to make a lot of sense. Disabilities (p. 151) Cases where true owner may have some good reason why they didn't eject adverse possessor within statute of limitation: - Minor - Unsound mind - Imprisoned In sample statute you would get ten extra years before statute runs out. Cannot tack disabiliies. Disability must exist at time of cause of action occurred--when entry was made. 1. (a) H has until 2005 to eject A. Ten year statute of limitation only begins when disability ends (when insane O dies). Wouldn't it be better to have guardian appointed for people who are disabled and eliminate need for disability statute? -& Will go over rest of disability problem and O'Keeffe case, supplement problem, and gifts in Wednesday's class Adverse possession of chattels/"Theft" _O'Keefe v. Snyder_ (p. 153) What is period of statute of limitations? - Trial Court rules to measure from date of theft - Appellate Division rules to require Adverse Possession in order to exercise statute of limitations defense - Possession needs to be open and notorious -- very difficult standard to meet - Supreme Court comes up with discovery rule involving 'due diligence'--needs to show that true owner made reasonable effort to find property. If there is no due diligence, statute of limitations starts running from moment of theft. Puts burden on owner. - Under New York (?) rule--where Guggenheim is, statute of limitations starts running the day the true owner has knowledge of location of stolen art. Very generous to true owners/artists. - Court is trying to tell art industry to set up registry in order to track stolen art, make it easier to demonstarte 'due diligence' - Becomes question of fact: what is *reasonable* due diligence? - To replace, this is. _Rosenbergs in Supplement_ Rosenbergs have claim that property was lost before WW II - Under straight statute of limitations, no claim to property - Under O'Keefe 'due diligence' test, did exercise due diligence, very hard to find, would have satisfied requirements - In New York Guggenheim rule, statute wouldn't start until owners located property, favors owners, would have claim - Under O'Keefe appellate rule, would have to determine how open and notorious was possession by museum? Should the rosenbergs have known about it? _Gifts_ (p. 168) - How do 'clear' requirements give courts so much discretion in determining gifts? - Why is delivery required, and what do we mean by delivery? - How are delivery and intent related? - We require physical delivery to make vivid and concrete to donor the significance of act. Evidentiary issue is easily resolved. - Usually presume acceptance--inquiry is usually about intent and delivery. - Constructive or symbolic delivery - Symbolic: Could I give you 'a written instrument of gift'? - Constructive: I give you the keys to my car, and say, "I'm giving you my car". - How do we know if formal requirements are met? grasp reasons for formal requirements. Problems (p. 169) Courts don't always 1. Clear statement of intent, physical possession has already been delivered, one could be satisfied that gift was intended. -& Read through Gift Cases and Estates and Land Gifts problems continued... Gifts might fail by attempt to get around formalities of will; testimentary disposition. No delivery, no intent to make a present transfer, doesn't qualify as gifts. Could make present gift of future interests, but in last part of problem 1 doesn't qualify for this. 3. If something can be handed over (delivery) it must be. Classical doctrine says delivery of symbolic instrument of gift doesn't qualify if the delivery of gift itself can be done. 4. Both brother and sister had access to box for whole life; brother acts like owner, doesn't give up dominion and control. Clipping coupons indicated that he still have dominion. Document that looked like will but was not legal will actually weakened Joan's case. _Newman v. Bost_ (p. 170) Supreme Court of North Carolina, 1898 Van Pelt tells Julia Newman he wants to give her everything in the house, points out various things. Claims insurance policy etc. were gifts causa mortis. Causa mortis gifts are conditional gifts--if you don't die, there is no gift. Newman wins all claims at trial, at appellate level loses some things--gets some furniture, new trial on piano, but not proceeds on life insurance policy. Constructive delivery of contents of drawer by handing over the key, which includes the policy. Court is concerned with *intent*--did Newman know policy was in bureau? Distinguishes facts of Thomas v. Lewis from this case since key in that case was to a lockbox, intent to give contents is clearer; when handing over keys to bureau intent to transfer documents within bureau less clear. Court will recognize constructive delivery but not symbolic delivery. Only way to give intangible is through written instrument of gift. _Notes and Problems_ (p. 177) 2. Probably 'good enough' constructive delivery of content. Intent is clear. 3. Court might say box is small enough to be handed over. Traditional ('sticky') court would insist on actual delivery rather than constructive delivery when actual delivery is possible. _Gruen v. Gruen_ (p. 178) Court of Appeals of New York, 1986 Father wrote letter to son (student) 'giving' him painting, but possession never transferred. Stepmother argues that there was no delivery. Son would argue there was a present interest delivered by letter--i.e., son gets remainder interest of painting. Father retains 'present possessory interest' = life estate. Unambiguous statement of intent on part of father to give painting to son not to stepmother. Father retained life estate and gave future interest immediately to son. Actual delivery and return would be silly formalism. Father could do many things with painting during his life. could sell life estate to someone else. _Systems of Estates_ (p. 185) Feudal landholding arrangements help gain understanding of where we are now, how law changes to accommodate economic and cultural depends. Dispells idea that 'land ownership was once absolute and now is not.' Land was viewed much more as object in commerce in U.S. than in England. Way of thinking about property not as concrete objects but as abstractions. Creative core of real estate law--how can you conceive of owner-occupied affordable housing without some abstractions? Limiting interests (rather than 'fee simple'), new ways of owning and holding property require creative abstractions. Co-operatives, timeshares, condominiums, large real estate developments (ground leases, etc..). Need to learn language of ownership to address these underlying issues of distribution, inheritance, etc.. Property is 'alienable' -- can be sold, as well as inheritable. Not always true historically. Will look at how vision has changed since feudal times. In feudal times, property was kind of 'social glue', set up hierarchy, 'Godgiven'. Defined by relationship to land. Americans tend not to view land and inheritance as vehicle of social motion, tend to think of education, professional degrees, etc.. Thomas Jefferson questioned inheritably in letter to James Madison: "...Dead have neither power nor rights over Earth..." Question of control from grave over land. English property rights were neither inheritable nor saleale. This would have changed social order--wealth was transmitted in very specific socially acceptable ways. Not until 1540 could owners leave property to whom they chose. When William the Conqueror came to England and won, divided up land. Gave men estates in exchange for services--"knight's services." Men got fee from land, owed King certain number of days of year to defend England. Could For example, subinfeudate to others. Poor peasants at bottom were allowed to use and farm land in exchange for services rendered to people above them (as before William). Could not sell interest, only could subinfeudate. Could not substitute interest. Had rights of Lordship, marriage of children. Conceived of as very temporary arrangements--if service was not rendered, Knight would lose land. Not ownership but *tenure*. Within 200 years temporary relationship became permanent relationship, could begin to transfer interest or pass interest on in socially prescribed ways. Eventually other kinds of payments other than Knight's service became acceptable; this allowed transfer and inheritance to gain ground. 1290 could transfer interest, 1540 could inherit as chosen. Until then, could only pass on to eldest male son (primogeniture). Providing knights as not very effective for protection; in 13th century changed to require money instead of knights for protection, later became more like taxes. By subinfeudating to monastery, monastery never died, many of feudal incidents no longer required. 1290 statute was passed forbidding subinfeudation; you can only 'substitute'. Attempt to preserve feudal rights/feudal 'incidents'. Turned out to be death blow to feudalism, as allowed property to be alienable and inheritable. O to A and his heirs. "To A" are considered words of purchase, "and his heirs" limits, what kind of estate you have. Rule of primogeniture required only eldest son to require property; but once property was alienable could give property to someone other than eldest son. Wanted to develop device to keep property in family. "A to B and heirs of his body with wife to be X." Land can only go to descendants. Courts construed rule that B could alienate his property once he married. New statute was passed to restrict property to direct male descendents--"fee tail". Land was source of power and families wanted to keep control over it. Most of land in England was thus entailed. *Fee Simple Absolute*: Any property transfer without any restrictions. Owner can sell property, give it away, by will or intestate. No one other than owner has legal right to obtain ownership of property in the future. Historically, you could only create fee simple absolute with "O to A and his heirs." Now assumption is that owner intends to transfer everything he has, i.e., fee simple absolute. _Problems_ p. 202 1. A has life estate. Today we would assume B has a fee simple absolute, but in 1600 all B would have a remainder (life interest) but when B dies property goes back to O or O's heirs. 3. B has no real interest; transfer grants A specific sort of title that would permit her to pass it on to children but children have no interest. _Problems_ p. 204 2. B2--eldest's son's eldest's son would get property in 1800. 3. Under fee simple absolute, property will escheat to the state. 4. Property reverts to state. 5. Cannot create new sorts of estates. Could have given life estate to granddaughter, remainder to someone else. Or, could have given life estate and gave option to sell fee simple to someone else. Or, could create trust (modern way). Need to fit within existing categories. _Fee Tail_ Mostly abolished in the United State. Had drastic effect on marketability and alienability of land. Allowed people to accumulate land in families. Some states recognize fee tails but with limits: estates are disentailed when sold, or fee tail is only recognized for one generation. _Problems_ p. 209 3. B had fee tail; property can only pass to her issue. Would need to have disentailed property; could have sold it, or transferred it back and forth to 'straw'. By conveying "to A and the heirs of her body", property is conveyed as succession of life estates to issue of A." 4. C owns property, since A disentailed property by conveying it during his life time. In other states that allow fee tail for one generation, have to wait to see if A has issue at death, if yes then C's interest becomes absolute. _Life Estates_ p. 210 Reversions and Remainders "O to A for life" - If property goes to O when A does, *reversion*. - If property goes to third party, *remainder*. - Since two people share an interest in life estate, there are limitations on what you can do--doctrine of waste. _White v. Brown_ p. 210-211 Supreme Court of Tennessee, 1977 - Questions is whether life estate has been passed on or fee simple absolute. - If life estate holder and remainder interest agree, they can sell fee simple absolute. - If White is only life estate holder and fee simple is sold, White only gets value of property for her life (actuarial tables). - Court relies on statutes to hold that 'greater estate' was intended to be conveyed, that 'same interest' was intended, etc., unless other intent in stated. Law has strong policy against restraints on alienation. _White v. Brown_ p.210 (continued) Supreme Court of Tennessee 1977 - If conveyance is fee simple, White will get 100% of sale of house (restriction on alienation is not valid), if it is life estate, she will get 39% based on her age. - Can't restrict alientaion on fee simple, but can on life estate, so court might want to interpret inheritance as life estate in order to give meaning to "my house will not be sold." _Baker v. Weedon_ p. 219 Supreme Court of Mississippi 1972 - Weedon wants land to be sold so she can get life estate share and survive - Remaindermen claim property is not deteriorating; there is sufficient income from land to cover taxes and thus court should not intervene unless there is waste. Remaindermen also believe property will be worth much more in several years, want to wait to sell it. - Remaindermen's argument lacks some logic: they claim that property is currently worth $168,000 and will be worth $300,000 in four years. But-real estate market reflects speculative value of land. If land will be worth $300,000 in four years that would be reflected in the current price of the land. This would represent 19% return on investment, which might have been true in New Jersey but probably wasn't the case in Mississippi. - Court rejects 'economic waste' standard. - Court adopts instead 'best interest of all parties' standard. Standard usually adopted when children are involved. - Court rules that some of the land can be sold to cover Weedon's 'reasonable needs'. - No 'real waste'--waste would be doing something to decrease the value of the property - Modern way would be some kind of trust - Cannot cut spouse out of will by statute -* Ameliorative waste: in England, a court might consider something to be waste to grant an injunction to stop an activity that is increasing the value of the land. Thought is that you keep property as it is. Modern idea (in America) is that waste only exists if value of property is decreasing, since property is thought of more as investment. Ameliorative waste is archaic concept in U.S., generally not recognized by courts. Exception might be important historic home. Cases where interests are more remote--future interests are not as certain. _Defeasible Fees_ p. 229 - Estates and law that are created by language sufficient to create fee simple followed by some kind of provision for defeasance if something happens for property to go to someone else. Usually uncertain whether defeasance will occur. - Cases - Fee simple absolute - Fee simple determinable - Fee simple subject to condition subsequent - Fee simple limited to executory determination - For determinable and subject to condition favors person making estate, executory determination favors third party - Fee simple determinable terminates automatically when certain condition is met. - Fee simple subject to condition subsequent gives someone option when condition is met. - Defeasability -- makes someone vulnerable to claims of waste and effects relationship with creditors - Certain conditions won't be recognized by courts due to public policy considerations - Fee simple determinable - O grants to A so long as the property is used for residential purposes. As long as used for... while used for... unless used for non-residential purposes, etc.. - When condition in violated, property automatically reverts to grantor. - Fee simple subject to condition subsequent - Future interest is *right of entry* or *power of termination*. - If condition is broken, grantor O must do something to assert their rights. - O to A on condition that property be used for residential purposes. In the event ... O has right of entry. Provided that property is used for... -* "Magical Words" _Mahrenholz v. County Board of School Trustees_ p. 231 Appellate Court of Illinois 1981 - Original owners gave 1.5 acres of 40 acre state to School Board to be used for school purposes only and to revert back to grantor if not. - Land is transferred twice, school stops using land for classes. - Court does not examine whether land is being used for school purposes. - Harry Hutton, heir of original owners, sold his interest to Mahrenholz. What is this interest? - If conveyance was fee simple determinable, Harry automatically has fee simple absolute to convey to Mahrenholz. - If conveyance was fee simple subject to condition subsequent, cannot convey power of termination under Illinois unless Harry re-enters property. Harry did not exercise power of termination (did not reenter property) and this power cannot be conveyed. - Depending on what sort of conveyance it was, Mahrenholz will or will not have any property. - If he had a fee simple absolute, he could not have released condition. If condition were broken, Harry then has fee simple absolute, would not be enough to release condition, would have had to convey land to school. - Adverse possession difference under two conditional fee simples - Under fee simple determinable, adverse possession statute of limitations begins as soon as condition is violated - Under fee simple subsequent to condition subsequent, adverse possession begins when person reenters. - Court might rule that right to reentry is waived if period is long enough, or right to reenter is estopped by promise, laches--so late that it is unfair. - Court concludes that this is fee simple determinable by citing a bunch of cases. Problems: Property conveyed so long as no alcohol is sold, then original owner has right of re-entry. Not clear whether this is fee simple determinable or fee simple subject to condition subsequent. Also not clear if complementary glass of champagne and alcohol used in cooking constitute violation. Property conveyed 'for church purposes'--church discovers oil on land and starts drilling. Condition was not violated because condition did not say 'for church use only'. Issue of waste: the more remote the possibility of the future interest becoming possessory the less likely a court is to rule in favor of future interest. _Mount Lodge Case_ - Strong bias against restricting alienability of land - Toscanos deed land to lodge with two conditions - For use and benefit of second party only - If there is sale or transfer by second party, lot reverts to first party. - Court voids second restriction as absolute restriction on alienability. - First restriction court rules as valid. - Doesn't matter in this case if it is fee simple determinable or fee simple subject to condition subsequent. - Does use restriction effect alienability? - Does this restrict buyers? Could buyers only buy land if lodge remains tenant? - What effect does restriction have on improvements? Would a bank lend money to do improvements? - Courts tend to look more favorably on use restrictions when they involve charitable purposes. "Dead Hand of Past" -- how much power are we going to give to ancestors to control what we are doing now? Presumption against forfeiture Some jursidictions will uphold personal use restrictions, but most generally won't. Equitable servitude and covenant are preferable devices now; more flexible devices. _Concurrent Estates_ Two people can have joint ownership of property--share undivided possessory interest in whole thing. In condominium common areas, have shared possessory interest with other condo members. Not different type of estate--'sit on top of' other fundamental type of estate: e.g., life estate, fee simple absolute, fee simple determinable. Want to pass on land to children - Could divide property up into equal parts - Difficult to make sure it's fair, parts might not be of equal property - Property might be small, not worth dividing - Could be divided up subsequentially rather than concurrently - First one child, then the next, etc.. - Last might have to wait a long time to get property - Joint Tenants vs. Tenants-in-common - Used to be joint tenants was preferred category, now tenants in common is - Joint Tenancy - Right of survivorship--if land is given to A, B, and C, and A dies, property goes to B and C. - Possible for one joint tenant to defeat survivorship; can convey his interest in someone else, new person becomes tenant in common, no longer right of survivorship - 'Metaphysical result' for ending joint tenancy - "Unities were broken" - Unity of possession, interest, time, and title - Unity of possession: Each joint tenant must have undivided interest in whole thing (common to all forms of concurrent ownership) - Each person in ownership has undivided right to use whole property - Unity of time: you and other joint tenant had to acquire at same time - Unity of title: must have been same instrument - Unity of interest: needs to be same portion (e.g., 1/2) of same interest (e.g., fee simple) - Absence of any of these unities makes it a tenancy in common - Tenancy by the Entirety - Must be married couple - Also has survivorship - Cannot sever estate alone (unlike Joint Tenancy) - Tenancy in Common - Cotenancy in which none of the unities need to be present *except* unity of possession (common to all cotenancies) - Preferred construction--if in doubt, it is a tenancy in common. Common areas of condominiums. P. 324 - O conveys blackacre to A, B, and C. A conveys interest to D. B dies intestate, leaving H as his heir. D and C split property. When A conveys to D, cuts off right of survivorship to his interest. D becomes tenant in common. B and C are joint tenants, so when B dies, interest in conveyed to C by right of survivorship. Co-ownership Issues _Riddle v. Harmon_ p. 326 Court of Appeal of California, First District, 1980 - Wife conveys share of property to herself in attempt to sever joint tenancy. - Courts have been reluctant to impose notice requirement of severing joint tenancy - Why shouldn't person be able to terminate joint tenancy in will if they can do it while alive? - Might complicate probate. _Harms v. Sprague_ p. 332 Supreme Court of Illinois, 1984 - Issue: was joint tenancy severed when one joint tenant mortgages interest, and does mortgage survive death or mortgagor as a lien? - Court holds mortgage operates a lien; not a transfer of title, therefore no severance. Joint tenancy survives mortgage. - Even in a 'title theory' mortgage state, joint tenancy should still survive. Under this theory, when you mortgage property, you are actually conveying title to bank, which only becomes good if person defaults on mortgage. - Lien: bank has security interest in property, able to foreclose. - Conclusion: if bank wants both lien to survive death of joint tenant, needs to get signature of both joint tenants. - Court dismisses statute (p. 336) with no apparent reason other than Simmonses' lawyer didn't raise the issue early enough. _Questions_ p. 337 - A and B in joint tenancy, A leases to C, wills all property to D. dies before lease expires. - Does lease sever joint tenancy? Probably not. - Standard practice in long term lease to search title, C should know property is held in joint tenancy, in commercial lease, should have known this and had both A and B sign lease. - Thus C probably does not have lease, and D does not get property. A _Delfino v. Vealencis_ p. 341 Supreme Court of Connecticut, 1980 - Parties are tenants in common. - Plaintiff Delfinos want court to order sale of property (partition by sale). They intend to purchase all of property--essentially buy out Helen Vealencis' portion. - Defendant Vealencis wants land physically partitioned (partition in kind). - Lower court ruled that land could not be partitioned. Partitions would make it difficult for Delfinos to do residential subdivision development. - Standard used for partition by sale: - Physical attributes make partition impracticable/inequitable - Interest of owners would better be promoted by sale - i.e.: if whole is worth significantly more than parts separately, court will usually order sale - Court will not look at 'intangibles' -- value of having homestead across from partition; value of continuing business in long-term location, etc.. Problem 5. 348 Partition Action - Distinction between outright prohibition on partition (=alienability) and conditional prohibition. Former is unreasonable restriction on alienability. _Spiller v. Mackereth_ p. 348 Supreme Court of Alabama, 1976 334 So. 2d 859 - Issue is whether there was a physical ouster. - For adverse possession claim, there must be proof of ouster as well as claim to sole ownership. - Ouster rule tends to promote partition _Swartzbaugh v. Sampson_ p. 352 Court of Appeal of California, 1936 11 Cal. App. 2d 451, 54 P.2d 73 - When people lease out property, don't usually intend to cut off survivorship. - Wife wants to cancel lease - Court rules she cannot because lessee stands in place of husband; gives him all rights of lessor (husband) - Wife needs to exercise ownership rights - Options - Could wait for husband to die and then eject lessee - Could seek partition in kind or partition by sale, or partition the leasehold - Partition leasehold: get physical partition in kind of lease property for term of lease - This would cut off her right of survivorship to leased property for time of lease - Partition sale of leasehold: public auction of ten year lease term - Collect rent: construct ouster, seek damages of half reasonable rental value--this could be more than what property was rented for based on market price. - Could acquiesce to lease, then would get half of rental income - If property had been community property or tenancy in the entirety, husband could not have leased out land without consent of wife. _Sawada v. Endo_ p.363 Supreme Court of Hawaii, 1977 57 Hawaii 608, 561 P.2d 1291 - Endo liable for injury to Sawada, has no insurance. - Endos convey property held in entirety to children. - Sawadas claim conveyance is fraudulent; only fraudulent if Sawadas could have gotten to property held in entirety. - Court found plaintiffs could not have gotten Endos' property, so conveyance was not fraudulent. - Important to protect family home - If creditor could get at property held in entirety, could claim Mr. Endo's share, thus putting Mrs. Endo in relationship with creditor as joint tenants. If husband dies (and creditor is corporation), other tenant (Mrs. Endo) gets whole property. If wife dies, creditor gets whole property. Dower rights -- problems, p. 395 1. (a) A and B should have had O's wife make release of dower. (b) No, W has no dower. (c) C's widow has good dower interest, A's wife has good dower interest. For C's widow depends on type of tenancy. -& Problem on P. 396, next class _Problem_ p. 396 - Son only gets $60,000 _Mortgages_ - Early common law mortgages resembled 'pawn shop' transaction - If you don't pay, land is gone from you forever, and thus 'dead' (=mort). - Rather early on, courts of equity intervened because of basic unfairness. Mortgage became conveyance on fee simple to lender on condition subsequent. If B loans A money, A conveys property to B and his heirs subject to condition that if A repays B by certain date ('law date'), A could re-enter and reclaim property. - Lender gets legal title to property - Property could pass by will - B received more than he was after, which was just security on loan - Church prohibited usury, mortgage system got around this. - Later on, custom developed to leave borrower in possession of property - Gradually become a promise that lender would reconvey land back to borrower upon repayment of loan. - Courts of chancery (equity courts) stepped in and gave borrower reasonable time before they would lose property forever after non-payment. 'Equitable right of redemption' -- have historical right after default when you could still pay back loan and recover property. - Lender can go into court to foreclose right of redemption; foreclosure proceeding cuts off borrower's equitable right to redeem property. - When lender forecloses, lender gets property, but property can be worth much more than the debt, regardless of how much has been paid off or value of property. - In early 1800's, requirement developed that there needed to be a judicial sale of property, and any moneys in excess of the debt would return to borrower. - Judicial sale is 'part and parcel' of mortgage law now. If sale is not judicially supervised, it is still highly regulated ('power of sale' sales). _Example_ P. 635 - Buyers get deed, and then there is a series of mortgages on property, sequence of liens. Default on primary mortgage. Bank forecloses, sells house for $50,000. Bank gets 100% of proceeds. If more is available, proceeds will be distributed to other lenders. Anything left over is returned to borrower. - Mortgage Market - Highly standardized - Once a bank makes a mortgage, they usually don't hold it forever; usually sell on nationally mortgage market, through institutions such as Fannie Mae or Freddie Mac. - Keeps cash in bank, could be more or less of face value of market - Not a lot of variety in terms, because terms are dictated by national market. Allows money to flow more evenly through country. - This is called secondary market, not to be confused with secondary mortgage. - Security for mortgage can be leasehold or fee simple - Leasehold = interest in property, can act as security - Even in states that call mortgage title, still acts as lien on property. _Murphy v. Financial Development Corp._ p. 637 Supreme Court of New Hampshire, 1985 126 N.H. 536, 495 A.2d 1245 - Plaintiff claims defendant acted in bad faith, difference in fair market value and what defendant bid on property at foreclosure sale. - When bad faith is shown, should go with fair market value. Under due diligence, just need to get 'fair price', not necessarily fair market value. - Critical fact: day of sale, turned down offer, knew property was worth more. Murphys had a lot of equity in property, much more than they owe. - Defendant could have 'upset price', minimum bid could be appraised amount. Usually mortgages have a 'due on sale' clause--immediately owe outstanding balance when house is sold. _Landlord/Tenant Law_ p. 417 - Outline - Background Information on Leases, types of leases - Access to housing/Fair Housing Act/discrimination - Possession - Sub-leasing and assignment - Tenant's duties and defaults/landlord's duties and defaults - Dramatic change in rights of tenants over short period of time - Significant erosion of common law rules and doctrines, substantial amount of law reform - How have these changes effected the Housing Problem? - To avoid church's prohibition of interest, leases were used as lending device, but as mortgages developed, leases were used less and less. - Sale lease-back--sell building and lease it back. - Lease was way to get poor to work land. Non-free-hold estate-tenants right was completely unprotected originally. - Eventually, landlord was conveying limited possessory interest in land. Present possessory interest is held by tenant and landlord holds reversionary interest. Traditional law developed on this concept of conveyance; thus landlord-tenant law is part of property law rather than contract law. - Because property was conveyance, courts tended to see covenants as independent: if one party fails to uphold its duty, the other party still has to exercise its duty. Over time, this has changed to be more reciprocal. - Under common law, landlord had almost no duties, since it was looked at as a conveyance. Most leases were for agrarian property. - Shift over time from agrarian concept to more urban concept->commercial, residential leases. Many of the ideas you still see might have made sense when lease was for farm. - Relationship heavily regulated by statute, both federal and state. - Lots of procedural statutes--how to evict tenant, requirements for forming a lease - Substantive requirements: housing codes, standards for housing - Four kinds of leasehold interest - Tenancy for term of years - Period tenancy - Tenancy at will - Tenancy at sufferance (not really a tenancy at all) - Principle distinction among tenancies relates to whether notice is needed to terminate the tenancy by either party, and the type at which that notice has to be given - If you don't terminate properly, you are responsible for many things in lease. Determines rights of landlords and tenants. - Tenancy for term of years - Fixed beginning and fixed ending, doesn't have to be for years - No notice to terminate - Even though lease ends on fixed date, lease can provide conditions for early termination. - e.g., non-payment of rent. - Alienable, divisible, and descendable. - Lease is part of estate, can leave it to someone else. Can sell lease to someone else. - Works as an interest in property, like a fee simple interest. - In most states, cannot have term of years for more than a year unless you have a written lease. - Periodic Tenancy - Continues to be renewed unless landlord or tenant gives a notice to terminate - Can possibly be of infinite duration, but require minimum notice to terminate - Usually notice to terminate is statutorily defined, thirty days (e.g.) for one year lease (six months under common law). - If you fail to give proper notice, you are responsible for an additional period of lease. - Tenancy at will - Under common law, no notice is required from either party. Most states require some notice, often based on period of time for which you pay rent--if you pay monthly rent, you may have to give one month notice. - Potentially infinite duration - If one party dies, lease ends. - Even under common law, exceptions existed for no notice. For example, exception to harvest crops already in ground. - Tenancy at sufferance - "Holdover" tenants - Like trespasser. Entered property legally but stayed over past legal limit. - Can be treated as trespasser or as periodic tenant. _Problems_ p. 421 Exercise: help out family with housing issue. Break up questions within TA group, write out answer. Exercise will be available outside room 65 (Sabina Connolly's office). Will meet with Property TA's to discuss answers. _Landlord-Tenant law_ - Historically, relationship involved conveyance, similar to a fee, explains why landlord had no responsibilities originally. - Because this was not originally contractual, one side could fail to fulfill responsibilities and other side would still be required to perform. - Over time, relationship has become more contractual, but not entirely _Garner v. Gerrish_ p. 421 Court of Appeals of New York, 1984 63 N.Y.2d 575, 473 N.E.2d 223 - Tenant received lease stating "privilege of termination of agreement at adate of his own choice." - Under common law, if tenancy in at will of one party, then it is also at will of the other party - Interpreting as tenancy-at-will frustrates intent of agreement, which was drafted by landlord - Tenant argues this is a life-tenancy-determinable, thus it is a freehold rather than a nonfreehold estate. Life estate in terms of length but not other factors. - Rather than trying to fit lease into a particular cubby-hole, court tries to interpret intent of lease agreement. _Problems_ p. 424 - Lease for duration of war. - "Procrustean" What type of tenancy? _Crechale & Polles, Inc. v. Smith_ p. 425 Supreme Court of Mississippi, 1974 295 So. 2d 275 - Court is reluctant to impose unwilling tenancy when there is an alternate way to make the landlord whole. _Problems_ p. 431 - What constitutes a lease?? - Look at intent of parties, facts _Discrimination_ p. 434 - Picture of 'no rules' --> 'fair housing act' wrongly presented in book - Used to have many regulations *enforcing* discrimination--racial zoning, racially restrictive covenants - Lots of land racially controlled - To get Federal Housing Insurance in deed from 1930's-1950's required racial restrictions - December 1865 - Needed a 'labor contract' -- black codes -- could be arrested for not having labor contract - Congress passed §1981 and §1982 - §1982: cannot discriminate in selling, leasing, holding of property - After 14th amendment, §1981 and §1982 were re-enacted. - Statutes had very little practical importance until 20th century civil rights movement, starting in 1948. - Initially considered to only apply to public discrimination, not private discrimination. - Plessy v. Ferguson: recognizes 'separate but equal'. Took 'guts' out of §1981 and §1982. Racial zoning was not violation because people were being treated equally--races were equally prohibited from selling property to other race. - Beginning in 1917, opponents of segregation began long effort to obtain fair housing laws. - Buchanan v. W...rly? - Decided not as civil rights case, challenging racial zoning in Louisville, Kentucky. White seller entering into contract to black buyer; seller then refuses to go through based on Racial Zoning. Court strikes down Racial Zoning on basis of 'freedom to contract' (now discredited theory). Conservative theory prohibited denial of rights to dispose of property. Housing Discrimination Continued... History of discrimination--federal government played large role in enforcing segregation. Government insured bank loans with racial restrictions. Concerted effort by civil rights organizations to 'get at' these covenants. In 1948, Shelly v. Kramer recognizes that enforcement of racial restrictions is state action. Congress passes Fair Housing Act; Supreme Court decides Jones v. Mayer. Jones v. Mayer decided §1982 applied to housing. As much as 72% (at least 50% of the time) when seeking housing, will encounter discrimination with realtors. Interplay between Fair Housing Act, 1982, State Statutes, Local Ordinances, etc.. Title VIII = Fair Housing Act (Title VIII of Civil Rights Act), as opposed to Title VII = Employment Provision. _Problems_ p. 438 3. "Furnished basement apartment in private white home." - 'Honest bigot' -- easy case - Exemption from Fair Housing Act for owner occupied housing -refusal provision (actual denial because of race). Advertising is not exempt, however. - Advertising does not violate §1982, but refusal to rent *does* violate §1982. - Penalties: used to be limitations on Fair Housing Act damages, no limits on §1982, in 1988 FHA was amended to lift limits. Standard for prima facie case is different. - §1982 only covers race, not handicap or sex, etc., FHA does not contain sexual preference... Need to be in protected category to have a case. - Supreme court interpreted §1982 to mean what race meant in 1866-included National Origin (i.e., 'German Race', etc..) Difficult question is one of _proof_--what evidence do you need to establish discrimination, and which party has burden of proof. Disparate treatment model & disparate impact model. Disparate treatment -- e.g., you keep coming back to see apartment and agent is not there, finally come back and apartment has been rented to someone else. "I individually have been subject to discrimination." Disparate impact -- a facially neutral rule that has a disparate impact on basis of protected class. "I only rent to people w/ professional degrees." Has disparate racial impact ('classic impact case'.) Question is how much motivation must you prove, and how do you find evidence for motivation? - First landlord has 'professional' policy, has no idea that it is discriminatory, just think it is nice. - Second knows it is discriminatory, but does not have policy for that reason, just wants classier building. - Third adopts policy *because* he wants to discriminate. - How do you establish what someone's intent is? see what is in people's minds. Subjective. Can't What is prima facie case for disparate treatment? - Must prove that you are member of protected class - Applied for and otherwise qualified to rent or purchase property - Rejected - Opportunity to purchase or rent remained open to a non-protected person At trial, defendant simply needs to articulate a non-discriminatory reason for action. Plaintiff has opportunity to prove that reason given was 'pretextual', essentially requiring plaintiff to prove racial motivation. Need to send in testers to prove disparate treatment. Original act sought conciliation with landlord or realtor. and attorney's fees are substantial. New act, damages Disparate impact model--what must plaintiff prove? - Facial neutral rule that has a disproportionate impact - E.G.: Will not rent to anyone who does not earn $50,000. Could be justified if this is commensurate with rent, even if it has a discriminatory impact. Does not get at issue of intent. - Intent is complicate & different element. - Not clear how much intent is needed in prima facie case. - Civil rights group will not bring case unless it is clear that race is involved. - Arlington Heights case: claim that zoning is exclusionary. Made it to supreme court on constitutional claim. Supreme Court ruled, to prove constitutional claim, need evidence of racial intent in prima facie case. - Could not impute racial motivation in zoning practices. Very difficult to bring claim against public entity for facially neutral practice. - How much burden is present *defines* substantive right. Examples of disparate impact: - Need to be family member of someone working at Hospital to work at hospital - Need to have medical degree to work at hospital - Both have disproportionate impacts, second is justified for other reasons, first probably can't be. _Soules v. U.S. Department of Housing & Urban Development_ (p. 439) US Court of Appeals, 2nd Circuit 1992 967 F.2d 817 - Plaintiff makes prima facie case, as described above under disparate treatment - Defendant makes answer: need quiet for elderly residents; was out of town; plaintiff had bad attitude. - Plaintiff needs to prove defendant's order was pretextual, that defendant didn't want to rent to her because she had a child. - Court rules that you need to interpret preference about children in context of noisiness. - Not sufficient evidence to overturn Administrative Law Judge's decision. - Court accepted non-discriminatory reasons proffered by defendant. - Choice of model (disparate treatment vs. disparate impact) to some degree effects results of case. This may not have changed the result of *this* case. -& Will finish discrimination assignment--Ronk & two cases in supplement on Monday (Arlington Heights) on Monday. _Bronk v. Ineichen_ (p. 448) U.S. Court of Appeals, 7th Circuit, 1995 54 F.3d 425 - Complaint based on landlord's unwillingness to allow them to have a 'hearing dog' - Fair Housing Act: need to show that dog is (1) reasonable accomodation and (2) necessary to use and enjoy dwelling. This test *only* applies to handicap discrimination. - Wisconsin Statute requires credential for animal, very specific/precise. - Madison Statute requires proof that animal has passed course of training, but does not refer to accreditation. - Defendant responds dog is not certified dog. - Case is remanded because trial court judge may have given inaccurate directions by conflating different bases for action. Plaintiff could succeed under one statute but not others. - Under FHA, just need to show animal's necessity, does not require credentials or training necessarily. - Defendant could have motioned for summary judgment on state and local claims based on lack of credentials if Landlord had indeed asked for credentials. _Problems_ (p. 454) - Numerical limitations. Plaintiff could claim 'facially neutral rule with disparate impact on families with children." - Discriminatory intent very hard to establish in this sort of case. - Defendant then needs to show 'legitimate business interest' in rule. - Landlord will claim numerical limitation keeps up property value. - Yet to be really determined whether numerical limitation is discriminatory. - Landlord demands sexual favors. Not enough to say gender discrimination. Can claim she has different terms and conditions of rental (3604 (b): "to discriminate against any person in the terms, conditions, or privileges of sale of rental of a dwelling, or in the provision of services or facilities in connection therewith, because of...") (p. 456) - Protected categories--income/wealth are not protected categories. Impact alone is not sufficient to prove FHA case. _Hanson v. Veterans Administration_ (supplement) - Issue is whether Veterans Administration underappraised properties, thereby hindering Veterans ability to afford houses because government would not insure to the 'full' level. - VA has statutory defense: statute does not cover appraisals only sales or rentals. - Court rules that that appraisal is part of transaction and thus is covered. - Discussion of intent vs. effect--"could prove intent on the basis of significant effect." - Plaintiff uses statistical report to try to prove effect, to prove that there is a racial practice in underappraising that is not random. - Defendant calls expert to challenge plaintiff's statistical analysis. - Use very narrow definition of discrimination--'what defendants did'. _Metropolitan Housing Development Corp. v. Village of Arlington Heights_ (p. 62 supplement) US Court of Appeals 7th Circuit (1977) - Federal subsidized private low-income housing development needs zoning change to build - Constitutional equal protection claim--disaffirms lower court cases that suggest public entities need to act affirmatively to counter discrimination. Plaintiffs must prove motivation in order to make 14th amendment housing discrimination claim. Thus, plaintiffs lose constitutional claim but remand fair housing act claim. - Criteria for Fair Housing Act Claim: - How strong is showing of discriminatory effect - Evidence of discriminatory intent (not as strong as constitutional standard in Washington v. Davis) - Defendant's interest in taking action - Whether plaintiff is being blocked by defendant or seeks to compel defendant. - Show Impact - Minorities on waiting list are disproportionate to population, people eligible for affordable housing - Intent -- difficult to show, particularly if there are not other developers who are 'similarly situated' or zoning change made in order to block development - What does court mean by 'acting within their legitimate authority' with respect to Village?? - Nature of Relief--court's comfort level with different remedies. - Majority opinion requires town to provide other available sites as defense; concurrence would require plaintiffs to prove there was no other site. - In the end, Arlington Heights allowed housing to be built outside of Village and then incorporated land. - Sometimes Courts will require more intent with private defendant than with public one. _Hannah v. Dusch_ (p. 459) Supreme Court of Appeals of Virginia, 1930 154 Va. 35, 153 S.E. 824, 70 A.L.R. 141 - Under American rule, tenant has 'right to possession' not necessarily 'actual possession'. Thus tenant has right to force holdover tenant out. - Only issue before court is delivery at beginning of lease. - Arguments for 'English Rule' - Landlord has all the information, would be first witness under American Rule suit - Landlord has security deposit as leverage - Landlord is in better position to know status of apartment. - Court uses 'American Rule' - "Landlord didn't do anything wrong" -- putting label of wrongdoer on tenant begs the question. - Imposes cost of eviction on new tenant and not on landlord. - English Rule could handcuff landlord--might only be sure that he could lease apartment if apartment were vacant first (uneconomic). - Could include in lease provision for rule of delivery--"let them figure it out for themselves." - What power does tenant has to negotiate? - If landlord accepted rent from prior tenant and 'renewal of lease' can be proved, new tenant could have action against landlord even under American rule. _Problems_ (p. 464) - 1. Tenant could find out parcel was inaccessible--not same issue of inequal information (whether prior tenant will stay on). Element of 'concealment' on part of landlord by not telling tenant about lack of access. Lawyer might say: "English rule doesn't apply here because landlord has delivered possession." - Could argue 'possession is meaningless without access.' _Assignments and Subleasing_ (p. 465) - Leasehold interest can be transferred unless prohibited by lease. This is either an assignment or a sublease. - Assignment conveys all of tenant's remaining property interest. Transferring tenant does not retain any future rights to enter property. - Under sublease tenant retains some future interest or some right to control property in future. - Traditionally, under assignment, new tenant (assignee) is responsible to landlord for most/all undertakings in original lease. Landlord can sue assignee directly for beach of covenants. - *Privity of estate*: if there is privity of estate between landlord and assignee, this allows landlord to sue assignee directly. - When landlord and tenant enter into lease, there is both privity of estate and privity of contract. - Both signed document, dealt directly with each other -> privity of contract. - When lease expires, property reverts to landlord (landlord has future interest) -> privity of estate. - When tenant assigns interest to someone else, no privity of contract between landlord and new tenant. - Can landlord sue on privity of estate? - Yes, under assignment, because prior tenant has assigned all interest to new tenant and not retained any future interest, so property reverts to landlord directly. - No, under sublease, no privity of estate or privity of contract. - Exception: if sub-tenant assumes all obligations of lease (must be express, not implied), then landlord may be able to get at sub-tenant on theory of third-party beneficiary (in most jurisdictions.) - Landlord can always goes against original tenant. - In assignment case, although there is no longer privity of estate between landlord and tenant, there is still privity of contract. In this case landlord can go after either original or new tenant. _Ernst v. Conditt_ (p. 465) Court of Appeals of Tennessee (1964) 54 Tenn. App. 328, 390 S.W.2d 703 - Court believes critical issue is whether lease was sublease or assignment. - Conditt argues he was sub-tenant, cannot be sued directly. - Court was mistaken in difference, will get to this letter. - How to figure out whether this was sublease or assignment - Duration of transference - Examine intent of parties - Court rules that, even though stated intent was 'sublease', that transfer was assignment, because there was no future interest for original tenant (Rogers). - Transference stated that Rogers would still be liable, but he would be responsible regardless of document, since original tenant is always responsible. - Since there is express assumption by Conditt, could have used thirdparty beneficiary theory (not mentioned by court). - When court mentions privity of contract, it means privity of estate. Example: landlord rents to physician, part of transaction is that physician agrees to provide medical care for family, this would *not* be transferred to sublettors or assignees. Non-compete covenant--courts are split as to whether this is transferred with leasehold interest. What happens when landlord transfers interest? - Is transferring fee interest of lease, e.g., interest subject to lease - Privity of estate no longer exists in this case - Privity of contract still exists -- still have contractual right against original landlord. - Usually provision in lease "if landlord sells building contract is transferred." _Problems_ p. 470 - 2.a. Landlord leases to tenant for 3 years for $300/month, one year later T 'sublease, transfers, and assigns' to T1 for 'a period of one year from date.' - Sublease because interest reverts back to original tenant after one year for one more year. - Landlord still has privity of estate and of contract with original tenant, thus may sue original tenant for rent. - Unless there is express promise to assume all responsibilities of original lease, landlord cannot get at sub-tenant, because there is no third-party beneficiary. - T could go after T1 on privity of estate and privity of contract. - Could try to evict non-paying sub-tenant, since lease is broken for failure to pay rent. May be statutory remedies for sub-tenant eviction. _Kendall v. Ernest Pestana, Inc._ (p. 473) Supreme Court of California, 1985 40 Cal. 3d 488, 709 P.2d 837, 220 Cal. Rptr. 818 - Court rules that original landlord does not have right to tenant's sublease at greater rent than original. - Reasonable restrictions on commercial lease: - Competition issues - Tenant can only transfer 'what he's got' -- e.g., if lease specifies tenant can have 'restaurant with twenty tables and service bar', that is his interest in real estate and what he can transfer. _Problems_ p. 481 - Should Kendall standard be imposed on residential leases? - Not as much--'free alienability goal' does not apply as much to residential - Yes--bargaining power is stronger in commercial - More subjective criteria come into play with residential leases--particularly with owner-occupied building, more of a personal relationship with tenant. - New York Co-ops are notoriously restrictive about lease transfers, courts have been relatively generous to co-ops in restrictions. - "Green Card" movie -- person needs to get permission from co-op board _American Book Company v. Yeshiva University_ (Supplement) - Proposed transfer of leasehold interest to Planned Parenthood; University finds it incompatible with its philosophical beliefs; Court rules that this is not a reasonable restriction -- 'subjective'. - Must be commercially justifiable reasons. - Position wasn't totally consistent--medical school had similar activities. - Concerned that lease is being changed by new landlord. - Under this decision, might not be able to refuse to lend to neo-Nazi organization. _Problems_ p. 483 - Historically, landlord had no duty to try to mitigate his losses; now he does. Not reasonable to expect taking tenant from another building landlord owns to count as mitigation. Not actually damages, but losses. - Jurisdiction follows majority rule--lease may terminate if tenant transfers without necessary consent. Rule only applies to assignment, not to subleases. Can tenant transfer interest for remaining interest less one day, then becomes sublease. - Court allowed this--bias for alienability. - Rule in Dumpor's Case--once a landlord has consented to one assignment, he consents to all further assignments (i.e., cuts off all subsequent consent). _Berg v. Wiley_ (p. 484) - Issue of remedies - Historically--if one party breached, the other party is still required to perform - Landlord took over possession, entered with sheriff, etc. - Self-help issue--question of whether action was 'peaceable' -& Sommer, Hilda Cases for Monday _Serreze v. YWCA of Western Massachusetts, Inc._ 572 N.E.2d 581 (Mass.App.Ct. 1991). - Statute (FN2) does not necessarily restrict to landlords/tenants. "Lessor" and "occupant". Cannot use self-help, have to abide by summary eviction statute. - Discussion of policy issues _Sommer v. Kridel_ (p. 494) 74 N.J. 446, 378 A.2d 767 (Supreme Court of New Jersey, 1977) - Issue of whether landlord has duty to mitigate damages - Traditional common law rule: not landlord's responsibility to mitigate damages. Tenant is responsible for rent until termination of lease. - Law reform: landlord does have duty to mitigate. - Enormous revolution in landlord/tenant law, made mostly by lawreform lawyers and judges. - Focuses more on lease as contract--rather than historical concept of lease as conveyance - Doesn't make sense for landlord to leave property empty - Has to use reasonable diligence to mitigate damages - Could be hiring realtor - Advertising in newspaper - Burden of proof on landlord (as practical matter) - Restatement view: duty to mitigate will increase vacancies since tenants will break leases more easily. Opposite reasoning could be used as well. - Should landlord be able to write into lease provision waiver of prohibition against self-help or of mitigation duty? - Inequality of bargaining power: should not be negotiable _Landlord's Remedies_ - Eviction: how landlord gets someone out of property, regains possession - Back Rent: suing for money - Could sue for both (back rent and eviction) - Abandonment and Surrender - Tenant says "I surrendered the lease, and landlord accepted surrender." - Gave up possessory interest, wrote letter, no response, thus claim that surrender was accepted. - Claims no more liability. - Landlord could elect to not accept surrender, but could 'rent on tenant's account'. - If landlord can re-rent property, tenant could be liable for difference in rent if rent is lower. - If new tenant does not complete term, original tenant could be liable for remainder period. - If landlord rents for higher amount, tenant might get difference. - Could sue for 'anticipatory breach' - Landlord attempts to prove what damages will be, based on differential between lease rent and current fair market value _Landlord's Duties_ - What courts read into lease, even if it is not explicitly there - Covenant of 'quiet enjoyment': landlord implicitly promises not to disturb tenant's quiet use of property. - Historically, tenant had all responsiblities unless express agreement in lease. - Beginnings of tenant's rights: constructive eviction. Defense of constructive eviction: tenant argues that quiet possession is so substantially interfered with that it amounted to eviction. Can stop paying rent and move out. _Reste Realty Corp. v. Cooper_ (p. 508) Supreme Court of New Jersey, 1969 53 N.J. 444, 251 A. 2d 268 - What are exceptions to common law 'no duty' rule that Court could have used? - Tenant leased office space, water leak from outside, landlord dies, new landlord never fulfills promise to resurface - Landlord wants back rent, historically only defense is 'constructive eviction'. - Landlord contends flooding is not permanent interference with use; court responds that continuous is enough, even if it's not constant. - Common law exception of 'reliance': exception when landlord explicitly promises to do something and fails to do it. - Under common law, could be 'latent defect'. - Court is given definition of 'quiet enjoyment' new life in this circumstances--which renders premises substantially unuseable for the purpose for which they were leased, broadening of 'quiet enjoyment' and of 'constructive eviction'. - Landlord also has duty to abate nuisances. High standard for nuisances. - Implied warranty of habitability--applies only to residential leases. _Exceptions to No Duty rule_ (p. 516) - Short term, furnished premises - Landlord has duty to put apartment into 'tenantable' condition - Might not expect tenant to do repairs for short period of time - Latent defects - Inspection by tenant won't reveal latent defects, landlord has duty to tell tenant - Common areas - Which tenant could be responsible? Landlord needs to keep common areas in good repair. - Nuisances - Landlord has best ability to correct. Could file lawsuit to get nuisance abated. _Problems_ (p. 518) - Tenant is abortionist, been targeted by protesters. Landlord has done nothing despite tenant's request. What arguments could be made that landlord has a duty? - Quiet enjoyment - Common area - Central issue is how much control does landlord have? - Public authority will not act unless landlord calls to request action - Effects suitability for which premises were leased _Implied Warranty of Habitability_ (p. 519) - How did major law reforms effect housing situation? Have they made housing more or less available to poor people? Why is implied warranty not raised often? Measure of damages. Can you rent nearly unhabitable apartment for low rent? Then raise implied warranty? How does court assess damages in Vermont case? Should we allow waiver of provisions? -& Should get through p. 779, first three cases Covenant of quiet enjoyment 'stands on it own'--can be breached without necessarily constituting constructive eviction. Limited remedy. _Reste_ case (p. 508) greatly expands constructive eviction, consonant with changes occurring in landlord-tenant law at the time. Exceptions to 'no duty' rule: - Latent defect about which landlord failed to inform Had to be constructive eviction to be sufficient to refuse to pay rent, otherwise you could sue for damages _Problems_ (p. 517) - Neighboring tenants party loud, is landlord responsible under quiet enjoyment? Courts found duty in lease language. _Implied Warranty of Habitability_ (p. 519) - Historically, landlord had no duty regarding condition of premises, unless you bargained it into lease. - Under common law of covenants, failure of landlord to maintain premises did not allow tenant to withhold rent. - Only way out was for tenant to show constructive eviction and risk having to move out. - Most states have repudiated this approach (of lack of duty to repair and that covenants of lease are independent) _Hilder v. St. Peter_ (p. 519) Supreme Court of Vermont, 1984 144 Vt. 150, 478 A.2d 202 - Classic 'slum' case - Suing for breach of implied warranty of habitability, seeks damages - No duty rule was product of history, circumstances have changed, tenants are in disadvantageous position for making repairs - How to prove unhabitability? - Begin with code - Need to put landlord on notice, give them reasonable opportunity to repair - Needs to be substantial code violation--not every violation is breach of implied warranty. Not every breach of implied warranty need be code violation either. - Tenant damages - Difference between property as warranted and property as it exists - Rent is assumed to be as if property were in good condition, even if it weren't - Slum apartment 'can't have a fair market value'--more of a 'black market', people are desperate. Doesn't want to have implied waiver of warranty. - Premise of implied waiver is unequal bargaining power - Don't want to have externalities associated with substandard properties _Servitudes_ - Devices which have enormous public impact - Can seller get buyer to agree to certain restriction when conveying property? - E.g., can only build 2 bedroom house; cannot cut down any trees; etc.. - Can restriction bind subsequent landowners? - Private Land-use Controls, with large public impact - Categories: Easements, real covenants, and equitable servitudes - Smaller: profits and licenses - Property is conveyed by written deed, recorded at registry. - Should be able to go to registry and find out restrictions on land. Some things are not recorded, i.e., adverse possession, forged deeds ('offrecord risks'), mentally incompetent - Possible remedies for not discovering restrictions: Can get title insurance; certain warranties in deed; lawyer who did title examination. - Written and occasionally unwritten servitudes - Late 19th and through 20th century--rapid uncontrolled industrial and urban development - Zoning did not come into existence until 1920's - Bind land and succeeding landowners to condition - Issues - Creating servitudes--formality v. informality - When will courts simply strike down restrictions (race) - How do we decide whether restrictions bind succeeding landowners? - How to terminate restrictions? -& Read Pazolt + Sheftel (supplement) after Matthews (casebook) -& Finish Van Sandt, read Othen v. Rosier _Willard v. First Church of Christ, Scientist_ (p. 783) Supreme Court of California, 1972 7 Cal. 3d 473, 102 Cal. Rptr. 739, 498 P.2d 987 - Easements - Willard has to allow church to park there - Church can be charged for upkeep, but Willard cannot charge church members to park in lot - Dealt with deed creating an easement ('express easement') _Holbrook v. Taylor_ (p. 790) - Other ways to obtain easements - When will courts imply easements when there is writing? - Holbrook deals with two possible doctrinal reasons for recognizing easements - Roadway, plaintiff let several people use land. Defendants built house, used roadway to build house. Plaintiff eventually told defendant they wanted payment for use of road. - Two theories - Prescription - Estoppel - Prescriptive easement: not valid because easement was permissive (Holbrook allowed Taylor to use land). - Easement by estoppel: because owner has allowed machines, etc., on the road, has seen improvements on property, but has taken no action, then he is prevented from taking action. - Starts with license--permission to use property, completely revokable. - If someone continues to use property, and they invest in property, license can be come irrevokable (estoppel). - Under this theory, might not be able to build second house. Great split in authority as to whether to recognize easement by estoppel - Shepard v. Purvine: in accord with Holbrook - Henry v. Dalton: Rhode Island, complete opposite. Don't want to burden land with unrecorded restrictions. (minimize off-record risks). - Why not say there is an easement and force Taylor to pay for it? - Easement is limited to use Taylor has made--i.e., if Taylor built more houses, etc., Holbrook could take action (if he doesn't, easement by estoppel may increase in scope). _Van Sandt v. Royster_ (p. 795) Supreme Court of Kansas, 1938 148 Kan. 495, 83 P.2d 698 - Another doctrinal basis for recognizing easement without document - "Quasi-easement" - Plaintiff has sewerage in his basement, trying to get owners of adjacent properties to stop using sewage line. - Defendant's continued use is justified that easement was implied when properties were divided--was in common ownership. "Quasieasement" because you can't really have an easement outside your own property. - Court recognizes big difference between easements recognized by grantors and easements recognized by grantees. Grantor has ability to write easement into deed. - 'English rule' -- will not recognize easement by grantor unless it is of absolute necessity. Many courts follow this rule because they are reluctant in case where grantor could have included an easement in the deed when selling property. - Reverse situation, where grantee is claiming an easement against property owned by grantor, courts are much more willing to recognize. _Van Sandt v. Royster_ (p. 795) Supreme Court of Kansas, 1938 83 P.2d 698 - Needs to consider whether easement was reasonable necessary when land was severed_Van Sandt v. Royster_ (p. 795) Supreme Court of Kansas, 1938 83 P.2d 698 - Needs to consider whether easement was reasonable necessary when land was severed - Quasi-easement--can't have a real easement across your own property - Original grantor could have made provision in sale for easement; grantee could not have. Thus, quasi-easements are usually found in grantee's favor. - "Off record risks" -- did Van Sandt have notice or inquiry notice of sewerage problem? _Problem_ (p. 802) - 3. Church is grantor, could have included easement in deed - Is parking necessity? Maybe, depending on zoning. - Buyer of lot is on inquiry notice--registry would show prior express notice for parking easement - Questions - One lot? - Necessity? - Notice? _Othen v. Rosier_ (p. 802) Supreme Court of Texas, 1950, 226 S.W.2d 622 - Two different kinds of implied easements - Othen claims easement by prescription or by necessity for access across Rosier's property - Othen failed to show that there was no other way out at time land was severed; thus cannot show easement by necessity - Quasi-easement would have been lower standard of necessity: reasonably necessary at the time. Texas follows rule "will only follow quasi-easement when it's strictly necessary"--does not follow Van Sandt rule. Also will have problem of when easement was apparent. - Court does not recognize prescriptive easement because it was not adverse/hostile (gate), and that Othen was not only person using easement. - Road was not constant; court believes this bars prescriptive easement. - Some states have mechanism to force sale of easement for landlocked property - Could this be easement by estoppel? - Texas refuses to recognize easement by estoppel, despite improvements made by Othen _Matthews v. Bay Head Improvement Association_ (p. 815) Supreme Court of New Jersey, 1984 469 U.S. 821 (1984) - Claimants want public access to beach--public trust doctrine - _Avon_ extends public trust doctrine to recreational activities, for publicly owned beaches - _Matthews_ extends to 'right to reasonable access', right to cross privately held property - If right had been established by statute, would have been 'taking' - Associations looks more like municipality than purely private owner; court leaves open possibility that rule could apply to private ownership. _Pazolt v. Marine Fisheries_ (supplement) - Plaintiff was harvesting between high and low water mark, claiming public trust. - Opposite attitude to New Jersey court: looks at historic activities within Public Trust Doctrine--fishing, clamming, but not cultivation of shellfish. Reads historical trust more literally. _Miller v. Lutheran Conference & Camp Association_ (p. 823) Supreme Court of Pennsylvania, 1938 331 Pa. 241, 200 A. 46, 130 A.L.R. 1245 - Frank and Rufus have explicit easement for fishing and boating and prescriptive easement for bathing. Rufus dies and passes easements to heirs. - Easement without dominant estate = easement in gross (e.g., utility lines, cell towers on churches). - Court rules easements in gross are assignable: - Intention of both parties - Must have commercial nature - Rejects old doctrine, says easements are transferrable - How do you control use for tenants-in-common? - Court uses 'one stock' rule--must be used in entirety and not separately. Can't do anything without permission of other person. _Easements, licenses, and leases_ - Example: Baumann lets motorcycle gang use garage. - They pay--looks more like a lease; regularly, more leaselike. - If longer than a year, would have to be in writing to be a lease. - How limited use--if it is only to park motorcycles, looks more like easement or possibly license. - Revokable? Looks more like license. - The more 'possessory' it looks; the more defined in terms of physical location; the more it looks like the transfer of a possessory interest (lease), whereas if it is more 'can bring motorcycles in and out' = about use = easement or license. - If it is non-exclusive, looks more like license--more and more motorcycles using space. - Easement would be transferrable (license is not transferrable), lease could be transferred as well - Lease gives 'tenant' more process rights. _Brown v. Voss_ (p. 832) Supreme Court of Washington, 1986 105 Wash. 2d 366, 715 P.2d 514 - How did Brown's lawyer convince court that easement went to another parcel? - Discussed in law review article. - "Formalistic approach": got damages of $1 (they 'won'). -& Through p. 871 for Friday _Presault v. United States_ (p. 842) United States Court of Appeals, Federal Circuit, 1996 100 F.3d 1525 - First need to determine whether easement or fee simple; court determines it is an easement, despite warranty deed - Then needs to figure out whether use is in scope of easement - There is no dominant estate--railroad has right-of-way unrelated to any property (easement in gross, not appurtenant easement) - Trail doesn't have anything to do with 'enterprise' of railroad - Even if trail was within scope of easement, was it abandoned?? - Tracks were removed - Ultimately depends on underlying common law if right-of-way is easement or fee simple How to get rid of easement? - Abandon it - Servient estate could purchase easement back (through the market) - Merger--purchase the dominant estate - Could be lost by prescription (right to use has been violated for statutory period of time) _Equitable Servitudes and Real Covenants_ - Law is in great state of flux - Covenant Examples for 'Upper Class Neighborhoods' - Forbid uses -- e.g., separate business and residential - Limited to single family - Style--couldn't be 'modern' - Minimum cost - Contractual in some sense, but also goes with the land - Courts unwilling to recognize these limits as easements, so developed new body of law of equitable servitudes and real covenants - Restatement propose we merge easements, equitable servitudes, and real covenants, as promises on land; simplify law - Relatively recent devices--started in 19th century with industrialization - Real Covenants and Equitable servitudes developed under two separate English systems, thus have different rules - Both relate to underlying promise - Real Covenants has many more requirements for court to enforce - Remedy - Damages for breach of promise: real covenant - Injunction: equitable servitude (could be same promise) - Horizontal Privity/Vertical Privity - Benefit/Burden - Need to ask whether burden ran to successor and/or whetehr benefit runs to successor - For real covenant, to make burden run, need intent for burden to run to successor. Statement of assignment, binding. - Promise must touch and concern the land. (very controversial-restatement would abandon this requirement for 'publicy policy'.) - Third requirement is horizontal privity (between promiser and promisee). - Historically, courts would only recognize privity between landlord and tenant. - Now in America, grantor-grantee relationship is considered sufficient for privity. - Could use straw to create grantor-grantee relationship. -& Tulk v. Moxhay, look at questions after cases, Sanborn v. McLean, Naponsit Review of horizontal/vertical privity. Running in Real Covenants... Historically, courts required strict vertical privity for burden to run, but had more relaxed rule for benefit running. Running in Equitable Servitudes... Courts were much more relaxed. For burden: needed intent to bind successors; promise must 'touch and concern' land; remote party needed to be informed of covenant. For benefit: needed to own property that was intended to benefit. If only seeking injunctive relief, do not need privity. Still find some cases where courts will find some amount of vertical privity for both benefit and burden to run. New restatement of property does away with privity requirements and recommends merging real covenants and equitable servitudes; not many courts have adopted this standard. _Problems_ (p. 861) - (1) A can only sue C unless A and B were in horizontal privity; would need to have had straw transaction to have horizontal privity. C could sue A because there is sufficient vertical privity for benefit to run (and A is original promising party with burden). - Adverse possessor and lessee do not inherit burden since they are not in vertical privity. _Tulk v. Moxhay_ (p. 863) Court of Chancery, England, 1848 2 Phillips 774, 41 Eng. Rep. 1143 - Charles Tulk conveys Leicester Square Garden to Elms. - Maintain garden--affirmative. Keep garden open, no buildings-negative. Inhabitants of Leicester square should have access to garden-easement in favor of third party. - Elms conveys to Moxhay with deed not mentioning covenant, but Moxhay knows of covenant. - Tulk is seeking injunctive relief on promise to not build. In England, cannot sue for Real Covenant because there is no horizontal privity (only present in landlord-tenant relationship). - Injunction in granted on the basis of notice. _Sanborn v. McLean_ (p. 868) Supreme Court of Michigan, 1925 233 Mich. 227, 206 N.W. 496, 60 A.L.R. 1212 - No restriction appeared in chain of title to lot 86 - When original owners convey out lots, they impose restrictions, but never imposed restrictions on their own property. Would not have found any restrictions on lot 86 either in its own chain of title, or in chain of title of other lots. _Nahrstedt v. Lakeside Village Condominium Association, Inc._ Supreme Court of California, 1994 8 Cal. 4th 361, 878 P.2d 1275, 33 Cal. Rptr. 2d 63 - Court doesn't want to limit what 'private governments' can do too much because the market demands these kind of restricted housing. - Note 3: 'business judgment rule' -- requires bad faith for rule to be struck down. Courts have been very deferential to co-op boards. Co-ops as different from condos. Co-ops - Don't actually own your unit--own shares in corporation that own building - You get lease from corporation - If one unit doesn't pay lease, corporation still has to pay mortgage. Thus group is quite financially interdenpendent. - In condo, you have deed to each unit. If you fail to pay, your bank will foreclose on your unit. - Co-op board can be 'crazy' but can't violate Fair Housing Act. _Takings_ - Public land-use controls (v. servitudes--private land-use controls) - Government can protect public 'health safety and welfare' - Speed limits, building codes, environmental controls, etc.. - When government enacts police power provision that has a 'disproportionate' effect--how do we assess scope of police power, and what are limits on government's exercise of police power? - Unconstitutional takings - 5th amendment prohibits government from taking property without just compensation - Doesn't mention state governments, but supreme court (using 14th amendment) has said that 5th amendment applies to states - Substantive due process analysis _Euclid_ case -- upheld zoning -- legitimate exercise of police power What is zoning? - Divides land up into districts and restricts use of each district - Zoning is 'cumulative'--generally allows 'lesser uses' (like pyramid) - New York was first city in US to be zoned--didn't want immigrants working in factories to appear in tonier neighborhoods - Model Zoning Ordinance--still basic scheme for Zoning - Original zoning people thought they could come up with plan and it would be fixed forever time - Now pretty much 'deal-making' approach - Some states struck down as unconstitutional--not legitimate use of police power - Other states--good idea to segregate uses _Village of Euclid v. Ambler Realty Co._ (p. 950) Supreme Court, 1926 272 U.S. 365 - Unusual zoning arrangement - Vision: segregation of uses - Hierarchy of uses--some uses are better than others - Claim: zoning is unconstitutional--plaintiff won't be able to sell land at value expected - Not contesting ordinance as applied to his property, but ordinance itself - Did not seek relief from ordinance; variance, etc. "Necktau" -- Cambridge/BU Bridge case -- Zoning challenge as applied to parcel - Legitimate public benefit--planning--does more than separate industry from residences. Also keeps out apartment houses--has idyllic view of neighborhood, court analogizes between apartment houses and nuisances. - Which children to protect--those that live in single-family houses (note on p. 949) - Did not have confront segregation of single-family from two-families - Economic discrimination not protected by law - Euclid analysis as 'roadmap to the future'--what became problems with zoning - How to find out if new idea passes constitutional scrutiny - Meaning vs. Application - Meaning of Constitution doesn't change, Application may change. - Court doesn't closely examine decisions made by localities - Takes extremely deferential position - Makes analogy to nuisance law (will haunt us until current times) - Certainly a stretch to say apartment houses are nuisances - Essentially, municipalities can take into account own interests without looking at region, etc.. - Preservation of property values for single-family home is legitimate use of police power - Sutherland: Laissez-faire judge, "true lockenarian" Are there limits on how far the police power can go in Zoning? 5th amendment: government cannot take property for a public use without just compensation. 'Public use' broadly defined, includes government taking private property and giving it to another entity. Courts have been very deferential to local and other governments. 5th amendment is only limitation on federal power. At end of 19th century, supreme court decided that 14th amendment includes 5th amendment, thus binding states to 5th amendment. Does state regulation = taking of property? Essentially same regulations being applied to state and federal government. In 19th century, there would only be a taking if the government acquired your property--no sense of taking by regulation. _Loretto v. Teleprompter Manhattan CATV Corp._ (p. 1124) Supreme Court of United States, 1982 458 U.S. 419 - Statute requiring landlords to allow cable connections - Court holds that as long as 'physically takes up space' then it becomes a taking--attempt to come up with bright line test. 'Permanent physical occupation'. - Not a balancing test--not going to balance strength of public interest with intrusion; not going to look at economic impact (could increase property value, still doesn't matter) - Makes distinction between permanent and temporary invasions of space - Physical invasions have always been recognized (e.g., airplane flying overhead) - Some rules exist on landlords which don't amount to takings--e.g., requiring mailboxes, smoke detectors, etc.. Landlord owns mailboxes, smoke detectors, unlike cable installation, which landlord does not own. - Dissent does not see difference between regulatory controls and 'takings'. - Ends up awarding just $1 since cable boxes increased property value. _Note 5: Rent Control Issue_ (p. 1139) - Landlords were not allowed to evict rent controlled tenants. Court finds that since landlord initiated landlord-tenant relationship and tenant is already in property, situation is not controlled by _Loretto_, even though the economic impact to landlord is much greater than the cable box in _Loretto_. _Hadacheck v. Sebastian_ (p. 1140) Supreme Court of United States, 1915 239 U.S. 394 - Zoning-like restriction--certain districts of city cannot have a brick yard. - Owner claims very valuable clay area, purchased land because he could have brick yard. Worth $800,000 for brick making but only $60,000 for residential purposes. - Effect of ordinance is to take property without just compensation - 'Equal protection' type claim--being treated unfairly with respect to other brick yards. Court dismisses this claim--government doesn't have to be all-inclusive. Can regulate only one part of evil without violating equal protection, approach some of problem without approaching all of problem. - Court rules that this is not unconstitutional taking--does not deprive him of clay deposits, could transport it elsewhere. Plaintiff claims this makes it uneconomical and thus cannot make bricks. - Court is essentially deferring to legislative body, saying brick yard is 'nuisance-like'. Court does not want to balance pros and cons of brick yard, but deferring to legislative judgment. Question harm prevention v. benefit acquisition? When government says you can't build in wetlands or beach, which category? States generally develop their own bodies of law after Hadacheck--supreme court does not rule again until 1987. Example case on 1146 characterizes as harm prevention rather than benefit acquisition wetlands protection. _Pennsylvania Coal Co. v. Mahon_ (p. 1147) Supreme Court of the United States, 1922 260 U.S. 393 - Court is very activist in 'takings' interpretation, even though it is known as very conservative court. Cannot revert to historical interpretation. - Statute required company to leave enough coal in place to leave surface subsidence. - Court found statute to be unconstitutional. Holmes claim benefit is purely private--serves no public purposes. For benefit of one house, thus private. - Government should have purchased 'support estate'--government is acquiring the support estate, thus amounts to unconstitutional taking -without compensation. - Measure of economic impact: right to coal itself is right to mine it. Holmes looks at value of pillars of coal, whereas Brandeis looks at value of home as well. - Issue of 'total taking'--how much segmentation to allow when calculating value of taking. Issue with coastal development and other contexts. - Why is this not controlled by Hadacheck? - Use v. possession - Anti-majoritarian view - 'Progress'--refusal to see coal-mining as nuisance while willing to see brick-yard as nuisance. - Very hard to make distinction between harm prevention and benefit acquisition - 'Reciprocity of advantage/benefit' - Even though you are restricted, you are getting some of the benefit of others being restricted. - e.g., all mine owners share benefit of mine-safety law which requires keeping some coal in place. - Brandeis: harm prevention --> doesn't matter if there is reciprocity of advantage - Basic 'fairness': is it fair to impose this burden on a private landowner? - Efficiency concern: if government had to pay for benefit, would they have enacted statute? - Remedy in Pennsylvania Coal was invalidation--took until 1987 to have remedy be compensation -& Read keystone _Keystone Bituminous Coal Association v. DeBenedictis_ (p. 1157) 480 U.S. 470 470 (1987) Harm prevention vs. benefit acquisition. For benefit acquisition must be paid for. _Penn Central Transportation Co. V. City of New York_ (p. 1159) 438 U.S. 104 (178) - City declared Grand Central Station as landmark, Penn Central had to get New York City's permission to do anything. Penn Central claimed landmark law was taking. - NYC creates landmarks building-by-building, rather than 'historic districts' - Possible to transfer developmen rights--if landmark status restricts your ability to build higher where you already would be able to, you can transfer this increased height permission to somewhere else - Challenging landmark law both 'on its face' and as applied to this building. - How do we figure out 'if regulation went too far'? - Economic impact - Look at property as a whole, not just particular segment - Interference with reasonable investment-backed expectations--what does this mean?? - Fluid, open-ended idea _Palazzolo v. Rhode Island_ 121 U.S. 2448 - Recent supreme court case (this year) - Claim was that since land owner knew about regulation when he bought property on wetlands, his expectations would have been adjusted accordingly... Supreme Court rejected this reasoning, this does not preclude constitutional challenge. TDRs as 'funny money'. Pennsylvania Supreme Court has held its Historical Preservation Law to be unconstitutional. 'Equal protection'-like claim. Fairness and justice: party can't be singled out to pay for public benefit _Penn Central_ is basis for doctrine, essentially saying 'decide on case-bycase basis', fluid standard: nature of government action (is it invasion, nuisance-prevention, etc..), economic impact, investment-backed expectations. -& Nollan and Dolan Recommended: Read full text opinions of _Nollan_ and _Dolan_ cases Extreme deference--rational basis review. Under equal protection clause, if government is making distinction on race-very high level of review. If distinction is based on categorizations such Real distinction? as 'optometrist/opthamologist' etc, very low standard of review--legislative discrimination must just be rational. High level of review for gender as well. Are property rights being elevated to level of 'fundamental' right--e.g., 1st amendment right? Two pieces: - How deferential should courts be to legislatures? - Federalism--where is line between property rights being defined as matter of state common law and state legislation and how much should be 'federalized'/'constitutionalized'? Issue of Remedies - Example: city imposes one year building moratorium, landowners sue, in month 11 landowners win. What should remedy be? - Until 1987, remedy was invalidation. After 1987, Supreme Court decides there must be remedy of compensation for temporary taking. - Mere diminuition in value is not taking. - How to determine damages? - Look at value of 'option' on land; rental value; return on property for that period of time. Example situation: - People form community, one house per acre (private group) - One person wants to put two houses on acre. Private group says pay $150,000 instead of $100,000. Property owner says fine, because value of land goes up to $300,000. - Fine for private group, what about if government does it? _Nollan v. California Coastal Commission_ (p. 1181) Supreme Court of United States, 1987 483 U.S. 825 - Nollans owned small structure on coast, fell into disrepair. Nollans applied to Coastal Commission to build larger structure. Commission would permit structure if Nollan granted easement on coastal land--allow people to pass through (between public beaches). - Nollans not singled out--part of CCC program to give access to beach in exchange for building larger buildings. - Scallia used close scrutiny--surprised Coastal Commission who was expecting 'rational review' standard, strikes down law - Could be explained 'heightened level of scrutiny when actual land is being extracted'--limited to physical occupation cases - What kind of physical intrusion would be allowed after _Nollan_? - Coastal Commission denies building at all. - If House blocks view of beach, could extract permanent viewing access. Physical invasion is allowed when it directly alleviates impact of what Nollans want to do. - Not enough of a nexus between construction and easement. - Scallia makes analogy between shouting fire in a crowded theater - Sees developer as victim of very open-ended process Penn Central--could commission restrict Nollans to the current size of their property? Five part test out of _Nollan_: - Could government have forbidden use to begin with (could government have denied Nollans right to expand their bungalow)? - Would this have been a taking? - Identify adverse effects of denial of permits - Match exaction to those adverse effects - Case by case close scrutiny - Changed burden of proof to regulator to prove tight nexus _Dolan v. City of Tigard_ (p. 1186) Supreme Court of the United States, 1994 512 U.S. 374 - Need to prove a closer connection with bike path/traffic congestion relief--city needs to prove reduced traffic would be trips actually going to store - Unlike standard used in "_Penn Central_" case: - Look at nature of government's action - Economic effect--investment backed expectations of landowners - Court reasons that 'overall legislative scheme' justifies lesser level of scrutiny than specific judgment. - In this case there is a requirement to deed property unlike Penn Central - Legislative scheme v. specific judgment is very thin distinction. - "Rough proportionality" standard _Lucas v. South Carolina Coastal Council_ (p. 1198) Supreme Court of the United States, 1992 505 U.S. 1003 - South Carolina prevented Lucas from building seaward of a particular line - Claims that, even in case of harm prevention, if regulation wipes out all value to property, still constitutes taking. - Court tries to narrow scope of earlier case as only attempts to define police power, rather than addressing compensation issue - 'Total wipeout' issue - Was there really no value to property? Probably could have found people to buy property. - South Carolina Supreme Court had found property was valueless - Does this undermine _Penn Central_ or _Keystone_? - Issue of severance - "Nuisance" exception - State can take legislative action if it can prove that regulation was just effectuating a common-law nuisance - _Lucas_ rule would apply to complete wipeouts--_Penn Central_ would apply to other cases - Relies on some sort of 'expectations' argument to base constitutional argument Mean shore line Equitable Servitudes v. Real Covenants - Differences is in remedy - Need horizontal and vertical privity for real covenants (to be enforceable monetary damages) - Now require strict vertical privity for burden of covenant to run - Equitable Servitude (injunction) -- lesser requirements Courts will look at intent Notice issue -- what is your duty to go and look? Strict vertical privity: need to succeed to exactly the same estate _Mahrenholz_ - Cannot convey a future interest in Illinois Appurtenant easement -- attached to neighboring land, dominant estate has easement over servient estate Easement in gross -- unrelated to property -- e.g., utilities, railroad Joint tenancy v. tenancy in common -- no difference in possessory interest, just in right of survivorship (difference in unities). Problem with notice -- gambling about who will die first in case where you don't show deed unless the other person dies first -- requirement to be recorded. Tacking issue Two types of discrimination - Disparate treatment, disparate effects - Need to show that non-discriminatory reason was pretextual (discriminatory intent) -- individualized model - Facially neutral rule with disparate effects -- Arlington Heights -refusal to rezone - Need 'some evidence' of racial intent Statute of Limitations - Some ambiguity with disabilities - Does period begin to run when disability ends, or if normal statute of limitations is not over at that point? Usually courts pick up whichever is longer. Civil Rights Act §1981-§1982: - Give basic civil rights to former slaves - Limited to race - Very specific: right to convey, property rights, etc. - Covers both private and public discrimination. 14th amendment - Civil War amendment to rectify pre-civil war inequities. Body of doctrine extended from equal protection clause. Much broader scope than Civil Rights Act. - Only applies if there is State Action. Fair Housing Act - Different standards of proof. - Covers private acts of dicrimination. If State Action, Supreme Court has said you need to prove some intent. Examples: - Landlord 1 has no idea policy is discriminatory. - Landlord 2 knows it is but is not implementing it for that idea. - Landlord 3 knows it is and is doing it for that reason. Under discriminatory effect doctrine, only 2 and 3 would be liable, and possibly only 3. Not sufficient to say 'it violates fair housing act' -- need to explain *how* For example, in running housing only for women, could say it is providing services rather than housing. - Is this a fee simple determinable or fee simple subject to condition subsequent? - Are AAU and KIC tenants in common? - If you have a middleman for rent, does this effect assignment v. sublease? - Can Sound raise the rent on MMM?