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Real Estate and Medford Wisconsin

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					                                              OUTLINE - PROPERTY
                                    Professor Doremus - UC Davis Spring 1998
                                                                                                                 Prepared by Keith G. Wagner
                                                                                                                  USE AT YOUR OWN RISK



I. THE LAW OF SERVITUDES ..................................................................................................23
   A. CENTRAL ISSUES in LAND USE AGREEMENTS (pp 379-40) ....................................23
     1. Creating servitudes: Formality v. Informality .................................................................23
        a) Generally courts require a writing to enforce servitudes......................................................23
     2. Interpreting Ambiguities: Preferences and Presumptions .............................................23
        a) Effectuate intent of the grantor ..........................................................................................23
        b) Presumptions based on public policy ................................................................................23
     3. Compulsory Terms and Illegality .....................................................................................23
        a) Courts will not enforce such covenants against public policy ..............................................23
     4. Running with the Land ......................................................................................................23
        a) Land use agreements are treated as if they are attached to the land. ...................................23
        b) Technical rules govern whether promise "runs with the land.".............................................23
     5. Terminating Agreements ..................................................................................................23
        a) Doctrine of changed circumstances ...................................................................................23
        b) Other forfeiture ................................................................................................................23
   B. Licenses ................................................................................................................................23
     1. Licenses Generally ...........................................................................................................23
        a) Revocable permission to enter real property (p. 377) ........................................................23
        b) Person permitted to enter is LICENSEE (p. 77) ...............................................................24
        c) NON-TRANSFERABLE (p. 388) ..................................................................................24
        d) No writing required. .........................................................................................................24
        e) No exclusion allowed based on race .................................................................................24
        f) IRREVOCABLE LICENSES ..........................................................................................24
     2. IRREVOCABLE LICENSE (EASEMENT by ESTOPPEL) .........................................24
        a) 2 different types of easement by estoppel..........................................................................24
        b) May exist where grantor induces reliance on license ..........................................................24
        c) Easement by Estoppel is an EXCEPTION to SoF requirements. .......................................24
        d) MINORITY of courts do not recognize easement by estoppel. .........................................25
        e) See REVIEW PROBLEM, P 395....................................................................................25
     3. Constructive Trusts...........................................................................................................25
        a) A form of IRREVOCABLE LICENSE ............................................................................25
        b) Treats property AS IF owner had created a trust arrangement. .........................................25
   C. Easements.............................................................................................................................25
     1. Generally ...........................................................................................................................25
        a) IRREVOCABLE and usually PERMANENT right to enter OR control property possessed
        by another. (p. 378) .............................................................................................................25
        b) TRANSFERABLE..........................................................................................................25
        c) Generally must satisfy Statute of Frauds ............................................................................25
        d) Creates LIMITED INTEREST in someone else's property ...............................................25
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      e) AFFIRMATIVE EASEMENT ........................................................................................25
      f) NEGATIVE EASEMENT................................................................................................25
      g) SERVIENT ESTATE ......................................................................................................26
      h) DOMINANT ESTATE ...................................................................................................26
   2. Profits or Profits á Prendre ...............................................................................................26
      a) Rights to REMOVE objects from real property.................................................................26
      b) Are a FORM of AFFIRMATIVE EASEMENT ..............................................................26
D. Easements WITHOUT A WRITING .................................................................................26
   1. Easement by Estoppel (see Irrevocable License, above). ..............................................26
   2. Prescriptive Easement ......................................................................................................26
      a) REVIEW ADVERSE POSSESSION (Fall '97 outline). ...................................................26
      b) Actual, Open, Notorious, Hostile, Continuous use for the statutory period. ........................26
      c) Arguments for/against Prescriptive Easements ...................................................................26
      d) Generally, no acquisition of prescriptive easement by general public...................................26
   3. NEGATIVE EASEMENTS ..............................................................................................27
      a) NO NEGATIVE PRESCRIPTIVE EASEMENTS ..........................................................27
      b) LIMITS ON EXPRESS NEGATIVE EASEMENTS ......................................................27
   4. EASEMENTS v. SERVITUDES (covenants) .................................................................27
      a) Easements DO NOT require TOUCH & CONCERN. ....................................................27
      b) Easements DO NOT require PRIVITY of ESTATE. ........................................................27
      c) Easements ARE NOT subject to DOCTRINE of CHANGED CONDITIONS. ...............27
      d) EASEMENT may be held IN GROSS.............................................................................28
      e) Servitudes DO NOT grant ACCESS to another's land......................................................28
      f) R3d Property (Servitudes) would combine easements and restrictive covenants. .................28
      g) No affirmative easements to ACT on TRANSFERRED land.............................................28
   5. IMPLIED EASEMENT: Generally.................................................................................28
      a) Requires UNITY of TITLE ..............................................................................................28
      b) EASEMENT by RESERVATION ..................................................................................28
      c) EASEMENT by GRANT ................................................................................................28
   6. IMPLIED EASEMENT: Easement by Prior use............................................................28
      a) Elements ..........................................................................................................................28
      b) Also, buyers will be held to INQUIRY NOTICE standard (see NOTICE below) .............29
      c) Restatement Property §474: eight important circumstances for inferring and easement
      (BALANCING TEST): .......................................................................................................29
      d) TYPICAL APPLICATIONS ..........................................................................................29
   7. IMPLIED EASEMENT: Easement by necessity ...........................................................29
      a) Access over original grantor's land ....................................................................................29
      b) Policy concerns in granting easement by necessity .............................................................30
E. EXPRESS EASEMENT.......................................................................................................31
   1. EXPRESS EASEMENTS: Formal Requirements ..........................................................31
      a) Writing (p. 409) ...............................................................................................................31
      b) MAJORITY RULE: No reservation of easement in third party ..........................................31
   2. TWO TYPES of EASEMENTS ........................................................................................31
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      a) Appurtenant .....................................................................................................................31
      b) In Gross ..........................................................................................................................31
      c) To distinguish Appurtenant from In Gross, look to where the BENEFIT lies AND the
      INTENT of the GRANTOR. ...............................................................................................32
      d) Rationale for presuming appurtenant as the "right thing" to do. ..........................................33
   3. SCOPE of APPURTENANT & IN GROSS EASEMENTS ...........................................33
      a) 3 issues in examining whether scope encompasses new use ...............................................33
      b) SCOPE: KIND of USE ..................................................................................................33
      c) SCOPE: UNREASONABLE BURDEN .........................................................................33
      d) SCOPE: DIVISIBILITY or APPORTIONABILITY .......................................................34
      e) Extension of use to another parcel generally not allowed. ...................................................34
      f) Appurtenant easements can be use for "reasonable development" in the future. ...................34
      g) But, uses of an existing appurtenant easement must not place an UNDUE BURDEN on the
      servient estate. .....................................................................................................................34
      h) CHANGING LOCATIONS ...........................................................................................34
F. TERMINATION of EASEMENTS.....................................................................................35
   1. Ways to terminate .............................................................................................................35
      a) By express terms of easement...........................................................................................35
      b) By written release ............................................................................................................35
      c) By abandonment ..............................................................................................................35
      d) Adverse possession or prescription ..................................................................................35
      e) Merger ............................................................................................................................35
G. REAL COVENANTS and EQUITABLE SERVITUDES..................................................37
   1. Generally ...........................................................................................................................37
      a) Promises made by one landowner to another to use or not to use one's own land in particular
      ways. ...................................................................................................................................37
      b) Provide benefit holder with the right to prevent use on servient estate, OR .........................37
      c) Provide benefit holder with a right to compel a particular use on servient estate. .................37
      d) Enforceable against subsequent owners as long as requirements are met. ...........................37
      e) Easements are created by GRANT, Covenants are created by PROMISE. .......................37
      f) If broken, owner of benefited land may sue for $$ (Real Covenant) or INJUNCTION
      (Equitable Servitude). ...........................................................................................................37
   2. ELEMENTS of REAL COVENANT - Remedy at law ($$ damages) ...........................37
      a) WRITING .......................................................................................................................37
      b) INTENT to run with land (thus binding successors in interest) ...........................................38
      c) NOTICE (Actual, Inquiry, Constructive) ..........................................................................38
      d) PRIVITY of ESTATE .....................................................................................................39
      e) TOUCH & CONCERN ..................................................................................................39
   3. PRIVITY OF ESTATE (required for $$ damages) .........................................................39
      a) Privity originally developed as a way of LIMITING enforcement of covenants ...................39
      b) For BURDEN to run with land in REAL COVENANT, Horizontal and Vertical privity
      MUST exist. ........................................................................................................................39

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   c) For BENEFIT to run with land in REAL COVENANT, Horizontal privity may not be
   required, and vertical privity is relaxed. .................................................................................39
   d) Law of EQUITABLE SERVITUDES replaces privity with "COMMON SCHEME" and
   "THIRD-PARTY BENEFICIARY" doctrines. .....................................................................39
4. HORIZONTAL PRIVITY ................................................................................................39
   a) The relationship between the original convenanting parties. ................................................39
   b) The covenanting parties must have equal interest in their own land (typically fee simple)......39
   c) TWO TYPES: Instantaneous privity and Simultaneous (Mutual) privity .............................39
   d) Horizontal Privity DOES NOT EXIST in promises between neighbors. .............................40
   e) Horizontal Privity DOES NOT EXIST in promises made by grantor or grantee after
   conveyance. .........................................................................................................................40
   f) Horizontal Privity is a FORMALITY .................................................................................40
   g) Some courts allow the BENEFIT to run with land, even if Horizontal Privity is missing. (But,
   Horizontal Privity is REQUIRED for the BURDEN to run with the land)................................40
   h) R3d Property (Servitudes) would eliminate Horizontal Privity. ...........................................40
5. VERTICAL PRIVITY ......................................................................................................40
   a) The relationship between successive owners of land. .........................................................40
   b) Vertical privity exists where previous owner retains no interest in land................................40
   c) Vertical privity does not exist where:.................................................................................40
   d) R3d Property (Servitudes) would adopt relaxed view .......................................................41
   e) Homeowners Association may enforce real covenant. .......................................................41
   f) Practical result: Tenant cannot be sued for $$ damages. .....................................................41
6. TOUCH & CONCERN ....................................................................................................41
   a) The covenant must be connected to the use and enjoyment of land. ...................................41
   b) Traditional view was that restriction was on use of the land itself. .......................................41
   c) 2 Part test: Use or Enjoyment AND Market Value............................................................41
   d) Old court decisions did not recognize economic covenants as "touching and concerning" the
   land. ....................................................................................................................................41
   e) Modern view supports recognition of non-competition covenants. .....................................41
   f) Likewise, covenants to pay homeowners dues are enforceable at modern law. ...................41
   g) BURDEN and BENEFIT must touch and concern land.....................................................42
   h) PERSONAL SERVICES are not generally contemplated by Touch and Concern .............42
   i) If the BENEFIT does not touch and concern, but the BURDEN does, there is a split as to
   whether the benefit is enforceable. ........................................................................................42
   j) Split in finding touch and concern in AFFIRMATIVE COVENANTS ...............................42
   k) R3d Property (Servitudes) would eliminate touch and concern. .........................................42
7. EQUITABLE SERVITUDE - Remedy in equity (injunction) .........................................42
   a) No privity of estate required. ............................................................................................42
   b) REVIEW PROBLEM, p. 469. ........................................................................................43
8. IMPLIED NEGATIVE RECIPROCAL EASEMENT (INRE) .....................................43
   a) Based on concepts of COMMON SCHEME and THIRD PARTY BENEFICIARY .......43
   b) FACTORS INDICATING a COMMON SCHEME ......................................................44
   c) DEVELOPER CANNOT enforce restrictions once the last lot is sold. ..............................44
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      d) R3d would allow enforcement IN GROSS where party has "legitimate interest." (p. 490). .44
      e) EARLY vs. LATER Buyers .............................................................................................44
      f) THIRD PARTY BENEFICIARY Doctrine .......................................................................45
      g) UNIFORM PATTERN OF DEVELOPMENT puts later buyer on inquiry notice of
      restrictions within neighborhood. ...........................................................................................45
      h) Neighboring lots owned by grantor may be included in "common scheme" .........................45
      i) FACTORS which NEGATE COMMON SCHEME ........................................................45
      j) Neighboring lots may use third party beneficiary doctrine to enforce in equity, but not for $$
      damages. .............................................................................................................................46
      k) EXAMPLE cases ............................................................................................................46
   9. REVIEW PROBLEMS, p. 495-97. ..................................................................................47
H. LIMITATIONS on SUBSTANTIVE CONTENT of SERVITUDES................................47
   1. No unreasonable restraints on alienation. .......................................................................47
      a) Review policies against unreasonable restraints on estates in land (Fall '97 outline). ............47
      b) Reasonable or indirect restraints may be upheld. ...............................................................47
   2. No Racially Restrictive Covenants..................................................................................47
      a) Such covenants violate 14th amendment IF enforced by STATE ACTION .......................48
      b) MODERN LAW: such covenants violate the Fair Housing Act, 72 USC §§ 3601 et seq. 48
      c) MODERN LAW: such covenants also violate the civil Rights Act of 1866, 42 USC §§
      1981, 1982..........................................................................................................................48
      d) Also contravene modern public policy. .............................................................................48
      e) Some states have passed legislation invalidating such restrictions. .......................................48
      f) EXAMPLES ....................................................................................................................48
   3. DOCTRINE of CY PRES and Unenforceable Covenants ..............................................49
      a) Modifying otherwise unenforceable covenants ...................................................................49
I. TERMINATION of COVENANTS .....................................................................................49
   1. Ways of terminating covenants: .......................................................................................49
      a) Express terms. .................................................................................................................49
      b) Merger. ...........................................................................................................................49
      c) Written release. ................................................................................................................49
      d) Prescription .....................................................................................................................50
      e) Marketable title statute .....................................................................................................50
   2. Doctrine of Changed Conditions ......................................................................................50
      a) DOES NOT APPLY TO EASEMENTS .........................................................................50
      b) Covenants will not be enforced if conditions have changed drastically. ...............................50
      c) Changed Conditions focuses on the DOMINANT PARCEL. ...........................................50
      d) Doctrine may apply where changes occur outside of a subdivision. ....................................50
      e) Restatement Property § 164 allows damages when a finding of changed conditions is made.50
   3. Doctrine of RELATIVE HARDSHIP ..............................................................................50
      a) Relative Hardship focuses on the SERVIENT estate. ........................................................51
   4. INJUNCTIONS v. $$ Damages.......................................................................................51
      a) Traditional Economic Arguments (see LAW and ECONOMICS, Fall '97 outline) .............51
   5. EQUITABLE DEFENSES and OTHER WAYS TO TERMINATE SERVITUDES....51
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         a) Acquiescence, abandonment, or unclean hands .................................................................51
         b) Estoppel ..........................................................................................................................51
         c) Laches .............................................................................................................................51
         d) Marketable Title Acts ......................................................................................................52
      6. REVIEW PROBLEM, p. 515-16. ....................................................................................52
         a) Another daycare center controversy. ................................................................................52
   J. REFORMING THE LAW OF SERVITUDES (pp. 11-26, reader) ...................................52
      1. Restatement tries to persuade Jx to adopt unified approach to servitudes...................52
         a) Eliminate touch and concern .............................................................................................52
         b) Eliminate privity................................................................................................................52
         c) Base enforcement on reasonableness and public policy......................................................52
      2. Some formalities may serve beneficial purposes ............................................................52
         a) Requiring writing and privity provides assurance that owners understand the gravity of the
         promise................................................................................................................................52
         b) touch and concern assures promise has something to do with land use & enjoyment...........52
      3. CONSERVATION EASEMENT.....................................................................................52
         a) A promise not to develop specific land..............................................................................52
II. COMMON OWNERSHIP......................................................................................................52
   A. Forms of Co-Ownership .......................................................................................................52
     1. TENANCY IN COMMON ..............................................................................................52
        a) Preferred at law ...............................................................................................................52
        b) Tenants in common each have right to possess entire property...........................................52
        c) Tenants in Common may transfer w/o permission of co-owners. ........................................52
     2. JOINT TENANCY............................................................................................................52
        a) Co-owners have RIGHT of SURVIVORSHIP.................................................................52
        b) Typical form of ownership for spouses in some states........................................................52
     3. Creating a Joint Tenancy: THE FOUR UNITIES .........................................................52
        a) TIME ..............................................................................................................................52
        b) TITLE .............................................................................................................................53
        c) INTEREST......................................................................................................................53
        d) POSSESSION................................................................................................................53
        e) NOTE: Some states have done away with one or more of these formalities. .......................53
     4. Severance of a Joint Tenancy ..........................................................................................53
        a) Joint tenancy is terminated by sale of interest to another.....................................................53
        b) Permission of co-owner is not required to sell. ..................................................................53
        c) Only co-owner who transfers is no longer joint tenant........................................................53
     5. CONFLICTING authority as to effect of leasing one's joint tenant interest. ...............53
        a) CA RULE: Joint Tenancy NOT affected by lease to third party. .......................................53
        b) NB RULE: Lease continues beyond joint tenancy ............................................................54
        c) MD RULE: Lease DESTROYS joint tenancy ..................................................................54
     6. Mortgages and joint tenancy: LIEN theory v. TITLE theory (note 4, p. 727). .............54
        a) LIEN theory: Joint tenancy is preserved. ..........................................................................54

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     b) TITLE theory: Joint tenancy destroyed. ...........................................................................54
  7. Creating a "lasting" joint tenancy ...................................................................................54
     a) Dual life estates with alternative contingent remainders. (p. 711) ........................................54
  8. Interpreting conveyances: Tenancy in Common v. Joint Tenants .................................55
     a) Presumption is of Tenancy in Common. (p. 711) ...............................................................55
     b) Co-owners can ONLY transfer the interest they have in property......................................55
     c) AGREEMENT b/t co-owners not to lease without permission of others IS NOT an
     unreasonable restraint ...........................................................................................................55
  9. OBLIGATIONS of CO-OWNERS ..................................................................................55
     a) Sharing the benefits of ownership ......................................................................................55
     b) OUSTER defined ............................................................................................................55
     c) Co-owners share any rents paid by third parties. ...............................................................56
     d) Any co-owner may lease her interest without consent of other co-owners..........................56
     e) Sharing the Burdens of ownership .....................................................................................56
     f) REVIEW PROBLEM, p. 718-19 .....................................................................................56
  10. PARTITION....................................................................................................................56
     a) Joint tenants or tenants in common may file for partition. ....................................................56
     b) Agreements to not partition are generally VOID as restraints on alienation. ........................57
  11. ADVERSE POSSESSION and OUSTER......................................................................57
     a) Co-owners cannot normally adversely possess against one another....................................57
  12. TENANCY by the ENTIRETY (married couples) ........................................................58
     a) Form of joint tenancy ONLY available to married couples. ...............................................58
     b) Similar to Joint Tenancy EXCEPT: ...................................................................................58
     c) The co-owners must be legally married. ............................................................................58
     d) The property cannot be partitioned except through divorce. ..............................................58
     e) No transfer of interest w/o consent of other.......................................................................58
     f) Attachment by creditors for ONE spouses debts ...............................................................58
  13. COMMUNITY PROPERTY (CA RULE for married couples)....................................58
     a) Property acquired before marriage remains under sole ownership. .....................................58
     b) Property acquired during marriage is owned by "community" as a partnership ....................58
     c) "Manager" of community property has fiduciary duties to spouse. ......................................58
     d) Typically, statutes REQUIRE that spouses agree to disposition of property under community
     ownership. ...........................................................................................................................58
     e) Distribution on divorce varies............................................................................................59
     f) No right of survivorship .....................................................................................................59
B. OWNERSHIP and DISTRIBUTION of MARITAL PROPERTY ...................................59
  1. States deal with marital property 3 ways .........................................................................59
     a) Tenancy by Entirety..........................................................................................................59
     b) Community Property (CA RULE) ....................................................................................59
     c) Separate Property............................................................................................................59
C. DIVORCE and MARITAL PROPERTY ...........................................................................59
  1. ALL states have rules about distribution of property on divorce. ..................................59

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         a) Typically involves EQUITABLE proceedings which BALANCE the parties interests (see
         O'Brien v. O'Brien, supra) ...................................................................................................60
      2. CA STATUTES on DISTRIBUTION of EQUITABLE PROPERTY............................60
         a) CA Family Code § 2641 (p. 1125-26).............................................................................60
   D. DISTRIBUTION of PROPERTY for UNMARRIED COUPLES ....................................60
      1. Theories for Recovery by UNMARRIED PARTNERS ................................................60
         a) Meretricious Relationship .................................................................................................60
         b) Contract (CA RULE) ......................................................................................................60
         c) ELEMENTS of UNJUST ENRICHMENT:.....................................................................61
         d) ELEMENTS of CONSTRUCTIVE TRUST....................................................................61
         e) Contract theory continued… ............................................................................................61
         f) Partnership .......................................................................................................................61
      2. Imposition of Constructive Trusts ....................................................................................61
         a) May be imposed to protect reliance interest of non-owning party.......................................61
      3. Property rights on Death ..................................................................................................62
         a) in "Partnership" Jx ............................................................................................................62
   E. ARGUMENTS FOR & AGAINST SPECIAL PROPERTY STATUS for MARRIED
   PERSONS .................................................................................................................................62
      1. SHOULD we have rules which ONLY protect MARRIED COUPLES?.......................62
         a) Arguments for: .................................................................................................................62
         b) Arguments against ............................................................................................................62
      2. Should such rules only cover property acquired after the marriage?.............................62
         a) Argument against..............................................................................................................62
         b) Argument for ...................................................................................................................62
      3. Should married persons be able to obtain sole interest in property after marriage? ....62
         a) Argument for:...................................................................................................................63
         b) Argument against:.............................................................................................................63
      4. Should rules allow spouses to transfer property without consent? .................................63
         a) Argument for:...................................................................................................................63
         b) Argument against:.............................................................................................................63
      5. Should courts allow Married Couples to insist on PARTITION on separation?...........63
         a) Argument for:...................................................................................................................63
         b) Argument against:.............................................................................................................63
   F. RIGHTS IN THE FAMILY HOME....................................................................................63
      1. DOMESTIC VIOLENCE and PROTECTIVE ORDERS..............................................63
         a) Domestic Abuse Restraining Orders and Injunctions..........................................................63
         b) TAKINGS and TRO's.....................................................................................................63
III. COMMON INTEREST COMMUNITIES (CIC's).............................................................63
   A. General Information.............................................................................................................63
      1. FACTORS FUELING GROWTH if CIC's .....................................................................63
         a) Tax Breaks for Owner Occupied Housing ........................................................................63
         b) Greater Security Interest Protection than traditional forms of limiting use. ...........................63

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     c) Access to shared amenities through sharing costs ..............................................................63
     d) Dissatisfaction with services rendered by local government. ...............................................64
  2. ELEMENTS COMMON to various forms of CIC's ......................................................64
     a) Exclusive occupancy rights to a dwelling unit .....................................................................64
     b) Co-ownership of common areas.......................................................................................64
     c) Detailed covenants, conditions and restrictions (CC&R's) governing use & transfer............64
     d) Assessment fees to operate CIC ......................................................................................64
     e) Participation in governance of CIC by owners...................................................................64
B. PREDOMINANT FORMS of CIC's ..................................................................................64
  1. COOPERATIVES (Reader, p. 28) ...................................................................................64
     a) Typically uses CORPORATION or BUSINESS TRUST model. .....................................64
     b) Most often used to structure ownership in MULTI-UNIT BUILDINGS. ..........................64
     c) "Owners" hold STOCK in CORP. which grants 'PROPRIETARY LEASES." ..................64
     d) CORP. CHARTER & BYLAWS govern use by and responsibilities of owners.................64
  2. CONDOMINIUMS (Reader, p. 29) ................................................................................64
     a) Members OWN their individual unit in FEE SIMPLE........................................................64
     b) Typically deal with multi-unit structures/ ............................................................................64
     c) OWNERS possess title part way through exterior walls. ...................................................64
     d) Owners are TENANTS in COMMON with respect to land and common areas................64
     e) ESTABLISHMENT of CONDOMINIUM: DECLARATION, BYLAWS and
     INDIVIDUAL DEEDS........................................................................................................64
  3. PLANNED UNIT DEVELOPMENTS (PUD's) / SUBDIVISIONS with
  MANDATORY HOA's (reader, p. 31) ................................................................................65
     a) Homeowners own both the house and the land underneath. ...............................................65
     b) Developer establishes non-profit corp. to manage common areas. .....................................65
     c) PUD's have "quasi-democratic" decisionmaking structure ..................................................65
     d) PUD's structure controlled by STATUTES / ZONING ORDINANCES ..........................65
     e) Developer records DECLARATION of CC&R's.............................................................65
C. COMPARISON / CONTRAST of FORMS OF CIC's ......................................................65
  1. Where building is DESTROYED .....................................................................................65
     a) Cooperative: corporation determines how to use insurance proceeds ................................65
     b) Condominium / PUD: Individual owners retain more power over insurance proceeds .........65
D. Typical DECLARATION of CC&R's ................................................................................65
  1. See DECLARATION of PROTECTIVE COVENANTS for BLACKACRE
  COMMUNITY ASSOC. (Reader, p. 32-43.) ......................................................................65
  2. QUESTIONS to ASK when examining CC&R's and Bylaws.........................................65
     a) What power does HOA exercise over aesthetic conditions? ..............................................65
     b) Who sets the standards? How? .......................................................................................65
     c) Who decides of owners are in compliance? On what basis? .............................................65
     d) What limits are placed on the Board's decisions? ..............................................................65
     e) How are board members selected? Who has control? ......................................................65
     f) Who votes? Owners? Tenants? .......................................................................................65
     g) How are fees established? What are penalties for non payment? .......................................65
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      h) How are penalties assigned? Who determines $$ amount? ...............................................65
E. Legislation Governing CIC's ...............................................................................................65
   1. EARLY CIC's....................................................................................................................65
      a) Before specific legislation, CIC's were created through general state corporate and common
      law. .....................................................................................................................................65
   2. CRITICISMS leading to STATUTORY REFORM of CIC's ........................................65
      a) Lack of reasonable control over fee structures and increases .............................................65
      b) Lack of reasonable control over maintenance and costs of upkeep of common areas .........65
      c) Lack of reasonable control over HOA's structure and governance .....................................65
      d) Owners may be saddled with extensive retrofit costs in older buildings...............................66
   3. UNIFORM CONDOMINIUM ACT (UCA) ...................................................................66
      a) Required greater disclosure requirements and consumer protections. .................................66
   4. UNIFORM COMMON INTEREST OWNERSHIP ACT (UCIOA) ............................66
      a) Developed COMPREHENSIVE and CONSISTENT guidelines for all CIC's...................66
      b) Newest state legislation draws from this act ......................................................................66
      c) See pp. 47-54 of Reader for SPECIFIC PROVISION of UCIOA ..................................66
   5. THREE AREAS of CIC's typically controlled by MODERN LEGISLATION (Reader,
   pp. 46-47) ...............................................................................................................................66
      a) Requirements mandating DISCLOSURE of information to prospective purchasers (Reader,
      p. 46) ..................................................................................................................................66
      b) Requirements governing PROCEDURES of HOA's (Reader p. 47) ..................................66
      c) Requirements governing SUBSTANTIVE REGULATION of CIC's (Reader, p. 55) ........66
F. JUDICIAL ROLE in OVERSIGHT of CIC's .....................................................................67
   1. Court must first determine appropriate STANDARD of REVIEW ...............................67
      a) most courts adopt standard of "reasonableness." ...............................................................67
   2. CONTRACT/CONSENT MODEL .................................................................................67
      a) Court should DEFER to HOA's JUDGMENT..................................................................67
      b) Assumes owners' VOLUNTARY INFORMED CONSENT to CC&R's. ........................67
      c) May be problematic with regard to SUBSEQUENT AMENDMENTS to bylaws. ............67
      d) Concept of "PARTICIPATORY CONSENT".................................................................67
      e) Emphasizes "freedom of K" aspects of CIC's ....................................................................67
   3. LOCAL GOVERNMENT MODEL ................................................................................67
      a) Court should apply EXTERNAL STANDARD to assess validity of CIC restrictions. ........67
      b) CIC should be subject to same standards of constitutional review as local governments. ....67
   4. ADMINISTRATIVE AGENCY MODEL.......................................................................68
      a) "Middle ground" b/t Contract Model and Local Government Model ..................................68
      b) Court uses BALANCING TEST .....................................................................................68
      c) HOA must give NOTICE to homeowners, .......................................................................68
      d) HOA must give FAIR OPPORTUNITY to be HEARD, and............................................68
      e) HOA must provide a concise statement of BASIS for DECISIONS RENDERED. ...........68
      f) HOA may not promulgate "arbitrary or capricious" rules. ...................................................68
      g) Whoever bears the burden of proving "arbitrary and capricious" is at disadvantage.............68
   5. CORPORATE BOARD MODEL ...................................................................................69
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     a) Decisions of HOA must be within DELEGATED AUTHORITY.......................................69
     b) HOA Board Member assigned FIDUCIARY DUTY to membership of CIC ....................69
     c) Court emphasizes controlling bad faith, fraud or actions beyond delegated authority. ..........69
     d) CRITICISM: For-profit corp. model may not suit needs of non-profit community
     organization..........................................................................................................................69
  6. TRUST MODEL...............................................................................................................69
     a) Similar to Corporate Model..............................................................................................69
     b) HOA is viewed as TRUSTEE who manages property for owner-beneficiaries ...................69
     c) CRITICISM: Trusts are generally designed to serve parties who are incapable of making
     their own decisions. ..............................................................................................................70
G. Conflicts Among Condo Owners - RESTRAINTS on ALIENATION ..............................70
  1. Right of PREEMPTION...................................................................................................70
     a) Condo Assoc. Board MUST exercise a right of first refusal REASONABLY....................70
     b) Condo Assoc. Board MUST FOLLOW ITS OWN RULES in exercising the right of
     preemption...........................................................................................................................70
     c) Right of First Refusal must be RATIONALLY RELATED to protect, preservation or proper
     operation of the property and the association ........................................................................70
     d) Right of First Refusal must be exercised in a FAIR and NON-DISCRIMINATORY manner70
     e) "REASONABLE" Right of First Refusal must compensate current owner. .........................70
     f) Condo Assoc. Board Members are FIDUCIARIES of the members. ................................70
     g) Failure to follow BYLAWS may result in liability for the association and for the individual
     Board members. ..................................................................................................................70
  2. Rule Against Perpetuities .................................................................................................71
     a) See RAP and PREEMPTIVE RIGHTS in Fall outline .......................................................71
     b) MOST Jx hold that preemptive rights BY DISINTERESTED PARTIES are subject to the
     RAP. ...................................................................................................................................71
     c) BUT if preemptive right IS HELD by a CONDO ASSOCIATION or HOA, most Jx will
     uphold the right (see note 6, p. 615). ....................................................................................71
  3. Requirement of PRIOR CONSENT by Condo Assoc. ...................................................71
     a) VERY SUSPECT type of clause b/c the violation is not triggered until AFTER the SALE. .71
     b) Restrictions on right to transfer are valid as a means of controlling overall environment of
     Condo. ................................................................................................................................71
     c) HOWEVER, such restrictions are INVALID where they contravene PUBLIC POLICY or
     CONSTITUTIONAL RIGHTS. ..........................................................................................71
     d) If the restriction constitutes a RESTRAINT of ALIENATION, it must be REASONABLE.71
     e) Rule "IN PLACE" at time of purchase generally upheld .....................................................71
     f) "POST FORMATIVE" rules will be examined for REASONABLENESS .........................71
     g) ANY restraint may be valid where Assoc. must pay owner FMV. .....................................71
     h) Reverter clause in HOA bylaws is HIGHLY SUSPECT as INVALID. .............................71
  4. RESTRICTIONS on LEASING ......................................................................................72
     a) Restrictions on Leasing are generally OKAY IF DISCLOSED at time of PURCHASE .....72
     b) BUT, some states have STATUTES which LIMIT ENFORCEABILITY of
     RESTRICTIONS to ONLY THOSE which are recorded AT THE TIME OF SALE. ..........72
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        c) ND RULE: SOME Amendments to Bylaws after purchase restricting leasing ARE
        INVALID............................................................................................................................72
        d) CA RULE: Amendments to Bylaws after purchase restricting leasing ARE VALID............72
        e) Restriction of SHORT TERM LEASES may be reasonable ..............................................72
   H. THE FUTURE of CIC's .......................................................................................................73
     1. CONCERNS about CIC's ................................................................................................73
        a) DURATION ...................................................................................................................73
        b) PROPOSED SOLUTION: LIMIT ability to ENFORCE after a set number of years .......73
        c) NEGATIVE EFFECTS on INDIVIDUAL RIGHTS ........................................................73
        d) PROPOSED SOLUTION: Incorporate a minimum "Bill of Rights" into CC&R's or require
        them legislatively...................................................................................................................73
        e) See READER, p. 74-75 for FRENCH'S Bill of Rights......................................................73
        f) PROPOSED SOLUTION: BROWER: Two step system instead of Bill of Rights. ............74
        g) DEFINITIONS of "COMMUNITY" can also VARY, leading to conflicts. .......................74
IV. LANDLORD-TENANT RELATIONS .................................................................................74
  A. LEASEHOLD ESTATES.....................................................................................................74
     1. Types of Tenancies ...........................................................................................................74
        a) Commercial Tenancy........................................................................................................74
        b) Residential Tenancy .........................................................................................................74
     2. Categories of Tenancies ...................................................................................................74
        a) Term of Years..................................................................................................................74
        b) Periodic Tenancy .............................................................................................................74
        c) Tenancy at Will ................................................................................................................74
        d) Tenancy at Sufferance ......................................................................................................75
     3. STATUTE of FRAUDS.....................................................................................................75
        a) All transfers of interest in real property MUST BE IN WRITING. ....................................75
        b) EXCEPT for cases involving: ADVERSE POSSESSION, PRESCRIPTIVE
        EASEMENTS, EASEMENTS by ESTOPPEL and NECESSITY. ......................................75
        c) Leasehold of LESS THAN ONE YEAR may be ORAL. .................................................75
     4. REGULATION of LL/T RELATIONSHIPS ..................................................................75
        a) PROCEDURAL regulations .............................................................................................75
        b) SUBSTANTIVE regulations ............................................................................................75
     5. Procedures for REMOVAL of TENANTS ......................................................................75
        a) self-help vs. Judicial Process.............................................................................................75
        b) See NEW JERSEY ANTI-EVICTION ACT, p. 765. .....................................................75
     6. REMOVAL of EMPLOYEE/TENANTS.........................................................................75
        a) COMMON LAW: Employee who received board in exchange for services was NOT
        considered a tenant. .............................................................................................................76
        b) MODERN LAW: Will examine statutes to determine whether "employee" falls within such
        status. ..................................................................................................................................76
        c) Where K of tenancy is the result of UNFAIR BARGAINING, courts will modify K or imply
        necessary terms to preserve dignity of tenant (Vásquez, p. 771). ...........................................76

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     d) ALSO, see PROBLEM at p. 781 (Students in Dorms who sign "license") .........................76
B. CONFLICTS ABOUT RENT..............................................................................................76
  1. Landlord's RIGHTS..........................................................................................................76
     a) Right to RECEIVE RENT ................................................................................................76
     b) Right to have premises maintained intact (subject to NORMAL wear and tear). ................76
     c) Right to REVERSION after term of lease is up. ................................................................76
  2. LL's REMEDIES when TENANT REFUSES to LEAVE: SUMMARY PROCESS....76
     a) LL may sue for POSSESSION and BACK RENT ..........................................................76
     b) HOLDOVER TENANTS and RENEWAL of TENANCY .............................................76
     c) OLD VIEW: LL may use SELF-HELP ...........................................................................77
     d) SUMMARY PROCESS .................................................................................................77
  3. LANDLORD'S REMEDIES when TENANT LEAVES ................................................77
     a) Landlord may ACCEPT the TENANT'S SURRENDER ..................................................77
     b) LL may SUE for DAMAGES (difference b/t RENT and FMV) ........................................77
     c) LL may RE-LET on the TENANT'S ACCOUNT ............................................................78
     d) LL can WAIT and SUE for RENT AT THE END OF THE TERM .................................78
     e) MODERN TREND: LL MUST make REASONABLE ATTEMPTS to MITIGATE
     DAMAGES.........................................................................................................................78
     f) See QUESTION on 794. SHOULD LL be allowed to "disclaim" duty to mitigate? ...........79
  4. REGULATION of SECURITY DEPOSITS ....................................................................79
     a) Some states regulate security deposits...............................................................................79
C. CONFLICTS about OCCUPANCY.....................................................................................79
  1. Landlord's Duty to Deliver Possession............................................................................79
     a) Failure to deliver the premises at the beginning of the lease term is a BREACH by the LL. .79
     b) MINORITY RULE: LL only has to deliver the RIGHT to possession, not actual possession.
     ............................................................................................................................................79
  2. Landlord's rights to transfer her REVERSION ..............................................................79
     a) Landlord may transfer their property interest. ....................................................................79
     b) NEW owner ONLY RECEIVES what LL could sell. .......................................................79
  3. Tenant's right to Assign or Sublet ....................................................................................79
     a) Tenant may ASSIGN or SUBLET unless the lease EXPRESSLY FORBIDS such action..79
     b) Provision denying ability to sublet IS NOT (generally) an UNREASONABLE
     RESTRAINT.......................................................................................................................79
     c) ASSIGNMENT: Conveys ALL of the tenant's remaining interest without reserving any
     future rights. .........................................................................................................................79
     d) SUBLEASE: Tenant reserves right of re-entry. .................................................................79
     e) In ASSIGNMENT, the new tenant is DIRECTLY RESPONSIBLE to LL for rent. ..........79
     f) Under SUBLEASE, new tenant IS NOT responsible to LL for rents. Original tenant is......79
     g) ASSIGNMENT does NOT RELIEVE original tenant of duty to pay rent if new tenant
     defaults. ...............................................................................................................................79
     h) Think of VERTICAL PRIVITY when deciding whether LL can sue for $$ damages..........79
     i) If lease FORBIDS sublease/assignment, LL MIGHT be assigned duty or reasonableness. ..80

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      j) OR, in some cases, LL may be denied right to enforce provisions through WAIVER or
      ESTOPPEL. ........................................................................................................................80
   4. Commercial Lease: LL MIGHT be assigned duty to be "REASONABLE"...............80
      a) MAJORITY VIEW: (Commercial lease) LL does NOT have duty to be REASONABLE in
      denial. ..................................................................................................................................80
      b) MINORITY VIEW" (Commercial lease) LL must be reasonable. .....................................80
      c) DISSENT: Would enforce the lease's PLAIN LANGUAGE. ..........................................80
      d) In commercial lease, REASONABLENESS will be determined by JURY as to what is
      "commercially reasonable." ...................................................................................................80
      e) GENERAL TREND: is toward imposing "reasonableness" standard into commercial lease.80
   5. Residential Leases: LL does NOT have to be REASONABLE in denial of sublease 80
      a) Courts less likely to assign duty of "reasonableness" in allowing assignment of residential
      sublease b/c LL may live in building too. ...............................................................................80
      b) NY RULE: Reasonableness in allowing sublet in residential leases is imposed by STATUTE.
      ............................................................................................................................................81
      c) NO CLEAR RULE EMERGES in this area, rules vary state to state. ................................81
D. COVENANT of QUIET ENJOYMENT and CONSTRUCTIVE EVICTION .................81
   1. If LL breaches Covenant of Quiet Enjoyment, T's duty to pay rent may be excused...81
      a) Where LL's acts SUBSTANTIALLY DEPRIVE T of the BENEFICIAL USE and
      ENJOYMENT of the property, the covenant is breached. ....................................................81
      b) IF only a part of the lease is rendered useless, T may only be relieved of a percentage of the
      payments. ............................................................................................................................81
      c) Puni's may be assessed if LL's acts are INTENTIONAL and MALICIOUS .....................81
      d) MINORITY RULE: Tenant DOES NOT have to move out to be "CONSTRUCTIVELY
      EVICTED" ..........................................................................................................................81
      e) MAJORITY RULE: Tenant DOES have to be literally forced out. ...................................81
      f) AND, if LL merely creates nuisance, or fails to abate nuisance under her control, T may be
      "constructively evicted".........................................................................................................81
      g) If a disturbing condition is a NATURAL and PROBABLE consequence of a LL's actions,
      CONSTRUCTIVE EVICTION may follow. ........................................................................82
      h) COVENANT of QUIET ENJOYMENT is an IMPLIED TERM in every lease. ...............82
      i) See PROBLEM, p. 840. (woman who is sexually harassed by neighbor in apartments. Can
      she move out? Is it constructive eviction?) .............................................................................82
E. IMPLIED WARRANTY of HABITABILITY....................................................................82
   1. COMMON LAW: No LL duty to make premises habitable.........................................82
      a) Duties of LL and T were INDEPENDENT ......................................................................82
      b) Based on traditional view of lease as an transfer of an interest in land. ................................82
   2. MODERN LAW: LL does have a duty to maintain and repair ....................................82
      a) Based on modern view of lease as K relationship ..............................................................82
      b) Also, it makes little sense to put such duties on apartment dwellers ....................................82
   3. Warranty of Habitability ...................................................................................................82
      a) Guarantees a minimum "package of goods" when seeking shelter .......................................82
      b) Majority of Jx now have warranty of habitability for RESIDENTIAL leases. .....................83
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      c) BUT, states are split on whether warranty applies to COMMERCIAL leases. ...................83
   4. REMEDIES for BREACH of IMPLIED WARRANTY of HABITABILITY ..............83
      a) Recission: The right to move out. .....................................................................................83
      b) RENT WITHHOLDING.................................................................................................83
      c) RENT ABATEMENT .....................................................................................................83
      d) Repair and Deduct ...........................................................................................................83
      e) Injunctive Relief/Specific Performance ..............................................................................83
      f) Administrative Remedies ...................................................................................................83
      g) CRIMINAL PENALTIES ...............................................................................................83
      h) Compensatory Damages ..................................................................................................84
   5. SHOULD WE ALLOW PARTIES to contract OUT of the IWH? .................................84
      a) Two kinds of arguments: RIGHTS and ECONOMICS....................................................84
      b) RIGHTS: FREEDOM of K ARGUMENTS:...................................................................84
      c) ECONOMIC ARGUMENTS .........................................................................................85
      d) EFFECTS on DISTRIBUTION ......................................................................................85
F. RETALIATORY EVICTION ..............................................................................................86
   1. TRADITIONAL VIEW: LL can terminate for ANY REASON....................................86
      a) At end of lease term, LL could terminate for any reason, or for NO REASON. .................86
      b) BUT, this could lead to T's being afraid to assert their rights. .............................................86
   2. MODERN VIEW: T's protected for CERTAIN KINDS of actions .............................86
      a) State Statute may protect T's when they form Tenants' Association, or complain about code
      violations..............................................................................................................................86
      b) BUT, once violations of codes are taken care of, T's do not have a right to stay FOREVER.86
      c) LL may later evict for legitimate reason or no reason at all. ................................................86
      d) BUT, they cannot evict in RETALIATION.......................................................................86
      e) Some statutes GIVE a period of time where ANY eviction is PRESUMED to be retaliatory.86
   3. FACTORS in DECIDING if EVICTION IS RETALIATORY (R2d Property § 14.8
   comment f.). ...........................................................................................................................86
      a) The LL's decision was a reasonable exercise of business judgment ....................................87
      b) The LL, in good faith, desires to dispose of entire property free of tenants .........................87
      c) The LL in good faith desires to make a different use of the leased property ........................87
      d) The LL lacks financial ability to repair the property, and therefore wishes to have it free of
      T's .......................................................................................................................................87
      e) The LL was unaware of T's activities which are protected under Retaliatory Eviction Statute87
      f) The LL did not act at 1st opportunity after leaning of T's conduct .......................................87
      g) The LL was not discriminatory..........................................................................................87
   4. RETALIATORY EVICTION MUST deal with CONDITION OF PREMISES...........87
      a) Disputes as to other matters DO NOT QUALIFY............................................................87
   5. EVIDENTIARY BURDENS in RETALIATORY EVICTIONS (Based on Bloomquist
   case (IA Statute)). .................................................................................................................88
      a) If T's showing is sufficient to imply Retaliatory Eviction, then there is REBUTTABLE
      PRESUMPTION that LL acted in retaliation. .......................................................................88
      b) Then, LL must introduce evidence sufficient to REBUT the PRESUMPTION ...................88
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     c) If LL succeeds, then T must PROVE eviction was retaliatory. ...........................................88
     d) AND there is a 6 month limit (after that, LL can evict at will). ............................................88
G. DISCRIMINATION in LEASING .....................................................................................88
  1. FAIR HOUSING ACT 42 USC §§ 3601-3619 (pp. 981-987) ..........................................88
     a) §3601: It is the POLICY of the US to provide for FAIR HOUSING throughout the US. ..88
     b) §3603(b)(2): Act DOES NOT APPLY to 4 unit or less apartment where owner resides in
     one of the units. ....................................................................................................................88
     c) §3603(b)(1): Act DOES NOT APPLY to person owning less than 3 rental houses who does
     not use an AGENT or any DISCRIMINATORY ADVERTISING to rent the houses. ..........88
     d) § 3604: No renting or selling or advertising based on race color, religion, sex , family status,
     national origin or handicap. ...................................................................................................88
     e) §3605: Prohibits LENDING INSTITUTIONS from discriminating in hosing loans.............88
     f) §3607(A): Religious Organizations and Private Clubs can discriminate in renting or selling
     residences that they own.......................................................................................................88
     g) §3607(B)(1): Allows state regs on maximum number of occupants. ...................................88
     h) §3607(B)(2): Old folks homes can discriminate against everybody ....................................88
     i) §3607(B)(4): Druggies don't deserve homes. .....................................................................88
     j) §3613(A): Person discriminated against has 2 year SoL to bring CIVIL Suit ......................88
     k) §3613(B): Court may appoint attorney and waive fees for . ............................................88
     l) §3613(C): ACTUAL and PUNITIVE damages may be awarded as court sees fit. .............88
     m) §3617: It's illegal to interfere or coerce a person attempting to exercise these rights and
     protections. ..........................................................................................................................88
  2. Discrimination by HOUSING PROVIDERS...................................................................88
     a) 42 USC § 1982: All citizens of the US have the same right as "white citizens" to inherit,
     purchase, lease, sell, hold, and covey real and personal property. ..........................................88
     b) Under FHA, failure to provide equal access to information about housing availability is illegal.88
     c) THREE PART BURDEN of PROOF ..............................................................................88
     d) White "testers" may be used to prove discrimination..........................................................89
     e) ELEMENTS of PRIMA FACIE CASE (element 1) .........................................................89
     f) PUNI's to be awarded where 's conduct is result of EVIL MOTIVE or INTENT, or.......89
     g) PUNI's to be awarded where 's conduct involved RECKLESS or CALLOUS
     INDIFFERENCE to federally protected rights of others. ......................................................89
  3. SETTING QUOTAS .........................................................................................................90
     a) CEILING QUOTAS: a limit on the max # of any given group. ..........................................90
     b) ACCESS QUOTAS: a FLOOR, below which the LL actively seeks members of the group
     in "shortage".........................................................................................................................90
     c) Courts are more sympathetic to REASONABLE access quotas than to strict ceiling quotas.90
     d) Race MAY be an appropriate consideration for a SHORT DURATION and for VALID
     PUBLIC MOTIVES............................................................................................................90
     e) BUT, Setting QUOTAS of INFINITE DURATION in order to maintain a "fixed level of
     integration" is NOT ACCEPTABLE under FHA. .................................................................90
  4. REMEDIES under FHA ...................................................................................................90
     a) may sue for COMPENSATORY and PUNITIVE damages. ............................................90
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          b) FHA allows aggrieved person to complain to HUD...........................................................90
          c) FHA also empowers AG to investigate claims by aggrieved parties and to bring suit...........91
       5. STANDARD of LIABILITY ............................................................................................91
          a) MAJORITY RULE:  can show EITHER discriminatory INTENT or DISPARATE
          IMPACT. ............................................................................................................................91
          b) MINORITY RULE: Only a showing of INTENT to discriminate will trigger sanctions. .....91
       6. Stating the PRIMA FACIE CASE ...................................................................................91
          a) Refusal to sell or refusal to lease are sufficient....................................................................91
          b) AND refusal to DEAL is ALSO sufficient under FHA ......................................................91
       7. "Racial Steering" .............................................................................................................91
          a) Showing houses in one area to one race, and showing houses in another area to a different
          race VIOLATES FHA.........................................................................................................91
          b) To prove "steering," TESTERS may be used. ...................................................................91
       8. STANDING to bring SUIT ...............................................................................................91
          a) Persons who are discriminated against may initiate the suit. ................................................91
          b) TESTERS may initiate the suit ..........................................................................................91
          c) And ORGANIZATIONS DEVOTED to PROMOTING EQUAL ACCESS may bring suit.
          ............................................................................................................................................91
       9. DISCRIMINATORY ADVERTISING...........................................................................91
          a) Always using WHITE MODELS for housing ads MAY VIOLATE FHA. (see note 7, p.
          999). ...................................................................................................................................91
       10. TIPPING..........................................................................................................................91
          a) The idea that once minority concentrations rise above a certain %, white-flight will occur....91
       11. CRA of 1866 ....................................................................................................................91
          a) And don't forget that the freedom to contract is guaranteed under 42 USC 1982. ..............91
V. ZONING ...................................................................................................................................91
  A. Some Basics..........................................................................................................................91
    1. HISTORY of Zoning .........................................................................................................91
       a) Read the reader. P. 83. ....................................................................................................91
       b) Zoning is a method for the POLITICAL system to PRE-PLAN the future of the community.92
       c) Zoning is an exercise of the STATE'S POLICE POWER..................................................92
       d) In the past, states delegated wide authority to LOCAL GOV'TS in ZONING. ..................92
       e) Recently, States are reserving more power for themselves in this area. ...............................92
    2. GENERALLY, ZONING is LEGAL (big surprise).........................................................92
       a) Owners of property cannot claim a GENERAL taking when property is zoned. They must
       show a specific INJURY. .....................................................................................................92
    3. TYPES of ZONING...........................................................................................................92
       a) EUCLIDEAN ZONING: Zoning in "rectangular, cookie cutter shapes."...........................92
       b) CUMULATIVE ZONING: Each progressive zone, INCORPORATES all the uses allowed
       in the previous zone. .............................................................................................................92
       c) EXCLUSIVE ZONING: (modern trend) Each zone is "self-contained"; uses are not
       "cumulated" from previous zones...........................................................................................92

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  4. HOW ZONING is AUTHORIZED ..................................................................................92
     a) STATE: passes ZONING ENABLING ACT ..................................................................92
     b) COMPREHENSIVE PLAN is DEVELOPED.................................................................93
     c) LOCAL GOV'T: Enacts ZONING ORDINANCE and SUBDIVISION CONTROLS ..93
     d) ZONING BOARD: Enforces the ordinances. ...................................................................93
  5. ENFORCEMENT of ZONING........................................................................................93
     a) Typically enforced by denial of requested permits..............................................................93
     b) Uses which are OUT OF COMPLIANCE may be sanctioned by injunctions, fines and/or
     minor criminal penalties.........................................................................................................93
  6. SUBDIVISION CONTROLS ..........................................................................................93
     a) Subdivision Ordinances are SIMILAR to zoning, but differ in important ways. ...................93
     b) Subdivision Ordinance provide developers with GUIDELINES for developments .............93
     c) Once developer complies with subdivisions ordinances in plan, board cannot deny approval.
     (p. 102 READER) ...............................................................................................................93
     d) Developer may be required to provide SPECIFIC IMPROVEMENTS both on and off-site
     OR pay an EXACTION ......................................................................................................93
B. PRIOR NON-CONFORMING USES................................................................................94
  1. DOCTRINE of NON CONFORMING USES ................................................................94
     a) Generally, where zoning is implemented, people who are using land for "non-conforming
     uses" may continue. ..............................................................................................................94
     b) BUT such uses may not be expanded, unless the change is NEGLIGIBLE or
     INSUBSTANTIAL .............................................................................................................94
     c) PRESUMPTION is that any change IS NOT NEGLIGIBLE or INSUBSTANTIAL ........94
     d) GOAL: To reduce non-conforming uses to CONFORMITY ASAP. ................................94
     e) Even a CHANGE in HOURS of OPERATION will be considered SUBSTANTIAL
     ENOUGH to justify denial of permit to change use................................................................94
     f) AMORTIZATION: Some Jx will also put a TIME LIMIT on non-conforming uses...........94
     g) Typically an owner CAN SELL the right to continue a non-conforming use to another. ......94
  2. VARIANCE may be granted for EXCEPTIONAL and UNDUE HARDSHIP. ............94
     a) An owner may be granted a VARIANCE from zoning where an EXTRAORDINARY and
     EXCEPTIONAL situation results in EXCEPTIONAL and UNDUE HARDSHIP.................95
     b) BUT, ONLY where the variance will not create SUBSTANTIAL DETRIMENT to the
     PUBLIC GOOD or SUBSTANTIALLY IMPAIR the intent and purpose of the ZONE PLAN
     and ZONING ORDINANCE..............................................................................................95
     c) OWNER who inflicts hardship on themselves WILL NOT be granted relief.......................95
     d) Where a VARIANCE is DENIED under these circumstances, the local gov't may have to
     COMPENSATE for a "TAKING."......................................................................................95
     e) OR, OPTION to purchase may be given to NEIGHBORS ...............................................95
     f) MINIMUM LOT SIZES for housing, without more, DO NOT constitute a SUBSTANTIAL
     INTEREST in public health and safety. .................................................................................95
  3. VESTED RIGHTS IN a PROPERTY'S STATUS may prohibit later ZONING
  CHANGES ............................................................................................................................95

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      a) The CITY may not DISREGARD their COMPREHENSIVE ZONING PLAN in order to
      discriminate against a "type" of person...................................................................................95
      b) Whether a RIGHT HAS VESTED depends PRINCIPALLY on the AMOUNT
      ACCOMPLISHED UNDER CONFORMITY....................................................................95
      c) As long as a zoning ordinance is a VALID EXERCISE of POLICE POWER, the fact that it
      deprives the owner of its MOST BENEFICIAL USE does not render it an unconstitutional
      taking...................................................................................................................................95
      d) In determining where a ZONING REGULATION ENDS and a TAKING BEGINS the test
      is ESSENTIALLY ONE OF REASONABLENESS. ..........................................................95
   4. See PROBLEM on p. 690 (daycare center that wants to convert to high school for
   hearing impaired.) .................................................................................................................96
C. ZONING: The GOOD, The BAD, and THE UGLY..........................................................96
   1. Good things about zoning ..................................................................................................96
      a) Encourage investment in community ..................................................................................96
      b) Improves quality of peoples lives ......................................................................................96
      c) Provides sense of security.................................................................................................96
   2. Bad things about zoning ....................................................................................................96
      a) Cost of some special injury to certain land owners.............................................................96
      b) Rigidity: freezing a vision of community that seemed attractive at one time, but is no longer
      reflective of modern values. ..................................................................................................96
   3. The UGLY .........................................................................................................................96
      a) Can promote, or at least abet, discrimination.....................................................................96
      b) When zoning is delegated to local Jx, we wind up with "comprehensiveness in a very small
      world.".................................................................................................................................96
D. EXCLUSIONARY ZONING...............................................................................................96
   1. MOTIVES for ZONING may have (UN)INTENDED EFFECTS .................................96
      a) Where a city zones with TAX BASE in mind, strange things can happen. ...........................97
      b) ALL exercises of POLICE POWER must conform to basic CONSTITUTIONAL
      REQUIREMENTS of Substantive Due Process and Equal Protection...................................97
      c) Some courts may take CUMULATIVE EFFECTS of various local zoning ordinances into
      consideration when determining if they are CONSTITUTIONALLY VALID ........................97
      d) NJ & CA RULE: Every community MUST provide a plan to make it realistic for the
      opportunity for low income housing to exist. ..........................................................................97
      e) NOW, inclusionary zoning has ALSO come under attack as being racially discriminatory
      under FHA (so how do you win?) ........................................................................................97
E. DISPARATE IMPACT CLAIMS - RACIALLY DISCRIMINATORY ZONING
PRACTICES .............................................................................................................................97
   1. Zoning regulations may have DISPARATE IMPACT leading to discrimination. .........97
   2. DISPARATE IMPACT ANALYSIS ................................................................................97
      a) FIRST:  must make PRIMA FACIE CASE that the challenged practice ACTUALLY or
      PREDICTABLY results in RACIAL DISCRIMINATION. .................................................98



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           b) SECOND: Once PRIMA FACIE case is plead, BURDEN SHIFTS to TOWN to
           demonstrate LEGITIMATE JUSTIFICATIONS for ORDINANCE and that NO LESS
           DISCRIMINATORY means exists. .....................................................................................98
       3. Making the PRIMA FACIE CASE..................................................................................98
           a) DISCRIMINATORY INTENT .......................................................................................98
           b) DISCRIMINATORY IMPACT......................................................................................98
       4. Town's Burden: Showing LEGITIMATE JUSTIFICATIONS ......................................98
           a) The town must show that its actions further a LEGITIMATE, BONA FIDE government
           interest. ................................................................................................................................98
           b) AND must show that no LESS DISCRIMINATORY ALTERNATIVE exists .................98
           c) IF  is only suing to compel rezoning, success of 's claim is greater than where  is
           demanding government to build the housing. ..........................................................................98
           d) Justifications which are thought of for trial purposes, but which were not in the original
           reasons for denial are automatically suspect...........................................................................98
       5. DIFFERENTIATING TYPES of government justifications for purposes of determining
       if there is a LESS DISCRIMINATORY ALTERNATIVE:...............................................98
           a) SITE SPECIFIC: May survive analysis because changes are not easily made.....................98
           b) PLAN SPECIFIC: These types of justifications are generally more suspect because simple
           alterations to the plan may be implemented............................................................................98
       6. ABSOLUTE NUMBERS vs. PROPORTIONAL STATISTICS ...................................99
           a) Even if absolute numbers do NOT indicate discrimination, a lopsided distribution of
           PROPORTIONAL STATISTICS may still do so.................................................................99
       7. PUBLIC vs. PRIVATE DISCRIMINATION .................................................................99
           a) Private Parties may be IMMUNE from the DISPARATE IMPACT analysis. ....................99
       8. Case Study in DISPARATE IMPACT ANALYSIS ........................................................99
           a) Huntington Branch NAACP v. Town of Huntington, p. 1038. ......................................99
VI. "TAKING" of PROPERTY INTERESTS ..........................................................................100
  A. SOME BASICS ..................................................................................................................100
     1. 5th Amendment ...............................................................................................................100
        a) "nor shall private property be taken for a public purpose without just compensation." .......100
     2. 14th Amendment .............................................................................................................100
        a) Due Process clause interpreted to REQUIRE that any taking MUST be for a PUBLIC
        PURPOSE, and must be COMPENSATED. .....................................................................101
     3. CA TERMINOLOGY: INVERSE CONDEMNATION .............................................101
  B. WHAT is a PUBLIC PURPOSE?......................................................................................101
     1. See fall outline: EMINENT DOMAIN (same standard)..............................................101
     2. PURPOSE of "TAKING" ..............................................................................................101
        a) BOTTOM LINE RULE: "Public Purpose" DOES NOT MEAN "Public Ownership." .....101
        b) Taking for later transfer to private individuals does not necessarily mean that there is no
        public purpose. ..................................................................................................................101
  C. REGULATORY vs. PHYSICAL TAKING ......................................................................101
     1. PHYSICAL TAKING is ALWAYS COMPENSABLE. ................................................101

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   a) Anytime there is a PHYSICAL OCCUPATION, no matter how slight, there is a
   PHYSICAL TAKING.......................................................................................................101
2. BUT, Mere PHYSICAL INVASION is not necessarily a PHYSICAL TAKING .......101
   a) Allowing persons to petition at mall against mall regulations is not a physical taking.
   (PruneYard).......................................................................................................................101
   b) Regulation denying a mobile home park owner the right to decide who lives on the pad is not
   a taking. (Yee.) ..................................................................................................................102
3. TWO FACTORS which ARE CONSIDERED in assessing whether there is a taking
though zoning or rent ordinances........................................................................................102
   b) BUT: A law CANNOT REQUIRE a landlord to stay in the landlord business. ...............102
4. THREE PART TEST for REGULATORY TAKINGS.................................................102
   a) There must be an Economic Impact ................................................................................102
   b) Which interferes with REASONABLE, INVESTMENT-BACKED expectations AND..102
   c) The character of the Government's action must be examined............................................102
   d) Regulation affecting right to DEVISE may be a taking, regardless of economic impact......102
   e) Regulation banning sale of goods may not constitute a taking. ..........................................103
5. Burdens of Citizenship v. Unfair Sacrifice for the Public Good ....................................103
   a) The state may decide on the destruction of one class of property in order to protect another.103
   b) Where there is a FACTUAL FINDING that property has been rendered "valuless" the
   regulatory action is a taking per se. .....................................................................................103
   c) A state can only prevent by regulation those uses which conflict with "background principles
   of property law or nuisance." (Lucas, p. 1242)....................................................................103
6. PER SE GOVERNMENT TAKINGS OCCUR WHERE ............................................103
   a) Physical Invasion............................................................................................................103
   b) Extinguishment of CORE property right ..........................................................................103
   c) Denial of economically viable use ....................................................................................103
7. CHARACTER of GOVERNMENT ACTION likely to be found a TAKING ............104
   a) Forced physical invasion.................................................................................................104
   b) Extraction of a BENEFIT for the community rather than preventing a HARM. .................104
   c) A forced REDISTRIBUTION of a BARGAINED for CONTRACTUAL RIGHT .........104
8. CHARACTER of GOVERNMENT ACTION likely to be found a VALID EXERCISE
of POLICE POWER ...........................................................................................................104
   a) Regulation of property use rather than physical invasion. ..................................................104
   b) Limitations on property use to prevent harm to the community. ........................................104
   c) Regulations which both impact property rights but also confer benefits on the owner ........104
   d) Situations where there is a forced choice b/t INCOMPATIBLE property interests ..........104
9. INTERFERENCE with INVESTMENT BACKED EXPECTATIONS ......................104
   a) Taking is more likely to be found where there is already a VESTED RIGHT....................104
   b) Taking is more likely to be found if it interferes with PRESENT USE of property.............104
   c) Taking is LESS likely to be found if all that regulation does is impose an OPPORTUNITY
   LOSS ................................................................................................................................104
   d) Taking is LESS likely to be found where owner SHOULD HAVE REASONABLY
   FORESEEN the regulation. ................................................................................................104
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       10. DEFINING WHAT HAS BEEN TAKEN ...................................................................104
         a) In many cases the AMOUNT of diminution in value can be WILDLY altered by the way the
         right is defined. ...................................................................................................................104
       11. "TAKING" THROUGH REGULATION...................................................................104
         a) Penn Central Transp. Co. v. NY City (US S CT, 1978) .................................................104
         b) Loretto v. Teleprompter Manhattan CATV Corp. (US S CT, 1982)...............................106
         c) Keystone Bituminous Coal Ass'n v. DeBenedictis (US SCT, 1987).................................106
         d) Nollan v. California Coastal Com'n (US S CT, 1987) .....................................................106
         e) Dolan v. City of Tigard (US S CT, 1994) .......................................................................106
         f) Lucas v. South Carolina Coastal Council (US S CT, 1992) .............................................107
         g) FIRST ENGLISH EVANGELICAL LUTHERAN CHURCH v. LA County (US S CT,
         1987) ................................................................................................................................107
VII. REAL ESTATE TRANSACTIONS ...................................................................................107
  A. Statute of Frauds v. Part Performance and Estoppel .......................................................107
     1. Real estate Transactions must be in WRITING...........................................................107
     2. BUT, SoF can be defeated by ESTOPPEL or PART PERFORMANCE ....................107
        a) Where a party "partly performs" the part performance MUST be UNEQUIVOCALLY
        REFERABLE to the contract for sale. ................................................................................107
        b) Where a party has REASONABLY RELIED on a contract for sale of land to their
        detriment, the K may be enforced even if it is not in writing. .................................................108
        c) Where a party ADMITS to an oral term of the K, that term may be enforced, even if it does
        not appear in the writing. ....................................................................................................108
  B. RECORDING ACTS and TITLE SEARCHES ...............................................................108
     1. Conducting the TITLE SEARCH ...................................................................................108
        a) LOOK in the GRANTEE index to find out who granted the parcel to the current owner. .108
        b) Keep going back until you have gone "far enough" ..........................................................108
        c) THEN, Look in the GRANTOR index to find out about any special conveyances made
        during the chain of title. .......................................................................................................108
     2. TYPES of RECORDING ACTS ....................................................................................108
        a) RACE STATUTES: First to the recorder wins...............................................................108
        b) NOTICE STATUTE: Later purchaser wins UNLESS they have NOTICE of previous sale.108
        c) RACE-NOTICE STATUTE: First to the recorder wins, unless it is the LATER purchaser
        who has NOTICE of the previous sale................................................................................108
     3. TYPES of NOTICE .........................................................................................................108
        a) Actual notice: party has personal knowledge of the previous transaction.........................109
        b) Constructive notice: The party could have found out about the previous transaction though a
        title search..........................................................................................................................109
        c) Inquiry notice: where conditions on the property would make any purchase wonder if there
        had been a previous sale.....................................................................................................109
     4. Chain of title problems ....................................................................................................109
        a) Even if a party records their interest first, they can ONLY record that which they are granted.
        ..........................................................................................................................................109

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C. CAVEAT EMPTOR...........................................................................................................109
   1. MISREPRESENTATION and FRAUDULENT DISCLOSURE ................................109
      a) Where the seller knows of material facts affecting the value of property they must be
      disclosed............................................................................................................................109
   2. ELEMENTS of a FRAUDULENT MISREPRESENTATION....................................109
      a) A FALSE STATEMENT concerning a MATERIAL FACT ...........................................109
      b) REPRESENTOR KNOWS the REPRESENTATION is false .......................................109
      c) INTENT by the REPRESENTOR to INDUCE ACTION by the RECIPIENT of the
      REPRESENTATION ........................................................................................................109
      d) INJURY as a RESULT of RELIANCE on the REPRESENTATION. ...........................109
   3. In a property Tx, the time of signing the K is not dispositive. ......................................109
      a) A person can sue for FRAUDULENT MISREPRESENTATION until the time of the
      closing. ..............................................................................................................................109
   4. BUT, where a buyer has NOTICE of a defect, they may not be able to recover when its
   extent is greater than anticipated.......................................................................................109
      a) See Note 3, p. 932. .......................................................................................................109
   5. AS IS clause only applies to patent defect which are easily exposed. .........................109
      a) (See Mulkey v. Waggoner, p. 935). ...............................................................................109
D. ELEMENTS of a REAL ESTATE DEED ........................................................................109
   1. What goes into a deed to make it valid? ........................................................................110
      a) Identification of the parties ..............................................................................................110
      b) Identification of the property...........................................................................................110
      c) Identify the interest being conveyed.................................................................................110
      d) Words of Conveyance ...................................................................................................110
      e) Grantor's signature .........................................................................................................110
   2. Other things that can be included (must be included for RECORDING): ...................110
      a) Recital of Consideration .................................................................................................110
      b) Acknowledgment Clause................................................................................................110
   3. Finally, to make the deed valid, we must have DELIVERY. ........................................110
      a) But, with DEEDS we have to make sure that the GRANTEE has accepted. ....................110
      b) WHAT is DELIVERY: Some manifestation outside of the deed itself that the grantor intends
      to relinquish control, and no objection by the grantee...........................................................110
      c) Thus, even once the deed is SIGNED, there is NO TRANSFER until the DEED is
      DELIVERED.....................................................................................................................110
   4. What constitutes DELIVERY? ......................................................................................110
      a) Recording it. ..................................................................................................................110
      b) Placing it in the hand of the grantee. ................................................................................110
E. TYPES of DEEDS...............................................................................................................110
   1. QUITCLAIM DEEDS ....................................................................................................110
      a) No guarantees. Simply says the grantor is transferring whatever it is that she owns. .........111
   2. WARRANTY DEEDS ....................................................................................................111
      a) Actually promises that the grantor owns what they are purporting to transfer. ...................111

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     b) Essentially means that the GRANTOR WILL DEFEND the GRANTEE against any
     challenges to title. ...............................................................................................................111
     c) In many states, the guarantees of a "WARRANTY DEED" are set forth by STATUTE....111



I.   THE LAW OF SERVITUDES
     A.   CENTRAL ISSUES in LAND USE AGREEMENTS (pp 379-40)
          1.     Creating servitudes: Formality v. Informality
                 a)     Generally courts require a writing to enforce servitudes
                        (1)     However, courts will enforce oral agreements, representations
                                in advertising and long standing agreements under certain
                                conditions.
          2.     Interpreting Ambiguities: Preferences and Presumptions
                 a)     Effectuate intent of the grantor
                 b)     Presumptions based on public policy
          3.     Compulsory Terms and Illegality
                 a)     Courts will not enforce such covenants against public policy
                        (1)     No racial restrictions
                                (a)      In fact, damages may be awarded to individuals who
                                         are wrongly excluded from the market.
                        (2)     Requirement that certain property rights be "bundled together."
          4.     Running with the Land
                 a)     Land use agreements are treated as if they are attached to the land.
                 b)     Technical rules govern whether promise "runs with the land."
          5.     Terminating Agreements
                 a)     Doctrine of changed circumstances
                 b)     Other forfeiture
     B.   Licenses
          1.     Licenses Generally
                 a)     Revocable permission to enter real property (p. 377)
                        (1)     May be revoked at will by grantor (p. 388)
                 b)     Person permitted to enter is LICENSEE (p. 77)
                        (1)     Permission is temporary AND limited to specific purpose
                                (a)      Person whom you invite to your house is a licensee
                        (2)     License may be IMPLICIT
                                (a)      Store which is open to public.
                 c)     NON-TRANSFERABLE (p. 388)
                        (1)     May not be sold, inherited or left by will.
                                (a)      except theater tickets, which are treated as a
                                         PROMISE to grant a license.
                                (b)      If theater refuses to honor tickets, holder may sue for
                                         breach of K.
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     d)    No writing required.
     e)    No exclusion allowed based on race
           (1)      See PUBLIC ACCOMMODATION STATUTES (Civil
                    Rights Act of 1866) (Fall '97 Outline).
     f)    IRREVOCABLE LICENSES
           (1)      EASEMENT by ESTOPPEL and
           (2)      CONSTRUCTIVE TRUST
2.   IRREVOCABLE LICENSE (EASEMENT by ESTOPPEL)
     a)    2 different types of easement by estoppel
           (1)      Oral easements
           (2)      License coupled with an interest
     b)    May exist where grantor induces reliance on license
           (1)      "Courts may prevent a real property owner from revoking a
                    license if the owner grants the licensee the right to invest in
                    improving the property or otherwise includes the licensee to act
                    in reasonable reliance on the license." (p. 381)
           (2)      "When nonowners expend resources or labor in reasonable
                    reliance on permitted access the owner may be held to have
                    waived the legal power to revoke that access." (p. 393)
           (3)      Holbrook v. Taylor, p. 382. ( owns land with road leading to
                    's property. The road had been used for purposes of mining
                    the land, and later for building a home and residential access.
                    During period of use,  had spent ~$100 in "improvements" to
                    road (laying gravel and culverts).  later tries to force 's to
                    purchase road outright. 's claim this is little more than an effort
                    to extort money for an implied easement which they already
                    hold. S Ct. KY HOLDS: That the previous permission to  to
                    use the road for various purposes (including building the house)
                    created an IRREVOCABLE LICENSE.
           (4)       "[T]he [irrevocable] license will continue for so long a time as
                    the nature of it calls for." Stoner v. Zucker, p. 394.
     c)    Easement by Estoppel is an EXCEPTION to SoF requirements.
     d)    MINORITY of courts do not recognize easement by estoppel.
           (1)      Rationale: licensee knows or should know the nature of their
                    interest, and therefore has no justification for claiming a reliance
                    interest, even if investment is made in the property.
     e)    See REVIEW PROBLEM, P 395.
           (1)      Student has "license" to dorm room w/ clause giving College 48
                    notice to terminate. Student writes critical letter to editor,
                    school terminates "license." What are Student's options?
3.   Constructive Trusts
     a)    A form of IRREVOCABLE LICENSE

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                    (1)     Normal trust: owner of property (settlor), transfers property to
                            trustee, who manages the property for the best interest of the
                            beneficiary.
                    (2)     Trustee holds LEGAL TITLE; Beneficiary holds EQUITABLE
                            TITLE.
            b)      Treats property AS IF owner had created a trust arrangement.
                    (1)     "When one party has been wrongfully deprived either by
                            mistake, fraud or some other breach of faith or confidence of
                            some right, benefit, or title to the property, a court may impose
                            upon the present holder of legal title a constructive trust for the
                            benefit of that party." Steven Gifis, Law Dictionary 213(1975)
                            (p. 385)
C.   Easements
     1.   Generally
          a)      IRREVOCABLE and usually PERMANENT right to enter OR control
                  property possessed by another. (p. 378)
          b)      TRANSFERABLE
                  (1)     May be sold or devised to others. (p. 378)
                  (2)     May be transferred without any notice in the writing or without
                          the purchaser even knowing.
          c)      Generally must satisfy Statute of Frauds
                  (1)     Except: prescriptive easements, easement by estoppel
                          (irrevocable license), easement by implication from prior use,
                          easement by necessity
                  (2)     Writing gives provides greater certainty in the market (but, of
                          course with so many unwritten easements, does it really?).
          d)      Creates LIMITED INTEREST in someone else's property
          e)      AFFIRMATIVE EASEMENT
                  (1)     The right to enter another's property (p. 378)
          f)      NEGATIVE EASEMENT
                  (1)     The right to restrict a neighbor's use of property (p. 378)
                  (2)     EXAMPLE: granting a neighbor an easement for light an air.
          g)      SERVIENT ESTATE
                  (1)     The land BURDENED by the easement (p. 378)
          h)      DOMINANT ESTATE
                  (1)     The land BENEFITING from the easement (p. 378)
     2.   Profits or Profits á Prendre
          a)      Rights to REMOVE objects from real property
                  (1)     Oil, gas, coal, minerals
          b)      Are a FORM of AFFIRMATIVE EASEMENT
D.   Easements WITHOUT A WRITING
     1.   Easement by Estoppel (see Irrevocable License, above).
     2.   Prescriptive Easement
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     a)  REVIEW ADVERSE POSSESSION (Fall '97 outline).
     b)  Actual, Open, Notorious, Hostile, Continuous use for the statutory
         period.
         (1)     Differs from ADVERSE POSSESSION in element of
                 EXCLUSIVITY. There is no requirement that the claimant
                 exclude others use.
         (2)     TACKING is allowed.
         (3)     Typically the easement will be CONDITIONED on the
                 FUTURE USE being consistent with PAST USE which
                 established the easement.
         (4)     Community Feed Store v. Northeastern, p. 169. Feed store
                 uses gravel area owned by Northeastern for its trucks to turn
                 around for making deliveries to the feed store. The trucks have
                 used the gravel strip for 60+ years. Feed store sues for
                 prescriptive easement after Northeastern erects barricade. S
                 Ct. VT HOLDS: Community feed store meets the elements of
                 adverse use, and a prescriptive easement is granted.
     c)  Arguments for/against Prescriptive Easements
         (1)     For: encourages productive use of land
                 (a)      (in the example case Northeastern has not been using
                          land, but feed store has been putting it to use).
                 (b)      But what if Northeastern now has a use for the land?
         (2)     Against: parties should be able to rely on what is written on the
                 deeds. If no easement is written, then there shouldn't be one.
     d)  Generally, no acquisition of prescriptive easement by general public.
         (1)     OLD CASES: general public could not acquire prescriptive
                 easement.
         (2)     MODERN CASES: trend toward recognizing possibility of
                 public prescriptive easement.
                 (a)      BUT often finding for property owner anyway because
                          use of owner's land by public is presumed to be
                          permissive.
                 (b)      Also see PUBLIC TRUST DOCTRINE, Fall '97
                          Outline.
3.   NEGATIVE EASEMENTS
     a)  NO NEGATIVE PRESCRIPTIVE EASEMENTS
         (1)     Recall Fountainbleau from last semester. (Hotel sough
                 injunction against improvements at neighboring hotel which
                 would block sun to swimming pool.)
         (2)     Justifications for denying negative prescriptive easements (p.
                 173):
                 (a)      Individual claiming a prescriptive easement must be
                          trespassing on owners property.
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                                                                           Property
                                                                     Page 27 of 111
                    (b)    No notice to owner that potential to lose property rights
                           exists.
                  (c)       May interfere with development of land.
          (3)     Does not require that use be mistaken.
                  (a)      Deliberate trespass by the claimant is not a defense for
                           the owner.
                  (b)      POLICY ARGUMENT: Regardless of intent of the
                           party, we want land to be put to beneficial use. (p. 174)
     b)   LIMITS ON EXPRESS NEGATIVE EASEMENTS
          (1)     Traditional common law categories limited to:
                  (a)      lateral support.
                  (b)      light and air.
                  (c)      flow of stream.
          (2)     Rationale for rule: Buyers cannot be put on any reasonable
                  notice that an easement is being reserved. (p. 411)
          (3)     MODERN LAW: NO ACQUISITION OF TRADITIONAL
                  NEGATIVE EASEMENTS BY PRESCRIPTION.
                  (a)      England allowed such easements (doctrine of "ancient
                           lights") but US never has.
          (4)     Modern Statutory Negative Easements
                  (a)      Some state have passed legislation authorizing
                  (b)       CONSERVATION EASEMENTS,
                  (c)      HISTORIC PRESERVATION EASEMENTS
                  (d)      SOLAR EASEMENTS
4.   EASEMENTS v. SERVITUDES (covenants)
     a)   Easements DO NOT require TOUCH & CONCERN.
     b)   Easements DO NOT require PRIVITY of ESTATE.
     c)   Easements ARE NOT subject to DOCTRINE of CHANGED
          CONDITIONS.
     d)   EASEMENT may be held IN GROSS.
          (1)     IT MAY BE MALPRACTICE TO DRAFT AN INVALID
                  NEGATIVE EASEMENT WHERE A SERVITUDE COULD
                  HAVE ACCOMPLISHED THE DESIRED OUTCOME. (p.
                  412).
     e)   Servitudes DO NOT grant ACCESS to another's land
     f)   R3d Property (Servitudes) would combine easements and restrictive
          covenants.
          (1)     R3d Property (Servitudes): Negative easements and restrictive
                  covenants should be treated as alike: land use restrictions
                  intended to run with the land. (p. 412)
          (2)     R3d Property Servitudes would regulate land use by simply
                  invalidating any restrictions (regardless of type) which serve no

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                  LEGITIMATE PURPOSE or that CONTRAVENE STRONG
                  PUBLIC POLICY.
          (3)     (p. 412)
     g)   No affirmative easements to ACT on TRANSFERRED land.
          (1)     Easement are used to create AFFIRMATIVE DUTIES by the
                  grantor to ALLOW A USE by GRANTEE of grantor's
                  remaining land.
          (2)     Servitudes are used by the grantor to create AFFIRMATIVE
                  DUTIES to DO SOME ACT on ones own land.
                  (a)      such as duty to build structure or pay monthly condo
                           fee. (p. 413)
5.   IMPLIED EASEMENT: Generally
     a)   Requires UNITY of TITLE
          (1)     Where two parcels used to, at some point in the past, be part of
                  one larger estate.
     b)   EASEMENT by RESERVATION
          (1)     Seller retains easement across sold property.
     c)   EASEMENT by GRANT
          (1)     Seller intends to grant easement over their own land.
6.   IMPLIED EASEMENT: Easement by Prior use
     a)   Elements
          (1)     Prior common ownership
          (2)     One portion of property used for benefit of another during
                  common ownership
          (3)     Easement is NECESSARY and BENEFICIAL to the to the
                  enjoyment of the parcel conveyed or retained.
                  (a)      "Necessary and beneficial" is balanced, and measured
                           against whether such conditions make the easement
                           "reasonably necessary."
                  (b)      The greater the prior use, the lesser degree of necessity,
                           and vice versa.
     b)   Also, buyers will be held to INQUIRY NOTICE standard (see
          NOTICE below)
          (1)     Granite v. Manns, p. 396. Granite, as owner of original
                  common parcel with grocery store sells part of parcel to
                  Manns. The portion sold has a driveway used by the store.
                  Although use of the driveway was not mandatory for the store,
                  it would cause hardship to truck deliveries. Noting that Manns'
                  were at the very least on INQUIRY NOTICE of the condition,
                  S Ct. IL HOLDS: granting an easement implied by prior use to
                  Granite is REASONABLY NECESSARY.
                  (a)      NOTE: Unlike the above case, most courts are less
                           willing to protect sellers than they are to protect buyers.
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            (2)  Absolute necessity is NOT required where prior use is shown.
                 (a)       Russakoff v. Scruggs, p. 406. Owners of lots near
                           lake use land in between to travel to lake for enjoyment.
                           After forced sale of traveled property, new owner tries
                           to exclude. S Ct. VA HOLDS that the residents prior
                           use was sufficiently visible to put the owner on notice,
                           and the use was "reasonably necessary" for plaintiff's
                           enjoyment of their own land.
     c)   Restatement Property §474: eight important circumstances for inferring
          and easement (BALANCING TEST):
          (1)    Whether claimant is conveyor or conveyee
          (2)    terms of the conveyance
          (3)    consideration given for conveyance
          (4)    whether claim is against simultaneous conveyee
          (5)    extent of necessity of the easement to the claimant
          (6)    whether reciprocal benefits result to the conveyor and conveyee
          (7)    the manner in which the land was used prior to its conveyance
          (8)    extent to which the manner of prior use was or might have bee
                 known to the parties.
     d)   TYPICAL APPLICATIONS
          (1)    Obtaining access to a home,
          (2)    continued access to sewer lines laid over grantor's remaining
                 property, or
          (3)    to access a lake for recreational purposes.
7.   IMPLIED EASEMENT: Easement by necessity
     a)   Access over original grantor's land
          (1)    Even if a grantee has had access over neighboring land, once
                 such access is lost, an easement by necessity may be granted
                 against the owner of the parcel from which claimant's parcel
                 was severed.(see Finn v. Williams, @ p. 405)
          (2)    Finn v. Williams, p. 403. (Finn sues Williams as owner of
                 parcel from which Finn's parcel was severed. Finn had access
                 to his property via private roads over other's property AND
                 access over the Williams parcel. At some later time, Finn's
                 private access roads were cut off. Then Williams tried to also
                 cut Finn off. S Ct. Ill HOLDS: Because there was UNITY of
                 title, the right of way (easement) by necessity should be granted.
                 (a)       Decision above is consistent with the notion that where
                           a common owner sells off part of a parcel, an easement
                           for access across the retained property is the proper
                           way to gain access.



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                           (b)  NOTE: in some Jx, the courts will honor intention to
                                DENY access to landlocked parcel, if it is expressed
                                clearly.
          b)   Policy concerns in granting easement by necessity
               (1)     Effectuate the grantors intent
                       (a)      In the absence of any other access, the law
                                PRESUMES that a grantor intends to convey or
                                reserve whatever is necessary for the beneficial use of
                                property.
               (2)     Promote the efficient utilization of property.
               (3)     SPLIT of AUTHORITY on what to do when these policies
                       conflict. (p. 407)
                       (a)      CALIFORNIA RULE: In some states if it is CLEAR
                                that the grantor and grantee KNEW that they were
                                bargaining over a landlocked parcel, then no easement.
                       (b)      In others states (such as Finn v. Williams), court makes
                                policy decision that all property must have some access
                                as a MATTER of LAW, regardless of intent in original
                                transaction.
               (4)     Statutory regulation of landlocked parcels
                       (a)      Some states have statutes enabling owners of
                                landlocked parcels to apply for an easement over
                                neighboring land in exchange for some payment for the
                                easement.
               (5)     REVIEW PROBLEM: p. 408-09 (What if, in Finn v.
                       Williams, the buyer and seller specifically bargained away the
                       access right BECAUSE there were two other access roads at
                       the time of sale?)
E.   EXPRESS EASEMENT
     1.   EXPRESS EASEMENTS: Formal Requirements
          a)   Writing (p. 409)
               (1)     Easements generally must be in writing to be enforceable under
                       the statute of frauds.
                       (a)      BUT easement only need be signed by the grantor
               (2)     An easement is "analogous to the sale of a piece of property; it
                       is treated as a grant of an interest in real property." (p. 410)
               (3)     Easement may by in deed itself, or in a separate document
          b)   MAJORITY RULE: No reservation of easement in third party
               (1)     O to A while reserving an easement in B is NOT a valid
                       easement.
               (2)     CA RULE: California is in a minority of states which DO allow
                       reservation in 3rd parties.

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            (3)  DRAFTING AROUND THE RULE: All the owner need do is
                 transfer the property to B first. Then B reserves the easement
                 in conveying to A.
                 (a)     FAILING TO OBSERVE THIS FORMALITY IS
                         CONSIDERED MALPRACTICE.
2.   TWO TYPES of EASEMENTS
     a)    Appurtenant
          (1)    The BENEFIT of the easement is linked to the land.
          (2)    This means that transfers of land include a transfer of the
                 easement. (and, the easement CANNOT BE SEVERED from
                 the land).
                 (a)     Successor in interest cannot convey ownership of the
                         easement alone to a buyer without also transferring
                         ownership.
          (3)    In ambiguous conveyances, presumption is toward appurtenant.
                 (a)     In gross will be denied by court where anything in the
                         deed or the situation of the property which indicates
                         that the easement is appurtenant. (Green v. Lupo, @
                         p. 417)
          (4)    Even when dominant estate is subdivided, each part continues
                 to enjoy the use of the servient estate. (Green v. Lupo, @ p.
                 417).
     b)   In Gross
          (1)    BENEFIT         (right     to    use)     is    held     by      a
                 PERSON/COMMERCIAL INTEREST, and does not transfer
                 in a conveyance of the land.
          (2)    Generally transferable by the owner of the easement, although
                 some state refuse to allow the transfer of easements in gross. (p.
                 420).
          (3)    TWO types distinguished by courts (p. 418, n.10)
                 (a)     Commercial Easement (such as for power companies).
                         May be transferred by one holder to another.
                 (b)     Personal Easement (such as right to swim in a privately
                         owned lake).
          (4)    Includes Profits á Prendre.
                 (a)     Profits (timber, minerals, etc.) are considered to be
                         freely alienable. (p.420).
          (5)    In gross easement may be held in common or exclusively. Only
                 exclusive easement is freely alienable without property owners
                 permission. (see Henley v. Continental Cablevision, @ p.
                 427).
                 (a)     An in gross easement is held in common when "the
                         grantor, or owner of the servient estate, has reserved
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                      for herself the right to use the easement in conjunction
                      with the grantee." (p. 431)
c)   To distinguish Appurtenant from In Gross, look to where the BENEFIT
     lies AND the INTENT of the GRANTOR.
     (1)     If grantor moves away, is there any (legitimate) personal use left
             to them? If not, easement should be interpreted as appurtenant.
     (2)     If the easement is useful separate from ownership of neighboring
             land, then court may find it to be in gross. (p. 419)
     (3)     Green v. Lupo, p.415. Greens originally owned all of the land.
             They sold a portion of the land to Lupos. Before the sale was
             complete the Lupos requested the Greens to grant deed so they
             can build a house. Greens agree under the condition that when
             Lupos take title, the Lupos will grant an easement on the
             southern 30' of their entire tract bordering Greens land for
             access road. But, in the mean the Greens build a mobile home
             park. Some of the residents of the park used the easement as a
             "practice runway" for their motorcycles. Lupos, on taking title,
             refuse to grant the easement. ISSUE: SCOPE of the easement
             (did Lupos intend to grant easement to Greens (in gross) only
             for limited access to their cabin? Or was it for general purpose
             access to the land (appurtenant) and thus transferable?) WA S
             Ct. HOLDS, that the PRESUMPTION is that an easement is
             APPURTENANT unless the language of the grant clearly states
             otherwise. Finding that language in the agreement did not
             clearly make easement in gross, the mobile home park may
             continue to use the easement, subject to REASONABLE
             limitations. Since the trial court enjoined ALL use of
             motorcycles on the easement, the App. Ct. remands for
             instructions to modify so that easement may be used for ingress
             and egress (but presumably not as a "practice runway").
d)   Rationale for presuming appurtenant as the "right thing" to do.
             (a)      It makes finding recorded easements easier (but all
                      easements have to be recorded, so there is really no
                      difference).
             (b)      Being attached to land, successive owners have more
                      certainty as to the obligations of ownership.
             (c)      If easement is attached to the LAND, then it is easier to
                      find the holder of the easement at any given time
                      (because it will always be the owner of the dominant
                      estate).
             (d)      EQUITY: If the easement provides a benefit to the
                      land, then that benefit will not be magically "stripped
                      away" when the current owner moves away.
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3.   SCOPE of APPURTENANT & IN GROSS EASEMENTS
     a)   3 issues in examining whether scope encompasses new use
          (1)     Was the use of a KIND intended by grantor
          (2)     Will the use place an UNDUE BURDEN on the servient estate
                  not anticipated by the grantor
          (3)     CAN the easement be subdivided?
     b)   SCOPE: KIND of USE
          (1)     Most courts hold general right of way may be used for any
                  purpose (p. 429). (some states only allow use contemplated by
                  grantor).
          (2)     Henley v. Continental Cablevison, p. 426. Henely (property
                  owner where telephone poles are situated) sues Continental
                  because they string cable television wires on existing poles
                  where power company and phone company had existing
                  easement in gross. MO Ct. APP HOLDS that the original
                  grant was exclusive (not in common), and therefore was freely
                  transferable by the power and phone companies. Also, the
                  addition of one television cable line was not an UNDUE
                  BURDEN on Henley.
          (3)     Rationale in Henley: Just because cable television had not been
                  imagined in 1922 does not mean that the easement cannot serve
                  that purpose.
     c)   SCOPE: UNREASONABLE BURDEN
          (1)     Requires a BALANCING of INTERESTS
                  (a)      Easement owner's freedom to develop
                  (b)      Servient estate's interest in not being overly burdened.
     d)   SCOPE: DIVISIBILITY or APPORTIONABILITY
          (1)     Most courts agree that appurtenant easements benefit the entire
                  dominant estate (see Cox v. Glenbrook, or Green v. Lupo).
                  (a)      "Though some increase in burden may result from the
                           fact that the number of users is increased by the
                           subdivision, the extent of the use is still measured by the
                           needs of the land which constituted the dominant
                           tenement." Restatement Property § 488 (1944).
          (2)     In gross easements generally only divisible without owner's
                  permission where they are held exclusively.
     e)   Extension of use to another parcel generally not allowed.
          (1)     Most court will not allow an owner of an easement which
                  benefits one of their parcels to extend that use to an adjoining
                  parcel.
          (2)     EXCEPTION: WA S Ct. allowed homeowner to extent use to
                  additional property when it was shown the owner intended to
                  build a house on the border between the two owned lots, and
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                       there would be no additional burden on the servient estate. (p.
                       431-32)
         f)    Appurtenant easements can be use for "reasonable development" in the
               future.
         g)    But, uses of an existing appurtenant easement must not place an
               UNDUE BURDEN on the servient estate.
         h)    CHANGING LOCATIONS
               (1)     Traditional rules prevent an owner from changing the location of
                       an easement
               (2)     R3d Property (Servitudes) would allow servient estate owner to
                       "make reasonable changes in the location or dimension of an
                       easement when necessary to permit normal use or development
                       of the servient estate" IF the changes do not "significantly lessen
                       the utility of the servitude"; "increase the burden on the holder of
                       the servitude benefit"; or "frustrate the purpose for which the
                       servitude was created." (p. 432)
               (3)     MO Rule: Allows servient owner to relocate easement so long
                       as damages are paid to the dominant estate owner.
               (4)     Cox v. Glenbrook Co., p. 420. In this case, the easement to
                       the Cox property was granted in 1938 to a Mr. Quill, which
                       was subsequently sold to Cox. The easement is the only access
                       at this time. Litigation occurs when Cox decides to subdivide
                       their parcel for 40 to 60 homes, and need to use the easement
                       for ingress and egress. The current access is a one-lane access.
                       The easement is appurtenant. NV S Ct. HOLDS 1) the benefit
                       is attached to the land (the Cox parcel), because it is the only
                       access from the parcel to existing public roads. (and if Cox
                       was to sell or move away, they would have no use for the
                       easement), and 2) the right of way will attach to any later
                       subdivision of Cox's property, BUT, 3) that no UNDUE
                       BURDEN may be placed on Glenbrook, and so the easement
                       is limited to access to single-family residences, and cannot be
                       widened from single lane (noting that if any future use by Cox
                       does create an UNDUE BURDEN, Glenbrook may be entitled
                       to future relief). The court also ruled that Glenbrook, if it
                       desired, could move the easement at its own expense.
               (5)     NOTE: Practical result is that the parties in Cox are still free to
                       later negotiate on widening the road, thus leaving valuation to
                       Glenbrook. How is this good? How is it bad?
F.   TERMINATION of EASEMENTS
     1.  Ways to terminate
         a)    By express terms of easement
               (1)     On a specific date
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     (2)     On the occurrence of a specific condition
b)   By written release
     (1)     Writing signed by the holder of the dominant estate
             (appurtenant) or the person who holds the right to use the
             easement.(in gross)
c)   By abandonment
     (1)     Requires INTENT to abandon. Mere non use is not enough.
     (2)     Simply because owner of easement uses "more convenient"
             method of access does not extinguish actual easement. It
             requires an AFFIRMATIVE display of intent to find
             abandonment. (see Lindsey v. Clark, p. 2).
d)   Adverse possession or prescription
     (1)     Open, notorious, hostile exclusive use for statutory period.
e)   Merger
     (1)     When dominant and servient tenements are brought under
             common ownership, the easement is extinguished.
             (a)     Note, this means that an easement maybe extinguished
                     through the formality of transferring to a "straw man"
                     both parcels, who then re-conveys the parcels, without
                     the easements, back to the original owners.
     (2)     BUT, where the quality of the common ownership differs, the
             easement remains.
             (a)     Example, O owns lot A in fee simple which is subject to
                     an easement held by the owner of neighboring lot B. If
                     O merely obtains a life estate, or a leasehold over lot B,
                     the easement is not extinguished by merger. The quality
                     of ownership must be same (fee simple) for merger to
                     occur.
     (3)     Lindsey v. Clark, reader, p.1. Clark owns 4 lots. Sells 100' of
             two lots to Six, but retains easement along south side of
             property to access back side of property. Easement was
             specifically reserved at one location, but the right of way was
             physically located in a different area (with the apparent
             agreement of both parties that this was where the easement was
             located). Lindsey eventually buys the servient estate, and then
             complains about the use of the easement. Then they check the
             records, and find that the easement was supposed to be
             somewhere else. In the appropriate place for the easement, the
             Lindsey's house has been built. Lindsey claims that the
             easement was ABANDONED. VA S Ct. HOLDS: That
             Lindsey had ACTUAL and CONSTRUCTIVE notice of the
             existence of the easement due to the use of the land, that Clark
             did not manifest any intent to abandon the easement by using
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                        alternate access, and that. Clarks retain their right to their
                        original easement (now through the Lindsey's house) and may
                        enforce that easement if the Lindseys refuse to allow Clarks to
                        use the currently placed access.
                (4)     Castle Associates v. Schwartz, reader, p. 6. Land originally
                        owned by one person divided into four lots and sold. One lot is
                        permitted 12' easement across another specific parcel for
                        access to street. (But, location is not exactly established). What
                        they did agree was that the right of way would be across the
                        original owner's land from western boundary of Schwartz's
                        property. Schwartz claims the easement has not been used for a
                        very long time (about 70 years); that he fenced off his property
                        (thus "hostile" possession); and that adequate parcels had come
                        under common ownership so as to relieve the need for an
                        easement and so should be terminated. NY App Ct. HOLDS:
                        There is no merger, because neither parcel was under common
                        ownership (even though neighboring parcels were
                        consolidated); Adverse Possession is not possible because the
                        actual easement was never physically located; and there is no
                        CLEAR and CONVINCING evidence that subsequent owners
                        intend to extinguish the easement (abandonment). Thus, Castle
                        retains its right to an easement over Schwartz's land.
                (5)     "RULE" of Castle: "The owner of the servient tenement may
                        fence his land and such use will not be deemed adverse to the
                        existence of the easement until such time as (1) the need for the
                        right of way arises, (2) a demand is made by the owner of the
                        dominant tenement that the easement be opened and (3) the
                        owner of the servient tenement refuses to do so." (Castle
                        Associates v. Schwartz, reader p. 10).
G.   REAL COVENANTS and EQUITABLE SERVITUDES
     1.   Generally
          a)    Promises made by one landowner to another to use or not to use one's
                own land in particular ways.
          b)    Provide benefit holder with the right to prevent use on servient estate,
                OR
          c)    Provide benefit holder with a right to compel a particular use on servient
                estate.
          d)    Enforceable against subsequent owners as long as requirements are
                met.
          e)    Easements are created by GRANT, Covenants are created by
                PROMISE.
          f)    If broken, owner of benefited land may sue for $$ (Real Covenant) or
                INJUNCTION (Equitable Servitude).
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2.   ELEMENTS of REAL COVENANT - Remedy at law ($$ damages)
     a)  WRITING
         (1)   Only needs to be signed by GRANTOR to satisfy SoF.
         (2)   Restrictions generally must be in CHAIN OF TITLE in order to
               be enforced.
               (a)       BUT where representations are made to buyer either
                         orally or though sales literature, SOME courts may
                         estop the seller from asserting that the promise is invalid
                         for want of a writing (varies by Jx)
         (3)   May be satisfied where developer records a DECLARATION
               of RESTRICTIONS applicable to an entire subdivision and/or
               PLAT (map showing restrictions) before lots are sold. (p. 449)
               (a)       Some states require that deeds refer to plat.
               (b)       CA RULE: reference to plat does not have to be made
                         in deed for covenant to be enforced as an equitable
                         servitude. (p. 449).
         (4)   Filing of "common plan" by neighbors does not create real
               covenant, but may be enforceable by injunction as a equitable
               servitude.
         (5)   Representations in sales literature does not count as a writing
               for purposes of $$ damages (real covenant).
         (6)   MUST be recorded at the time of or prior to sale. IF developer
               later files Declaration of Restrictions, owners who purchase
               before that time are NOT BOUND by the declaration (see
               Riley v. Bear Creek, p. 483).
     b)  INTENT to run with land (thus binding successors in interest)
         (1)   FORMAL requirement
               (a)       May be satisfied simply by saying "Grantor intends for
                         this covenant to run with the land."
         (2)   Two ways to make intent clear:
               (a)       If covenant is made to the grantor or grantee and "their
                         heirs or assigns" and/or
               (b)       that it "is intended to bind future owners" of the parcel
                         described in the deed or explicitly states that the
                         covenant is "intended to run with the land." (p. 453)
         (3)   If covenant "touches and concerns" the land, intent is satisfied.
               (a)       In this case, ask yourself, "would it make sense for the
                         beneficiary of the promise to try to enforce it once she
                         moves away?" If the answer is no, then the promise
                         "touches and concerns" the land.
         (4)   Presumption in ambiguous grant language is for covenant to run
               with the land IF the promise specifically benefits land itself, or
               the owner of land AS the owner of that land (for example
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                   commercial advantage, such as in Whitinsville Plaza v.
                   Kotseas).
          (5)      Look for any indication in the language that the promise is useful
                   to land.
     c)   NOTICE (Actual, Inquiry, Constructive)
          (1)      Actual notice: the parties ACTUALLY know of the nature and
                   existence of the covenants.
          (2)      Inquiry notice: Where party can see something going on on the
                   land that indicates there might be restrictions.
                   (a)      Some courts hold that a UNIFORM PATTERN of
                            USE in a neighborhood puts the buyer on Inquiry notice
                            (may be evidence of a "COMMON PLAN," infra.)
          (3)      Constructive notice: Where the restriction is recorded in the
                   chain of title. If the party had done a search of the title, they
                   would have found it.
                   (a)      "A reasonable purchaser is expected to search the title
                            to find out whether the property is burdened by any
                            land use restrictions, and the buyer is deemed to know
                            what she would have discovered had she performed a
                            search of her chain of title." (p. 452)
                   (b)      Some courts also require the buyer to search the title of
                            sales to OTHER buyers from common previous owner
                            to discover any negative servitudes.
     d)   PRIVITY of ESTATE
     e)   TOUCH & CONCERN
3.   PRIVITY OF ESTATE (required for $$ damages)
     a)   Privity originally developed as a way of LIMITING enforcement of
          covenants
          (1)      Covenants were viewed in early common law as restraints on
                   use and therefore alienation, and so narrowly defined the range
                   of enforceable real covenants through privity.
          (2)      Modern courts recognize the economic value of real covenants
                   now, but the rules of privity remain.
          (3)      Courts of equity were simply looking to find the "fair" result in
                   deciding whether a covenant should be enforced. They refused
                   to follow the narrow rules of privity.
          (4)      Practical result is that all real covenants are equitable servitudes,
                   but not all equitable servitudes are real covenants (because of
                   problems with privity).
     b)   For BURDEN to run with land in REAL COVENANT, Horizontal and
          Vertical privity MUST exist.
     c)   For BENEFIT to run with land in REAL COVENANT, Horizontal
          privity may not be required, and vertical privity is relaxed.
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          Law                                              Equity
Burden    Horizontal & Vertical                            No privity req'd.
Benefit   Horizontal (depends on Jx) & Vertical            No privity req'd
          (relaxed - possession only)
                      d)      Law of EQUITABLE SERVITUDES replaces privity with
                              "COMMON SCHEME" and "THIRD-PARTY BENEFICIARY"
                              doctrines.
               4.     HORIZONTAL PRIVITY
                      a)      The relationship between the original convenanting parties.
                      b)      The covenanting parties must have equal interest in their own land
                              (typically fee simple).
                      c)      TWO TYPES: Instantaneous privity and Simultaneous (Mutual) privity
                              (1)      Instantaneous privity: That "split second in time" where owners
                                       share an interest in common when property is transferred from
                                       one to the other.
                                       (a)      Essentially a "legal fiction" created by the US courts to
                                                justify imposing a burden on an owner who was not a
                                                party to the original agreement.
                              (2)      Simultaneous (Mutual) privity: Where both parties have an
                                       ongoing interest in same property (such as landlord tenant).
                                       (a)      Mutual privity exists in Landlord-Tenant relationship
                                                (because both parties have a simultaneous interest in the
                                                same land).
                                       (b)      Mutual privity also exists where one party has an
                                                appurtenant easement in the other's land.
                      d)      Horizontal Privity DOES NOT EXIST in promises between neighbors.
                      e)      Horizontal Privity DOES NOT EXIST in promises made by grantor or
                              grantee after conveyance.
                      f)      Horizontal Privity is a FORMALITY
                              (1)      Suppose two owners of neighboring parcels want to create a
                                       covenant which runs with the land. They cannot simply promise
                                       each other, because this is a contract between individuals.
                                       There is no horizontal privity. But, to create horizontal privity,
                                       both parties can transfer their land to a "straw man" this creating
                                       privity. The "straw man" then conveys back the parcels to each
                                       party with the desired covenant.
                                       (a)      Although this may seem to make horizontal privity an
                                                undue and useless burden, some commentators note
                                                that the requirement may be useful in putting owners on
                                                notice that they are doing something more than making
                                                simple promises with one another.


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     g)   Some courts allow the BENEFIT to run with land, even if Horizontal
          Privity is missing. (But, Horizontal Privity is REQUIRED for the
          BURDEN to run with the land).
     h)   R3d Property (Servitudes) would eliminate Horizontal Privity.
          (1)     Instead, the restatement would simply invalidate servitudes
                  which have no "rational justification or that violate public
                  policies." (p. 457)
5.   VERTICAL PRIVITY
     a)   The relationship between successive owners of land.
     b)   Vertical privity exists where previous owner retains no interest in land.
          (1)     For example, in a lease, the tenant does not have vertical privity
                  because the owner retains a reversionary interest in the
                  property.
     c)   Vertical privity does not exist where:
          (1)     A successor in interest has an estate of lesser duration than the
                  previous owner (LL-T)
          (2)     Neighbors who are intended beneficiaries, but who were not
                  part of the original covenant, wish to enforce.
                  (a)       Note, this only means that the neighbor cannot receive
                            $$ damages. Almost all courts allow neighbors to
                            enforce covenants as equitable servitudes (injunction).
                  (b)       To enforce as equitable servitude, neighbor must show
                            that GRANTOR INTENDED to benefit neighbors with
                            covenant.
                  (c)       Intent may be STATED or may be implied by existence
                            of COMMON SCHEME.
     d)   R3d Property (Servitudes) would adopt relaxed view
          (1)     R3d would allow enforcement of real covenant against
                  possessory interest regardless of reversionary interests.
     e)   Homeowners Association may enforce real covenant.
          (1)     Even though the association itself owns no property, "It is now
                  well settled, . . . homeowners associations have standing to
                  enforce those servitudes." (p. 458)
          (2)     BUT, some courts require the charter of the homeowners
                  association to AUTHORIZE the association to take
                  enforcement action.
          (3)     Vertical privity may be RELAXED on the BENEFIT side.
     f)   Practical result: Tenant cannot be sued for $$ damages.
          (1)     "[D]amage remedies are not available against a tenant who
                  violates a covenant in the deed to the landlord when that
                  covenant is not contained in the lease; similarly, a landlord may
                  not be able to sue a subtenant for unpaid rent." (p. 460)
6.   TOUCH & CONCERN
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a)   The covenant must be connected to the use and enjoyment of land.
     (1)       A covenant touches and concerns land if it benefits the owners
               AS the owners of the land.
b)   Traditional view was that restriction was on use of the land itself.
c)   2 Part test: Use or Enjoyment AND Market Value
     (1)       To touch and concern land, a covenant must have something to
               do with the use of the land OR be connected with enjoyment of
               the land AND
     (2)       must affect the market value of the land (increasing benefited
               parcel and/or decreasing the value of the burdened land.
d)   Old court decisions did not recognize economic covenants as "touching
     and concerning" the land.
e)   Modern view supports recognition of non-competition covenants.
     (1)       "An otherwise enforceable covenant not to compete should be
               held enforceable in the same manner as an equitable servitude."
               (Whitinsville Plaza v. Kotseas, @ p. 442, citing Restatement
               of Property § 539).
f)   Likewise, covenants to pay homeowners dues are enforceable at
     modern law.
     (1)       But, other covenants to pay are troublesome to courts.
     (2)       EXAMPLE: In Castlebrook, Ltd. v. Dayton Properties, the
               court found that a covenant to return a tenant's security deposit
               did not touch and concern the land and so was not binding on a
               successor landlord. (See p. 462 for a variety of examples).
g)   BURDEN and BENEFIT must touch and concern land.
     (1)       BURDEN: touches and concern if it affects how the owner can
               use the land or decreases the market value.
     (2)       BENEFIT: touches and concerns if it reduces legal restrictions
               on use or increased market value.
h)   PERSONAL SERVICES are not generally contemplated by Touch
     and Concern
     (1)       In cases where the burden is personal, it is enforceable against
               that person even after they move away. (burden which is not
               attached to land follows the promisor).
i)   If the BENEFIT does not touch and concern, but the BURDEN does,
     there is a split as to whether the benefit is enforceable.
     (1)       EXAMPLE: Simpsons sell an entire vacant lot to Flanders, on
               the condition that Flanders put up the "Simpson building." The
               burden touches and concerns Flanders new land, but the benefit
               does not (it benefits Simpson personally).
     (2)       Courts use touch and concern to find covenants held in gross
               are generally not enforceable.
j)   Split in finding touch and concern in AFFIRMATIVE COVENANTS
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              (1)       Covenants which require owners to continue particular uses are
                        troublesome for courts. (AZ rule: golf course owner MUST
                        operate golf course per covenant (injunction). CA rule: No
                        injunction granted to force operation, but lien placed on golf
                        course property to compensate holders of dominant estates for
                        any losses resulting from closure of golf course).
      k)       R3d Property (Servitudes) would eliminate touch and concern.
               (1)      In its place, the restatement would make covenants enforceable
                        unless they are "unconscionable, without rational justification, or
                        otherwise would violate a strong public policy." R3d §§ 3.1-3.7
                        (p. 463).
7.    EQUITABLE SERVITUDE - Remedy in equity (injunction)
a)    No privity of estate required.
               (1)      But a balancing of the BENEFIT and BURDEN will still be
                        examined.
(2)   Owner of possessory interest in the dominant tenement has the right to enforce,
      regardless of privity.
(3)   Whitinsville Plaza v. Kotseas, p. 437. Kotseas convey some land to "The
      Trust," but retain a neighboring parcel. "The Trust" is a wholly owned
      subsidiary of Whitinsville Plaza. Trust plans to convey the land to Plaza for a
      convenience store. In the conveyance Kotseas covenants not to allow a
      discount-drug store on its retained parcel. Later Kotseas leases their retained
      parcel to CVS (a mega discount drugstore/department store) without informing
      CVS of the covenant. Whitinsville already had a shopping center on its land.
      MA S Ct. finds that t. court erred in granting summary judgment to Kotseas on
      Plaza's failure to state a claim.
(4)   ISSUES in Whitinsville Plaza case: 1) Can Whitinsville (successor in fee
      simple to The Trust) enforce the covenant against CVS (a leaseholder in
      Kotsea's fee simple interest)? If so, for $$ or injunction? 2) Can Whitinsville
      enforce against Kotseas? If so, for $$ or injunction? MA S Ct. holds that the
      WRITING and INTENT requirements are satisfied by the original deed.
      NOTICE to Kotseas is clear because it is actual notice (they agreed to the
      covenant). CVS was at least on constructive notice, because they could have
      discovered the covenant was by title search (Kotseas claims that mention was
      made of the covenant in the lease, but this is not substantiated by the facts).
      PRIVITY: clearly exists between Kotseas as a fee simple owner who agreed
      to the covenant and Whitinsville Plaza as successor in fee interest to The Trust.
      But, privity DOES NOT exist between Whitinsville and CVS because Kotseas
      retains a reversionary interest in the land it leased to CVS. Thus, Whitinsville
      CANNOT obtain money damages against CVS (only an injunction), but might
      be able to obtain $$ or injunction against Kotseas. TOUCH AND
      CONCERN: In this case, the court takes the modern view that an anti-
      competition covenant does touch and concern the land.
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(5)   See pp. 465-469 for a DETAILED analysis of the Whitinsville Plaza case.
      b)     REVIEW PROBLEM, p. 469.
             (1)    Developer creates subdivision with 20 lots. One lot is
                    conveyed with covenant that it will be used as daycare center
                    for benefit of the other property owners in the subdivision. The
                    original owner of the daycare center sells to a new owner. The
                    new owner solicits minority children from outside of the
                    subdivision. The owners in the subdivision (perhaps because of
                    racial prejudice) want to block the daycare center from allowing
                    these children in. What do you tell the owner? In particular
                    focus on INTERPRETING the COVENANT; TOUCH and
                    CONCERN; and considerations of PUBLIC POLICY.
8.    IMPLIED NEGATIVE RECIPROCAL EASEMENT (INRE)
      a)     Based on concepts of COMMON SCHEME and THIRD PARTY
             BENEFICIARY
             (1)    COMMON SCHEME: Courts may enforce covenants among
                    multiple owners restricting use of land if the properties were all
                    intended to be a part of a common plan.
                    (a)      If Homeowners Association is to enforce covenants, its
                             charter must authorize it to do so.
      b)     FACTORS INDICATING a COMMON SCHEME
             (1)    presence of restrictions in all or most of the deeds in an area.
             (2)    recorded plat showing restrictions
             (3)    presence of restrictions in the LAST deed from original grantor
                    (since the grantor retains no interest in the area, the court
                    assumes the covenant is intended to benefit other lot owners).
             (4)    observance by owners of similar development of their land and
                    conformity to written restrictions
             (5)    language stating intent for covenants to run with the land
             (6)    recording of an instrument declaring that the covenants are
                    intended to be mutually enforceable.
      c)     DEVELOPER CANNOT enforce restrictions once the last lot is sold.
             (1)    Exception: A California case allowed enforcement by the
                    developer's successor in interest when the covenant provided
                    for such enforcement and the declaration gave the homeowners
                    association the power to amend the declaration and take
                    control of the architectural commission by a 2/3 vote. (see BCE
                    Development v. Smith, p. 490). BUT. Also see Cal. Civ.
                    Code § 1462 which prohibits enforcement IN GROSS. (direct
                    contradiction here?). (p. 490).
             (2)    Also, developer may be allowed to enforce if she owns another
                    tract ADJACENT TO the parcels with the covenants.

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d)   R3d would allow enforcement IN GROSS where party has "legitimate
     interest." (p. 490).
e)   EARLY vs. LATER Buyers
     (1)      If later buyer's deed do not have restrictions recorded,
              enforcement problems arise. Later buyers may enforce against
              earlier buyers, but early buyers may not be able to enforce
              against later buyers. Problems of NOTICE and PRIVITY of
              ESTATE (for $$ damages) are present.
     (2)      NOTICE PROBLEMS: If the later purchaser has no recorded
              restrictions in her deed, she must search the title of all the other
              lots in the neighborhood to try to discover any INRE's.
     (3)      To solve this notice problem, developers today often file a
              DECLARATION OF RESTRICTIONS intended to apply to
              all lots. Buyers impliedly agree to these terms when they
              purchase their lot.
     (4)      PRIVITY PROBLEMS: If the covenants are only made by the
              grantees to not engage in certain uses, then earlier buyers
              CANNOT enforce for $$ damages (real covenant) against later
              buyers. There is no HORIZONTAL PRIVITY between them.
              O's transfer to A is already complete at the time O sells to B.
     (5)      THIS PROBLEM IS EASILY SOLVED: If the covenant is
              also made by the GRANTOR, then when O conveys to B, the
              promise by O to A (which IS now supported by
              HORIZONTAL PRIVITY) flows to B in the sale
              (instantaneous vertical privity).
              (a)       "When the later buyer B purchases Lot 2, some of the
                        sticks in the bundle of property rights have already been
                        transferred to A. O can convey only what she owns,
                        and that is all B can get when B buys Lot 2." (p. 492)
f)   THIRD PARTY BENEFICIARY Doctrine
     (1)      This doctrine allows contractual promises to be enforced by
              someone for whose benefit a promise was made even though
              the promise was not made to that person. (p. 492)
     (2)      Solves privity of estate problems associated with common
              scheme INRE's. (see examples above.)
g)   UNIFORM PATTERN OF DEVELOPMENT puts later buyer on
     inquiry notice of restrictions within neighborhood.
h)   Neighboring lots owned by grantor may be included in "common
     scheme"
     (1)      If lots neighboring the "common scheme" are shown on the
              original plat and are owned by the same developer, some courts
              will find these bordering parcels to include the same restrictions.
              (see Note 5(a), p. 493).
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             (a)       In effect, the grantors neighboring lots may be "sucked
                       in" to the common plan (in effect a sort of estoppel on
                       the original grantor).
     (2)      BUT, MOST COURTS honor the grantor's intent and will
              enforce INRE's on neighboring land only where the grantor has
              specifically intended to make those restrictions binding on
              parcels neighboring the common scheme.
i)   FACTORS which NEGATE COMMON SCHEME
     (1)      piecemeal development
     (2)      over an extended period
     (3)      separate recorded subdivisions
j)   Neighboring lots may use third party beneficiary doctrine to enforce in
     equity, but not for $$ damages.
     (1)      A minority of courts require strict privity of estate to allow
              enforcement of covenants. (thus denying neighbors who were
              not parties to the original promise the right to enforce).
     (2)      Majority Rule: Third party beneficiaries have standing to
              enforce covenants in equity (by injunction). (p. 494)
k)   EXAMPLE cases
     (1)      Sanborn v. McClean, p. 480. Original owner "platted"
              (mapped out and approved as individual lots, usually be county)
              91 lots in 1891. In 1892, 10 lots are sold w/ with restrictions
              (including a limitation to residential use). In 1893, 11 more lots
              deeded with the same restrictions. In Sept. 1893 the future
              McClean lot is purchase without restrictions. McCleans obtains
              the property through "mesne conveyances" (several
              intermediaries) in 1910 or 1911. Of all lots sold (91), 53 have
              the restrictions. McCleans decide to build a gas station on their
              property. Other residents (including Sanborns) bring suit. MI
              S Ct. Upholds T. Court decision that McCleans cannot
              construct a gas station on their property because a "common
              scheme" is present. The court reasons that McCleans were on
              INQUIRY notice of the restrictions because of the residential
              nature of the area, and were on CONSTRUCTIVE notice
              because they could have found the restrictions by doing a title
              search of all properties in the area sold by the original grantor.
              However, S Ct. modifies decision to allow structures already
              built by McCleans to stand, IF they can be used for purposes
              consistent with the covenant.
     (2)      ANALYSIS of Sanborn:
              (a)      WRITING: court finds that the writing requirement is
                       satisfied by the existence of covenants on OTHER lots
                       sold by the grantor in the same neighborhood.
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                    (b)     INTENT: Court says that grantors intent to create
                            "high grade" residential neighborhood was clear by
                            $2,500 minimum value of house language in conveyance
                            (conclusory statement, no strong facts to back up this
                            statement—IF this was grantor's intent, why not file
                            Declaration of Restrictions w/ plat or burden ALL
                            parcels?).
                            (i)    Intent Dilemma: The first lot was sold with grantee
                                   restrictions (INRE) but by the time the last lot was
                                   sold, barely over half of the lots were burdened by the
                                   restrictions.
                            (ii)   Here, the court reasons that the TYPE of restrictions
                                   indicate intent. By reserving SOME lots to high cost
                                   housing, the other lots are benefited. Therefore, they
                                   must be dedicated to uses which are consistent with
                                   that benefit.
                    (c)  NOTICE: No actual notice to McCleans, but court
                         says they could have found restrictions by searching
                         neighboring lots. Court reasons they knew which lots
                         to search because their abstract of title mentioned the
                         original subdivision. Also, the court finds they were on
                         inquiry notice because of the CONDITION of the
                         neighborhood.
               (d)       Privity not of concern because  wants and injunction.
               (e)       Promise clearly touches and concerns the land
                         (restricting type of use).
          (3)  Riley v. Bear Creek, p. 483. Riley builds a "snow tunnel" on
               his property. There are no restrictions in Riley's deed. And, no
               restrictions were on file (plat, declaration of restrictions, etc.)
               when the parcel was conveyed by the developer to the first
               owner, BUT were filed 9 months later. The homeowners
               association sues to enforce the covenant. CA S Ct. Holds:
               Since the restrictions were not recorded BEFORE the original
               transfer of the parcel, they are not binding on subsequent
               owners.
          (4)  NOTE on Riley: In the facts of the case, it is likely that the
               developer had orally discussed the "common scheme" of the
               neighborhood with the first purchaser, and intent of the grantor
               is clearly shown by the later recorded Declaration of
               Restrictions. The dissent would have used this evidence to hold
               Riley to the later recorded declaration.
          (5)  Note that this is a case where the homeowners association is
               trying to enforce directly. This may help individual homeowners
               who do not want to personally confront their neighbors.
9.   REVIEW PROBLEMS, p. 495-97.
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H.   LIMITATIONS on SUBSTANTIVE CONTENT of SERVITUDES
     1.   No unreasonable restraints on alienation.
          a)    Review policies against unreasonable restraints on estates in land (Fall
                '97 outline).
          b)    Reasonable or indirect restraints may be upheld.
                (1)      Where the value conferred on the dominant tenement outweighs
                         the burden on the servient tenement or neighboring land, such
                         restraints will be enforced by the courts.
     2.   No Racially Restrictive Covenants
          a)    Such covenants violate 14th amendment IF enforced by STATE
                ACTION
                (1)      In Shelly v. Kramer, on reason the court gave for rejecting the
                         covenant was that if the covenant was enforced, the state would
                         have to physically remove the Shellys from the house.
                (2)      In fact, if the Shelly's had not already been living in the house, it
                         is not clear that the State would have still invalidated the
                         restriction.
          b)    MODERN LAW: such covenants violate the Fair Housing Act, 72
                USC §§ 3601 et seq.
          c)    MODERN LAW: such covenants also violate the civil Rights Act of
                1866, 42 USC §§ 1981, 1982.
          d)    Also contravene modern public policy.
          e)    Some states have passed legislation invalidating such restrictions.
          f)    EXAMPLES
                (1)      Shelly v. Kramer, p. 622. 30 of 39 owners of 47 of 57 parcels
                         sign a covenant, intended to run with the land, which states that
                         the property can only be occupied by whites for the next 50
                         years. The restriction is in the form of a condition precedent to
                         sale (in other words, if somebody is trying to violate by selling
                         to non-whites, the sale will not occur). 34 years later, one of the
                         owners of a parcel covered by the covenant decides to sell to
                         the Shelly's. Kraemer's, owners of a neighboring property sue
                         based on the covenant.
                (2)      ANALYSIS of Shelly: This is probably an equitable servitude
                         because there is no conveyance of property at the time the
                         conditions and promises are made, and thus no privity. If this
                         agreement is to be enforced at all, it will be with an injunction.
                (3)      HOLDING in Shelly:             The US S Ct. HOLDS that
                         GOVERNMENT enforcement of the covenant is not possible
                                    th
                         due to 14 amendment violations. BUT, that the covenant itself
                         is not invalid. (this rule was later changed by the Fair Housing
                         Act).

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                      WHY DIDN'T SHELLY JUST MAKE A CLAIM ON
                    (4)
                      UNREASONABLE RESTRAINT ON ALIENATION?
                      Probably could have, EXCEPT, that such claims are STATE,
                      not FEDERAL. Shelly needed a FEDERAL claim to get out of
                      the MO state courts.
               (5)    The RULE of Shelly also applies to conditions placed on fee
                      interests in land.
               (6)    ALSO, note the problems with TOUCH and CONCERN.
               (7)    Evans v. Abney, p. 629. Property conveyed in trust to city as a
                      park, with covenant that its only for the use of whites only. If
                      condition is broken, property is to revert to settlor's heirs.
                      Eventually the city realizes that it is UNLAWFUL to maintain a
                      public park "for whites only." When city decides to open park
                      to all races, other trustees of the park object. The city
                      withdraws from the board of trustees, in order to allow the
                      board to privately enforce the covenant. The US S Ct.
                      HOLDS that the park cannot revert to private control by mere
                      withdrawal from the board by the city. In response, the GA S
                      Ct. then holds that the settlor's intent can no longer be honored,
                      and so the property reverts to his heirs. US S Ct. yields to the
                      GA court because the interpretation of a grantor's intent and
                      dissolution of the trust are matters of state not federal law.
     3.  DOCTRINE of CY PRES and Unenforceable Covenants
         a)    Modifying otherwise unenforceable covenants
               (1)    Cy pres could be applied to modify the grant in Evans, but the
                      court found that because of the clear, specific intent of the
                      settlor, such modification was inappropriate. (In this case, the
                      court points to the senator's statement that he doesn't think the
                      races should mix socially as evidence that his intention was
                      racially based, not based on creating a park.)
               (2)    Where can cy pres be applied?
                      (a)      When a specific charity no longer exists, if the court can
                               find an alternative charity which would fulfill the
                               grantor's intent, then cy pres may be used.
                      (b)      But, if the change effectively negates the grantors intent,
                               then cy pres cannot be applied.
                      (c)      DISSENT in Evans would have modified covenant
                               because allowing the park to revert to private hands
                               ALSO amounted to state action. In this view, allowing
                                                              th
                               the reversion violated the 14 amendment.
I.   TERMINATION of COVENANTS
     1.  Ways of terminating covenants:
         a)    Express terms.
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            (1)     On a specified condition or date expressly stated in the
                    restriction (e.g., term of years).
     b)     Merger.
            (1)     It the burdened and benefited estates are held by the same
                    person, the covenants are terminated.
     c)     Written release.
            (1)     Agreement between the parties to terminate.
            (2)     For neighborhood "common scheme"
                    (a)       Each owner can give up their own right to enforce the
                              covenant, but they cannot remove the right of the other
                              party to enforce.
     d)     Prescription
            (1)     An apparent open and notorious violation of the covenant for
                    the statutory period.
     e)     Marketable title statute
            (1)     Requiring covenants be periodically re-recorded to keep them
                    in force.
2.   Doctrine of Changed Conditions
     a)     DOES NOT APPLY TO EASEMENTS
     b)     Covenants will not be enforced if conditions have changed drastically.
     c)     Changed Conditions focuses on the DOMINANT PARCEL.
            (1)     Change is considered drastic where the covenant is no longer of
                    SUBSTANTIAL BENEFIT to the dominant parcel.
     d)     Doctrine may apply where changes occur outside of a subdivision.
            (1)     But ONLY where the change outside has so adversely affected
                    EVERY LOT in the subdivision that enforcement is pointless.
            (2)     For instance, in Allemong v. Frendzel, (p. 509) a grocery
                    store which wanted to sell alcohol in contravention of a
                    restrictive covenant was unable to convince the court that
                    because other stores within a three mile radius sold alcohol,
                    they should be allowed to also. The VA S Ct. found that
                    because the immediate neighborhood was agricultural and
                    residential, the covenant should be upheld.
            (3)     El Di v. Town of Bethany Beach, p. 505. Bethany Beach
                    founded as a quiet, church town. Later as town developed,
                    only 15% of all property was burdened with covenant which
                    excluded sale of alcohol and commercial use. El Di buys a
                    restaurant on a restricted lot and wants to sell alcohol. A store
                    sells alcohol 300 yards away. Town sues to enjoin them. DE S
                    Ct. OVERTURNS T. Ct. injunction against El Di finding that
                    public policy favors allowing the restaurant to control alcohol
                    consumption, and that the restrictions no longer serve a
                    beneficial use to the dominant parcels.
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     e)     Restatement Property § 164 allows damages when a finding of changed
            conditions is made.
            (1)      NOTE: This means that even where privity is missing, a court
                     may award damages UNDER an EQUITABLE SERVITUDE
                     if an injunction is too severe, but no action is unfair to the owner
                     of the dominant estate.
3.   Doctrine of RELATIVE HARDSHIP
     a)     Relative Hardship focuses on the SERVIENT estate.
            (1)      "A covenant will not be enforced of the harm caused by
                     enforcement, that is, the hardship to the owner of the servient
                     estate, will be greater by a "considerable magnitude" than the
                     benefit to the owner if the dominant estate. Restatement
                     Property § 563 (1944). (p. 510).
            (2)      Shalimar v. DOC, Note 3, p. 510. Golf Course owner
                     required by injunction to continue operating golf course which is
                     losing $$. "A mere change in economic conditions rendering it
                     unprofitable to continue the restrictive use is not alone sufficient
                     to justify abrogating the restrictive covenant."
            (3)      Lange v. Scofield, p. 510. Owner of lot allowed to build, even
                     though restrictive covenant required permission of all neighbors
                     (one neighbor objected). Finding that the construction would
                     not affect surrounding property values, the AK S Ct. HELD
                     that the benefit derived by the neighbor was negligible
                     compared to the hardship on the lot owner in not being able to
                     build.
4.   INJUNCTIONS v. $$ Damages
     a)     Traditional Economic Arguments (see LAW and ECONOMICS, Fall
            '97 outline)
            (1)      Injunction works best where parties can bargain for result.
            (2)      $$ damages work best where transaction costs are too high to
                     promote efficiency.
5.   EQUITABLE DEFENSES and OTHER WAYS TO TERMINATE
     SERVITUDES
     a)     Acquiescence, abandonment, or unclean hands
            (1)      If a party has already violated the covenant themselves (unclean
                     hands), has tolerated previous violations of the covenant by the
                     owner of the servient estate (acquiescence), or has tolerated
                     violations of the covenant by other restricted parcels in the
                     neighborhood (abandonment), they may be denied
                     enforcement.
     b)     Estoppel
            (1)      An owner of a servient estate who acts in reliance on the owner
                     of the dominant estate's oral promise to not enforce the
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                                    covenant may estop the dominant owner from enforcing the
                                    covenant.
                     c)Laches
                       (1)     If the covenant has been ignored or breached for a substantial
                               period of time, but less than the time necessary for prescription,
                               the court may still find the delay in enforcement induced reliance
                               by the servient estate which would cause enforcement of the
                               covenant to be unconscionable.
                d)     Marketable Title Acts
                       (1)     In some states, statutes require that covenants be periodically
                               re-recorded to remain enforceable.
          6.    REVIEW PROBLEM, p. 515-16.
                a)     Another daycare center controversy.
      J.  REFORMING THE LAW OF SERVITUDES (pp. 11-26, reader)
          1.    Restatement tries to persuade Jx to adopt unified approach to
                servitudes.
                a)     Eliminate touch and concern
                b)     Eliminate privity
                c)     Base enforcement on reasonableness and public policy.
          2.    Some formalities may serve beneficial purposes
                a)     Requiring writing and privity provides assurance that owners understand
                       the gravity of the promise.
                b)     touch and concern assures promise has something to do with land use
                       & enjoyment.
          3.    CONSERVATION EASEMENT
                a)     A promise not to develop specific land.
                       (1)     Such easements are purchased from the owner and are held in
                               gross by the government. CA Civ Code § 815.
                       (2)     Conservation easements may not be held by private parties.
II.   COMMON OWNERSHIP
      A.  Forms of Co-Ownership
          1.    TENANCY IN COMMON
                a)     Preferred at law
                b)     Tenants in common each have right to possess entire property.
                       (1)     For instance 3 owners each own 1/3 as tenants in common.
                               They each get 1/3 of the revenues when the property is sold,
                               but each has the right to possess the entire parcel.
                c)     Tenants in Common may transfer w/o permission of co-owners.
                       (1)     This conforms to notions that such a restriction might constitute
                               an unreasonable restraint on alienation.
                       (2)     This included the power to devise by will.
                               (a)       (if no will, the intestacy statutes of the state will
                                         determine who the interest goes to.)
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2.   JOINT TENANCY
     a)     Co-owners have RIGHT of SURVIVORSHIP
            (1)      This differs from tenants in common, where the ownership
                     interest goes to the co-owners heirs.
     b)     Typical form of ownership for spouses in some states.
3.   Creating a Joint Tenancy: THE FOUR UNITIES
     a)     TIME
            (1)      The interest of each joint tenant must be created at the same
                     moment in time.
     b)     TITLE
            (1)      All joint tenants must acquire title by the same instrument.
     c)     INTEREST
            (1)      All joint tenants must possess equal fractional undivided
                     interests in the property and their interest must last the same
                     amount of time.
     d)     POSSESSION
            (1)      All joint tenants must have the right to possess the entire parcel.
     e)     NOTE: Some states have done away with one or more of these
            formalities.
4.   Severance of a Joint Tenancy
     a)     Joint tenancy is terminated by sale of interest to another.
     b)     Permission of co-owner is not required to sell.
            (1)      Because of the above two rules, Joint Tenancies are very
                     fragile. They only last as long as the parties so desire. A party
                     to a joint tenancy may terminate it at anytime through a "straw
                     man" transaction.
            (2)      CA RULE: A joint tenancy may be converted to tenants in
                     common by filing a document transferring one's own interest.
     c)     Only co-owner who transfers is no longer joint tenant
            (1)      Any other co-owners (if more than two originally) maintain pre-
                     existing relationship as joint tenants, but now they as a group
                     are tenants in common with the new owner.
5.   CONFLICTING authority as to effect of leasing one's joint tenant
     interest.
     a)     CA RULE: Joint Tenancy NOT affected by lease to third party.
            (1)      "Because a joint tenancy may be created only by express intent,
                     and because there are alternative and unambiguous means of
                     altering the nature of that estate, we hold that [a] lease…[does]
                     not operate to sever the joint tenancy." Tenhet v. Boswell at p.
                     723.
            (2)      Tenhet v. Boswell, p. 721.  owns land as joint tenant. Co-
                     owner leases his interest to  without knowledge or consent of
                     , supposedly granting  an option to purchase. Co-owner
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                 dies, and  sues to regain possession of property from 
                 lessee. Accepting the fact that some Jx hold that such a lease
                 would terminate the joint tenancy, the CA S Ct. HOLDS that a
                 lease by one co-owner DOES NOT destroy the joint tenancy.
                 Furthermore, since the joint tenancy is not destroyed, the co-
                 owner can ONLY lease the interest they have. THUS, when
                 the co-owner died, SO DID THE LEASE.  now owns the
                 property in fee simple, unencumbered by the now extinguished
                 lease.
                 (a)      In reasoning this case, the court found that because the
                          leasing co-owner retained a reversionary interest in the
                          property, the joint tenancy was not severed. In a sense,
                          one could say that leasing is a way by which a co-
                          owner exercises their right to possession.
                 (b)      Note: the CA Court's interpretation here goes strongly
                          against the typical notions we have about the fragility of
                          joint tenancies.
     b)    NB RULE: Lease continues beyond joint tenancy
           (1)   Kreshaw v. Kreshaw, p. 725. Father and  mother co-own a
                 piece of land (tenants in common). Without mother's consent
                 or knowledge, father rents land to  son. Father and mother
                 get divorced.  mother receives property in divorce settlement
                 in fee simple.  mother desires to now invalidate  son's lease
                 since she now owns land in fee simple. NB S Ct. HOLDS That
                 although the mother now owns the land outright, the lease is still
                 VALID by reasoning that the mothers acquisition of sole
                 ownership where a lease existed was similar to where a person
                 buys land from another with knowledge of an existing lease.
                 (a)      NOTE: in this case mother still retains her interest to
                          possess as a co-owner. (may raise issue of constructive
                          ouster and potential for son to have to pay her an
                          addition 1/2 rent…)
                 (b)      NOTE: Since mother KNEW of lease during divorce
                          proceedings, she should have asked court to consider
                          reducing value of land by 1/2 when calculating divorce
                          settlement.
     c)    MD RULE: Lease DESTROYS joint tenancy
           (1)   Alexander v. Boyer, note 3, p. 727. Where a joint tenant
                 leased her interest in the land, the joint tenancy was converted
                 into a tenancy in common because the "unities" of interest and
                 possession were destroyed.
6.   Mortgages and joint tenancy: LIEN theory v. TITLE theory (note 4, p.
     727).
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     a)     LIEN theory: Joint tenancy is preserved.
     b)     TITLE theory: Joint tenancy destroyed.
7.   Creating a "lasting" joint tenancy
     a)     Dual life estates with alternative contingent remainders. (p. 711)
            (1)      O to A and B as life tenants, with a remainder in A if A survives
                     B, and a remainder in B if B survives A.
                     (a)      In this case, even if one of the parties transfers their life
                              estate, the right of survivorship (the remainder) remains.
8.   Interpreting conveyances: Tenancy in Common v. Joint Tenants
     a)     Presumption is of Tenancy in Common. (p. 711)
            (1)      IF a conveyance is ambiguous, the presumption by the courts is
                     that a TENANCY IN COMMON was intended.
            (2)      JOINT TENANCY can only be established by a CLEAR
                     STATEMENT of INTENT to do so.
     b)     Co-owners can ONLY transfer the interest they have in property.
            (1)      Thus, if one tenant in common LEASES her share, the lessee
                     steps into the shoes of the lessor and becomes a tenant in
                     common with the other owners for the duration of the lease.
                     (Carr v. Deking, p. 720.)
     c)     AGREEMENT b/t co-owners not to lease without permission of others
            IS NOT an unreasonable restraint
            (1)      However, if one of the co-owners decides to breach such an
                     agreement, the injured co-owners redress is probably only
                     going to be $$ damages against the co-owner.
                                                                           rd
                     (a)      Justified on the basis that an unknowing 3 party lessee
                              should not bear the burden of conflicts between the co-
                              owners.
                     (b)      HOWEVER, if it can be shown that lessee knew of the
                              agreement and leased anyway, questions of good faith
                              may allow the injured co-owner to terminate the lease.
9.   OBLIGATIONS of CO-OWNERS
     a)     Sharing the benefits of ownership
            (1)      If one tenant chooses to live on the property and another
                     chooses not to, the party living on the property does not have to
                     pay rent to the other.
            (2)      But, co-owners MUST pay (pro-rata) rent if they have
                     OUSTED their co-owners.
     b)     OUSTER defined
            (1)      An explicit act by which one co-owner wrongfully excludes
                     others from the jointly owned property.
            (2)      "CONSTRUCTIVE OUSTER" occurs if the property is
                     physically too small to be physically occupied by all the co-
                     owners.
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             (a)      "[T]he obligation of the occupying cotenant to pay rent
                      may arise in the absence of "actual" ouster when the
                      realities of the situation, without there being any fault by
                      either cotenant, prevent the cotenants from sharing
                      occupancy." Olivas v. Olivas, p 716.
             (b)      "If one of the parties in a divorce remains in possession
                      of the community residence . . . then there may be a
                      form of constructive ouster . . .. To hold otherwise
                      would mean that both divorced spouses should have
                      continued to live with each other . . . or that both should
                      have abandoned the property." Olivas v. Olivas,
                      quoting Hertz v. Hertz, p. 716.
             (c)      "If, however, hostility flows only from the cotenant out
                      of possession, ordinarily there would be no constructive
                      ouster."      Olivas v. Olivas citing O'Connell v.
                      O'Connell, p. 717.
     (3)     Olivas v. Olivas, p. 715. Married couple owned house
             originally as community property. In December '84 couple
             converts ownership to tenants in common. This situation lasts
             almost three years, during which the wife lives in the home and
             the husband lives elsewhere. Husband sues for 1/2 rent during
             tenancy in common because he has been "excluded" from use
             and enjoyment of the property. NM Ct. App. HOLDS that
             Husband voluntarily left (was "pulled" not "pushed" from home).
             Also, court notes that husband's delay in suing for rent (not until
             three years later) indicated he did not feel deprived of the right
             to possess at the time of dispossession, and so he cannot collect
             rent.
c)   Co-owners share any rents paid by third parties.
d)   Any co-owner may lease her interest without consent of other co-
     owners.
e)   Sharing the Burdens of ownership
     (1)     Co-owners must share mortgage payments, property taxes,
             insurance and costs of major improvements.
     (2)     Where "balance" is due, if property is partitioned, a co-owner
             may be able to satisfy the debt of other co-owners from the
             proceeds of the sale.
     (3)     If a co-owner is occupying the premises, and the expenses
             related to the property are less than the value of her occupation,
             then she must pay all expenses.
f)   REVIEW PROBLEM, p. 718-19
     (1)     Abused woman throws husband out of the house. Separated
             for two years, then divorced. After wife is awarded house in
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                      divorce, husband sues for 1/2 rent during the separation.
                      NOW, suppose wife leaves house and refuses to return when
                      husband asks. Now she sues for 1/2 rent. Same result? Is the
                      battery a "constructive ouster"?
10.   PARTITION
      a)   Joint tenants or tenants in common may file for partition.
           (1)      If it is physically possible, partition results in a line(s) being
                    drawn on the property and each of the parties with an
                    ownership interest being allotted their pro-rata share in fee
                    simple.
           (2)      BUT if it is not physically possible (such as where a HOUSE is
                    owned in common, the PROPERTY will be SOLD, and each
                    party will receive their pro-rata share of the proceeds.
           (3)      Carr v. Deking, p. 719. Father and  son own parcel of farm
                    land as tenants in common. For twelve years they rent to .
                    Rent is in the form of a share of 's crops. Then, the  son
                    decides he wants $$ instead of a share, and so notifies . In
                    turn,  goes to father and negotiates 10 year lease based on
                    share of crops. Then father dies.  sues to invalidate the lease
                    granted by his father to . WA Ct APP HOLDS: The lease 
                    negotiated with the father is VALID, and is not subordinate to
                    the 's interest as a tenant in common who did not agree to the
                    lease.  is given a choice of remedies: 1) to agree to the terms
                    of his father's lease with  and collect rents accordingly (a share
                    of the crops), or 2) to sue for PARTITION. In this case, once
                    property is divided,  will only have half of the land to farm
                    under the 10 year lease, and must continue to pay the successor
                    to the lessor (presumably ) based on the lease terms. But, this
                    will allow  to obtain possession of the other half of the
                    property UNENCUMBERED by his father's lease.
                    (a)      NOTE: another possibility we discussed in class is that
                             the son MIGHT be able to sue for constructive
                             OUSTER instead of partition. In this case, if the son is
                             successful, he might be able to collect 1/2 of the
                             reasonable rental value of the land (in $$). Interestingly,
                             this would apparently be IN ADDITION TO the share
                             of the crops he would collect as the successor to his
                             father's lease with Deking.
      b)   Agreements to not partition are generally VOID as restraints on
           alienation.
           (1)      Some courts will uphold such agreements if they are reasonably
                    limited in time and have a reasonable purpose.
11.   ADVERSE POSSESSION and OUSTER
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      a)  Co-owners cannot normally adversely possess against one another.
          (1)      UNLESS co-owner in possession NOTIFIES others of intent
                   to adversely possess.
                   (a)      (probably would require changing locks & putting up
                            signs & sending letter to make it CLEAR that
                            possession was EXCLUSIVE and HOSTILE and that
                            co-owners were on notice that the possessor was
                            intending to adversely possess.)
12.   TENANCY by the ENTIRETY (married couples)
      a)  Form of joint tenancy ONLY available to married couples.
      b)  Similar to Joint Tenancy EXCEPT:
      c)  The co-owners must be legally married.
      d)  The property cannot be partitioned except through divorce.
      e)  No transfer of interest w/o consent of other.
          (1)      In most states the interest of each spouse cannot be sold,
                   transferred, or encumbered by a mortgage without consent of
                   the other spouse.
                   (a)      Thus, one party cannot unilaterally destroy the joint
                            tenancy.
      f)  Attachment by creditors for ONE spouses debts
          (1)      In some states which observe tenancy by the entirety, creditors
                   cannot attach property held through tenancy by the entirety to
                   satisfy the debts of one of the spouses.
          (2)      Sawada v. Endo, p. 728. 's are injured when  husband
                   negligently gets into auto accident with them. Just before trial, 
                   husband and wife transfer their land, which they own by tenancy
                   of the entirety, to their sons. After judgment in their favor, 's
                   ask to have conveyance set aside as a fraudulent attempt to
                   avoid judgment. HI S Ct. HOLDS: that Hawaii will adopt
                   version of tenancy by the entirety which holds that such form of
                   ownership is IMMUNE from attachment by creditors of ONE
                   of the spouses. Having decided this, the court finds the
                   conveyance cannot be fraudulent because even if there had
                   been no conveyance, 's still could not attach the property in
                   question.
          (3)      BUT, in other states EITHER the HUSBANDS debts can be
                   attached but not the WIFE'S (old view); OR either spouse's
                   individual debts can be attached. (see p. 730 for a list of which
                   states follow which rule).
13.   COMMUNITY PROPERTY (CA RULE for married couples)
      a)  Property acquired before marriage remains under sole ownership.
      b)  Property acquired during marriage is owned by "community" as a
          partnership
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                    (1) This MAY include profits earned on separately owned property
                        during the marriage (depending on the Jx).
         c)     "Manager" of community property has fiduciary duties to spouse.
         d)     Typically, statutes REQUIRE that spouses agree to disposition of
                property under community ownership.
                (1)     CA Family Code § 1102 requires both spouses to join in
                        conveying any property.
         e)     Distribution on divorce varies.
                (1)     Some states give each spouse their separately owned property
                        plus one half of community property.
                (2)     Other states use "equitable distribution" to parse out all
                        property.
                        (a)      O'Brien v. O'Brien, p. 1116.  Husband pursues
                                 medical degree while wife supports him. She is a
                                 teacher at a private school, and foregoes obtaining her
                                 credential while he goes to school. They move to
                                 Mexico for his medical school, and then to NY for his
                                 residency. Then he dumps her. She sues for "half" of
                                 his medical license. NY S Ct HOLDS: Although not
                                 "traditional" property, the license can be considered
                                 equitable property of the marriage, and thus she should
                                 receive some compensation. In this case the court
                                 decides to value the license over the young doctor's
                                 working career based on his average earning potential,
                                 but discounted to present value.
                        (b)      NOTE: In the above case a PRIMARY issue is HOW
                                 to value the medical license. In fact, the method of
                                 calculation used in O'Brien is NOT the majority view.
                        (c)      OTHER         OPTIONS        for VALUATION            of
                                 EQUITABLE PROPERTY: 1) Reimburse spouse for
                                 work done. 2) make the number of years that she
                                 worked for him the basis for calculation how many
                                 years of salary should be subject to garnishment.
         f)     No right of survivorship
                (1)     Either party may devise their share as they wish.
B.   OWNERSHIP and DISTRIBUTION of MARITAL PROPERTY
     1.  States deal with marital property 3 ways
         a)     Tenancy by Entirety
         b)     Community Property (CA RULE)
         c)     Separate Property
                (1)     Spouses own their property separately except to the extent that
                        they CHOOSE to commingle their ownership through joint
                        tenancy or tenancy in common.
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                    (2)   Typically in such Jx, there are statutes which prevent a spouse
                          who "owns" all the property in a relationship from writing the
                          other spouse entirely out of their will.
C.   DIVORCE and MARITAL PROPERTY
     1.   ALL states have rules about distribution of property on divorce.
          a)     Typically involves EQUITABLE proceedings which BALANCE the
                 parties interests (see O'Brien v. O'Brien, supra)
     2.   CA STATUTES on DISTRIBUTION of EQUITABLE PROPERTY
          a)     CA Family Code § 2641 (p. 1125-26)
                 (1)      Party contributing to the education of another shall be
                          REIMBURSED for contributions made.
                 (2)      The amount reimbursed shall be paid with interest from the time
                          the contributions were made.
                 (3)      Adjustments to this amount may be made where
                          (a)       The community has SUBSTANTIALLY BENEFITED
                                    from the education
                          (b)       There is a REBUTTABLE PRESUMPTION that the
                                    community HAS SUBSTANTIALLY BENEFITED if
                                    the contributions were made 10 years or more prior to
                                    the dissolution.
                          (c)       Also, OFFSET is allowed if one party has been
                                    educated, and then the other has been educated by
                                    contributions to the community.
                          (d)       OR, if the party who would normally be RECEIVING
                                    COMPENSATION is the one who was educated by
                                    contributions to the community.
                 (4)      Also, established standard of living will be used to determine a
                          fair distribution. (§ 4330)
                 (5)      And, § 4320 provides a laundry list of additional considerations
                          in determining spousal support (see pp. 1126-27).
D.   DISTRIBUTION of PROPERTY for UNMARRIED COUPLES
     1.   Theories for Recovery by UNMARRIED PARTNERS
          a)     Meretricious Relationship
                 (1)      Hewitt v. Hewitt, note 1, p. 1142. Religious view case which
                          says: "If you live in sin you get what you deserve. Courts won't
                          help you out. Period." (IL S Ct.)
                 (2)      "[I]t should be presumed that household services are rendered
                          gratuitously without expectation of a salary or other
                          remuneration." Judge Dorothy Comstock Riley, CJ, MI S Ct.
                          in Carnes v. Sheldon (note 1, p. 1143)
          b)     Contract (CA RULE)
                 (1)      Watts v. Watts, p. 1134. Unmarried couple lives together for
                          12 years, has children. She takes his last name. They tell
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                    everybody they're married including the bank when they buy
                    their house, and the gov't when they file taxes. She works for
                    his business without receiving pay and does housework. He
                    claims that she deserves nothing because it is a meretricious
                    relationship. WI S Ct. HOLDS: He, and the t. court which
                    dismissed 's claim are full of crap. Court finds that there is
                    sufficient consideration other than the SEX to find an implied K.
                    Finding the elements of unjust enrichment and constructive trust
                    satisfied by a review of 's complaint as alleged, the WI S. Ct.
                    remands to t. court for determination of whether a constructive
                    trust should be imposed and/or the property partitioned as
                    requested by .
     c)     ELEMENTS of UNJUST ENRICHMENT:
            (1)     Benefit conferred on  by 
            (2)     appreciation or knowledge by  of the benefit
            (3)     Acceptance or retention of the benefit by  under
                    circumstances making such retention inequitable
     d)     ELEMENTS of CONSTRUCTIVE TRUST
            (1)     Satisfy elements of UNJUST ENRICHMENT, plus
            (2)     ABUSE of a CONFIDENTIAL RELATIONSHIP or some
                    OTHER UNCONSCIONABLE CONDUCT.
     e)     Contract theory continued…
            (1)     Marvin v. Marvin, note 1, p. 1143. Tobriner, CA S Ct.
                    HOLDS: In the absence of an explicit agreement between the
                    parties, the court should look to see if their behavior indicates
                    an agreement to pool earnings and hold property acquired
                    during the relationship as community property or to share
                    resources otherwise. "[C]ontracts between nonmarital partners
                    should be enforce unless they are 'expressly and inseparably
                    based upon an illicit consideration of sexual services.'"
            (2)     Also, equitable remedies such as imposing constructive trusts
                    and restitution of reasonable value of services rendered should
                    be considered.
            (3)     Some "contract" Jx only allow for EXPLICIT contracts, and
                    will not allow agreements to be implied from conduct (NY).
     f)     Partnership
            (1)     Partnership Jx (MI and WA) rest on the assumption that the
                    parties relied on each other and that both contributed to their
                    ongoing relationship. Recovery is based on the nature of the
                    relationship rather than on a real or fictitious contract between
                    the parties.
2.   Imposition of Constructive Trusts
     a)     May be imposed to protect reliance interest of non-owning party
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                    (1)  Sullivan v. Rooney, note 2, p. 1144-46.  lived with  for
                         many years. They bought a house with pooled moneys.  gave
                         up flight attendant career, and became a waitress and
                         housekeeper. BUT, because of desired financing through VA
                         house was only owned in 's name.  at various time promised
                         to make  co-owner. MA S Ct ORDERS  to convey a half-
                         interest in the house to .
                (2)      However, in a later decision, the same court REFUSED to
                         impose such an order on a couple who jointly occupied a farm
                         owned only by one of them in the absence of "fraud, breach of
                         fiduciary duty or other misconduct." The Sullivan case was not
                         cited.
     3.  Property rights on Death
         a)     in "Partnership" Jx
                (1)      In Williams v. Mason, (note 3, p. 1146-47.) The MI S Ct.
                         refused to honor an oral promise by one partner to leave
                         property to long time companion, because of conflict with SoF.
                         Even so, the court nevertheless allowed RESTITUTION for
                         value of services rendered by the companion against the
                         decedent's estate. "The positive law of this state directs that a
                         person who provides services…in consequence of an oral
                         agreement to devise property…is not without enforceable
                         rights."
E.   ARGUMENTS FOR & AGAINST SPECIAL PROPERTY STATUS for
     MARRIED PERSONS
     1.  SHOULD we have rules which ONLY protect MARRIED COUPLES?
         a)     Arguments for:
                (1)      Since marriage is an institution and "desired" by society, we
                         should protect the parties higher expectations.
                (2)      Provides security for children
                (3)      Some non-married couples keep assets divided ON
                         PURPOSE, they should not be forced to divide property by
                         state's rules later
         b)     Arguments against
                (1)      May lead to unequal protection for long term partners who
                         never get married by choice.
                (2)      Some committed partners CANNOT get married (same sex
                         couples for example).
     2.   Should such rules only cover property acquired after the marriage?
         a)     Argument against
                (1)      Might make clearly understanding what is owned jointly difficult
                (2)      Perhaps one party has reliance interest in all property of
                         marriage.
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                      b)Argument for
                        (1)     May be more fair. Why should somebody get a piece of
                                something they haven't "earned."
           3.    Should married persons be able to obtain sole interest in property after
                 marriage?
                 a)     Argument for:
                        (1)     Married people should still be able to retain some level of
                                autonomy.
                                                                  rd
                        (2)     May help to protect rights of 3 party buyers.
                 b)     Argument against:
                        (1)     We should protect a spouses expectation of sharing everything
                                in the marriage, regardless of where it came from.
           4.    Should rules allow spouses to transfer property without consent?
                 a)     Argument for:
                        (1)     Flexibility increases alienability and most efficient uses.
                 b)     Argument against:
                        (1)     May lead to undue surprise when time for accounting comes.
           5.    Should courts allow Married Couples to insist on PARTITION on
                 separation?
                 a)     Argument for:
                        (1)     Is equitable because each person receives their fare share for
                                the land, or of its value.
                 b)     Argument against:
                        (1)     Often partition results in forced sale. Is this fair to a party who
                                wants to stay in their home?
       F.  RIGHTS IN THE FAMILY HOME
           1.    DOMESTIC VIOLENCE and PROTECTIVE ORDERS
                 a)     Domestic Abuse Restraining Orders and Injunctions
                        (1)     See pp. 1110-1113 for Wisconsin Statute on TRO's and
                                Injunctions.
                 b)     TAKINGS and TRO's
                        (1)     Courts aren't about to buy this one.
                        (2)     See Cote v. Cote, p. 1113. Husband sues on theory that TRO
                                granted to wife effected a "taking" of his right to property in
                                ordering him out of his house. MD CT SPEC APP HOLDS:
                                No.
III.   COMMON INTEREST COMMUNITIES (CIC's)
       A.  General Information
           1.    FACTORS FUELING GROWTH if CIC's
                 a)     Tax Breaks for Owner Occupied Housing
                 b)     Greater Security Interest Protection than traditional forms of limiting
                        use.

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                    (1)CIC's help reduce free-rider problems associated with
                       enforcement of traditional forms of non-possessory interests
                       (easements, covenants, servitudes).
         c)   Access to shared amenities through sharing costs
              (1)      Many CIC's provide swimming pools, community rooms, tennis
                       courts, etc., which the association manages for the owners.
         d)   Dissatisfaction with services rendered by local government.
              (1)      CIC may supplement or replace traditional gov't services such
                       as road maintenance, utility service, fire protection, etc.
     2.  ELEMENTS COMMON to various forms of CIC's
         a)   Exclusive occupancy rights to a dwelling unit
         b)   Co-ownership of common areas
         c)   Detailed covenants, conditions and restrictions (CC&R's) governing use
              & transfer
         d)   Assessment fees to operate CIC
         e)   Participation in governance of CIC by owners.
B.   PREDOMINANT FORMS of CIC's
     1.  COOPERATIVES (Reader, p. 28)
         a)   Typically uses CORPORATION or BUSINESS TRUST model.
         b)   Most often used to structure ownership in MULTI-UNIT
              BUILDINGS.
         c)   "Owners" hold STOCK in CORP. which grants 'PROPRIETARY
              LEASES."
              (1)      Owner do not hold actual title to their unit. The Corporation
                       owns the assets of the co-op.
         d)   CORP. CHARTER & BYLAWS govern use by and responsibilities of
              owners.
              (1)      Typically includes rules governing use of dwelling units and
                       common areas; division of costs to finance and maintain the co-
                       op; structure and governance of co-op.
              (2)      Shareholders elect directors who oversee operation.
     2.  CONDOMINIUMS (Reader, p. 29)
         a)   Members OWN their individual unit in FEE SIMPLE.
              (1)      "a freehold interest in a horizontal slice in a vertical column of
                       air." (Reader, p. 29)
         b)   Typically deal with multi-unit structures/
         c)   OWNERS possess title part way through exterior walls.
         d)   Owners are TENANTS in COMMON with respect to land and
              common areas
              (1)      Includes exterior of building, basement, roof, lobby, hallways,
                       elevator, etc.
         e)   ESTABLISHMENT of CONDOMINIUM:                            DECLARATION,
              BYLAWS and INDIVIDUAL DEEDS
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                    (1)    DECLARATION: Describes the physical space governed by
                           the condominium, applicable CC&R's, establishes Home
                           Owners Association (HOA), and provides for amendment to
                           declaration and bylaws.
                   (2)     CC&R's often include restrictions on occupancy, use, partition,
                           and sometimes even transfer.
                   (3)     BYLAWS: set forth rules for governing the HOA.
                   (4)     DEEDS: Transfer TITLE of units to individual owners, and
                           cross-reference declaration.
     3.     PLANNED UNIT DEVELOPMENTS (PUD's) / SUBDIVISIONS with
            MANDATORY HOA's (reader, p. 31)
            a)     Homeowners own both the house and the land underneath.
            b)     Developer establishes non-profit corp. to manage common areas.
                   (1)     e.g., roads, rec. facilities, clubhouses, parks.
            c)     PUD's have "quasi-democratic" decisionmaking structure
            d)     PUD's structure controlled by STATUTES / ZONING
                   ORDINANCES
            e)     Developer records DECLARATION of CC&R's
                   (1)     CC&R's determine structure of HOA and establish rules for its
                           governance.
                   (2)     CC&R's are also incorporated into deeds for individual units.
C.   COMPARISON / CONTRAST of FORMS OF CIC's
     1.     Where building is DESTROYED
            a)     Cooperative: corporation determines how to use insurance proceeds
            b)     Condominium / PUD: Individual owners retain more power over
                   insurance proceeds
D.   Typical DECLARATION of CC&R's
     1.     See DECLARATION of PROTECTIVE COVENANTS for
            BLACKACRE COMMUNITY ASSOC. (Reader, p. 32-43.)
     2.     QUESTIONS to ASK when examining CC&R's and Bylaws
            a)     What power does HOA exercise over aesthetic conditions?
            b)     Who sets the standards? How?
            c)     Who decides of owners are in compliance? On what basis?
            d)     What limits are placed on the Board's decisions?
            e)     How are board members selected? Who has control?
            f)     Who votes? Owners? Tenants?
            g)     How are fees established? What are penalties for non payment?
            h)     How are penalties assigned? Who determines $$ amount?
E.   Legislation Governing CIC's
     1.     EARLY CIC's
            a)     Before specific legislation, CIC's were created through general state
                   corporate and common law.
     2.     CRITICISMS leading to STATUTORY REFORM of CIC's
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     a)   Lack of reasonable control over fee structures and increases
     b)   Lack of reasonable control over maintenance and costs of upkeep of
          common areas
     c)   Lack of reasonable control over HOA's structure and governance
     d)   Owners may be saddled with extensive retrofit costs in older buildings
3.   UNIFORM CONDOMINIUM ACT (UCA)
     a)   Required greater disclosure requirements and consumer protections.
4.   UNIFORM COMMON INTEREST OWNERSHIP ACT (UCIOA)
     a)   Developed COMPREHENSIVE and CONSISTENT guidelines for all
          CIC's
     b)   Newest state legislation draws from this act
     c)   See pp. 47-54 of Reader for SPECIFIC PROVISION of UCIOA
          (1)    Requires supermajority votes to make amendments to CC&R's.
                 (a)      2/3 vote required for general amendments.
                 (b)      80% vote required to terminate CIC
                 (c)      UNANIMOUS vote required to change boundaries of
                          CIC or number of units.
          (2)    Enforcement of rules
                 (a)      Fines assessed must be REASONABLE
                 (b)      NOTICE and HEARING required.
                 (c)      Costs of projects which only benefit certain units cannot
                          be spread across entire community.
5.   THREE AREAS of CIC's typically controlled by MODERN
     LEGISLATION (Reader, pp. 46-47)
     a)   Requirements mandating DISCLOSURE of information to prospective
          purchasers (Reader, p. 46)
          (1)    Underlying assumption: CIC's CC&R's will be "fair & efficient"
                 and CIC governance will operate smoothly if parties enter
                 ownership agreements based on full information.
          (2)    CA RULE: California has enacted COMPREHENSIVE
                 STATUTES extending disclosure requirements to ALL
                 FORMS of CIC's.
          (3)    Some states require a "COOLING OFF" period for buyers.
     b)   Requirements governing PROCEDURES of HOA's (Reader p. 47)
          (1)    "[I]nformation disclosure [requirements alone do] not guarantee
                 that CIC's will adequately protect consumers….¶ [M]odern
                 uniform acts…provide fairly detailed requirements for the
                 structure, procedures and voting rules of homeowner
                 associations." (Reader, p. 47.)
     c)   Requirements governing SUBSTANTIVE REGULATION of CIC's
          (Reader, p. 55)
          (1)    Restrictions placed on the TYPE of RESTRICTIONS that
                 developers and HOA's can adopt.
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                     (2) UCIOA grants owners right to make improvements or
                         alterations to their unit which do not impair structural integrity of
                         the CIC.
                 (3)     BUT, aesthetic regulations of CIC will generally be given great
                         deference by courts (see Reader, note 4, p. 70.)
                 (4)     Some states protect basic association and political rights of
                         owners.
                         (a)      EXAMPLE: FL Statutes forbid regulations affecting
                                  right to peaceably assemble, or to invite public officers
                                  or candidates for public office to appear and speak.
                                  (Reader p. 55.)
                 (5)     Other states rely on DISCLOSURE and PROCEDURAL
                         requirements to proved sufficient control over substantive rules
                         established by HOA.
                         (a)      Nevertheless, COURTS are the ultimate "gatekeeper"
                                  of substantive decisions and policies implemented by
                                  HOA's.
F.   JUDICIAL ROLE in OVERSIGHT of CIC's
     1.   Court must first determine appropriate STANDARD of REVIEW
          a)     most courts adopt standard of "reasonableness."
                 (1)     Courts draw on traditional models of review, such as those
                         applicable to corporate boards, local government and
                         administrative agencies. However, the specific standard
                         adopted is often context (fact) sensitive. (Reader, p. 57)
     2.   CONTRACT/CONSENT MODEL
          a)     Court should DEFER to HOA's JUDGMENT
          b)     Assumes owners' VOLUNTARY INFORMED CONSENT to
                 CC&R's.
                 (1)     But, such assumptions might not reflect the realities of how
                         people actually make home ownership decisions. Potential
                         buyers may not READ CC&R's. And, even if they do, they
                         may not understand the full import of such regulations.
          c)     May be problematic with regard to SUBSEQUENT AMENDMENTS
                 to bylaws.
          d)     Concept of "PARTICIPATORY CONSENT"
                 (1)     Under this model court may EXPAND notion of consent to
                         maintain that as long as amendments are reached through
                         democratic process, all owners "consent," even if individuals
                         disagree on particular substantive issues.
          e)     Emphasizes "freedom of K" aspects of CIC's
     3.   LOCAL GOVERNMENT MODEL
          a)     Court should apply EXTERNAL STANDARD to assess validity of
                 CIC restrictions.
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     b)  CIC should be subject to same standards of constitutional review as
         local governments.
         (1)     Some commentators question the applicability of this model
                 because submission to HOA's authority is more voluntary than
                 submission to local government's authority.
4.   ADMINISTRATIVE AGENCY MODEL
     a)  "Middle ground" b/t Contract Model and Local Government Model
     b)  Court uses BALANCING TEST
         (1)     CIC's wide discretion in promulgating rules is balanced against
                 a requirement of adherence to scope of CIC's "mandate" and
                 reasonableness.
     c)  HOA must give NOTICE to homeowners,
     d)  HOA must give FAIR OPPORTUNITY to be HEARD, and
     e)  HOA must provide a concise statement of BASIS for DECISIONS
         RENDERED.
         (1)     Actions of HOA are assessed as to whether they fit within
                 CIC's delegated authority AND whether decisions are
                 reasonable.
     f)  HOA may not promulgate "arbitrary or capricious" rules.
     g)  Whoever bears the burden of proving "arbitrary and capricious" is at
         disadvantage.
         (1)     Hidden Harbour v. Norman, p. 61.  condo owner
                 challenges rule promulgated AFTER purchase stating no alcohol
                 may be used in club house. Rule was approved by 2 to 1 vote
                 of membership. Stating that rules promulgated by the HOA
                 must have some "reasonable relationship to the protection of
                 life, property or the general welfare of the residents of the
                 condominium…to be valid and enforceable," (LOCAL
                 GOVERNMENT MODEL) the t. court STRIKES DOWN
                 the regulation. The FL APP Ct. REVERSES. By using a
                 balancing test based on the facts (ADMINISTRATIVE
                 AGENCY MODEL) the App. Ct. notes that restriction on use
                 of alcoholic beverages are widespread throughout both
                 governmental and private sectors, that there is nothing
                 "unreasonable or unusual" (arbitrary or capricious) about the
                 new regulation banning alcohol. (burden placed on property
                 owner to establish A&C, property owner loses.)
         (2)        Hidden Harbour v. Basso, p. 64.  HOA sues  unit owner
                 for placing a well on their property, which the HOA had
                 previously denied  the right to install. The t/ court refused to
                 grant the HOA injunctive relief. Citing principles that
                 restrictions in the DECLARATION should be construed strictly
                 (CONTRACT MODEL) b/c owners are informed and rely on
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                   them; BUT, that later ADDITIONS to RULES by the board
                   should be judged by a REASONABLENESS standard
                   (GOVERNMENT AGENCY MODEL), the FL APP CT
                   UPHOLDS the t. court's decision to deny injunctive relief to the
                   HOA.
          (3)      NOTE: in the Basso case the court examined the REASONS
                   STATED in the HOA's decision to deny the 's request to drill
                   a well, and found that the board FAILED TO
                   DEMONSTRATE how its denial was REASONABLY
                   RELATED to its stated goals. The court also emphasized that
                   this test is very fact sensitive. (burden of proving A&C on
                   HOA, HOA loses).
          (4)      Rhue v. Cheyenne Homes, Reader p. 68.  is denied
                   permission by  HOA to move his 30 year old Spanish style
                   home into a newly developed ranch-house style community. 
                   claims that because the CC&R's did not give exacting standards
                   for homes, and only stated that approval was contingent on
                   approval by the "architectural control committee," the restriction
                   is unenforceable. CO S Ct. UPHOLDS t. court decision in
                   favor of HOA's denial of permission to . "So long as the
                   INTENTION of the covenant is clear…[they will be] upheld
                   against the contention that they lack[] specific restrictions
                   providing a framework within which the architectural committee
                   must act." The court later qualifies this statement by noting that
                   refusals to approve plans must be REASONABLE and in
                   GOOD FAITH, and must not be ARBITRARY or
                   CAPRICIOUS. Finding that 's 30 year old home could
                   reasonable devalue surrounding properties, the CO S Ct. feels
                   the HOA's denial sufficiently passes muster. (burden of proving
                   A&C on owner, owner loses.)
5.   CORPORATE BOARD MODEL
     a)   Decisions of HOA must be within DELEGATED AUTHORITY
     b)   HOA Board Member assigned FIDUCIARY DUTY to membership of
          CIC
     c)   Court emphasizes controlling bad faith, fraud or actions beyond
          delegated authority.
     d)   CRITICISM: For-profit corp. model may not suit needs of non-profit
          community organization.
6.   TRUST MODEL
     a)   Similar to Corporate Model.
     b)   HOA is viewed as TRUSTEE who manages property for owner-
          beneficiaries

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                     (1)    HOA assigned duties of IMPARTIALITY, LOYALTY,
                            REASONABLE              CARE,        and       INFORMATION
                            REPORTING.
                   (2)      Also, sanctions "self-dealing" by HOA.
            c)     CRITICISM: Trusts are generally designed to serve parties who are
                   incapable of making their own decisions.
G.   Conflicts Among Condo Owners - RESTRAINTS on ALIENATION
     1.     Right of PREEMPTION
            a)     Condo Assoc. Board MUST exercise a right of first refusal
                   REASONABLY
            b)     Condo Assoc. Board MUST FOLLOW ITS OWN RULES in
                   exercising the right of preemption
                   (1)      For instance, where a 2/3 vote is required to exercise the right,
                            the board must comply. This is as much to protect the entire
                            membership from unexpected assessments as it is to protect the
                            individual owner against whom the right is to be exercised.
            c)     Right of First Refusal must be RATIONALLY RELATED to protect,
                   preservation or proper operation of the property and the association
            d)     Right of First Refusal must be exercised in a FAIR and NON-
                   DISCRIMINATORY manner
                   (1)      BUT, note that to sustain a claim for DISCRIMINATION,
                            INTENT must be shown. The fact there is merely a
                            "discriminatory result" is NOT ENOUGH. The board must act
                            DELIBERATELY in its discrimination.
            e)     "REASONABLE" Right of First Refusal must compensate current
                   owner.
                   (1)      May be at "fair market value"
                   (2)      Or, may be required to match 'bona fide" offer.
            f)     Condo Assoc. Board Members are FIDUCIARIES of the members.
            g)     Failure to follow BYLAWS may result in liability for the association and
                   for the individual Board members.
                   (1)      Wolinski v. Kadison, p. 738.  owns a unit in Condo. She
                            then arranges to purchase another unit, and sells her current unit
                            before the sale of the new unit is completed. After the sale of
                            the first unit, the  Condo Assoc. Board exercises its RIGHT
                            OF FIRST REFUSAL leaving  homeless.  alleges that the
                             1) failed to comply with assoc. bylaws requiring a 2/3 vote
                            for preemption, 2) discriminated against her based on her
                            gender and familial status (single mother w/ children). T. Court
                            dismisses the complaint. IL APP CT HOLDS:  has stated
                            FOUR VIABLE CoA's: 1) that the Right of First Refusal is an
                            UNREASONABLE RESTRAINT where the Board is allowed
                            to exercise it against a CURRENT MEMBER, 2) That the
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                    Board's decision to preempt w/o the 2/3 vote was a
                    VIOLATION of the Assoc. Bylaws, and thus a BREACH of 
                    's FIDUCIARY DUTY to  as a member of the Assoc., 3)
                    That 's CoA for discrimination based on sex / marital status is
                    viable due to city ordinance, and 4) That the board acted with
                    willful and wanton misconduct. Case remanded for trial.
           (2)      NOTE: In this case, Ms. Wolinski could have save herself a
                    LOT OF TROUBLE by simply making the sale of her first unit
                    CONDITIONAL ON the closing of the sale of the second unit.
2.   Rule Against Perpetuities
     a)    See RAP and PREEMPTIVE RIGHTS in Fall outline
           (1)      And Cambridge Co. case, p. 607.
     b)    MOST Jx hold that preemptive rights BY DISINTERESTED
           PARTIES are subject to the RAP.
     c)    BUT if preemptive right IS HELD by a CONDO ASSOCIATION or
           HOA, most Jx will uphold the right (see note 6, p. 615).
           (1)      BUT HOA must pay MARKET VALUE
3.   Requirement of PRIOR CONSENT by Condo Assoc.
     a)    VERY SUSPECT type of clause b/c the violation is not triggered until
           AFTER the SALE.
     b)    Restrictions on right to transfer are valid as a means of controlling
           overall environment of Condo.
     c)    HOWEVER, such restrictions are INVALID where they contravene
           PUBLIC POLICY or CONSTITUTIONAL RIGHTS.
     d)    If the restriction constitutes a RESTRAINT of ALIENATION, it must
           be REASONABLE.
     e)    Rule "IN PLACE" at time of purchase generally upheld
     f)    "POST        FORMATIVE"           rules   will    be     examined     for
           REASONABLENESS
     g)    ANY restraint may be valid where Assoc. must pay owner FMV.
     h)    Reverter clause in HOA bylaws is HIGHLY SUSPECT as INVALID.
           (1)      The problem is that even if a reverter clause requires the HOA
                    to pay the owner FMV, if there is no TIME for the payment
                    specified, then the owner is deprived with no assurance of when
                    compensation will be forthcoming.
           (2)      Aquarian Foundation, Inc., v. Sholom House, Inc., p. 741.
                    Condo Assoc. bylaws allow  association to "arbitrarily,
                    capriciously or unreasonably" withhold CONSENT TO
                    TRANSFER. However, they also provide that the association
                    must compensate the owner at FMV, if the owner transfers in
                    violation of the clause.  purchases a condo unit. But the
                    owner FAILS to obtain consent of association. FL DIST CT
                    APP HOLDS: The restraint is UNREASONABLE because
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                   there is no obligation on the association to compensate the "ex-
                   owner" in a REASONABLE TIME. The court also feels that
                   this is an UNREASONABLE RESTRAINT because people
                   will not want to negotiate with owners if they know an
                   association board can invalidate the deal after extensive costs of
                   negotiating sale. ALSO, there is a problem here b/c the clause
                   is not triggered until the sale is COMPLETE, yet the Board only
                   has to compensate at FMV.
4.   RESTRICTIONS on LEASING
     a)   Restrictions on Leasing are generally OKAY IF DISCLOSED at time
          of PURCHASE
     b)   BUT,        some      states     have      STATUTES        which     LIMIT
          ENFORCEABILITY of RESTRICTIONS to ONLY THOSE which
          are recorded AT THE TIME OF SALE.
     c)   ND RULE: SOME Amendments to Bylaws after purchase restricting
          leasing ARE INVALID
          (1)      Only subsequent amendments which relate to "maintenance of
                   common elements, limited elements where applicable,
                   assessment of expenses, payment of losses, division of profits,
                   disposition of hazard insurance proceeds and similar matters"
                   will be enforceable.
          (2)      Breen v. Plaza Towers Assoc., p. 745.  owner buys unit.
                   Later, the association adopts new bylaw (through its established
                   procedures) restricting leasing, except for very short term
                   leases, and allowing exceptions for "hardship." ND has a
                   "recording statute" which requires that restrictions be recorded
                   prior to conveyance. ND S CT HOLDS: The later restriction
                   on leasing is not enforceable against .
     d)   CA RULE: Amendments to Bylaws after purchase restricting leasing
          ARE VALID
          (1)      Justified on the grounds that the greater majority of residents in
                   a condo association should be allowed to set restrictive rules,
                   even where they affect alienability, if the legitimate interests of
                   the residents OUTWEIGH the individual owners interest in
                   leasing.
          (2)      THIS is JUSTIFIED by the fact that even though the
                   SPECIFIC RESTRICTION was not in place at the time of the
                   sale, the owner KNEW THAT THE RULES COULD BE
                   CHANGED when she purchased, and so is bound by the later
                   changes made according to the associations established
                   procedures.



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                    (3) The court notes that such changes will be enforces where they
                        are "REASONABLY RELATED to the COMMON GOOD
                        of all unit owners." (see note 1, p. 748)
          e)   Restriction of SHORT TERM LEASES may be reasonable
               (1)      This is because allowing short term leases may conflict with the
                        idea that a condo is designed to create a stable sense of
                        community (see p. 75, reader)
H.   THE FUTURE of CIC's
     1.   CONCERNS about CIC's
          a)   DURATION
               (1)      Even where bylaws allow for change such changes can be time
                        consuming and expensive.
               (2)      Problems with PERPETUAL rules include endless segregation
                        of neighborhoods, and the inability to change with conditions.
          b)   PROPOSED SOLUTION: LIMIT ability to ENFORCE after a set
               number of years
               (1)      WINOKUR: Suggests that rather than allowing an ENTIRE
                        DEVELOPMENT to be the enforcing group, the area should
                        be broke into smaller, neighborhood "enforcement units" or
                        "pods."
               (2)      KORNGOLD: Rejects Winokur's approach. Rather, the only
                        requirement should be that rules can be changed with less than
                        unanimous votes. This way, the owners "free choice to enter
                        into a community relationship" is respected.
          c)   NEGATIVE EFFECTS on INDIVIDUAL RIGHTS
               (1)      Because HOA's are not branches of gov't, many Constitutional
                        protections do not extend to their functions and actions.
          d)   PROPOSED SOLUTION: Incorporate a minimum "Bill of Rights" into
               CC&R's or require them legislatively.
               (1)      FRENCH: Criticizes UCIOA for failing to include a "Bill of
                        Rights."
               (2)      FRENCH: Feels that developers write CC&R's with an eye
                        toward what SELLS, not toward what is LEGAL. She claims
                        that including a "Bill of Rights" in CC&R's will actually lead to
                        INCREASED marketability.
          e)   See READER, p. 74-75 for FRENCH'S Bill of Rights
               (1)      EQUAL TREATMENT under CC&R's
               (2)      SPEECH: Including display of political and religious signs and
                        symbols
               (3)      NO RESTRICTION on HOUSEHOLD COMPOSITION:
                        Other than that HOA might require all occupants to be
                        members of a single "housekeeping unit," and total number of
                        persons per lot.
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                           (4)NO RESTRICTIONS WITHIN THE CONFINES of an
                              individually owned property.
                     (5)      NO RESTRICTIONS ON "ORDINARY" HOUSEHOLD
                              PETS: unless included in the original CC&R's.
                     (6)      NO CHANGE in ALLOCATION OF BENEFITS AND
                              BURDENS where owner objects to the changes.
                     (7)      NO RESTRAINTS on ALIENATION, except HOA may
                              prohibit leases of two months or less.
               f)    PROPOSED SOLUTION: BROWER: Two step system instead of
                     Bill of Rights.
                     (1)      FIRST: Analyze any changes to ensure they are within the
                              scope of the original CC&R's and that they are consistent with
                              those CC&R's and with any legislative limitations.
                     (2)      SECOND: Review the change against PUBLIC POLICY and
                              SUBSTANTIVE VALUES for reasonableness.
               g)    DEFINITIONS of "COMMUNITY" can also VARY, leading to
                     conflicts.
IV.   LANDLORD-TENANT RELATIONS
      A.  LEASEHOLD ESTATES
          1.   Types of Tenancies
               a)    Commercial Tenancy
               b)    Residential Tenancy
          2.   Categories of Tenancies
               a)    Term of Years
                     (1)      Leas for a SPECIFIED TIME
                     (2)      Can be ANY amount of time: 1 year, 5 years, 60 days, 7 days.
                     (3)      Lease TERMINATES AUTOMATICALLY upon the
                              conclusion of the stated time.
                              (a)     LL may be able to evict sooner with notice and court
                                      proceedings.
                     (4)      FUTURE INTEREST: is a REVERSION, unless assigned to a
                              third party, in which case it is a REMAINDER
                     (5)      Death of EITHER PARTY does NOT TERMINATE
                              leasehold.
               b)    Periodic Tenancy
                     (1)      Lease RENEWS AUTOMATICALLY at certain intervals
                     (2)      Such as month-to-month, or year-to-year, etc.
                     (3)      By STATUTE or COMMON LAW, TERMINATION
                              requires NOTICE
                              (a)     For example, inmost Jx, one month's notice is required
                                      to terminate a month-to-month tenancy
                     (4)      DEATH of EITHER PARTY does NOT TERMINATE
                              leasehold.
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     c)    Tenancy at Will
           (1)      Similar to PERIODIC TENANCY, BUT may be canceled with
                    NO NOTICE by either party.
           (2)      MANY STATES have effectively ABOLISHED this type of
                    tenancy through STATUTORY REQUIREMENT of notice.
           (3)      DEATH of either party TERMINATES TENANCY
           (4)      LL may not be able to terminate where there is a violation of
                    IMPLIED WARRANTY of HABITABILITY
     d)    Tenancy at Sufferance
           (1)      Where tenant WRONGFULLY STAYS after the
                    LEASEHOLD HAS TERMINATED.
           (2)      Also called "HOLDOVER TENANT"
           (3)      LL may use "self-help" to eject TRESPASSER, but MUST
                    USE COURT PROCEEDING to evict HOLDOVER
                    TENANT.
           (4)      LL who accepts rent checks from Tenant at Sufferance may be
                    held to have created to a new tenancy based on payment
                    schedule.
                    (a)      e.g., check for month of rent creates monthly periodic
                             tenancy.
3.   STATUTE of FRAUDS
     a)    All transfers of interest in real property MUST BE IN WRITING.
     b)    EXCEPT for cases involving: ADVERSE POSSESSION,
           PRESCRIPTIVE EASEMENTS, EASEMENTS by ESTOPPEL and
           NECESSITY.
     c)    Leasehold of LESS THAN ONE YEAR may be ORAL.
           (1)      Thus, even a month-to-month tenancy which lasts more than a
                    year can still be oral b/c its "relevant period" is less than one
                    year.
4.   REGULATION of LL/T RELATIONSHIPS
     a)    PROCEDURAL regulations
           (1)      Writing
           (2)      Notice
           (3)      Eviction procedures
     b)    SUBSTANTIVE regulations
           (1)      Minimum habitable conditions
           (2)      Covenant of quiet enjoyment
           (3)      Violations of substantive regulations may lead to a suspension of
                    the other parties duties.
                    (a)      Thus if LL fails to comply with housing code, tenant
                             may be entitled to not pay rent.
5.   Procedures for REMOVAL of TENANTS
     a)    self-help vs. Judicial Process
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                    (1) Typically, owners may use "self-help" to evict trespassers, but
                        MUST use judicial processes to evict tenants.
         b)    See NEW JERSEY ANTI-EVICTION ACT, p. 765.
     6.  REMOVAL of EMPLOYEE/TENANTS
         a)    COMMON LAW: Employee who received board in exchange for
               services was NOT considered a tenant.
         b)    MODERN LAW: Will examine statutes to determine whether
               "employee" falls within such status.
         c)    Where K of tenancy is the result of UNFAIR BARGAINING, courts
               will modify K or imply necessary terms to preserve dignity of tenant
               (Vásquez, p. 771).
               (1)      Vásquez v. Glassboro Service Association, Inc., p. 767. 
                        migrant farmworker comes to US under K with Puerto Rican
                        gov't. K requires  to work for one year in order to have way
                        home paid.  operates "base station" camp for workers. 
                        fires  before his year is up. The only "process" provided is an
                        interview in the field b/t , 's supervisor, and a rep from the
                        Puerto Rican gov't.  sues for wrongful eviction. NJ S CT
                        holds, that  is not within the "CLASS" of employees who are "
                        tenants" by NJ's ANTI-EVICTION STATUTE (such as
                        janitors and building supervisors). Thus,  was not entitled to
                        the JUDICIAL PROCESS and NOTICE required by the
                        statute.     But, court DOS find that terms of K are
                        UNCONSCIONABLE.                In this case, as a matter of
                        DIGNITY, the court finds that the 's actions in firing the p and
                        telling him to leave that day were UNREASONABLE.
         d)    ALSO, see PROBLEM at p. 781 (Students in Dorms who sign
               "license")
B.   CONFLICTS ABOUT RENT
     1.  Landlord's RIGHTS
         a)    Right to RECEIVE RENT
         b)    Right to have premises maintained intact (subject to NORMAL wear
               and tear).
         c)    Right to REVERSION after term of lease is up.
     2.  LL's REMEDIES when TENANT REFUSES to LEAVE: SUMMARY
         PROCESS
         a)    LL may sue for POSSESSION and BACK RENT
               (1)      IF a tenant WRONGFULLY stops paying rent the LL may sue
                        the tenant for BACK RENT and for POSSESSION
               (2)      TENANTS may respond with DEFENSES (e.g. implied
                        warranty of habitability, or covenant of quiet enjoyment).
         b)    HOLDOVER TENANTS and RENEWAL of TENANCY

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            (1) If the tenant wrongfully holds over, but continues to pay rent, a
                NEW TERM is typically created.
         (2)    MAJORITY RULE: The payment creates a PERIODIC
                TENANCY based on the rent payment (e.g., payment of a
                month's rent creates a month-to-month tenancy.
         (3)    MINORITY RULE: A new TERM is created, even if payment
                only covers a portion of the term.
         (4)    LL can refuse to take any payment, and treat them as a
                holdover tenant and then sue for possession.
         (5)    SOME Jx: Allow LL to ACCEPT CHECK form TENANT
                but NOT CREATE TENANCY if the LL writes ON THE
                BACK OF THE CHECK that they are NOT AGREEING to a
                renewal of the tenancy, but is rather accepting the check to
                cover rental value of the property from the tenant at sufferance.
     c)  OLD VIEW: LL may use SELF-HELP
         (1)    Majority of states: LL MAY NOT USE SELF-HELP to
                recover property. LL MUST US SUMMARY PROCESS
                THROUGH COURTS.
                (a)      Prevents conflicts which could turn violent.
                (b)      Helps avoid situations where LL is MISTAKEN in the
                         belief of her right to eject tenant.
                (c)      Helps avoid IMBALANCES in power b/t LL and T.
                (d)      Spinks v. Taylor, p. 80 READER.  rented apartment
                         from .  failed to pay rent, and  put padlock on
                         door after warning  he would do so. The court notes
                         there are THREE APPROACHES by different Jx's: 1)
                         Allow SELF HELP, 2) Deny SELF HELP, or 3) Only
                         allow SELF-HELP where "peaceful." NC S CT
                         HOLDS: That ANY action to repossess "AGAINST
                         the T's WILL" is FORCIBLE. Therefore, self help
                         cannot be allowed where denial of access is against the
                         tenant's will.
         (2)    Some states DO NOT ALLOW THE PARTIES TO WAIVE
                the STATUTE IMPOSING SUMMARY PROCESS for
                evictions
     d)  SUMMARY PROCESS
         (1)    Court proceeding which determines the parties rights.
         (2)    Summary process statutes often limit the issues that can be
                addressed.
                (a)      However, at least in modern times, T's are allowed to
                         defend based on implied warranty of habitability.
3.   LANDLORD'S REMEDIES when TENANT LEAVES
     a)  Landlord may ACCEPT the TENANT'S SURRENDER
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     (1)    This simply means the LL can agree that the tenant is no longer
            bound to pay rent.
     (2)    BUT any back rent owed is still due, and LL can sue to recover
            that amount.
b)   LL may SUE for DAMAGES (difference b/t RENT and FMV)
     (1)    The landlord cannot sue for the entire rent b/c the THEORY is
            that the LL can re-rent the premises.
     (2)    Costs associated with FINDING NEW TENANT can be
            included in the damages.
c)   LL may RE-LET on the TENANT'S ACCOUNT
     (1)    In this case, the LL refuses to ACCEPT the TENANTS
            SURRENDER, but still RE-RENTS the premises.
     (2)    TWO ADVANTAGES for LL: 1) LL may sue first tenant for
            DIFFERENCE in RENT, 2) IF 2nd tenant leaves, LL still has
            1st tenant on the hook for any rent still owing.
     (3)    LL must make it CLEAR that they are exercising the "RE-LET"
            option. DOREMUS suggests a certified letter might do the
            trick. She also suggests that the re-let term should be shorter
            than the original lease to make sure it is clear that the old lease
            is not "dead."
d)   LL can WAIT and SUE for RENT AT THE END OF THE TERM
     (1)    The "SIT on your HANDS" approach.
     (2)    This is an old rule which is falling into non-usage.
     (3)    Most states now REQUIRE the LL to MITIGATE
            DAMAGES.
     (4)    LL must act REASONABLY in trying to seek out new tenants.
e)   MODERN TREND: LL MUST make REASONABLE ATTEMPTS
     to MITIGATE DAMAGES.
     (1)    Many states impose this duty through STATUTES or Judicial
            decision.
     (2)    Sommer v. Kridel, p. 787.  tenant enters 2 year lease with 
            LL and pays first month's rent and security deposit.  never
            takes possession of the unit, and three weeks after the lease
            term starts,  notifies the LL that he cannot continue the lease.
            LL "sits on his hands" for sixteen months, and the re-lets the
            apartment. LL then sues  for the entire back rent. LL never
            TRIED to re-let the apartment, and even turned one prospect
            away during that time. NJ S CT HOLDS: The old rule of
            holding tenants responsible for the entire term is based on an
            old view of the leasehold as a transfer of interest in land which is
            no longer compatible with modern leases which are more like
            contracts. From now on Landlords will be required to
            MITIGATE damages when a lessee terminate early.
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                    (3) NOTE: That the "fairness" of this rule can vary quite a bit with
                        factors such as the vacancy rate in town, competitiveness in the
                        rental market, rent controls, and number of units this particular
                        LL has available.
         f)    See QUESTION on 794. SHOULD LL be allowed to "disclaim" duty
               to mitigate?
     4.  REGULATION of SECURITY DEPOSITS
         a)    Some states regulate security deposits
               (1)      Limit the AMOUNT which can be charges
               (2)      Require LL to keep security deposits in a separate ACCOUNT
               (3)      Require LL to pay back security deposit PLUS INTEREST at
                        end of lease term, less any amounts needed to repair damage to
                        premises.
C.   CONFLICTS about OCCUPANCY
     1.  Landlord's Duty to Deliver Possession
         a)    Failure to deliver the premises at the beginning of the lease term is a
               BREACH by the LL.
         b)    MINORITY RULE: LL only has to deliver the RIGHT to possession,
               not actual possession.
     2.  Landlord's rights to transfer her REVERSION
         a)    Landlord may transfer their property interest.
         b)    NEW owner ONLY RECEIVES what LL could sell.
               (1)      Thus, the new LL cannot kick tenant in rightful possession out
                        until term of lease is completed.
     3.  Tenant's right to Assign or Sublet
         a)    Tenant may ASSIGN or SUBLET unless the lease EXPRESSLY
               FORBIDS such action.
         b)    Provision denying ability to sublet IS NOT (generally) an
               UNREASONABLE RESTRAINT.
         c)    ASSIGNMENT: Conveys ALL of the tenant's remaining interest
               without reserving any future rights.
         d)    SUBLEASE: Tenant reserves right of re-entry.
         e)    In ASSIGNMENT, the new tenant is DIRECTLY RESPONSIBLE to
               LL for rent.
         f)    Under SUBLEASE, new tenant IS NOT responsible to LL for rents.
               Original tenant is.
               (1)      BUT, LL can sue the sub-tenant as a THIRD PARTY
                        BENEFICIARY to the original K.
               (2)      AND, even if LL cannot get $$'s, LL can EVICT sub-tenant if
                        rent goes unpaid under their of equitable servitude.
         g)    ASSIGNMENT does NOT RELIEVE original tenant of duty to pay
               rent if new tenant defaults.
               (1)      This is because original K is still in effect.
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     h)      Think of VERTICAL PRIVITY when deciding whether LL can sue for
             $$ damages.
             (1)      If vertical privity with current tenant exists, LL can go for the
                      "whole enchilada."
     i)      If lease FORBIDS sublease/assignment, LL MIGHT be assigned duty
             or reasonableness.
     j)      OR, in some cases, LL may be denied right to enforce provisions
             through WAIVER or ESTOPPEL.
4.   Commercial Lease:               LL MIGHT be assigned duty to be
     "REASONABLE"
     a)      MAJORITY VIEW: (Commercial lease) LL does NOT have duty to
             be REASONABLE in denial.
     b)      MINORITY VIEW" (Commercial lease) LL must be reasonable.
             (1)      Kendall v. Ernest Pestana, Inc., p. 811. City leases airport
                      hangar to a person who SUB-LEASES to Bixler. Then lessor
                      assigns primary lease to Pestana. THEN Bixler wants to
                      ASSIGN the SUB-LEASE to KENDALL who has purchased
                      BIXLER'S business. The sub-lease requires that BIXLER get
                      PESTANA'S permission to assign the sub-lease. PESTANA
                      refuses to sign. KENDALL SUES because PESTANA'S
                      denial is "unreasonable." CA S CT HOLDS: That the
                      MINORITY RULE will be adopted, and LL will be forced to
                      adhere to a "reasonableness" standard in denying the T
                      approval on the sublet. Court justifies this on POLICY
                      GROUNDS:
     c)      DISSENT: Would enforce the lease's PLAIN LANGUAGE.
     d)      In commercial lease, REASONABLENESS will be determined by
             JURY as to what is "commercially reasonable."
             (1)      It is NOT "reasonable" for a LL to deny approval merely to try
                      to extract a higher rent from the tenant.
             (2)      BUT note: This does not mean LL was acting in BAD FAITH.
                      There was simply a "difference of opinion" as to what the "no
                      sublease" clause meant.
     e)      GENERAL TREND: is toward imposing "reasonableness" standard
             into commercial lease.
5.   Residential Leases: LL does NOT have to be REASONABLE in denial
     of sublease
     a)      Courts less likely to assign duty of "reasonableness" in allowing
             assignment of residential sublease b/c LL may live in building too.
             (1)      Slavin v. Rent Control Board of Brookline, p. 817.  LL
                      applies to  rent control board for permission to evict b/c
                      tenant sublet apartment in contravention of express lease
                      provision.  refused, stating that the LL had to at least consider
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                        allowing the sub-tenant to have the premises. MA S CT
                        HOLDS:  is WRONG. LL in residential lease DOES NOT
                        have to be "reasonable" in denial of sublease. In particular,
                        court finds that where there is a rent control district, fear of LL
                        refusal so they can charge higher rent is not present, and also
                        court has concerns about residential LL's being able to pick
                        their tenants.
         b)     NY RULE: Reasonableness in allowing sublet in residential leases is
                imposed by STATUTE.
         c)      NO CLEAR RULE EMERGES in this area, rules vary state to state.
D.   COVENANT of QUIET ENJOYMENT and CONSTRUCTIVE EVICTION
     1.  If LL breaches Covenant of Quiet Enjoyment, T's duty to pay rent may
         be excused.
         a)     Where LL's acts SUBSTANTIALLY DEPRIVE T of the
                BENEFICIAL USE and ENJOYMENT of the property, the covenant
                is breached.
         b)     IF only a part of the lease is rendered useless, T may only be relieved of
                a percentage of the payments.
         c)     Puni's may be assessed if LL's acts are INTENTIONAL and
                MALICIOUS
                (1)     Minjak Co. v. Randolph, p. 833.  LL rents under
                        "commercial" lease to  T, who LL knows lives in the space.
                        During the period of the lease the LL does all kinds of things
                        that mess with T (water from hot tubs upstairs comes in, dust,
                        jackhammers, etc., etc.). T cannot use the area that is set up
                        for a music studio. T quits paying rent. A couple of years later,
                        the LL decides to sue for back rent. NY APP CT HOLDS: 
                        has been constructively evicted, thus duty to pay rent is
                        substantially reduced. And PUNI DAMAGE award is upheld
                        b/c court feels that LL's acts were INTENTIONAL and
                        MALICIOUS.
         d)     MINORITY RULE: Tenant DOES NOT have to move out to be
                "CONSTRUCTIVELY EVICTED"
         e)     MAJORITY RULE: Tenant DOES have to be literally forced out.
         f)     AND, if LL merely creates nuisance, or fails to abate nuisance under
                her control, T may be "constructively evicted"
                (1)     Blackett v. Olanoff, p. 835.  tenants quit paying rent after
                        LL rents its nearby lounge to a place that plays music loud and
                        late.  LL sues for rents.  T's say that they have been
                        "constructively evicted" by the loud noise. LL claims that the
                        lounge's noise is not his fault, and so no constructive eviction
                        should apply. MA S CT HOLDS: That LL did take actions
                        which led to T's being "very substantially deprived" of quiet
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                         enjoyment of their leased premises for a SUBSTANTIAL time.
                         The court also notes that a term in the lease with the lounge
                         prohibited loud music, and the LL failed to enforce that term.
                (2)      NOTE: IN this case the T's probably had a good action against
                         the bar for NUISANCE as well. But allowing the constructive
                         eviction defense puts more of the burden on the LL to take care
                         of things.
          g)    If a disturbing condition is a NATURAL and PROBABLE
                consequence of a LL's actions, CONSTRUCTIVE EVICTION may
                follow.
          h)    COVENANT of QUIET ENJOYMENT is an IMPLIED TERM in
                every lease.
          i)    See PROBLEM, p. 840. (woman who is sexually harassed by neighbor
                in apartments. Can she move out? Is it constructive eviction?)
E.   IMPLIED WARRANTY of HABITABILITY
     1.   COMMON LAW: No LL duty to make premises habitable.
          a)    Duties of LL and T were INDEPENDENT
          b)    Based on traditional view of lease as an transfer of an interest in land.
     2.   MODERN LAW: LL does have a duty to maintain and repair
          a)    Based on modern view of lease as K relationship
          b)    Also, it makes little sense to put such duties on apartment dwellers
     3.   Warranty of Habitability
          a)    Guarantees a minimum "package of goods" when seeking shelter
                (1)      Heat, light, ventilation, serviceable plumbing facilities, secure
                         windows and doors, proper sanitation, proper maintenance.
                (2)      Javins v. First Nat'l Realty Corp., p. 842.  LL sues tenant
                         to evict tenants who fail to pay rent. In response,  T's allege
                         1500 violations of statutory Housing Regulations. T. Court
                         rules for  finding that the violations of the statutes is not
                         relevant because it is INDEPENDENT of Ts' duty to pay their
                         rent. DC CIR CT APP HOLDS: Traditional views of duties of
                         LL's and T's as independent is no longer realistic in today's
                         society. In particular the court finds that the Housing Code is a
                         "baseline" for the implied warranty of habitability. Where that
                         warranty is breached, the T's have no duty to pay until the
                         defects are remedies. The court justifies its holding in THREE
                         ways 1) Rentals of apartments in cities are completely different
                         from the agrarian notions of leases in common law, 2) requiring
                         a warranty of habitability brings LL-T law into better harmony
                         with other consumer type transactions (such as implied
                         warranties of fitness and merchantability), and 3) in modern
                         society, the LL is the party with the financial interest in the long
                         term condition of the premises, and so should bear the burden
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                   of its upkeep. Court decides that RENT MAY BE REDUCED
                   by whatever amount reflects the breach of the warranty of
                   habitability.
     b)   Majority of Jx now have warranty of habitability for RESIDENTIAL
          leases.
     c)   BUT, states are split on whether warranty applies to COMMERCIAL
          leases.
4.   REMEDIES for BREACH of IMPLIED WARRANTY of
     HABITABILITY
     a)   Recission: The right to move out.
          (1)      The tenant may move out and terminate the lease where the LL
                   fails to perform her obligations under the IWH.
     b)   RENT WITHHOLDING
          (1)      Another option is for the T to withhold rent until the situation is
                   remedied.
          (2)      After LL sues for rent, T may be required to pay SOME rent
                   depending on the severity of the warranty violations.
          (3)      ALSO, T should SAVE the money they do not pay, so that
                   they will have sufficient funds to cover any portion of the rent
                   which is reinstated.
          (4)      AND, tenants must be careful to comply with any
                   STATUTORY requirements imposed, such as a requirement to
                   NOTIFY the LL of the problems before withholding.
     c)   RENT ABATEMENT
          (1)      T's can also sue to recover rent already paid if condition has
                   existed in the past.
          (2)      TWO APPROACHES to CALCULATING REDUCTIONS
                   (a)       Some courts will calculate a FMV based on the
                             apartment in its non-conforming condition.
                   (b)       Other courts will simply assign a percentage by which
                             the rent should be reduced.
     d)   Repair and Deduct
          (1)      T MAY be allowed to make their own repairs and deduct the
                   cost from their rent.
          (2)      HOWEVER, this type of remedy tends to be governed by
                   statutes regulating how MUCH can be deducted and the
                   TYPES of repairs that are covered.
     e)   Injunctive Relief/Specific Performance
          (1)      Some states allow T's to bring a suit to COMPEL ll to make
                   the necessary repairs.
     f)   Administrative Remedies
          (1)      Some states have agencies which respond to T's requests for
                   inspections, such as a "housing inspector."
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            (2) The inspector may be empowered in various ways, including the
                ability to ORDER the LL to make repairs, or to sue the LL
                directly for CIVIL or CRIMINAL charges.
     g)  CRIMINAL PENALTIES
         (1)    For some EGREGIOUS violations, LL's may actually be sent
                to jail.
         (2)    In some cases, LL's have been forced to go live in the
                substandard housing themselves.
     h)  Compensatory Damages
         (1)    If the breach of the IWH actually causes DAMAGE to the T's
                belongings, the LL may be held responsible for replacement of
                those goods as well.
5.   SHOULD WE ALLOW PARTIES to contract OUT of the IWH?
     a)  Two kinds of arguments: RIGHTS and ECONOMICS
     b)  RIGHTS: FREEDOM of K ARGUMENTS:
         (1)    Freedom of Action to enter K's
                (a)      People should be free to make whatever deals they
                         want.
                (b)      Competition will keep LL's from "dictating" terms.
         (2)    Unequal Bargaining Power
                (a)      Housing is a necessity, people may have no choice.
                (b)      Landlords may COLLUDE in limiting T's options
                (c)      Why would anybody agree to substandard housing
                         unless forced
                (d)      Courts should INSERT terms of fairness where
                         bargaining was unequal.
         (3)    RIGHTS: DISTRIBUTIVE CONSIDERATIONS
         (4)    UNFAIR BURDEN
                (a)      IF society wants the poor to have good hosing, society
                         should pay. Not just mandate that LL's must absorb
                         the cost. That's not fair.
         (5)    JUSTICE in ONGOING RELATIONSHIPS
                (a)      LL's should bear the burden of subsidizing poor tenants.
                         This is only bringing them in line with other groups who
                         (ab)use the public, such as manufacturers of goods and
                         strict liability. (If you want to play the game, you'll have
                         to pay the price of admission).
                (b)      No one has a right to earn a living from someone else's
                         misery.
                (c)      Substandard housing IMPOSES costs on society due
                         to poor health conditions, and poor social conditions.
         (6)    RIGHTS: PATERNALISM
         (7)    SELF-DETERMINATION
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            (a)  A bunch of lefties shouldn't take away peoples right to
                 enter K's to live in slums.
         (b)     If T's want to waive some rights to get better prices, we
                 should let them
     (8) REAL ASSENT and LIMITS to ASSENT
         (a)     Actual Intent of the Parties: Does the tenant TRULY
                 UNDERSTAND what they are giving up? Perhaps LL
                 should be forced to read a warning to T before allowing
                 such "self-determination."
         (b)     Cognitive Distortion: perceived short term gains in rent
                 reduction may APPEAR better than long term exposure
                 to substandard conditions when signing the lease.
         (c)     REAL paternalism: 1) it violates common decency and
                 individual dignity for courts to enforce terms that are
                 clearly unfair; 2) Anti paternalism: who cares. If people
                 want to make an unfair deal, then courts should honor
                 that too.
c)   ECONOMIC ARGUMENTS
     (1) Incentives to Invest in SAFETY and MAINTENANCE
         (a)     AVAILABLE INCOME:                   Requiring continued
                 payment from T's ensures enough money to LL to make
                 repairs.     Enforcement through housing codes is
                 sufficient.
         (b)     ONLY EFFECTIVE SANCTION: In many cases the
                 ONLY way to get the LL's attention long enough to get
                 the repairs done. Besides, LL's should be saving
                 money for necessary repairs in ADVANCE.
     (2) EFFECTS on ALLOCATIVE EFFICIENCY in HOUSING
         MARKET
         (a)     PARETO OPTIMALITY:                 Forcing K terms is
                 INHERENTLY INEFFICIENT because parties are
                 not allowed to put their wealth where they feels it serves
                 them the best. T's may well believe that the housing
                 codes will protect them enough, and wish to spend their
                 wealth on other things.
         (b)     MARKET              IMPERFECTIONS:                      1)
                 EXTERNALITIES: Third party considerations make
                 forced terms a necessity. Health and welfare of
                 children, a need to control blighted areas, and medical
                 problems all associated with substandard housing make
                 forced terms a NECESSITY.                2)IMPERFECT
                 INFORMATION: T's often do not understand the
                 SIGNIFICANCE of the concessions being made. They
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                               may INCORRECTLY JUDGE the likelihood of a
                               violation occurring And of the value of the ability to
                               withhold rent if it does.
          d)   EFFECTS on DISTRIBUTION
               (1)     RAISING RENT / DECREASING AVAILABILITY
                       (a)     IWH tends to cause LL's to charge higher rents, thus
                               hurting the people who the IWH is supposedly
                               benefiting.
                       (b)     Increased cost will cause fewer people to rent. With
                               fewer renters, LL's will abandon market. Net result:
                               Less housing to go around.
               (2)     IWH IMPACTS will VARY depending on the MARKET
                       (a)     Some LL's will simply take less profit in order to stay
                               competitive.
                       (b)     Net effect in most cases is a REALLOCATION of
                               wealth, not driving LL's out all together.
                       (c)     EVEN IF a LL cannot afford to operate, then they will
                               go under, but THE BUILDING WILL be
                               AUCTIONED AT A SUFFICIENTLY LOW PRICE
                               TO ALLOW THE NEXT LL to OPERATE
                               EFFICIENTLY. While this may be unfair to individual
                               LL's, there is no net loss of housing overall. This is just
                               a REDISTRIBUTION of WEALTH to its most
                               efficient use.
F.   RETALIATORY EVICTION
     1.   TRADITIONAL VIEW: LL can terminate for ANY REASON
          a)   At end of lease term, LL could terminate for any reason, or for NO
               REASON.
          b)   BUT, this could lead to T's being afraid to assert their rights.
     2.   MODERN VIEW: T's protected for CERTAIN KINDS of actions
          a)   State Statute may protect T's when they form Tenants' Association, or
               complain about code violations.
               (1)     Hillview v. Bloomquist, p. 861.  T's in mobile home park
                       set up T's association to complain about some conditions in the
                       park. At their last meeting with the manager, one of the T's gets
                       into physical altercation with manager. Manager evicts all of the
                       tenants who are the "leaders" of the T's association. IA S CT
                       HOLDS: That the T who hit the manager has to go, but the
                       park cannot evict the others (there was a statute in this case
                       DELINEATING what conduct a LL could not then evict T's
                       for).
          b)   BUT, once violations of codes are taken care of, T's do not have a right
               to stay FOREVER.
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     c)     LL may later evict for legitimate reason or no reason at all.
     d)     BUT, they cannot evict in RETALIATION.
     e)     Some statutes GIVE a period of time where ANY eviction is
            PRESUMED to be retaliatory.
3.   FACTORS in DECIDING if EVICTION IS RETALIATORY (R2d
     Property § 14.8 comment f.).
     a)     The LL's decision was a reasonable exercise of business judgment
     b)     The LL, in good faith, desires to dispose of entire property free of
            tenants
     c)     The LL in good faith desires to make a different use of the leased
            property
     d)     The LL lacks financial ability to repair the property, and therefore
            wishes to have it free of T's
     e)     The LL was unaware of T's activities which are protected under
            Retaliatory Eviction Statute
     f)     The LL did not act at 1st opportunity after leaning of T's conduct
     g)     The LL was not discriminatory
4.   RETALIATORY EVICTION MUST deal with CONDITION OF
     PREMISES
     a)     Disputes as to other matters DO NOT QUALIFY
            (1)     Imperial Colliery Co. v. Fout, p. 866.  Coal worker rents
                    house from company for $1 per year.  Coal company sends
                    him a letter of eviction. At first  simply says he needs more
                    time.  gives it to him. Then, when  sues for possession of
                    the premises, the  says that this is a RETALIATORY
                    EVICTION because of 's pro-union activity. W VA S CT
                    HOLDS: Retaliatory eviction ONLY applies where a tenant
                    has made complaints about health or safety conditions regarding
                    the housing itself, or where there is some incidental connection
                    to the housing itself. Finding none, the court tells  to pack his
                    bags and get OUT.
            (2)     Windward Partners v. Delos Santos, p. 868. Tenants are
                    PROTECTED by retaliatory Eviction Defense where they
                    testified against a development their LL wanted to pursue in
                    their neighborhood. The evictions were found to be incidental
                    to their tenancy.
            (3)     Robinson v. Diamond Housing, p. 869. LL tries to evict
                    month-to-month tenant for nonpayment of rent. She counters
                    with IWH defense (with good evidence to back it up). LL then
                    follows normal 30 day notice procedure hoping to evict on
                    basis of simply desiring to end periodic tenancy. LL argues that
                    he needs tenant out to make necessary repairs. T counters that
                    LL's "normal" eviction is, in fact, a RETALIATORY
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                          EVICTION for T's original failure to pay based on the IWH.
                          DC CIR CT APPS HOLDS: Unless LL can prove that he is
                          FINANCIALLY UNABLE to make the repairs, then the
                          tenant cannot be evicted.             In particular the court is
                          EXTREMELY SUSPICIOUS of the LL's SUBJECTIVE
                          STATE of MIND, and states that where the LL has LOST on
                          an earlier IWH claim, there is a PRESUMPTION that any later
                          eviction is RETALIATORY. The DISSENT argued that the
                          court was going way overboard in not allowing the LL to take
                          the house off the market.
     5.   EVIDENTIARY BURDENS in RETALIATORY EVICTIONS (Based
          on Bloomquist case (IA Statute)).
          a)     If T's showing is sufficient to imply Retaliatory Eviction, then there is
                 REBUTTABLE PRESUMPTION that LL acted in retaliation.
          b)     Then, LL must introduce evidence sufficient to REBUT the
                 PRESUMPTION
          c)     If LL succeeds, then T must PROVE eviction was retaliatory.
          d)     AND there is a 6 month limit (after that, LL can evict at will).
G.   DISCRIMINATION in LEASING
     1.   FAIR HOUSING ACT 42 USC §§ 3601-3619 (pp. 981-987)
          a)     §3601: It is the POLICY of the US to provide for FAIR HOUSING
                 throughout the US.
          b)     §3603(b)(2): Act DOES NOT APPLY to 4 unit or less apartment
                 where owner resides in one of the units.
          c)     §3603(b)(1): Act DOES NOT APPLY to person owning less than 3
                 rental houses who does not use an AGENT or any
                 DISCRIMINATORY ADVERTISING to rent the houses.
          d)     § 3604: No renting or selling or advertising based on race color,
                 religion, sex , family status, national origin or handicap.
          e)     §3605: Prohibits LENDING INSTITUTIONS from discriminating in
                 hosing loans.
          f)     §3607(A): Religious Organizations and Private Clubs can discriminate
                 in renting or selling residences that they own.
          g)     §3607(B)(1): Allows state regs on maximum number of occupants.
          h)     §3607(B)(2): Old folks homes can discriminate against everybody
          i)     §3607(B)(4): Druggies don't deserve homes.
          j)     §3613(A): Person discriminated against has 2 year SoL to bring CIVIL
                 Suit
          k)     §3613(B): Court may appoint attorney and waive fees for .
          l)     §3613(C): ACTUAL and PUNITIVE damages may be awarded as
                 court sees fit.
          m)     §3617: It's illegal to interfere or coerce a person attempting to exercise
                 these rights and protections.
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2.   Discrimination by HOUSING PROVIDERS
     a)     42 USC § 1982: All citizens of the US have the same right as "white
            citizens" to inherit, purchase, lease, sell, hold, and covey real and
            personal property.
     b)     Under FHA, failure to provide equal access to information about
            housing availability is illegal.
     c)     THREE PART BURDEN of PROOF
            (1)      FIRST:  must prove prima facie case of discrimination.
            (2)      SECOND: Burden then shifts to  to produce evidence of non-
                     discriminatory motive
            (3)      THIRD: burden shifts back to  to show the proffered reasons
                     were pretextual
     d)     White "testers" may be used to prove discrimination
            (1)      For instance, a person representing themselves as same
                     economic class, age, etc., visits LL and asks about housing. If
                     they receive better info, then this is strong evidence of
                     discrimination.
     e)     ELEMENTS of PRIMA FACIE CASE (element 1)
            (1)       must prove she is a racial minority
            (2)       must prove she applied for and was qualified to rent
            (3)       must have been denied the opportunity to rent or negotiate to
                     rent
            (4)      The housing opportunity must have been available.
     f)     PUNI's to be awarded where 's conduct is result of EVIL MOTIVE
            or INTENT, or
     g)     PUNI's to be awarded where 's conduct involved RECKLESS or
            CALLOUS INDIFFERENCE to federally protected rights of others.
            (1)      Asbury v. Brougham, p. 987. , visibly a racial minority, sues
                      LL under 42 USC 1982 and 42 USC 3601 et. seq. (FHA),
                     after  landlord refuses to allow her to rent or negotiate to rent,
                     but a few days later allows 's sister -in-law (who is similarly
                     situated, but white) to inspect floor plans and gave the sister-in-
                     law indication that units were available for rent. 10th CIR CT
                     APPS: FIRST: Applies THREE PART BURDEN OF
                     PROOF: 1) Finds a) was a minority, 2) she applied for and
                     was likely qualified to rent, 3) she was denied an opportunity to
                     rent, and 4) the opportunity (as indicated to the sister-in-law)
                     remained available. PRIMA FACIE CASE ESTABLISHED.
                     LL the offers evidence that the housing was divided into
                     groupings where children could and couldn't live in its attempt to
                     prove a non-racial motive.  shows that this motive is
                     PRETEXTUAL by proving that EXCEPTIONS to the rules
                     had been made in the past. Therefore the court decides that
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                   there HAS BEEN DISCRIMINATION under FHA. THEN,
                   the court UPHOLDS 's award for PUNITIVE DAMAGES,
                   because  is able to show that the LL's denial was the result of
                   ESTABLISHED POLICIES and RULES established by the
                   owners which where CALLOUSLY INDIFFERENT to the
                   fact that the policies called for screening of applicants based on
                   race. (In particular, the policy called for the building manager to
                   LIE to all persons calling in by telling them NO UNITS were
                   available, but then encouraging them to come in. Once she
                   inspected them for RACE, she would tell the WHITE clients
                   that there actually were units available).
3.   SETTING QUOTAS
     a)   CEILING QUOTAS: a limit on the max # of any given group.
     b)   ACCESS QUOTAS: a FLOOR, below which the LL actively seeks
          members of the group in "shortage"
     c)   Courts are more sympathetic to REASONABLE access quotas than to
          strict ceiling quotas.
          (1)      For instance, in Starrett City below, the quota system may
                   have been allowed if it simply stated that no race could go
                   below 15% of total occupancy.
     d)   Race MAY be an appropriate consideration for a SHORT
          DURATION and for VALID PUBLIC MOTIVES
          (1)      See note 8, p 1001, South Suburban Housing Ctr. v.
                   Greater South Suburban Board of Realtors (7th Cir Ct
                   Apps, 1991). (LL allowed to ACTIVELY seek white tenants
                   for a complex dominated by blacks as a means to achieve racial
                   integration).
     e)   BUT, Setting QUOTAS of INFINITE DURATION in order to
          maintain a "fixed level of integration" is NOT ACCEPTABLE under
          FHA.
          (1)      US v. Starrett City Associates, p. 993. Giganto-mondo
                   housing development owned and managed by  maintains a
                   quota system of 64% white, 22% black, 8% Hispanic and the
                   remainder (6%) whatever. They justify this system as necessary
                   in order to PROMOTE integration of the races and to prevent
                   TIPPING (white-flight when minority occupancy exceeds a
                   certain level). 2d CIR CT APPS HOLDS: That while the
                   motive of integration is desirable, and such programs MIGHT
                   be acceptable if limited in DURATION, this policy, which has
                   been in place for 13 years is contrary to FHA.
          (2)      DISSENT in Starrett City: Finds that the entire purpose of
                   FHA was to END segregated housing, not promote it. Dissent
                   feels that by erasing the LL's quota plan, too many minorities
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                      will move in, TIPPING will occur, and SEGREGATION not
                      INTEGRATION will be the result. (In other words, would
                      implement the INTENT of the FHA, not its provisions' "PLAIN
                      MEANING."
4.    REMEDIES under FHA
      a)      may sue for COMPENSATORY and PUNITIVE damages.
      b)     FHA allows aggrieved person to complain to HUD
             (1)      HUD can investigate the complaint itself, and if it finds
                      reasonable cause to believe a violation has occurred it must
                      issue a CHARGE on behalf of the aggrieved party.
             (2)      Either party in the complaint can ELECT for the suit to go to a
                      FEDERAL COURT.
             (3)      If neither party takes this option, the CHARGE is heard by a
                      HUD Administrative Law Judge.
                      (a)      Limits are imposed on the penalties an ALJ can assess:
                               $10K for first offense, $25K for second offense in five
                               years, $50K for third offense in seven years.
      c)     FHA also empowers AG to investigate claims by aggrieved parties and
             to bring suit.
5.    STANDARD of LIABILITY
      a)     MAJORITY RULE:  can show EITHER discriminatory INTENT or
             DISPARATE IMPACT.
      b)     MINORITY RULE: Only a showing of INTENT to discriminate will
             trigger sanctions.
6.    Stating the PRIMA FACIE CASE
      a)     Refusal to sell or refusal to lease are sufficient.
      b)     AND refusal to DEAL is ALSO sufficient under FHA
7.    "Racial Steering"
      a)     Showing houses in one area to one race, and showing houses in another
             area to a different race VIOLATES FHA.
      b)     To prove "steering," TESTERS may be used.
8.    STANDING to bring SUIT
      a)     Persons who are discriminated against may initiate the suit.
      b)     TESTERS may initiate the suit
      c)     And ORGANIZATIONS DEVOTED to PROMOTING EQUAL
             ACCESS may bring suit.
9.    DISCRIMINATORY ADVERTISING
      a)     Always using WHITE MODELS for housing ads MAY VIOLATE
             FHA. (see note 7, p. 999).
10.   TIPPING
      a)     The idea that once minority concentrations rise above a certain %,
             white-flight will occur.
11.   CRA of 1866
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                    a)     And don't forget that the freedom to contract is guaranteed under 42
                           USC 1982.
V.   ZONING
     A.   Some Basics
          1.    HISTORY of Zoning
                a)    Read the reader. P. 83.
                      (1)     Only important idea: ZONING looks to pre-plan land use,
                              instead of SERVITUDES and NUISANCE which enforce
                              AFTER incompatible use has already begun.
                b)    Zoning is a method for the POLITICAL system to PRE-PLAN the
                      future of the community.
                c)    Zoning is an exercise of the STATE'S POLICE POWER
                      (1)     States may set and enforce rules to protect the public
                              SAFETY, HEALTH, WELFARE and MORALS.
                d)    In the past, states delegated wide authority to LOCAL GOV'TS in
                      ZONING.
                e)    Recently, States are reserving more power for themselves in this area.
          2.    GENERALLY, ZONING is LEGAL (big surprise).
                a)    Owners of property cannot claim a GENERAL taking when property is
                      zoned. They must show a specific INJURY.
                      (1)     Village of Euclid v. Ambler Realty Co., READER, p. 85. 
                              owns land. City zones land owned by .  sues for taking,
                              claiming a 75% reduction of value in land. US S CT HOLDS,
                              general challenges to ENTIRE ZONING SCHEMES are not
                              valid based on TAKINGS (14th subst. DP and 5th "takings"
                              through 14th).        Owner MUST show that SPECIFIC
                              PROVISIONS have had a SPECIFIC IMPACT on the
                              landowners' use and enjoyment (finding none, the zoning
                              ordinance stands,  loses.).
                      (2)     Nectow v. City of Cambridge, note 6, READER p. 96. 
                              landowner complains that city has put a 100 foot strip of
                              property into residential use, and the rest unrestricted. US S
                              CT HOLDS: that were FINDER of FACT determines that the
                              zoning results in NO PRACTICAL USE for strip, and that the
                              placing of the strip did not promote health, safety or welfare, the
                              ZONING was UNCONSTITUTIONAL.
          3.    TYPES of ZONING
                a)    EUCLIDEAN ZONING: Zoning in "rectangular, cookie cutter
                      shapes."
                b)    CUMULATIVE            ZONING:             Each       progressive     zone,
                      INCORPORATES all the uses allowed in the previous zone.



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            (1)    Example: R1 is single family, detached housing: R2 allows
                   duplexes AND all uses in R1; R3 allows apartments and ALL
                   USES in R2 and R1, etc.
     c)   EXCLUSIVE ZONING: (modern trend) Each zone is "self-contained";
          uses are not "cumulated" from previous zones.
          (1)      Thus, area zoned for factories cannot have apartments. Area
                   zoned for apartments cannot have factories.
4.   HOW ZONING is AUTHORIZED
     a)   STATE: passes ZONING ENABLING ACT
          (1)      See p. 98 READER for "central sections" of the STANDARD
                   STATE ZONING ENABLING ACT.
          (2)      Such ACTS AUTHORIZE LOCAL GOV'TS to engage in
                   zoning.
     b)   COMPREHENSIVE PLAN is DEVELOPED
          (1)      BUT in many cases, the zoning ordinances themselves are found
                   to constitute this "comprehensive plan"
          (2)      The EMPHASIS is on whether the zoning ordinance is a
                   comprehensive plan, not whether it is in "accordance" with such
                   a plan. (p. 100 Reader).
          (3)      NOTE: Some States have SPECIFICALLY CHANGED this
                   understanding to REQUIRE a separate "Comprehensive Plan"
                   against which all zoning ordinances are to be measured.
     c)   LOCAL GOV'T:                   Enacts ZONING ORDINANCE and
          SUBDIVISION CONTROLS
          (1)      Zoning Ordinance is ALWAYS a written document
          (2)      Zoning ordinances are typically adopted by the local legislature.
                   (city council, etc.)
                   (a)       This body takes ALL of the land in their control and
                             chops it up into "zones" each with various types of
                             restrictions (uses, heights, size of lots, etc.)
     d)   ZONING BOARD: Enforces the ordinances.
          (1)      Refuses to issue PERMITS if proposal violates ordinances.
          (2)      Generally the zoning board DOES NOT have the power to
                   CHANGE the zoning ordinance, that is a function of the local
                   legislative body.
          (3)      Denials of permits generally can be appealed to the local
                   legislature.
          (4)      Such appeals can ALWAYS be appealed to the COURTS.
5.   ENFORCEMENT of ZONING
     a)   Typically enforced by denial of requested permits
     b)   Uses which are OUT OF COMPLIANCE may be sanctioned by
          injunctions, fines and/or minor criminal penalties.
6.   SUBDIVISION CONTROLS
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            a) Subdivision Ordinances are SIMILAR to zoning, but differ in important
               ways.
          b)   Subdivision Ordinance provide developers with GUIDELINES for
               developments
               (1)     Thus, rules on traffic flow, access to light and air, transportation
                       flows, water and sanitation needs.
          c)   Once developer complies with subdivisions ordinances in plan, board
               cannot deny approval. (p. 102 READER)
          d)   Developer may be required to provide SPECIFIC IMPROVEMENTS
               both on and off-site OR pay an EXACTION
               (1)     EXACTIONS: Fees charged to subdivision developers by the
                       CITY in order to mitigate burdens of development on
                       community.
               (2)     Court CHALLENGES to EXACTIONS: The assessment will
                       be upheld if there is a RATIONAL NEXUS b/t the assessment
                       and the needs created by the new community.
B.   PRIOR NON-CONFORMING USES
     1.   DOCTRINE of NON CONFORMING USES
          a)   Generally, where zoning is implemented, people who are using land for
               "non-conforming uses" may continue.
          b)   BUT such uses may not be expanded, unless the change is
               NEGLIGIBLE or INSUBSTANTIAL
          c)   PRESUMPTION is that any change IS NOT NEGLIGIBLE or
               INSUBSTANTIAL
               (1)     Person desiring the change bears burden of proving that change
                       in use is negligible and insubstantial.
          d)   GOAL: To reduce non-conforming uses to CONFORMITY ASAP.
          e)   Even a CHANGE in HOURS of OPERATION will be considered
               SUBSTANTIAL ENOUGH to justify denial of permit to change use.
               (1)     Town of Bellville v. Parillo's, Inc., p. 677.  owned a
                       restaurant. Then zoning implemented which would not allow the
                       restaurant (it is a residential zone). In this case, under the
                       doctrine, he is allowed to continue the non-conforming use
                       ("grandfathering" previous uses in). But, later the owner makes
                       renovations to convert the restaurant to a disco. The city
                       refuses to grant the license. The owners appeal a criminal
                       conviction for owning the disco without a license. NJ S CT
                       HOLDS: The changes in clientele, type of music, and HOURS
                       OF OPERATION are substantial enough to deny the change in
                       use. The disco must die.
               (2)     HD NOTES: Let's look at what the owner intended to do
                       when they bought property. Did they intend to have a disco

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                   pre-1955? Hell no. So we shouldn't feel too bad for them
                   today (no loss of expectation).
     f)   AMORTIZATION: Some Jx will also put a TIME LIMIT on non-
          conforming uses.
          (1)      This allows the owner to receive some economic benefit for
                   their planned use, but assures that 20 or 30 years later the use
                   WILL TERMINATE.
     g)   Typically an owner CAN SELL the right to continue a non-conforming
          use to another.
2.   VARIANCE may be granted for EXCEPTIONAL and UNDUE
     HARDSHIP.
     a)   An owner may be granted a VARIANCE from zoning where an
          EXTRAORDINARY and EXCEPTIONAL situation results in
          EXCEPTIONAL and UNDUE HARDSHIP.
     b)   BUT, ONLY where the variance will not create SUBSTANTIAL
          DETRIMENT to the PUBLIC GOOD or SUBSTANTIALLY
          IMPAIR the intent and purpose of the ZONE PLAN and ZONING
          ORDINANCE
     c)   OWNER who inflicts hardship on themselves WILL NOT be granted
          relief
     d)   Where a VARIANCE is DENIED under these circumstances, the local
          gov't may have to COMPENSATE for a "TAKING."
     e)   OR, OPTION to purchase may be given to NEIGHBORS
          (1)      In this case the VARIANCE will be GRANTED, unless the
                   NEIGHBORS who wish to keep the non-conforming use out
                   PAY the owner FMV.
     f)   MINIMUM LOT SIZES for housing, without more, DO NOT
          constitute a SUBSTANTIAL INTEREST in public health and safety.
          (1)      Commons v. Westwood Zoning Board of Adjustment, p.
                   680.  is owner of lot which is too small to build on according
                   to local zoning ordinance. Other houses are on non-conforming
                   lots in the area. Owner of lot attempted to purchase more land,
                   but neighboring owners refused to sell. Owner tried to sell his
                   land to neighbors, but offers were too low. Now owner wants
                   to build a house and asks for variance. Local zoning board
                   denies permit. NJ S CT HOLDS: Cursory denial of the permit
                   is improper in this case. the Owner has done all she can to
                   bring the property into closer conformance or to sell. To deny
                   any use altogether may be an EXCEPTIONAL and UNDUE
                   BURDEN. But the court cannot say for sure on the specified
                   facts. The court remands for further consideration.
3.   VESTED RIGHTS IN a PROPERTY'S STATUS may prohibit later
     ZONING CHANGES
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            a)   The CITY may not DISREGARD their COMPREHENSIVE
                 ZONING PLAN in order to discriminate against a "type" of person.
          b)     Whether a RIGHT HAS VESTED depends PRINCIPALLY on the
                 AMOUNT ACCOMPLISHED UNDER CONFORMITY
          c)     As long as a zoning ordinance is a VALID EXERCISE of POLICE
                 POWER, the fact that it deprives the owner of its MOST
                 BENEFICIAL USE does not render it an unconstitutional taking.
          d)     In determining where a ZONING REGULATION ENDS and a
                 TAKING BEGINS the test is ESSENTIALLY ONE OF
                 REASONABLENESS.
                 (1)     Stone v. City of Wilton, p. 686.  purchases property which
                         is zoned for multi-family residential in order to build low income
                         housing.  has architects plans drawn up and engineers draw
                         up plats.  also secures a loan from the Farmers' Home
                         Administration for the project.  files the plat and applies for a
                         permit to build multi-family housing. The city responds by
                         denying the permits because, low and behold, the city has
                         decided to look into changing the zoning to all single family
                         residential. City states that its reasons for changing the zoning
                         are because 1) the area is no longer appropriate for multi-family
                         housing, 2 the existing zoning would create too great a density,
                         3) the existing zoning would create too much traffic on existing
                         streets and 4) the city's electric, water and sewer systems
                         couldn't handle a multi-family subdivision in that area of town.
                         The owner say, BULL-oney, its a plan to discriminate against
                         the poor and racial minorities, AND that the plan to change
                         now is unfair b/c the Owner's right to have the original zoning
                         has VESTED b/c of the money already spent on preparing for
                         the project. IA S CT HOLDS: The city's reasons are good
                         enough to look like a valid exercise of police power,  hasn't
                         spent enough (whatever that means) to have vested his rights
                         and nobody at the city council ever mentioned discrimination, so
                         that couldn't have been one of the motivating factors.
     4.   See PROBLEM on p. 690 (daycare center that wants to convert to high
          school for hearing impaired.)
C.   ZONING: The GOOD, The BAD, and THE UGLY
     1.   Good things about zoning
          a)     Encourage investment in community
          b)     Improves quality of peoples lives
          c)     Provides sense of security
     2.   Bad things about zoning
          a)     Cost of some special injury to certain land owners

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            b)  Rigidity: freezing a vision of community that seemed attractive at one
                time, but is no longer reflective of modern values.
     3.   The UGLY
          a)    Can promote, or at least abet, discrimination
                (1)       Intentional or Unintentional effect by closing persons out of the
                          neighborhood.
          b)    When zoning is delegated to local Jx, we wind up with
                "comprehensiveness in a very small world."
D.   EXCLUSIONARY ZONING
     1.   MOTIVES for ZONING may have (UN)INTENDED EFFECTS
          a)    Where a city zones with TAX BASE in mind, strange things can
                happen.
          b)    ALL exercises of POLICE POWER must conform to basic
                CONSTITUTIONAL REQUIREMENTS of Substantive Due Process
                and Equal Protection
          c)    Some courts may take CUMULATIVE EFFECTS of various local
                zoning ordinances into consideration when determining if they are
                CONSTITUTIONALLY VALID
          d)    NJ & CA RULE: Every community MUST provide a plan to make it
                realistic for the opportunity for low income housing to exist.
                (1)       Municipalities may zone for INDUSTRY RATABLES with tax
                          base in mind, but CANNOT EXCLUDE certain types of
                          families and residences based on the same concerns.
                (2)       Mt. Laurel I, p. 664. City zones itself to only include industry,
                          commercial and single-family residential. Its reasons are that
                          multi-family housing are too much of a drag on the tax base. NJ
                          S CT HOLDS: That the cumulative effects of this type of
                          thinking would leave no housing for the poor anywhere in the
                          state. Court declares that the city has 90 days to add zoning for
                          multi family homes.
                (3)       Mt. Laurel II, p. 673. On remand, the city zones multi-family
                          areas—in unbuildable wetlands. This time the NJ COURT
                          loses patience. They create an entire ADMINISTRATIVE
                          RULE STRUCTURE and COURT SYSTEM to ensure that all
                          cities in NJ comply with the SPIRIT, not just the LETTER of
                          the law. The court required municipalities to use existing
                          government subsidies for low income housing, provided
                          incentive to developers to set aside portions of developments
                          for low income housing, assigned mandatory set asides for low
                          income housing that developers HAD to comply with in order
                          to obtain a permit to build, and ordered municipalities allow
                          developers to build such housing unless the city could make an
                          affirmative showing of environmental or other SUBSTANTIAL
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                          planning concerns. In some cases, the courts would go so far
                          as to appoint a MASTER who would revise the city's zoning
                          ordinances if the city failed to do so on its own.
          e)     NOW, inclusionary zoning has ALSO come under attack as being
                 racially discriminatory under FHA (so how do you win?)
E.   DISPARATE IMPACT CLAIMS - RACIALLY DISCRIMINATORY
     ZONING PRACTICES
     1.   Zoning regulations may have DISPARATE IMPACT leading to
          discrimination.
     2.   DISPARATE IMPACT ANALYSIS
          a)     FIRST:  must make PRIMA FACIE CASE that the challenged
                 practice ACTUALLY or PREDICTABLY results in RACIAL
                 DISCRIMINATION.
          b)     SECOND: Once PRIMA FACIE case is plead, BURDEN SHIFTS
                 to TOWN to demonstrate LEGITIMATE JUSTIFICATIONS for
                 ORDINANCE and that NO LESS DISCRIMINATORY means
                 exists.
     3.   Making the PRIMA FACIE CASE
          a)     DISCRIMINATORY INTENT
                 (1)      To prove discriminatory intent, there must be ACTUAL
                          language in the ordinance or in the legislative history which
                          directly indicate a desire by the local government to discriminate
                          on the basis of race. This can be difficult to prove.
          b)     DISCRIMINATORY IMPACT
                 (1)      Under this analysis, the  only need show that the zoning
                          regulation ACTUALLY or PREDICTABLY results in racial
                          discrimination. There is no need to show INTENT.
                 (2)      Intent is SPECIFICALLY EXCLUDED from the analysis
                          because it can be covered up by a careful legislative body.
     4.   Town's Burden: Showing LEGITIMATE JUSTIFICATIONS
          a)     The town must show that its actions further a LEGITIMATE, BONA
                 FIDE government interest.
          b)     AND must show that no LESS DISCRIMINATORY
                 ALTERNATIVE exists
                 (1)      Evidence of DISCRIMINATORY INTENT will vitiate any
                          legitimacy in government's decision.
          c)     IF  is only suing to compel rezoning, success of 's claim is greater
                 than where  is demanding government to build the housing.
          d)     Justifications which are thought of for trial purposes, but which were not
                 in the original reasons for denial are automatically suspect.
                 (1)      The local government cannot attempt to rationalize its zoning at
                          trial by creating new reasons for the denial of the zoning change.

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5.   DIFFERENTIATING TYPES of government justifications for purposes
     of determining if there is a LESS DISCRIMINATORY
     ALTERNATIVE:
     a)    SITE SPECIFIC: May survive analysis because changes are not easily
           made.
           (1)      Thus concerns about street traffic, ability of sewer systems to
                    handle additional load, fire protection, etc., tend to be valid
                    justifications.
     b)    PLAN SPECIFIC: These types of justifications are generally more
           suspect because simple alterations to the plan may be implemented.
           (1)      Thus, concerns about the number of bathrooms in a unit,
                    available parking, or overall square footage are generally not
                    sufficient reason to deny zoning because the plans can be
                    changed to conform to the towns concerns.
6.   ABSOLUTE NUMBERS vs. PROPORTIONAL STATISTICS
     a)    Even if absolute numbers do NOT indicate discrimination, a lopsided
           distribution of PROPORTIONAL STATISTICS may still do so.
7.   PUBLIC vs. PRIVATE DISCRIMINATION
     a)    Private Parties may be IMMUNE from the DISPARATE IMPACT
           analysis.
           (1)      Brown v. Artery Organization, note 3, p. 1047. D DC
                    HOLDS: That  must show DISCRIMINATORY INTENT
                    against a private . Disparate impact analysis will only apply to
                    PUBLIC entities.
8.   Case Study in DISPARATE IMPACT ANALYSIS
     a)    Huntington Branch NAACP v. Town of Huntington, p. 1038.
           (1)      Local non-profit group buys property in single-family zone
                    which is predominantly white with intent to build low income,
                    multi-family housing. Town's zoning restricts such development
                    to an area of the city which is run-down, and already contains
                    the majority of the city's ethnic minorities. The city claims that
                    this zoning is designed to encourage "urban renewal" in that
                    area. City refuses to rezone the property for 's so that they
                    can build their low income housing where they want. The city
                    cites several reasons: including the fact that the site is at the
                    intersection of two very busy streets, that the plan does not
                    have adequate parking and fire access, that the property is
                    located next to a railroad station, that the plan doesn't have
                    enough park space and that the sizes and configurations of the
                    units are not sufficient. US S CT Applies DISPARATE
                    IMPACT ANALYSIS to find that the zoning has a
                    DISCRIMINATORY IMPACT, and directs the T COURT to
                    order the city to rezone the area, and to strike that portion of
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      their zoning regs which limits low income, multi family housing to
      the 'urban renewal' zone.
(2)   THE COURT'S ANALYSIS: FIRST: The court looks to 's
      claim to see if they have made a PRIMA FACIE case for
      discrimination. Although they find no clear evidence of
      DISCRIMINATORY INTENT, what  does show is that
      there is a DISPARATE IMPACT on minorities in that the
      zoning as it existed IMPEDED INTEGRATION by restricting
      low income housing to an area which was already 52%
      minority. IN PARTICULAR, the court is concerned with the
      PROPORTIONAL STATISTICS which show that a
      disproportionate PERCENTAGE of minorities were in need of
      low income housing (even though the absolute numbers were
      relatively small compared to the white population in need of low
      income housing). All of this evidence, according to the court,
      makes a strong prima facie claim for plaintiff that the zoning
      practice of the town had a discriminatory impact.
(3)   SECOND: The COURT THEN looks to the evidence offered
      by the city to determine if they have provided BONA FIDE
      reasons for refusing to rezone, and whether there would be a
      less discriminatory way to achieve those goals. The court finds
      that the city's excuse for zoning the low-income housing in the
      "urban renewal area" is a legitimate government interest, BUT
      strikes it down because there are LESS DISCRIMINATORY
      WAYS to achieve the goal of urban renewal (such as tax
      credits to builders). The court THEN examines the specific
      reasons why the 's plans were rejected. In particular, it finds
      that the PLAN SPECIFIC reasons given for the refusal are not
      sufficient because the plans could be changed in order to
      accommodate for those concerns (amount of parking, fire
      access, size of units, number of bathrooms, etc). At the
      appellate level he city also offered that SEWAGE would also
      be a SITE SPECIFIC problem which hadn't yet been
      examined. The COURT is highly critical of this excuse b/c it
      wasn't offered as a reason until after the litigation began. Thus,
      the concern about sewage is disregarded as a POST HOC
      RATIONALIZATION for the town's actions.
(4)   FINALLY:          Noting that the 's were only seeking
      PERMISSION to build their low-income housing complex
      (rather than asking the city to undertake the actual construction
      project) and noting that here there was a public entity, not a
      private entity involved in the discrimination, the court

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                                 REVERSES the APP CT judgment for the town, and declares
                                 the area must be rezoned for 's project to go forward.
VI.   "TAKING" of PROPERTY INTERESTS
      A.   SOME BASICS
           1.    5th Amendment
                 a)     "nor shall private property be taken for a public purpose without just
                        compensation."
           2.    14th Amendment
                 a)     Due Process clause interpreted to REQUIRE that any taking MUST be
                        for a PUBLIC PURPOSE, and must be COMPENSATED.
           3.    CA TERMINOLOGY: INVERSE CONDEMNATION
      B.   WHAT is a PUBLIC PURPOSE?
           1.    See fall outline: EMINENT DOMAIN (same standard).
           2.    PURPOSE of "TAKING"
                 a)     BOTTOM LINE RULE: "Public Purpose" DOES NOT MEAN
                        "Public Ownership."
                        (1)      As long as Congress goal is a legitimate public purpose
                                 (protecting health, safety, welfare, morals), then the end result
                                 of who owns the property is immaterial.
                 b)     Taking for later transfer to private individuals does not necessarily mean
                        that there is no public purpose.
                        (1)      Hawaii Housing Auth. v. Midkiff (US S CT, 1984): Upholds
                                 State's use of eminent domain to lessen concentration of fee
                                 simple landownership.
                        (2)      In enacting the legislation, the state legislature found that the
                                 over concentration of fee simple ownership was injurious to
                                 "public tranquillity and welfare."
                        (3)      RULE: Where the Exercise of the eminent domain power is
                                 RATIONALLY RELATED to a CONCEIVABLE PUBLIC
                                 PURPOSE, the Court will find that the "public purpose" clause
                                 is satisfied for a COMPENSATED TAKING.
                        (4)      "When the legislature's purpose is legitimate and its means are
                                 not irrational, our cases make clear that empirical debates over
                                 the wisdom if takings--no less than debates over the wisdom of
                                 other kinds of socioeconomic legislation--are not to be carried
                                 out in the federal courts."
      C.   REGULATORY vs. PHYSICAL TAKING
           1.    PHYSICAL TAKING is ALWAYS COMPENSABLE.
                 a)     Anytime there is a PHYSICAL OCCUPATION, no matter how slight,
                        there is a PHYSICAL TAKING
                        (1)      Loretto (apartment owner forced to allow cable company to
                                 attach box to her building. Physical taking.)

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2.   BUT, Mere PHYSICAL INVASION is not necessarily a PHYSICAL
     TAKING
     a)      Allowing persons to petition at mall against mall regulations is not a
             physical taking. (PruneYard)
             (1)      In PruneYard, the court found that allowing the plaintiffs to
                      have petitions signed 1) did not unreasonably impair the value of
                      the property, and 2) did not rise to the level of a physical
                      invasion requiring compensation.
     b)      Regulation denying a mobile home park owner the right to decide who
             lives on the pad is not a taking. (Yee.)
             (1)      In this case, O'CONNOR explains that where a regulation
                      affects the use of property, compensation is only required
                      where the owner is DEPRIVED of ECONOMIC USE of the
                      property, and where the owner has been UNFAIRLY
                      SINGLED OUT to bear a burden that should be borne by
                      society as a whole.
             (2)      Here, a factor that seems important to the court is that the
                      owner has ALREADY consented to the occupancy of the land
                      by another (their renter), so where there are now regulations
                      placed on how that renter will be treated this is not viewed as a
                      taking.
             (3)      BOTTOM LINE RULE: Rent control and zoning regulations
                      do transfer wealth, but cannot be viewed as physical "takings."
3.   TWO FACTORS which ARE CONSIDERED in assessing whether
     there is a taking though zoning or rent ordinances
             (1)      Is the owner still able to exercise their PRIMARY
                      EXPECTATION in purchasing the property?
             (2)      Is the owner still able to obtain a reasonable return on their
                      investment?
     b)      BUT: A law CANNOT REQUIRE a landlord to stay in the landlord
             business.
             (1)      See Seawall Associates v. NY, note 3, p. 1219. (Law
                      requiring owners to rent empty space as Single Room
                      Occupancy rather than converting it to other uses struck down
                      in NY as a taking).
4.   THREE PART TEST for REGULATORY TAKINGS
     a)      There must be an Economic Impact
     b)      Which interferes with REASONABLE, INVESTMENT-BACKED
             expectations AND
     c)      The character of the Government's action must be examined.
     d)      Regulation affecting right to DEVISE may be a taking, regardless of
             economic impact.

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             (1)   Hodel v. Irving, p. 1222. Congress enacts laws dividing
                   reservations into private ownership. But the law prohibits any
                   sale of the allotments (Lands moved from being "in trust" for
                   tribes, into being "in trust" for individuals). Over time this
                   resulted in severe fractionation of ownership, and a virtually
                   impossible accounting system. (because land could not be
                   devised by the beneficiary, then intestacy statutes would
                   "fractionate" the interest by granting the beneficiary status to the
                   CLASS of heirs). By the 1980's this became so
                   "unmanageable" that Congress passed a law that where the
                   fractionated interest is less than 2% and has earned less than
                   $100 in the previous year would "escheat" to the tribe on the
                   death of the holder. Three devisees challenge the statute. US S
                   CT HOLDS: That the regulation is a TAKING of property
                   interests. This ruling is primarily an example of how the
                   CHARACTER of the government action can affect the
                   outcome. In this case it is not likely there was a very substantial
                   economic impact, but because the owner's right to devise is
                   such a 'basic" part of the bundle of property rights, the
                   regulation went too far.
     e)    Regulation banning sale of goods may not constitute a taking.
           (1)     Andrus v. Allard, Reader, p. 104: Upholds ban on sales of
                   commercially traded Indian artifacts containing eagle parts taken
                   before the Act.
           (2)     RULE: Where an owner possesses a full "bundle" of property
                   rights, the destruction of one "strand" of the bundle is not a
                   taking b/c the aggregate must be viewed in its entirety.
           (3)     ALSO--note that this is NOT real property, but rather interest
                   in goods.
5.   Burdens of Citizenship v. Unfair Sacrifice for the Public Good
     a)    The state may decide on the destruction of one class of property in
           order to protect another.
           (1)     Miller v. Schoene, p.1233. US S CT HOLDS that the
                   destruction of all red cedar trees in the state is not a "taking"
                   because it is necessary to protect the state's apple crop. B/c
                   apples are a multi-million dollar crop in the state.
           (2)     PROBLEM with this opinion, IF there is such a deparate public
                   need, why is there no compensation?
     b)    Where there is a FACTUAL FINDING that property has been
           rendered "valuless" the regulatory action is a taking per se.
           (1)     Lucas v. South Carolina Coastal Council, p. 1234. Developer
                   buys two lots for nearly $1 million. Then a regulation by the
                   Coastal Commission makes it impossible for him to build there.
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                    Because the lower court found that this eliminated all economic
                    value of the property, the US S CT finds that the regulation is a
                    taking per se.
      c)   A state can only prevent by regulation those uses which conflict with
           "background principles of property law or nuisance." (Lucas, p. 1242).
6.    PER SE GOVERNMENT TAKINGS OCCUR WHERE
      a)   Physical Invasion
      b)   Extinguishment of CORE property right
      c)   Denial of economically viable use
7.    CHARACTER of GOVERNMENT ACTION likely to be found a
      TAKING
      a)   Forced physical invasion
      b)   Extraction of a BENEFIT for the community rather than preventing a
           HARM.
      c)   A forced REDISTRIBUTION of a BARGAINED for
           CONTRACTUAL RIGHT
8.    CHARACTER of GOVERNMENT ACTION likely to be found a
      VALID EXERCISE of POLICE POWER
      a)   Regulation of property use rather than physical invasion.
      b)   Limitations on property use to prevent harm to the community.
      c)   Regulations which both impact property rights but also confer benefits
           on the owner
           (1)      (such as changing the speed limit to 55 hurts truckers by making
                    hauling time longer, but benefits them by providing safer
                    highways.
      d)   Situations where there is a forced choice b/t INCOMPATIBLE
           property interests
           (1)      Such as Miller v. Schoene.
9.    INTERFERENCE with INVESTMENT BACKED EXPECTATIONS
      a)   Taking is more likely to be found where there is already a VESTED
           RIGHT
      b)   Taking is more likely to be found if it interferes with PRESENT USE of
           property
      c)   Taking is LESS likely to be found if all that regulation does is impose an
           OPPORTUNITY LOSS
      d)   Taking is LESS likely to be found where owner SHOULD HAVE
           REASONABLY FORESEEN the regulation.
10.   DEFINING WHAT HAS BEEN TAKEN
      a)   In many cases the AMOUNT of diminution in value can be WILDLY
           altered by the way the right is defined.
           (1)      For example, in Keystone, the majority defined the interest as
                    all coal to be mined, and so a regulation impacting 2% of the
                    coal was NOT sufficient to be a taking. The Dissent looked at
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                 the 2% and said that since ALL of the right to that 2% had been
                 removed, it was a taking.
11.   "TAKING" THROUGH REGULATION
      a)   Penn Central Transp. Co. v. NY City (US S CT, 1978)
           (1)   Upholds City's Landmark Preservation Law which designated
                 certain properties as landmarks, limited the development which
                 could be done on the properties, but also granted Transferable
                 Development Rights on the owners of such affected property.
           (2)   Court acknowledges that rule making in this area has been to a
                 large extent on a case-by-case basis.
           (3)   FACTORS in EVALUATING if GOVERNMENT ACTION
                 is a TAKING
                 (a)      The ECONOMIC IMPACT of the regulation--
                          PARTICULARLY the EXTENT to which the
                          regulation has INTERFERED with DISTINCT,
                          INVESTMENT-BACKED EXPECTATIONS.
                 (b)      The CHARACTER of the GOVERNMENT ACTION
                 (c)      PHYSICAL INVASION is more readily characterized
                          as a taking.
           (4)   RULE: Where a state tribunal REASONABLY concludes that
                 the "health, safety, morals, or general welfare" are promoted by
                 the use, the court HAS upheld regulations which destroy or
                 adversely affect recognized real property interests.
                 (a)      Example: Euclid, Zoning.
           (5)   RULE: A state might properly make a choice b/t the
                 preservation of one class of property and that of the other. The
                 state does not exceed its Constitutional authority by deciding on
                 the destruction of one class of property without compensation in
                 order to save another which, in the judgment of the legislature,
                 is of greater value to the public.
                 (a)      Example: Miller v. Schoene (Economic interest to state
                          in Apple crop allows state to take individual owners red
                          cedars without compensation).
           (6)   RULE: A state statute which substantially furthers state interest
                 may so frustrate distinct investment-backed expectations as to
                 amount to a taking.
                 (a)      EXAMPLE: PA Coal: State statute regulating coal
                          extraction under people's houses found to render it
                          "commercially impracticable" to extract the coal, and
                          thus a 'taking" of the coal company's property rights.
           (7)   RULE: Government actions which are characterized as
                 ACQUISITIONS of RESOURCES to permit or facilitate

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             UNIQUELY PUBLIC FUNCTIONS have often been held to
             constitute "takings."
             (a)       EXAMPLE: Causby:              Chicken farmer is due
                       compensation when new airport is built so as to cause
                       the flight path to go directly over his property, scaring
                       his chickens.
     (8)     RULE: IF the government grants rights (such as TDR's) when it
             "takes" others, then the court is less inclined to find a taking--
             even where the new right is clearly less valuable than the
             previously held right.
     (9)     RULE: Taking jurisprudence does not divide a single parcel into
             discrete segments and attempt to determine whether rights in a
             particular segment have been entirely abrogated.
     (10) RULE: The mere fact that a regulation ahs a more severe
             impact on some landowners than others does not, of itself,
             mean that the law effects a "taking."
     (11) DISSENT: RQ attempts to dissect the property interest--since
             the "air rights" have been completely taken, RQ thinks that
             compensation is due.
b)   Loretto v. Teleprompter Manhattan CATV Corp. (US S CT, 1982)
     (1)     Finds that city regulation allowing CATV to attach its equipment
             to privately owned apartment building is a taking of building
             owner's property.
     (2)     RULE: Where there is a PERMANENT PHYSICAL
             OCCUPATION, the court "invariably" finds a taking.
c)   Keystone Bituminous Coal Ass'n v. DeBenedictis (US SCT, 1987)
     (1)     Upholds State Subsidence Act which requires mining Co. to
             leave 50% of coal under protected structures in place.
     (2)     Here there were legislative goals of protecting the public interest
             in safety, health and enjoyment.
     (3)     The court DISTINGUISHED PA coal by the fact of the
             legislative findings (pretty weak stuff)
     (4)     RULE: The majority finds that the ECONOMIC IMPACT as a
             PERCENTAGE of overall coal production is so minimal as to
             not justify a taking.
     (5)     DISSENT: RQ once again breaks apart the bundle to
             myopically investigate one segment of one strand in isolation.
             Since the coal company cannot have this one teaspoon of coal,
             this one teaspoon of coal has been 100% taken, and the poor,
             injured, suffering corporation needs to be compensated.
d)   Nollan v. California Coastal Com'n (US S CT, 1987)



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     (1)    Holds an uncompensated taking a commission condition that in
            order to replace a small shack with a three story building the
            owner must grant an 8' public easement along the beach.
     (2)    RULE: There must be a NEXUS b/t the public interest to be
            advanced and the private interest invaded.
            (a)      The problem here was that the commission cited its
                     concern for a public view of the ocean as its concern.
                     SCALIA refused to see how granting an easement
                     across the beach front would assist with promoting a
                     view of the ocean.
e)   Dolan v. City of Tigard (US S CT, 1994)
     (1)    Finds a 'taking" a city's conditioning of a permit to expand a
            business on the owner making a public dedication of her flood-
            plain and an additional 15' for a bike path.
     (2)    RULE: "ROUGH PROPORTIONALITY" added to the
            "NEXUS" test.
     (3)    Now there is a TWO TIERED APPROACH
            (a)      FIRST; The NEXUS must be established b/t the
                     government interest advanced and the property interest
                     invaded.
            (b)      SECOND: The government must show that the invasion
                     of     the    property      interest  is    ROUGHLY
                     PROPORTIONAL to the public good to be derived
                     from the invasion.
f)   Lucas v. South Carolina Coastal Council (US S CT, 1992)
     (1)    Holds that a coastal council regulation prohibiting development
            of two lots is a TAKING where the trial court determined that
            such regulation denied all "economically beneficial or productive
            use" of the land.
     (2)    RULE: Where it is found that "all economically beneficial or
            productive use" has been taken, the government action is a
            categorical taking UNLESS the property interest invaded was
            not a part of the owner's title to begin with.
     (3)    In particular, such action IS NOT a taking where
            BACKGROUND PRINCIPLES of State property law and
            nuisance already prohibit such uses.
     (4)    DISSENT: STEVENS: Finds that SCALIA'S cramped
            approach would attempt to freeze State common law nuisance
            principles in time.
g)   FIRST ENGLISH EVANGELICAL LUTHERAN CHURCH v. LA
     County (US S CT, 1987)



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                              (1)   Holds that even a TEMPORARY TAKING may be subject to
                                    compensation for the period of time where the government
                                    interfered with the property owner's rights.
VII.   REAL ESTATE TRANSACTIONS
       A.   Statute of Frauds v. Part Performance and Estoppel
            1.     Real estate Transactions must be in WRITING.
            2.     BUT, SoF can be defeated by ESTOPPEL or PART PERFORMANCE
                   a)      Where a party "partly performs" the part performance MUST be
                           UNEQUIVOCALLY REFERABLE to the contract for sale.
                           (1)      Burns v. McCormick, p. 916: Cardozo rules that a couple
                                    who moves in to take care of an old dude LOSE when they
                                    claim that their services were in exchange for his promise to will
                                    the property to them after his death. Since they were doing
                                    women's work, they are losers. If they had done MAN'S work
                                    they might have prevailed.
                           (2)      NOTE: That in this case the couple still may have a valid claim
                                    for RESTITUTION for the value of the services which they did
                                    convey. (But hey, how much can women's work be worth?)
                   b)      Where a party has REASONABLY RELIED on a contract for sale of
                           land to their detriment, the K may be enforced even if it is not in writing.
                           (1)      Hickey v. Green. Couple buys a lot from an old lady and gives
                                    here a check for it, but there is no written contract for the sale.
                                    Then the couple sells their house. Then the old lady says
                                    "Sorry, I changed my mind." MA APP CT HOLDS: Since
                                    there has bee a REASONABLE DETRIMENTAL
                                    RELIANCE by the couple, the sale transaction must be
                                    enforced, even without a K.
                   c)      Where a party ADMITS to an oral term of the K, that term may be
                           enforced, even if it does not appear in the writing.
                           (1)      Gardner v. Gardner, p. 920. Siblings transfer their remainder
                                    interest to deadbeat brother so he can get a loan. There is an
                                    oral agreement that if the loan doesn't go through deadbeat
                                    brother will reconvey the interest. The loan fails, and deadbeat
                                    brother refuses to reconvey. IA S CT HOLDS: Since
                                    deadbeat brother has admitted sufficient facts to infer that such
                                    an oral agreement existed, deadbeat brother will now have to
                                    follow through on his promise, even if it is not contained within
                                    the "four-corners" of the document.
       B.   RECORDING ACTS and TITLE SEARCHES
            1.     Conducting the TITLE SEARCH
                   a)      LOOK in the GRANTEE index to find out who granted the parcel to
                           the current owner.
                   b)      Keep going back until you have gone "far enough"
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            c)  THEN, Look in the GRANTOR index to find out about any special
                conveyances made during the chain of title.
                (1)      May include things like easements, and transfer of other
                         property rights.
     2.  TYPES of RECORDING ACTS
         a)     RACE STATUTES: First to the recorder wins.
         b)     NOTICE STATUTE: Later purchaser wins UNLESS they have
                NOTICE of previous sale.
         c)     RACE-NOTICE STATUTE: First to the recorder wins, unless it is the
                LATER purchaser who has NOTICE of the previous sale.
     3.  TYPES of NOTICE
         a)     Actual notice: party has personal knowledge of the previous
                transaction.
         b)     Constructive notice: The party could have found out about the previous
                transaction though a title search
         c)     Inquiry notice: where conditions on the property would make any
                purchase wonder if there had been a previous sale.
     4.  Chain of title problems
         a)     Even if a party records their interest first, they can ONLY record that
                which they are granted.
                (1)      Sabo v. Horvath, p. 947. Horvath's purchase the right to
                         posses property from owner. LATER owner is granted title
                         from US Gov't. Then owner sells to Sabos. AK S CT
                         HOLDS: Since the sale was to Horvaths before title was
                         owned by Owner, there is no reason why Sabos would have
                         known of the sale to Horvaths, and so Horvaths are screwed.
C.   CAVEAT EMPTOR
     1.  MISREPRESENTATION and FRAUDULENT DISCLOSURE
         a)     Where the seller knows of material facts affecting the value of property
                they must be disclosed
                (1)      Johnson v. Davis, p. 925.  puts a $5K deposit on a home,
                         but withholds the remaining $26K deposit when they discover
                         buckling plaster and stains on the roof.  tells  the plaster is
                         an old problem that was fixed and the stains are from
                         wallpaper.  pays the remaining deposit. Then it rains and the
                         house tours into Waterworld. FL S CT HOLDS:  had a duty
                         to disclose the known facts about the leaky roof, and  is
                         entitled, at the very least, to recover the $26K deposit and to
                         rescind the deal.
     2.  ELEMENTS of a FRAUDULENT MISREPRESENTATION
         a)     A FALSE STATEMENT concerning a MATERIAL FACT
         b)     REPRESENTOR KNOWS the REPRESENTATION is false

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            c)   INTENT by the REPRESENTOR to INDUCE ACTION by the
                 RECIPIENT of the REPRESENTATION
         d)      INJURY as a RESULT of RELIANCE on the REPRESENTATION.
     3.  In a property Tx, the time of signing the K is not dispositive.
         a)      A person can sue for FRAUDULENT MISREPRESENTATION until
                 the time of the closing.
     4.  BUT, where a buyer has NOTICE of a defect, they may not be able to
         recover when its extent is greater than anticipated.
         a)      See Note 3, p. 932.
     5.  AS IS clause only applies to patent defect which are easily exposed.
         a)      (See Mulkey v. Waggoner, p. 935).
D.   ELEMENTS of a REAL ESTATE DEED
     1.  What goes into a deed to make it valid?
         a)      Identification of the parties
                 (1)      Grantor
                 (2)      Grantee
         b)      Identification of the property
                 (1)      Might be by "metes and bounds"
                 (2)      Might be by a number in a designated subdivision
                 (3)      Name by which the property is popularly known
                 (4)      ENOUGH that IN CONTEXT it SUFFICIENTLY
                          DESCRIBES the PIECE of LAND.
         c)      Identify the interest being conveyed
                 (1)      Fee simple? An easement?
                 (2)      Can be informal, and implicit.
                          (a)      Thus, even if the deed doesn't say what is being
                                   conveyed, we can IMPLY (most often EVERYTHING
                                   is assumed).
         d)      Words of Conveyance
                 (1)      Words indicating a PRESENT INTENT to transfer the interest.
         e)      Grantor's signature
                 (1)      Must be adequate to satisfy the SoF.
     2.  Other things that can be included (must be included for RECORDING):
         a)      Recital of Consideration
                 (1)      To make it clear that this is not a trust-type situation.
                 (2)      And, RECORDING ACTS only protect a PURCHASERS
                          FOR VALUE.
         b)      Acknowledgment Clause.
                 (1)      Notarization of document
                 (2)      This is not required to make the deed valid.
                 (3)      BUT you can't RECORD the document without notarization.
     3.  Finally, to make the deed valid, we must have DELIVERY.

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            a)   But, with DEEDS we have to make sure that the GRANTEE has
                 accepted.
          b)     WHAT is DELIVERY: Some manifestation outside of the deed itself
                 that the grantor intends to relinquish control, and no objection by the
                 grantee.
          c)     Thus, even once the deed is SIGNED, there is NO TRANSFER until
                 the DEED is DELIVERED.
     4.   What constitutes DELIVERY?
          a)     Recording it.
          b)     Placing it in the hand of the grantee.
E.   TYPES of DEEDS
     1.   QUITCLAIM DEEDS
          a)     No guarantees. Simply says the grantor is transferring whatever it is
                 that she owns.
     2.   WARRANTY DEEDS
          a)     Actually promises that the grantor owns what they are purporting to
                 transfer.
          b)     Essentially means that the GRANTOR WILL DEFEND the
                 GRANTEE against any challenges to title.
          c)     In many states, the guarantees of a "WARRANTY DEED" are set forth
                 by STATUTE.




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DOCUMENT INFO
Description: Real Estate and Medford Wisconsin document sample