VIEWS: 25 PAGES: 35 POSTED ON: 7/12/2011
Property Outline 1) Owner‟s Right to Exclude a) Owner‟s General Rights i) The right to exclude is fundamentally a right to control the behavior of others. (1) The corollary of the right to exclude is the legal duty to stay off. No such duty exists if there is a right to free access, which comes at the expense of the right to exclude. (2) Property rights are inherently at the expense of everyone else (in rem), whereas contract rights come at the expense of one other person (in personam). ii) Protects interests such as exclusive possession and quiet enjoyment; also autonomy, dignity, and religious and associational freedom. iii) The supermajority of states gives property owners an absolute right to exclude, so long as it does not violate any law. (1) Innkeepers and common carriers are exceptions, as they are more likely to be monopolies providing necessities. iv) A few states hold that when owners open their premises to the public in the pursuit of private business interests, they have no right to exclude people unreasonably. (1) Property owners have no legitimate interest in unreasonably excluding particular members of the public when they open their premises or public use. (2) See Uston v. Resorts International Hotel, Inc. b) Employer‟s Rights i) See State v. Shack for an exhaustive list of associational rights that the employer cannot prevent an employee from exercising. (1) These rights are too fundamental to be denied on the basis of an interest in real property and too fragile to be left to the unequal bargaining strength of the parties. ii) Employers do not have an absolute right to exclude. Private interests can outweigh property interests in some circumstances. (1) Our legal system likes to avoid things that look like feudalism, where the lord has absolute power over the serfs. c) Trespass i) One who intentionally makes an unprivileged entry onto property owned by another person is a trespasser. ii) Common law definition of trespass: (1) intentionally (not intent to trespass – just intent to enter the property – protects you from being thrown in unwillingly or something.) (2) entering (3) property (4) owned or possessed (leased or rented) by someone else (5) unprivileged – exceptions exist: (a) With consent: (i) Invalid if deception is used to acquire the consent. 1. See Desnick v. American Broadcasting Companies, Inc. (ii) Who (or what groups), specifically, was invited? What were they invited to do? Did later behavior violate consent by exceeding the scope of the initial invitation? 1. Businesses holding themselves out to the public automatically consent to anyone coming onto its property seeking services, regardless of ulterior motives. 2. See Food Lion, Inc. v. Capital Cities/ABC, Inc., where the business granted consent to physical entry but not to videotaping. (b) under public policy (pressing state concern) (i) Consumer protection (ii) First Amendment rights 1. The First Amendment does not apply directly to private property, so there is no fundamental free speech right of access. 2. See Marsh v. Alabama. The owner cannot prevent people from passing out handbills in a company-owned town, likening it to the business district of a regular town. This applies only to the situation in which a company had assumed all the municipal responsibilities, leaving no recourse for people to exercise their free speech. 3. See Amalgamated Food Employees Union v. Logan Valley. Protestors can picket in a shopping mall, when the picketing is directly related to the business practices of a store located in the shopping center, and there is no other nearby place to picket. 4. See Hudgens v. NLRB. Logan Valley is entirely overruled in favor of right to exclude. Bolstered by Pruneyard Shopping Center v. Robins (1980). These decisions limited the sole free speech exception to company-owned towns. 5. See Lloyd Corp., Ltd. v. Tanner. The U.S. Supreme court took a strange middle ground where no free speech right applies to private shopping malls under the First Amendment, but the states can decide the question on their own (by expanding the protections granted by the federal constitution). a. See New Jersey Coalition Against War in the Middle East v. J.M.B. Realty Corp. The N. J. Supreme Court holds that people have the right to distribute handbills in a privately-owned mall, as the mall had replaced central business districts, creating a compelling public interest. (c) by necessity (saving a person‘s life) iii) Acts that would normally constitute trespass may not under circumstances where the entry was not invasive in the sense of infringing the kind of interest of the ∏s that the law of trespass protects; it was not an interference with the ownership or possession of land. d) Illegal Reasons for Discrimination by Public Accommodations i) Homeowners can generally exclude for any reason, but public accommodations have much less of a privacy interest. ii) State discrimination laws cannot offer less freedom than federal law, but they can and often do offer more freedom. iii) Title II, Civil Rights Act of 1964 (42 USC §2000a): Prohibition Against Discrimination or Segregation in Places of Public Accommodation: (1) All persons shall be entitled to the full and equal enjoyment of the goods, services, facilities, privileges, advantages and accommodations of any place of public accommodation without discrimination or segregation on the ground of race, color, religion or national origin… (2) Establishment is a place of public accommodation if its operations affect commerce, or if discrimination or segregation by it is supported by State action. (a) any inn, hotel, motel, or other establishment which provides lodging to transient guests, other than an establishment located within a building which contains not more than five rooms for rent or hire and which is actually occupied by the proprietor of such establishment as his residence: (b) any restaurant, cafeteria, lunchroom, lunch counter, soda fountain or other facility principally engaged in selling food for consumption on the premises, including, but not limited to, any such facility located on the premises of any retail establishment, or any gasoline station; (c) any motion picture house, theater, concert hall, sports arena, stadium or other place of exhibition or entertainment; and (d) any establishment which is physically located within the premises of any establishment otherwise covered by this subsection, or within the premises of which is physically located any such covered establishment, and which holds itself out as serving patrons of such covered establishments… (e) The provisions of this subchapter shall not apply to a private club or other establishment not in fact open to the public, except to the extent that the facilities of such establishment are made available to the customers or patron of an establishment within the scope of subsection (b) of this section. (3) In order to prove violation of the Federal statute, you must show: (a) Public accommodation (list) (b) Must serve public. (c) Affect commerce or be supported by state action. (d) Deprived of full & equal enjoyment on the ground of race, etc. (4) Statute provides for declaratory and injunctive relief only (NO DAMAGES) (5) Federal statute does not cover sex discrimination, but many state statutes do. (6) Big Question: does this cover retail stores? Courts that have considered issue have held list to be exclusive rather than illustrative. iv) Civil Rights Act of 1866 (42 USC §1981): “All persons…shall have the same right…to make and enforce contracts…as is enjoyed by white citizens” (1) Prohibits RACIAL DISCRIMINATION ONLY. Has been held to cover discrimination against Jews and Arabs since they were viewed as separate races in 1866. (2) Courts have implied a damages remedy (distinguishes from 1964 Act which is just injunctive relief) (3) Can establish prima facie case by demonstrating: (a) Member of a racial minority. (b) D intended discrimination on that basis. (c) That this discrimination abridged contract or other rights enumerated in 1981. (4) If ∏ establishes PF case, ∆ must assert a legitimate, nondiscriminatory basis for his conduct. Then ∏ has ultimate burden of proving these reasons are pretextual. (5) Recently been interpreted to prohibit retail establishments from intentionally refusing to deal with an individual on account of race. (6) Some causes of action are not covered by CRA 1964, but are saved by CRA 1866. (7) More specific statutes usually limit the interpretation of earlier, more general ones. But the earlier broader statute continues in force if the legislature that passed the later act intended the general act to retain independent force. (a) §2000a-6 of 1964 CRA says ―nothing in this subchapter shall preclude any individual…from asserting any right based on any other Federal or State law not inconsistent with this subchapter, including any statute or ordinance requiring nondiscrimination in public establishments or accommodations‖ (8) Civil Rights Act of 1991 amended §1981 to clarify that the right to make and enforce K included a right to nondiscriminatory terms and conditions in those K. (a) Expanded to cover private conduct. (b) Regulates ONLY RACE. (c) Damages are available. (d) Some have used it to cover public accommodations not covered in 1964. (e) Right to ―contract‖ – used to cover right to enter a store. (f) §1981(a) = contract rights (right to contract, enter a store, receive service in a store (haircut, etc.)) (g) §1982 = property rights (right to purchase property, enter a store). v) Americans with Disabilities Act (1990) (1) Imposes restrictions on construction of new buildings, renovations of old buildings, and structure of existing buildings. (2) § 12181(9): renovations that must be done to existing structures to comply with ADA must be ―readily achievable‖- easily accomplished without much difficulty or expense. Factors to consider are: (a) nature and cost of contemplated renovation (b) financial resources of the facility or the entity that owns it (c) type of operation being run (3) 12182(b)(1)(A)(ii)-(iii): disabled people must be afforded equal benefit to a good, service, facility, privilege or advantage being offered by an entity- the benefit cannot be different or separate (4) 12182(b)(2)(A)(ii)- existing structures must be reasonably modified unless owner can show that modification would fundamentally alter the nature of the facility (5) 12182(b)(2)(A)(iv)- discrimination includes failure to remove architectural barriers where such removal is readily achievable (6) 12182(b)(3)- no accommodation for the disabled that requires a ―direct threat‖ (significant risk that cannot be avoided) to health and safety of others is required (7) 12183(a)(1)-(2): new structures must be readily accessible, and existing facilities that are renovated must be altered in such a way as to make the renovated part accessible to the disabled ―to the maximum extent feasible‖- primary function of renovated facility must be accessible to bathrooms, telephones, drinking fountains (a) For new buildings, the front entrance would probably have to be accessible unless such accommodation was ―structurally impracticable‖. (8) 12187: private clubs and religious organizations that are exempt from the 1964 CRA are also exempt from ADA. (9) Other points: (a) ADA was deliberately left somewhat vague- almost any kind of discrimination seems to be illegal under 12182(b)(1), but then there are more specific prohibitions in b(2)- do they cancel out the wider previous provision? (b) Conditions under which public accommodation must make a renovation are not consistent (i) b(2)(A)(i)- when change is unreasonable (ii) b(2)(A)(ii)- when alteration would fundamentally alter the nature of the goods or services (iii) b(2)(A)(iii)- when renovation poses undue burden (iv) b(2)(A)(iv)-when renovation is readily achievable (c) See Lara v. Cinemark USA – a theater with stadium seating did not violate ADA by having seating for disabled only in the very first row. (i) What‘s important is that there were lines of sight comparable to those afforded to the general public. Since the seats were open to everyone, and not just the disabled, it‘s fine. (ii) Other courts could disagree with this result since theater was forcing disabled people to take the worst seats in the house. vi) Dale v. Boy Scouts of America (1) The New Jersey Supreme Court held that: (a) The Boy Scouts organization is classified as a public accommodation, despite not being associated with a specific location, on the basis of its broad public solicitation and close relationship with governmental entities also factored in. (b) It is also classified as not a private club because of its enormously large size and general non- selectivity. (c) The problem for the Boy Scouts is that they are selective on only two illegal criteria: religion and sexual orientation. (2) The U.S. Supreme Court reversed, holding that: (a) Based on the 1st Amendment right to freedom of expression and association, the Scouts can exclude gays. In one category, this generally refers to political groups. In the other category, it refers to ―intimate‖ associations, meaning a group or club of friends. It is difficult to demonstrate private club status if you sell things for profit. (i) The counterargument is that the Scouts were not founded to exclude gays, so their expressive rights would not be violated by having to include gays. (ii) The response is that restricting membership serves an expressive and associational function. (iii) This is permissible so long as selectivity goes beyond the suspect category. (b) The 1st Amendment did not initially apply to states; just to Congress. In the 1960‘s, courts used the 14th Amendment to extend the application of the first 10 Amendments to states. 2) Nuisance and Land Use Conflicts a) Generally i) Property rights give you the power to control the actions of neighboring owners to some extent. ii) Ideally, you have the privilege of freely using your own property so long as your use does not interfere with someone else‘s. iii) Most property disputes are governed by the “nuisance doctrine”, which states that you cannot unreasonably cause substantial harm to a neighbor‟s property. It‘s close to strict liability because the focus is on the harm, not the cause. It is a flexible doctrine, but applies only to land disputes. iv) Remedies (1) Injunction: may obtain an injunction against ‘s conduct when ‘s conduct is unreasonable (causes more social harm than good) and causes substantial harm to P. (2) No relief: is entitled to no remedy if the harm to is not substantial; or ‘s conduct is reasonable, and it is not unfair to impose the costs of the activity on the ; or the imposition of damages would put the out of business and avoiding this result (because of the social value of the ‘s conduct) is more important than preventing the harm to the . (3) Damages: may obtain damages, but no injunction if ‘s conduct is reasonable, but the harm to the is substantial so that it is unfair to burden the with the costs of ‘s socially useful conduct. (4) Purchased injunction: is entitled to a purchased injunction if ‘s conduct causes more harm than good, but it is fair to impose the cost of shutting down the activity on the (e.g. when the comes to the nuisance). Granted for fairness and efficiency reasons. v) Nuisance is not a form of trespass. (1) Trespass protects an owner‘s absolute possessory interest in his land. (2) Nuisance concerns use of one‘s own land that interferes with a neighbor‘s use and enjoyment of his property. The non-absolute right being protected is that of quiet enjoyment. vi) Note on contracting costs: (1) Basic rights and efficiency argument behind the nuisance tort is that if you cause harm to your neighbors, you should be forced to internalize the costs of such harms. (a) The above is one-sided, as ∆‘s rights are also being violated since he can‘t use his property as he would like. Frequently, ∆‘s activity provides greater benefit to society. (2) If contracting costs are low, it doesn‘t matter what property rule we have - neighbors can negotiate. (a) Contracting costs frequently are NOT low, and coming to agreement can be expensive in terms of time and money (3) Problem of bilateral monopoly - if you only have two parties (one buyer and one seller), each trying to get best deal, they can easily get stuck in a rut. (4) Problem of 3rd party externalities - parties‘ actions may affect other people with no say in the deal. (5) Problem of information costs - party who would value an entitlement most often is not the one who gets it because this party has worse information. (a) Courts may be in a better position to see the real interests of the parties. (6) Problem of personal hostility - parties may hate each other (7) Of course, courts cost money as well, but you definitely need them to at least establish clear property rules. b) Types of Nuisance Rights: i) Water Rights (1) The various rules/standards governing water law disputes: (a) Free use rule, or common enemy rule: ∆s can always use the water on their property, and are free to drain or draw in any way they like, regardless of harm to neighbors. Resulting injury is damnum absque injuria (damage without redress). (b) Correlative rights rule: ∏ and ∆ can divide up the water based upon how much of it goes through each parcel of land. (c) Reasonable use standard: Majority rule -- a social policy balancing test which allows courts to factor in a variety of considerations. Ideally a rule of this sort will deter certain harmful conduct and give incentives for more considerate land use. (d) Prior appropriation rule: The person who began using the water supply first is entitled to continue using that water supply. Others can also then use it, so long as the initial user retains the amount of water they initially required. (e) Natural flow rule: A ∏ cannot materially alter the strength or direction of the flow of water into or from a neighbor‘s land. This is a strict liability claim for negligence. ii) Support Easements (1) Lateral Support (a) Landowners typically own both the surface and the earth beneath the surface (unless they‘ve sold mineral rights). (b) Under the oldest rule, one never had a duty to support their neighbor‘s land or structures, and could not be held liable for damage (common enemy rule). (c) Under the modern common law: (i) Property owners have an absolute right of lateral support for the land itself, and this right runs with the land. 1. Strict liability applies if this right is violated. (ii) You have a duty to refrain from negligent injury to adjoining structures, so long as the land in its natural condition was sufficient to support those structures. 1. The negligence doctrine proposed here differs from nuisance doctrine. Negligence doctrine focuses on and seeks to punish unreasonable negligent conduct. (iii) See Noone v. Price. If the weight of the ∏‘s house placed so much pressure on the soil that the house itself caused the subsidence, and the land would not have subsided without the weight of the house, then the ∏s cannot recover. 1. Basically, you have a duty to support your neighbor‘s land in its natural state. If you fail to meet that burden, and a house is there, you can be held liable. If the land fell because of the weight of the house itself, you aren‘t liable. (2) Subjacent Support (a) Subjacent support is often provided by underground water which prevents soil from collapsing. (i) See Friendswood Development Co. v. Smith-Southwest Industries, Inc. Owners can be held liable for negligently withdrawing subjacent support from others (although you can dry up others‘ wells). 1. See Acton v. Blundell. Overruled by Friendswood. Landholders could not be held liable for water subsidence on other property caused by drawing water on their own property (common enemy rule). 2. Friendswood needed to apply Noone and Armstrong, and distinguish from the holding in Acton. a. Noone and Armstrong deal with actual land itself – not potential property such as the underground water. You probably need to apply them by analogy, stating that you have a duty not to harm neighbor‘s land, and there‘s no good reason to differ subjacent support from lateral support. b. Acton holds that you have an absolute right to draw water from under your property, regardless of whether you then draw water from under others‘ property. i. There‘s a strong policy argument to support Acton: Texas, being a very dry state, needs to encourage drawing of water. ii. To counter this, you might just seek damages rather than injunctive relief, although this would be effectively giving up the right to the peaceful enjoyment of the property. iii. You can also enter into a cost-benefit analysis, although it seems likely this would favor ∆s in this case. c. Acton probably didn‘t mean to indicate that you can draw water to the extent that you cause major damage to another‘s actual land. Acton dealt with water levels in wells. iii) Radiation (1) See Page County Appliance Center, Inc. v. Honeywell, Inc. (a) Nuisance does not depend on the intent of the perpetrator, but rather on the effect his actions have on the victim. (b) Vendors can therefore be liable for a pollution-emitting product, even if it‘s being used by a third party. (c) The test is one of reasonableness. iv) Light and Air (1) See Fontainebleau v. Eden Roc. (a) Easements for light and air are not warranted by the nuisance doctrine. (i) Majority Rule: There is NO common law right to the free flow of light and air, even if your neighbor acts negligently or maliciously to obstruct it. 1. Generally justified with cost/benefit analysis – every time you build something, it obstructs some light and air – there is a huge potential for endless litigation. 2. Minority Rule: nuisance law applies to obstruction of free flow of light and air, but only under circumstances where someone is behaving very unreasonably. (ii) The parties can enter into a contract for such an easement. (iii) The only exception sometimes recognized is for spite fences, which have no use except to harass and annoy the neighbors. (2) Right/privilege distinction: A privilege is a right that does not confer a duty on anyone else. (a) So you can put up solar panels, but you have no absolute right to them – you cannot impose upon your neighbors a duty to facilitate your use of solar panels. (b) You have the right to enjoy the use of your property free from nuisance and to exclude other people from it- (c) Correspondingly, other people have the duty to not create nuisances and to stay off your property without permission. (d) You have the privilege to do a wide range of things that give you pleasure or satisfaction on your property (e) This has nothing to do with other people – if their actions incidentally dampen your pleasure but do not amount to nuisances, you are out of luck. 3) Adverse Possession a) Under the doctrine of adverse possession, a non-owner can gain title to a piece of land from the actual owner. b) The majority rule is that you have to prove not by a preponderance of the evidence, but by clear and convincing evidence. c) The non-owner‘s possession of the property must have been: i) Actual possession – in residence, occupying or clearly taking possession of the property. (1) When a person uses, but does not occupy a piece of land in a given capacity for a long enough time, the person does not gain ownership via adverse possession, but they will often gain the right to continue using the property via a prescriptive easement. It generally applies for things like right of way to cross a driveway or something similar. (a) The exclusivity rule is relaxed here, because it is unlikely that the ∏ would be the only person using the property in some capacity, and that should not prevent them from continuing to use it in a set capacity. (2) See Community Feed Store, Inc. v. Northeastern Culvert Corp. ii) Exclusive. The true owner is the one who has to be excluded – fences are usually a pretty good indicator. iii) Visible (―open and notorious‖). There has to be some way for the actual owner to reasonably notice that the property was being occupied by another party. Apply the ―constructive notice‖ test – should the owner have known? iv) Continuous. The adverse possessor cannot entirely give up possession at any time. v) Without the owner‘s permission (―adverse‖), meaning that the owner is not simply waiving their right to exclude for the time being. (1) The presumption is generally that the use is non-permissive unless permission has been explicitly given. (2) The corollary of this rule is that idea that you can just give the adverse possessor permission to eliminate the threat of them getting the property. vi) For a period defined by state statute. This is usually ten years. (1) Tacking occurs when one non-owner adversely possesses a property for x years and sells it to another non-owner. Courts will generally hold that the previous non-owner‘s time of possession is added when the current non-owner claims adverse possession. (2) See Brown v. Gobble. vii) Color of title means that you have some sort of written instrument to the property, and an error in that title cannot prevent you from recovering. Claim of title, in a few states, means you actually think you own the property, but don‘t. These aren‘t actual requirements for adverse possession, but make it easier to claim. viii) A few states have a good faith requirement, where the non-owner must have honestly thought they owned the property. (1) A few other states have the opposite requirement, where the non-owner must have known that they did not own the property. d) Adverse possession appears to be a common law rule, but it is actually an after-effect of the statute of limitations for actions of ejectment. e) What remedies should an owner take if they find out about the squatter before the statute of limitations expires? i) You could immediately give them permission via certified letter, granting a license, an easement, or a lease. ii) You could bring a lawsuit to forcefully eject them from the land. iii) If you put up a ―no trespassing‖ sign, you basically win the case for the other side. iv) You could use self-help, but this might not be legal. v) See Nome 2000 v. Fagerstrom. vi) Valuation- which way is better for purposes of distribution? (1) Auction- who would value the property more if neither party owned it (favors wealthy- usually willing and able to pay more for the same thing) (2) Offer-ask- takes into account the fact that one person is in possession- so it compares what she would sell it for to what the other party would pay for it (takes into account the endowment effect- favors less wealthy since tends to create permanent security interest that can‘t be taken away) (3) Redistribution value: Ask-ask- pretend both parties are owner- see who would value it more (someone who has nowhere to live will value a simple shack in the woods more than someone who already has a house) (4) Fair Market Value- whose property would be most benefited on the open market by adding the disputed parcel (good for border disputes). f) Unjust Enrichment via Improving Trespasser i) Ordinarily any structure or other fixture (something that is attached to the property) on a piece of property belongs to the owner. ii) Traditional approach is that if you build by mistake on somebody else‘s land, they can get an injunction ordering you to tear down the buildings OR they can keep the structure without compensating you, even if you actually improved the value of their land. (1) UNLESS- true owner was or should have been aware of what you were doing and did nothing to stop you. iii) The contemporary approach is to apply the equitable doctrine of relative hardship. (1) If cost of removal is low and building greatly effects value of servient estate you may be compelled to tear it down. (2) If cost of removal is high and servient estate has either not suffered much or actually increased in value you will probably not be nailed and may even be able to claim compensation. (3) The underlying idea is that both parties were negligent – one trespassed, and the other wasn‘t minding the store as much as he should have been. (4) If structure actually improves property, many states have ―betterment statutes‖, stating that either the true owner is forced to sell land to the trespassing builder, or the true owner must pay compensation (it varies from state to state which party gets to decide). (a) See Somerville. Party that accidentally built a warehouse on someone else‘s property (because of a mistake made by the surveyor) was allowed to either purchase the property at its FMV minus the improvements or claim compensation equivalent to the value of the improvements. 4) Servitudes a) Any legal device creating an obligation that runs with the land b) When permission is informal and revocable by the owner, a license has been granted c) If the permission is permanent or irrevocable, then there is an easement. i) In current Restatement (1) All obligations restricting what one can do with one‘s own land are referred to as negative covenants or restrictive covenants (2) Affirmative rights to do something on someone else‘s land are referred to as easements (3) The right to remove something from someone else‘s land is called a profit (from the original profit à prendre) (4) Obligations to do something affirmative for the benefit of another‘s property are called affirmative covenants ii) If you sell a piece of property but retain the right to do something on it, you have created an easement by reservation iii) If you sell or otherwise give a right to do something on property that you will continue to own you have created an easement by grant d) Easements i) An easement is the right to do something on another person‘s land (an affirmative easement) or the right to prevent that person from doing something on their land (a negative covenant). ii) Prescriptive Easements (1) Similar to adverse possession. Basically, if you commit a tort for long enough you get the right to keep committing it (but you don‘t actually get title to the property). (2) No exclusivity requirement – this is adverse use, not adverse possession. (3) Standard of proof = clear and convincing evidence. (4) The most common type of prescriptive easement is right of way. (5) Terminology (a) Dominant Estate - estate benefiting from the easement. (b) Servient Estate - estate over which the easement governs. (6) Prescriptive easement does not need to show exact boundaries of effected property, just general area consistent with a particular pattern of use over the years (a) See Community Feedstore. (7) As with adverse possession, use is presumed to be nonpermissive unless the owner of affected property shows otherwise. iii) Easements by Estoppel (1) Where a license is not just a right to enter but also to erect structures and improve land, the licensor can be estopped from revoking the license under some circumstances. (2) The requirements are: (a) A license. (b) Induces investment. (c) Substantial investment / reasonable reliance (d) Injustice would occur without an easement. (3) See Holbrook. License to pass over neighboring land granted, so ∏s constructed a house and improved the roadway in question – the license could not be revoked at will. (4) This is also an exception to the statute of frauds – normally you need a writing to transfer any interest in real property (including to convey an easement), but the recognized principle is that where there is a parole license that induces licensee to invest (either in money or labor) it becomes irrevocable (a) See Stoner v. Zucker. iv) Constructive Trusts (1) Most trusts are created expressly by a grantor, but some trust arrangements can be imposed by construction of the court. (2) Requirements: (a) breach of faith (b) depriving ∏ of property (c) prevent unjust enrichment (3) More versatile than easement by estoppel. (4) See Rase v. Castle Mountain Ranch, Inc. v) Easements By Implied Reservation (1) It is assumed that the seller will continue to have easement rights, and the buyer is not explicitly aware of it. (2) Implied easements generally exist because the court thinks the parties actually intended to include the easement, but forgot or messed up. (3) Much more difficult to claim than an easement by grant. (4) Would granting an easement maximize the fair market value of all the parcels? (a) Maximization of fair market value is not necessarily the goal of property law. (b) The ∆ may have long-term goals involving the driveway space which could eventually be more beneficial than the status quo. (c) We should never allow easements by reservation except for easements by necessity. They make property rights less clear, and they encourage sellers to claim rights after the actual sale. (d) Maybe a better scenario would be allowing the ∏s to purchase the easement from the ∆s. (5) There are two kinds of easement by implied reservation: (a) Easements Implied by Prior Use (i) Requirements: 1. ∏ must have initially had common ownership of the now-separated parcels. 2. The ∏, pre-sale, used part of the united parcel for the benefit of another part, and this use was visible, continuous, and permanent. 3. The claimed easement is necessary and beneficial to the enjoyment of the parcel retained by the ∏. (ii) See Granite Properties v. Manns (b) Easements Implied by Necessity (i) In cases where a seller transfers a land-locked parcel (surrounded not by water, but by seller‘s remaining land) to a buyer, it is presumed that the buyer necessarily gets an easement for use as ingress and egress. It generally agreed that the intent of the parties is the basis for this rule, although public policy concerns play a secondary role. (ii) See Finn v. Williams. vi) Easements By Grant (1) The easement has been worked into the actual property sale, and the buyer is (or should be) fully aware of the easement before the transaction. (2) Appurtenant Easements (a) Running with the land. (b) Recorded in property deeds, or recorded in a separate specific deed. (c) Can only be granted to owners of neighboring or nearby property. (d) The requirements are: (i) Writing, generally in a deed. (ii) Intent generally is found in the deed, but is generally presumed to be appurtenant if unspecified. (iii) Notice – an easement doesn‘t have to be in the deed if a grantor transfers his property, but the buyer must have received at least verbal notice. 1. Inquiry notice is when the party doesn‘t know, but reasonably should have done more investigation to find out. 2. Actual notice is when the party actually knows. 3. Constructive notice is when a party doesn‘t know, but reasonably should have because a title search would have unearthed it. (e) A grantor cannot sell property to someone without the grantee retaining the easement. The grantor can only sell what he has, which is property that has an easement on it. (f) When asking whether an easement runs with the land, you must consider whether it runs with the dominant or subservient estate. If it runs with the dominant estate, then all owners of the dominant estate can use the easement, even if it split up later. (g) A dominant estate only has the right to maintain or improve its use of an easement in a way that does not put an undue burden on the servient estate. (i) Majority Rule is that servient estate can‘t move or change the easement. (ii) Minority Rule is that servient estate can relocate easement at their own expense, so long as that does not unduly disrupt the interests of the dominant estate (in 3 rd Restatement) (3) Easements In Gross (a) Applies only to the particular owner who agrees to it – not her heirs or assigns. (b) Not intended to run with the land. (c) Can be granted to anyone, nearby owner or not. (d) See Henley v. Continental Cablevision. ∏, whose predecessor in interest granted an easement in gross to the utility companies to run wires across his property, could not prevent the grantees from in turn selling their right of access to the cable company. (i) If easement in gross is exclusive to a grantee then it is alienable by the grantee. 1. Most law professors find this rule much too rigid 2. Rationale: intent – the idea is that if you give someone exclusive rights you are intentionally creating an alienable property interest. 3. Limit = undue burden (see Cox) 4. Problem: right of way across someone‘s property is a very valuable right- control of it has essentially been stripped from the owner, perhaps without his consent. a. As a practical matter, if the cable company had to get each individual owner‘s permission to put down a cable line we would have no cable. 5. Easements in gross for commercial purposes are supposed to be particularly alienable (4) Interpretation problems (a) The presumption in U.S. law is generally to take a broad view of easement use favoring development. Remember that easements are just as strong a property right as actual title. (b) When deciding whether an easement is appurtenant or in gross, the intent of the grantor is the controlling factor. The grantor should always make their intent completely clear in the deed. There‘s a presumption that easements are appurtenant if unspecified, particularly if the easement is something that is obviously necessary or useful to whomever owns the dominant estate. (c) Courts also tend to prefer appurtenant easements because there is a much more limited scope for who can hold them (neighbors)- helps keep the property rights bundle together (d) See Green v. Lupo (i) Ambiguous easement for use of driveway granted to party that in turn rented to mobile home owners who used the driveway to race their motorcycles judged to be appurtenant but subject to reasonable restrictions by servient estate. (ii) Parole evidence is admissible to resolve ambiguity over whether an express easement is appurtenant or in gross. (e) See Cox v. Glenbrook (i) Generally, there are two questions to ask: 1. What is the scope of the easement? 2. Would the proposed use create an unreasonable burden on the servient estate? (ii) What should the test be to determine if an unreasonable burden exists? 1. Is the resort‘s financial success negatively affected? 2. Is the resort‘s generally serenity significantly disturbed? (iii) The court held that: 1. ∏ could use his property in any manner that did not constitute an unreasonable burden on ∆, which is left to a factual determination. 2. ∏ could allow use of the easement for traffic from a housing development. 3. ∏ could not widen the road, although it could improve it in other ways. 4. ∆ has the right to relocate the easement at its own expense. e) Covenants i) Basically the right to prevent someone else from doing something on their property. ii) Requirements: (1) There needs to be a writing between the initial two parties, in which it is specified that the covenant is intended to run with the land on both sides (burden and benefit). (2) The covenant must not be in violation of public policy (e.g., racially restrictive or anticompetitive). (3) There must be intent between the parties to make the covenant run with the land. (4) There must be notice to a buyer from the initial servient owner, although there is disagreement as to whether actual or constructive is required. (5) There is a requirement that the covenant must ―touch and concern‖ the land. It generally must physically affect the land in some way, but it can also help you make money such as with zoning laws and anticompetitive agreements. (a) If it does touch and concern the land, courts will usually assume that the covenant runs with the land in both directions. (6) Privity of estate means that somebody‘s property is restricted by someone else‘s property, in any way. (a) Horizontal privity exists only from the moment when one party transfers property to another party, and a covenant is created as part of that transaction. (i) Mutual privity, when both parties possess an interest in the property simultaneously, such as between landlord and tenant. (ii) Instantaneous privity, existing between two parties at the moment the deed to real property is transferred. (iii) It does not exist if two neighbors decide to create a covenant, or if the covenant is made some time after property is transferred. 1. This requirement is dumb, as the neighbors can agree to all sell their property to an intermediary for $1, then buy it back with covenant in place. (b) Vertical privity exists in the moment when one party involved in the original covenant transfer the land to a third party, or a third-party owner transfers it to another. (i) Vertical privity does not exist if the party transferring the property maintains a future interest, such as in a lease. (c) The importance of privity has decreased, particularly with the Restatement 3 rd, although relaxed privity is still important, meaning that you cannot, of course, get injunctive relief against someone near the servient property. (d) You typically only have to show privity for damages – not for an injunction. (7) See Whitinsville Plaza v. Kotseas. iii) Grantor Covenants (1) Imposed by a developer on all the people to whom she sells plots in a subdivision (2) Supposed to induce people to buy property- so is essentially a promise by the seller to all the buyers (3) Problem: grantor covenant is only going to be recorded on the deed of the granting estate, but most people only do title searches of the property they are actually buying, in which case they might not find out about all their obligations. (a) There is a similar problem with grantee covenants as well- see Evans below (b) Majority Rule = you have to do title searches on neighboring property as well as your own. (c) Minority Rule = only have to do a title search for property you are actually buying (d) NOTE: today many developers of property are required to make a Declaration laying out restrictions before any plots are sold – by buying the property you agree to the Declaration, even if you say that you are not agreeing to it iv) Grantee Covenants (1) Promise by a buyer to the seller – recorded in the deed of the servient estate and so can be discovered in a normal title search. v) Implied Reciprocal Negative Servitude (IRNS) (1) Created by courts to handle situations where an owner subdivides a large tract of property into many individual lots, and attempts to restrict the development of some or all of the lots. (a) This solves the problem occurring when a grantor sells lots 1 and 2 to A and B respectively, and both promise to restrict use to residential purposes. Then A sells plot 1 to D. (i) If D violates the covenant, she can be sued by the Grantor if he still owns part of the subdivision, or by B, who can claim that one of the rights he bought from the Grantor was to be a beneficiary of a covenant restricting use on Plot 1. (ii) BUT, if it was B who violated the covenant, D would be screwed because at the moment B made his promise the Grantor no longer owned plot 1- so B could say the only beneficiaries of his promise are future owners of the Grantor‘s remaining property at the time of the promise- there is NO contractual obligation on B‘s part to owners of plot 1. (2) Based on the third party beneficiary doctrine: (a) Early buyers were intended beneficiaries of covenants made by later buyers. (b) All the lots were part of a common plan of development with restrictions to be uniformly applied for the benefit of all owners in the plan. (3) A declaration describing the area covered by the common plan and specifying the covenants to be applied should be created and recorded prior to sale of any lots. This puts buyers on constructive notice of the covenant, and creates a grantor covenant, meaning that it constitutes a legal promise buyers can rely on regarding development of their neighborhood. (4) Each buyer makes a grantee covenant at the time of their purchase of the land. These covenants are mutually enforceable by and against all owners whose property is contained in the general plan. (5) A developer generally loses ability to enforce the covenants once they have sold all lots – the owners themselves become the enforcers. This is because of the rule generally prohibiting the benefit of covenants to be held in gross (with the sometimes-exemption of the government and charities). The Restatement 3rd revokes this rule, but a legitimate interest is still required in the party who seeks enforcement. (6) See Evans v. Pollock (a) Just because part of an original tract is subject to a common plan does not mean the entire tract is subject to this plan – it can instead be restricted to certain well-defined, similarly situated lots. (b) This case illustrates why legislatures imposed the declaration requirement – to head off this kind of dispute about what was and was not part of the common plan. (7) See Sanborn v. McLean (a) In a neighborhood where most of the surrounding property is bound by grantee covenants, an individual owner does not get off the hook just because his property is not bound by a similar covenant – courts will bind him anyway. (b) Policy Justifications (i) Entirely residential character of a neighborhood puts an owner on constructive notice of covenants in other deeds in the vicinity sold by the same grantor (ii) Most of your neighbors bargained for a covenanted neighborhood- a small minority cannot be allowed to screw that up (c) This case is another illustration of why most states now say that you can‘t just do a title search on the property you are going to buy- also have to look up neighboring property (8) See Riley v. Bear Creek Planning Committee (a) Court refused to issue an injunction against owners of a lot that was sold before the declaration was filed, because they only made an oral promise to the developer to abide by the common plan. (b) This decision is unusual: most courts would have estopped the owners from denying their promise to abide by the common plan, since the developer sold the rest of the plots in reliance on this promise. (9) See Appel v. Presley Companies. (a) A contradiction exists when both an elaborate set of restrictive covenants are present along with a clause reserving power for the developer to modify those covenants. (b) Even if modifications are allowed by committee or a grantor, they must be reasonable, taking into consideration the buyers‟ reliance on the covenants at the time of purchase. (10) See El Di, Inc. v. Town of Bethany Beach. (a) Restrictive covenants can be rendered unreasonable and unworthy of enforcement based on changed circumstances in the surrounding community IF the covenant is no longer of substantial benefit to the dominant estate. (b) Changed conditions doctrine can also apply if changed conditions occurred substantially outside the restricted subdivision. (c) Restatement suggests modifying the covenant rather than throwing it out if at all possible. (11) See Blakely v. Gloin. (a) The relative hardship doctrine states that a covenant need not be enforced if the harm to the servient estate substantially outweighs the benefit to the dominant estate. vi) Covenant may not be enforced if complaining party has: (1) Violated it himself (unclean hands) (2) Tolerated previous violations of it by the owner of the servient estate (Aquiescence) (3) Tolerated violations of it by owners of other restricted parcels that it covers (Abandonment) (4) Orally represented to owner of servient estate that he will not enforce the covenant (Estoppel) (5) Engaged in an unexcused delay in pressing his rights resulting in investment by servient estate owner in reliance on dominant estate owner‘s failure to object (Laches) vii) Difference between Covenants and Rules-by-laws (Both common-interest communities) (1) Rules-by-laws (a) Created by a group of condominium homeowners, usually by an elected board. (b) Not recorded. (c) A reasonableness requirement still exists. (i) Majority rule: YES- see O’Buck 1. Reasonableness determination comes from balancing the importance of the right against the importance of the rule against which it infringes 2. Rights rationale: when you buy a condo you accept that such a lifestyle entails reduced rights (ii) Minority Rule: more lenient standard- business judgment rule (generally applicable to for-profit corporate boards as well) 1. See Levindusky - any decision by association officials is valid as long as they act ―in good faith‖ in the furtherance of the association or board‘s legitimate purposes 2. Social Utility rationale: economic and social benefits of community control through coop board outweighs potential for abuse (d) Less of a presumption of validity exists than the presumption for covenants. 5) Property Transfers a) Fee simple absolute i) No one but the owner has a current or future interest in the property – the current owner possesses all possible rights. ii) ―O to A‖ is generally interpreted as granting fee simple absolute. Courts have a strong presumption toward interpreting contracts such that grantors must specifically reserve that which they intend to keep. iii) O to A and her heirs (1) ―To A‖ are words of purchase, meaning they effect the actual transfer. (2) ―And her heirs‖ are words of limitation, meaning that they do not retain an interest in the property. These words simply indicate that if A dies intestate (without a will), the property goes to the heirs. (a) Heir is a technical term, meaning the person or people to whom property would go if the decedent left no will. (b) If decedent left a will, the will devises real property to a devisee. The will bequeaths other possessions to a legatee. (c) If no heirs exist, the property escheats to the state. iv) ―O to A and her heirs, other than her husband‖ (1) This could be interpreted in two ways; (a) As an impermissible new estate (a new kind of estate) which the law will not recognize. (b) As an instance where O has expressed a permissible interest that is not contradicted by public policy, and so it should be squeezed into the form of an existing estate, such as a fee simple subject to covenants. The covenant would typically be remedied by damages or injunctive relief – not transfer of title. b) Defeasible Fees i) A defeasible fee is one in which the current owner stands to lose their ownership upon the occurrence of some possible but not definite event. ii) Future interest in grantor or her heirs (1) Automatic transfers (a) Current interest: fee simple determinable is where a grantor grants a fee simple to a grantee predicated on a condition of some kind. The grantee can sell the property, but the condition does not disappear; the new owner must still abide by it or risk possibility of reverter. (i) O to A and her heirs, so long as used for residential purposes. (ii) O to A and her heirs, until a Democratic president is elected. (b) Future interest: possibility of reverter is held by the grantor (or grantor‘s heirs or devisees) when the grant will automatically revert back to them if a specified condition is unmet. The statute of limitations starts immediately upon violation of the condition, and grantee will maintain title if grantor doesn‘t take possession until after the statute has expired. (i) Possibilities of reverter and all interests in the grantor are exempt from the rule of perpetuities. (c) Fee simple determinable and possibility of reverter add up to a fee simple absolute. You should ALWAYS be able to add up to fee simple absolute. (d) These interests are frequently lost because of adverse possession, where the heirs forget about the property and the owner of the fee simple determinable retains occupation. (2) Transfer only if future interest owner asserts her interest (a) Current interest: fee simple subject to condition subsequent is where a grantor grants a fee simple to a grantee predicated on a condition of some kind, but the property does not automatically revert back the grantor if the condition is unmet. (i) O to A and her heirs, but if used for non-residential purposes then O has a right of entry. (ii) Most courts find the phrase ―but if‖ or ―on condition that‖ to mean right of entry. ―Condition‖ in particular is a technical term indicating right of entry. (iii) Laches is the doctrine allowing equitable remedies if someone reasonably relies on another‘s failure to act. It may apply here if a grantor fails to exercise their right of entry within a reasonable period of time. (b) Future interest: right of entry is the right of the grantor to assert claim to the property once the condition is not met. This can expire under the statute of limitations, although the clock only starts once the party has asserted the interest but not actually taken control of the property. iii) Future interest in third party (1) Current interest: fee simple subject to executory limitation. (a) O to A and her heirs, as long as used for residential purposes, then to B. (2) Future interest: executory interest. (a) Executory interests are always subject to the rule against perpetuities, because it‘s always possible that they may never vest. c) Life Estates i) Current interest: life estate is where O transfers to A, such that A has a right to the property until her death. ii) A can sell or rent the property to B, but reversion to O still occurs at the time of A‘s death, even if B is the owner at that point (life estate per autre vie). iii) Future interest (1) In grantor: reversion to grantor or his heirs/devisees occurs immediately at time of grantee‘s death. (a) O to A for life. (b) Doctrine of Worthier Title- ―O to A for life, then to O‘s heirs‖ is usually interpreted as ―O to A for life, then to O‖. (2) In third party: remainder. (a) Vested remainders – not subject to rule against perpetuities. (i) Absolutely vested remainder 1. ―O to A for life, then to B‖. B has a fee simple absolute upon A‘s death. 2. ―O to A for life, then to B for life‖. 3. In either case, if B dies before A, the property goes to B‘s heirs or devisees. (ii) Vested remainder subject to open 1. Here, the class of people to whom the interest will vest is not yet complete – more can be added. 2. ―O to A for life, then to B‘s children‖ (so long as B already has at least 1 child). If more children come along, they get a piece. (iii) Vested remainder subject to divestment 1. The possibility exists here that the person might lose the interest and be divested. 2. ―O to A for life, then to B if B graduates from law school, but if B does not graduate, back to O‖. a. Here, the same as a contingent remainder. (iv) ―Vested‖ means you know who it is going to. (b) Contingent remainders – always subject to rule against perpetuities (i) condition precedent 1. ―O to A for life, then to B if B graduates from law school‖. 2. Reverts to grantor if condition precedent never occurs. (ii) unascertained person 1. O to A for life, then to B‘s first child (made at a time when this first child isn‘t yet alive). (iii) ―Contingent‖ means you don‘t know who it‘s going to, or you don‘t know whether it‘s actually going to go because of a condition. (3) Reversions and remainders are both transferable. (4) Defeasible life estates are also allowed. ―O to A for life, but if a Democrat is elected president, then to B‖ can cut short A‘s life estate, giving B not a remainder, but an executory interest. (5) Courts will not find a future interest where the grantor did not specify one, as they decrease the alienability of property. (6) Certain restraints on fee simples are generally void, except when dealing with charities. (a) The cy pres doctrine allows the court to modify the restrictions of the grant to ensure that the charity can continue to benefit from it. (b) Because of a presumption against forfeitures, when a future interest is not specified, the court will often choose a right of entry rather than possibility of reverter, so that the statute of limitations will not have expired. d) Other Interests i) Future interests commonly used in commercial transactions (1) Option - some sort of right (often to purchase) that vests when the contract is completed. (2) Right of First Refusal- if X ever decides to sell, O has the right to purchase the property first. ii) Fee Tail- An estate whose purpose is to keep the property in a family. (1) traditional conveyance ―O to A and the heirs of his body‖ (2) Prevents A and his heirs from selling or leasing the property. (3) Substantially abolished in most states. iii) Trusts – grantor (settlor) conveys property to a trustee, who manages it for the benefit of the beneficiaries (1) Trustee holds legal title- can sell property and reinvest it if doing so is in the best interests of the beneficiaries (unless settlor said otherwise). (2) Income is paid to beneficiaries, who also get principal when and if the trust terminates e) Additional Notes i) Remember, under most circumstances you can only convey what you own. (1) Exception -- ―O to A‖ but A doesn‘t record the deed. O then conveys the property to B, who promptly records. In most states B now owns the property (a) Recording statute is designed to protect B, who had no constructive notice that the property had already been conveyed. Of course, this could not happen if A were already living on the property, since that would be constructive notice – B would not get the property in that case. (b) Similarly, if a landlord leases to a tenant but then defaults on his mortgage for the building, the tenant‘s lease comes to an end and tenant loses property interest. ii) Waste (1) Life tenant of an estate is the estate‘s trustee in that she is not permitted to injure or dispose of property which she holds only as a life estate (2) If waste of property is going on, anyone holding a remainder in the property can sue the life tenant during her tenancy, or wait until she dies and sue her estate. (3) See Moore v. Philips: Court refused to overturn damages for waste awarded to remainder-holders against the estate of their estranged mother simply because ∆s waited 11 years until the mother died to sue. (4) Ameliorating waste – sometimes life tenants‘ actions actually increase the value of the property, some courts accept this as still being preventable by remainder-holders. (a) See Pabst Brewing Co. iii) Courts are moving away from categorical rules that govern the estate system and towards a reasonableness standard. (1) Example: In the 19th century we allowed testators to leave their designees property on the condition that it is never sold; later we decided that this was an unacceptable restraint on alienation except in the context of charitable bequests; now we are moving back to reasonableness standards. iv) Two Priorities of Estate System (1) Implement intent of the grantor (2) Promote free use and alienability of property v) When grantor‘s intent is hopelessly unclear, the presumption against forfeitures kicks in. (1) This is essentially a presumption against finding a future interest – courts want people to have full control of their property rather than being subject to a future dispossession. (2) So, if possible, courts will try to turn an estate conveyed in an ambiguous manner into a fee simple when possible (3) Conditions tending to destroy estates should be narrowly interpreted. (a) See Wood. (i) The mere presence of the phrase ―for the purpose of constructing and maintaining…a County Hospital in memorial to…‖ in the deed did not turn a conveyance of land to a charity from a fee simple absolute into a fee simple determinable. (ii) Note: this was not a covenant because the charity held the benefit in gross (b) See Cathedral (i) Court found that a deed from the 19th century created a right of re-entry if the property in question ever stopped being used as a Church. Since such rights were not assignable at the time the deed was written, ∏ (successor in interest to the original grantor) could not regain the property when ∆ was forced to violate the terms of the deed because such a result could not have been the original grantor‘s legitimate intent. (ii) So court kept the property alienable but recognized importance of complying with grantor‘s intent (4) Courts are MUCH more likely to see a restraint on alienation as reasonable in the context of a gift to charity. (5) Also, remember that grantor cannot create a new estate (a) So a conveyance that does not fit within any of the established categories must be interpreted to create the most closely analogous estate (b) ―O to A and her heir except for that no good husband of hers‖ becomes simply ―O to A and her heirs‖- the bad part is just dropped. (c) Johnson v. Whiton (i) Court refused to enforce provision of a will that conveyed property to ∆ and ―her heirs on her father‘s side‖, instead saying that ∆ simply held the property in fee simple (and therefore could sell it.) (d) Edwards v. Bradley (i) Court decided to enforce a conveyance in which a mother left her daughter a farm ―conditioned upon‖ her not selling it or it getting seized by creditors (in which case it was to go to the daughter‘s own children) as a life estate despite the fact that the original testatrix never used such a phrase. Thus the court invalidated the daughter‘s own will, which disinherited ∏ 1. What the mother seems to have been trying to do was create a fee simple subject to executory limitation, an estate that had generally been banned outside of the charitable context at the time. 2. SO- the court created a life estate even though that is clearly not what the original testatrix‘s intent was (ii) NOTE: court could have just gone the other way and said that original testatrix intended to create a fee simple- this case was right in the middle. 1. This seems to go against presumption against forfeitures vi) Cy Pres Doctrine (1) When settlor establishes a charitable trust with a general intent to contribute to some form of charity but their particular charitable purpose becomes impracticable or impossible to achieve, a court can authorize the trust income to be used for some other purpose consistent with the settlor‘s intent. (a) The primary test is that the court must decide whether grantor‘s intent was general or particular. (2) See In re Certain Scholarship Funds (a) Court allowed income from two educational trusts that discriminated on the basis of race and gender and that were supposed to be administered by a public school board to instead be used in a non-discriminatory fashion consistent with current law. (3) But see Evans v. Abney- public park that had been reserved for whites only by original grantor of land was shut down after passage of 1960s Civil Rights legislation because the court found that the grantor‘s specific intent was to create not just any park but a segregated park, so cy pres doctrine could not be applied (a) What would grantor‘s intent have been in light of contemporary changes in social values? Given the uncertainty, why not interpret the trust in light of current public policy? 6) Public Policy Limitations on Enforceability of Servitudes and Future Interests a) Restraints on Alienation i) The law does not look favorably on attempts by owners to restrict future owners‟ ability to transfer a particular piece of property -- attempts are subject to a general reasonableness test. ii) Four Types (1) Direct Restraint on Alienation (See Horse Pond Fish & Game Club v. Cormier) (a) Court said that a provision of the club‘s deed mandating that it could not sell its land without the consent of 100 percent of its members was NOT subject to any reasonableness test if the club was a charitable entity. (b) For non-charities, the restraint must be reasonable based on the justified expectations of the parties (i) BUT If we‘re dealing with a charity, any restraint is reasonable (c) This case illustrates the problem of dead-hand control – the club needed to sell its land for reasons that the previous owners could not have anticipated. (i) Maybe they could apply the cy pres doctrine, to say that trust no longer could fulfill its purpose. (2) Consent to sell provisions (a) Grantor Consent Clauses: (i) Northwest Real Estate Co v. Serio 1. Restriction in fee simple deed to lot in subdivision that required grantees to not sell the property for a specified period of time held to be void per se (ii) Riste v. Eastern Washington Bibile Camp 1. Restrictions in fee simple deed granted by camp when it subdivided some of its property that required the grantees to get consent from the camp before re-selling their property and that the buyers be members of the Assembly of God Church held to be void per se (iii) Grantor consent clauses usually held to be void per se with respect to fee simple interests 1. Rationale: the essence of holding property in fee simple is that it is completely alienable 2. BUT- sometimes developer does have legitimate business interest a. Example: co-ops – if whomever you sell your shares to doesn‘t pay their rent, the entire association has to make up the difference- so heavy restrictions are usually upheld. (iv) Consent of the Association: Aquarian Foundation, Inc. v. Sholom House 1. Court said that condo association‘s power to arbitrarily deny an association member the right to sell her condo to ∏ without buying the condo itself constituted an unreasonable restraint on alienation 2. Refusal of consent + payment of FMV = per se reasonable (3) Right of First Refusal: Wolinsky v. Kadison (a) Court said that right of first refusal exercised to exclude ∏, allegedly because she was a single mother, was an unreasonable restraint on alienation although it included compensation for the owner (b) This case is at odds with Aquarian because it says that Right of First Refusal may ONLY be exercised for a good reason. (4) Restrictions on Leasing: Breene (a) Court said that a condo association‘s ban on leasing, enacted after ∏s purchased their units, could not be retroactively applied to them. (i) Prospective buyers must have notice of all restraints on alienation before they purchase property 1. So only types of by-laws that can be applied retroactively are those that deal with maintenance, etc. 2. Rationale: people must be on notice about what they are buying into a. Similar to restrictive covenant: it can‘t be enforced if there was no way for you to reasonably have found out about it- 3. Counter-argument: well, they were on notice that the by-laws could be amended at any time- if you buy property that you know could be subjected to new rules by your neighbors why should you be surprised at a restraint on alienability? 4. This is NOT the majority rule (5) Other restraints on alienation to note (a) Total restraint on alienation of fee simple interests- takes the form of (i) Disabling restraints (O toA in fee simple, but if A tries to sell the transaction shall be null and void), (ii) Promissary restraints (O to A in fee simple. A promises on behalf of himself, his heirs and assigns to never sell) and (iii) Forefeiture Restraints (O to A in fee simple, but if A tries to sell, then to B and his heirs) (iv) Total Restraints on alienation of fee simple interest are VOID PER SE 1. Rationale: definition of fee simple is that it is an alienable property interest- central power of being an ―owner‖ is the right to sell 2. Courts have been moving towards reasonableness standards for direct restraints (see Horse Pond) but they still can‘t be total (b) Options: likely to be held an unreasonable restraint on alienation if they are for a fixed price and have no termination date (c) Indirect restraints: when private restrictions on use of land are so all-encompassing that the land is very difficult to sell the restraints may be struck down (d) Restraints designed to keep housing afforadable for low-income families (i) These are usually upheld because they serve a public purpose that competes with promoting alienability -- providing affordable housing that would not otherwise be provided by the market. (e) Spendthrift Trusts: when settlor says that beneficiary has no right to alienate her beneficial interest- court generally uphold restraints on alienation of beneficial or equitable interests. b) The Rule Against Perpetuities i) Invalidates future interests that may vest too far into the future. ii) Basic test: is there any chance that the interest will vest outside the allowable period (lives in being + 21 years). (1) The period starts at the moment of the creation of a future interest. If in a will, it begins when the testator dies. (2) The rule deals with the vesting moment, not the possession moment. (a) With executory interests, the vesting moment and possession moment are almost always the same time. (b) With contingent remainders, the vesting moment almost always comes well before the possession moment. iii) Application: (1) Executory interests are subject to the rule. (a) O to A as long as used for residential purposes, then to B. INVALID. (i) You are left with O to A as long as used for residential purposes (with O keeping a possibility of reverter.) (ii) It seems like A should just get a fee simple absolute, because the policy arguments against B receiving the property apply equally to O receiving it. (b) O to A but if used for non-residential purposes, then to B. INVALID. (i) Surprisingly, the general remedy for this is to give a fee simple absolute to A, because of the condition with no direction. (c) The obvious fix for both of these is to say ―O to A, but if not used for residential purposes for 21 years, then to B.) (2) Contingent remainders are subject to the rule. (a) Look for a validating life. (b) O to A for life, then to B if B graduates from law school. VALID. B is alive at the creation of the interest, so there‘s no possibility the rule could be violated. (c) O to A for life, then to B‘s children (when B has no children as yet.) (i) VALID if B has children before A‘s death. (ii) INVALID if B is childless at A‘s death and contingent remainders are destructible (extinguished upon reversion – minority rule). (iii) VALID if B is childless at A‘s death and contingent remainders are indestructible – the property reverts to A but springs back to B‘s children if she ever has any. (d) O to A for life, then to the first child of B to become President. INVALID. B could have a child who becomes President after the death of all named parties. (e) O to A for life, then to B‘s first child if the child graduates. INVALID unless the child is already born, because the child is not yet born and all named parties could die before graduation. (3) Vested remainder subject to open is subject to the rule. iv) Exceptions: (1) Interests in the grantor are never subject to the rule, so possibilities of reverter and rights of entry are always valid (a) O to A as long as used for residential purposes. VALID (b) O can transfer this interest and have it still be valid. v) New Tests: (1) Wait and See: (a) Wait until the condition is granted, or violated, and then see if the rule against perpetuities has been violated at that moment. (b) The lives in being are the parties to the contract and intervening generations. (c) If it has been violated, the interest is destroyed. If it hasn‘t been violated, possession is allowed to transfer. (d) The policy rationale is that if chances are it will actually vest within the legal period, let‘s just give it a shot. (2) Cy Pres Doctrine: (a) The goal is to achieve the grantor‘s intent as much as possible. (b) Here, the judge will attempt to modify or strike the offending portions to enact the intent of the grantor in a legal way. (3) Uniform Statutory Rule Against Perpetuities (USRAP) (a) Adopted by more than half the states, with the intent of giving people more freedom of contract. (b) Sales of property are now exempted. (i) Commercial transactions tend to naturally avoid grants that might violate the rule, because it is too inflexible. (ii) The major concern is preventing families from keeping property for many, many generations. (iii) Donative transfers are not exempted. 1. Unless the transfer is from one charity to another. (c) If the ―lives in being + 21 years‖ test is violated, the court will apply the ―wait and see‖ test 90 years from the start of the original period. (i) Gives some dead-hand control, but not much. (d) Options and rights of first refusal are also exempted, but they are still subject to unreasonable restraints on alienation (see Central Delaware County Authority v. Greyhound) 7) Racial Restrictions on Alienation a) Brief history of Equal Protection Clause i) Equal protection under the 14th Amendment applies only to state action in relation to the individual (the state action doctrine), and not to the actions of private parties. The exceptions are statutes passed by either the states or federal government. The commerce clause and the 14 th Amendment Sec. 5 generally give Congress the power to pass some laws regulating discrimination through private conduct. ii) The Rehnquist court later interpreted the Equal Protection Clause in Washington v. Davis to say that only intentional discrimination violates the 14th Amendment. Disparate impact discrimination does not implicate the 14th Amendment. iii) There are two types of discrimination: (1) Intentional, motivated by specific discrimination because of race, sex, etc. Two people that should be treated the same are being treated differently. (2) Disparate impact: A neutral policy not explicitly treating one group differently from another, but having the indirect effect of discrimination. This impact may be permissible if the department instituting it can show a reasonable justification. (a) Ex. The enforcement of racially-segregated covenants by the government. (b) Ex. A height requirement for police officers would have a disparate effect on women, who are statistically shorter. (c) Ex. A too-high income requirement for an apartment building would have a disparate effect on women and certain races, who statistically earn less. iv) Direct Horizontal Application: A statute gives you a right to sue for damages under the equal protection clause. v) Indirect Horizontal Application: A change in the common law occurs as an indirect effect of the statute. vi) Direct Vertical Application: The equal protection clause makes it illegal for the state to operate in a certain manner. b) Shelley v. Kraemer i) US SC refused to enforce a racially restrictive private covenant because to do so would constitute state action in violation of the 14th Amendment‘s guarantee of equal protection. (1) A private citizen cannot expect the state to enforce his discriminatory will. ii) This decision was very controversial: if you don‘t like someone because of their race, don‘t invite them to dinner and then they crash- can you not ask the police to remove them because that would be enforcement of your discriminatory will? iii) State action doctrine complicates everything needlessly – we really want to say that equal protection applies to public accommodations (including sales of real estate) but not to private homes. c) Washington v. Davis i) SC refused to throw out qualifying test for job as a police officer simply because ∏s proved disparate impact on blacks ii) Cannot make equal protection claim unless you show INTENT to discriminate (1) Note: contrast with FHA, under which you CAN make a disparate impact claim. iii) Does this case overrule Shelley, as no public official intends to discriminate just by enforcing a covenant? (1) Not quite- here the test itself was facially race neutral – so the cases are distinguishable. d) Evans v. Abney i) SC refused to force lower courts to amend a will leaving land to the city of Macon, GA for a park that was to be for whites only in order to desegregate. Instead the park was closed. (1) Refusal to apply cy pres doctrine is not state action. ii) Distinguish from Shelley: City could not close public park to keep it from being integrated (actually even this got changed by Plummer- city allowed to close public pool to keep it from integrating) - but that‘s not what happened here- there was simply a trust (to provide land for a segregated park) and it failed. When trust fails, title shifts automatically- state does nothing. 8) Common Ownership a) Tenants in Common i) ―O to A and B as tenants in common.‖ ii) If unspecified, a deed is presumed to give the property in common. iii) Both A and B each own the entire property, share management powers, and have the full right to use and enjoy the property. iv) Each has a 50% undivided interest. They can sell or divide and sell this interest to other parties. (1) A co-tenant-in-common may lease his rights to commonly-owned property to whomever he pleases without co-owner‘s permission. (2) See Carr v. Deking. v) If B dies intestate, his interest is divided equally among his heirs. For example, with three heirs, the new ownership is (C 16%, D 16%, E 16%, A 50%) b) Joint Tenancy i) ―O to A and B as joint tenants.‖ ii) Same as tenancy in common, in that each co-tenant has the right to possess the entire parcel. iii) The difference between this and tenancy in common in the right of survivorship. (1) If A or B dies, their interest goes directly to the other party. (2) If either party sells or transfers their interest, that interest is severed, and the property is held in common. (a) The majority rule is that the interest must be transferred entirely to sever – if the joint landowner dies while leasing to a third party, the lease becomes invalid. (b) The minority rule is that a lease does sever joint tenancy. (3) If A, B, and C are joint tenants, and C sells her interest to D, then A and B still hold their interest in joint but D‘s interest is in common. iv) This is used most often for marital relationships. v) An agreement or statute can specify that a no fault division of property will occur upon divorce or separation. c) Tenancy by the Entirety i) Initially allowed the husband to control and manage the property, with the wife only able to benefit from his management. ii) Most states have since passed laws empowering women (Married Women‘s Property Act), which leveled the balance of power, and in some states eliminated tenancy by the entirety. iii) States don‘t really agree on what tenancy in the entirety consists of, but most have: (1) Right of survivorship exists, indestructible in some cases (the most a person can sell is effectively a life estate with remainder to their partner.) (2) Restraints on alienation – both husband and wife must agree to sell, and severance con only occur with divorce. (3) Restraint on partition, which can only occur with divorce. (4) Protection from creditors (a) Important for protection from both contract creditors AND tort creditors (to whom you owe a debt from a tort.) (b) The court cannot order you to sell or give up the property owned through tenancy by the entirety. (c) Both parties would have had to be negligent for the property to be vulnerable. (d) In some states, homestead laws protect parties from claims by third parties (but not the bank if you took a loan) against the house in which they live. iv) How would you establish this if the state does not explicitly recognize tenancy by the entirety? (1) The presumption is that you‘re building off a joint tenancy here, so that the parties acquire the right of survivorship. (2) Covenants with restraints on alienation for the lifetime of the parties, with exceptions for dual agreement to sell and severance upon divorce, would be presumed void unless reasonable. These covenants seem reasonable because the party is married and there are several ―outs‖ allowing the property to be sold. (3) The same arguments exist for the restraints on partition. (4) Courts would NEVER allow parties to establish a covenant making their property unavailable to creditors. d) Conflict Resolution i) Partition (1) Traditionally the only remedy courts offer when parties can‘t get along is the absolute right under common law to ask a court for partition, where property is divided up if possible, or the court orders it sold and divides up the proceeds (unless one tenant is willing to buy the others out). You can‘t force the one tenant living in the house to pay rent. (2) Common situation involves a family home that is left to multiple siblings but in which only one is living. The latter wants to keep doing so, but the former would like her to pay them rent. (3) Majority Rule: NO duty to pay rent by tenant in possession; only remedy is partition. (4) Minority Rule: There is a duty to pay rent for tenant in possession ii) Ouster (1) One party tells the other parties they must leave, and this starts the statute of limitations for adverse possession. The other party can bring suit to recover a portion of the rental value for the time they were ousted. (a) The opposite of ouster is abandonment, by which one party forsakes their ownership of the property. (b) Party claiming constructive ouster has burden of proof: must show that he was forced out rather than having chosen to leave (2) Constructive ouster is when no physical or explicit ouster has occurred, but there is a physical or emotional impossibility for the parties to live together. (3) Forfeiture occurs when a party does something allowing another party to take full possession of the property. (4) The party at fault should have the burden of paying rent or not receiving rent, depending on the situation. (5) Formal Realizability issues w/ constructive ouster in divorce setting: (a) Should determinations of fault factor in at all? Such inquires inevitably get mired in detailed factual issues that are difficult to resolve. (i) Determinations of fault in property distribution are especially problematic given that nowadays most divorces are ―no fault‖- property is supposed to be divided equitably, with factors being: 1. Standard of living 2. Who gets kids 3. Earning potential of each party 4. Length of marriage (ii) A minority of states do still take fault into account when dividing up property 9) Landlord / Tenant Law a) Categories of tenancies i) Term of Years: lease lasts for a specified period of time of any length. (1) To get out of term of years before it‘s due, you can‘t just give a month‘s notice- you have to show constructive eviction. ii) Periodic: renews automatically at specified intervals unless either landlord or tenant chooses to end it- most states require notice (usually a month) before termination. (1) If tenant has no formal lease but pays rent on a monthly basis, essentially a month-to-month tenancy has been created. iii) At will: similar to a periodic tenancy but no notice is required for either party to end it. Many states have effectively abolished such tenancies by requiring notice under all circumstances, but statute may provide for different required period than with a periodic tenancy. iv) At sufferance - held by a tenant rightfully in possession who wrongfully stays after the leasehold has terminated b) Landlord‘s rights and basic duties i) Landlord‘s rights (1) Right to receive rent (2) Right to have premises intact and not damages at end of lease (tenant has duty not to commit waste) (3) Right to her reversion (to regain possession at the end of the lease) ii) Landlord‘s remedies when tenant breaches and won‘t leave (1) Possession and Back Rent (a) If a tenant is in breach for failure to pay rent, the landlord can bring suit to recover the back rent, and also for possession (to evict the tenant and be able to re-rent to someone else). (2) Holdover Tenants (a) This involves a tenant staying after the lease period but continuing to pay rent. (b) If the landlord accepts one check, a new month-to-month tenancy is generally established, although some courts have enforced the beginning of a new term equal to the previous one. (c) The landlord can generally bring suit to evict the tenant, providing notice as usual. (3) Self-Help (a) Self-help is when a landlord forcefully evicts a tenant, either peaceably (i.e., changing the locks) or physically (i.e., pushing him out the door) without resorting to courtroom remedies. (b) The majority of states prevent the use of self-help because: (i) Fast summary process hearings are available specifically for such cases, making the right to be heard more realistic and attainable in these situations. (ii) Even peaceable means of self-help is likely to become violent at some point. (iii) The owner may be mistaken about his right to repossess. (4) Summary Process (a) Summary process is a relatively speedy method allowing an owner or tenant to determine their legal habitation rights. A majority of states do not allow defenses by the tenant. (b) See Vasquez v. Glassboro Service Association, Inc. (i) A leasehold is recognized as a transfer of possession, or exclusive control of a specific area. Tenants under a lease can only be removed through summary process. (ii) Putting the word ―license‖ in the contract does not automatically make it a license rather than a lease. The difference is important, because a lessee is a tenant, but a licensee is not. (iii) Almost all states hold that month-to-month leases can be terminated at any time for any reason, and term of year leases can be non-renewed at any point for any reason. (iv) Migrant workers are not tenants in the traditional sense of the word, but a common law remedy is appropriate here. Employers of this sort now have to hold a summary process court proceeding to evict migrant workers. iii) Landlord‘s remedies when tenant breaches and leaves (1) Accept tenant‟s “surrender of the lease”- the landlord will not hold tenant liable except for back rent and any damages resulting directly from the breach (but not for future rent owed) (a) Damages resulting from breach are the agreed upon rental price – fair market price (b) Landlord can sue for damages immediately after breach (2) Re-let on the tenant‟s account- refuse to accept surrender of the lease and re-let the apartment ―for the tenant‖, then sue him at the end of the term for damages resulting from the breach (a) New rent must be reasonable- landlord cannot rent the apartment to her sister for five bucks (b) Advantage to this is that if landlord cannot find a new tenant, the old one is still liable for the rest of the lease, not just the agreed upon price minus the FMV (3) Wait and sue the tenant at the end of the term for unpaid rent (a) Traditional rule is that the landlord can just sit and do nothing, and then sue. (b) States have started apply contract doctrine that requires landlord to mitigate damages by re- letting – see Sommer v. Kridel. iv) Landlord‘s Basic Duty (1) Deliver Possession (a) Majority rule is that landlord has a duty to deliver possession- if prior tenant holds over landlord must remove him within a reasonable amount of time or the new tenant can either break the lease and collect damages or affirm the lease and pro-rate the rent (b) Minority rule is that landlord only has to deliver the right to possession- so new tenant has to evict the holdover and must pay rent from the get go no matter what c) Alienation of Leaseholds i) Conflicting rights: landlord‘s right to control occupancy vs. tenant‘s right to alienable property ii) Kinds of transfers (1) Assignment: if lease is assigned then the new tenant is responsible directly to the landlord for all the obligations covered by the original lease. Also, they are in privity of estate because they share common interest in property. (2) Sublease: landlord has no direct relationship with subtenant, only with tenant. Only the tenant can sue subtenant. (a) The exception is if subtenant contracts with tenant to pay rent directly to landlord and then breaches, landlord may be able to sue as a third party beneficiary. iii) There is a general presumption that leaseholds are alienable, but also that specific clauses in a lease contract preventing alienation are always enforceable. iv) Landlords often include clauses specifying that owner approval is required for sub-leases and assignments. (1) The majority view is that there is no reasonableness requirement on the landlord‘s part. See Slavin v. Rent Control Board of Brookline (residential case). (2) The minority view is that owner approval for sub-leases should be subject to a reasonableness requirement. See Kendall v. Ernest Pestana, Inc. (commercial case). d) Implied Covenants i) Implied Covenant of Quiet Enjoyability (1) In every contract, there is an implied covenant of quiet enjoyability, which need not be expressly listed in the leasehold terms to be present. (2) Substantial deprivation of quiet enjoyment of premises, when prolonged for a substantial time, can constitute constructive eviction. See Minjak Co. v. Randolph (a) Partial constructive eviction can occur even if only a portion of the demised premises has been abandoned due to landlord‘s acts making the premises unusable. (i) The landlord must substantially deprive the tenant of their quiet enjoyment of the premises. (ii) Tenants in most jurisdictions no longer have to entirely abandon the premises before they can bring suit. 1. If someone can‘t find another place, we don‘t want them forced out onto the street. 2. We don‘t want to have landlords chasing tenants out through constructive eviction, which in rent-control jurisdictions they have incentive to do 3. If we force tenants to move out to sue, they risk having to pay double rent for a substantial amount of time – this creates a strong disincentive against bringing suit. (3) A breach of the landlord‘s covenant of quiet enjoyment can flow as the natural and probable consequence of what the landlord did, what he failed to do, or what he permitted to be done. (a) See Blackett v. Olanoff (b) The measure of liability is not the landlord‘s intent, but rather his conduct, including his choice to exercise control to the extent of his ability. (c) Landlords are not traditionally chargeable in cases where one tenant is annoyed by another. (d) Landlords can be chargeable in cases where they enter into a lease with a tenant which they know or should know will interfere with the rights of another tenant. (e) Essentially, the contract with the residential tenant imposed a duty on the landlord to exercise his power to evict the commercial tenant if that tenant breached his duty not to harass. (f) The residential tenant can sometimes sue the other tenant under tort liability, or attempt to have criminal charges pressed. (g) The residential tenant can also sue the other tenant as a third-party beneficiary to the promise made by that tenant to the landlord, although she probably can‘t have him evicted. ii) Implied Warranty of Habitability (1) Landlord/tenant obligations are dependent, as in many other contractual relationships, so the landlord must deliver premises that can be lived in. See Javins v. First National Realty Corp. (a) Previously, landlord had a statutory duty, but this case says they have a tort duty too, based on bringing the housing code/regulations into the contract (b) It‘s illegal to rent an apartment w/o complying w/ the housing code, so that brings the code into the contract itself and it‘s a promise the landlord has made. (2) Tenants can therefore withhold rent and sue for damages if the property does not comply with the housing code. (3) The old rule of interdependency was based on factual assumptions no longer true, and so it is no longer justifiable on its own terms. (a) Urban tenants are interested in not the land, but the dwelling. (b) The general urban tenant may be unable to make repairs on his own for lack of knowledge. (c) Tenants are mobile, and may be transitory enough that they have little incentive to expend considerable effort in making repairs from which they will have only short-term benefit. (d) The complexity of modern dwellings renders them more difficult to repair in general. (e) Low and middle income tenants may not have access to financing or equipment for major repairs. (4) A group of recent consumer protection cases require that the old rule be abandoned to bring landlord-tenant law in harmony with new principles. (a) The landlord has much greater knowledge and opportunity to inspect and maintain the building than the tenant does. (b) Because a leasehold specifies a term, a tenant should have a reasonable expectation that their apartment will be habitable for that term. (5) The nature of today‘s urban housing market dictates abandonment of the old rule. (a) Because of scarcity of housing, combined with racial and class discrimination and standardized lease forms, tenants have little leverage to enforce demands for better housing. (b) Poor housing is detrimental to the whole society. (6) Different states have different ideas of what constitutes habitability. (a) The major problem is that it lets tenants live in apartments without paying rent, which seems to defeat the purpose of tenancy. (b) In most places, a tenant has to give the landlord notice, allowing them the opportunity to fix it. (c) There‘s a strong concern that a ∏ who exercises of his rights under the implied warranty may be immediately evicted, especially if it‘s a month-to-month tenancy. (d) The eviction hearing process tries to ensure that landlords can‘t evict you in retaliation for exercising their right. (You‘d raise the defenses of implied warranty and also retaliatory motive of eviction, which probably creates a presumption against the landlord). (i) New Jersey and D.C. have just cause eviction, where you need to show cause to evict. (ii) There are indeed limits on a landlord‘s ability to evict in other places – the implied warranty, retaliatory motive, and discriminatory eviction. (e) In situations of longer tenancy, a landlord will often just refuse to renew the lease upon the term‘s expiration. It‘s true that there‘s no right to another year, but there‘s also no right to another month. (7) Most states have implied duty of habitability for residential property, but NOT for commercial property. (a) Assumption is that commercial tenants tend to be in a stronger position, so they can bargain to protect themselves (8) The implied warranty of habitability generally cannot be contracted around or shifted by agreement of the parties. e) Retaliatory Eviction i) Landlord cannot evict someone for exercising their legal rights (i.e. withholding rent for a reason, calling the housing inspector, etc.) ii) If you evict someone within six months of their exercising a legitimate right (such as calling the housing authority), a rebuttal presumption that the eviction was retaliatory is created. (1) To counter the presumption, the landlord must show evidence that the eviction has a reasonable business justification. iii) See Hillview v. Bloomquist. Court upheld the eviction of a tenant who actually physically assaulted a mobile home estate manager but said that the eviction of his comrades, who merely participated in the formation of a tenants‘ association, was retaliatory. iv) See Fout v. Imperial Colliery. Court found retaliatory eviction against a company that evicted ∏ from his company-owned house because he was helping to form a union v) Retaliatory eviction defense only protects tenants exercising their rights as tenants- it does you no good if your landlord is mad at you for other reasons. 10) Division of Marital Property a) Separate Property (Majority Rule) i) Spouses own their own property during marriage (both what they came into the marriage with and what they acquire during the marriage) except to the extent that they choose to co-mingle their assets; each is responsible for their own debts. ii) Spouses DO have a legal duty to support each other, and can be forced to do so by a court order for maintenance. iii) On divorce, property is subject to equitable distribution. (1) There‘s a presumption of equality and that everything should be split equally, regardless of who contributed more or less in terms of time, money, effort, etc. Factors in the analysis include: (a) Future responsibility for children. (b) Maintaining each spouse in lifestyle to which they are accustomed (c) Rehabilitation: allowing one spouse to get marketable skills in order to become independent (d) What each spouse contributed to the marriage (e) Sometimes fault (in about ¼ of states) (2) Timeframe of marriage matters: (a) Short marriages don‘t usually require an equal distribution of property. (b) 10 years is a substantial marriage. (3) Pre-marital contracts (prenuptial agreements) have regulations attached to them in most states (a) Certain things must be disclosed. (b) They can‘t be unconscionable. (c) But lots of states are leaning towards less regulation and favoring ―freedom of contract‖. iv) On death, decedent may dispose of his property at will, subject to certain state-imposed limitations mandating a certain portion to the surviving spouse (that person‘s statutory forced share). b) Community Property (Minority Rule) i) Spouses own their pre-marriage possessions separately (as well as anything acquired during marriage by gift, inheritance, etc.) but all other property gained during marriage is owned jointly. ii) Earnings on separate property vary -- some courts say they are owned jointly, some separately. iii) On divorce: some states automatically give each spouse half, others have adopted equitable distribution. iv) On death: spouse can dispose of her separate property and one half of the community property at will. v) Creditors: half the community property states say creditors cannot seize community property to satisfy one spouse‘s debts. c) See O’Brien v. O’Brien, where the question was whether a medical license constitutes property under the New York Equitable Distribution Law. i) The problem here is that a license does not satisfy traditional common-law definitions of property. (1) Knowledge is generally not treated as property. ii) The court‘s strongest argument might be that this is an actual change in the definition of ―property‖, and that such changes have occurred in the past. (1) Before the 1960s, divorce was a more shameful thing, and women were less self-sufficient. (2) The courts at some point made a change to recognize not just separate property, but also community property, in order to make equitable distribution more feasible. (a) This gives huge amounts of discretion to the judge in these cases, so most cases settle before trial. (b) This interpretation moves in the direction of reducing alimony payments. (c) Additionally, fault is almost never factored in anymore. iii) The court decided that licenses to practice medicine and law are property within the meaning of the 5 th and 14th Amendment – you need due process to be deprived of it. d) Most other courts in the country would have dissented: i) Professional degrees do not resemble traditional property interests because they are not exchangeable or inheritable, and cannot be transferred. ii) They are the cumulative product of many years of hard work and cannot be acquired by mere expenditure of money. iii) Their value cannot readily be determined because we don‘t know what the person will do with the degree. iv) Awards of property are technically unmodifiable. v) Marriage shouldn‘t be viewed as a business arrangement in which the parties keep track of debits and credits with accounts to be settled on divorce. vi) They would actually have awarded reimbursement and maybe rehabilitation alimony to put herself through school. 11) Fair Housing Act a) Prohibits discrimination on the basis of race, color, religion, sex, national origin, familial status and disability in the provision of residential housing. b) Important Sections i) § 3603 (1) (a): Does not apply to single family homes being rented or sold by the owner without the use of a broker, real estate agency, or advertising. (2) (b): Does not apply to rooms or units in a dwelling containing the landlord‟s residence. (a) This exception only applies to dwellings with four families or fewer living independently of each other, and is intended to protect privacy and right to free association. ii) § 3604(f)(3) (1) (A) Disabled people have to be permitted to make reasonable modifications to a dwelling in order to continue living there or move in (if modification is to the interior landlord may require that the tenant agree to restore the dwelling to its original state before he leaves). (2) (B) Landlord is supposed to make reasonable accommodations in rules, policies or services for disabled tenant/ (3) (C) You cannot construct multifamily dwellings (4 or more units) after 1988 whose public areas are not handicapped accessible iii) § 3607(a)- religious organizations are exempt, as are private clubs that also happen to provide lodging to members. iv) § 3607(b) (1) (1) The act is not intended to limit the applicability of reasonable zoning laws regarding maximum occupancy. (2) (2) The act is also not intended to impact ―housing for older persons‖- nursing homes and retirement communities. (3) (4) The act does not protect you if you are evicted for use or manufacture of controlled substances. c) Liability under FHA does not depend on motive – what‘s important is that race, color, etc. was a factor in the denial of an opportunity to rent or purchase. i) Courts have said that quotas are okay under some circumstances, but they cannot be fixed and the burden they impose cannot fall solely on minorities. See Starrett City. ii) Discrimination against someone because you think they have a particular handicap counts as discrimination even if they do not in fact have that handicap. d) FHA does NOT prohibit discrimination based on sexual orientation or marital status, although statutes prohibit it in several states. e) FHA does not prohibit discrimination regarding commercial property – only residential. f) Disparate Impact Analysis under FHA i) 3 Major Categories (1) Race/Ethnic Origin - some groups are much more likely to be poor. (2) Sex - women make less money than men (3) Children – much more likely to be poor than an adult ii) FHA makes no explicit reference to disparate impact. iii) To make disparate impact claim regarding a zoning ordinance you must show either a segregating effect or disproportionate impact (percentages relative to the general population are key). iv) Defense: (1) Municipalities can show a bona fide legitimate justification for the policy. (2) Private ∆s can show a legitimate business interest, including simply making money. v) Some courts weigh the disparate impact against the justification, but see Langlois (once a legitimate reason has been provided, that‘s enough). vi) Overall, it‘s very difficult to win on a disparate impact claim under the FHA, but see Huntingdon. (1) Plan-specific justifications are almost never a legitimate defense, as a developer can almost always re-write the plan. g) Problems: i) ―Renters ask for housing only in Jewish neighborhoods‖ (1) A broker is definitely not allowed to show in one area and not another purely because of race, and cannot engage in ―steering‖ buyers toward certain areas. (2) Anything that makes the housing ‗unavailable‘ violates the law, either on the buyer or seller‘s side. (3) Intent of broker doesn‘t matter. (4) Not showing everything that‘s available violates the act (5) Brokers are licensed (like doctors) and their general practice is not to answer any of the questions so that they avoid seeming guilty of discrimination (protect themselves by not answering about quality of schools, synagogues, neighborhood demographics, etc.)…if they answer such a question, then they‘re guilty of ―steering‖ the client b/c it might have an unintentional effect. (6) Brokers‘ own regulations are stricter than fair housing act because they‘re so scared of liability. ii) Is it sex discrimination under the FHA for a landlord to harass his female tenant on the basis of sex, forcing her to move out? See Grieger v. Sheets. (1) It would seem that if his harassment only prevented single women from living there, he would effectively be discriminating against them by making the premises available to everyone else. (a) This is contingent upon only women being harassed. But is it really ok if a landlord harasses mostly women and throws in a guy or two to prevent FHA claims? (2) Would it still be sex discrimination if it was a male tenant being harassed? (a) The same argument could apply, but the court might actually make the ∆ prove that the ∆ was gay. iii) A landlord refuses to rent to a young married couple because they are young and may have children in the future. Is this discrimination on the basis of familial status? (1) The statute doesn‘t prevent discrimination on the basis of age. The question is whether it prohibits discrimination on the possibility of having children. (2) It seems like the family has a standing problem – the statute seems to only protect discrimination on the basis of actual children. iv) A landlord refuses to rent to someone who doesn‘t speak English. Is that discrimination based on national origin? (1) It seems like constructively, the answer is yes. Discrimination on this basis has a disparate impact on people not born in the country. Is the disparate impact here justified by a sufficiently important need? Maybe – a landlord has a strong interest in being able to communicate with their tenant. h) See Ashbury v. Brougham i) Employs a prima facie burden-shifting test structured after employment discrimination cases (McDonnell Douglass): (1) ∏ must assert a non-discriminatory reason (2) Once a non-discriminatory justification is set forth, the burden shifts back to ∏ to prove that the justification is pretextual. (a) The common way to do this is to use testers (someone as similar as possible to the ∏) to show pretextuality by exposing: (i) Exceptions/inconsistent application (ii) Negative facts (iii) Post hoc rationalization (e.g., if one reason is given at the time and a different one is given at trial) ii) Prima facie case is enough proof of the factual elements of the case that jury can find in your favor (minimal requirements here…doesn‘t actually require proof of the discriminatory reason) (1) If ∆ says nothing or comes up w/ reasons that are negated by the ∏, then what happens? (a) Some people argue ∏ should just automatically win, even w/o trial (e.g., summary judgment), but that‘s not the law (b) Some people say you need other proof of a discriminatory treatment, but that‘s not the law either (c) The law is that once you satisfy prima facie case, you get to the jury and the jury is entitled but not required to find that the real reason was discrimination (d) ∏‘s attorney would want to come up w/ more evidence (beyond just prima facie case) in order to improve chances of winning 12) Takings Law a) The government cannot take a person‟s property for public use without just compensation. b) Founded in the 5th Amendment, which directly applies to the federal government based on interpretation. i) The 14th Amendment, the Due Process Clause, has been interpreted as basically applying the 5 th Amendment to the states. c) Definitions: i) Just compensation is usually interpreted as meaning the property‘s fair market value under its highest and best use. (1) This is unfair to the owner, as fair market value is almost by definition lower than its value to the owner – they wouldn‘t still own it if it were worth only FMV to them. (2) It‘s also unfair because if you have a business, they don‘t take the business – just the real estate. You aren‘t compensated for the intangible loss of the value of an established location. ii) Public use until recently meant any public purpose. In the past five years, several state supreme courts have struck down rulings where cities have taken property to transfer it from one developer to another, saying it fails the public use test in their state constitutions. d) The whole notion of a per se taking is part of long-term struggle between O‘Connor and Scalia. Scalia likes rules, so the idea of a per se taking appeals to him. O‘Connor likes standards and so is in favor of apply Penn Central test. e) Not Takings i) PruneYard (1) It‘s not a taking to require public access to a shopping center open to the public for free speech purposes. (2) It‘s not a significant deprivation of economic value if the owner is allowed to impose reasonable time, place, and manner (TPM) restrictions to protect his legitimate property interests ii) Heart of Atlanta Motel (1) Not a taking to require public accommodations to serve the public without discrimination. (2) When open to the public, property is subject to regulation to promote equal access. iii) Yee/Block v. Hirsh/Pennell (1) Not a taking to prevent a landlord from evicting current tenants. (a) The rationale is that these laws are not mandating forced invasions by strangers, they are regulating existing relationships. (2) Not a taking per se to include tenant hardship as a factor in a rent control ordinance. (3) At least the landlord has the power to evict the tenants when the landlord wants to change the use of the building from residential rental to some other business purpose (Yee) or the landlord has the right to evict the tenants in order to move into the building herself or give/rent it to a family member (Block v. Hirsh). (4) A better argument might be the policy argument that landlord‘s interest is economic, tenants‘ interest is remaining in their home, and the legislature is free to make the choice between them. f) Categorical (per se) takings i) Physical Invasion (1) Permanent, forced physical invasion by a stranger through either transfer of title or an easement. (2) Loretto (a) It‘s a per se taking to require a landlord to allow cable service boxes on his tenants‘ property. (i) It‘s not a taking to require landlord to provide cable service as a condition of renting the property. (b) If Nolan and Dolan are good law, it doesn‘t make sense to distinguish Loretto from Pruneyard by saying that the invasion was only temporary in Pruneyard, because the same thing was effectively held an ―occupation‖ in Nolan and Dolan. ii) Deprivation of Core Property Right (1) Example: right to leave property by will. (2) Babbitt v. Youpee/Hodel v. Irving (a) Taking when state converts an inheritable interest into a life estate, thereby depriving the owner of the reversion. iii) Deprivation of All Economically Viable Use (1) 100% taking of value of land. (a) Unless use would have been wrongful and illegal under state nuisance law or ―traditional principles of property law‖ (to protect human life and safety). (b) See Agins v. City of Tiburon (i) Zoning law limiting owner‘s site to 5 or fewer single family homes was not a taking, even though owner intended to develop the property for multifamily use. (c) See Lucas v. South Carolina Coastal Council. (i) Justifications for the policy that when an owner has been called upon to sacrifice all economically beneficial uses in the name of the common good, he has suffered a taking: 1. Total deprivation of beneficial use is, from the landowner‘s point of view, the equivalent of a physical appropriation. 2. The legislature is not simply ―adjusting benefits and burdens of economic life in a manner that secures an average reciprocity of advantage to everyone concerned.‖ 3. The functional basis for permitting the government, by regulation, to affect property values without compensation—that ―Government hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law‖—does not apply to the relatively rare situations where the government has deprived a landowner of all economically beneficial uses. 4. Regulations that leave the owner of land without economically beneficial or productive options for its use carry with them a heightened risk that private property is being pressed into some form of public service under the guise of mitigating serious public harm. (ii) ―Land-use regulation is not a taking if it „substantially advances legitimate state interest‟‖. 1. This is the current form of the older doctrine that ―harmful or noxious uses” of property may be proscribed by regulation without the requirement of compensation. 2. Cases: a. Mugler v. Kansas. i. Prohibition of alcohol not a taking even though destroys much of the value of a factory. b. Hadacheck v. Sebastian. i. Prohibition of brickyard not a taking when it became a nuisance c. Miller v. Schoene. i. No taking to order destruction of some property which is harming other property ii. State has the power to choose between incompatible types of property when they cannot conflict with each other d. Goldblatt v. Hempstead. (iii) The distinction between ―harm-preventing‖ and ―benefit-conferring‖ is often in the eye of the beholder, and difficult if not impossible to determine on an objective, value-free basis. 1. If this were determinative for the Takings Clause, legislatures could easily format every regulation to take the form of ―harm-preventing.‖ (iv) States can avoid paying compensation in cases of total economic deprivation only by showing that the proscribed use interests were not part of the owner‟s title to begin with. 1. Under private nuisance law. 2. Under the state‘s complementary power to abate nuisances that affect the public generally. 3. Absolution of liability for destruction caused in order to forestall grave threats to lives and property of others. (v) This requires an analysis of: 1. The degree of harm to public lands and resources or adjacent private property posed by the claimant‘s proposed activities. 2. The social value of the claimant‘s activities and their suitability to the locality in question. 3. The relative ease with which the alleged harm can be avoided through measures taken by the claimant and the government or adjacent landowners. 4. Whether similarly situated owners traditionally engaged in the particular use. 5. Whether similarly situated owners are permitted to continue in the use denied to claimant. (d) The major problem is – how do you know when it‘s economically worthless?? (i) What‘s the denominator? 5 useless acres out of 50 result in a 10% recovery or a 0% recovery?? iv) Vested Rights (1) Interference with reasonable, investment-backed expectations embodied in a completed investment under existing regulatory laws constitutes a taking. (2) Kaiser Aetna (a) Taking when owner invests to develop private beach and connect it to navigable waters; state cannot require public access when the owner did not open the property to the general public and when the connection to navigable waters only results from the owner‘s investment. (b) Reasonable expectations can include the ability to derive profits from land development when the property is not made open to the public but is intended to operate as a private club. v) Regulation Does Not ―Substantially Advance‖ Legitimate Government Interests (1) Usually applied in the context of Exactions and Linkage (2) An exaction is when a person can grant an easement in return for a usually unavailable building permit. (3) Unconstitutional conditions doctrine: you cannot ask someone to give up a constitutional right in order to get a discretionary benefit. (a) So you cannot give up your right to just compensation when your property is taken in exchange for zoning board‘s permission to build a sunroom. (4) In order for an exaction to not be a taking, there must be an essential nexus between what the person wants to do and a legitimate state interest that motivates demanding the exaction. (a) This is an individualized factual determination, based partly on rough proportionality between the dedication of land and harm sought to be prevented. (b) The government must show a reasonable relationship between what they want and the impact of the proposed development. (c) Example: We‘ll let you expand your factory if you put in better pollution control devices. (5) See Nollan and Dolan for examples of exactions that turned out to be ―forced physical invasion‖ takings for lack of a nexus. (6) Linkage ordinances require certain developers of commercial and/or residential property to provide low-income housing or pay a fee for this purpose (see Mt Laurel). g) Penn Central Test i) No taking when a historic preservation law leaves the owner with the right to continue the historic use and allows economically viable use. ii) If not a per se taking, consider the following three factors: (1) Character of government action (a) Government actions that are most likely to be takings include: (i) Forced physical invasions. (ii) Deprivation of core property right. (iii) Individualized extraction of a benefit for the good of the general community. (iv) Forced redistribution of bargained-for contractual rights from one party to another, rather than general regulatory program responding to externalities resulting from property use. (v) Transfer of property from one party to another (vi) Regulations that do NOT advance legitimate state interest (b) Government actions less likely to be takings include: (i) Regulation of property use rather than forced physical invasion or mandated temporary physical invasion of a public accommodation. (ii) Regulations advancing an average reciprocity of advantage- i.e. those whose property interests are hurt by the law also benefit from its concomitant regulation of other‘s property. 1. See Village of Euclid v. Ambler Realty. a. Looks like an average reciprocity of advantage – the same people who are limited are also benefited. b. Seems to apply equally to all. (iii) Government regulation to protect the public interest. 1. See Keystone. a. Not a taking to require coal to be kept in place underground to prevent subsidence of surface even though it may destroy a ―support estate‖ recognized by state law. 2. See Tahoe-Sierra. a. A temporary moratorium on construction imposed by a planning committee (designed to allow time to revise zoning plan) is not per se a taking of property. (iv) Regulation of ongoing contractual relationship that forces transfer of some property interests from one party to another. 1. See Yee and Block. (v) When government has to mediate between incompatible property interests 1. State has power to choose between incompatible property interest when they conflict (2) Extent of diminution in value (a) What was taken and what is left? (i) Is the loss a real loss or just an opportunity loss? (b) Less than 100% is not a taking. (i) See Euclid. (c) If the benefit gained was only created as a side effect of a government program, it‘s not a taking to take that benefit, because the net loss to client is zero. (i) See Brown. (3) Interference in reasonable investment backed expectations (a) Has the owner already invested substantially in reliance on an existing statutory or regulatory scheme? (b) There is more likely to be a taking if the government actions interferes with: (i) Vested rights- see Kaiser Aetna (ii) Present use of property. (c) It is less likely that there will be a taking if: (i) The government just imposes an opportunity loss. 1. See Euclid, Penn Central, Stone v. City of Wolton and Agins. (ii) The change in law was expected such that the owner‘s reliance was not that reasonable (d) But see Palazzolo. (i) Owner may have a takings claim even if the owner's proposed use was statutorily prohibited at the time he purchased. Still apply Penn Central test even though ∏ has probably already lost one tong. (ii) The rationale is that we don‘t want states saying ―all property in the state is subject to regulation in the public interest‖, basically legislating their way out of the takings clause. iii) Then ALL three factors MUST be weighed against the interest of fairness and justice. (1) Is the obligation imposed a burden of citizenship, or should it be shared by the entire community? (2) This is effectively a disparate impact test- is a particular owner being impacted by a government action far and above other owners, to the extent that he is really being unfairly singled out? (3) Basically we are talking about a version of distributive fairness as the ultimate goal (NOT efficiency). h) How to answer the Takings Question: i) Does it qualify as a categorical taking, where the government has to provide just compensation? Try hard here, because ∏ owners almost never win on Penn Central. ii) Is it a taking under the Penn-Central test? i) Example Problem i) New Jersey Protected Tenancy Act – 40 year protected tenancy for elderly persons and people with disabilities preventing landlord from moving in or converting to a use other than residential rental use. Does the New Jersey statute take the landlord‘s property without just compensation? ii) ∏ owner wants to apply Loretto, Kaiser Aetna, Babbitt/Hodel, and distinguish Pruneyard, Yee, Heart of Atlanta. ∆ state wants to do the opposite. iii) ∏ arguments: (1) The physical invasion argument doesn‘t hold up in light of Yee. (2) The ∏ loses the right to live in her own house, and this constitutes a violation of core property rights under Babbitt. (a) But it‘s already someone‘s home, and the person currently living there has a stronger interest in staying. (3) In cases like Yee, there‘s a specific clause allowing ∏ or her family to displace a tenant to move into the apartment. (a) The owner had this expectation when he bought the building. It‘s reasonable because that‘s what the law was at the time. (b) Retroactively changing it should be unconstitutional. (4) The economic impact of this regulation is to diminish the property‘s value by effectively imposing a covenant preventing the owner from moving in. (a) This is small, percentage-wise. By using the denominator problem, you can restate the problem by saying that this eliminates almost 100% of the right to move in. iv) ∆ arguments (1) Looks very similar to Yee, as we‘re dealing with regulation of an already-existing contractual relationship. (2) The existing use was profitable, and you‘re not being prohibited from continuing the existing use. (3) We have lots of regulations in the business world to make co-existence possible. The owner here went into the residential housing business, which already has lots of regulations (implied warranty of habitability, etc.). This is a legitimate regulation of the business in order to protect legitimate legislature-defined interests. Also, there is at most an opportunity cost loss. (4) Tenants also have core property rights – the legislature balanced the tenants vs. the landlords, and chose the tenants while still protecting the economic interests of the landlord. (5) Landlords are allowed to increase the rent to compensate for their loss if they so desire. 13) General Tips a) Contextualize the issue by giving situational history. This adds legitimacy to their decision to limit traditional property rights of the owner, particularly in cases where the facts favor the ∏s, but the law heavily favors the ∆. b) Judge must generally address interests of losers as well as winners. Therefore, a good argument is two- sided; it addresses the opposing side as well as advancing its own independent claims. c) Framing the question for the ∆: The issue in this case is whether a property owner should be forced to endure a surprise post-sale restriction on their rights, where such a restriction is not absolutely necessary to the previous owner. d) Why do we grant injunctive relief rather than damages in property law? i) Location really matters. The property owner doesn‘t want damages – they want to maintain their current situation. ii) With an injunction, the owner can always prevent breach. Injunctive relief puts the choice to change the fact situation in the hands of the property owner. If they later want to bargain for the value of giving up the covenant, they can do that, so the goal of efficiency is still accomplished. iii) With damages, the possibility of efficient breach exists, where a party can breach, pay damages, and still profit. A reward of damages puts the choice to change the fact situation in the hands of the intruder, because they don‘t have to bargain at the will of the owner – they just have to pay the damages. 14) Economic Analysis a) Pareto Superiority – If a rule can be changed such that it benefits someone and hurts no one, the rule should be changed. b) Potential Pareto Superiority (Cost-Benefit Analysis) – If a rule can be changed such that the benefits outweigh the harms, the rule should be changed. c) When engaging in these analyses, benefits and harms must be quantified, typically in monetary terms. i) For land, this is usually fair market value. ii) One definition of efficiency is to maximize the joint fair market value of the properties involved. iii) A deficiency in this argument is the fact that it is indifferent to property rights – you can‘t just pretend like the property doesn‘t belong to anyone. iv) The results of a cost-benefit analysis regarding a specific case can often be countered by taking into account the effect on society overall in future cases. d) Another strategy is to allow the parties to resolve the dilemma on their own by bargaining, which tends to resolve things in an economically efficient manner by comparing offer and asking prices in the status quo. i) Transaction costs can sometimes block a sale that would be advantageous to both parties, and in such a circumstance, the court can improve the result by giving the entitlement to the party who should have it without transaction costs. ii) It might be difficult or impossible for the court to acquire the information necessary to make this judgment. Also, transaction costs are associated with the legal system; the court might not be able to do any better than the market. e) There‘s also an auction technique which would assume no one owned the entitlement in order to examine who values the property the most. f) Four commonly seen arguments include: i) ∏s will often claim that ∆s (owners) should internalize their externalities – they should bear the costs of the harm from their actions because they‘re receiving the benefits from it. (1) If that puts ∆ out of business because damages are greater than the profits, this is a good thing because they were hurting social as a whole. ii) ∆s will often argue that the ∏ should internalize the cost, because either way the decision goes, somebody loses. The entitlement could be a right to build, or a right to stop the transaction. (1) ∏ should internalize the cost of stopping the transaction rather than ∆ internalizing the cost of building. 15) Hohfeldian Analysis a) Useful in distinguishing precedent, and in analyzing cases with a complex web of actors. b) Terms, paired by their correlative: i) A right is a claim enforceable by state power that others act in a certain manner to the right holder. ii) A duty is the absence of permission to act in a certain manner. iii) A privilege is permission to act in a certain manner without being liable to others for damages and without others being able to summon state power to prevent your action. iv) A no-right is the inability to summon state power to alter another‘s behavior. v) A power is a state-enforced ability to change legal entitlements held by others. vi) A liability (or vulnerability) is the situation where another has a power over you. vii) An immunity exists when another person has no power over you. viii) A disability exists when you have no power over another person.