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Property Law Outline PROPERTY LAW – OUTLINE R Schragger Spring

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Property Law Outline PROPERTY LAW – OUTLINE R Schragger Spring Powered By Docstoc
					                                          PROPERTY LAW – OUTLINE
         (R. Schragger, Spring 2005) (SINGER, PROPERTY LAW: RULES, POLICIES, AND PRACTICES (3d ed. 2002))
                             (Also: SPRANKLING, UNDERSTANDING PROPERTY LAW (2000))


OWNERSHIP OF PROPERTY .................................................................................................................................2
    I.   OWNERSHIP ....................................................................................................................................................2
         A.Original acquisition of property ................................................................................................................2
         B.Theories of property and how ownership arises (the 6 justifications) .....................................................3
         C.Why grant property rights? .......................................................................................................................4
         D.Possession as a component of ownership .................................................................................................4
    II. THE RIGHT TO EXCLUDE: A STICK IN THE OWNERSHIP BUNDLE ...................................................................5
       A. The right to exclude as a non-absolute right ............................................................................................5
       B. The right to exclude and the First Amendment ........................................................................................6
       C. The right to exclude and public resources ................................................................................................7
    III.   ADVERSE POSSESSION ...............................................................................................................................7
       A. Doctrinal elements of adverse possession .................................................................................................7
       B. Hohfeldian terminology.............................................................................................................................9
       C. Prescriptive easements ...............................................................................................................................9
TYPES OF OWNERSHIP ..........................................................................................................................................9
    I.    ESTATES IN LAND ............................................................................................................................................9
       A. Methods of devising land ownership .........................................................................................................9
       B. The estates system .................................................................................................................................... 10
       C. Interpreting conveyances under the estates system ................................................................................ 11
       Estates System: Freehold Interests ................................................................................................................... 11
    II. CONCURRENT OWNERSHIP OF PROPERTY ................................................................................................... 12
       A. Tenants in common ................................................................................................................................. 12
       B. Joints tenants WROS ............................................................................................................................... 13
       C. Similarities between tenancies in common and joint tenancies ............................................................. 13
       D. Tenants by the entireties .......................................................................................................................... 13
       E. Marital property ....................................................................................................................................... 14
    III.     LEASEHOLD INTERESTS ........................................................................................................................... 15
       A. Categories of tenancies ............................................................................................................................ 15
       B. Leasehold interests and lease commencement and termination ............................................................ 15
       C. Warranty of habitability and the covenant of quiet enjoyment (CQE) .................................................. 17
    IV.      AFFORDABLE AND FAIR HOUSING ........................................................................................................... 18
       A. Three fundamental problems of affordable and fair housing ................................................................ 18
       B. Fair housing and race ............................................................................................................................. 19
PRIVATE REGULATION OF LAND USE............................................................................................................ 20
    I.   NUISANCE: SUBSTANTIAL AND UNREASONABLE INTERFERENCE WITH USE AND ENJOYMENT OF LAND.... 20
         A.Contours of the doctrine .......................................................................................................................... 20
         B.The Coase theorem and economic analysis of law ................................................................................. 21
         C.Forms of remedies available in nuisance cases and generally............................................................... 22
    II. EASEMENTS................................................................................................................................................... 22
       A. Classifications and terminology of easements ........................................................................................ 22
       B. Forms of easements and how they are created ....................................................................................... 23
       C. Interpreting the scope and extent of ambiguous easements ................................................................... 24
    III.   REAL COVENANTS .................................................................................................................................... 25
       A. Evolution of covenants ............................................................................................................................ 25
       B. Creation of covenants .............................................................................................................................. 25
       C. Equitable servitudes ................................................................................................................................. 27
       D. Posner on injunctions versus damages for breach of anticompetitive covenants ................................. 27
       E. Racially motivated restrictive covenants ................................................................................................. 27
    IV.    IMPLIED RESTRICTIVE NEGATIVE SERVITUDES – SUBDIVISIONS ............................................................ 27
       A. Purpose .................................................................................................................................................... 27
       B. Cases and examples of implied restrictive negative servitudes ............................................................... 28
                                                                                                                  Property Law – Outline                              1
   V.        COMMON INTEREST COMMUNITIES ............................................................................................................. 29
        A.     Types of common interest communities .................................................................................................. 29
        B.     Critiques of these organizational forms .................................................................................................. 29
        C.     Evaluating the decisions of common interest communities ................................................................... 29
PUBLIC REGULATION OF LAND USE .............................................................................................................. 30
   I.   ZONING ......................................................................................................................................................... 30
        A.Biggest regulatory scheme in world b/c all land in country is regulated by zoning .............................. 30
        B.Conceptual elements of zoning................................................................................................................ 30
        C.Developments in the doctrine of zoning .................................................................................................. 30
        D.Exclusionary zoning ................................................................................................................................ 31
   II. TAKINGS ....................................................................................................................................................... 32
      A. Constitutional underpinnings: The Takings Clause .............................................................................. 32
      B. Doctrinal elements of takings .................................................................................................................. 32
      C. The scope of what constitutes a government taking ............................................................................... 33
      D. The scope of the public use requirement ................................................................................................ 34
      E. Exactions and unconstitutional conditions............................................................................................. 35
MISCELLANEOUS TOPICS .................................................................................................................................. 36
   I.   INTELLECTUAL PROPERTY ........................................................................................................................... 36
        A.Generally .................................................................................................................................................. 36
        B.Cases in intellectual property law ........................................................................................................... 37
   II. COMMODIFICATION ..................................................................................................................................... 37
      A. Commodification and theory ................................................................................................................... 37
      B. Babies, people, and body parts ................................................................................................................ 37



OWNERSHIP OF PROPERTY
I. Ownership

     A. Original acquisition of property
        1. Ownership vis-à-vis Indians in North America
           i. What colonists understood as transfer of property and sovereignty was often
                understood by Indians as temporary accommodations of land use
           ii. Federal government obtained property from Indians and distributed to citizens
           iii. All land ownership can trace back to federal ownership and grant through
                conquest, coercion, voluntary concession, or judicial fiat from Indians
        2. Johnson v. M’Intosh (U.S. 1823) [1.1 CB 4]: Johnson acquired property through his
           father who got it from Piankeshaw Indians. M’Intosh bought same property from fed
           gov’t. Johnson sues M’Intosh for ejectment. Rule: Indian sovereignty was quashed
           by conquest. Indians lost sovereignty in property (could not transfer), but
           retained an extinguishable right of occupancy in land. Land grant by Indians to
           Johnson was not within Indians’ power in light of exercise of fed sovereignty.
           i. Adopts positivist theory: title to land depends entirely on laws of nation in which
                land lies; rejected natural law theory (abstract principles) re: Indians
           ii. Indians retained a right of occupancy (grace of US gov’t), but US has absolute,
                ultimate title in all American lands and can quash Indian occupancy
           iii. As between European powers, rule of discovery (unclaimed lands got go to the
                first possessor thereof) – Marshall had to decide this way in order to justify US
                property ownership
        3. Rule of discovery and the theory of conquest


                                                                                                                   Property Law – Outline                               2
      i. Marshall in Johnson: not a moral claim, but rather force is the primary
           determinant of property rights
      ii. Property not a “thing,” but rather ability to get state to enforce your rights
      iii. Derives from Lockean labor theory of property, but hard for Marshall to justify
           why discovery = conquest
   4. Legal positivism: law as the source of property rights
      i. Property exists only to extent that the law (sovereign) will protect it
      ii. Distinguishes between law and morals – morals may justify laws, but the two are
           distinct and laws may act in contrast to moral dictates (Holmes’ “bad man”:
           analyze the law as would someone looking at it w/o giving it moral content)
   5. Residual claims of Indians in real property
      i. Tee-Hit-Ton Indians v. United States (U.S. 1955) [1.3 CB 15]: US authorized
           timber co. to cut from lands occupied by Indians. Indians claimed title and sought
           Takings Clause compensation. Rule: Congress has never recognized Indian
           sovereignty over this land as Indian ownership after white possession has
           only been right of occupancy. Discovery and conquest gave conquerors
           complete sovereignty over all lands thus obtained.
      ii. As a tribe, you’d prefer to be property owner rather than sovereign b/c latter than
           be conquered, while former has enforceable property rights

B. Theories of property and how ownership arises (the 6 justifications)
   1. Labor & Lockean theory: all property is held in common; property becomes personal
      only when you but your effort into it and remove it from the common store
      i. Focus is not on efficiency, but rather on moral desert justification for property –
           labor theory gives laborer normative claim to property
      ii. Certain forms of labor are favored vis-à-vis others (colonial settlement is
           preferred to Indian occupancy w/o settlement)
      iii. Critique focuses on labor theory as justification for private property – why award
           entire property for labor as opposed to just the value added to property
   2. Possession – brute social fact: if you have it, you can prevent others from taking it
      i. Actual possession of contested resources often creates presumption of right to
           possess unless other party can demonstrate a superior claim
   3. Social welfare/utilitarianism – award property rights in such way as to maximize
      social welfare
      i. Instrumentalist conception of property: how it contributes to social welfare
      ii. Create incentives for people to do the “good” by way of conferring property rights
      iii. Clear property rights enhance social welfare b/c clarifies who owns what and
           reduces the transaction costs of conveyance
      iv. Utilitarianism: involves a cost/benefit comparison with the goal of adopting rules
           that will promote efficiency and will maximize social utility/welfare
   4. Settled expectations: reliance theory to protect property to people’s conformed
      notions of what property is and that law should vindicate settled expectations/reliance
      i. Point of property is to determine whether parties’ actual expectations w/r/t
           property are justified and thus protected by property law
   5. (Natural) Rights: Property as an ends – property has human value in and of itself
      i. Rights as a mean of protecting some important notion of autonomy or privacy,
           some aspect of personhood or dignity that can’t be trumped by considerations of
           social welfare


                                                              Property Law – Outline       3
      ii. Professor Radin’s human flourishing argument: humans beings need to own
           certain things in order to flourish (wedding rings, sentimental things)
      iii. Certain property not fungible b/c of the idiosyncratic value attached to it
   6. Distributive justice: B/c they are a legal form of wealth, property rights have
      distributive effects that affect fair allocation
      i. Compromise btw. principle of protecting possession and promoting distribution
      ii. Prof. Michelman argues that property must be widely distributed otherwise all
           held in one person or limited oligarchy would create dictatorship

C. Why grant property rights?
   1. Allows expectation interests to arise that let people plan and invest
   2. Allows bargaining for stuff that we want (economic efficiency)
   3. Prevents exploitation of common resources
   4. Prevents wasting of things that would otherwise be used up w/o property rights

D. Possession as a component of ownership
   1. Actual possession normally creates presumption of right to possess unless defeated by
      a superior claim of possession
   2. Rule of capture: possession in animal arises only on deprivation of liberty of animal
      i. All these rules, at some point, appear to fade into standard (they are announced as
           bright line rules, but countervailing considerations apply them as standards)
      ii. Pierson v. Post (N.Y. 1805) [1.5 CB 78]: Π hunts fox. At end of hunt, ∆ comes in
           and captures fox. Rule: Π has no property interest b/c property right in
           animal arises only through capture (point where animal’s liberty is deprived
           and brought within hunter’s control).
           a. Rationale for majority: need clear rule to avoid litigation re: ownership
           b. Dissent: This should be resolved via social norms; point of hunting is to
               encourage elimination of fox and majority’s rule creates disincentives for
               people to put efforts into hunting foxes
           c. Dissent’s social norms arg. makes sense b/c what would hunter’s decide?
               They are the institutionally competent party to make this determination
      iii. Elliff v. Texon Drilling Co. (Tex. 1948) [1.7 CB 82]: Π and ∆ each owned property
           that shared underground oil deposits. ∆ withdrew oil at depth that caused this
           joint oil to crater and catch fire. Π sued for negligence. Rule: Owners own
           shared oil rights. Law of capture permits owner to draw oil from wells on his
           land even if he dips into others’ oil. No liability for reasonable legitimate
           drawing of oil, so long as capture not used to produce waste.
           a. Rule premised on reciprocity: you can do to others and they can do it to you
           b. Bright line rule (capture) evolves into standard (only reasonableness allowed)
           c. Encourages investment in oil drilling b/c can take others, but limits free-rider
               overconsumption problem b/c restricted by reasonableness
           d. Most jurisdictions have adopted reasonableness as standard for determining
               right to extract from a common pool of sub-soil gas and oil
   3. Possession and other natural resources
      i. Water: Surface water tends to be nuisance; same rule as re: oil and gas
           a. Groundwater: Doctrine of free use or absolute ownership – owner may
               withdraw from common aquifer even if draws from under others’ property
               (some states reject this and adopt test of reasonable use of groundwater)


                                                              Property Law – Outline        4
               b. Surface water: Streams/lakes – most states adopt reasonable use test, while
                    some states adopt prior appropriations doctrine (first use trumps later)
       4. Abandonment and finders law
          i. Finders can acquire title in goods that are properly abandoned (law of finders)
               a. Abandonment: When owner forms intent to relinquish all rights in property
               b. Lost: When owner accidentally misplaces property
               c. Mislaid: When owner intentionally left it somewhere but forgot where
               d. Finder of lost or mislaid property does not acquire title as to the true owner –
                    dispute is often over whether found property is abandoned, lost, or mislaid
               e. Finder has claim to lost/mislaid property against all 3d parties except owner
               f. Most states abandon distinctions, require finders to disgorge found property to
                    police for period, with reversion in the finder if true owner not come out
          ii. Charrier v. Bell (La. 1986) [1.9 CB 92]: Π removed several tons of Indian burial
               artifacts. Louisiana, intervening for Indians, sued. Rule: Burial of artifacts of
               dead is not abandonment, which requires intent to abandon. Burial of these
               artifacts not tantamount to voluntary relinquishment of property interest.
               a. Central holding: grave burials not abandoned b/c we don’t intend to relinquish
                    any property rights in the things that are buried (don’t abandon ancestors)
               b. Alternative holding: don’t want to discourage archeological digs so require
                    true owners to pay finders fee (i.e. treats property as quasi-abandoned)
          iii. Popov v. Hayashi (Cal. 2002) [1.10 Supp.]: Popov nearly catches fly ball when it
               leaves his glove precluding absolute dominion and control b/c crowd rushes him.
               Hayashi ends up with ball and establishes dominion and control. Rule: Rules of
               possession are defined in context: in baseball, need equivocal dominion and
               control. Crowd prevented Popov from attempting to establish so Popov has
               a pre-possessory right to possession, need to balance against Hayashi’s claim.
               a. Awards equitable division as the remedy between Popov and Hayashi
               b. Looks to social norms to determine ownership – requirements in baseball
               c. Applies some rule of capture (Hayashi), but also to Popov b/c he gets a pre-
                    possessory right b/c others interfered with his ability to complete possession

II. The right to exclude: a stick in the ownership bundle

   A. The right to exclude as a non-absolute right
      1. Non-owners may have right to access under common law, accommodations law, etc.
      2. More an owner has opened property to public, less the right to exclude is enforced
      3. Trespass = unprivileged intentional intrusion on property possessed by another
         i. Intent element is intent to do the act (walk on the land), not intent to trespass
         ii. Trespass is privileged if consensual, necessity, or encouraged by public policy
      4. State v. Shack (N.J. 1971) [1.12 CB 106]: Owner employed migrant workers on his
         farm. Under federal law, ∆ sought to access migrant works to counsel them on their
         rights. Owner sought to have ∆ excluded as trespassers. Rule: ∆ conduct not
         trespass b/c complainant not have power to isolate migrant workers and exclude
         ∆ from helping migrant workers under color of federal law. No trespass under
         NJ law b/c owner had no right to exclude these ∆s.
         i. However, owner can ask for ID, set limits on visitation, but can’t exclude in toto
         ii. Rights of both parties are limited (owner’s right to exclude not absolute, workers
              right to receive visitors can’t be excessive, commercial, etc.)
         iii. Some hints in case of privacy interests, rights needed for human flourishing

                                                                  Property Law – Outline         5
   5. Desnick v. Am. Broadcasting Co. (7th Cir. 1995) [1.14 CB 111]: ABC got Desnick
      approval to film and use film in broadcast piece about the eye center. Desnick sues
      for trespass and defamation. Rule: Look to interest tort (trespass) is supposed to
      protect. Trespass works to protect the property of another person. No such
      interests violated here: only professional interviews shown, no intimate details
      revealed, no eavesdropping, no violation of doctor-patient privilege.
      i. Unclear that court’s rule is workable: some conduct we like, some we don’t (why
           do we say window-shopping okay [false pretenses], but not letting these same
           reporters in if their goal is to reveal trade secrets)
      ii. Food Lion, Inc. v. Capital Cities/ABC, Inc. (4th Cir. 1999) [1.15 CB 117 n.5]:
           Employees hired and then did investigative reporting. Initial entry not trespass,
           but subsequent videotaping did. Rule: Consent, though given, is not absolute so
           that even some actions ostensibly w/consent are trespass.
   6. Uston v. Resorts Int’l Hotel, Inc. (N.J. 1982) [1.15 CB 119]: Π was professional BJ
      player excluded from hotel for card counting. Π sought injunction on grounds hotel
      had no right to exclude him. Rule: When property owners open property to public
      invitation, they have no right to exclude unreasonably and have duty not to act
      in an arbitrary or discriminatory manner.
      i. Reasonableness of exclusion is decided on a case-by-case basis
      ii. Π is not security threat or disruptive, can’t be excluded unless violates rules
      iii. Common law rule was that all except innkeepers and common carriers had an
           absolute right to exclude (this is rule adopted in most of country); NJ rejects
   7. Right to exclude further modified by federal civil rights laws
      i. Laws don’t apply to boarding houses < 5 rooms b/c more likely to be private
           residence and greater right of association and rights of privacy than public inns
      ii. CRA of 1964 and 1866 prohibit use of various types of discrimination as means
           of exclusion from public accommodations, make contracts, hold property

B. The right to exclude and the First Amendment
   1. Spectrum of property categories: private property  quasi-private  quasi-public 
      common carriers  public property. The more public the property, the more access
      the public has to the property
   2. Marsh v. Alabama (U.S. 1946) [1.18]: Rule: Company owned town was equivalent
      to a true municipality in all ways except private ownership such that there were
      rights to public access and free speech in the town’s shopping district (functional
      equivalent of a public business district).
   3. Amalgamated Food Employs. Union v. Logan Valley Plaza (U.S. 1968) [1.18]:
      Extended Marsh to shopping center when speech related to shopper center operations.
      (Overruled by Court in Hudgens.)
   4. Lloyd Corp. v. Tanner (U.S. 1972) [CB 1.16 CB 160]: Π non-disruptively distributed
      handbills at mall, private property of ∆. ∆ obtained injunction against Π’s further
      distribution. Rule: Though there are 1st Amend. concerns, those apply only to
      state action and not private action. Private property does not lose its character
      simply because public is generally invited to use it for designated purposes.
      i. Dissent: Marsh held that more private owner opens his property to public use,
           more that private owner is constrained by statutory/constitutional rights of users
      ii. Dissent fears that more speech will be proscribed b/c speech parasitic on property
           and also that malls are where people are at, so need access in order to do speech
      iii. Distinguishing Marsh: Near-public nature of co. town v. private property

                                                              Property Law – Outline        6
             iv. Distinguishing Logan Valley: Speech related to venue, near-exclusive means of
                  protesting was to protest at that site
          5. N.J. Coalition against War in the Middle East v. J.M.B. Realty Corp. (N.J. 1994) [1.19
             CB 167]: Π non-disruptively distributed handbills against war on mall private property.
             ∆s prohibited their access to the mall for such purposes. Rule: NJ recognizes
             broader affirmative speech rights than fed Const. Based on State v. Shmid,
             three elements to be considered: (1) nature, purposes, and primary normal use
             of private prop; (2) extent and nature of public invitation to use; and (3) relation
             of expressional activity to private and public use of property.
             i. Central fact: shopping centers were all-inclusive and sought to attract non-
                  shopping crowds as well, despite fact that primary use was commercial/for profit
             ii. Right to exclude vindicated by allowing owner regulation of time, place, manner
             iii. Dissent: Purpose of malls was for shopping, owner not intend to create downtown

       C. The right to exclude and public resources
          1. Public trust doctrine: certain property owned f/b/o people for common use
             i. Usually extends to navigable waters and certain related lands to protect public’s
                  right to use these areas for navigation, commerce, fishing, swimming, etc.
             ii. Public trust doctrine not give property right, but rather rights of access and use
                  (can’t convey it or exclude others from using it)
             iii. Other methods states use to achieve same ends: prescription, dedication, custom
                  a. Dedication: gift of realty from private owner to public at large
                  b. Prescription: public’s prescriptive easement through long-term use of property
                  c. Custom: long-term public use conferred continuing right to use
          2. Matthews v. Bay Head Improvement Ass’n (N.J. 1984) [1.22 CB 182]: ∆ and its
             members own all the private roads leading to the public beach in Bay Head.
             Although the beach can be accessed by walking from an adjoining borough’s beach,
             access on ∆’s roads is retained exclusively to its members. Π sued for access under
             the public trust doctrine. Rule: Public trust doctrine permits public access to the
             water and to publicly owned upland beaches. Because the ∆’s activities parallel
             those of a municipality (lifeguards, keep beaches clean), ∆ takes on a quasi-
             public nature and must be open to the public.
             i. Access to upland beaches not just for passage, but rest/sunbathe and use of water
                  (public trust extended past water to dry sands b/c those necessary for water use)
             ii. No other public beaches in Bay Head, if all boroughs in NJ did this, no public
                  beaches would be accessible and this would violate public trust doctrine
             iii. ∆’s quasi-public nature important: rule limited to such situations and court takes
                  no position on outcome if this were fully privately owned property

III.      Adverse possession

       A. Doctrinal elements of adverse possession
          1. Consistent elements of adverse possession
             i. Actual possession: ordinary use to which land is capable, how an owner uses it
                  a. If claim is under color of title, actual possession of part of the parcel will
                      translate into constructive possession of the entire disputed parcel
             ii. Open and notorious possession: required to put actual owner on notice that there
                  is an actual possession and that the use of the land is in controversy
             iii. Exclusive possession: not that all are excluded, but excluded as an owner would

                                                                     Property Law – Outline           7
     iv. Continuous possession
     v. Adverse/hostile possession: Possession had to have been non-permissive, the
          rebuttable presumption is that possession and use is non-permissive
          a. Permission to use land ends adverse possession, running of statutory period
          b. Claim of right: formulation of mental states
              1. Some states use objective test (do your acts show objective ownership?)
              2. Some states use subjective test, but hard b/c hard to prove good faith/bad
                  faith – also choice between which test? (Good faith b/c ∆ thought he
                  owned, or bad faith b/c he took affirmative steps to acquire?)
     vi. All of the foregoing for the statutorily required period
          a. Can think of AP like stat of limitations requiring true owner to bring suit
2.   Adverse possession based on color of title
     i. Romero v. Garcia (N.M. 1976) [1.26 CB 206]: Π purchased land from married
          couple (∆ and ∆’s deceased husband); however, ∆ did not join the conveyance in
          the deed. Πs occupied during their marriage. Π sues for adverse possession.
          Rule: A color of title claim is satisfied despite lack of signature and lack of
          complete description of parcel so long as a surveyor could determine parcel
          or adverse possessors had built in such a way to identify bounds of parcel.
     ii. Color of title adverse possession tends to have lesser statutory waiting period
     iii. Can fix void/problematic documents of conveyance, avoid formal rules of transfer
3.   Nome 2000 v. Fagerstrom (Alaska 1990) [1.27 CB 208]: ∆ had been in possession of
     piece of land and used it seasonally. ∆ erected structures during last period of adverse
     possession, but question remained re: whether his use before erecting structures in
     first year was adverse possession. Rule: Sufficient continuous, notorious, and
     exclusive use does not depend on significant improvements, substantial activity,
     or absolute exclusivity. The standard is what use an average owner would have
     made of the land. Also, hostility element is not subjective, but by objective test
     of whether ∆ took actions consistent with hostile ownership of land.
4.   Doctrine of tacking: allows satisfaction of statutory period by adding up successive
     owners’ adverse possession connected via privity of title or claim
     i. Brown v. Gobble (W. Va. 1996) [1.25 CB 199]: Gobble thought two-foot tract of
          land was his and used it as such. Brown’s survey revealed it to be his and sued
          for ejectment. All elements of adverse possession were unchallenged except the
          statute of limitations. Gobble tried to prove through tacking. Rule: ∆ should
          have opportunity to show that they adversely possessed not by meeting the
          ten-year requirement, but by showing that previous owners did and that
          adverse possession passed to them by tacking.
          a. Court imposes clear and convincing evidence as standard of proof, idea is to
              make it hard for the adverse possessor to dispossess the actual owner
          b. At heart, case is re: previous owners’ adverse possession transferring to ∆
5.   Adverse possession of personal property: rules more protective of the true owner (i.e.
     running of period not start until true owner demands return of stolen goods) [CB 252]
6.   Policy: adverse possession encourages use and development of land; redistribution of
     land in this way presumes active use has greater value than just holding the land
     i. Adverse possession helps to reconcile social norms of property ownership
          (possession/use) with legal norms of property ownership (title) (labor theory too)
     ii. AP helps make clear what people own and will help encourage transactions b/c
          people will be able to convey what they own (but probably wrong in reality b/c
          bright line rule of title probably would result in less litigation and more sales)

                                                             Property Law – Outline        8
         iii. May be justified on moral grounds of protecting reliance on relationships (the
              relationship between land owner and the adverse possessor, the possessor has
              come to understand that the land owner will not interfere or object to his use)
         iv. May be justified on personhood grounds: property becomes a part of you
         v. Psychological claims: hurts more to lose something you’ve understood to be
              yours than gain to the owner of something he didn’t think was his
      7. Alternatives to adverse possession
         i. Force sales requiring true owner to sell to adverse possessor
         ii. Restrict adverse possession only to situations of good faith adverse possession
         iii. Creation of presumption that all use is permissive (minimizes adverse possession)
         iv. Put burden on adverse possessor to find the true owner
         v. Sharing regimes as between the true owner and the adverse possessor

   B. Hohfeldian terminology [1.30 CB 222]: Any time the state confers an advantage on one
      party, it creates a countervailing vulnerability on the part of others
      1. Legal entitlements are not simply entitlements, but jural relations between 2 parties
      2. Forerunner of realist jurisprudence re: property as state positivism and idea that
          property rights are relational (property rights are also property duties on others)
      3. Basic elements of Hohfeldian terminology
          i. Right: claims, enforceable by state power, that others act in a certain manner in
               relation to the rightholder
          ii. Privileges: permission to act in a certain manner w/o liability to others and w/o
               others’ ability to summon state power to prevent those acts
          iii. Duties: absence of permission to act in a certain manner
      4. Central correlative relationships: right-duty; privilege-no right; power-liability;
          immunity-disability

   C. Prescriptive easements
      1. Community Feed Stores, Inc. v. Northeastern Culvert Corp. (Vt. 1989) [1.30 CB 232]:
         Π used gravel lot land for parking lot and backing out purposes since 1956. 1984
         survey showed land to belong to ∆, who erected barrier around its portion to prevent
         continued use. Π sought prescriptive easement. Rule: Elements for prescriptive
         easement are same as adverse possession, except right acquired is right of use
         rather than title.
      2. Why not require party seeking prescriptive easement to acquire property from owner?
         i. Disconnect in offer price of prescriptive easer and sale price of owner
         ii. Distributional argument fearing that prescriptive easer will not have $ to do it


TYPES OF OWNERSHIP
I. Estates in land

   A. Methods of devising land ownership
      1. Land can be divided among owners and across time (temporally)
         i. Present estate holder has the current possessory right while the interest lasts
         ii. Future estate holder has right in the future to obtain right of possession
         iii. Dead hand problem: by letting current owners restrict future alienability of
              property, allows dead persons to control present use of land
                                                                  Property Law – Outline          9
   2. Nonfreehold interests are those associated w/landlord-tenant, freehold are all others

B. The estates system [CB 579]
   1. FEE SIMPLE [ABSOLUTE]: property w/o an associated future interest; w/rights to possess, to
      sell, and to devise by will/leave to heirs
      i. O to A; O to A and her heirs; O to A in fee simple
      ii. Failure to indicate intent to create future interest is presumption of fee simple
   2. Defeasible fees: present interests that terminate upon happening of specified event
      other than the death of the owner
      i. Automatic future interest in the grantor: FEE SIMPLE DETERMINABLE W/POSS. OF REVERTER
           a. O to A during residential use; O to A while used for residential purposes; O to
               A so long as for residential purposes, with reverter in O if otherwise
           b. Language denoting ownership during limited time period = grantor intent to
               terminate ownership rights automatically when condition violated or is met
           c. If condition vitiated, reverts immediately and adverse possession starts now
      ii. Reversion in grantor upon affirmative act of grantor: current interest is FEE SIMPLE
           SUBJECT TO A CONDITION SUBSEQUENT and the future interest is a RIGHT OF ENTRY
           a. O to A, but if used for nonresidential purposes, O shall have a right of entry
           b. Vests in grantor the right to choose to exercise whether to retake the property
           c. Rights of entry are devisable (to heirs) and transferable (to third parties)
           d. Historically, right of entry not possessory until exercised so adverse
               possession couldn’t run, but courts avoid through doctrine of laches
      iii. Automatic future interest in 3d party: current interest is the FEE SIMPLE SUBJECT TO
           EXECUTORY LIMITATION and future interest is EXECUTORY INTEREST
           a. O to A so long as for residential purposes, then to B: shifting interest that
               automatically vests title in B when condition is broken
           b. O retains no interest after the shifting grant; future interest is in B or B’s heirs
           c. O to B when B graduates from law school: springing interest b/c the condition
               divests the original grantor instead of an intermediate party
   3. Life estates: present estates measured by life of some party
      i. Present estate measured by grantee’s life: LIFE ESTATE
           a. O to A for life: after A’s death, reversion to O or O’s heirs
           b. If A sells interest to B, B has life estate for length of A’s life, then reverts to O
               (B’s interest is a LIFE ESTATE PER AUTRE VIE)
           c. O to A for life, then to B: after A’s death, reversion to B or B’s heirs.
      ii. Contingent remainders
           a. Remainder is contingent if it’s triggered upon happening of event not certain
               to happen or if the remainder will go to person unascertainable at conveyance
           b. O to A for life, then to B if B has graduated from law school: contingent
               remainder that reverts to O if B not graduated from law school; if B later
               graduates from law school, the interest springs to B (SPRINGING INTEREST)
           c. Unlike common law, contingent remainders are now largely indestructible
   4. Presumptions arising from the estates system
      i. Presumption against forfeitures (preference for current possessor rather than
           dispossessing in favor of another party): interpret conveyance if possible to avoid
           loss of property current owner
      ii. Presumption against restraints on alienation
      iii. Presumption against creation of new estates other than those already existing


                                                                  Property Law – Outline        10
    C. Interpreting conveyances under the estates system
       1. Wood v. Board of County Comm’rs of Fremont County (Wyo. 1988) [1.35 CB 580]: Π
          conveys land to county for purpose of constructing hospital thereupon. County runs
          hospital, but sells to third party who seeks non-hospital use of land. Wood asserts
          either possibility of reverter or right of entry. Rule: Language indicating purpose
          for land grant but not indicating special circumstances to trigger automatic
          reversion does not create fee simple determinable. Deed not indicate length of
          time land has to be used for hospital before reverter interest will trigger.
          i. Central tenet is intent of the grantor in the manifestations of the grant
          ii. Hard for the court to make out type of conveyance b/c no “magic words” used
          iii. Strong presumption for fee simple absolutes unless “magic words” used; there
               will be no non-fee simple absolute unless explicit magic words (bright line rule)
          iv. Most states read “purpose” language as precatory (no intended legal significance)
       2. Cathedral of the Incarnation in the Diocese of Long Island, Inc. v. Garden City Co.
          (N.Y. 1999) [1.36 CB 582]: Heirs of Stewart convey property to Cathedral so long as
          for church purposes with no right to re-convey; remainder or reversion rights are in
          Garden City Co. Cathedral files bankruptcy and court orders sale of land f/b/o
          Cathedral’s creditors. Rule: Absent express intent to create right of reverter, the
          presumption is right of reentry. However, right of reentry at time of heirs’
          conveyance was non-assignable. Also, NY law allows escape from restrictions if
          restrictions impede purpose for which property is held.
          i. NY statute allows removal of restrictions on charitable/educational land
          ii. No possibility of reverter b/c Co. could identify no evidence showing that intent
       3. Edwards v. Bradley (Va. 1984) [1.38 CB 586]: Lilliston devised property to daughter
          (Edwards) on condition it never be encumbered or would pass to Edwards’ children.
          Edwards got all children except one to agree to sell property. On Edwards’ death, she
          left $1 to hold-out child (Bradley) and called for property to be sold. Rule: Expressio
          unius argument (Lilliston’s will had used “fee simple” in other places).
          Conditions on alienation on a fee simple are void, but conditions on a life estate
          as here are valid. This is a life estate b/c clear intent for land to go to children
          upon Edwards’ death or violation of conditions.
          i. Why not treat as fee simple subject to executory limitations? The conditions
               permissibly imposed do not include inability to alienate (i.e. can’t say O to A so
               long as A doesn’t convey, then to B)
          ii. Life estate vindicates intent of grantor that this property will pass to grandchildren
       4. Interpreting ambiguous conveyances
          i. Determine grantor’s intent (from language of the deed if possible)
          ii. If language is ambiguous, construe in light of presumption against forfeiture of
               current possessor – preference for the current holder versus future interest holder
          iii. Must balance grantor’s intent with public policy re: dead hand control problems

                             Estates System: Freehold Interests [CB 579]

  Present Interest            Words Often Used                            Future Interest
                            to Create the Interest           In Grantor                In Third Person
Fee simple absolute   “to A”                                     –                            –
                      “and his heirs”
                      “to A in fee simple”
Fee simple            “so long as (used for)”        Possibility of reverter                 –
determinable          “while (used for)”

                                                                          Property Law – Outline         11
                     “during”
                     “until”
                     “unless”
Fee simple subject   “provided that”                  Right of entry if the                  –
to condition         “on condition”                   condition is broken (or
subsequent           “but if…than O shall have a      power of termination)
                     right of entry”
Fee simple subject   “until (or unless)…, then to…”                              Executory interest
to executory         “but if…, then to…”
limitation
Life estate          “for life”                       Reversion                  Remainder

II. Concurrent ownership of property

    A. Tenants in common: most common form of concurrent ownership, parties have separate
       but undivided interest in the property, each interest is devisable and alienable
       1. All tenants have right to possess entire parcel, regardless of ownership share
       2. Ownership proportion is relevant only in determining division of sale proceeds
       3 O to A, B, and C as tenants in common (equal ownership)
           O to A, B, and C with 1/2 undivided interest in A and 1/4 undivided interest each in B
                and C (non-equal ownership)
       4. Olivas v. Olivas (N.M. 1989) [1.40 CB 646]: Husband and wife owned community
           property while married and tenants in common after dissolution of marriage. As
           result of lengthy delay between divorce decree and property division, husband got
           second home. Husband sued for constructive ouster and rent from wife. Rule:
           Ouster does not require an affirmative physical act, but can arise w/o fault of
           either cotenant when the realities of the situation prevent the cotenants from
           sharing occupancy.
           i. When co-tenants can’t live together on property, constructive ouster and
                remaining co-tenant has obligation to pay rent
           ii. Husband bears burden of proving constructive ouster, which he failed to do b/c
                TC could have construed his leaving as wanting to live with new girlfriend
           iii. Could have distributional rule: only when the poorer spouse is ousted does rent
                have to be paid
           iv. Ruling seems to turn on fault – idea that husband pulled out of the house to live
                w/girlfriend rather than pushed out of the house (actively or constructively)
           v. Alternate rule: No constructive ouster, only have actual ouster
       5. Carr v. Deking (Wash. 1988) [1.41 CB 650]: Father and son own property as tenants in
           common. Against son’s will, father leases his portion of property to Deking for
           payment in crops. Father dies. Son sues to eject Deking. Rule: One co-tenant may
           lease property w/o other’s consent. Lessee steps into lessor’s shoes for duration
           of lease. Son not entitled to eject lessee, but rather to partition.
           i. Deking gets full use of land under lease b/c co-tenant can lease it all
           ii. Property rule awarded here allows parties to bargain either for sale of property to
                Deking (Deking buys out) or for son to buy-out Deking’s lease (son buys out)
       6. Kresha v. Kresha (Neb. 1985) [1.43 CB 655]: Husband and wife own as tenants in
           common. Husband goes behind wife’s back and leases to son. Husband and wife get
           divorced. Court awards property to wife, is it encumbered by the leas to the son?
           Rule: Wife takes the property subject to the lease to the son. Husband had full
           right to lease, and wife knew about the lease and could have objected at the
           property dissolution stage.
                                                                         Property Law – Outline       12
       i. Court says unlike situation of sale of property which remains encumbered by
          lease – however in sale, you do title search and would know re: lease, not the
          same in situation of divorce and property dissolution

B. Joints tenants WROS: less common than tenants in common; co-owners are treated as a
   single owner so one when dies, decedent’s share passes by operation of law to the
   surviving tenant
   1. Requires the four unities to create:
       i. Time: interests must be created at the same time
       ii. Title: all joint tenants must take interest under the same instrument
       iii. Interest: all joint tenants must have an equal share
       iv. Possession: all joint tenants must have the right to possess entire parcel
   2. Severance if one party conveys his/her interest – result is tenants in common
       (severance does not change relationship between non-selling parties, who remain
       joint tenants, but who are tenants in common w/r/t selling party)
   3. O to A, B, and C as joint tenants
   4. Ambiguous conveyances vis-à-vis intent are interpreted as tenancies in common
   5. Tehnet v. Boswell (Cal. 1976) [1.42 CB 652]: Johnson and Tehnet own property as jt.
       tenants. W/o Tehnet’s permission, Johnson leases property to Boswell for 10 years.
       Johnson dies 3 mos. into lease. Tehnet brings suit to void lease. Rule: Leases, unlike
       sales, are not inconsistent with jt. tenancies so as to require severance. Court
       will sever only upon acts that indicate both parties intend to end the joint
       tenancy. However, Tehnet takes property free and clear of all liens, so the lease
       does not encumber Tehnet’s ownership.
       i. Fair to Boswell who had no knowledge of jt. tenancy? Law favors protection of
            the joint tenant owner’s right to take in fee simple absolute free and clear
       ii. May make sense: hard to create jt. tenancies, should be hard to eliminate unless
            clear evidence of the intent to terminate the joint tenancy

C. Similarities between tenancies in common and joint tenancies
   1. Either JT or tenants in common can seek partition, judicial remedy of physical
      division of property, or if not feasible, forced sale and division of proceeds
   2. Both have right of possession and can possess w/o paying rent to other, except in
      cases of ouster; either can lease the entire property w/o the other’s consent

D. Tenants by the entireties: only available in some states and only as between spouses
   1. Requires 4 unities of joint tenants and can be dissolved only upon marriage
   2. Property can’t be partitioned except in divorce and in most states, individual interest
      of one spouse can’t be alienated w/o consent of the other spouse
   3. Many states read Married Women’s Property Act as abolishing tenancy in entirety
   4. Sawada v. Eno (Haw. 1977) [1.43 CB 659]: Husband and wife Endos owned property
      as tenants in the entirety. Endo caused car accident with Sawada. Before judgment is
      entered, Endo conveys property to sons. Sawada gets judgment and tries to execute
      against property on theory of fraudulent conveyance. Rule: No fraudulent
      conveyance b/c property owned as tenants in the entirety not subject to
      execution so no fraudulent intent w/r/t conveyance.
      i. Alternatives court could have adopted that other courts have
          a. Treat as fraudulent conveyance, reverse and allow to execute on husband’s
              share – but problematic b/c infringes on wife’s right to inherit it

                                                              Property Law – Outline       13
           b. Can’t partition b/c not permissible by TBTE, so can’t attach one or other
           c. Neither spouse can alienate their share for non-joint debts
           d. Either spouse can alienate, but subject to other spouses survivorship rights
       ii. Dissent: Either spouse’s creditors should be able to levy on spouse’s share –
           better thing to do is elevate wife to husband’s status prior to Married Women’s
           Property Act, rather than bringing the wife down

E. Marital property – what becomes property of the marital estate for division purposes
   1. O’Brien v. O’Brien (N.Y. 1985) [1.45 CB 671]: Husband goes back to school to get BS
      and MD. Wife gives up opportunities to follow husband and support him while he’s
      in school. Husband divorces two months after getting MD. Is the MD marital
      property for division purposes? Rule: NY treats this as property b/c it has value.
      Awards 1/2 valuation of what general surgeon (husband’s field) makes above
      what a white man with a college degree would make.
      i. Alternative would be to value this on a services rendered basis by the wife
      ii. Dissent: Valuation will force husband to work as surgeon, unfair to him
      iii. Alternative might be to make this fault-based system, but we’re uncomfortable in
           marriage situation saying one spouse is “bad” or at fault
      iv. Most courts say professional licenses not marital property [CB 678 n.1]
   2. Marital property exists differently in community and separate property states
   3. Separate property states: spouses own separately except to extent they choose to
      intermingle their property; equitable distribution occurs upon divorce; spouse can
      freely devise upon death (although limited by statutory forced share statutes)
   4. Community property states (9/50 states): only property acquired during marriage is
      community property (all other property before marriage and some during marriage
      remain separate property); some states give half to each upon divorce but most now
      go route of equitable distribution; spouse may only devise one-half of community
      property (deceased’s share) since other half vests in other spouse; creditors can reach
      separate property, and occasionally can reach community property
   5. In re Marriage of King (Mont. 1985) [1.46 CB 72]: Husband and wife w/2 kids
      separated in 1980 and dissolved in 1981. Court awards house to wife on basis of
      wife’s continuing support of children. Rule: Under Montana property settlement
      statute, TC can apportion property to promote best interests of children and to
      promote equitable apportionment.
      i. Forced sale of home as per husband would incur significant realty fees and uproot
           children from the familial home (psychological justification)
      ii. Significant that husband is professional gambler with unpredictable income from
           which to support children (distributional choice)
   6. Watts v. Watts (Wis. 1987) [1.47 CB 688]: Unmarried couple cohabited for twelve
      years, had 2 children, held themselves out to be married, and owned property. They
      separated. Woman was homemaker, while man provided financial support. Rule: In
      making distribution of property, court looks to doctrines in contracts, equity,
      and property to fashion a remedy.
      i. Formalist objection: these are incidents of marriage that should be available only
           to those that accept the burdens of marriage
      ii. Policy objection: don’t create forms approximating marriage b/c this will create
           disincentives to parties getting married – retort: marriage is re: love
      iii. Why court looks to contracts: settled expectations, social welfare, distributional
           and labor reasons for wanting to find a contract

                                                              Property Law – Outline         14
            iv. Why court gives equitable remedy: distributional and fairness concerns b/c the
                wife was the homemaker while the husband accrued many assets
         7. Over time, marriage tends to take on contractual characteristics such as premarital
            agreements re: property distribution at marital distribution, but courts are hesitant to
            go full speed ahead b/c of fear of meretricious nature of contracts
         8. Goodridge v. Dep’t of Public Health (Mass. 2003) [1.49 Supp.]: Court says reads its
            principles from Lawrence v. Texas, but no need to find affirmative duty for state to
            have to recognize marriage from constitutional prohibition on state right to criminal
            sodomy based on core of privacy rights

                         Alienable?                 Devisable?                Leaseable?            Mortgageable?
Tenants in               Y                          Y                         Y                     Y
common
JTWROS                   Y, but severs joint        N – survivorship          Y in Tehnet; N        Depends on
                         tenancy                                              in other juris.1      jurisdiction
TBTE                     N (except by               N – survivorship          N                     Maybe –
                         spouses jointly)                                                           jurisdictional

III. Leasehold interests

    A. Categories of tenancies
       1. Term of years: lasts for a specified period of time determined by parties; terminates
          automatically at lease end; landlord retains future interest of reversion; death of either
          party does not terminate the tenancy
       2. Periodic tenancy: renews automatically at specified period unless either party ends
          relationship; notice is required prior to termination of lease; death of either party does
          not end tenancy, but heirs of either may exercise right to terminate
       3. Tenancy at will: similar to periodic tenancy but can be ended w/o notice by either
          party (most states have eliminated this form of tenancy with notice requirements);
          death of either party typically terminates tenancy
       4. Tenancy at sufferance: tenancy created by tenant who wrongfully holds over after the
          termination of he lease (as distinguished from a trespasser); landlord who continues to
          accept rent checks may have agreed to a new tenancy based on check frequency
          i. Minority states: if lease was term of years, new term of years lease is created
          ii. Landlord can treat tenant as holdover and sue for possession

    B. Leasehold interests and lease commencement and termination
       1. Self-help eviction: most states deny landlords self-help and require landlords to evict
          through courts, though oftentimes summary process can be used which limits issues
          that can be brought in lawsuit and expedites the eviction process
       2. Vasquez v. Glassboro Service Ass’n (N.J. 1980) [1.49 CB 741]: Migrant farmworkers
          hired by ∆ association for labor services and resided on ∆’s property. After
          termination of employment, farmworkers were given summary hearing and then
          evicted from property. Rule: Farmworker does not qualify as tenant protected
          under state tenancy statutes. However, unequal bargaining power between
    1
       Four ways in which this can be treated: (1) lease severs the joint tenancy and creates a tenancy in common; (2)
lease does not sever the joint tenancy but ends on the death of the lessor co-tenant; (3) lease temporarily severs the
joint tenancy for the term of the lease; or (4) lease does not sever the joint tenancy but encumbers it after the lessor
co-tenant’s share.
                                                                                 Property Law – Outline              15
   parties is particular evident in case of migrant farmworker so that public policy
   requires reading an implied provision of reasonable time for workers to find
   alternative housing before eviction.
   i. NJ allows summary dispossession methods for leases, but no such provisions for
        farmworkers – court fashions appropriate remedy to give workers some protection
   ii. NJ law prohibits eviction of janitors/superintendents living on premises w/o
        judicial process, but court finds farmworkers don’t fit under this rubric
   iii. Court eliminates self-help process for farmworkers and gives them at least some
        rights under law – but summary dispossession probably sufficient
   iv. Can parties negotiate around this rule – depends on if waiveable default rule or if
        it’s a mandatory default rule – still fear of bargaining power, so probably avoid
        contracts to resolve this kind of situation
3. Landlord’s duty to mitigate damages
   i. Sommer v. Kridel (N.J. 1977) [1.51 CB 762]: ∆ entered into lease and paid security
        deposit and month’s rent, but never took occupancy b/c of changed
        circumstances. ∆ sought to terminate lease, but Π never responds. Π never re-
        leases for term of lease, even though third party inquired re: leasing. Rule: Court
        imposes implied duty to mitigate, especially where lessor turned away 3d
        party ready and willing to lease.
   ii. Traditional rule does not require landlord to mitigate lease damages, but many
        states have rejected this position and imposed duty to mitigate
   iii. Upon breach, landlord can accept termination and release lessee from lease
        obligations, or he can re-let on the tenant’s account (where tenant remains
        responsible for remainder of lease if landlord can’t re-let)
   iv. Duty to mitigate is not a duty per se, but rather an affirmative defense for lessee
   v. Mitigation may be efficient b/c encourages use of land; but may be inefficient b/c
        landlord has already paid transaction costs for locating this tenant
   vi. Acceleration clauses sometimes upheld, but sometimes rejected as penalties
4. Compulsory vs. non-compulsory terms in LL-T relationships
   i. Pro-compulsory terms: can deal with disparity in bargaining power, dignitary
        harms (don’t want ppl. to contract out of some things), externalities (3d party
        effects not incumbent on parties), failures in housing market
   ii. Anti-compulsory terms: rights based arg that owners can do what they want with
        their property, contractual autonomy of both parties, efficiency/distributional
        claim (compulsion to certain terms might harm ppl who we’re trying to help)
5. Tenant’s power to sublease and LL’s right in opposition
   i. Sublease vs. assignment: assignment conveys all of the assignor’s property
        interests to the assignee w/o reservation of rights in assignor; sublessee is liable
        only to the sublessor while sublessor is liable directly to the lessor (middle-man)
        a. Assignors/assignees are in privity of estate; sublease parties are in privity of K
        b. Even under sublease, LL can sue sublessee for possession (and lessee for rent)
   ii. Kendall v. Ernest Pestana, Inc. (Cal. 1985) [1.53 CB 785]: Lessee sought to assign
        his lease interest in commercial hangar to third party that had stronger financial
        status and agreed to be bound by lease. Sub-lessor refused assignment based on
        written consent provision. Rule: Case applies only to commercial leases. CA
        rule = leasehold interests should be freely alienable except as limited by
        contractual provisions. Landlords can withhold consent only if they have a
        commercially reasonable objection for withholding consent.


                                                            Property Law – Outline        16
            a. Many jurisdictions will enforce consent clauses as is, though tend is toward
                implying a commercial reasonableness standard to lease consent clauses
            b. Impetus for change in CA: presumption against unreasonable restraints on
                alienation and increased treatment of leases as contracts (idea that where party
                as discretionary power in K, duties of good faith and fair dealing)
            c. Under CA standard, can withhold consent based on lessee’s finances, suit-
                ability of premises for proposed use, legality of use, nature of occupancy
            d. LL can’t withhold in order to obtain higher rents b/c getting higher rents has
                nothing to do with promoting leasehold alienability (fears of coercion)
            e. Objections to this rule: LL contracted for this T; LL bargained for unrestricted
                right to object to sublease; allows T to profit by increase sub-lease rents
       iii. Slavin v. Rent Control Bd. of Brookline (Mass. 1990) [1.55 CB 792]: T sub-leased
            apartment to 3d party w/o consent of LL as per lease. LL sought to evict T based
            on non-compliance w/lease. Rule: Most states still enforce consent clauses in
            residential context (though changing in commercial); LL in residential
            retains contractual right to refuse consent arbitrarily.
            a. Residential leases different than commercial, esp. here, b/c no fear of LL
                withholding for financial gain (rent control juris.) and no need found in case
                law for alienability of residential property – but unclear whether the
                residential/commercial distinction does much work [1.55-56]
            b. Vast majority of states retain rule of absolute discretion in residential leases

C. Warranty of habitability and the covenant of quiet enjoyment (CQE)
   1. Covenant of quiet enjoyment: LL has duty to provide T with premises that are
      sufficient so as not to force the tenant out (i.e. no constructive eviction of T)
      i. Idea that ppl need certain elements to live and not be constructively evicted
      ii. Minjak Co. v. Randolph (N.Y. 1988) [1.56 CB 805]: T rented loft for use as music
           studio and home. LL did major construction, causing debris to enter loft and
           significantly impairing T’s use of the property. T stopped paying rent and LL
           sought to recover rent, which T defended against on grounds of constructive
           eviction. Rule: Actual abandonment of property not required in order to
           show partial constructive eviction, grounds for withholding rent.
           a. Traditional breach of CQE requires T to abandon premises b/c of breach, but
               now in case of constructive eviction, need not have actual abandonment
           b. Doctrine of partial constructive eviction requires T not to have to abandon
           c. Punitive damages available where LL’s act/inaction was intentional/malicious
      iii. Blackett v. Olanoff (Mass. 1976) [1.57 CB 808]: T argue constructive eviction b/c
           LL didn’t prevent other commercial T from operating nightclub w/crowds and
           noises until all hours and engaged in fighting. LL defends on grounds not
           responsible for actions of other Ts. Rule: While constructive eviction usually
           requires some intentional act of the LL, LL can constructively evict for
           consequences of things he did or failed to do. Disturbances to T were natural
           consequence of LL failing to enforce noise restrictions in leases with
           commercial tenants.
           a. Typical rule is that LL not responsible for one T’s annoyance of another –
               exception created here where LL knowingly permitted one to disturb other
           b. Most important element: LL could by lease quiet commercial T, but didn’t do
           c. Solution in residential context: eviction based on commercial T nuisance


                                                               Property Law – Outline        17
         2. Contracting around CQE – probably not b/c fear of distributional effects – ppl who
            will contract tend to be poorer and look for any way to cheapen rent
         3. Javins v. First Nat’l Realty Corp. (D.C. Cir. 1970) [1.58 CB 815]: LL seek payment of
            back rent on property in urban area. ∆ withheld rent based on numerous violations of
            local housing regulation. Rule: Lease in urban area contemplates habitable
            premises. Court will imply warranty of habitability into such leases based on
            enforceable provisions of local housing code.
            i. Traditional rule not require habitability b/c concern was more for the piece of land
                 (agrarian) rather than improvements to the land, but today, T tend to want a full
                 set of goods & services (electricity, heat, plumbing, etc.)
            ii. Many courts impose warranty of merchantability b/c buyers rely on sellers for
                 good products – same idea here – standard is housing code, which effectively
                 becomes another term in the lease
            iii. Why need change in old rule: (1) old rule based on idea that T fully capable of
                 making all repairs, while current T is not jack of all trades and has little incentive
                 to make repairs in short-term lease; (2) recognized broader protections for
                 consumers (esp. since we have this in new residential construction); (3) nature of
                 today’s urban housing market2
            iv. T duty to pay rent now conditioned upon LL provision of habitable premises
            v. Counter-argument: imposing warranty increases LL costs and some LL will exit
                 market thereby leaving tighter market and higher rents; alternative might be to
                 have greater governmental enforcement of housing code
            vi. Warranty of habitability marks movement of LL-T from property to K law
            vii. Warranty is generally non-disclaimable in almost all jurisdictions

IV. Affordable and fair housing

   A. Three fundamental problems of affordable and fair housing
      1. Housing production and the availability of housing
         i. If you think it’s supply side problem, could be solved by gov’t creating more
              housing or gov’t subsidizing new construction
         ii. If you think it’s demand side problem, create subsidies for people to enter market;
              however for most ppl, vouchers don’t got all the way to home ownership/rental
         iii. Historically tried all three approaches (gov’t building superblocks, providing
              subsidized Section 8 housing, or providing vouchers) but generally all have failed
              a. “Superblocks” of 1960s failed b/c housing could really only be built in
                  segregated way so most housing built in poor neighborhoods w/minorities
              b. Vouchers tend to increase overall cost of housing market b/c prices go upward
                  as demand for housing services increases
      2. Homelessness as a social ill
         i. Pottinger v. City of Miami [1.62 CB 192]: Rule: Gov’t has to provide space for
              the homeless to perform necessary functions. Miami law forbidding
              homeless from certain public areas denies the homeless a place to perform
              acts necessary to living (sleeping, urinating, etc.).
         ii. One solution: give homeless fundamental right to housing enforceable against the
              government and so can treat them as “productive members of society”
         iii. Another: change property rights to give homeless rights in public property

   2
       Idea that housing demand > housing supply, so we’ll have race to bottom by LL w/o warranty of habitability.
                                                                               Property Law – Outline           18
   3. Economic discrimination in housing
      i. Rent control is one way to make housing affordable
          a. Arguments against rent control: increases demand and encourages over-
             consumption of housing (own house vs. roommates); decreases supply b/c
             landlords have less incentive to provide housing; rent control tends to benefit
             those that need it least; opens way for black market
          b. Arguments for rent control: housing market is already heavily influenced by
             taxes and zoning so comparison to unregulated market is unfair; would
             promote new construction b/c new is exempt from rent control and could get
             above-market rents; rent control provides reasonable return on investment;
             though it may lead to decrease in housing, it makes housing accessible to
             those that have no housing options in an unregulated market
      ii. Need particular data re: housing market to empirically test these claims

B. Fair housing and race
   1. Tend to overlap b/c oftentimes race is a proxy for economic status
   2. Fair Housing Act prohibits discrimination in sale or rental of housing based on race,
      color, religion, sex, familial status, or national origin [CB 939], designed to provide
      housing opportunities to minorities
      i. Works in conjunction with CRA of 1866 (esp 42 USC 1982)
      ii. Main provision is § 3604 that prohibits discrimination housing sales/rentals
      iii. FHA may have opened up some access to blacks via elimination of most blatant
           facial discrimination, but RE agents still tend to steer by racial groups
   3. Asbury v. Brougham (10th Cir. 1989) [1.63 CB 945]: Black woman told no housing
      opportunities and that there were non-waivable rules re: children. White tester sent in
      and given opposite information. Suit under FHA and § 1982. Rule: Π must make
      prima facie case of discrimination. ∆ then has opportunity to argue why its
      actions in refusing to rent or negotiate were based on non-race considerations.
      Burden then shifts to Π to show pretextual nature of ∆’s assertions.
      i. Punitive awards may be granted on theories of agency and ratification
      ii. FHA tends to be underenforced b/c most people refused housing need housing
           immediately rather than pursuing judicial remedies
   4. United States v. Starrett City Assocs. (2d Cir. 1988) [1.64 CB 950]: ∆ maintained strict
      racial balancing in its housing complex so as to avoid white flight. US claimed this
      violated FHA b/c it has a disproportionate effect on minorities. Rule: FHA applies
      not only to discriminatory intent actions, but actions that have disparate impact
      on minorities. While strict quotas enforce FHA’s integration standard, it
      violates FHA’s anti-discrimination standard.
      i. Like public schooling arena, some remedies might be available if there’s past
           history of discrimination and the remedy is limited in time or scope – Starrett
           City’s is neither remedial nor limited in time/scope
      ii. White flight justification – white flight occurs b/c of racism/irrationality or
           sometimes rational b/c decline in property value/services caused by others flight
      iii. Dissent: FHA meant to bar perpetuation of segregation, ∆’s conduct here is to
           maintain integration and promote fair housing (not segregated housing)
      iv. Majority: FHA is meant to be anti-discriminatory – effect of intermediate actors
           that would change that are not relevant to this analysis – this program hurts the
           very minorities it was designed to help


                                                              Property Law – Outline       19
      5. City of Memphis v. Green (U.S. 1981) [1.66 CB 960]: City closed streets to prevent
         access from black neighborhood through white neighborhood. Rule: No § 1982
         violation b/c streets are closed to both blacks and whites (no special benefits for
         whites) and no depreciation in black property values or restricted access to black
         homes.
         i. Majority: inconvenience is not the basis for a § 1982 claim.
         ii. Dissent: Majority ignores plain and powerful symbolic message of inconvenience
              in this case – tells blacks that they must take detour around white neighborhood;
              need to consider more than just effects on property values.
         iii. How would you make a FHA claim? Probably focus on access to neighborhood
      6. Attorney General v. Brown (Mass. 1987) [1.67 CB 993]: Brown refused to rent to
         Section 8 certificate holders even though his housing was in their allowable price
         range. Rule: TC erred in dismissing Brown’s defenses based on negative effects
         of having to take on Section 8 housing and his legitimate business reasons for not
         doing so.
         i. Implication: legitimate business reasons may justify denial of rent to Section 8 ppl
         ii. Brown’s asserted reasons: administratively expensive, he insisted on first month
              and last month’s rent, Section 8 leases materially disadvantageous to him


PRIVATE REGULATION OF LAND USE
I. Nuisance: substantial and unreasonable interference with use and enjoyment of land

   A. Contours of the doctrine
      1. Page County Appliance Center, Inc. v. Honeywell, Inc. (Iowa 1984) [2.1 CB 308]: ∆’s
         travel agency computers caused interference with Π’s television sets in his retail
         store. Π sued for nuisance. Rule: Fair test of whether the operation of a business is a
         nuisance is to consider its reasonableness given the manner, circumstances, and place
         of its operation and taking into account priority of occupation and location.
         i. Honeywell is responsible as material participation in causing nuisance b/c it
              created the computers that emitted this radiation
         ii. Favoring Π: interference b/c TV screens don’t function any more; Π was first in
              time; computer could be fixed so not to leak radiation (unreasonable not to fix it)
         iii. Favoring ∆: normal use in this case (computers) and Π is hypersensitive in its use
         iv. Leads back to intuition: should computers reasonably leak radiation? Which
              party is the active use? Cost-benefit analysis.
      2. Fountainebleau Hotel Corp. v. Forty-Five Twenty-Five, Inc. (Fla. 1959) [2.2 CB 319]:
         ∆ sought to build upper levels to hotel that would throw shadow on Π’s hotel and
         beach. Claim based on interference with Π’s entitlement to light across ∆’s property.
         Rule: No nuisance b/c Π has no property interest in access to light coming from
         adjoining property.
         i. Court rejects English doctrine of ancient lights
         ii. Π’s most compelling argument: it will be put out of business if ∆’s use is not
              enjoined – interference does not get more substantial than this
         iii. Depending on how property rights assigned, there are costs on both parties (i.e. if
              there’s a nuisance, ∆ will have to pay, vice-versa in other hypothetical)
         iv. Do cost-benefit analysis to see costs each party would bear under each scenario

                                                                  Property Law – Outline       20
   3. Boomer v. Atlantic Cement Co. (N.Y. 1970) [2.3 CB 315 n.5]: Rule: Cement factory
      spewing particulate matter is a nuisance, but not enjoined b/c of the employment
      it brings to area. Court provides a damages rule instead.
   4. Prah v. Maretti (Wis. 1982) [2.3 CB 341]: Prah builds house with solar panels. Maretti
      moves in and builds house that blocks Prah’s access to sun. Rule: Rejects
      traditional rule of no right of access to sunlight based on changed situations and
      recognition of collecting sunlight in solar panels as a valuable interest.
      i. Reasons for old rule that are rejected: old rule used to be freedom to do whatever
           as long as no physical damage to neighboring property; no need for sunlight b/c of
           artificial lighting; society interest in promoting growth.
      ii. Case rejects Fountainebleau’s central holding of no property interest in sunlight,
           but that case can be defended on two grounds: if we don’t like the right, we can
           always create a statutory right to light and a per se property rule lowers litigation
           costs (and parties can more easily negotiate around a clear rule)
      iii. Dissent: this is something for the legislature to consider, a policy judgment

B. The Coase theorem and economic analysis of law [CB 321]
   1. Legal realists argue maxims like nuisance don’t get us anywhere, need tools to help
      focus on issues: social welfare analysis of law and economics movement
   2. Goal is to promote efficiency: increasing social utility or promoting the greatest
      amount of general welfare at the lowest possible cost
   3. Problem in nuisance is externality: parties that benefit from causing nuisance do not
      bear the full costs of the nuisance so they tend to overconsume a good that is cheaper
      than expected to be (i.e. the right to pollute)
      i. If factory can pay homeowners and still operate profitably, then it is overall an
           efficient operation b/c it internalizes all costs of its operations
      ii. General idea is to get parties to properly price their consumption by forcing them
           to internalize all costs associated with that consumption
   4. Coase Theorem: Criticizes idea that parties should internalize their external costs –
      the pollution harms homeowners, but likewise, homeowners demand to stop the
      pollution harms the factory. Granting a property right in either direction will impose
      costs on one party or the other.
      i. Part I: regardless of how the property rule is allocated, in the absence of
           transaction costs, any legal rule will be efficient b/c parties will be able to bargain
           around it if necessary
      ii. Part II: with transaction costs, legal rules creating entitlements can have an effect
           on efficiency. Courts can maximize efficiency by granting the entitlement to the
           party that would have purchased it in the absence of transaction costs.
      iii. Though no effects on efficiency in absence of transaction costs, can have huge
           distributional effects depending on how the entitlements allocate resources
      iv. Transaction costs include the costs of bargaining, of acquiring information, of
           engaging professionals, cost of litigation. Bargaining costs become even greater
           as more and more parties are added to the picture.
   5. Critique of law & econ: need some moral theory to justify why wealth maximization
      is the highest value.
      i. The leading theoretical opponent to utilitarianism is “rights” theory. “Rights”
           says that increasing overall social wealth isn’t the only goal. There are natural
           rights, inalienable rights, etc.
      ii. Critiques of the efficiency analysis:

                                                                 Property Law – Outline         21
             a. Wealthy have greater power because efficiency is defined by willingness and
                 ability to pay, so efficiency “has limitations as an ethical criterion of social
                 decisionmaking” as constrained by existing distribution of wealth
             b. Offer/asking problem – people value things differently depending on whether
                 they already own it or if they would have to buy it. Efficient result depends
                 on initial distribution of wealth
             c. Externalities complicate the offer/asking problem.
             d. Difficulty of identifying transaction costs
             e. Commodification – certain things, like maybe workplace safety or adoption,
                 should never be on the market but should rather be treated as rights that are
                 inalienable. Also can’t commodify justice or fairness concerns
             f. Law shapes preferences (feedback effects): legal rules shape what we value
                 and may also express values that we hold dear (Bill of Rights)
      6. Descriptive law & econ tries to explain why common law’s development is/isn’t
         efficient; normative approach tries to formulate particular rules based on social
         welfare analysis

   C. Forms of remedies available in nuisance cases and generally
      1. Calabresi and Melamad: you can grant various types of remedies – property rules;
         liability rules; inalienability rules
      2. Injunction for Π (Fountainebleau can build): Π can choose whether or not to bargain
         away this right.
      3. Injunction for ∆ (Fountainebleau can’t build): ∆ can choose whether or not to bargain
         away this right.
      4. Liability rule for Π (purchased injunction): ∆ can pay a price set by the court at which
         Π must sell its right to build. If ∆ pays, Π must sell stop.
      5. Liability rule for ∆: Π can build, but if Π constructs, Π must pay to ∆
      6. Inalienability rule for Π – Π can build, but it can’t bargain it away. Why would we
         want an inalienability rule? B/c although a deal might be made, the deal continues to
         impose negative externalities on other third parties (wider externalities).
      7. Property rules (injunctions) are good where transaction costs are low so that parties
         can bargain around them. Liability rules are better where transaction costs high b/c a
         third party will already have priced it out. Inalienability rule is situation where we
         don’t want parties to be able to get around court-order.
      8. Remedies might be structured to favor the low cost avoider – i.e. in Prah, allow solar
         panel guy to prevent building before neighbor starts building, but after neighbor has
         built, force solar panel guy to reform his solar panel kit (cheaper than making
         neighbor move his house)

II. Easements

   A. Classifications and terminology of easements
      1. License: temporary invitation to come onto one’s property to do something, generally
         revocable at will, can be expressed or implied, no property interest conferred
      2. Easement: Permanent, irrevocable rights to non-owners to use property in certain way
         i. Affirmative easements: grantee can to enter land and use it (usually right of way)
         ii. Negative easements: agreement not to do something on one’s own land (now
             typically thought of as restrictive covenants) – new ones include conservation
             easements, preservation easements, historic easements

                                                                  Property Law – Outline       22
           a. Generally disfavored b/c buyers typically not on any kind of notice of
               negative easements when they purchase property
      iii. Easements are a form of property rights
   3. Running with the land: easement that runs with the land is attached to the parcel so
      that any future owner is both burdened and benefited by the easement
      i. Easements by necessity, implication, and estoppel generally run w/the land only if
           they were intended to do so and are reasonably necessary for enjoyment of the
           dominant estate
      ii. Burdens of easements run with the land if they are (1) in writing; (2) original
           grantor intended to run w/land; and (3) subsequent purchaser have notice at time
           of purchase
           a. Notice may be by way of actual notice, inquiry notice (some physical
               inspection should have indicated signs of easement), or constructive notice
               (through the chain of title)
      iii. Benefits of easements run w/the land if they are attached to the particular parcel
           (appurtenant easement), but if they aren’t attached to a particular parcel and there
           is no dominant estate then we have an easement in gross – distinction depends on
           the intent of the original grantor
           a. Easements in gross can be enforced by their beneficiary (think utility lines)
           b. Green v. Lupo (Wash. 1982) [2.9 CB 396]: Greens get 30-foot easement at
               north of property in exchange for release of part of property to Lupo. Green
               want to use the easement for road to new trailer park and for motorcycle
               runway. Lupos argue easement is in gross and personal to the Greens. Rule:
               Presumption against personal easements and in favor of appurtenant
               easements. Reasonable that easement would be for future rights of way.
               · In gross easement benefits only the Greens and does not run with the land to
                    the subsequent purchaser of the trailer home park
               · Presumption in favor of appurtenant easement helps w/notice b/c when
                    buyers investigate property, they’ll now of existence of easement; also
                    limits number of persons w/easements to those w/surrounding land
               · Classic nuisance analysis re: whether motorcycles can be used on land –
                    easement can be limited only by reasonable restrictions not absolute ban
           c. Appurtenant easements not severable from land – seller of property
               w/easement can’t sell property and retain easement in gross for himself
           d. Courts may hold in gross easements not transferable if the grantor did not
               intend for them to be transferable to other parties
   4. Dominant vs. servient estate: dominant estate is the one benefited by the easement,
      servient estate is the one burdened by the servitude

B. Forms of easements and how they are created
   1. Express easements in writing
      i. All express easements must be in writing in order to be enforced by SoF
      ii. Buyers are generally put on inquiry notice of express easements b/c they should
          be revealed by investigation of the chain of title
   2. Easements by estoppel (a/k/a irrevocable licenses)
      i. Holbrook v. Taylor (Ky. 1976) [2.8 CB 363]: Π seeks to get access via road over
          woodlands owned by ∆. ∆ had previously permitted Π to use road for access
          purposes, important after Π built house with road access. ∆ now blocks usage of


                                                               Property Law – Outline       23
           that road. Rule: A license to use property becomes an easement by estoppel
           because of investment or reliance interest by the grantee of the license.
           a. Efficiency argument: Π needs some way to get to his house and creates
               incentives for development of land if grantee knows he’ll be able to get to it
           b. Counterargument: ∆ offered to sell right to use land to Π prior to home
               construction, but Π declined – why not force Π to buy it – ∆ may previously
               have given permission to use land or fear that ∆ blackmailing once Π starts
               buiding
      ii. Central idea is that no party would invest in property construction relying on
           existence of right of ingress/egress over a neighbor’s property if they thought the
           neighbor could simply dispossess them of these rights of entry and exit
   3. Easements by prescription
   4. Easements (implied) by necessity
      i. Finn v. Williams (Ill. 1941) [2.9 CB 384]: Π conveys property to ∆, leaving Π no
           outlet of ingress and egress except over ∆’s property (one piece of property
           surrounds the other). Rule: Where owner conveys land leaving him w/no outlet
           except over conveyed land, easement by necessity exists over the conveyed
           land. This implied right runs with the land and may lay dormant before
           being exercised in the future.
      ii. Elements of an easement implied by necessity: (1) unity of title; and (2) absolute
           necessity in sense that grantor can ingress/egress from his property only over the
           land of the grantee
      iii. We grant easement by necessity on idea that nobody would sell landlocked
           property unless he had some way of access to/from the property
   5 Easements implied by prior use
      i. Granite Properties L.P. v. Manns (Ill. 1987) [2.8 CB 377]: Π owned whole plot of
           property. Sold some of it to ∆. Π continued to use driveways over ∆’s properties
           in order to provide rear access to Π’s shopping center and for access to Π’s
           apartment complex. ∆ seeks to stop this access. Rule: Π must prove necessity
           as an element of an easement implied by prior use, but Π need only prove
           reasonable necessity in order to acquire easement implied by prior use.
      ii. Elements of easement implied by prior use: (1) prior unitary owner; (2) notice
           requirement that purchaser bought servient estate subject to easement; and (3) use
           is necessary and beneficial to enjoyment of the parcel retained by the grantor
      iii. Most courts hold that absolute necessity is not required
      iv. Argument for ∆: Granite could and should have expressly reserved an easement
           when it conveyed the property to ∆
      v. Argument for Π: ∆ could have performed title search and surveyed property prior
           to purchase in order to determine any possible encumbrances on the property

C. Interpreting the scope and extent of ambiguous easements
   1. Cox v. Glenbrook Co. (Nev. 1962) [2.10 CB 400]: Glenbrook grants Cox easement
      over one lane dirt road. Cox wants to expand dirt road for access to new housing
      development he’s creating. Rule: Easement is appurtenant rather than limited to
      access to single family home as asserted by Glenbrook. In gross easement would
      prohibit Cox development b/c those buyers couldn’t use that easement.
      However, intent of grantor was for easement to be used only as one lane road.
      i. Preference for appurtenant easement is b/c we prefer development and also easier
          to price appurtenant easement into land (as opposed to pricing in gross easement)

                                                              Property Law – Outline       24
          ii. Court’s test for what easement owner can do with land: imposes test of
               reasonableness and undue burden, but ultimately returns to intent of the grantor
          iii. Court gives w/one hand and takes away w/other – could be vindicating intent of
               the grantor or could be forcing parties to engage in bargaining or vindicating
               settled expectations of both parties to more limited extent
       2. Henley v. Continental Cablevision of St. Louis County, Inc. (Mo. 1985) [2.11 CB 406]:
          Π’s predecessors had rights to install electric and phone lines on ∆’s property. Π now
          seeks to install cable lines on ∆’s property. Rule: The easement was exclusive to the
          original grantee (and not shared jointly with the servient estate) so that it is
          transferable to a new party. Easements extend to cable use b/c that’s within
          scope of original easement grant for telecommunications purposes.
          i. Utility easements can be construed to evolve to encompass new communications
          ii. Most courts will agree with Henley and interpret easements broadly
       3. Determination of whether use is within scope of easement turns on three part test:
          i. Whether use is of kind contemplated by grantor;
          ii. Whether use is so heavy as to constitute an unreasonable burden on servient estate
               not contemplated by grantor
          iii. Whether easement can be subdivided
               a. Most courts agree w/Cox that appurtenant easement benefits entire dominant
                   estate and is apportionable among all future purchasers if dominant estate is
                   divided – that this is not by itself an unreasonable burden on the servient
                   estate to have more owners of the easement than in the original grant
               b. Most in gross estates are also apportionable unless contrary to intent of the
                   grantor or it would place an undue burden on the servient estate

III. Real covenants

   A. Evolution of covenants
      1. Courts limited number of negative easements that were available, so parties turn to
         contract for alternatives. However, contractual rights at that point were not
         assignable; except was if the contract rights were somehow attached to interest in
         land of two parties that simultaneously had rights in same land – privity of estate.
      2. English courts not acknowledge instantaneous privity arising from transfer of
         property, so many had to turn to equity – creation of equitable servitudes.
      3. American courts recognize both covenants and equitable servitudes and will treat
         instantaneous privity as privity of estate for covenant purposes.
      4. Restatement (3d) merges covenants and equitable servitudes and provides remedies
         both at law and in equity so long as they are in writing, intended to run w/the land,
         owner of the burdened estate was on notice of the restriction, and the covenant is one
         that is appropriate to impose on subsequent possessors of the servient estate for
         benefit of future owners of the dominant estate (“touch and concern”).

   B. Creation of covenants
      1. Elements of real covenants
         i. Covenant is in writing – usually in deeds or developers will file declaration
         ii. Owner of burdened land had notice of restriction at time of purchase – notice can
              be actual, notice (only affirmative easements), or constructive
         iii. Grantor intended restriction to run with land on both sides (servient & dominant):
              usually through language such as to the grantor/grantee’s “heirs and assigns” or if

                                                                  Property Law – Outline       25
        it states “intended to run w/the land”; if ambiguous courts tend to hold that runs
        w/land if the covenant touches and concerns the land
   iv. Restriction touches and concerns both the dominant and servient estates – this is
        the only substantive requirement, all others are procedural
        a. Idea is to identify kinds of obligations that should run with servient estate b/c
             they are intended to and will legitimately benefit current and future owners of
             dominant estates
        b. Burden side: obligation touches and concerns burdened estate if it relates to
             use of the land and obligation is intended to benefit current and future owners
             of the dominant estates
        c. Benefit side: Obligations touches and concerns if it improves enjoyment of the
             dominant estate or increase its market value
        d. Courts traditionally refuse to enforce in gross covenants b/c of lack of touch &
             concern – burden to servient estate not offset by benefit to dominant estate\
        e. Sometimes use this element as guise for public policy reasons not to enforce
        f. R(3d) eliminates this element and says covenants will run w/land if they’re
             not unconscionable, w/o rational justification, or otherwise violate PP
        g. Affirmative covenants under R(3d): usually enforceable if they end after a
             reasonable time and if they can be modified when conditions change
   v. Privity of estate exists between original covenanting parties (horizontal privity)
        and between parties succeeding the original parties (vertical privity)
        a. Mutual horizontal privity: when two parties have simultaneous interest in land
             such as the LL-T relationship
        b. Instantaneous horizontal privity: privity attaches at moment of property Xfer
        c. Horizontal privity excludes agreements between neighbors not part of a
             conveyance of another property right or when agreement not made as part of
             conveyance of property interest burdened or benefited by the covenant
        d. Relaxed vertical privity: position in equitable servitudes and R(3d) – burden
             and benefits fall on any future possessor of the burdened/benefited land
        e. Strict vertical privity: required by real covenants – grantor can’t retain any
             future interests in the land (so LL-T relationships are excluded)
2. Whittinsville Plaza v. Kotseas (Mass. 1979) [2.12 CB 416]: ∆ conveyed property to
   Trust w/restrictions on adjacent property retained by ∆, including promise not to use
   retained land in competition with discount store envisioned by Trust. Trust conveyed
   land to Π. ∆ leases his land to CVS for use as discount dep’t store. Rule: In contrast
   to earlier cases, reasonable covenants not to compete run with the land when
   they are consistent with orderly and harmonious development for commercial
   use.
   i. TC dismissed on failure to state claim on basis Π lacked standing to sue ∆
   ii. Old rule: covenants not to compete not touch & concern b/c did not confer direct
        physical benefit to dominant estate and market value increase not sufficient for
        touch and concern to the dominant estate
   iii. Trust can clearly sue ∆ b/c there’s privity of contract between them and courts
        don’t want dead hand to interfere with current owner’s control of property
   iv. Trust conveys to Π; ∆ breaches; Trust can’t sue ∆ b/c he’s conveyed his entire
        interest in the property; Π can sue ∆ if benefit granted to the Trust runs to Π
   v. Slightly more complicated b/c ∆ leases to CVS – who can be sued ∆ or CVS?
        a. If ∆ incorporated covenant in lease, ∆ can evict CVS for breach of covenant


                                                            Property Law – Outline       26
              b. ∆ remains ultimately responsible b/c failure to include covenant or failure to
                  exercise such covenant is an independent breach of the convenant
          vi. In traditional real covenants, Plaza can’t enforce real covenant against CVS b/c of
              lack of strict vertical privity, but can enforce equitable servitude (injunctive relief)
              against CVS [modern law would make both remedies available to Plaza on basis
              of relaxed vertical privity]

   C. Equitable servitudes
      1. Same requirements as real covenants except no need for privity
      2. Remedy available is injunctive relief at the discretion of the court

   D. Posner on injunctions versus damages for breach of anticompetitive covenants
      1. Benefits of injunctions: parties can bargain around them and are better able to price
         them than can courts through damages
      2. Costs of injunction: require continuing court supervision, may be negative
         externalities, limitations in bargaining due to bilateral monopoly problem
         (negotiations break down b/c parties know must deal w/one another)
      3. Damages: may be efficient outcome if court can figure out the appropriate amount of
         damages, but damages may often be inadequate
      4. But empirical evidence shows most parties unwilling to negotiate around injunctions
         b/c winners think they deserve to win and hard feelings = higher transaction costs

   E. Racially motivated restrictive covenants
      1. Shelley v. Kraemer (U.S. 1948) [2.21 CB 493]: 30/39 property owners held deeds
         restricting conveyance to white owners. Non-restricted owner sold property to black
         family. State supreme court enforced restriction. Rule: Fourteenth Amendment
         stops states from interfering with civil right to own, acquire, enjoy, and dispose
         of property. There was state action triggering 14th Amend. here when state
         court enforced the racially restrictive covenant. State court enforcement of these
         provisions is what makes them continue to be enforceable.
         i. State action doctrine is rule of The Civil Rights Cases
         ii. Restrictive covenants themselves are not unconstitutional, but state intervention in
              enforcement makes them unconstitutional: but-for court’s intervention, the
              covenant could not be enforced
         iii. Counter-argument to claim of state action: (a) this isn’t state action b/c otherwise
              state action will be everywhere b/c regulation is so pervasive; (b) positivism tells
              us that property is only that which state enforces so that state is everywhere so
              that to enforce any of your rights is state action
         iv. If white person refused to sell to Shelley – probably no state action/14th Amend.
              claim, but may have statutory claim under 14th Amend.
      2. Spectrum of state action: No state action unless positive law  passive enforcement
         (covenant itself not illegal but state not step in to regulate)  declaratory judgment
          active participant (enforcement of covenant)  pervasive state action everywhere
      3. We see many fewer constitutional cases like this b/c heavily regulated by statute

IV. Implied restrictive negative servitudes – subdivisions

   A. Purpose


                                                                    Property Law – Outline         27
   1. Help to encourage suburban development b/c was means of enforcing common plan
      or scheme (usually through a declaration, notice to purchaser, and some fairness
      considerations as to who are the intended beneficiaries)
   2. Doctrine permits neighbors to enforce covenants against parties with home they have
      no legal relations

B. Cases and examples of implied restrictive negative servitudes
   1. General idea is that developer sells to first party w/restrictions. The intended
      beneficiaries of these restrictions are all the future parties – next buyer can enforce
      these restrictions against first party and vice-versa. Effect is that all in community
      have standing to sue against anybody else.
      i. Subsequent purchasers get benefit b/c it flowed w/developer’s sale of property
      ii. What if some deeds have them and some don’t or problems in recording deed –
          some would be able to build in contravention of general plan – prevent his by
          implied reciprocal negative servitudes
   2. Evans v. Pollock (Tex. 1990) [2.17 CB 443]: Land in community was parceled out by
      original owners w/restrictions permitting only residential use of land. Original
      owners’ parcels (on the “hilltop” area of development) did not have such restrictions,
      and their devisees sold land to third party seeking to build marina. Rule: General
      scheme or plan may be restricted to only certain well-defined similarly situated
      lots in a development for doctrine of implied restrictive negative easements to
      apply. Deed restrictions will not be implied to hilltop parcel.
      i. Covenants can also be procedural – one here also required 3/4 votes of lakefront
          owners to change the residential restriction
      ii. Might want to reject this court’s rule of applying doctrine only to certain sub-sets
          of division b/c might want to put prospective buyer on inquiry notice of whether
          there is an implied restrictive negative servitude via fully uniform neighborhood
   3. Sanborn v. McLean (Mich. 1925) [2.18 CB 447]: 53 of 91 lots in neighborhood contain
      residential restrictions. McLean starts to erect a gas station at the rear of her property.
      Property had no deed restriction, but some deeds at time of original conveyance had
      such restrictions. Rule: Implied negative easement had attached to McLean’s land
      at the time of other land sales. McLean was on inquiry notice due to uniform
      use of parcels neighborhood for residential purposes.
      i. Significant: McLean is the first party to depart from restrictions in 30 years
      ii. Strength of inquiry notice argument unclear – but moral claim is easy b/c
          probably clear this is residential neighborhood not for gas stations
   4. Riley v. Bear Creek Planning Comm. (Cal. 1976) [2.20 CB 450]: Π bought property in
      subdivision with no restrictions and no recorded declaration. Nine months later,
      developer files declarations requiring Committee approval before building. Π seeks
      to build snow tunnel, but Committee denies. Rule: Party is bound by restrictions
      only if both the grantor and the grantee intended it to be binding. Π is not
      bound b/c he was on no notice of the declaration and not intend to be bound
      thereby.
      i. Dissent: buyer purchasing with actual knowledge of general plan of mutual
          restrictions may not in future seek to be absolved by restrictions of general plan –
          we’re giving the buyer something for nothing b/c he knew of the restrictions
      ii. Why majority ignores actual notice: wants bright-line rule that if we have
          recording system, we’re going to bind parties to it – makes it less expensive to
          make factual determination of notice during litigation

                                                                Property Law – Outline        28
          iii. If no restrictions now, it will never burden this buyer’s successor and Riley can’t
               put it into a conveyance deed b/c it’d be an in gross servitude and can’t get
               implied restrictive negative servitude on successor b/c no longer have common
               owner

V. Common interest communities

   A. Types of common interest communities
      1. Homeowner’s and condominium owners’ associations – set up by developer and
         empowered to enforce restrictions and covenants, usually by brinigng lawsuits
         i. Set up in declaration creating subdivision, homeowners have voting rights
         ii. May collect dues to maintain common areas such as roads, hallways, etc.
         iii. Each condominium owner owns his own unit and all owners own the common
              areas as tenants in common
      2. Cooperatives – Entire building owned by a single nonprofit coop corporation,
         individual owners buy shares in the corporation, other owners are responsible for a
         delinquent owner’s failure to pay rent b/c corporation is the mortgagee on the entire
         proprety; b/c of owners’ financial interdependence, usually have veto power re: who
         can live in the cooperative building

   B. Critiques of these organizational forms
      1. Distributional fears that people w/money will be attracted to these quasi-
         governmental entities leaving poorer people w/worse municipal services
      2. Fear of producing socioeconomic and racial discrimination b/c these organizations
         undermine democracy and civic engagement

   C. Evaluating the decisions of common interest communities
      1. O’Buck v. Cottonwood Village Condominium Ass’n (Alaska 1988) [2.24 CB 546]:
         Cottonwood took down and prohibited use of antennae on building rooftop by rule of
         the Board of Directors. O’Buck complained that they would now have to use cable
         system that would cost them more b/c they had multiple TVs. Rule: Reasonableness
         test – Legitimate considerations underlie the antennae ban such as roof repair,
         aesthetic value to the community from uniform buildings. Condo owners
         sacrifice some freedom of choice to live in this kind of unit.
         i. Condo owners don’t rely on courts in these situations, but rather on internal
             political processes within the condominium association
         ii. Court imposes reasonableness test and determined that safety and aesthetic
             concerns were sufficiently reasonable to ban use of the antennae – the association
             need not list all of its restrictive uses, but can enforce unlisted ones so long as
             they are reasonable and some other ground for connecting the use
      2. Court could have adopted unconscionability test – only overrule Board decision if it’s
         unconscionable
      3. Many states adopt business judgment rule (standard applied to board of directors of
         corporations) – if you’re doing you’re job and doing it for good of community, court
         will defer and will not assess your choices
      4. The more governmental the function the association is asserting, the more likely the
         court will intervene to review the action of the association



                                                                   Property Law – Outline        29
PUBLIC REGULATION OF LAND USE
I. Zoning

  A. Biggest regulatory scheme in world b/c all land in country is regulated by zoning
     1. Prior to zoning, nuisance was only substantive restriction on how you could use land
     2. Zoning arose in tandem w/suburban subdivisions – several ideas underlying it include
        pastoralism (escape of the city), race (white flight), and ethnicity
     3. Zoning enabling acts – states delegate their “police power” to municipalities to
        regulate land use. The acts usually require the municipal government to establish a
        comprehensive plan for land use throughout the municipality.
        i. Use zoning – accomplished by dividing the municipality into districts and
            regulating the kinds of uses allowed within each district, like commercial uses in
            one district and industrial uses in another.
        ii. Area zoning – regulates uses within a district, like establishing rules for the size
            of lots within a district, the height of buildings, the requirements to set back
            structures a certain distance from the property borders, etc.
     4. Legal backdrop:
        i. Police power –state power to protect the safety, welfare, health, and morals
        ii. Takings (Amend. V) – a property cannot be taken with just compensation – but
            Mugler v. Kansas [CB 1048] says zoning in good faith and to protect public from
            harm of any kind is not a taking
     5. Average reciprocity of advantage – the idea that we don’t worry about distributional
        problems if a set of zoning decisions has a predominantly average affect on most
        property owners and doesn’t create windfalls for any one group.
     6. There are also special exceptions and spot zoning

  B. Conceptual elements of zoning
     1. Debate between Holmes and Brandeis in Pa. Coal Co. v. Mahon (U.S. 1922) [2.25 CB
        1049], where Court strikes down land use regulation as a taking for first time
        i. Holmes: Regulation goes too far b/c it prohibits mining of coal under streets, a
            vital component of property rights that makes the regulation = taking; property
            can be regulated, but if regulation goes too far, it will be understood as a taking
        ii. Brandeis: Regulation not go too far b/c co. still owns the coal (no divestiture), rule
            is just that it can’t be removed until can be done safely, not takings b/c they are
            intended to benefit general welfare; this alleged taking impinges on only fraction
            of entire property; don’t have to worry about “average reciprocity of advantage”
            (what owner gets in return) when state is exercising its police power for general
            welfare and what owner gets in return is to live in a civilized society

  C. Developments in the doctrine of zoning
     1. Village of Euclid v. Ambler Realty Co. (U.S. 1926) [2.26 CB 1051]: Developer
        purchased tract of land for industrial purposes. Subsequent zoning prohibited
        industrial uses and reduced value by 75%. Rule: Zoning ordinance serves a
        legitimate public interest and does not unconstitutionally deprive Π of property
        rights under Amend. XIV notwithstanding substantial decrease in market value.
        i. If validity of legislative judgment is debatable, legislative judgment must stand



                                                                 Property Law – Outline        30
      ii. Zoning by districts is upheld w/such benefits: making areas more fire safe,
           increase safety and security of home life, prevent accidents and traffic, decrease
           noise, create a better environment in which to raise children
      iii. Adopts Brandeis’ conception of average reciprocity of advantage
   2. Prior nonconforming uses – uses of land that are nonconforming now but were
      conforming to prior zoning laws before the zoning laws were changed
      i. Grandfathering is not constitutionally required
      ii. Town of Belleville v. Parillo’s, Inc. (N.J. 180) [2.26 CB 1055]: District with
           restaurant was re-zoned for residential use where restaurant not permitted.
           Restaurant grandfathered in via prior nonconforming use. Restaurant changes
           largely to a disco dance club. Rule: Municipalities can put limitations on non-
           conforming uses, generally by preventing increase or change in non-
           conforming use. Existing nonconforming use will be permitted to continue
           only if it’s a continuance of substantially the same kind of use as that to
           which the premises were devoted at time of passage of zoning ordinance.
   3. Variances – have to show “hardship” to be get one; usual test for “hardship” is strict:
      i. The hardship cannot be self-imposed.
      ii. Hardship is not usually found unless there is NO economically viable use of the
           property if the zoning is enforced.
      iii. Many states also require that the property be different in some unique way from
           surrounding property, such as having a unduly narrow frontage or an odd shape or
           elevation, and that the hardship result from this unique condition.
      iv. Many zoning boards will ignore strict requirements, grant the variances anyway.
      v. Commons v. Westwood Zoning Bd. of Adjustment (N.J. 1980) [2.26 CB 1058]: Π
           sought variance from zoning board to build house on undersized lot. The variance
           application was opposed by many neighbors. Board denied on basis of no
           showing of hardship and that variance would substantially impair purpose and
           intent of zoning scheme. Rule: Undue hardship means no effective use can be
           made of property w/o variance. However, even in light of undue hardship, zoning
           board must find that variance does not substantially impinge upon public good
           and intent and purpose of zone plan.

D. Exclusionary zoning
   1. Huntington Branch, NAACP v. Town of Huntington (2d Cir. 1988) [2.27 CB 997]:
      Town zoning restricted multi-family housing to largely minority area. Developer
      sought rezoning to build apartment complex in largely white neighborhood, which
      Town denied. Developer brings Title VIII disparate impact claim. Rule: In a
      disparate impact claim, Π need not allege discriminatory intent in its prima facie
      case. ∆ bears the burden of rebutting with evidence of a bona fide and legitimate
      justification for its action and demonstrate that no less discriminatory
      alternative can serve those ends.
      i. Easier to press disparate impact claim that disparate treatment claim
      ii. Π prima face case: statistical evidence of how multi-family zoning falls
          disproportionately upon the minorities who are in need of public housing (court
          found disparate impact b/c zoning perpetuated segregation and shortage of low-
          income housing falls upon blacks who have a greater need for it)
   2. Village of Belle Terre v. Boraas (U.S. 1974) [2.27 CB 1011]: City has zoning ordinance
      prohibiting more than two unrelated people from living together, though any number
      of related persons may cohabit. Students bring suit against ordinance. Rule: The

                                                             Property Law – Outline       31
         drawing of the lines of families belong to the legislature. No fundamental rights
         impinged here; rational basis review. Legitimate guidelines for zoning met by
         city here: quiet place, wide yards, few people, restricted motor vehicles.
         i. Dissent: Ordinance violates petitioner’s First Amendment associational and
              privacy rights b/c ordinance was overinclusive and underinclusive; other means
              were available
         ii. Legitimacy of zoning increased to include these types of goals: protection of
              children and families, clean air, low traffic, low noise
      3. Moore v. City of East Cleveland (U.S. 1977) [2.28 CB 1017 n.1]: Only certain familial
         relations were permitted to live together. Rule: Ordinance is unconstitutional b/c
         cuts deep into fundamental right to construct one’s own family.
         i. Different from Belle Terre b/c deals w/construction of families w/related persons
      4. Southern Burlington County, NAACP v. Township of Mt. Laurel (N.J. 1975) [2.28 CB
         1030]: Π claims Mt. Laurel zoned its land in such way to require certain housing and
         lot sizes that low and middle income families were excluded. Clear demarcation
         between the town and neighboring Camden, NJ where white flight occurred. Rule:
         Every municipality must by its land use regulations make realistically possible
         an appropriate variety and choice of housing.
         i. Implicitly a race case b/c correlation in Mt. Laurel between race and income
         ii. State constitutional law rationale – municipality is an arm of the state and the
              municipality must exercise police power to benefit the general welfare and not
              just the welfare of the municipality; also rationales based on spillover effects and
              externalities and disparate impact on poor and minority
         iii. Reasons underlying Mt. Laurel’s scheme: want to avoid low income housing,
              want to avoid bringing in kids that would burden educational system w/o
              reciprocal tax base
         iv. Mt. Laurel was imposing externalities on rest of state by excluding the poorest
         v. Mt. Laurel is minority rule – few states interpret constitution to prohibit
              exclusionary zoning
         vi. Decision is deregulatory to extent that it permits landowners to do more w/land
         vii. Not go that far b/c although requires affordable housing, the affordable housing
              can still be marginalized and kept distinct from higher income housing

II. Takings

   A. Constitutional underpinnings: The Takings Clause
      1. Amend V: “nor shall private property be taken for public use w/o just compensation”
      2. Property always subject to government taking, so long as for public use and gov’t
         provides just compensation (power of eminent domain) – liability rule for gov’t
      3. Takings Clause not care much for idiosyncratic value – criteria is market value
      4. Taxation does not constitute a taking, nor does every diminution in value of land
         constitute a taking requiring compensation (regulation typically not a taking)

   B. Doctrinal elements of takings
      1. Two basic classifications of takings
         i. Per se takings: Gov’t action is facially a taking, i.e. physical occupation of land
             a. Forced invasions can only be conducted through eminent domain power
             b. Even a forced invasion increasing property value qualifies as a per se taking


                                                                  Property Law – Outline          32
           c. Other per se takings: diminution of property value to zero; where the
              government takes a core incident of ownership (but no case has dealt w/this)
      ii. Ad hoc takings: All other takings are ad hoc takings w/three part test involving (a)
           character of governmental action; (b) economic impact of the government action;
           and (c) reasonable investment back expectations of the parties (settled expects)
      iii. These tests are to figure out whether what government is doing is a taking at all
      iv. Owners prefer per se to ad hoc b/c former has no balancing tests to apply
   2. The denominator problem – defining the scope of what’s being taken (is it a 100%
      taking of small part of larger property or a smaller percentage of the whole property)

C. The scope of what constitutes a government taking
   1. Cases dealing with per se takings
      i. Loretto v. Teleprompter Manhattan CATV Corp. (U.S. 1982) [CB 1095 n.1]: Law
           required landlord to permit cable companies to place certain cables and equipment
           on their building. Rule: A permanent, forced invasion of property is taking of
           property per se, no matter minimal the invasion and no matter how small its
           effect on the market value of the property.
      ii. Yee v. City of Escondido (U.S. 1992) [2.33 CB 1091]: CA established law to
           protect mobile home owners by limiting actual/constructive eviction, establishing
           rent control, and including right of occupancy as part of sale of mobile home unit
           in park. Park owners argue physical invasion and taking. Rule: Not a physical
           taking b/c Court has always held to require owner to submit to physical
           occupation of land. Here, owners continue to voluntarily rent land even after
           the regulation.
           a. O’Connor argues not a taking b/c settled expectations of owners is that they’ll
               have mobile homes on their pads so they don’t lose anything by the statute
               and also b/c owners invited lessees and retain the right to end leasing of pads
      iii. Lucas v. S.C. Coastal Council (U.S. 1992) [2.36 CB 1110]: Owner bought beach-
           front property at time when it was not regulated. SC then institutes regulations
           prohibiting occupable improvements on certain beachfront lots. Owner asserts
           diminution to zero as per se taking. Rule: Amend V violated when owner
           denied all viable economic use of his land unless it’s justified by background
           state property or nuisance law. Diminution to zero is a per se taking.
           a. Scalia found that statute eliminate all economically useful/viable use of land
           b. Court treats as per se b/c similar to total appropriation of the property under
               physical invasion and unlikely we’ll ever see this kind of case again
           c. Blackmun dissent: Not a 100% taking, but rather a small taking of a larger set
               of property rights; state is empowered to take property to protect from harm
           d. Kennedy concurrence: Fear that we’re making static law re: when state can do
               a non-compensable taking (w/in bounds of nuisance) and also diminution
               should be in light of reasonably-backed expectations
           e. Stevens dissent: Arbitrary to distinguish between 95% taking and 100% taking
               – argument is that this shouldn’t be a per se taking, but rather an ad hoc taking
   2. Kaiser Aetna v. United States (U.S. 1979) [CB 1097 n.1]: Private owners dredged
      waterway to create marina and connect it to Pacific Ocean making it a navigable
      waterway. Fed gov’t tried to get it to open to public b/c it was a component of
      navigable waterway. Rule: This is taking requiring compensation b/c owners
      invested in property on expectation that they would be able to control it and
      became part of navigable waterways only through owner’s investment.

                                                               Property Law – Outline        33
      i. Holding that right exclude is one of the fundamental sticks in the property bundle
      ii. Distinguish from PruneYard: private club instead of general public business
   3. PruneYard Shopping Center v. Robins (U.S. 1980) [2.31 CB 1087]: Protestors sought to
      peacefully distribute handbills in corner of shopping mall. CA court upheld right to
      protest on private property when done reasonably. Rule: Not every governmental
      destruction or injury to property is a taking. Examination focuses on whether
      the restriction burdens some people alone which should be borne by the public
      at large.
      i. Restricting right to exclude for free speech purposes not unreasonably restrict use
           of property or impair its value nor is so essential to economic use as to be a taking
           (distinguish from Loretto b/c this is just a temporary taking)
      ii. Potential adverse impact mitigated by time, place, and manner regulations
      iii. Why case arises: CA court changes conception of property right to exclude
      iv. Court says not a per se taking, but an ad hoc taking subject to ad hoc test – says
           not a physical invasion b/c mall is open to public so right to exclude not crucial to
           use or economic value of property
      v. Best argument for taking: state is requiring public forum for free speech purposes
   4. Miller v. Schoene (U.S. 1928) [2.35 CB 1108]: State entomologist ordered destruction
      of all red cedar trees within two miles of apple orchards due to cedar rust. Owners of
      nominal value red cedar trees argued impermissible state action. Rule: Statute had
      to choose between red cedars and apple trees, and when faced with such
      decision, states does not exceed constitutional powers when it destroys one class
      of property in favor of another that state determines is of great public value.
      i. Cedar trees were ornamental and nominal values; apples were big cash crop
      ii. Theory is that you own subject to limit that you can’t cause nuisance – red cedars
           here were nuisance on apple trees so state not do taking in ordering destruction
      iii. Coase: Apple trees impinge on existence of red cedars – relationship has 2 faces
   5. Battle over background principles of state property law: Government takings law
      often changes the shape of background principles of state property law

D. The scope of the public use requirement
   1. Traditional view is very deferential to state’s assertion of “public use” b/c state pays
   2. Hawaii Housing Auth. v. Midkiff (U.S. 1984) [2.41 CB 1174]: Legislature made finding
      of oligopoly in land ownership that skewed fee simple market; passed law that upon
      tenant petition permitting housing authority to condemn land from owner and sell to
      tenant. Rule: Where state seeks to exercise eminent domain, public interest is
      also conclusive for public use requirement is coterminous with state sovereign
      power. Public use requirement not proscribe taking where eminent domain
      power is related to conceivable public purpose (rational basis analysis).
      i. Fact that property is transferred immediately to private use is not relevant b/c
          Court has rejected literal requirement that condemned property be put into use for
          the general public
   3. Development of the doctrine in Michigan
      i. Poletown Neighborhood Council v. City of Detroit (Mich. 1981) [2.42 CB 1179]:
          GM needed 400-500 acres of land to construct plant facility. State condemned
          property for conveyance to GM in order to facilitate economic growth and adding
          jobs and taxes to economic base. Rule: Once legislature has made
          determination that government action of the type contemplated here serves a


                                                               Property Law – Outline        34
           public need and is essential to the public purpose, court’s rule is extremely
           limited to rational basis review.
           a. Dissent: Only private party stands to gain from this public use. Unlike Slum
               Clearance cases where the public benefited from the slum clearance itself
               while private ownership and building was just an incidental benefit.
      ii. County of Wayne v. Hathcock (Mich. 2004) [2.43 Supp.]: County needed to acquire
           several hundred more continuous acres to build business park that would bring
           thousands of jobs to area. After negotiation, County condemned remaining
           property. Rule: Overrules Poletown. Public use arises only when (1)
           condemnation required for public necessity; (2) when private party getting
           land remains accountable to public in use of that property; or (3) when
           selection of land for condemnation is based on public concern.
           a. Office parks do not require condemnation in order to be built
           b. Adopts Poletown dissent’s reasoning that there is no public benefit to the
               condemnation, only to the private use that will come from the condemnation
           c. Incidental economic benefits cannot justify such a condemnation
   4. Arguments on the two sides of Kelo v. City of New London [Supp.]
      i. Raises same issue as in County of Wayne: do incidental economic benefits justify
           the power of eminent domain
      ii. Arguments in support of the exercise of power of eminent domain (pro-City):
           a. “Public use” is addressed to the legislature not judiciary, and legislature
               deserves deference in its findings of public use (Midkiff argument)
           b. Consistent w/Midkiff b/c state sovereign power, rational basis review
           c. Efficiency argument: benefit of taking for many > burden on the few;
               Constitution presumes gov’t will take property so long as it pays
           d. No slippery slope fears b/c takings are expensive and costs lot to do, also
               protected by democratic political process, and b/c creates possible
               disincentives for businesses to invest in land b/c of fear of condemnation
           e. Legislatures make distributional arguments all the time
      iii. Arguments in support of not extending “public use” (homeowners):
           a. Constitution contains “public use” limitation, thereby limiting takings
               authority, and it’s the judiciary’s role to enforce this limitation
           b. Taking from one private entity to another is not a public use (Midkiff doesn’t
               permit use of police power to benefit single party)
           c. Fairness argument – burden falls disproportionately on homeowners
           d. Slippery slope argument: what is the limit of governmental takings? Take
               from EconoLodge to give to the Ritz?

E. Exactions and unconstitutional conditions
   1. Occurs when party seeks adjudicative body permission to do something and body
      attaches conditions to grant of request (exactions, impact fees, linkage requirements)
      – all raise question of whether latter constitute a taking
   2. Exaction: Requirement that requester provide benefit to public to get some action
   3. Nollan v. Cal. Coastal Comm’n (U.S. 1987) [HB 674]: Nollan sought permit to build
      home on beach property. State conditioned permit on grant of easement over dry
      sand to permit public access. Rule: A regulation substantially advances a state
      interest when there is an essential nexus between the exaction and the state
      interest the exaction is intended to serve.


                                                              Property Law – Outline       35
         i. Scalia analysis focuses on whether w/o the permit request state could require
              Nollan to dedicate land – no b/c would be per se taking under Loretto
         ii. Court holds state interest in providing public visual access unrelated to exaction –
              an exaction relating to a height limit might related, but not an easement
      4. Dolan v. City of Tigard (U.S. 1994) [2.38 CB 1148]: Dolan sought to expand store and
         gravel parking lot. City conditioned building permit on land grant to floodplain (b/c
         lot would be more impervious surface) and bike path (for extra congestion). Rule:
         Although there’s an essential nexus, state must show rough proportionality
         between exaction and the nature and extent to the impact of the proposed
         development. Gov’t has burden of proof w/r/t exaction.
         i. Court holds floodplain dedication satisfies essential nexus but not rough
              proportionality b/c no need for full dedication to effect city’s purposes
         ii. Less deferential to findings that bike path could offset traffic, as opposed to
              finding that it would offset traffic – no proportionality b/c of this state finding
         iii. Stevens dissent: Why distinguish public/private? Owner probably prefers public
              b/c no taxes, no liability and she wants tramplers – they’re potential customers
         iv. Stevens’ proposed proportionality test: an exaction is proportional unless
              developer can show that it’s so grossly disproportional to development’s adverse
              effects that it manifests motives other than land regulation on party of city
         v. Test applies only to adjudicative bodies, not to legislative bodies (zoning)
      5. Court has limited reach of Nollan/Dolan to exaction in form of dedication


MISCELLANEOUS TOPICS
I. Intellectual property

   A. Generally
      1. IP is catch-all term for patents, copyrights, and trademarks, but aloso rights of
         publicity and trade secrets – things that are intangible
      2. Federal and state trademark laws – gives perpetual property rights to holders of
         distinct marks and prevents future use of similar marks by other to create confusion
         i. Idea to protect consumers from buying goods palmed off as somebody else’s
         ii. Issues of dilution: tarnishment (good marks associated w/lousy products) and
             dilution (when mark becomes less closely tied to the product)
      3. Copyright and patent have roots in Copyright Clause of Art. I, sec. 8
      4. Patents are scientific inventions that have to be novel, non-obvious, and useful
         i. Have to get patent from USPTO
         ii. Lasts for twenty years (monopoly) in exchange for information forcing of the
             elements of the patent
      5. Copyrights applies to artistic works, lists for lifetime of creator plus seventy years
         i. Eldred v. Ashcroft (U.S. 2003) [2.47]: Sonny Bono Act extending terms of current
             copyright holders constitutional on basis Congress can extend, but indicated there
             may be some limits.
         ii. Fear is that copyrights supposed to promote progress, but at some point, too long
             periods will actually inhibit progress in artistic works
      6. Might prefer liability rules (you can violate any of these freely as long as you pay) or
         property rules (can’t violate, but will possibly induce bargaining to efficient outcome)

                                                                 Property Law – Outline        36
   B. Cases in intellectual property law
      1. Int’l News Service v. Associated Press (U.S. 1918) [2.45 CB 35]: INS took AP press
         articles wholesale and re-released it to its members for publication in their
         newspapers. AP claims copyright in their news articles, but INS says news is factual
         and not protected. Rule: News of current events is common property and general
         public may acquire it for consumption from AP. As between AP and INS,
         however, INS may not use AP news for commercial purposes.
         i. Value of news is first-to-report and to allow INS actions would be to permit it to
              free-ride on AP’s investment in producing the news (recognizes AP’s “quasi-
              property” right in the news information so long as it retained commercial value)
         ii. Holmes dissent: INS may do this, but it must credit AP (value in first-to-report)
         iii. Brandeis dissent: Courts should stay out of realm of attributing new property
              rights, that whole point of copyright is to stimulate progress – we should leave to
              legislature to determine whether we should have property or liability rules here
      2. Feist Publications, Inc. v. Rural Tele. Co. (U.S. 1991) [2.46 CB 1239]: Feist takes
         Rural’s phone book and resells it as its own. Rural asserts copyright interest in the
         compilation of the phone numbers. Rule: No one may claim originality as to facts,
         but compilations thereof are copyrightable. Copyright protection extends only
         to those works that are original to the author. No matter how original the
         format, facts do not become original through association.
         i. Name, phone numbers, and ordering are not original to Rural and there’s no
              originality as to Rural in the ordering of these facts, no creativity at all (originality
              requires some minimal amount of creativity on part of claimant)
         ii. We don’t copyright facts b/c that limits people’s use and stifles creativity

II. Commodification

   A. Commodification and theory
      1. Commodification – Creation of property rights in things other than real property
      2. What’s okay to commodify? Usually a matter of degree b/c impossible to prevent
         exchange in pretty much anything of value (drugs/sex) b/c black markets will arise
      3. Margaret Radin argues that certain types of property interests, e.g. freedom, are so
         crucial to individual dignity that they should be treated as personal rights that can’t be
         exchanged on the market
      4. Posner argues we should create a market for children because there aren’t enough – it
         would increase social welfare by having more children
      5. Property rights permit us to value work and reward investment, encourage socially
         beneficial behavior
      6. But property rights can also can devalue the most important things – the things we
         value most, some things that money just shouldn’t be able to buy
      7. Alternative: we like property rights, but only in certain spheres – market vs. family
         (we trade in the market, but not the family; money in the market, love in the family)

   B. Babies, people, and body parts
      1. Moore v. Regents of the Univ. of Cal. (U.S. 1990) [2.48 CB 51]: Moore had several
         operations for cancer in which doctors took his discarded genetic material and created
         very valuable and profitable cell lines. Moore sought to enforce property interest in
         this genetic material. Rule: Moore has no property interest as court does not want


                                                                     Property Law – Outline         37
   to commodify body parts (no recovery in conversion). However, he may be
   entitled to recovery on theory of informed consent.
   i. Dissent: Essence is that patients can still bargain for the giving of their consent to
        take body parts away – same effective outcome that majority is trying to avoid
   ii. Distributive concerns that most likely to sell are the poor
   iii. Moral and dignitary concerns: this is stuff we hold sacred, not to be sold
2. In re Baby M (N.J. 1988) [2.48 CB 1279]: Surrogate mother refused to perform contract
   and give up baby. Father and to-be-adoptive mother seek to enforce. Rule: Court
   will not enforce surrogacy contract on fears that it is baby-selling and raises
   considerable distributional problems and bargaining/coercion problems.
   i. Rich can use poor to get babies – need to take 3d party babies into account (court
        treats surrogacy as akin to adoption and the paramount interests of the child)
   ii. NJ particularly fearful re: bargaining power – implying that if the process is
        sufficiently safe, there may be possibility of enforcement of surrogacy contracts
   iii. However, case focuses lot on protecting rights of mother and ensuring the
        voluntariness and knowingness of her decision to give up child
3. Dred Scott v. Sandford (U.S. 1857) [2.49 CB 1264]: Rule: Scott refused access to
   diversity jurisdiction in fed courts b/c he was not person under law and not a
   citizen, but rather was property of his owner.
   i. Property can be used to monopolize and oppress and dehumanize
   ii. Property rights fundamental to human flourishing, but they’re also a product of
        cultural and political decisions – need to reconcile the two




                                                            Property Law – Outline       38

				
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