pritchett_property_2005 by jrnbbyzbujktdafk

VIEWS: 1 PAGES: 55

									TABLE OF CONTENTS

I. WHAT IS PROPERTY?                                                                       8
STICKS IN THE BUNDLE OF PROPERTY RIGHTS:                                                   8
INSTITUTIONS THAT REGULATE PROPERTY                                                        8
LOCKE - LABOR                                                                              8
RADIN - PERSONHOOD                                                                         9
RAWLS – DISTRIBUTIVE JUSTICE                                                               9
JAMES WILSON – ANTI-RAWLS                                                                  9
UTILITARIANISM                                                                             9
POSNER - UTILITARIAN                                                                      10
HARDIN – TRAGEDY OF THE COMMONS                                                           10
OTHER FORMS OF RESOURCE ALLOCATION                                                        10

II. ACQUISITION OF PROPERTY                                                               11
ACQUISITION OF LAND AND CHATTELS                                                          11
WATER RIGHTS                                                                              12
NATURAL VS ARTIFICIAL NEEDS                                                               12
PRIOR APPROPRIATION                                                                       12
ADVERSE POSSESSION                                                                        12

III. ESTATES IN LAND                                                                      13
WASTE                                                                                     13
PRESENT INTERESTS                                                                         14
FUTURE INTERESTS                                                                          15

IV. CONCURRENT INTERESTS                                                                  16
MARITAL PROPERTY                                                                          18

V. LIMITATIONS ON USE                                                                     20
BLACKSTONE                                                                                20
THEORETICAL APPROACHES TO DEALING WITH EXTERNALITIES                                      20
RONALD COASE – UTILITARIAN ECONOMIST                                                      20
CALABRESI AND MELAMED                                                                     21
NUISANCE                                                                                  22
TRESPASS                                                                                  23
SOCIAL NORMS AS PROPERTY INSTITUTIONS                                                     24
LIMITATIONS ON THE RIGHTS OF PROPERTY OWNERS                                              25
EMINENT DOMAIN                                                                            26

VI. REAL ESTATE TRANSACTIONS                                                              27
COVENANTS OF TITLE                                                                        30
TYPES OF DEEDS                                                                            30
BREACH AND REMEDIES FOR BREACH:                                                           30
FORECLOSURE OF SECURITY INTERESTS                                                         31

Marla Conley                                           Property Outline, Pritchett, Fall 2005
                                                                                Page 1 of 55
VII. LANDLORD TENANT LAW                                                                            33
EVOLUTION AND OBLIGATIONS                                                                           33
KINDS OF LEASES:                                                                                    33
LANDLORD’S RIGHTS AND REMEDIES                                                                      34
TENANTS RIGHTS AND OBLIGATIONS                                                                      35
EVICTION                                                                                            37
RIGHTS AGAINST DISCRIMINATION                                                                       38

VIII. SERVITUDE LAW                                                                                 38
EASEMENTS                                                                                           39
COVENANTS                                                                                           40
EQUITABLE SERVITUDES                                                                                42

IX. COMMON INTEREST COMMUNITIES                                                                     44

X. ZONING                                                                                           47
EUCLIDEAN ZONING                                                                                    47
EXCLUSIONARY ZONING                                                                                 48
GROWTH CONTROLS                                                                                     50

XI. TAKINGS                                                                                         52
EXACTIONS                                                                                           52
BEEN:                                                                                               52
REGULATIONS OF USE                                                                                  53
JOSEPH SAX, “SOME THOUGHTS ON THE DECLINE OF PRIVATE PROPERTY”                                      54




Marla Conley                                                     Property Outline, Pritchett, Fall 2005
                                                                                          Page 2 of 55
Table of Cases

Popov v Hayashi                                                                                                        8
Π did not have full possession because he cannot prove he would have retained control of the ball after incidental
contact. Δ obtained a ball sullied by the pre-possessory interest of Π. Both men have a claim to the ball.             8

International News Service v Associated Press                                                                         10
Δ‘s use of Π‘s news in the same time frame without contributing to the cost of producing is unfair competition in
business. News can be quasi property.                                                                             10

Johnson and Graham‟s Lessee v M‟Intosh                                                                                11
‗The exclusive right to purchase from the Indians resides in the government; title granted to individuals by Indian
tribes is invalid.‘ This is not an issue of abstract moral justice but of rules which our government has adopted. 11

Pierson v Post                                                                                                        11
Pursuit of a wild animal does not create a property right.                                                            11

Evans v Merriweather                                                                                                  12
Everyone has a partial right to water. There is a distinction between use for natural and artificial needs.           12

Coffin v The Left Hand Ditch Co.                                                                                      12
―In the absence of express statutes to the contrary, the first appropriator of water from a natural stream for a
beneficial purpose has a prior right thereto, to the extent of such appropriation.‖                                   12

Mannillo v Gorski                                                                                                     13
The act of entry or possession asserts title and is of the requisite hostile nature for adverse possession. Minor
encroachments along a common boundary, even if visible, may not be open and notorious.                                13

Brokaw v Fairchild                                                                                                    13
The life tenant does not have ownership rights; any alteration of the buildings would constitute waste even if it makes
the property more valuable.                                                                                          13

Melms v Pabst Brewing                                                                                                 14
Changed circumstances allowed elimination of a residential building because the property had become valueless for
residential – all the surrounding area had been transformed to commercial and industrial                       14

People v Nogarr                                                                                                       16
If mortgage (in a jurisdiction) is not a transfer of title, a mortgage by one tenant does not severe joint tenancy, and
the lender‘s interest survives only as long as that of the lendee.                                                    16

Delfino v Vealencis                                                                                                   17
A court can only order partition by sale if it is in the best interests of all the parties; a home or business owned by
one party should be taken into account. There is a preference for physical division.                                   17

In re the Marriage of Graham                                                                                          18
An academic degree is not marital property that can be divided upon dissolution of the marriage.                      18

O‟Brien v O‟Brien                                                                                                     18
A license earned during the marriage represents increased earning power; this is marital property of which the
non-licensed spouse is entitled to a portion.                                                                  19

Waschak v Moffat                                                                                                      22
Marla Conley                                                                   Property Outline, Pritchett, Fall 2005
                                                                                                        Page 3 of 55
Δ‘s use of its land was reasonable and the damage caused to Π‘s property was unintentional; therefore, Δ is not
liable. Πs were aware of Δ when they purchased their property.                                                 22

Boomer v Atlantic Cement Co.                                                                                         23
If the cost of eliminating the nuisance is too great, a Π can receive permanent damages instead.                     23

Pile v Pedrick                                                                                                       23
Δs have no right to have their property on the Π‘s land; they must remove it even though it protrudes less than 2
inches.                                                                                                           23

Geragosian v Union Realty Co.                                                                                        24
An owner can only be deprived of his property in extreme circumstances; the drain and fire escape must be removed.
                                                                                                                24

Raab v Casper                                                                                                        24
A good faith improver who has a mistaken belief that he is the landowner can lose rights if he is negligent. Any
improvements he makes after he knows he may not be the land owner are not covered by good faith improvement
legislation.                                                                                                     24

Schild v Rubin                                                                                                       25
―people who live in organized communities must of necessity suffer some inconvenience and annoyance from
their neighbors and must submit to annoyances consequent upon the reasonable use of property by others‖ 25

State v Shack                                                                                                        25
The Δs didn‘t invade any possessory right of the Π; the property rights of an employer allowing employees to reside
on his property as a benefit of employment do not extend to insulating that employee from people providing
services or aid.                                                                                                    25

PruneYard Shopping Center v Robins                                                                                   25
A state‟s constitution that allows protestors to use the property of a private shopping mall does not violate the
federal constitution.                                                                                                25

Berman v Parker                                                                                                      26
Court upheld DC‘s redevelopment act. To redevelop slum lands through eminent domain                                  26

Hawaii Housing Authority v Midkiff                                                                                   26
The court has minimal authority to overrule eminent domain that a legislature has determined to be for ‗public use.‘
with a few constitutional limitations, ‗when the legislature has spoken, the public interest has been declared in terms
well-nigh conclusive‟                                                                                                 26

Poletown Neighborhood Council v City of Detroit                                                                      26
The city‘s plan shows a clear economic benefit and can be called public use. (Reversed ultimately)                   26

Kelo v City of New London                                                                                            26
„Public purpose‟ which allows takings of property is broadly defined, and great deference is given to the legislature.
Land may be taken for public use for promotion of the economy, and it does not have to be generally available to
the public.                                                                                                         26

Estate of Younge v Huysmans                                                                                          28
A contract is valid if a reasonable person would interpret it to be so; waiting 2 years to enforce the contract
constitutes unreasonable delay and prohibits claim for specific performance of the contract.                         28

Miller v Green                                                                                                       29
Marla Conley                                                                  Property Outline, Pritchett, Fall 2005
                                                                                                       Page 4 of 55
A purchaser has a duty to visit the land and inquire as to any residents and what relationship and rights they have to
the land.                                                                                                            29

Sommer v Kridel                                                                                                     35
Where a tenant has ceased to occupy an apartment, the landlord has a duty to make reasonable efforts to re-let the
apartment rather than letting it stay empty and damages accrue. Duty to mitigate.                                  35

Javins v First National Realty Corp.                                                                                36
The Housing Regulations for DC imply a warranty of habitability; breach of that warrant by a landlord provides a
tenant with usual remedies for breach of contract.                                                              36

United States v Starrett City Associates                                                                            38
Race can be a taken into consideration to promote integrated housing under Title VIII, but indefinite quotas that
restrict minority access to scarce housing are clearly in violation.                                              38

Otero                                                                                                               38
Court ruled the HA had a duty to create integrated housing and prevent segregation                                  38

Green v Lupo                                                                                                        40
WA has a strong preference for easements appurtenant to the land over personal easements; the easement should
be attached to the land if anything in the deed or situation indicates an intent to do so.                 40

Reese v Borghi                                                                                                      40
Intent during transfer does not negate a right-of-way of necessity that is created when one person parcels land.    40

Finley v Botto                                                                                                      40
An easement by prescription must be actual, adverse, open and notorious, and continuous and uninterrupted for the
prescriptive period. If it is a benefit of the owner‟s permission, there is no easement by claim of right.       40

Eagle Enterprises, Inc. v Gross                                                                                     41
For a covenant to run with the land, it must touch and concern a significant ownership interest attached to the
covenantor‘s property.                                                                                              41

Shelley v Kraemer                                                                                                   42
Courts may not enforce a private covenant that violates constitutional rights.                                      42

Bolotin v Rindge                                                                                                    43
For deed restrictions to be unenforceable, they must be either obsolete or have no remaining benefit for the
beneficiaries.                                                                                                      43

Neponsit Property Owners‟ Ass‟n, Inc., v Emigrant Bank                                                              43
A covenant granting fees to a community corporation that collects funds to maintain common areas can satisfy both
privity of estate and touch and concern requirements for running with the land. Homeowner associations are proxies
for the collective interests of homeowners.                                                                      43

Hidden Harbour Estates, Inc. v Norman                                                                               44
A condo association may enact reasonable rules that encroach on the rights of residents.                            44

Hidden Harbour Estates, Inc. v Basso                                                                                44
Unlike rules in a condo association‘s charter, rules promulgated by a condo association‘s board of directors must meet
a standard of reasonableness.                                                                                       45

Portola Hills Community Ass‟n v. James                                                                              45
Marla Conley                                                                     Property Outline, Pritchett, Fall 2005
                                                                                                          Page 5 of 55
A community association‘s prohibitions must meet a standard of reasonableness.                                       45

Windston Towers 200 Ass‟n v. Saverio                                                                                 45
Judge ruled the by-law was invalid and unenforceable because it attempted to impose a retroactive regulation         45

Laguna Royale Owners Ass‟n v Darger                                                                                  45
An Association can deny approval for transfer of a unit if the reasons are rationally related to the ‗protection,
preservation and proper operation of the property‘ and the purposes of the Association as stated in its bylaws‘ and are
applied in a fair and nondiscriminatory manner.                                                                      45

Village of Euclid v Ambler Realty Co.                                                                                47
Zoning ordinances that prohibit commercial or industrial development or limit areas to single family houses are not
unconstitutional.                                                                                                   47

Surrick v Zoning Hearing Board                                                                                       49
Municipalities must provide a fair share of their land for multi-family homes. If a municipality is in the path of
growth, it may not choose to zone out development.                                                                   49

Willistown                                                                                                           50
zoning ordinances allowed multi-family homes on 80 of 11,589 acres – this was just a token and was still exclusionary
                                                                                                                   50

Fernley v Board of Supervisors of Schuylkill Twp.                                                                    50
A zoning ordinance that completely prohibits multi-family dwellings is impermissibly exclusionary. A fair share
analysis is inapplicable.                                                                                       50

Mount Laurel                                                                                                         50
The intent of the legislature isn‘t controlling; the effect of excluding low income people is. The regulations were not
concerned w/ the general welfare of all persons.                                                                      50

Associated Home Builders of the Greater Eastbay, Inc., v City of Livermore                                           50
To show that an ordinance relates to the public welfare, Π must forecast the probable effect and duration of the
restriction and show that it does not represent a reasonable middle ground between competing interests.          50

Nollan                                                                                                               52
the regulation must have a central nexus with the solution                                                           52

Dolan v City of Tigard                                                                                               53
For a government to place a condition on receipt of a building permit, the condition must have an essential nexus
with the state interest and a reasonable degree of connection (rough proportionality) with the projected impact of
the development.                                                                                                   53

Penn Central Transportation Co. v City of New York                                                                   53
The landmark law is substantially related to the promotion of the general welfare and doesn‘t entirely prohibit
development above Π‘s property; therefore, it is not a taking requiring compensation.                                53

Lucas v South Carolina Coastal Council                                                                               54
Complete elimination of the economic value of property is likely to be a taking requiring compensation.              54




Marla Conley                                                                  Property Outline, Pritchett, Fall 2005
                                                                                                       Page 6 of 55
   ALLOWED                                         PROHIBITED
   OTHER PEOPLE: NUISANCE
   Waschack – culm mines                           Intentional/unreasonable or
     Reasonable use                               Ultrahazardous
     Unintentional damage
     Πs knew about Δs use
   Boomer – cement
     Too burdensome on Δ
   Schild – organized communities
     Inconvenience
     Annoyance
   OTHER PEOPLE: TRESPASS
                                                   Pile – Physical Invasion
                                                     Even minor
                                                   Geragosian – Physical Invasion
                                                     Even extremely burdensome
   Good Faith                                      Raab – Lack of good faith
   Shack – providing services/aid to 3rd parties
   Pruneyard – Free speech
     State Constitution
   GOVERNMENT: EMINENT DOMAIN W/O PAY
   Hawaii Housing – public use
     Even if not all public beneficiaries
     Legislation ―well nigh conclusive‖
   Poletown – Economic benefit                     Poletown (Reversed) – Economic benefit
   Kelo – Promotion of economy
     Not generally available to the public
     Not blighted
     Carefully considered plan
   GOVERNMENT: ZONING W/O PAY
   Euclid – prohibit commercial/industrial         Surrick – Fair share
     Limit SF housing areas                         Path of growth
     Arbitrary and unreasonable
     Apartments – parasites
                                                   Willistown – Token amount not enough
                                                   Fernley – Complete exclusion
                                                   Mount Laurel – Fair share
                                                     Effect of exclusion
   GOVERNMENT: GROWTH CONTROLS W/O PAY
   Livermore – Reasonable middle ground            Nollan – essential nexus
     Burden on Π
     Effect and duration
                                                   Dollan – Rough proportionality
                                                     Individualized determination
   Penn Central – Loss of value                    Lucas – Complete elimination of economic or
     Reasonable return                            productive value


Marla Conley                                                     Property Outline, Pritchett, Fall 2005
                                                                                          Page 7 of 55
I. WHAT IS PROPERTY?

    Is the thing up for dispute even property; can it be allocated?
    Property rights are rules that structure relationships between people over things.

Sticks in the bundle of property rights:
     1.   Right to exclude
     2.   Right to use
     3.   Right to transfer
     4.   Right to alter
     5.   Right to enjoy fruits
     6.   Right to possess

Institutions that Regulate Property
    Background legal principles/Common Law
    Social Norms
    Private Contractual Relations
    Political Institutions that control how land can be used in certain circumstances

Popov v Hayashi
                                                                        Superior Court of California, 2002
Π did not have full possession because he cannot prove he would have retained control of the ball after
incidental contact. Δ obtained a ball sullied by the pre-possessory interest of Π. Both men have a claim
to the ball.
    To rule entirely in favor of Δ would endorse violence in the stands. ―We are a nation governed by law,
     not by brute force.‖
    If one takes significant but incomplete steps to achieve possession and those steps are interrupted by
     unlawful acts of others, the person retains a pre-possessory interest in the property which can support
     action for conversion.
    Before being hit, the ball belonged to MLB. When hit, it became ‗intentionally abandoned property.‘

Locke - Labor
  A person owns himself and the work of his hands.
     He creates property by removing it from its natural state – a man should take as much as he
       needs as long as it doesn‘t leave bad stuff for everyone else.
     Necessary to get people to put productive labor into something.
     A person who picks up acorns makes them his (doesn‘t take into account that the tree may be
       owned)
  Creates a system of individual property rights
     Government‘s responsibility is to protect individual property rights and to protect against their
       transfer without consent
     Doesn‘t help determine whose rights prevail if there are conflicts. (says if one of them got there
       first, the property is converted from commonly owned)
     Doesn‘t take into account that one person‘s development could affect someone else
  Assumes that nature is pristine and unlimited (a different reality from modern times)
     His was an ‗artisan culture‘ – people were much more connected to the results of their labor.
       Feudal labor – anyone living on your land was yours, not theirs.

Marla Conley                                                             Property Outline, Pritchett, Fall 2005
                                                                                                  Page 8 of 55
       Land is not owned; there is a lot of common land.
    Worried about how the commons are used.
       A person can take as much as he can use (as he can till or use); any more is impermissible.



Radin - Personhood
  Property is the first embodiment of freedom and so is in itself a substantive end
     Shapes our relationship with the group
     You need some control over external objects and resources
  A person becomes a person by interacting with objects; certain objects are special
     Object loss is harsher than wealth loss
     Property is not all fungible – there is a spectrum
  From Hegel:
     Property ownership is a crucial part of being a person
     Property ownership shapes our relationships with other people
  Application – eminent domain – government can buy your property (at market value) for the good of
   society. Hard to quantify sentimental value.
     May not result in economic efficiency



Rawls – Distributive justice
  Veil of ignorance
     blocks knowledge of what abilities, desires, parentage, and social stratum a person might be born
       with
     should arrange resources as if you were disinterested person and you don‟t know where you‟re
       going to end up, you would want a society that gives everyone something
     People behind the veil of ignorance are assumed risk-averse, so they would choose that even the
       bottom would get enough to participate as equal citizens
  Society should provide people with certain kinds of property
     People have to have a certain amount of material and well-being to take part in society
     We want a minimal level for everyone



James Wilson – Anti-Rawls
  People are not risk averse, they are risk takers
     If we used Rawls, everyone would be adverse to risk – no incentive to improve your situation
  People do have different levels of talents – Rawls is unrealistic
     Want to match rewards to contributions
     In a settled society, inequalities become more evident, a natural division of labor occurs and the
       more gifted end up with more property

Utilitarianism
  The goal of society should be to allocate resources to maximize the aggregate welfare through
   efficiency.
  Free market competition will ensure an efficient allocation of resources (except for market failures)
     Private property rights will create incentives for people to invest efforts.
     Legal institutions should be concerned with protecting private property rights and facilitating
        transfer.


Marla Conley                                                           Property Outline, Pritchett, Fall 2005
                                                                                                Page 9 of 55
Posner - Utilitarian
  3 criterion for an efficient system:
      Universality – everything should be able to be owned by someone
      Exclusivity – if you own it, you have complete control. Not absolute
             Government has right to use your property
             Can‘t infringe on someone else‘s property rights.
      Transferability – shifting a resource from a less productive to a more productive use through
        voluntary exchange
  Criticism - aggregate welfare may not be the only consideration
      Aggregate welfare is difficult to measure.



Hardin – Tragedy of the Commons
  The individual benefits as an individual even though society as a whole, of which he is a party, suffers
      because the cost is born by all, the individual has no incentive to change
  i.e. oyster– because there are no property rights, they harvest the oysters too early and don‘t replace
   them or maintain the area where they live.
  Doesn‘t help to have private property rights in all cases – in reverse such as air and water, people are
   putting into the commons instead of taking out
  Possible solutions:
      make all property private;
      limit entrance into and use of commons by lottery, waiting list, entry fee;
      impose tax on polluters to provide incentive not to pollute


Other forms of resource allocation
  There are many systems that allocate resources – law is only one way.
Basketball courts
  In general, set up your own rules, social systems create rules to allocate basketball time without law

Limited Access Commons - Lobster fishing
  Very informal
  Disincentives shape society – able to allocate a scarce resources without specific private property rights
       They know each other – small society
       Will break each other‘s traps if they infringe on the other‘s area
  Sometimes fights break out; they don‘t go to the law
  Works pretty well – they don‘t overfish for lobsters

International News Service v Associated Press
                                                                Supreme Court of the United States, 1918
Δ‘s use of Π‘s news in the same time frame without contributing to the cost of producing is unfair
competition in business. News can be quasi property.
    An issue of their rights relative to each other, not to the public – neither has property interest against
     the public after publication, but that doesn‘t negate property rights to each other – news matters to
     both of them as ‗stock in trade‘ – merchandise for sale, so it is quasi property.
    ‗the peculiar value of news is in the spreading of it while it is fresh‘
    Although it costs each reader a trivial amount, the funds required to get news are, in total, significant –
     profit is necessary for the incentive of gathering and distributing news
    This doesn‘t give Π eternal rights to news it publishes; just long enough that Δ can‘t interfere with its
     business

Marla Conley                                                              Property Outline, Pritchett, Fall 2005
                                                                                                  Page 10 of 55
Dissenting: Holmes:
  Doesn‘t like that this court is making up a new definition of property – arguing with the court and
    with Locke (property is not inherent – it is dependent on law)
  If uncopyrighted words are published, you can‘t keep anyone from repeating them
  Property doesn‘t arise from value - you aren‘t excluded just because someone has used the words
    before ‗even if it took labor and genius‘

II. ACQUISITION OF PROPERTY
Acquisition of Land and Chattels

Johnson and Graham’s Lessee v M’Intosh
                                                              Supreme Court of the United States, 1823
 ‗The exclusive right to purchase from the Indians resides in the government; title granted to individuals by
Indian tribes is invalid.‘ This is not an issue of abstract moral justice but of rules which our government
has adopted.
    ―Conquest gives a title which the Courts of the conqueror cannot deny, whatever the private and
     speculative opinions of individuals may be‖
    Shouldn‘t oppress the conquered, but ‗the title by conquest is acquired and maintained by force.‘
    When Europeans discovered America the natives weren‘t using the land productively(like Locke,
     mixing the labor with the land that creates a property interest)
    Among themselves, they used the principle of discovery to claim title; ‗title might be consummated
     by possession‘ (conquest). Exclusion of other Europeans gave them a right to establish settlements.
    As a direct result, Indians not allowed to operate as independent nations – allowed to occupy and use
     land but not to transfer it.
   Consistency is key when deciding property rights, and authority must lie in the law of the US gov‘t.



Pierson v Post
                                                                       Supreme Court of New York, 1805
Pursuit of a wild animal does not create a property right.
   Pierson may have been rude or unkind, but his act does not deserve legal remedy.
   Post was chasing a fox across an unpossessed waste land. Pierson, knowing the hunt was going on,
    killed the fox in front of Post.
   If we let people claim animals just by seeing or chasing them without wounding or ‗ensnaring‘ them,
    there would be chaos. Must mortally wound the animal to have a claim.
   Nice, bright-line rule that is easy and consistent to enforce
       Might lead to some unfairness


Property Rights in the Whaling Industry, Herman Melville “Moby Dick”
  Fast Fish: A fish that is physically connected with an occupied boat or bearing a waif. A fast fish may
    be dead or alive. A Fast Fish belongs to the party fast to it.
  Loose Fish: A fish that is not physically connected with an occupied boat or marked with a waif. A
    loose fish may be dead or alive. A Loose Fish is fair game for anyone.
  Basic philosophy: Possession is 100% of the law.
       This removes any confusion about ownership.




Marla Conley                                                           Property Outline, Pritchett, Fall 2005
                                                                                               Page 11 of 55
Water Rights
Natural vs Artificial Needs
Evans v Merriweather
                                                                            Supreme Court of Illinois, 1842
Everyone has a partial right to water. There is a distinction between use for natural and artificial needs.
   One of Evans‘ employees, regardless, built a dam and diverted all the water into Evans‘ well so that
    there was none for Merriweather
   if the stream is small and there isn‘t enough for everyone‘s natural needs, no one can use it for artificial
    needs; each person may take enough to satisfy his natural needs
   if there is enough after providing for natural needs, each proprietor may take some as long as he
    doesn‘t infringe on the rights of others; the correct amount is a question for the jury
   Might result in less than an efficient allocation of resources. Big farms tend to be more efficient; this
      ruling supports small farmers.
   Like Rawls – ensures that almost everyone who needs it gets something – a distributive principle

Prior Appropriation
Coffin v The Left Hand Ditch Co.
                                                                         Supreme Court of Colorado, 1882
 ―In the absence of express statutes to the contrary, the first appropriator of water from a natural stream
for a beneficial purpose has a prior right thereto, to the extent of such appropriation.‖
    Need incentives to invest in the water – want to support people who invest
    It has always been the duty of the government to protect those rights, even before actual legislation was
     enacted
    The common law and Constitution have always protected prior appropriation
   Locke – Π‘s power has created value in this land
   More of a bright line rule – easier application
   Might create inefficient use of a scarce resource


Adverse Possession
Requirements:
  Actual possession
      Actually there,
      Using productively
      the type and scope of use was consistent with the particular characteristics of the land
           Exception: Under constructive possession doctrine, an adverse possessor who holds ―color
              of title‖ (claim based on documents that turn out to be defective), gains title to all land
              described in the deed, not just the land he actually possesses.
  Hostile claim of right – assert your claim in derogation of the true owner‘s claim
      Don‘t have permission
           Favorable treatment usually is given to claims based on ―color of title.‖
  Open and notorious – obvious, can see that it is going on – owner is put on notice of your use
      Can‘t hide it
      Often satisfied by payment of property taxes
  Exclusive possession – only one person can be using
      Can‘t be sharing possession with the owner or the public generally
      Can be an exception for 2 people acting in concert
  Continuous – for the whole period of the statute must be using the land
      Must be continuously used as would a normal occupant.

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         Seasonal use or periods of vacation are ok
         Tacking: The criterion of continuous possession need not be made by a single claimant.
          Successive occupiers may ―tack‖ their periods of possession together so long as there has been
          some privity between them and interest has been conveyed (ex. transfer by will, grant, or
          inheritance).
         Tolling: The statute of limitations is tolled (extended) if the true owner is incapacitated when the
          claimant first takes possession.

Theoretical base:
  An owner who has reason to know that land belonging to him is in the possession of another, and
    neglects his right for a considerable period of time, may be precluded.
  Utilitarian – someone making better use of the land should own it
  Locke – make the land your own through productive efforts – the land is abandoned by the person
    with actual title – they might still have a piece of paper, but that‘s all they have
  Radin – you become one with the land as an extension of yourself through spending so much time,
    personhood
  Rawls – it is more equitable, would be inequitable to take the land away after 20 years of use

Mannillo v Gorski
                                                                      Supreme Court of New Jersey, 1969
The act of entry or possession asserts title and is of the requisite hostile nature for adverse possession.
Minor encroachments along a common boundary, even if visible, may not be open and notorious.
   Δ altered house- The steps and concrete walk go 15 inches into Π‘s land
    (ME doctrine: Intention is a necessary part of adverse possession; mistake doesn‘t count, Awards an
    ‗intentional wrongdoer and disfavors and honest, mistaken entrant‘ – not used)
   French/CT doctrine: entry or possession itself is asserting ones own title and thereby denying the same
    title to others
   the true owner may be forced to sell this to the adverse possessor, unless it causes serious damage to his
    remaining land
   Up to a jury if it‘s open and notorious

III. ESTATES IN LAND
Waste
  someone with life estate would have an interest in wasting the estate – using it up. But, you want
   something to be left at the end of the life estate
  Permissive waste – letting the property deteriorate
  Affirmative waste – doing something active to change the property

Brokaw v Fairchild
                                                 Supreme Court, Special Term, New York County, 1929
The life tenant does not have ownership rights; any alteration of the buildings would constitute waste even
if it makes the property more valuable.
     Π wants the right to remove the house on the property (except the party wall) and put up an apartment
      complex
      ―The life tenant may do whatever is required for the general use and enjoyment of his estate as he
      received it.‖
     Might not be in Δ‘s best interest to object, but the court doesn‘t care about their motives


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       Intent of the grantor - In the will, the life estate clearly includes the house as well as the land – testator
        uses ‗my residence‘ 4 separate times
       If the life tenant does permanent injury to the inheritance, or substantial alteration, it is waste.
       ―The tenant has no right to exercise an act of ownership.‖

Policy:
  Not utilitarian – could make better use of the land
       (opposite) Could have historical value – aggregate welfare is better by keeping it
  Radin – not just an economic value, has personhood interest
       (opposite) why does the personhood interest survive the person?
  Policy – court should protect the future interest holder – typically, they aren‘t physically present – the
    life estate holder could take advantage

Substantially changed circumstances: if the circumstances have changed so much that the conditions
they placed are no longer possible to uphold – not fair to require life holder to abide by the restrictions

Melms v Pabst Brewing
Changed circumstances allowed elimination of a residential building because the property had become
valueless for residential – all the surrounding area had been transformed to commercial and industrial
   They thought they were fee simple owners
   Came to court after the knocked it down, not before

Present Interests
     Fee simple
        Absolute (overwhelming majority of property)
        Defeasible
     Life estate
        Can also be divided into absolute, defeasible
        Remainder
               Give ‗to Jones for life, remainder to Smith‘
               Goes to someone other than the grantor
        Reversion
               If you give it ‗to Jones for life,‘ I still have an interest
               Goes back to the person who gave the grant
        Pur autre vie (for someone else‘s life)


       Life Estate Holders have rights to:
          Sell –just life interest
          Enjoy fruits –but only with regard to waste concern of the future interest
          Use
          Alter—but only with permission of future interest holder
          Exclude—but allowing future interest holder to monitor


Defeasible estates – Interest in property is created subject to express conditions. If beneficiary does not
meet the condition, the property is forfeited back to grantor or to a third party.

       Fee Simple Subject to a Condition Subsequent
          I grant you the property subject to the following conditions. If you don‘t meet the conditions, I or
            another property have a right to take back the property
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      Creates a future interest – power of termination
      Implying vocab: expressing a condition, ―on condition that,‖ ―provided that,‖ and ―but if‖
      I give the property to L unless he goes to law school and if he goes to law school, I can take the
       property back.
  Fee Simple Determinable
      Creates future interest – possibility of reverter
      Implying vocab: expressing duration ―so long as,‖ ―during,‖ ―while,‖ and ―until‖
      I give the property to L so long as he does not go to law school
      Property automatically goes back
  Fee Simple Subject to an Executory Interest/Limitation
      Same as FSD but remaining interest to a third party
      I give the property to L but if L goes to law school, the property goes to M
      Creates future interest - executory interest
      M‘s interest is automatic – like FSD
  Judges don‘t like defeasible fees – courts try to interpret them to find against them

Future Interests
    Not going to get the property until something else happens, but you still have a future interest that
     gives rights that can be enforced today.

At common law, Grantors can retain the first 3, Grantees have only 2
    Grantors                                                Grantees
  Reversion                                                Remainder
  Power of Termination                                     Executory Interest
  Possibility of reverter

Grantees – have a lot of different subsets.
  Remainders:
      Contingent Remainder if
             The identity of the remaindermen is known (i.e. born)
             Subject to a condition precedent – may or may not happen
      Vested Remainder if not a contingent remainder
             Indefeasibly vested – no condition that could happen in the interest going somewhere else
             Vested remainder subject to open – there are people that could hold remainders who are not
              yet members of the class (not yet born)
             Vested remainder subject to complete divestment – at some future point, a condition could
              occur that would completely eliminate the interest
  Executory Interest
      Springing executory interest – comes from the grantor to a third party
      Shifting executory interest – from one grantee to another grantee


Rule Against Perpetuities – at some point, the grantor can‘t control the estate – whoever has the property
now, has it in fee simple absolute.




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                                                                                                 Page 15 of 55
IV. CONCURRENT INTERESTS

                     Tenancy in Common            Joint Tenancy                    Tenancy by Entirety
 Characteristics     Each tenant has separate     Can be a kind of TinC            Joint tenancy + Marriage
                     undivided interest           Own a single unified interest    For married couples ONLY
                                                  – people take the property as
                                                  one person
 Shares              Shares can be different      Each has an equal undivided
                     sizes.                       interest in the whole
 Rights              Possess and enjoy entire     Possess and enjoy entire         All parties must participate
                     property                     property                         in all decisions
                     Each owner can sell their
                     own interests
 Survivorship        No right of survivorship.    Survivor has entire interest     Surviving spouse gets rt of
                     Upon death, share goes to    in property                      survivorship
                     heirs
 Creation            Document, will or            Requires 4 unities               Requires 4 unites plus a 5th -
                     construction of the court                                     marriage
                     construction of the court
                     (in fact they had tenancy
                     in common although they
                     didn‘t know)
                     Requires only unity of
                     possession
 Severance/          By partition (upon death,    By agreement of all parties,     Only if both agree
 Termination         interest in transferred to   simultaneous death of all
                     heirs)                       parties, or unilateral act of
                                                  one party. i.e. Conveyance
                                                  of one joint tenant to 3rd
                                                  party. Creates a tenancy in
                                                  common.
 Other               Default – most people do     Poor man‘s will: if one party    Eliminated in majority of
                     this                         dies first, the other will       states
                                                  automatically get the entire
                                                  joint tenancy without having
                                                  to go through expense of
                                                  probate

    4 Unities for Joint Tenancy
        Interest – each must be identical (50% each if 2)
        Title – given in the same deed
        Time – given at the same time
        Possession – have equal rights to use the land in entirety


People v Nogarr
                                                                       Court of Appeal of California, 1958
If mortgage (in a jurisdiction) is not a transfer of title, a mortgage by one tenant does not severe joint
tenancy, and the lender‘s interest survives only as long as that of the lendee.
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   While Elaine and Calvert were separated, Calvert took out a mortgage with his parents(with her
    knowledge)
   If the mortgage that Calvert executed violated one of the unities, it severed the joint tenancy
          In CA, the mortgage doesn‘t transfer right of possession or legal title
          Since it was only a lien, it didn‘t destroy any of the unities
   Both joint tenants have life estate with a contingent remainder (contingent on who dies first)
   A lender can either enforce the debt right away and sever the joint tenancy or wait to see who dies first
         He stands a chance of double or nothing– that is his risk to take
   In other states, one tenant can sever joint tenancy by individual action.

Tenancy in Common creates certain kinds of relationships among the tenants
5 rights and obligations:
   Partition
        Any tenant in common can demand breakup, disposition of the tenancy in common
               Physical division of the property
               Division by sale – can be sold and interests are divided
               Division by appraisal (often same as by sale) – a separate person will appraise it and one
                 tenant buys out the others – can force others out
   Possession
        Can possess the entire property
        Non-resident co-tenants cannot charge rent from resident co-tenant
        Non-resident co-tenants cannot demand payment for share of profits earned by resident co-tenant
          from labor on property
        Ouster – one tenant has been deprived of a right of possession
               Creates new rights for that tenant
               Can require the resident party to pay rent
               Can ripen into adverse possession claim, although is difficult because possession by one co-
                 tenant is assumed to be permissive. Must show all AP elements plus notice by other co-
                 tenant of ouster
   Contribution
        All cotenants must contribute to the maintenance of the property (i.e. taxes)
        managing co-tenant cannot charge others for compensation for managing or for improvements
   Fiduciary obligations (act in good faith)
        Obligation of fair dealing with each other (i.e. one cotenant has more control over the property –
          is the manager – one wants to sell his interests – must tell the other cotenants one person wants to
          sell out)
   Accounting
        Can demand an accounting to the person who manages the property
        Can demand rents be divided according to ownership interests
        When one co-tenant is engaged in a productive activity that by its very nature devalues or injures
          the land (ex. cutting timber), a co-tenant out of possession may make a claim of waste.

Delfino v Vealencis
                                                                      Supreme Court of Connecticut, 1980
A court can only order partition by sale if it is in the best interests of all the parties; a home or business
owned by one party should be taken into account. There is a preference for physical division.
   Πs own 99/144 of a 20.5 acre parcel; Δ owns 45/144 as tenants in common
   Δ has her home and business (garbage removal) on the land
   Selling the entire parcel at once would bring in more money for the Πs
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    Burden of proof is on the party who wants partition by sale.
Partition by sale should only happen when:
    The ‗physical attributes of the land‘ make it impossible or difficult to divide and
    The owners‘ interests are better served by sale
   Delfinos own a majority – shouldn‘t the court be favoring them? Instead, the burden of proof is
     against them.
   Same problem in the South – one person with a minimal interest was equal to all other cotenants
   Court is saying you agreed to take this property as cotenants – it is better for you to work it out on your
     own

Concerns often incorporated into signed agreements:
  Contributions made by one cotenant if the other cotenant doesn‘t pay their share are loans at X
   percentage rate – might want to make the rate high to encourage people to make payments
  Right of First Offer – conflicts come up if one party wants to sell
     Provision for getting out of the arrangement
     Have to give other cotenants the right to buy it first
     Want to have clear rules for how to sell rights so that it is not to the detriment of other cotenants
  Some every day issues that can be resolved by the manager without consulting all cotenants
     Separate rules for major decisions – require everyone‘s consent



Marital Property
       Has changed drastically in recent times – woman had little to no control over property historically
       General rule - assumes that property acquired during the marriage is joint, though property
        brought into the marriage as separate property remains separate unless specific other provisions are
        made.
          Gifts, inheritance to one spouse, etc. during the marriage are separate property.




In re the Marriage of Graham
                                                                        Supreme Court of Colorado, 1978
An academic degree is not marital property that can be divided upon dissolution of the marriage.
   (more formalist approach – looking for a definition)
   Anne Graham, wife and Π, worked full time as an airline stewardess - She contributed 70% of the
    financial support
   Black‘s Law Dictionary: ―everything that has an exchangeable value or which goes to make up wealth or
    estate‖
   An MBA can‘t be transferred or sold, Can‘t get it with just money – also takes hard work
   The purpose of division is ‗to allocate to each spouse what equitably belongs to him or her‘ – not a
    rigid formula
Dissent by Carrigan (more instrumentalist approach – this is a problem and the court should do something
about it)
   The most valuable asset acquired during the marriage ‗was the husband‘s increased earning capacity‘
   Π‘s money was invested in the husband‘s education
   If they had been married for a while and acquired property, she could have claimed half
   In other contexts (torts), deprivation of future earnings is compensable

O’Brien v O’Brien
                                                                      Court of Appeals of New York, 1985

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A license earned during the marriage represents increased earning power; this is marital property of
which the non-licensed spouse is entitled to a portion.
    They moved to Mexico so Π could finish medical school
    Marital is anything acquired by the spouses during the marriage, ‗regardless of the form in which title is
     held‘
    Marriage is an ―economic partnership to which both parties contribute as spouse, parent, wage earner
     or homemaker‖
    Can‘t just reimburse the ‗funds advanced‘ by the other spouse – is an investment
Concurring: Meyer:
   Distributive awards should be reconsiderable. (i.e. if the licensed spouse doesn‘t go into that field,
     doesn‘t earn what the court expected) The opinion set $188,000 based on the Π being a surgeon.

California Family Code – more like O‟Brien
  Looks to maintaining the standard of living established during the marriage
  The contributions of one spouse to the other for education are considered a loan
       A loan that has to be paid back
  At 10 years, there is a presumption that the community benefited from the degree together – the one
    spouse has reaped the benefit and doesn‘t get their money back – other assets will be distributed

  Additional problems to adding up the value of a degree
      Can she say she owns half of his degree? Owe me the maximum ability to earn?
      Ties parties to each other even after the marriage is over.
  CA doesn‘t take into account that one spouse may make other sacrifices for the earning spouse – not
   fair just to give money back
      Hard to quantify damages – lots of sacrifices to be made
      Supporting spouse may be entitled to return on investment – wouldn‘t work this way if you
         invested in property or stocks
  CA is the way most of these things are going
      Most open to interpretation – judge very influential


Married Women‟s Property Acts:
  To eliminate the common law disabilities on women‘s rights to ownership, use, and disposition of
   personal and real property.
  ½ states abolished tenancy by the entirety, converting them into tenancies in common.
      A creditor of one spouse could reach jointly held property and become a tenant in common of the
        interest w/ the non-debtor spouse.
  Remaining ½ held that each spouse had an equal right to possess and use the land and that all
   conveyances of property held in tenancy by the entirety had to be made jointly.




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V. LIMITATIONS ON USE

Blackstone
    Man has despotic control of his property
       Rights are exclusive – can exclude others
       These rights can‘t be abridged even for the general good of the community – no limits allowed


    We are talking about the exceptions to Blackstone‘s ideas
    2 important questions:
        When can individual property owners impose burdens on each other?
        When can society impose burdens on individual property owners?



Theoretical approaches to dealing with externalities
Ronald Coase – utilitarian economist
  Optimum combination of freedoms and impingement on those freedoms – maximum aggregate
   welfare
      Assume no transaction cost
  Externality is an example of market failure
  The law doesn‘t matter – w/o transaction costs, the result will be the same
      the clear best option is the one with the lowest cost – if C can pollute, H will get together and pay
        for the fume control, if H has the right to clean air, C will pay for the fume control itself
  When one activity interferes with another, law must decide whether one party has the right to interfere
   (no legislation) or whether the other party has the right to be free form interference (legislate)

  Critique of Coase
      Doesn‘t work in the real world – there are transaction costs in the real world
      wealth determines the value each party is capable of putting on an entitlement—Coase assumes
        that everyone values entitlements at the same level. In fact, valuation is directly related to how
        much money each party has
      Does change who makes the payment
             matters psychologically who you give it to
             someone who has a right will charge more to sell it than they would have been willing to pay
                to get it
  Transaction costs:
      Negotiation and litigation (going to court)
      Free rider problem – each H would rather that someone else pay for the litigation – no one
        initiates the lawsuit
      Hold-out problem – (could be one example of opportunism) – if H has the right to clean air, one
        H could demand more money and keep the optimum solution from occurring, C could also hold
        out – demand more money than what fume control costs
      Opportunism – similar to hold out (C threatens to increase emissions if H don‘t pay enough)
  Implication: The right (entitlement) should be allocated to the party that would have bargained
   for it in the absence of transaction costs
      (in H, the residents should get the right to prevent the pollution – they care about it, they have
        incentives to push for an optimal solution)
  Least cost avoider theory – a refinement of Coase‘s theory


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         Liability should be imposed on the person who can deal with it with the least cost
         What if it would cost a lot of money to stop the pollution but wouldn‘t cost the residents a lot to
          move? Maybe not the optimal economic solution…

Calabresi and Melamed
    Legal Systems must first decide which side should get entitlements
    Then, they must determine how they are protected and whether the entitlement holder should be able
     to sell or trade them away.
        Property rule – private market transaction – must buy the right from someone with the
          property rights – court not involved
               (Coase – primarily property rule)
               Might be difficult for individual owners to enforce
               Can each negotiate a different amount
               Low state involvement
        Liability rule – court determined – encroacher can pay a certain amount in damages (liability) to
          the group with the right or owners must pay a certain amount to stop the pollution.
               Predetermined amount by state
               Might be more efficient to have the court determine the price – less individual litigation
               The price selected may not be the one people would have bargained for – may not be
                  efficient
        Inalienability rule – there is no selling of the right at any cost (i.e. nuclear power plant – not
          allowed even if they want to buy out the residents) or there is no right to complain

                        Entitlement      Property Rule    Liability Rule Inalienable
                                                                         Rule
                        Property         Can get          Damages        No pollution,
                        Owner            injunction or    From           even if
                                         EN to buy        neighbor       property
                                         them out at                     owners don‘t
                                         their price.                    care
                        Encroaching      Can pollute      Damages        Could pollute
                        Neighbor/        OR residents     from           in all manners
                        Industry         could buy        property
                                         them out         owners

    There are many possible values that we would want to promote in allocating entitlements
       Maximizing aggregate economic welfare
             (Coase was focused exclusively on this issue, but it is only one of many concerns)
       Distributional preferences – concerned about the fact that certain areas have more pollution than
         others and, even though it might make economic sense (poorer areas more pollution) it might not
         be fair
       Other justice considerations
             The economic approach results in a misallocation of externalities because
                  richer people can buy themselves out of externalities
                  People assign different values according to their wealth




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                                                                                                 Page 21 of 55
Article – Brief Reprieve for Some in Lead Town
  Property Rule given to residents – privately bargained for between the parties – company gave
    vacuums, etc., but that wasn‘t court ordered
       A pure property rule would say the company has to buy the residents out or it can‘t pollute –
         individual residents could negotiate different amounts – one person could keep the company from
         polluting
  Liability Rule given to residents – were able to sue – they were bought out – can be fined $1 mil if they
    don‘t complete the buyout
  Inalienable Rule given to Company – no one has argued they don‘t have the right to pollute – no one
    wants to shut the plant down – especially in the early stages – residents knew there were problems but
    thought the company was so important to their quality of life that they were willing to ignore those
    problems.

Nuisance
    A nuisance is an indirect violation that substantially interferes with another‘s ability to enjoy her land
       Generally a tort
2 types:
   Public – has negative impacts on society that can be regulated by public bodies
   Private

  Nuisance (by 2nd Restatement of Torts) – one of 2 things:
      Intentional and unreasonable, or
            Gravity of harm
                 The extent of the harm involved
                 The character of the harm involved
                 The social value which the law attaches to the use of enjoyment invaded
                 Suitability of the particular use invaded to the character of locality
                 Burden on the person harmed of avoiding the harm
            Utility of actor‘s conduct
                 Social value which the law attaches to the primary purpose of conduct
                 Suitability of the conduct to the character of the locality
                 Whether it is impracticable to prevent or avoid the invasion if the activity is maintained
                 Whether it is impracticable to maintain the activity if it is required to bear the cost of
                  compensating for the invasion
      Ultrahazardous (relatively small category – nuclear power plants, etc.)
  These aren‘t really so helpful – we live in a real world that has all kinds of considerations – maybe we fit
   the facts into these, maybe there are others that influence
  Ultrahazardous is like strict liability
      The law has changed somewhat in this area – society is moving slowly towards strict liability in
        many of these areas

Waschak v Moffat
                                                                     Supreme Court of Pennsylvania, 1954
Δ‘s use of its land was reasonable and the damage caused to Π‘s property was unintentional; therefore,
Δ is not liable. Πs were aware of Δ when they purchased their property.
    Hydrogen sulfide fumes form culm banks (coal mining waste) caused the white paint on Π‘s homes to
     turn black

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                                                                                                   Page 22 of 55
   The Δ‘s invasion of Π‘s property was not intentional
   The gas came from the ‗normal and customary use of their land‘
   ‗one‘s bread is more important than landscape or clear skies‘ – they picked a home near their job
Dissenting: Musmanno
  There was no ‗necessity on the part of the Δs to locate the culm banks in the very midst of the
    residential areas‘
       The culm banks are enormous
       They just didn‘t want to spend the money to cart it somewhere else
  The gases are disruptive of life and damage property
  Δs can‘t argue they didn‘t know about the odor
       It was intentional – they knew about the ‗probable harmful effect‘


Boomer v Atlantic Cement Co.
                                                                       Court of Appeals of New York, 1970
If the cost of eliminating the nuisance is too great, a Π can receive permanent damages instead.
    Π wants an injunction and damages for dirt, smoke and vibration from Δ‘s cement plant
    In NY – if you can show a nuisance, you get an injunction
    The damage is small compared to the $ Π asks for and the consequences of the injunction
    Fixing the large problem of air pollution would require lots of research and careful consideration of
     economic impacts, etc.
    Will need the efforts of the cement industry nationally to find a solution
   A single party is asking for an injunction from a single plant – if the court grants the injunction, the
     plant will have to shut down
   No incentive to fix the problem for Πs

       Here is an example where private regulation didn‘t work.
       Nuisance law has been changing substantially
          These private laws aren‘t so successful in dealing with big issues
          Trend towards governmental regulation – instead of forcing residents to bring a lawsuit, we have
            an agency that imposes regulations on how cement plants can operate
          Concern that some of these agencies have been taken over by big business
          There is a different framework, a different approach – much more frequent that people go to the
            legislature to get protection for their property interest.

Trespass
       It is an actionable invasion of a possessor‘s interest in exclusive possession of the land
       Happens less today – have surveys and private property lines and government agencies that monitor
        property

Pile v Pedrick
                                                                    Supreme Court of Pennsylvania, 1895
Δs have no right to have their property on the Π‘s land; they must remove it even though it protrudes less
than 2 inches.
   The district surveyor they employed got their property line wrong
   The wall is 1 3/8 inches over the line into Π‘s land
   Δs asked for permission to go on Π‘s land to ‗chip off‘ the ends of the stones; Πs refused
   Property rule in favor of Pile – damages are not enough. The only way Pedrick can get out of this is to
    buy Pile out in a private market transaction.

Marla Conley                                                             Property Outline, Pritchett, Fall 2005
                                                                                                 Page 23 of 55
    Πs have an absolute right to their property. Not efficient, but the court doesn‘t care.
    Expect the wall to stay but damages to be paid – damages less than the cost of tearing the wall down
     and building it again.

Geragosian v Union Realty Co.
                                                        Supreme Judicial Court of Massachusetts,1935
An owner can only be deprived of his property in extreme circumstances; the drain and fire escape must be
removed.
   Π‘s property is worth $2,800; Δ‘s theater is worth $250,000; the new drain would cost $4,300
   Vartigian (his land was mortgaged to Δ) built a theater next to land owned by Aaronian (sold to Π,
    Vartigian‘s wife‘s step-brother to make trouble for Δ)
   ―The right of property which the Π seeks to protect is legal, not merely equitable‖
   Can‘t always replace property or the right to use it with money
Owner‘s rights trump even if
   wrongdoer acted in good faith
   it would cost Δ lots of money to fix
   it doesn‘t hurt Π much to keep the trespass
   neighborly conduct and ‗business judgment‘ would make it more reasonable for Π to take $
   Don‘t want the drain to ripen into a claim for adverse possession

Raab v Casper
                                                                       Court of Appeal of California, 1975
A good faith improver who has a mistaken belief that he is the landowner can lose rights if he is
negligent. Any improvements he makes after he knows he may not be the land owner are not covered by
good faith improvement legislation.
   Δs built a family home 1/3rd of the way onto Π‘s land at the southern end
   Π warned Δ when the foundation was poured that the house was on Π‘s land
   ―Ownership of land includes the freedom not to dispose of it‖
   Good faith improver legislation could turn into ‗private eminent domain‘
   Raab has lost a stick in the bundle – transfer – someone else got to decide
   When you build a piece of property, you should have an obligation to make sure you own the land.
   Economically inefficient to make someone tear down property.

The law has evolved – this moved (Calabresi – different box) liability rule
  Good faith improver changes from a property rule to a liability rule


Social Norms as Property Institutions
Law of trespass in Shasta County:
  Open and closed range areas
      Strict liability in Closed Range – if you own the animals, you pay for any damage they call
      Open range – almost no liability – some exceptions
  Trying to understand how people respond to the law – virtually irrelevant in the area
      Assumes that everyone has knowledge of the law – Coase says you need to know your property
        rights and then you can bargain with people to reach an efficient solution – in Shasta the law is so
        complicated – people here are living beyond the shadow of the law
      Not relevant to the daily lives of almost anyone
      They don‟t like the law – think of it as negative – last course of action – lawyers are bad
  Society beyond the shadow of the law – they resolve issues between themselves

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                                                                                                Page 24 of 55
         Self-help retaliation – gossip
         Accounting – it all works out in the end (my cow might go on your property next time, maybe I‘d
          rather you be in debt to me than the other way around)
         Multi-plex relationships – families live in those areas for a long time

  Coase: People bargain in the shadow of the law. They determine who has the legal entitlement of that
   resource and structure their bargaining process from there.
  Ellickson: People bargain beyond the shadow of the law. They consider their relationships with their
   neighbor on a more global basis and bargain taking other transactions into account, but not considering
   the legal entitlements unless the violation is unsolvable by social norms.
  Ellickson agrees with Coase: regardless of the content of the law, people tend to structure their
   affairs to their mutual advantage
  Law may be more important as society changes – as newcomers arrive

Sometimes social norms break down
Schild v Rubin
                                                               District Court of Appeal, California, 1991
 ―people who live in organized communities must of necessity suffer some inconvenience and
annoyance from their neighbors and must submit to annoyances consequent upon the reasonable use of
property by others‖
   Π wants an injunction to keep Δ from playing basketball except during specified hours of the day
   Social systems don‘t always work – sometimes people resort to the law

Limitations on the Rights of Property Owners
    How do we balance the rights of the individual property owners against the needs of society?

State v Shack
                                                                    Supreme Court of New Jersey, 1971
The Δs didn‘t invade any possessory right of the Π; the property rights of an employer allowing employees
to reside on his property as a benefit of employment do not extend to insulating that employee from people
providing services or aid.
    Δs went on Π‘s property to provide medical and legal services to migrant workers
    Migrant workers are powerless - programs couldn‘t work if ‗the intended beneficiaries could be
     insulated from efforts to reach them‘
    ―the employer may not deny the worker his privacy or interfere with his opportunity to live with dignity
     and to enjoy associations customary among our citizens‖
    property rights do not ―include dominion over the destiny of persons the owner permits to come on
     the premises‖
   Court declines to take the approach that they are tenants

PruneYard Shopping Center v Robins
                                                                                                            `
A state‟s constitution that allows protestors to use the property of a private shopping mall does not violate
the federal constitution.
    Πs are high school students who wanted to solicit support against a UN resolution against ‗Zionism‘
    State can have more expansive individual liberties than the federal Constitution grants
    it doesn‘t impair the use of the shopping center
    Δ can still legislate time, place, and manner

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   Δs here failed to prove that the right to exclude Π is integral to the commercial use (economic value) of
    their property
   Shopping center isn‘t just for personal use – it is open to the public who comes and goes
   Δ can put up signs saying they don‘t agree
   Can argue that in many towns, the only place you can have a public forum is on private property


Eminent Domain
       Holmes – regulations should not require the few to endure burdens that should be borne by the public
        as a whole

Berman v Parker
                                                                Supreme Court of the United States, 1954
Court upheld DC‘s redevelopment act. To redevelop slum lands through eminent domain


Hawaii Housing Authority v Midkiff
                                                                Supreme Court of the United States, 1984
The court has minimal authority to overrule eminent domain that a legislature has determined to be for
‗public use.‘ with a few constitutional limitations, ‗when the legislature has spoken, the public interest has
been declared in terms well-nigh conclusive‟
   In mid-1960s, Hawaiian legislature - Land Reform Act of 1967- Required large landowners to break up
    their land
   Just because the land ultimately goes to ‗private beneficiaries‘ doesn‘t mean it doesn‘t have a public use
   Can‘t say the law isn‘t effective – it might work, it might not- That doesn‘t affect its constitutionality
   Hard to argue in this case that it doesn‘t benefit a small subset of the public

Poletown Neighborhood Council v City of Detroit
                                                                          Supreme Court of Michigan, 1981
The city‘s plan shows a clear economic benefit and can be called public use. (Reversed ultimately)
   The City of Detroit used eminent domain to take a large swath of land to give to General Motors
   Δs argue the industrial use will create jobs and help the economy
   The legislation has decided this is for public use – the court‘s ability to contradict is limited
   Ultimately reversed - can‟t use private land for economic development
Dissent: James Ryan
   ‗The evidence…is that what GM wanted, GM got‘
   Clearly one beneficiary – clearly for private use

Kelo v City of New London
                                                                Supreme Court of the United States, 2005
 „Public purpose‟ which allows takings of property is broadly defined, and great deference is given to the
legislature. Land may be taken for public use for promotion of the economy, and it does not have to be
generally available to the public.
    Pfizer will build a new research facility next to the revitalized properties
    None of the properties are blighted – they are only targeted because they are in the redevelopment area
    ‗promoting economic development is a traditional and long accepted function of government‘
    The city couldn‘t take the land to ‗confer a benefit on a particular private property,‘ but the takings here
     are part of a carefully considered development plan
Concur: Kennedy:

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                                                                                                  Page 26 of 55
   Here, the trial court conducted a thorough investigation to make sure that wasn‘t happening
   Πs argue taking should be presumptively invalid – this would prohibit a lot of takings that are valid
   Courts should be more active in determining
Dissent: O‘Connor
  All private property is now vulnerable for being transferred to another owner who can make more
    effective use of it
Dissent: Thomas:
  Cites Blackstone – property rights are inviolable
  They meant for ‗public use‘ to be narrowly construed – ALL the public must be able to use the
    property or the taking is illegal
       For his reasoning, you would have to throw out 200 years of case law allowing broader public use


VI. REAL ESTATE TRANSACTIONS

    How do you transfer interests in real property – in essence 3 parts
       Execution of the contract – signing of the agreement
            buyer gives seller ―earnest money‖ which is several % of purchase price to be credited
              toward price and will be forfeited if buyer breaches
            Doctrine of Equitable Conversion (majority of states): After execution of valid contract
              for but before buyer gets the legal title (i.e. during escrow) the buyer holds equitable title.
              Significance of equitable title:
                 seller keeps legal title only to secure payment at closing, but either party could seek
                  equitable relief
                 risk of loss or damage during escrow lies on buyer
                 if government condemns or takes through eminent domain the property, the buyer gets
                  proceeds
            Approach 2 (significant minority of states): If property is damaged during escrow such that
              an important part of the property was damaged, burden of loss is on seller.
            Uniform Vendor and Purchaser Act (12 states): If legal title and possession of subject
              matter of contract remain with seller, seller has risk of loss during escrow. If either legal title
              or possession has been transferred to buyer, buyer has risk of loss.
       Escrow period – after reach an agreement but before the property is actually transferred
            buyer investigates title, inspects property, secures financing. Further negotiating may occur.
       Closing
            seller delivers property deed and marketable title to buyer;
                 Marketable: Title shouldn‘t create an unreasonable risk of litigation. It need not be
                  absolutely perfect.
                 Unmarketable: liens, mortgages, easements, someone else has mineral rights, etc
            buyer delivers payment of purchase price.
            Normally, buyer records the deed

    Caveat Emptor: ―let the buyer beware.‖ Most states generally enforce, leave burden on purchaser to
     find physical defects and renegotiate contract. Exceptions include
        Covenants of title: grantor has liability for competing claims to title
        Implied warranty of fitness: especially on new homes. Not generally extended to used homes
        Tort of misrepresentation: if buyer can show material misrepresentation and detrimental reliance
          on that misrepresentation

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                                                                                                  Page 27 of 55
         Failure to disclose material facts: some courts will grant, others won‘t-determining that the
          buyer could have discovered problem with due diligence

  Statute of Frauds - Real estate contract must be in writing
     Identify the parties, signed by both
     Describe the land and the interest – what kind of transfer
     The purchase price
     Other essential terms
  A couple of exceptions to the statute of frauds:
     Doctrine of part performance – buyer has taken possession and paid a part of the price and make
       improvements – contract must go forward despite not having writing
     Equitable estoppel – if one party reasonably and detrimentally relies on a verbal contract.
       Detrimental reliance is often enough for specific performance.
     Unjust enrichment: form of estoppel where one party has relied on the agreement and taken
       action to their detriment which would allow the other party to benefit by not holding up their end
       of the oral agreement.

    Breach of Contract and Remedies
       Generally, no claim of anticipatory breach allowed before closing.
       Buyer‘s promise to pay and seller‘s promise to deliver marketable title are dependant promises so
         neither can bring an action until she has performed her side of the bargain.
       Exceptions:
             Where one party repudiates (indicates intention not to perform) the contract, but
               aggrieved party must show willingness and ability to tender performance. Remedies:
                  Rescission and restitution - including refund of any money if the seller is in breach and
                   return of property if the buyer had taken possession
                  Damages
                  Specific performance

Estate of Younge v Huysmans
                                                                Supreme Court of New Hampshire, 1985
A contract is valid if a reasonable person would interpret it to be so; waiting 2 years to enforce the
contract constitutes unreasonable delay and prohibits claim for specific performance of the contract.
    Δ sent a letter to Π confirming acceptance of the offer; Π recorded the Δ‘s letter in the County Registry
     of Deeds; Δ said it wouldn‘t proceed unless Π released the letter from the Registry of Deeds
    Δ sold the property to the Cuccis – they took possession and spent a lot of money on improvements
 ‗A meeting of the minds must occur before a contract is formed‘
    Doesn‘t mean mental agreement – just what a reasonable person would expect
Here, there is enough evidence for contract –
    Purchase and sale agreement
    The bank took the $10,000 check
    Bank‘s letter of Aug 31, 1981
    Bank took the property off the market
Only opposite evidence – the 2nd statement in the Bank‘s letter that they would send a purchase and sale
agreement – that might mean the letter wasn‘t a valid contract
    The improvements by the Cuccis were open and visible – Πs should have known




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Title
  At common law, the first person who acquired the interest was deemed to have title
       Everyone knew each other, like an announcement when you acquired property.
       After a while, we needed systems to record title
  Very locally based – some cover only a square mile of jurisdiction. Often the managers of these
     groups are elected or political appointees. Very cumbersome and pretty expensive title system
  2 kinds of systems:
       Property is filed by tract – can see who the owner of that tract is
       Chain of grantor/grantee index – can trace by person
             cumbersome complicated process – requires lots of time and is easily fallible
  Certainty in property system in important to its economic value – we lack certainty

Types of Recording Acts:
  Race
      Whoever records 1st gets it, regardless of the order of grant
      Pushes people to record right away – very clear rule
  Notice
      A prior grantee always wins if the later grantee had notice of the first claim (or failed to investigate)
      If the later grantee had no notice, the later grantee prevails
            as long as they are a bona fide purchaser – actually paid something for it
            even if the prior grantee records first sometime after the later grantee purchases
      A standard (rather than a rule) – looks at the whole body of facts – decide who equitably should
        get the property - subjective
  Race-Notice
      A prior grantee always wins if the later grantee had notice of the first claim (or failed to investigate)
      If the later grantee had no notice, whoever records first gets it
      PA has this
  Can be set by the legislature or by the court

Miller v Green
                                                                       Supreme Court of Wisconsin, 1953
A purchaser has a duty to visit the land and inquire as to any residents and what relationship and rights
they have to the land.
    Π (Eugene Miller) leased the tract for the crop season of 1950 – after the crop season, his father hauled
     50-60 loads of manure to the land and Π plowed the land
    To constitute constructive notice, the possession must be ‗open, visible, exclusive, and unambiguous‘
    Δ should have looked into Π‘s claim on the land
    Δs live half a mile away and could clearly see the property

Pippin v Boyer – the purchaser has to ask the possessor what the possessor‘s rights are – the purchaser has an
obligation to go and look at the land to see who is using it and ask what his relationship to the land is

Issues in PA
   Allows criminal conduct
   Lost interest revenue on fees paid
   Difficult to charge property taxes
   Do date stamp – potential for abuse of that – someone with an in at the office could get an earlier date
    stamp and no one would know
   Deeds office doesn‘t investigate the deeds – don‘t require both parties to be there

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                                                                                                 Page 29 of 55
    Unregulated notaries

Covenants of Title
  Under caveat emptor, after delivery a grantee is only protected from title defects (essentially
   competing claim to the land) by covenants of title in the deed. 6 types:
     Present covenants: usually only the original grantee, and not his successors, can rely on the
        present covenants since they don‟t run w/ the land.
            Seisin: promise that the grantor has title and possession of the land
            Right to convey: grantor promises that she has the right to transfer the property
            Freedom from encumbrances: promise that the land is free from undisclosed
               encumbrances (i.e. mortgage, a lease, a real covenant, and equitable servitude, an easement, a
               lien, or outstanding taxes)
     Future covenants: Benefit of future covenants runs with the land so successors to the original
        grantee may invoke them against any prior grantor who made the covenant.
            Warranty: Grantor promises to defend the grantee from any lawful 3rd party claims to the
               property. The grantor also covenants to compensate the grantee for losses sustained.
            Quiet enjoyment: Promise that no 3rd party will assert lawful title to the transferred
               property – similar to warranty
            Further Assurances: Promise that the grantor will take necessary steps to perfect title.
               (Usually omitted in the U.S.
  In sale of buildings (and land), caveat emptor still applies. The covenants do not provide any guarantee
   about the quality of the property. However, many states require a warranty of fitness for NEW
   houses.
     Exceptions: In PA, 2 warranties included in sale of used houses:
            it is free from termites and
            it is structurally sound

Types of Deeds
  General Warranty Deed: Usually contains the 6 covenants of title above. Warrants title against defects
   arising before as well as during the time the grantor had title.
      Common in the East and Midwest
  Special Warranty Deed: Normally contains the usual covenants above; however, the warranties cover
   only defects by acts of the grantor, and not defects arising prior to that time.
      Doesn‘t apply to any encumbrances created before grantor got the property.
      Common in the West
  Quitclaim Deed: Warrants nothing. The grantor merely transfers whatever right, title, or interest he
   has, if any. W/ the use of the word ―quitclaims‖ in the deed, the grantee has no rights against the
   grantor for defects of title.
      Over time the law has evolved to prohibit these – law has tried to make these difficult
  Usually, the deed will indicate directly what kind of deed it is. If not, the common law will apply.

Breach and Remedies for Breach:
  Usually, present covenants are breached, if at all, only at the moment of transfer so the statute of
   limitations begins to run at the time of the transfer.
                                                                               rd
  The future covenants are breached, if at all, after the conveyance when a 3 party makes a claim to
   the property.
  Remedies:
      Damages: Except for the covenant of further assurances, breach of covenant of title gives rise to
        claim of damages, NOT specific performance. Damages are capped by the grantor‘s liability at an

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          amount equal to the consideration she received for the property when she sold it. (This
          protects the grantor from increases in property value due to market or grantee which grantor can‘t
          avoid).
              If Title Totally Failed grantee gets purchase price + consequential damages
              If Title Failed for Part of Property grantee gets damages in proportion to failed part.
              If Grantor Breach Freedom from Encumbrances Amount depends on whether the
                encumbrance can be removed.
                   If it can, damages are cost of removing.
                   If not, damages are difference between value of property at time of transfer w/ and w/o
                    encumbrance.
         Estoppel by Deed: NOT remedy for breach, but can be invoked to perfect grantee‟s title. if
          grantor doesn‘t have real title when property is conveyed, he has to give it directly to grantee if he
          acquires it at a later time.
              Grantor is estopped from arguing that the grantee received nothing under the deed since
                grantor didn‘t have legal title at the time of transfer.

Foreclosure of Security Interests
  Purchases of real property are usually made w/ borrowed money. A lender normally requires a
   borrower to give a security interest in the property.
  Types of Security Interests:
      Mortgage: Borrower (mortgagor) gives the mortgagee (the lender) a lien on the property until the
       loan is repaid. If the borrower defaults, the lender may foreclose on the property and use the
       proceeds from the foreclosure sale to satisfy the debt.
           Have to use foreclosure procedure
           Borrower typically can‘t bid on the property
      Deed of Trust: Borrower conveys title to a trustee (usually chosen by the lender), who holds the
       property in trust for the benefit of the lender until the debt is repaid. If the borrower defaults, the
       trustee must follow the lender‟s instructions, which are usually to sell the property and use the
       proceeds from the sale to repay the debt.
           Trustee can sell the land at a public sale w/o having to use judicial foreclosure automatically.
           Borrower can bid on the property

    Types of Foreclosure:
       Judicial foreclosure: Lender must file a lawsuit against debtor, which orders the sale at a public
         auction
             Buyer‘s right before auctionequitable redemption allows the borrower to stop the
               proceedings by paying the balance, accrued interest, penalties and costs
       Private foreclosure: bank doesn‘t have to go to court to foreclose, rather sells at public auction.
             Court can stay out it- ability of bank to use a private foreclosure must be written in the lease.
             Lenders clearly prefer - faster and cheaper – can sell right after default

    Right of Redemption Statutes: Entitle the borrower to redeem the property for a specified period
     after the foreclosure sale (period of 3 months to 2 years).
        Borrowers may remain in possession during the redemption period
        Problem - the guy who buys the land at the sale is left hanging
        States are moving away from these


    Deficiency Judgment: When the foreclosure sale proceeds don‘t cover the balance of the loan, the
     lender may seek one of these to cover the difference.
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        Borrower may be required to satisfy this w/ personal assets other than the property on which the
         mortgage or deed of trust was originally taken.
        Anti-Deficiency Statutes: Many states have enacted these to protect borrowers from deficiency
         judgments.
             Many passed during the Great Depression
             Based on the theory that it would be unfair for property owners not only to lose their
              property in foreclosure, but then also to have an additional money judgment against them
              because the value of the property had dropped as a result of general economic conditions.
             Buyers cannot waive these protections in the initial mortgage agreement.

 Where should we place the burden of title problems?
  Arguments for the Buyer: Under caveat emptor, the theory is ―let the buyer beware.‖
     Coase If this was the case, the buyer brings in an inspector and then if something goes wrong,
       the inspector will be sued. So, no matter what system is adopted, we will have the same result.
  Arguments for Seller: Now, the law is changing and implied warranties are being created.
     Calebrasi The seller is the least cost avoider. He knows about the problem already and isn‘t
       waiting around for the flaw to come up. He is in a better position to know what the legal defects
       are and could either fix the problems or disclose.
     The law is moving in this direction, but very slowly b/c not as much litigation if caveat emptor is
       the rule.




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VII. LANDLORD TENANT LAW
Evolution and Obligations
    Tenant leases are non-freehold estates. When a landlord leases real property, 2 interests are created:
       tenant‟s present possessory interest in the land (ex. the leasehold) and
       the landlord‟s reversion. Leaseholds give the lessee full and exclusive possession.


Kinds of Leases:
  Term of Years:
     definite starting and ending date,
     created by express agreement,
     if more than 1 year must satisfy statute of frauds (normal 1-year, 2-year, 10-year lease),
     ends automatically at end-date, no notice needed.
  Periodic Tenancy:
     renewed automatically at end of period
     written notice (generally 1 period) for termination (or 6 months for a year contract)
     Sometimes expressly created, other times formed by actions of the parties (tenant pays rent each
       month, landlord accepts). Also recognized when a tenant overstays lease but continues to pay and
       landlord accepts
  Tenancy at Will:
     terminable by either party at any time, the death of either party, the execution of a new lease to a
       3rd party, or the conveyance of the fee. Generally, if one party has option to terminate at will, court
       will hold that other party also has that option
     May be the product of an express agreement OR when parties have no lease but T nevertheless
       took possession w/ the LL‘s permission.
     Issue may arise when employer provides employee w/ residence. Then, needs to be determined
       whether employee was a tenant or licensee. Test It‘s a lease if the employee had exclusive
       possession of the premises against all the world, including the owner.
  Occupancy at Sufferance:
     holdover tenant, who was once in legal possession after possessory rights have been terminated.
     Not same as trespasser because didn‘t enter wrongfully.
     Temporary— land lord may either try to evict, or create periodic tenancy if she accepts rent


Termination of Leases:
  Mutual Agreement: this is fine, but must satisfy statute of frauds if more than the statutory limit
   (~1year) remains on term of years lease
  Destruction of Premises
     At common law, tenant still had to pay rent if premises were destroyed, even if it wasn‘t their fault
     Now: generally if the lease is for just a building or part of a building and it is destroyed through no
        fault of tenant, lease is terminated
  Eminent Domain: if government takes all leased land, lease is terminated and tenant has no more
   obligation to pay rent
  Death: Always terminates a tenancy at will…varies with other kinds of leases
  Substantial breach of a material covenant
     Common law: treated lease more like a transfer of property rights than a contract
            lease provisions were independent- if one party breached one covenant, the other was not
               entitled to terminate lease.

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             Breach of one covenant meant the non-breaching party could just collect damages.
             only exception was that if landlord breached covenant of quiet enjoyment, tenant could
              consider contract rescinded.
         Modern: leases are treated more like contracts than conveyances of property.
             tenant‘s breach of covenant to pay rent allows landlord to rescind lease.
             Less clear on effect of breach of other covenants, although often provides right to other
              party to rescind

Bargaining Power
  Bargaining power of the parties depends a lot on market conditions, interest rates, economy, etc.
  Landlord‟s power:
      Form Leases: because prepared by landlords, they often contain very pro-landlord clauses.
      In tight housing markets, tenants are left with very little bargaining power
      Leases are long, hard to understand, official-looking
  Tenant‟s power:
      Statutes: many state statutes, local ordinances, case law imply rights to tenants whether they are in
        the lease or not
      Tenants generally cannot waive statutory rights, they override whatever clause in the lease tries
        to waive the rights, i.e.:
            protected against retaliatory eviction since there is a statutory right to lease a renewal
               except upon showing of good cause.
            LL‘s have general duty of ―reasonable care‖ to disclose defects.
            LL‘s right to w/draw from the rental market, while not entirely eliminated, has been severely
               restricted in some areas - laws that make it difficult to convert rental units to condos.
            Discrimination is barred

Local Landlord/Tenant Courts
  New York – probably more tenant friendly
      In NY, vast majority of people in the city are tenants, wealthier, more sophisticated than in other
        cities, highly regulated rental system, tenant advocacy groups are powerful
  Philadelphia – tenants have a perception of leniency towards landlords
      In PA, judges are elected – for an election, a judge raises about $200,000 – often rely on landlords
  Landlord/tenant court – specialized
      Smaller claims – less formal
      Quicker – more efficient (average civil case in Philadelphia takes 3 years)
      Judges become experts in this area
      Problems: Capture – regulators become captured by regulatees – specialization creates an affinity


Landlord’s Rights and Remedies
  Forcible Entry and Forcible Detainer (In general, illegal)
     Self-help: after tenant‘s breach, landlord may not change locks, remove tenant‘s belongings, cut
       off power
  Unlawful Detainer Action
     Summary proceeding for eviction after tenant has breached a covenant (paying rent, holds over,
       creates nuisance)
           landlord serves tenant with notice (demanding comply with covenant or quit premises)
                notice not required if lease is over or if it isn‘t possible to cure the breach
           If tenant complies within time period stated, landlord cannot evict

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           If tenant doesn‘t comply, court date (can take awhile). Some jurisdictions make tenant pay
             rent into escrow during this time, taking away some incentive for tenant to hold over.
           Tenant may raise affirmative defenses—landlord breached a covenant (habitability, repairs)
           If judgment for landlord, they get damages and the sheriff will evict the tenant.
           Damages: in unlawful detainer actions, landlords can generally only get rent, value of
             property during holdover, and other statutory fines. Other damages have to be pursued
             separately
  Holdover tenants – stayed past the end of the lease
     Landlord may go through unlawful detainer action
     Landlord may hold tenant for a new lease on same terms as old lease.
           can either extend for entire new term (i.e. another year) or just extend by month, depending
             on state law
     If actively negotiating next terms rent, tenant isn‘t considered to be holding over
           both sides must be negotiating
           Accepting rent (landlord) or paying rent (tenant) shows acceptance of the other party‘s
             actions and neither side can sue for rent-issues
  Abandonment by Tenant—landlord may:
     Terminate lease by accepting surrender
           If landlord accepts tenant‘s surrender, can‘t sue for damages or future rent that would have
             been due under lease
           Can be inferred if landlord used the property in a manner inconsistent with tenant‘s right to
             possession
     Sue tenant for the rent as it becomes due
           Landlord can sue each month as rent become due or wait and sue at end of lease
           Common law didn‘t require effort to mitigate
           Most state‘s now require landlords to try to mitigate damages by making reasonable efforts
             to relet the premises
     Retake possession to rent the premises on the tenant‘s account


Sommer v Kridel
                                                                   Supreme Court of New Jersey, 1977
Where a tenant has ceased to occupy an apartment, the landlord has a duty to make reasonable efforts to re-
let the apartment rather than letting it stay empty and damages accrue. Duty to mitigate.
     Δ wrote to Π - his engagement was cancelled – he can‘t rent the apartment; Π didn‘t respond
     A third person went to Π to ask about renting the apartment – Π told her it was already rented
     Social factors make the lease for residential purposes more like an ordinary contract
     ―Landlord has to treat the property as if it was vacant‖
     Π has the burden of proving that he made such reasonable efforts
     There is no formula for deciding whether Π met the reasonable standard – has to be case by case

Tenants Rights and Obligations
    Every lease has an implied covenant to deliver possession– landlord has a duty to actually provide
     premises
       American rule – landlord has to give tenant „legal possession‟
              breached if someone else with title, the landlord, or someone with permission of the
                landlord occupies
              not responsible to get rid of trespassers
       English rule – actual possession



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                                                                                              Page 35 of 55
             This is the dominant rule in US, especially in East and urban areas – many states still don‘t
               have
             Violated if anyone else is in possession
                  Landlord in a better position to know if someone else is in possession and to evict them
                  Landlord has better resources/experience for eviction
         Under either, tenant can terminate for breach and recover consequential damages

  Every lease has an implied covenant of quiet enjoyment
     Landlord, someone with paramount title, someone with the landlord‘s consent will not disrupt
        tenant‘s possession
     Against unauthorized entry or possession
     Doesn‘t usually cover disruptive behavior by third parties
     Sometimes landlord can be liable if he didn‘t evict other tenants and knew about the disturbance
     Most severe breach when landlord actually evicts tenant
     Doesn‘t establish maintenance obligations for landlord
  There are states considering giving a landlord a responsibility to make sure tenants maintain their
   property in a way that doesn‘t bother other tenants – enforce rules that prevent one tenant from
   disturbing another – doing things that are illegal
     Could be dangerous for landlords – do we want them to be a private police force?
     Increased costs for landlords – goes to tenants


    Right to Habitable Premises
       Did not used to exist – caveat lessee (version of caveat emptor) – lessee had the burden of
         inspecting
       Housing standards are enforced by local administrative agencies, which use civil penalties,
         injunctive relief, criminal penalties. However, often not effective due to
             Small civil penalties, rare criminal penalty use
             Difficulty in finding prosecutors b/c pay-out is small
             Buildings already very encumbered with liens
             Understaffed and underfunded city housing agencies
             Capture: Corrupt housing inspection offices

Javins v First National Realty Corp.
                                                   United States Court of Appeals for DC Circuit, 1970
The Housing Regulations for DC imply a warranty of habitability; breach of that warrant by a landlord
provides a tenant with usual remedies for breach of contract.
   This is a ‗package of goods and services‘ – adequate heat, light, plumbing, security, sanitation,
    maintenance, etc.
   Tenants continued to pay the same rent – they have a right to expect that the product will have the
    same characteristics
   Bad housing is detrimental to all of society, not just the tenants
Today‘s tenants aren‘t farmers with skills/resources to fix problems themselves
   More mobile tenants – they aren‘t as connected, less interest in the long term maintenance
   Any repair implicates more than the unit the tenant is renting – tenant doesn‘t have access
   More like modern contract law – the buyer relies on the skill and honesty of the seller
   Judge is creating a private remedy to deal w/ the problem of un-enforced codes. Even though codes
    should be enforced, judge recognizes that they are not.
   Calabresi – put the burden on the landlord – he is the least cost avoider – best enabled to solve the
    problems, Inalienable right – neither can negotiate it away – tenant has a right to habitable premises
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                                                                                               Page 36 of 55
    Rawls – veil of ignorance, some minimum for everyone

Eviction
    Process:
       Usually tenant stops paying the rent
       Landlord services notice
       Tenant can pay the rent
       If not, landlord files action
       Set a trial date – sometimes the court requires tenant to pay money into escrow
       Tenant can assert affirmative defenses


Tenant-Initiated remedies to enforce habitability:
  Rent application – tenant can use rent money for repairs
     Usually a limit on how many times per year and how much money
     Usually after notice to landlord and a period of time for landlord to fix the problem
     Hard to manage as a tenant – probably going to cost you more than the allotted amount if it is
        violating habitability
     Shifts all the responsibility onto the tenant, but gives tenant a chance to do it wrong or not the
        way the landlord might want
     When you get to court, have to debate what the tenant did – did they get the best price? Did they
        do it correctly?
  Rent withholding – tenant doesn‘t pay until the problem is fixed
     Sometimes tenant has to pay into an escrow
     Sometimes landlord can take money from the escrow for repairs
     Sometimes, the tenant doesn‘t have to pay the rent
     If you have to pay it back, then you didn‘t get the value of the rent for the apartment – it was gimp
        while you were there, but you have had to pay for it anyway
     Probably the best in most cases to get people to have a standard of habitability – probably the
        landlord is the best person to make the repairs
  Rent abatement – tenant stops paying altogether (previous case)
     Wait for landlord to file for possession and back rent and tenant uses this to defend
     If court finds for landlord, it can award possession
     Tenant‘s good faith doesn‘t help him
     Essentially get a discount
     Court details how much the rent should be decreased – maybe it doesn‟t change the
        habitability – the landlord can say I‘ll just take the lower rent
     Framework the court sets up doesn‘t necessarily give an inalienable right – maybe they are already
        paying what it is worth
     High risk for the tenant – court can rule the tenant has to pay it back


Charles Meyers – Covenant of Habitability and American Law Institute
  These rules will decrease overall available housing – will actually hurt low income renters
  There are 4 categories of housing:
      Suitable for living
      Unsuitable for living, can be fixed by money acquired through higher rents
           Landlord will fix it and charge higher rents
           People living there will have to pay more money – less for other necessities – or move out
           Improved housing
      Unsuitable for living, can be fixed by investment but can‘t be recovered by higher rents


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                                                                                              Page 37 of 55
             Initially a benefit for low-income residents
             Eventually, it will become nonprofitable and will disappear
             No new housing in this category will be built
         Unsuitable for living, investment would result in a negative return
             This will disappear from housing stock right away

Rights Against Discrimination
    When should the government intervene to regulate private contractual relations?

Fair Housing Act of 1968 (amended 1874 and 1988): prohibits discrimination in the sale or leasing of
housing on the basis of race, color, religion, sex, handicap, familial status, or national origin.
  Exemptions: single-family homes sold/rented by owner, religious organizations, private clubs and
    housing for elderly

United States v Starrett City Associates
                                      United States Court of Appeals for the Second Circuit, 1988
Race can be a taken into consideration to promote integrated housing under Title VIII, but indefinite
quotas that restrict minority access to scarce housing are clearly in violation.
   Δ own the largest housing development in the country – 46 high rise buildings with 5,881 apartments in
    Brooklyn, NY
   Minorities wait up to 10 times longer than whites before receiving an apartment
   Quotas are highly suspect, especially ceiling quotas
   The quotas have been in effect for 10 years and Δ says they will for at least 15 more years but doesn‘t
    say why – must be time limited
   Δ doesn‘t show any prior discrimination against whites requiring protection by quotas
   Quotas don‘t provide minorities with access – actually keep them out
                                          th
   For a quota to be limited (per the 14 Am):
       Time limited
       Access quota not a ceiling quota (does this distinction work in the end? Probably not)
       Based on a history of racial discrimination within the entity seeking to employ them


Dissent: Newman:
  The goal of the FHA was to promote integration – Starrett is a rare successful example
  The government has always known about and approved of Starrett‘s rental policies - funding
  the legislators would be happy to see integrated housing
  Starrett is entitled to a trial to prove that its policies are necessary to maintain integration

Otero
Court ruled the HA had a duty to create integrated housing and prevent segregation
NYCHA relocated over 1800 families for new development – they were supposed to have first priority to
return. Displaced families brought suit –– might mean keeping out some minority members during the
initial renting

Policy Making and Section 8
  Key Idea Behind it Free Choice. Was intended to try and avoid concentration of poor people and
     minorities. Also, meant to promote access to more resources (schools, jobs, etc.).

VIII. SERVITUDE LAW
Marla Conley                                                             Property Outline, Pritchett, Fall 2005
                                                                                                 Page 38 of 55
   Relatively flexible ways of allocating sticks in the bundle for land
       Allow you to portion out aspects of property rights – buy or sell only the part they are interested in
Servitudes – ‗arrangements between private parties that give on party the right to use or to restrict the use of
another‘s land‘
  Easements – right to use another‘s land
  Profits a pendre – the right to remove natural resources from another‘s land
  Real Covenants – lease provisions that bind successors
       Prevent or require someone to do something to their land with the goal of protecting another‘s
         land
  Equitable Servitude – promises between landowners that bind successors


Easements
  Easements – right to use another‘s land
     Not necessarily an exclusive right
  Can promote efficient land use – allow investor to purchase only the degree of control necessary to
   maximize the investment
  Can distort patterns of development

     There is a servient (burdened by the easement) and dominant tenement
    Owner of servient land can‘t revoke the easement at will
    Remedy for Breach: Damages or injunction
    2 axes –
        Affirmative – holder of the easement can use the other‘s land
        Negative – can prevent the servient land (ie. blocking light, stopping stream)
        Appurtenant – not personal to the original holder
              most states have a preference for this kind
        In Gross – personal to the holder, not attached to the land


  2 kinds by law if the land is subdivided – idea is that it is created at the moment of transfer
   By implication – sell land that depends somehow on the part seller retains
        2 parcels were originally owned by 1 person
        There was a quasi-easement across the servient land – permanent or continuous use pre-
          subdivision
        Use was apparent upon reasonable inspection (Maybe not as strict as open and notorious)
              i.e. underground sewer pipes and utility lines, satisfied if an adequate inspection of the utility
                and sewer connections would reveal the underground lines
        Easement is reasonably necessary
   By necessity (i.e. one parcel is landlocked after subdivision)
        2 parcels were originally owned by 1 person
        Easement is absolutely necessary
2 other kinds
   Express – actually written out
        Grant conveying easement must conform to statute of frauds – in writing and signed
        Can be created by grant or by reservation
        Scope determined by the grant – if the language isn‘t clear, the court looks at the actions of the
          original parties
   By prescription (adverse) – ‗lost grant‘ – public policy of maximizing underutilized land – assume that
     continuous use of another‘s land was granted by easement and the grant was lost

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                                                                                                  Page 39 of 55
         Actual
         Adverse
         Open and notorious
         Continuous and uninterrupted for the prescriptive period

Green v Lupo
                                                                      Washington Court of Appeals, 1982
WA has a strong preference for easements appurtenant to the land over personal easements; the
easement should be attached to the land if anything in the deed or situation indicates an intent to do so.
   Πs developed their land for mobile home occupancy - Some occupants use motorcycles
   It states Π‘s names – implies personal
   Allows ingress and egress and utilities – implies appurtenant to the land
   Parol (oral) evidence is admissible if the written easement doesn‘t state whether it is personal or
    appurtenant to the land – can be used to determine intent

Reese v Borghi
                                                                District Court of Appeal, California, 1963
Intent during transfer does not negate a right-of-way of necessity that is created when one person parcels
land.
    Πs remaining parcel (C) was landlocked
    Πs formerly owned all the parcels, Δs sneakily bought the last parcel
    There was no intent to create an easement – it isn‘t written in the transfer
In CA, you get a right-of-way of necessity if
    There is strict necessity – landlocked and
    Dominant and servient tenements were owned by the same person when the conveyance gave rise to
     the necessity
   Do we want to protect people from their own mistakes?

Finley v Botto
                                                                District Court of Appeal, California, 1958
An easement by prescription must be actual, adverse, open and notorious, and continuous and
uninterrupted for the prescriptive period. If it is a benefit of the owner‟s permission, there is no
easement by claim of right.
   Πs say they have an easement for a walkway between apartment houses owned by Π and Δ
   Π‘s tenants used to use the path to get to the laundry room
   Previous owner said they were being neighborly – didn‘t think anyone would ever make a legal claim

Covenants
    A more developed way of controlling land use (would say that easements are a subset of covenants)
    Promise to do or refrain from doing something that creates a relationship between 2 parties

  Real Covenant – if it is tied to the land and enforceable by damages
     Burdens and benefits pass to successors of the estate
     If they don‘t pass, then it is not a covenant
  Affirmative covenant – promise to do an actual act
     i.e. trim trees, pay rent, etc.
  Negative covenant (more like a negative easement)
     i.e. not to make noise late at night, paint house an ugly color


Marla Conley                                                            Property Outline, Pritchett, Fall 2005
                                                                                                Page 40 of 55
    Breach – only damages (not injunction)

    Differences between Easements and Real Covenants:
       Covenant is a promise (could be promise to pay rent or homeowners‘ association fees) while
         easement is property right
       Easement creates right in rem, so easement possessor can bring action against anyone who
         interferes, covenant creates rights in personam, so covenantee can bring action only against
         covenantor or successors

Assuming the covenant is enforceable between original parties per contract rules
  Must be in writing – statute of frauds
  Burden – 4 criteria to run with the land
      Intent
            Must have meant for it to bind successors (can be in writing but also in circumstances)
      Vertical privity - Relationship between covenantor and successor – identical relationship (i.e.
       fee simple to fee simple)
            Both must have the same interest and estate
                Contrast easement – any possessor has to honor
            Adverse possession doesn‘t count
                Contrast easement – comes with adverse possession
      Horizontal privity – Relationship between original covenantor and covenantee
            Restrictive approach – simultaneous interests in the land that is the subject of the covenant
                Landlord and tenant, owners of servient and dominant tenants respecting an easement
            Less restrictive – covenant created simultaneously with the transfer of interest in land
                Also if connected to the conveyance of a fee – can be in a deed transferring ownership
                This is more common
      Touch and concern – specific requirement must have a relationship to the land – can‘t be
       completely tangential or extraneous
            Must relate to covenantor‘s use of the land (i.e. maintain or repair structures)
            sometimes paying money counts but not always
  Benefit
      Intent
      Touch and concern
      Vertical privity between covenantee and successor
            Weakened in Restatement – any possessory interest counts
            Still no adverse possession

Eagle Enterprises, Inc. v Gross
                                                                    Court of Appeals of New York, 1976
For a covenant to run with the land, it must touch and concern a significant ownership interest attached to
the covenantor‘s property.
    In 1951, OHR conveyed property with a covenant that Baum would pay for water for 6 months every
     year for $35
    The covenant expressly provided it should run with the land
    Δ has refused to accept or pay for water since he built his own well
it doesn‘t substantially affect ownership interests of Πs
    nonpayment has no legal effect
    neither owner will be hurt

Marla Conley                                                          Property Outline, Pritchett, Fall 2005
                                                                                              Page 41 of 55
  This case is in the book because, although the intent was absolutely clear, the court still found the
   covenant didn‘t run with the land
  Can argue this is a community – they can‘t pick which pieces they pay for

Shelley v Kraemer
                                                              Supreme Court of the United States, 1948
Courts may not enforce a private covenant that violates constitutional rights.
   14th Am protects rights to acquire, enjoy, own, and dispose of property
   Covenant doesn‘t just keep A-As out, it requires that they be divested of title if they purchase property
   As long as the covenants are voluntary, they don‘t violate 14th Am – the issue is when the courts have
    to enforce them
   Here, States have made available to private ‗individuals the full coercive power of government to deny
    to petitioners, on the grounds of race or color, the enjoyment of property rights‘
   30 of 39 owners (47 of 57 parcels) signed an agreement not to sell to anyone who isn‘t white
   makes it tougher if Δ sued for relief – if family won‘t sell because of the covenant – much harder to win
    that case
   Another case – Civil Rights Cases says the laws only cover state action, not private actions


Equitable Servitudes
  Burden
     Touch and Concern
     Intent
           Commonly thought to be required, but not always
     NO Privity requirement
     Notice
           Party to be held liable must have notice of equitable servitude when he acquired possession
           Exception – donee, heir, or devisee
  Benefit
     Touch and Concern
     Intent
     Privity – mostly gone
           may be relevant when a 3rd party is trying to enforce the benefit – some state allow, some
             don‘t
     NO Notice requirement


  Creation
     Mostly Statue of Frauds writing required
     Negative equitable servitudes may be implied from a general plan for development of a
       residential subdivision.
  Remedy – injunctive relief
     May be monetary but if so it usually comes in a lien – limiting liability to the value of property
           Especially if the equitable servitude is to pay a fee
     Defenses
           Waiver, laches, unclean hands, estoppel
           Changed conditions – if no longer possible to fill original intent

    Differences between Equitable Servitudes and Covenants:


Marla Conley                                                            Property Outline, Pritchett, Fall 2005
                                                                                                Page 42 of 55
      Remedy:
           Covenant damages
           Equitable servitude enforcement/injunctive relief
     Creation:
           Covenant must be in writing
           Equitable Servitude usually, must be in writing BUT negative equitable servitudes may
             be implied.
     Privity of Estate
           Equitable Servitude  no horizontal and vertical privity of estate
           court is enforcing an interest in the land analogous to an easement, which is enforceable
             against any person who interferes with it.
           On the other hand, when a person other than the original promisee is enforcing the benefit,
             in some states such person must show that he acquired title to his land from the promisee,
             either before or after the original covenant was made.
  A single promise can create both a real covenant and an equitable servitude

Bolotin v Rindge
                                                                District Court of Appeal, California, 1964
For deed restrictions to be unenforceable, they must be either obsolete or have no remaining benefit for
the beneficiaries.
    Πs own an unimproved lot in a very desirable expensive residential area
    Πs argue the only good use for the property is commercial use similar to others on the same street East
     and West of the property – would bring commercial area 100 feet closer to Δs
    Court can declare deed restrictions unenforceable if conditions have changed so that the restrictions are
     inequitable and oppressive
    If the original purpose is still viable, it doesn‘t matter if it is rough on Π
   Burden is on the party who wants to break the agreement – to show that it is inequitable
   The presumption is to enforce the agreement
   Protecting some intangible interest of the homeowners – not utilitarian

Neponsit Property Owners’ Ass’n, Inc., v Emigrant Bank
                                                                     Court of Appeals of New York, 1938
A covenant granting fees to a community corporation that collects funds to maintain common areas can
satisfy both privity of estate and touch and concern requirements for running with the land. Homeowner
associations are proxies for the collective interests of homeowners.
    Covenant says that each lot will contribute up to $4 a year to a Property Owners‘ Association
    It would be holding to a useless formal rule to say it can be disregarded because it doesn‘t own any
     actual property
    In substance, if not in form, there is both touch and concern and privity of estate
   This was a covenant – the court reformed it into an equitable servitude – created a new entity in order
     to enforce this requirement
   Seems to be in conflict with Eagle
        That case was not about homeowner‘s associations – there is a special relationship between
          homeowner‘s associations and the parties
        Functional argument – facts are just different – in Eagle, the water wasn‘t necessary – no reason to
          uphold the covenant
        Really about changed circumstances in Eagle




Marla Conley                                                            Property Outline, Pritchett, Fall 2005
                                                                                                Page 43 of 55
IX. COMMON INTEREST COMMUNITIES
  CICs and Homeowners Associations, overlap a great deal – an organized effort to promote servitude
   law and creating communities through those principles
      CICs are a private response to perceived inadequacies in local government – one approach
      Create private arrangements to promote public values
  CICs include condominiums, cooperatives, and subdivisions with homeowners associations enforcing
   covenants.
  Fair Housing Act – can‘t discriminate against some groups including familial status
      CICs argue they are private clubs and not subject to FHA – courts tend to buy that argument but
        not for race
      Many laws against discrimination against mentally or physically disabled individuals
  Specific assessments – handed out at discretion of the board

Models (created by the book not the courts)
  Contract/consent – you signed a contract, you have to abide by it
     Court will generally not get involved
     Allow people to set their own standards – you give up some rights to receive the benefit of the
         community
     Will the market eliminate bad communities? Moves very slowly in a housing market – usually one
         incident at a time.
  Administrative agency – we delegate tasks to agencies and we should be deferential to their decisions
   but they have to abide by rules – must be consistent and back up their decisions with arguments
     Reasonableness standard – is that too arbitrary? Too inconsistent? Can change over time
  Local government – the ass‘n is like a local government – apply the law of local governments – same
   ability to restrict, subject to the same prohibitions
     More restrictive for association – certain things they can‘t regulate
     Can do some things as long as they are reasonable
     Apply external standards to assess validity of restrictions
  Corporate board – like corporations where people buy stock – focus on fiduciary duty
     Probably won‘t find too many courts applying this mode
  Trust – related to corporate model – trustees are representatives of individual owners – have a high
   obligation to make sure they are responsive to the needs of the owners

Hidden Harbour Estates, Inc. v Norman
                                                               District Court of Appeal of Florida, 1975
A condo association may enact reasonable rules that encroach on the rights of residents.
   Δ‘s board of directors (condo association) adopted a rule prohibiting use of alcohol in certain common
    areas
   Each owner gives up some freedom for the benefits he receives from the association
   The test should be reasonableness
   Conduct doesn‘t have to be a nuisance to justify regulation
   Each case must be decided based on the particular facts
   Alcohol restrictions are widespread in society – nothing unreasonable or unusual about them

    Could argue under the administrative view – maybe they went through the procedures, but the result is
     unjust

Hidden Harbour Estates, Inc. v Basso

Marla Conley                                                          Property Outline, Pritchett, Fall 2005
                                                                                              Page 44 of 55
                                                                 District Court of Appeal of Florida, 1981
Unlike rules in a condo association‘s charter, rules promulgated by a condo association‘s board of directors
must meet a standard of reasonableness.
   Δ put a shallow water well on his property – he applied for permission, was denied, and drilled anyway
There are 2 categories of condo rules and restrictive uses:
   Restrictions found in condo declaration
      Strong presumption of validity
      Notice – each owner knew when they purchased the property
      Not invalid unless they are wholly arbitrary, violate public policy or a constitutional right
      Can even have a level of unreasonableness
      Otherwise the owner couldn‘t rely on these – they would be in flux
   Rules promulgated by the board of directors or the refusal of board to allow a use when the board can
    grant or deny petitions
      This is where the rule of reasonableness applies
      Must be reasonably related to promotion of ‗health, happiness, and peace of mind‘ of unit owners
      The reasons for denial here were in the best interest of the other unit owners, but they were factually
        unsupported
   Like an administrative agency approach to this situation

Portola Hills Community Ass’n v. James
                                                                       Court of Appeal of California, 1992
A community association‘s prohibitions must meet a standard of reasonableness.
   The Π‘s covenants, conditions and restrictions (CC&Rs) ban use of satellite dishes
   The dish isn‘t visible to other residents or the public
   The ban doesn‘t promote any legitimate goal
   Doesn‘t even seem to qualify under Π‘s own rules
Applying the administrative agency model – unreasonable even though it was in the original contract
Also seems like a local government approach – want to promote things (i.e. satellite dishes)

Windston Towers 200 Ass’n v. Saverio
                                                                 District Court of Appeal of Florida, 1978
Judge ruled the by-law was invalid and unenforceable because it attempted to impose a retroactive
regulation
   Δ owned a female dog when he purchased his unit
   Π amended the bylaws to provide that all pets except those registered before the amendment (including
    pets replacing registered pets) are not allowed – a fine of $10 per day
   Δ‘s dog gave birth to 2 puppies – he decided to keep one

Laguna Royale Owners Ass’n v Darger
                                                                       Court of Appeal of California, 1981
An Association can deny approval for transfer of a unit if the reasons are rationally related to the
‗protection, preservation and proper operation of the property‘ and the purposes of the Association as
stated in its bylaws‘ and are applied in a fair and nondiscriminatory manner.
    Δs own a condo in Π‘s 78 unit apartment complex – they wanted to divide their interest into fourths
     and sell 3/4ths to 3 other couples
    the association‘s right to withhold approval is NOT absolute
    Assocation had a duty to act reasonably in withholding consent – it didn‘t



Marla Conley                                                            Property Outline, Pritchett, Fall 2005
                                                                                                Page 45 of 55
    Restraint on Alienation: In a condo, the unit owner owns a fee simple. Direct restraints on
     transferring a fee simple have usually been held void.
        The courts have been more tolerant of restraints on a condo unit, b/c of the interdependent
          ownership.
        Rule appears to be that a restraint is valid if it is a reasonable means of accomplishing valid
          objectives.


    Potential Problems:
       Duration - As residential associations age, their restrictions may be poorly adapted to
         changing economic conditions, changing values and preferences, and other changing
         conditions.
             may be quite expensive, time-consuming, or even impossible to change restrictions in
               practice.
       Individual Rights: most constitutional restrictions do not apply to homeowner associations.
             Although a ―reasonableness‖ standard of judicial review might invalidate restrictions that
               violate norms of EOC or due process, the expense of adjudication and the uncertainty of the
               standard of review as well as the courts‘ practice of deferring to many association decisions,
               leave many restrictions untouched.

Susan French - Homeowner‟s Bill of Rights
  Homeowners associations should create rules with the goal of making communities most profitable to
    them.
  Including guarantees of:
       Equal treatment
       Speech (display political signs)
       Religious and Holiday Displays
       Household composition (except to limit number of people)
       Activities within individually owned property
       Pets (unless determined at outset, pets should be allowed)
       Allocations of burdens and benefits (use of common areas can‘t be changed)
       Alienation (transfer)


Ellickson people tend to have informal means of working things out on their own.
  Don‘t need associations.
  The structures of home associations may be inefficient in a way because they infringe on the abilities
     of people to deal with stuff themselves.
  Problem w/ Approach: These associations are generally formed in new areas in the south and
     southwest, where people don‘t have established rules yet.




Marla Conley                                                           Property Outline, Pritchett, Fall 2005
                                                                                               Page 46 of 55
X. ZONING
  Local public response to the same questions as CICs – control the community around them
     Tries to enhance the value of property and create a more complete wholesome community
  Ordinances that limit the size and location of structures
     Can get variances to allow developers to do things on their property not envisioned within the
       original ordinance
     Subdivision controls – new development in suburban areas – government regulations that say
       what developers of subdivisions can do
     Building codes


Euclidean Zoning
Village of Euclid v Ambler Realty Co.
                                                             Supreme Court of the United States, 1926
Zoning ordinances that prohibit commercial or industrial development or limit areas to single family houses
are not unconstitutional.
    Π owns land next to 2 railroads categorized in U2, U3, and U6 categories – wants to use it for stores
     and industrial
    The village is divided into 6 districts – U1 through U6
    Deference to legislation
    Apartment houses can be a parasite
    Standard is arbitrary and unreasonable; Might be unreasonable in application to a particular
     circumstance
   Problem with view as a nuisance – Π doesn‘t even get to try – it is preemptive – maybe Π‘s potential
     use wouldn‘t be a nuisance but it is prohibited anyway

Mandelker
  In theory, zoning laws not necessary – market will allocate resources
  Market doesn‘t always work – people don‘t have to deal with externalities of their own actions
  There is still a gap between the zoning framework and its execution in the market
  Nuisance law – zoning is a way to deal with these externalities and others
     based on a hierarchy of preference that favors single family homes, not on dangerous externalities


Karkkainen
  Property rights of a neighborhood dweller include specified rights in a house and inchoate rights in
    neighborhood commons
      Open access but use restricted – streets, sidewalks
      Restricted access but communally owned – transportation systems, schools
      Privately owned quasi commons – retail shops, commons
      Private commons – churches and private schools
  Those neighborhood factors affect someone‘s decision to buy as much as the house itself
  Zoning regulates these things – protects the positive values of the commons
  Subjective value of these items – tied to personhood (Radin)

Epstein
  Doesn‘t like zoning
  Gives some residents essentially a veto power that could have overall negative consequences for the
   community or surrounding areas

Marla Conley                                                          Property Outline, Pritchett, Fall 2005
                                                                                              Page 47 of 55
    Can prevent future growth
    People usually need stores in the neighborhood – people like diversity
    Protects insiders

Ellickson
  suburban communities are especially prone to exclusionary zoning
       Not allowed to charge higher taxes for houses than can fit more kids
       Not allowed to charge tuition for public schools
  Inefficient
  Could pay fines – developer could choose to pay the monetary penalty – they should get that choice
  Better to use servitudes and/or CICs – would be more efficient to have the covenant already worked
     out – don‘t need a big zoning code to reach the same results
  Restrictive zoning will increase housing prices in other areas

Fischel
  Zoning redistributes property rights from owners to the community – some people don‘t care about
    things like parks, whether there are apartments, etc.
  Gives control to people with political power
  Results in less affordable housing – keeps out some people who desire to enter
  Can‘t maximize the value of the land
  Coase would have said we should allocate these according to what people will pay (people concerned
    with externalities will bargain in individual private contracts); zoning is a governmental overlap –
    regardless of what you would negotiate, we set a standard
  Zoning isn‘t an optimal result, but it will produce a positive result at a lower level

Constitutional Limits: must be met with respect to each individual lot.
  Due Process:
      the ordinance has been enacted w/o notice to him and w/o his having had an opportunity to be
        heard.
            For legislative, notice does NOT have to be given to each land owner affected
            For administrative, individual notice HAS TO BE given.
      Substantive Due Process: Court asks whether the ordinance bears a rational relationship to A
        permissible state objective. (doesn‘t necessarily have to be the best way of achieving the goal).
      State Due Process: State constitutions also require that legislation not deprive a person of due
        process of law.
  Equal Protection Clause: requires that landowners who are similarly situated be similarly treated,
   except where treating them differently can be justified.
      Diff. between this and due process clause: Under Due Process, the Q is whether govt. can take
        away the right.
      Under EPC, the question is whether the government can take away the right from these persons
        and not from others.
      To establish a violation, the P must prove a discriminatory purpose or intent. Discriminatory
        effect is not enough.
  Takings Clause: Taking P‘s property w/o compensation

Exclusionary Zoning
Pros
  Collective power – helps take care of parties with less bargaining power or resources



Marla Conley                                                           Property Outline, Pritchett, Fall 2005
                                                                                               Page 48 of 55
  Professionalism – zoning boards are people who think about these issues rather than leaving them to
   individuals who have a minimal interest in the greater community
  Preservation of the character of a community
  Guaranty against future externalities (the money couldn‘t replace what you really wanted)
      Preemptive – nuisance you have to wait until the damage happens
      May help economic growth – gives predictability
  Efficiency – can say that there is one decision maker and there are fewer costs than a thousand
   lawsuits that might get to the same results
      Higher property values


Cons
  Excludes
      Class – if the zoning codes require expensive homes, big lots
      Businesses – no economic diversity
      Concentration of low-income residents
  Static/conservative – difficult to change the zone when it is laid down – can stagnate growth
  Decreases value of property – limits what the land can be used for
  Raises costs to developers
  Who decides? Whose interests are they really taking into account? Is it truly democratic? Open to
   corruption
  Spillover effects – impacts other nearby communities (i.e. Camden is the only place in NJ that allows
   environmentally dangerous factories)
  This is subjective
  Denies property rights – lose some aspect
  Less sense of community

  Problems with court involvement:
     Value judgments - subjective
     Court functions – court is farther removed from local issues – based on empirical evidence –
       not the best system to develop a comprehensive solution
     Consistency – are courts equipped to handle these systematically
  Benefits of court involvement:
     These are state issues – court is uniquely positioned to apply general principles
     Courts do balance factors impartially


PA – striking down zoning ordinances
  Grounded in due process (justification for the land use restrictions isn‘t a part of the government
    police powers)
  These 2 cases are pretty typical of how courts have approached these issues

Surrick v Zoning Hearing Board
                                                                  Supreme Court of Pennsylvania, 1977
Municipalities must provide a fair share of their land for multi-family homes. If a municipality is in the
path of growth, it may not choose to zone out development.
   Π‘s lot is in A-1 which only allows single family dwellings on 1 acre lots – Π wants to build apartments
   Δ‘s township is a western suburb of Philly, ¼ of its land is undeveloped
   Zoning ordinances have to bear a ‗substantial relationship to the health, safety, morals, or general
    welfare of the community‘
       This is a ―substantive due process‖ analysis

Marla Conley                                                           Property Outline, Pritchett, Fall 2005
                                                                                               Page 49 of 55
   Suburban areas in the path of growth can‘t keep growth out
   1st question – is the community in question a logical area for development and population growth
   Then look at the present level of development
   Is the result of the zoning scheme exclusionary (is that it‘s primary purpose)
   Is the exclusion total or partial – look at percentage of community land as compared to the region –
    exclusionary if it is disproportionate

Willistown
zoning ordinances allowed multi-family homes on 80 of 11,589 acres – this was just a token and was still
exclusionary

Girsh – if the subdivision is a logical place for development – it has to bear part of the burden – ―fair share‖
– provide land use to meet legitimate needs of all people who want to live there

Fernley v Board of Supervisors of Schuylkill Twp.
                                                                    Supreme Court of Pennsylvania, 1985
A zoning ordinance that completely prohibits multi-family dwellings is impermissibly exclusionary. A fair
share analysis is inapplicable.
   Board of Supervisors of Township denied Π‘s application for amendment to change total prohibition
    of multi-family homes
   Since the ordinance is suspect based on a complete prohibition, it has to have an even more substantial
    relationship to public purpose than if it just confined activities to a particular area
   Demand for housing isn‘t necessarily correlated to population growth – there may be people who want
    to live there but not in a single family home
   We can‘t just let the township pass an amendment to cure the problem – they could then zone out the
    Π and there wouldn‘t be any incentive for Π to bring the case in the future
   Not completely automatic – still ‗predicated on the suitability of the proposed site and various health
    and safety considerations‘
   If there is total (instead of partial) exclusion, burden shifts to township to show a substantial relation to
    a valid public purpose
   Surrick might encourage you to completely exclude – because then the area couldn‘t be a logical place
    for development

Mount Laurel
                                                                                                             NJ
The intent of the legislature isn‘t controlling; the effect of excluding low income people is. The regulations
were not concerned w/ the general welfare of all persons.
city‘s zoning regulations, which didn‘t provide opportunity for a fair share of the region‘s need for low-
income and moderate income housing, were in violation of the state constitutional requirements of
substantive due process and equal protection.

Growth Controls
Associated Home Builders of the Greater Eastbay, Inc., v City of Livermore
                                                              Supreme Court of California, 1976
To show that an ordinance relates to the public welfare, Π must forecast the probable effect and duration
of the restriction and show that it does not represent a reasonable middle ground between competing
interests.
    Δ‘s ordinance prohibits further development until 3 standards have been satisfied:

Marla Conley                                                              Property Outline, Pritchett, Fall 2005
                                                                                                  Page 50 of 55
      No double sessions in the schools or overcrowded classrooms
      Sewage treatment meets standards set by Regional Water Quality Control Board
      No rationing of water for human consumption or irrigation and enough water for fire emergencies
   Legislation gets deference – if its public purpose is debatable, it stands
How do you decide if it relates to public welfare?
   Forecast the probable effect and duration of the restriction
      Here, look at how far away the area is from meeting the standards, whether the city is trying to meet
       the standards, when they are likely to complete improvements
   Identify the competing interest affected by the restriction
   Does the ordinance represent a reasonable middle ground between the competing interests
   Burden is on Π to show use beyond allowable police power
Dissent: Mosk:
   There isn‘t any incentive for the current residents to meet the standards – why would they want to
    make it possible for new people to move in?
   An absolute prohibition is presumptively invalid

Ellickson:
  Increase cost of housing
  Growth controls benefit those already in the community
       Current owners have an interest in keeping out competitors – raises the price of used housing by
        preventing construction of new housing
  Burdens of growth restrictions are borne by people employed to construct new housing
  Worst for
       Current tenants who like it too much to move – they have to pay more to renew leases
       Households that move in the future – have to pay higher prices
  Also bad for
       Tenants who leave because their rents go up
       Potential immigrants who can‘t afford to buy because of the price increase
       Property owners with undeveloped land
  Makes housing in local areas more attractive – increases prices there as well
  Becomes a huge political issue – there aren‘t a lot of other issues
       Becomes politically stacked in favor of current residents – they are the ones who get to vote
       Developers have more influence in large complex local governments where the voting population
        includes tenants and where homeowners represent a range of demographic groups
  Property rule
       Landowners with property rule can prevent suburb from using eminent domain
       Should be provided much more readily to municipality than to individual landowner
            Should be able to prevent some land uses without paying compensation
            If land use is a nuisance, should be limited by gross inefficiency (costs vastly exceeds
              benefits)
            If not a nuisance, should be limited by any proof of substantial drop in market value of the
              land
       Landowners should almost never be absolutely privileged – otherwise, the municipality can‘t
        implement efficient antigrowth programs
  Moratoria are inefficient and are always suspect
       Courts are too tolerant of them




Marla Conley                                                           Property Outline, Pritchett, Fall 2005
                                                                                               Page 51 of 55
XI. TAKINGS
    Growth controls are just one tool local governments can use
    Most of the taxes we pay and the government we have and the services we receive are at the local level
       Most of that money raised through property taxes
       Regulation of land is the crucial question



Exactions
    You can only do this if lots of people want to build in your area
    This happens in areas that are developing quickly

    Types:
       Subdivision requirements – developer pays for infrastructure
       Impact fees – usually passed on to the purchaser
       Linkage programs – replace what was lost


Nollan
the regulation must have a central nexus with the solution
homeowners by the beach want to add to their home – the coastal commission wants them to dedicate an
easement on the property in exchange for the building permit – court said this is the wrong approach – they
are trying to take property without reimbursing – the resolution has to help with the problem – here the
government said the problem was the view – but they are trying to create access

Been:
    The ‗bad‘ purpose test isn‘t clear: can be bad for 2 reasons
             Not legitimate state interest
             Not sufficiently related to the purpose
        Ignores the role exactions play as ‗damages‘ for injuries caused by developments
    Exactions create incentives for developers to consider all the costs in determining how much to
     develop
        Induce efficient use of land
        Mitigate negative effects of development
        Enable/Discourage certain kinds of growth
    Shouldn‘t matter how the municipality spends the money
        These restrictions prevent the most efficient allocation
        Nexus test prevents substitute remedies
             Should be damages paid back to the public
        Allows judges to substitute their value judgments for legislatures
    2 dangers to exactions:
        Municipality will charge developer more than the harm – redistributing wealth
        Overregulation – to get more money
             Might become so dependent that they have to let developers build
    Municipalities face competitive pressures
        With other jurisdictions
        With its own electorate (developer can go to an initiative measure)
        Higher levels of government (may strong arm towns to keep projects in-state)
        Private sector (developer can build other things)


Marla Conley                                                             Property Outline, Pritchett, Fall 2005
                                                                                                 Page 52 of 55
    Overall, the court interferes too much with a government‟s decision making – creative attempts
     to resolve problems

Dolan v City of Tigard
                                                              Supreme Court of the United States, 1994
For a government to place a condition on receipt of a building permit, the condition must have an essential
nexus with the state interest and a reasonable degree of connection (rough proportionality) with the
projected impact of the development.
    Π owns a plumbing and electric store next to the creek – she wants to double the size of the store and
     pave her parking lot
    City Planning Commission granted the permit application subject to conditions
    Dedicate portion within floodplain for greenway
    Dedicate an additional 15 foot strip of land adjacent to the floodplain for bike path
    Π claims she has to pick between the building permit and the compensation for her property
    Look to see if there is an ―essential nexus‖ between the state interest and the permit condition
    Then, is there a required degree of connection between the exactions and projected impact of the
     development (Nollan didn‘t get this far – stopped at the first question)
    Requires some individualized determination although not precise math
    Assertion about the decrease in traffic isn‘t specific enough
Dissent: Stevens:
   Π‘s building will have an adverse impact on city‘s interest in drainage and traffic
   City may not be able to attach arbitrary provisions, but these aren‘t arbitrary
   The state decisions don‘t support the additional constitutional hurdle of ―rough proportionality‖
     between harm caused by the development and benefit obtained by the condition
   She would rather have the greenway be public – then she doesn‘t have to take care of it or deal with
     liability related to it

    Under Euclid, zoning could be a for a public purpose – Rehnquist says this isn‘t zoning
    Now, you need actual statistics – how much impact will it have
    May cause the city to do better planning

Regulations of Use

Penn Central Transportation Co. v City of New York
                                                              Supreme Court of the United States, 1978
The landmark law is substantially related to the promotion of the general welfare and doesn‘t entirely
prohibit development above Π‘s property; therefore, it is not a taking requiring compensation.
   Designation imposes a duty to maintain the property at owner‘s cost
   Δ owns Grand Central Terminal
   Submitted a plan to build a 55 or 53 story building – both denied after several reviews
   If Πs were denied the ability to exploit a property interest they thought was there, that isn‘t a taking
   ― ‗Taking‘ jurisprudence does not divide a single parcel into discrete segments and attempt to determine
    whether rights in a particular segment have been entirelyl abrogated‖ – look at the parcel as a whole
   Loss of value itself isn‘t sufficient to show a taking
   Landmark laws only apply to selected parcels, not entire areas (like zoning) – Πs say they don‘t get the
    benefits of nearby buildings having the same restrictions
   The regulation doesn‘t interfere with permanent uses of Π‘s property – test is does it interfere with
    investment expectations

Marla Conley                                                           Property Outline, Pritchett, Fall 2005
                                                                                               Page 53 of 55
   Πs aren‘t prohibited from all use above the Terminal – just this particular plan
   It can continue to operate as is – that gives a ―reasonable return‖ on investment for Πs
   They can transfer these air rights to other nearby buildings
Dissent: Rehnquist:
  The designation of historical building comes with lots of burdens and almost no benefits
  Not like zoning – only applies to single buildings – unfair to make them bear the burden
  Valuable property rights have been destroyed

Majority
  They didn‘t really use the use of their property
      They can use it in the way it is now
      They can use it in the way they had originally planned
      They could possibly submit other plans that would be approved
  They can sell the air rights – they can still be compensated
  They could have objected to their designation
  They built the building to be an icon of sorts
  There is a public benefit to having attractive buildings – cities can regulate the type of buildings
  You could always let them build later – tearing it down is irreparable

Minority
  This isn‘t zoning – it only applies to certain buildings
  They‘ve lost a huge amount of money without being compensated
  They have lost the ability to alter their land
  City is giving something up – Grand Central went bankrupt – lost lots of jobs
  This isn‘t a public use

Joseph Sax, “Some Thoughts on the Decline of Private Property”
       writing shortly after the Grand Central case
       Wonder why the private market doesn‘t meet public goals anymore
       Developmental activity itself is suspect - lots of concern of excesses of development
       In this case, one landowner is prevented from doing something all his neighbors can do
           Required to continue conferring a benefit on the other owners
       We agree more now that non-development is optimal but private bargaining doesn‟t bring about
        that result
       Ability of the public to avoid paying compensation makes them want the benefit more
       Different types of consumption:
           Exclusive consumption (residence or shopping center), all the benefits go to the person who
             owns it, community is happy to let that person do what they want
           Nonexclusive consumption – competitors include those who benefit from maintenance –
             benefits flow to all beneficiaries regardless of what they contribute – the likelihood that they will
             organize is less – benefits in a diffuse way
       As development has increased, it has become less valuable (and lack of development is worth more) to
        us as a society

Lucas v South Carolina Coastal Council
                                                                  Supreme Court of the United States, 1992
Complete elimination of the economic value of property is likely to be a taking requiring compensation.
  In 1996, Π paid $975,000 for 2 plots of land in South Carolina – he planned to build single family
   homes

Marla Conley                                                                Property Outline, Pritchett, Fall 2005
                                                                                                    Page 54 of 55
   In 1988, SC passed the Beachfront Management Act – prohibited him from construction of any kind –
    established a baseline – Π‘s land is on the water side of the baseline
There are 2 categories where compensable without other inquiry required:
   Physical invasion
   Regulation denies all ―economically beneficial or productive use of land‖
   Harmful or noxious use can be prohibited without compensation
   Zoning does sometimes result in a lack of economic use – he has to expand past the rule that regulation
    denying all beneficial use is out – exception when government is protecting the health and welfare
   Seems to represent 2 different approaches to law and property- Lucas and Penn Central/Euclid
       Society should have the right to allocate property rights – can use grand central, don‘t have a right
         to tear it down
       Scalia says that Lucas has the right and the government can only adjust it in extreme circumstances
              There are no societal rights to property – they are individualized – government intervenes in
                some ways to protect personal rights (through nuisance law) as an embodiment of other
                private interests




Marla Conley                                                           Property Outline, Pritchett, Fall 2005
                                                                                               Page 55 of 55

								
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