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Prof. Carlson
Property Outline 2010
I. CREATION AND ACQUISITION OF PROPERTY

PRINCIPAL THEORETICAL EXPLANATIONS OF PROPERTY


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3.

4.

5.

6.

7.

8.
9.

FIRST IN TIME: taking possessing of an un-owned thing is the way to acquire an ownership interest in
it. There is a preference by priority.

See Pierson v. Post, Ghen v. Rich (whaling), Johnson v. M'Intosh, INS v. AP


LABOR THEORY (LOCKE): John Locke is the originator of the idea that by mixing your labor with
something unowned (e.g. cataching a wild fish), you own the resulting mixture of labor and object.

See INS v. AP, Local 1330 v. U.S. Steel, Ghen v. Rich (custom-emphasis on hardest worker),
Popov v. Hayashi, Pierson v. Post (dissent)
RELIANCE (SINGER): the legal system should recognize and protect the reliance interest of property
owners. Reliance theory is based on the moral argument about protecting the reliance interests of the longstanding user. It is wrong for a true owner to allow a relationship of dependence to be established, then try
to cut off that relationship/dependence.

To some degree adverse possession relies on this theory.

I.e., it would be immoral to allow the true owner to claim an interest after the possessor has come
to rely on the true owners staying away.

See Singer, dissent of Local 1330 v. U.S. Steel, Howard v. Kuntos, dissent of Van Valkenberg
v. Lutz, Adverse Possession, Easement by estoppel
PERSONALITY THEORY: choose a property rule to recognize a distinct property right when the objects
of the property define the owners person; similar to reliance.

Oliver Wendell Holmes: personality theory p. 118

Charlie's shack and right to exclude/trespass in Van Valkenberg v. Lutz that is, the shack had
become very essential to Charlies personhood, INS v. AP
UTILITARIAN THEORY (HUME and BENTHAM): David Hume and Jeremy Bentham argued that
property was adopt property was utilitarian. We protect others possessions as property because we desire
the same protection for our possessions. The implicit root of property in this theory is possession and it
attempts to maximize social utility.
Hume: private property justified because it is limited resource, also to encourage thrift and industry;
perfect equality would lead to impoverishment
Bentham: property is nothing but an expectation of protection created by the legislator and established
tradition
ECONOMIC EFFICIENCY: property is economically efficient. This theory promotes the best
consequences for society overall (i.e. markets and consumers). Compare the costs and benefits of
alternative property rules or institutions with the goal to adopt rules which will general economic wellbeing.

See Cheney Brothers v. Doris Silk Corp., Keeble v. Hickeringill, Smith v. Chanel (imitation
is the life blood of competition), Pierson v. Post, Ghen v. Rich, INS v. AP

All of the IP cases in one fashion or another are concerned with the tension in protecting
creativity v. promoting competition
John Stuart Mill:
INDIVIDUAL AUTONOMY (FRIEDMAN): favors optimizing individual autonomy through market
decisions even if doing so results in more people living in situations where full control over private
property is compromised in some way.
John Stuart Mill:security of property is essential for humankind to maximize its potential for liberty
INTERNALIZING EXTERNALITIES (HAROLD DEMSETZ): Demsetz believes new property rights emerge
when the gains become larger than the costs of internalization of externalities. Property helps to internalize the
externalities so that individuals make economically efficient judgments.
HOHFELDIAN RIGHTS: attempted to disambiguate the term rights by breaking it into eight distinct
concepts with four pairs of jural opposites and correlatives.

Jural opposites: (1) right/no right; (2) privilege/duty; (3) power/disability; (4)
immunity/liability

Jural correlatives: (1) right/duty; (2) privilege/no right; (3) power/liability; (4)
immunity/disability.

Right and duty are correlative concepts. If A has a right against B, this is equivalent to B
having a duty to honor As right.
10. CUSTOM: property has a customary root. People engaged in a common activity (e.g. whaling or cattle
ranching) often develop customs that govern their relationships between themselves and toward their
objects of acquisition or husbandry (e.g. whales or cattle).
11. Morris Cohen: acknowledge that the essence of private property is always the right to exclude others
but it should not be regarded as inviolable. To be really effective, the right of property must be supported
by restrictions or positive duties on the part of owners, enforced by the state as much as the right to
exclude others which is the essence of property.

RULES v. STANDARDS FOR PROPERTY RIGHTS


RULES (less discretion):

ADVANTAGES

DISADVANTAGES

Provides notice to people:


outcome known before going to
court

-Allows planning of behavior ---Easier


and more efficient to administer
-Uniform and predictable
-Low administrative costs

Advocates of this position must deal


with:
-Problem of rigidity
-Inflexibility to change over time
-Creation of cynicism by public

STANDARDS (more
discretion):
Decides instant case but leaves
future cases open

-Increases Fairness
-Considers individual differences
-Flexible over time towards
individual and PP changes

Advocates for this position must deal


with:
-Flood of litigation concern
-Inefficiency of administration

POLICY ENDS TO THE NATURE OF THE PROPERTY RIGHTS: (1) instrumental ends arguments (channel behavior,
reduce consequences of litigation and quarrels); (2) reward productivity and foster efficiency (labor theory); (3) create rules
consistent with societal habits, customs, or law; (4) create simple, easily enforceable rules; (5) maximize social utility argument
(peace, justice, competition); (6) produce fairness in terms of prevailing cultural expectation of fairness.

MATTER FOR LEGISLATURE OR COURTS?


Why Legislature:
-Accountable democratically
-Access to evidence/research
-More representative
-Weighs all issuesnot just the single case before them, much
more information and not bound by narrow dispute
-Benefit of time (no time pressure)
-Widespread ramifications
-Broad set of witnesses/interests
-Big Picture view

Why Courts:
-Neutral/not subject to interest group pressures (claim may be
overblown)
-Competence to decide property right Qs
-Reasoned decisions
-More efficient process
-Tradition of common law development to make property
rights decisions
-Flexibility to limit cases applicability, meant to be a more
anti-democratic institution
-Let court decide, if wrong legislature is a check

A. CAPTURE AND MEANING OF POSSESSION


POSSESSION: is the controlling or holding of personal property, with our without a claim of ownership.

Possession requires that the possessor have both (1) an intent to possess/control the property, and (2) actual control
over the item. This second element (or occupancy) was not present in Pierson v. Post.
CAPTURE: Wild animals (ferae naturae) may be one of the few things that are unowned and susceptible to capture.

1. FIRST IN TIME PRINCIPLE: the first person to occupy the thing/resource owns it and its corollary. A prior possessor
prevails over a subsequent possessor.

Not dispositive in Keeble; court promotes competition instead.

Not dispositive in Ghen; court promotes custom and incentive to hunt instead.
o Benefits: certainty, descriptive theory, settled expectations, reward capture and foster efficiency
o Disadvantages: unsympathetic to the energies pursuer, scarce resources can create inefficiencies,
distributional consequences, and morally unfavorable.
Pierson v. Post (1805), pp. 18-26: while Post (P) was pursuing a fox, Pierson (D) killed the fox and took possession of it.

RULE: a hunter must either trap or mortally wound (deprive it of its natural liberty) a wild animal in order to acquire
title or occupancy of wild animal.

Majority involves a rule of possession so that the first hunter to deprive animal of its natural liberty (wounding
where animal cannot survive on its own or capture) gains possession of it.

Majoritys rationale (PIERSON): possession is given to the


person who actually obtains occupancy of animal. This rule
would create more certainty and preserve peace and order in
society with less litigation costs. This is intended to reward the
effective and successful individual and not necessarily the
individual that tried. It also encourages more efficient capture
of the foxes.

Dissents rationale (POST): dissent objects on two grounds: (1)


It was better to adopt the customs of sportsmen to determine
ownership of fox, and (2) Recognition of a property right in
wild animals when there is a reasonable likelihood of capture
would conduce to more rapid extermination of foxes. It is
unfair and morally unfavorable to award the fox to a person
who did not invest the same time and energy in the capture.

2. EQUITABLE DIVISION/PRE-POSSESORY INTEREST:


Popov v. Hayashi (2002): involved rival claims to ownership of a baseball hit by Barry Bonds; both had quasi-possessory
interest in baseball.

HOLDING: Both parties have an equal and undivided interest in the ball. Solution to the problem was equitable
division (item is sold and the proceeds are split between the two parties).

RULE: Where an actor undertakes significant but incomplete steps to achieve possession of a piece of abandoned
personal property and is interrupted by the unlawful acts of others, the actor has a pre-possessory interest in the
property.
o Pre-possessory interest constitutes a qualified right to possession that can support a cause of action for
conversion.
o Conversion is the wrongful exercise of dominion over the personal property of another (in this case the ball).

Compare Post to Popov: in Post, the was not interrupted by outside unlawful intervening
event and therefore his right of possession based on labor was insufficient to trump the right of
actual possession, however in Popov was disturbed inappropriately and therefore his labor
granted him a pre-possessory right equivalent to that of actual possession
3. ACCEPTABLE COMPETITION V. MALICIOUS INTERFERENCE:
Keeble v. Hickeringill (1707), pp. 30-35: when Keeble (P) lured wild-fowl to his land with decoys, Hickeringill (D) frightened
the wildfowl away by firing a gun and affecting Ps livelihood.

RULE: a person may not maliciously prevent another from capturing wild animals in the pursuit of his trade.

POLICY: court favors protection of those who use their skill/industry to promote trade and fair competition
o If someone damages anothers business by competition, no liability exists.

E.g., a schoolmaster lures students away from school by offering better instruction is fair
competition, but it would be unlawful to frighten the students away.

Hickergill could gave created BETTER decoys.


o In Keeble, general welfare is best served by promoting social goal of furnishing the markets with duck and
defend lawful competition.

Property rights can be affect by policy ends: Hickeringills conduct was a dead-weight drag on
societal improvement (e.g. fewer ducks for the table). Hickeringills conduct might not be unlawful
if societal goals are to preserve biodiversity.

Doctrine of ratione soli: asserts that an owner of land owns the wild animals on that land. Serves to protect
a landowners constructive right to possession as against a trespasser (Keeble).

Specific instance of constructive possession: control or dominion over a property without actual
possession or custody of it.

4. CUSTOM DICTATING PROPERTY RIGHTS: custom is a practice that by its common adoption and long, unvarying habit
has come to have the force of law.
Ghen v. Rich (1881), pp. 26-29: Ghen (P) shot and killed a whale, which sank to the bottom of the sea. Three days later, Ellis
found the whale and did not notify obvious owner (P); instead, Ellis sold it to Rich (D).

HOLDING: the court can consider custom and usage within an industry to determine the rule of law regarding property
ownership.

RULE: title to a wild animal can be acquired when a hunter apprehends the beast in accordance with custom. Mortal
wounding is enough, if that is the custom.
o Swift v. Gifford: local custom is important and historical tradition regarding job itself lent to a decision for a
hunter.
o Barlett v. Budd: hunter who kills and lays appropriate claim on animal is rightful owner of the animal with
possession

ARGUMENTS FOR AND AGAINST CUSTOM


Arguments
Instrumental

For
-Works well in practice
- Necessary to the survival of the
industry and may collapse if not
followed (no one would hunt if chance
finder could take fruits of labor)
-Society deprived of benefits of industry

Against
-Customs will be formulated for benefit
of industry, not society as a whole
-Dangerous to those employed
-No reason to think that industry could
not respond to changes

Economic

-Custom may be more efficient at


promoting capture of wild animals
-Ensure individuals do not grab benefits
for themselves that impose net loses on a
group
-Apply when it requires in the first
taker the only act of appropriation that is
possible.
-Application is limited to and relied
upon by an industry and experts can be
relied upon
-Affects few people

-Wasteful of economic resources (some


of the whales floated out to sea and
were never recover)
-Lead to overinvestment in technology
(bomb lance)
-Custom may not internalize all
externalities

Other Interests

Individuals conform to customary rule out of self-interest: (1) In the long run, they will be better off; (2) In the
short run, deviation from the customs will result in substantial informal sanctions from the group.

RULE OF CAPTURE APPLIED TO OIL AND GAS: because fugitive minerals such as oil and gas appear to be similar to
wild animals because they wander, court initially applied legal doctrine pertaining to wild animals.

The underlying issue in those cases, however is really how best to foster productivity by the efficient exploitation of oil
and gas.

Rule of capture applies:


o The first driller to tap and produce oil or natural gas from a pool underlying the lands of several owners has
acquired possession of the resource brought to the surface, even though it may have drained the pool under
the others lands.
o Incentives reason to produce oil and gas.

Oil and gas characterized as fugitive resources similar to wild animals.


EXCEPTIONS: LATERAL DRILLING: drilling straight down from ones land is not a trespass. Lateral drilling is a trespass.

HYPO: B drills down and takes all the oil in the land. A sues B.
Arguments for B:
-First-in-time principle: first to deprive the oil of its natural
liberty (Pierson) and mortally wound (Ghen).
-Instrumental: extract oil for productive uses (Ghen and
Pierson).
-Oil is analogous to wild animals.

Arguments for A:
-B is unlawfully infringing on As oil under As land (Keeble/
ration soli).
-A bought the land for oil, A has a pre-possessory interest in oil
(Popov).
-Oil is not similar to animals (finite, cannot reproduce)

WATER:

A. Surface water (lakes, rivers, and streams)


o Riparian states and rights: water-rich eastern states, each owner of land along a water source has a right to
use the water, subject to the rights of other riparians.
o Prior appropriation: water is scarcer in western states and was allocated on the basis of first in time (the
first to make beneficial use of water gained a vested right to continue that use). The allocations are controlled
by state statute today.

B. Underground or ground water (water found in aquifers): can be classified into two categories (underground stream
and water not in a channel or percolating waters) and the owner of property has an absolute right to withdraw
percolating water and use it as he willed.
o English rule of absolute ownership: allowed each landowner over an aquifer to withdraw freely without
regard to effects on neighbors.
o American rule of reasonable use: water must be used solely on the overlying land if use elsewhere would
cause hardship to other landowners with access to the common underground pool of water.
HAROLD DEMSETZ, TOWARD A THEORY OF PROPERTY RIGHTS:
Thesis: Demsetz believes new property rights emerge when the gains become larger than the costs of internalization of
externalities.

Externality: it is a cost or benefit that a resource user is not forced to take into account when making decisions about
how to use the resource (i.e. external costs and benefits).

Transaction costs: trouble with getting numerous parties together, free riders who pay nothing but enjoy resource,
hold-outs (if negotiate separately, some parties may way for a better deal at the cost of others), one party may be
motivated to negotiate separately at cost of others, lawyers, times, organizing.

Types of Ownership:
o (1) Communal: all members exercise right, increased transaction costs because costs not born directly by
each person nor is are owners attentive of them, must negotiate;
o (2) Private: exclude others greatly reduces negotiation costs;
o (3) State: state can exclude anyone from use of property;
o (4) Anticommons: entails multiple rights to exclude others from ownership of property (under consumption
as number of anticonsumers increases); AND
o (5) Semicommons: combines private and common ownership.
o Property regimes in place to manage externalities

Tragedy of commons: tendency to over-exploit a common resource because the full costs of exploitation or
externalities are not borne by each user. (Self-interest and common interest collide).
DEMSETZS ARGUMENTS:

Encourage privatization of property to decrease problems of common property ownership (externalities).


o Fewer owners = fewer externalities
o Promotes sense of freedom, autonomy, privacy.
o Easier to negotiate with one owner.

Privatization may not be possible so must follow other schemes to control and minimize deleterious burdens of
externalities:
Ways to reduce externalities if privatization not possible: Government and Self Regulation:

1. Government can regulate by legislation and zoning (i.e. Hickeringill zone distance between ponds).

2. Government may impose rules or limits (quotas on hunting animals, require licenses).

3. Industries may be able to self-regulate (e.g. Maine lobster industry which self-regulates and enforces).

4. Let the injured party sue in court for damages.


5. Do nothing and increase competition

HYPO: 100 people own trees in an open lot. All have right to use. Each person has a 1/100 th interest in the last tree that remains
standing. Worried about externalities if the trees are valuable.

No one can limit use of others.


Consider the following:

Externalities:
-Inefficient use of trees
-Land value decrease
-$ for trees decreases if cut early in
growth
-Future generation interests not
considered

Interests of Society:
-Social order decreases if one person
gets all
-Decrease in peace
-Incentive to cut down trees
-Money to some and decrease in wealth
for others

Tragedy of Commons:
-Individual self-interests collide w/group
-Hard to control everyone
-Transaction costs increase
-Hold out/free rider

The long chain of causation: (1) Changes in technology or the opening of new markets create; (2) Changes in economic values
which increase; (3) Internalization (process that enables these effects to bear on all interacting persons); and (4) Lead to property
rights. (5) These changes may not be conscious but come about through social mores or common law precedents.

E.g., The development of the fur trade among Indians around Quebec: Indians established property rights after the
(beaver) fur trade picked up. Thus, they internalized the externality (overhunting the game), saving the beavers.

However, no property rights existed in the case of the Southwestern Indians. These Indians hunted grazing animals
with little commercial value (low benefit of internalization) and the animals wandered a lot (high cost of internalization
hard to keep track of which animals are yours)

B. ACQUISITION BY ADVERSE POSSESSION


RATIONALES FOR ADVERSE POSSESSION:
1. Earning/Social Utility theory: encourages use of property, social utility, and rewards people who use land productively and
beneficially for a long time.
2. Sleeping theory: people who ignore their land in braze violation of legal right deserve to be punished.
3. Stability/Quieting Title theory: enables disputes or doubts about land title to be cleared expeditiously by delivering title
(quieting title) to the person who has occupied the land as if he were the owner; it facilitates an efficient transfer of property.
4. Reliance/Expectations: longer one uses the property the deeper ones reliance becomes on the property.
5. Personality theory Holmes: the longer someone has been on a property the more it will be apart of ones person (economic,
psychological, and moral concerns).
5. Discourage trespass/reward honest behavior

Two ways an adverse possession suit can be brought: (1) Ejection by property owner; (2) Affirmative case brought
by an adverse possessor to rule about who actually owns title (quite title)
Claim of title: one way of expressing the requirement of or claim of right on the part of an adverse possessor.
Two types of adverse possession:
o (1) Under color of title: a written instrument, faulty deed, or other evidence that appears to establish title, but
does not.

Many state statues reduce significantly the statute of limitations period for persons taking
possession of property with color of title.

The adverse possessor with color of title who successfully proves an adverse possession claim
based on actual possession of a part of the tract described in the document constituting color of title
is deemed to be in constructive possession of the whole tract.

Constructive possession: control or dominion over a property without actual possession


or custody of it.
o (2) Someone merely begins living on the land and not under color of title.

ADVERSE POSSESSION ANALYSIS


ADVERSE POSSESSION is a means of acquiring title to the property of another when certain conditions are met
such conditions are: (1) actual entry; (2) giving exclusive possession which is (3) open and notorious (4)
adverse/hostile under a claim of right and (5) continuous/uninterrupted for the statutory period.
Thus, if [adverse possessor] satisfies these conditions for the [identify statutory period], he is able to file an
action to quiet title to make the property his [notwithstanding defenses such as laches- unreasonable delay
in pursuing a right or claim almost always an equitable one in a way that prejudices the party against
whom relief is sought].
The owners cause of action accrues and the statute of limitations period starts to run at the moment of
actual entry and when the owner has actual knowledge of encroachment.
If the owner of the land does NOT take legal action to eject a possessor who claims adversely to the owner,

the owner may lose the right to eject the trespasser from the property.
STEP 1: IDENTIFY THE STATUTORY PERIOD FOR ADVERSE POSSESSION (usually 5-21 years):
[INSERT ADVERSE POSSESSOR] began adversely possessing the property in [INSERT YEAR] which
trigger the action.
Note: even if adverse possessor does not meet the requisite statutory period, he may nonetheless still
succeed under the doctrine of TACKING. Under this doctrine, an adverse possessor may combine a period
of possession with a predecessor adverse possession as long as there is privity of estate between the two.
(Usually a voluntary transfer of physical possessor or estate in land). Although privity is established
between the two parties, the adverse possessors possession of the land would still need to meet all the
elements of adverse possession:

STEP 2: RUN THROUGH THE ELEMENTS OF ADVERSE POSSESSION AND INTERWEAVE FACTS
STEP 3.
ACTUAL
ENTRY AND
USE: has the
adverse
possessor
actually
entered onto
the land?

-Actual entry onto the land is required, and this entry starts to run against the statutory limit for
adverse possession.
-Adverse possession may exist even if the occupant does not reside on the property and for long
periods of time does not use it.
1. Ewing v. Burnet (1837): (AP/USE) court found for claimant that used lot primarily for
digging sand/gravel when claimant paid taxes on the lot, dug sand/gravel from time to
time, permitted others to do so and brought actions against those who did so without
permission. Did not reside on property nor for long times used.
-Courts have different standards regarding what is actual/ordinary use:
2. Van Valkenberg v. Lutz (1952): (NO AP/USE) even though P farmed on the land, built
a shack/garage on the land, raised chickens, stored rubbish, planted fruit trees, cut
timber, and neighbors attested to Lutzs ownership. But, P DID NOT UTILIZE
substantial portion of land.
3. Petis v. Lozier (1984): (NO AP/USE) for a claimant that occasionally used the land for
gardening, planted grass, posted No Hunting and No Trespassing Signs and twice
removed For Sale signs, during statutory period.

STEP 4. GIVING
EXCLUSIVE
POSSESSION: has the
adverse possessor exercised
exclusive possession? (#1-2
malleable standards)

STEP 5. OPEN
AND
NOTORIOUS:
has the adverse
possessors
possession been

-Adverse possessor does not share possession with the owner nor with the public
generally.
Note: sharing with the public generally does NOT denote excluding the
public from the land as a requirement, but rather exercising the rights
of ownership; CANNOT relinquish all ownership to the public
generally.

-Adverse possession must be so visible and obvious that a reasonable owner who inspects the
land will receive notice of an adverse title claim.
-Must use in a way that average true owner would use it under circumstances such that
observers would regard occupant as a person exercising exclusive dominion.
-Must be applicable to condition, size and locality of the land similar to a typical owner.
Van Valkenberg v. Lutz (1952): RULE (NY Law): to prove adverse possession it must

open and
notorious (some
places require
taxes to be paid
for limitations
period to be
met)?

be shown that the premises (1) are protected by a substantial enclosure, or are (2)
usually cultivated or improved.
o DISSENT: an adverse possessor need not use all of the land, only some of it.
-Not usually contested unless hidden areas are at issue:
Marengo Cave Co. v. Ross (1937): (NO AP) court held that open possession of an
underground cave is not open, visible, notorious, or exclusive.
-Where encroachment is small, open/notorious requirement may not be met:
Manilo v. Gorski (1969): court remanded case where 15-inch encroachment may have
been too small to satisfy the open and notorious requirement.
RULE: Possession need not be knowingly and intentionally hostile, but it must be
notorious enough to give the true owner actual or constructive notice of the
encroachment.
See Mannillo: actual knowledge v. reasonable person knowledge; most jurisdictions
use reasonable person knowledge.

STEP 6.
ADVERSE/
HOSTILE under
a claim of right:
has the adverse
possessors
possession been
adverse and
hostile under a
claim of right?
If not acting
under color of
title, proof of
adversity is
required This
depends on the
standard required
by the
jurisdictionIf
we apply the
[INSERT]
doctrine

-Adverse/hostile (intent to remain and hostile) = without the owners consent


Note: WITH the owners consent leads to a possible Landlord-Tenant analysis.
-DID [POTENTIAL ADVERSE POSSESOR] HAVE THE APPROPRIATE CLAIM OF
RIGHT?
KEY QUESTION: Does court apply a subjective or objective test?
Objective test (Majority): A/Ps state of mind irrelevant; actions of possessor
important and actions of A/P look like under a claim of right.
o Adverse possessor uses the land as a reasonable owner would satisfies this
requirement (consider actions of other owners in area)
o No subjective intent to claim title necessary, lack of true owners permission,
and inconsistent with true owners legal rights.
Manillo v. Gorski (1969): possession need not be knowingly and
intentionally hostile, but it must be open and notorious enough to
give the true owner actual or constructive notice of the
encroachment. A minor border encroachment of 15 inches does not
satisfy the open and notorious requirement for AP.
Connecticut Doctrine court adopted in Manilo: very nature of the
act is proof of intention, so there is no reason to inquire into the mind
of the possessor (an objective standard).
Subjective test (Minority X2)
o Good faith test (I thought I owned it)= adverse possessor must have bona
fide belief that he has title to the property.
Van Valkenberg v. Lutz (1952): NO ADVERSE POSSESSION.
VV court said that D voluntarily admitted that P owned land; thus,
occupation was not under claim of title and did not meet
adverse/hostile requirement.
Howard v. Kunto (1970): ADVERSE POSSESSION. Court said
that Kuntos (Ds) good faith belief that the tract was his land was
sufficient to meet the adverse/hostile requirement.
o Bad faith test (MAINE DOCTRINE) = adverse possessor must have intent
to claim title to the property against the true owner (i.e. squatters, I thought I
didnt own it, but I intended to make it mine)
Maine Doctrine it must be the intention of the occupant to claim
ownership of the land against true owner. A subjective standard

10

STEP 7.
CONTINOUS/
UNINTERUPPTD:
has the adverse
possessors possession
been continuous and
uninterrupted for the
statutory period?

arguably supporting trespass, falsehood, and rewarding greedy A/Ps.


Court rejected doctrine in Manilo
COLOR OF TITLE = Adverse Possessor enters the property w/defective/invalid
instrument (but appears valid on its face).
o Hostility may be proven by showing instrument
o Adverse possessor gains title not only to the lands he possesses, but in
constructive AP of lands described in the deed.
o SOL may be lowered (depends on state).

Requirement is met when the possessor maintains possession for statutorily


required period of time by using the property in the CUSTOMARY manner (like
the average owner).
Such use must be as continuous as those of a reasonable owner would.
o Consistent with the type of property
Interruptions in actual possession do not destroy continuity if AP occupies land as
would True Owner in similar circumstances.
o Seasonal use: may constitute continuous element but requires privity
(e.g. hunting cabin during hunting season).
Howard v. Kuntos (1970): (AP) Kuntos (D) occupied summer
residence under color of title (a defective deed). Met
continuous element b/c physical use of property was limited
to summer months and it constituted ordinary use.
Abandonment by AP = intentional relinquishment of possession, resets Statute
of Limitations (NO ABANDONMENT? CONTINUOUS)
o #1 AP abandons, #2 AP arrives and SL starts anew
o #1 AP abandons with intent to return, #1 can eject #2
TACKING = AP can combine consecutive periods of possession with a
predecessor to treat the periods as one continuous period if two are in privity with
each other.
o Requires PRIVITY OF ESTATE = voluntary transferred possession or
an estate in land. Privity occurs by contract of sale, gift, will, or
inheritance.
NOTE: The tacking requirements ought to follow the state of
mind requirements.
POLICY see Kuntos: privity requirement is merely judicial
recognition of the need for some reasonable connection
between successive occupants of real property to raise claim of
right above status of wrongdoer or trespasser. Support good
faith purchases of ownership, not squatters.
o Land ownership can be divided temporally that is, by time.
The general rule is that the statute does not begin to run against
a person having a future interest in land until the future interest
becomes possessory (original owner makes a transfer to new
owner).

11

PAY PROPERTY TAXES FOR STATUORY TIME: required in some areas in


west to give notice.

EXCEPTION: DISABILITIES (MUST BE IN PLACE AT TIME AP ENTER AND ACTION ACCRUES)


Disabilities = most statutes give an additional period of time to bring action against disabled (SOL v.
disable statue = which one is longer)
o Only the disabilities specified in the statue can be considered.
Usually minor or infants, insane or other unsound mind, prisoner or people in military
service or those who are absent from the state
o Usually only disability of the owner counts at the time AP entry begins SOL timer.
o SOL will not run against him or her until disability removed.
SOL is TOLLED (suspended) if the owner is disabled from bringing an action to recover
possession at the time the cause of action accrues.
No taking of disabilities, but when under more than one, the one of most benefit is
elected.
A person taking from or through a person with a disability may take advantage of the
tolling statute to the same extent as the person with the disability (except it ends the day
of the sale or gift of land).
Extent of land acquired by AP
o No color of title = actually occupied or controlled in a manner consistent with ownership of such
premises.
o Color of title = AP is in constructive AP of the part of the tract he does not actually possess.
AP does not need to cultivate land.
Constructive or actual possession trumps color of title.
EXCEPTONS: THREE ALTERNATIVES TO RESOLVING BOUNDARY DISPUTES:
Doctrine of Agreed Boundaries: evidence that the parties agreed about where the lines of the
boundary would be placed (oral agreements) and may be enforceable if explicit.
Doctrine of Estoppel: agreed upon boundary where non-owner has RELIED on agreement;
must demonstrate reliance with improvements, etc.
Doctrine of Long Acquiescence: long silence between neighbors on ownership of land is
considered an agreement can be used as evidence between the parties fixing the boundary
lines CA does not recognize. Often applies when one neighbor remains silent in the fact of
expenditures by another that suggest the latters notion of the boundarys location.
REMEDIES:
Property Rules
o Owner gets property
o A/P gets property
Liability Rules
o True owner gets property but must pay A/P for improvements
o A/P gets property and pays true owner for it less improvements

12

C. ACQUISITION BY RELIANCE IN THE MARKETPLACE


ADVERSE POSSESSION
WITH CHATTELS: title to
personal property can be
acquired by adverse
possession. A different often
shorter statute of limitations
usually applies.
AP not well suited to
personal property b/c
possession of
personal property is
not very open and
notorious.
Exception: latches
(did the true owner
behave in a way that
was sufficiently
diligent?)

REPLEVIN: action for repossession of personal property wrongfully


detained by another.
3 different rules for SoL: conversion, discovery (New Rule:
Majority), or demand (New Rule: Minority).
Thief cannot acquire good title, nor anyone that receives
property from a thief.
Bona Fide Purchaser: unaware property was stolen, not able to
retain ownership unless SoL tolls
Exception: (UCC) entrusting possession to a merchant dealing
in kind of goods given will empower to transfer all rights of
entruster to buyer venting good title in buyer.

CONVERSION RULE: Old Rule


DISCOVERY RULE: The modern trend applies
the discovery rule to adverse possession of
chattels.

(Old Rule) SoL begins when property is wrongfully


taken and TO is disposed of property (Tolls even if
theft is concealed)
SoL begins on stolen property once owner discovers
where stolen property is
-Not accrue while owner uses due diligence to
locate property.
-Does accrue once owner (1) knows or reasonably
should know whereabouts of property and (2)

13

identify of possessor

DEMAND RULE: NYC rule

BoP: owner must use due diligence in locating


missing item.
-Due diligence: what tools were available for
recovery?
-Conduct of the owner is analyzed and not that of
possessor
-Rationale: greater protection of innocent owner of
stolen property
-SoL begins when owner demands return of chattel
and GFP refuses return
-Until demand and refusal property is not
considered wrongful

1. ADVERSE POSSESSION WITH CHATTELS: title to personal property can be acquired by adverse possession. A different
often shorter statute of limitations usually applies. The modern trend applies the discovery rule to adverse possession of
chattels.

AP not well suited to personal property b/c possession of personal property is not very open and notorious.
OKeefe v. Snyder (1980): three of OKeefes paintings were stolen from an art gallery. The thefts were not reported to anyone.

RULE: the statute of limitations is tolled if the owner of stolen chattel makes diligent efforts to locate and recover the
lost chattel.

NEW RULE (DISCOVERY RULE): cause of action will not accrue until (1) when the loss occurs (except where
there is fraud or concealment); or (2) when the owner first discovers, or through reasonable effort should have
discovered, the cause of action (including the identity of the possessor).
o Burden of proof on plaintiff (owner) to show reasonable steps taken to pursue a missing chattel, encourages
owners to report losses, and undertake reasonable investigations.
o Encourages good faith purchases and discourages trafficking.

Accrue: the last element of the cause of action is in place or to come into existence as an enforceable claim or right.
KEY QUESITON: HAS THE POSSESSOR ACTED WITH DUE DILIGENCE IN PURSUING HIS OR HER
PERSONAL PROPERTY? (i.e. effective method of notice, contact authoritative institute, etc.)
Due diligence rule: after the property disappears, the true owner may toll the statue for the period of time that he or
she searches diligently for it, but if the search is discontinued, the statute runs. The true owner bears the burden of
proof on the issue of diligence.
o SoL does not run if owner cannot locate object or possessor when all reasonable efforts are made.
NY (Guggenheim) RULE: the clock on the SoL does not begin to run until the true owner knows the identify of the
possessor and makes a demand to get the item back.
o Museum makes a demand and the demand is refused.
o Person who has the art could defend it by latches. Original owner could have DONE MORE.
o Demand and refusal rule means that a possessor runs the statute from the date of the refusal and that the
statute was tolled beforehand.
Note: The Native American Graves Protection and Repatriation Act of 1990
o The act seeks to send back the possessions of Native Americans that were lost as a consequence of European
settlement to their erstwhile custodians.
2. ACQUISITION THROUGH RELIANCE/WORK
Local 1330 v. U.S. Steel (1980): two large steel mills shut down in Youngstown, Ohio after U.S. Steel Corporation (D) told
workers that if they increased productivity the plant would remain open.
o HOLDING: (1) No precedent would convey authority to the court to require a steel manufacturing corporation to
continue operation when its officers and Board of Directors decided to discontinue on the basis of unprofitability; (2)
Courts DO NOT have the power to regulate private property.
o Ds argument: it is private property and owners have a right to shut it down; no contractual promise was
made to keep it open.

Instrumental arguments for allowing plant to shut down: if forced to stay open more costs, no
incentive to open more businesses in U.S., companies may cshift businesses overseas, workers
could have seen the closing coming.

14

Ps argument: workers have relied on continued operation of the factory; Ds are obligated to keep it open.

Instrumental arguments for forcing plan to remain open: fairness in holding company
accountable for misrepresentations, lots of externalities unaccounted for if shut down (jobs,
community, etc.), another option is sell to worker or require workers to compensate.

MATTER FOR CONGRESS, NOT COURTS:

SINGER, THE RELIANCE INTEREST IN PROPERTY:

Judge Lambros initial intuition in U.S. Steel about correct legal result was better. Court should have:
o Recognized property rights arising out of relationship with company.
o Placed obligations on the company towards the workers and the community to alleviate social costs of its
decision to close the plant.
o Acknowledged precedent of the kinds of property rights that were asserted by the union.

Many property doctrines and legal rules are based on principle of shifting ownership rights when an owner has
caused a reliance interest in property.
o True owner in U.S. Steel caused possessor to rely on his actiosn and possessor developed a deep attachment.
o Singer supports shifting some ownership rights to workers.
HOFELDIAN RIGHTS: rights are relational!
o Rights: are claims that are enforceable by the state and others act or refrain from acting in a certain manner in relation
to the right holder.
o Correlative duty: for each right there is a correlating duty (i.e. right to exclude means others have a duty not to
trespass).
o Privilege: permission to act in a certain manner vis-a-vie property without being liable for damages to somebody who
has been affected by the act.
o Every Right Correlative Duty
o Every Privilege Correlative NO RIGHT
o Privilege to do something and someone else has NO RIGHT to stop.

D. ACQUISITION BY CREATION-INTELLECTUAL PROPERTY


1. LOCKES LABOR THEORY: Begins with the belief that every person owns oneself. Every man has a property in his own
hands, wrote Locke. Locke claimed that because you own your own labor, when you mix that labor with something unowned
by anyone, you own the resulting mixture.
2. QUASI-PROPERTY INTEREST
ISP v. AS (1918): P and D are newsgathering and distributing competitors. P brought suit to restrain D from pirating Ps news by
bribes, inducements, and copying from Ps bulletin boards/early editions.
o HOLDING: INSs conduct violated APs quasi-property right in its news presentation. It was misappropriate
(application of anothers property or money to ones own use) and unfair competition in business for INS to copy APs
new and release it before AP could.
o The rights between these companies were RELATIONAL.
o INS had a DUTY not to take from APs news.

Each party is under a DUTY not to undercut each other unfairly for competition.
o Instrumental arguments for INS: healthy competition is a good thing, even if a particular business is hurt
in the process, better for consumers, drive down cost of news, AP can figure out another way to disseminate
news.
o Instrumental argument for AP: newspaper would go under if court ruled in favor of INS, unfair business
practices should not be support (Keeble), AP captured the news first (Pierson).
3. NO PROTECTION AGAINST IMITATION:
Cheney Brothers v. Doris Silk Corp (1929): D copied Ps popular scarf design and sold the silk at a reduced rate but denied
knowledge that it was Ps design.
o HOLDING: skilled imitation of seasonal fabric designs is not so inequitable as to warrant a remedy.
o To exclude others from imitating certain chattels may set up monopolies with intense power over
competitors, which the Constitution only allows Congress to determine.
4. NO PROTECTION AGAINST BRAND COMPARISON:

15

Smith v. Chanel (1968):


o HOLDING: court held that perfume company (D) could announce in advertisements that their product was the
equivalent of the more expensive Chanel No. 5 (P).
o Instrumental argument favoring majority: public is better served because it permits the normal operation of
supply and demand to yield the fair price society must pay for a given commodity and it offered comparable
goods at lower prices.
o Fairness/Labor argument: trial court held that D should not be allowed to take a free ride on the trademark
owners goodwill and reputation.
o Monopolies: lead to higher prices, stiffen innovation, and less accessibility to desired products.
o Under protect intellectual property less motivation for innovators to create new products.
o Over protect intellectual property stiffen innovation.
DOUGLAS G. BAIRD-COMMON LAW INTELLECTUAL PROPERTY AND THE LEGACY OF ISI v. AP (1983), p.63:
clear distinctions between possessing wheat or land as property versus the possession of information. Possession of wheat
precludes possession by another else; many people can possess the same information. As long as freedom to imitate ideas does
not destroy all incentive for people to come up with new devices, it will help promote a market economy.
Intellectual property law: a category of intangible rights protecting commercially valuable products of human intellect.
Patents: the government grant of a right, privilege, or authority.
o Patent holder gets exclusive right to produce the product with no exception (monopolistic) (work need NOT BE
ORIGINAL).
o Lasts 20 years from date patent is filed.
Copyrights: the right to copy a work, specifically, a property right in an ORIGINAL work of authorship (e.g. books, music,
artistic works, articles) fixed in any tangible medium of expression, giving the holder the exclusive right to reproduce, adapt,
distribute, perform, and display the work.
o Less protection than patent owners.
o Last for authors life, plus 70 years.
Trademarks: a word, phrase, logo, or other graphic symbol used by a manufacturer or seller to distinguish its product or
products from those of others.
o Unlimited duration but the least monopolistic power, e.g., provide limited protection for a word.
o Others cannot use trademark for products that will cause consumer confusion.
o Only name protected.
Personal image as property: property rights exist in ones personal image. Today the ability to exploit your image for profit is
recognized as a valuable property right because we have created a culture of celebrity in which money can be made from selling
image.
o A celebritys right of publicity is widely recognized as a kind of property interest, assignable during life, descendible
at death.
5. PROTECTION AGAINST PROPERTY RIGHTS:
WHITE v. SAMSUNG (1992):
o HOLDING: court concluded Samsungs depiction of a robot clad in blonde wig, dress, and jewels posing in front of the
Wheel of Fortune infringed Vanna Whites common law right of publicity.
o RULE: right of publicity can be extended to any appropriation of a persons identity, anything that evokes their
personality, even if it does not use the persons name or likeness.
o DISSENT (KOZINSKI): criticized this ruling as a classic case of overprotection because it extended the
publicity right to preclude even images that might remind the viewer of a celebrity.
o This ruling overturned the balance between protection of creative endeavors and leaving room for new
innovation; it is a clear violation of the 1st amendment.

E. REFLECTIONS ON ACQUISITION AND POSSESSION


1. THE SOCIALLY CONTINGENT NATURE OF PROPERTY RIGHTS & RELATIONAL INTEREST IN PROPERTY:
JOHNSON v. MINTOSH (1823): MIntosh (D) acquired title to land under grant from the United States; Johnson (P) acquired
title to the same land by purchase from the Painkeshaw Indians.
o HOLDING: U.S. government had a right to take the land, even when the land is in previous possession by native
Americans, which is a right granted by the crown and established in this case.
o RULE (Discovery Doctrine): discovery of land in American by a European power gives absolute title subject only to
the Indian right of occupancy.

16

o
o
o

Native Americans were occupants but never really considered owners of the land and rights of Native
Americans were subservient to dominant society.
U.S. obtained all rights to realty that England previously had and did not recognize title based on a grant by
Indians.
NOTE: property rights are often what the federal government says they are.

2. PROTECTION OF PROPERTY RIGHTS IN YOUR OWN BODY:


MOORE v. REGENTS OF THE UNIVERSITY OF CALIFORNIA (1991): Moore (P) was a patient at Goldes (D) medical
center. P had a special disease and his cells were unique and had scientific and commercial value. P was not told and his cells
were used to develop a cell line.
o RULE: (1) A doctor has a duty to disclose the extent of his research and economic interests in a patients
body parts. (2) Human body party are not property such that they may be converted.
o Three reasons for refusing to extend conversion to the human waste tissue:
o 1. Chill medical research
o 2. Moral issues involved ought to be left to the political accountable legislature
o 3. Moore still had available to him claims based on asserted breach of fiduciary duty by his medical care
providers.
o Note: no ownership in discarded body parts, statutory laws strictly limit rights over body parts.
o DISSENT (MOSK):
o Moore had the right to do with his own tissue that the defendant did with it.

Moore could have contracted with companies/researches to develop and exploit the commercial
product of his tissue and its products.
o It is inequitable and immoral for Moore not to have any share of whatever proceeds of the cell line.
o Concept of property is bundle of rights and there is a protectable property interest in the body tissue.
o Arguments for Golde: Golde was the brains/labor behind the project, advance scientific research, cell line rare,
doctors may not pursue without incentive.
o Arguments for Moore: private/sense of bodily control, property interest in spleen, and first-in-time, Lockes premise
(possession of body parts), right to publicty, exact reproduction can be found from other spleens.
3. MORE ON POSSESSION: THE RIGHT TO EXCLUDE: the right of possession is usually conceived as containing a
corollary right: the right to exclude others from possession.
MAJORITY RULE: Absolute right to exclusion as limited by state and federal anti-discrimination laws. However, Innkeepers
and Common Carrier is cannot exclude arbitrarily with out reasonable cause (disruptive to safety, drunk, criminal)
o JACQUE v. STEENBERG HOMES, INC. (1997): a landowner, Jacque (P), sought punitive damages after a
developer, Steenberg (D) deliver a mobile home across the landowners property without permission.
o HOLDING: the actual harm is not the damage done to the land, which may be minimal, but in the loss of the
individuals right to exclude others from his property.
o RULE: punitive damages (intended to reform or deter) may be imposed for intentional trespass to property.
o RULE: the private landowners right to exclude others from his or her land is one of the most essential rights
of property.
MINORITY VIEW: When property owners open up property to public for their advantage, they cannot exclude for arbitrary or
unreasonable reasons
o STATE v. SHACK (1971): Shack (D) entered Tedescos property to give legal aid to migrant farm worker. Shack (D)
refused to depart upon Tedescos demand and is prosecuted for trespass.
o HOLDING: ownership rights do not include the right to bar access to governmental services available to
migrant workers.
o RULE: property rights may not be exercised so as to endanger the well-being of others.

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II. THE SCOPE OF PROPERTY RIGHTS


1. NUISANCE
PRIVATE NUISANCE is affecting a single individual or a definite small number of persons in the enjoyment of
private rights not common to the public. There are three elements to private nuisances:
1. It must create a substantial interference with the use and enjoyment of others properties and can be
separated into two types:
2. The D must act intentionally and unreasonably OR
3. The D must act unintentionally and result in negligent, reckless, or abnormally dangerous activity for
which there is strict liability.
a. NOTE: must use Threshold or Restatement Test to determine whether unreasonable.
2. PUBLIC NUISANCE: is a nuisance that affects the rights of general public and must affect a considerable
number of people or an entire community or neighborhood. It is widespread or indiscriminate in its range of effect.
The test used for public nuisance is the same for private nuisance: substantial harm caused by intentional and
unreasonable conduct or by conduct that is negligent, reckless, or abnormally dangerous.
a. Standing: although a public nuisance suit is usually brought by the attorney general,
i. It can be possible to enforce by a private person only if that person can show that the
nuisance is particularly injurious to him (special injury requirement for standing).
ANALYSIS FOR NUISANCE PROBLEM

18

NUISANCE is an unprivileged interference with a persons use and enjoyment of his land. Interference must comes
from an invasion of the land. In turn, the invasion can be particles (gases, noise, vibrations, etc.). All derives from
common law principle that one must use ones land so not to injure neighbors. There are two flavors of nuisance:
(1) private nuisance; and (2) public nuisance.
Private nuisance is any conduct that causes a substantial interference with the private use of land and is either (A)
intentional and unreasonable or (B) untinentional but {negligent, reckless, or resulting from an abnormally
dangerous activity for which there is strict liability}. Defendants actions in the fact pattern would likely be
considered an {intentional/unintentional}nuisance because {insert analysis here}.
STEP 1: The judiciary must first determine whether the landowners conduct was in violation of a statute
or considered a nuisance per se.
STEP 2: If the landowners conduct is NOT a nuisance per se, the court will evaluate the facts of the case
to determine if defendants conduct creates a substantial interference with the use and enjoyment of
others properties. That is, a person of normal sensitivities must deem it as a substantial interference.
Based on the defendants actions in the fact pattern would likely be considered an [intentional/unintentional]
nuisance because [insert analysis here].
GO TO STEP 3 [UNINTENTIONAL] OR STEP 4 [INTENTIONAL]

STEP 3: Unintentional
Nuisance: the harm
committed by the landowner
is unforeseeable but once a
landowner is aware of the
harm, it becomes an
intentional nuisance.

-Although the defendants actions were unintentional, he or she may still


be liable under the tort of nuisance if his conduct lowers to the level of
(1) negligent, OR (2) reckless, OR (3) abnormally dangerous so harm
resulting from that conduct.
-There is no balancing test as identified for intentional nuisance, and
utility of conduct is therefore not a defense to unintentional nuisance. The
reasonableness element refers to negligence/recklessness, or strict liability.
-Defendants conduct may be unintentional (and NOT unreasonable) if
defendants are abnormally sensitive to the conduct as occurred in
Amphitheaters, Inc. v. Portland Meadows (1948).

STEP 4: Intentional Nuisance: defendant has knowledge of harm, or harm is reasonably foreseeable (ill
will not necessary). [Identify the facts supporting that Ds conduct was intentional]
Defendants conduct is like defendants action in Morgan v. High Penn (1953), who intended
to operate a refinery and knew, or should have known, that its operations produced noxious
odors that would affect surrounding property owners.
The primary factor for determining an intentional nuisance is the unreasonableness of the
interference with the neighbors use and enjoyment of land.
o The court uses either the THRESHOLD TEST OR THE RESTATEMENT to
analyze whether the defendants conduct was a reasonable or an unreasonable

19

interference with the neighboring use and enjoyment of property.

The THRESHOLD TEST [minority view/older common law] requires that the thing complained of
produce such a condition that is judged by reasonable persons to be above some threshold of normal
activity that a person of ordinary sensibility, tastes, and habits should not be expected to bear without
redress.
The Threshold Test merely requires discomfort, which lowers the bar to establish a nuisance claim.
The Threshold Test finds liability and then balances.
o This differs from the Restatement Test in that the Restatement Test defines behavior as
unreasonable only if such behavior is serious and the defendant could afford to pay
money damages to the plaintiff and continue such behavior.
o The Restatement also incorporates the remedy into liability determination.

[Insert analysis on how Defendants actions produce discomfort for a reasonable person and use
the GRAVITY OF HARM ANALYSIS ABOVE]
GRAVITY OF HARM = the gravity of the harm is typically determined by five factors:
(A) Extent of such harm (long, often, bad, and time of day)
(B) Character of such harm (severity)
(C) Social value of the plaintiffs use or enjoyment infringed upon
o A high social value is attached to peaceful enjoyment of ones property, physical and
mental stress, anxiety)
(D) Suitability of the use or enjoyment infringed upon to the locality
o (1st in time, suitability of plaintiffs use)
(E) Burden on the person harmed in avoiding the harm (what is the cheapest cost avoider)

Under the RESTATEMENT SECOND OF TORTS [MAJORITY VIEW], any intentional invasion of an
interest in the private use and enjoyment of the land is unreasonable if the gravity of the harm outweighs
the utility of the actors conduct.
-Applying the restatement test produces an answer not only to the question of whether a nuisance exists
(liability) but also to the question of what remedy should be issued.
-If the gravity of the harm outweighs the unity of Ds conduct, then the property remedy is to enjoin.
-If it does not, then the court goes to prong 2 of the restatement to see if it should award damages.
-Thus, the balancing of the gravity of harm against the utility of such conduct requires an extensive
examination of the particulars given in the fact pattern [insert analysis with the following elements]:
-Utility of conduct = the utility of conduct is determined by analyzing these actions of the defendant:
(A) the social value of the primary purpose of the conduct:
o # of jobs, strengthen community ties, customers, size, economic impact to region,
valuable to public at large
(B) the suitability of the conduct to the character of the locality:
o Property and Ds activities well-suited to character,
industrial/agricultural/residential/mixed-business, 1st in time.
(C) the impracticability of preventing or avoiding the infringement:
o Technology, difficulty of brining D to new standards.

20

STEP 5: Other Considerations:


Did plaintiff come to nuisance?: knowledge or forseeability, development pattern, nuisance
expanded, nature of harm.
Affected parties not represented?
Unreasonable fears?
Harm characterized as a TRESPASS by THE RESTATEMENT strict liability tort (better for P),
some courts rejected this argument.
STEP 6: Remedies: balance the equities under both tests:
Considering both the potential harm to the defendants and to the public if an injunction is granted,
and the harm to the plaintiff if the injunction is denied.
If gravity of harm is greater than the social utility of conduct:
o IF YES: Unreasonable + Enjoin
If gravity of harm is outweighed by social utility of conduct:
o Does it cause (1) serious harm AND (2) the actor could compensate for that harm without
going out business?
o If YES: Unreasonable + Liability + Damages
o If NO: No liability

4 Traditional Types of
Remedies:
1. Enjoin and abate Ds
activity (Morgan &
Estancias)
1a. Mandatory injunctions
(tell the D how to behave,
what to stop)
2. Let the activity continue,
D pays damages to P
(Boomer)
3. Let the activity continue
by denying all relief
4. Enjoin D but only if the
P pays damages to the
enjoined actor (such as
moving damages, Spur)

Other Considerations:
1. Multiple parties: high
transaction costs, free riders,
holdouts, greater strategic
ability, more hesitation to
enjoin, post-litigation
negotiations difficult.
2. Two persons: bilateral
monopoly, more confidence
in parties ability to
negotiate.

Advantages of the Threshold Test


over the Restatement Test:
-Threshold test only requires
discomfort to establish a nuisance
claim and ignore balancing test
until remedies stage.
-Restatement test considers harm
from both the plaintiffs and the
defendants perspectives (more
equitable and fair).

Other types of remedies: dismissal of complaint, damages, cost of restoration, repairing the damage, bringing back
property to its prior condition, diminution in market value, injunction (court order for D to do OR NOT to do acts),
purchased injunction, conditional injunction, order to stop activity on condition that Ps reimburse D.
P may obtain an injunction against Ds conduct when:
P may obtain damages but NO injunction if:

Ds conduct is UNREASONABLE (causes more social


harm than good) and causes SUBSTANTIAL harm to
the P.
Ds conduct is reasonable (it causes more social good

21

than harm and should be allowed, but the harm to P is


substantial so that it is unfair to burden P with Ds
socially useful conduct.

When to apply/Advantages/Disadvantages of
Injunction:
1. (W) Harm difficult to quantify.
2. (W) Not all potential Ps known or present in
court.
3. (W) Harm so significant it CANNOT continue.
4. (W) D intended to cause harm and it was
unreasonable, more willing to grant injunction
because of fairness.
5. (A) Permanently stop defendant from doing
harmful action.
6. (A) Can be obtained more quickly, defendant
cannot delay proceedings.
7. (D) Inefficient
8. (D) Loss in economic and social value of
conduct.
9. (D) Issues of fairness (e.g., first in time, Spur).

When to apply/Advantage/Disadvantages of
Damages:
1. (W) Damages to P are significantly less than Ds
damages for abatement.
2. (W) Measurement cost of abatement possible.
3. (A) Redress all Ps at the same time.
4. (A) Terminate litigation and costs.
5. (D) Subsequent land owners may not be given
relief.
6. (D) Considerable error in ascertaining permanent
damages: measurement and foreseeability (e.g.,
Boomer- estimates too low).
7. (D) Fails to compensate for other harms by
focusing on fair market value. Equities should go
beyond the market value, including health or
sentimental attachments (e.g. Schultzes, Mahony v.
Walter, 1974).
General rule: stigma damages are recognized
only where Ps property has sustained actual
physical injury as a result of Ds conduct. Smith v.
Kansas (2007).
8. (D) No motivation or incentive on part of D to
abate its pollution in future. In effect, licensing a
continuing wrong.

NUISANCE CASE OVERVIEW


Morgan v. High Penn Oil Co. (p. 639) (1953)
Facts: P lives on 9 acres about 1,000 ft away from Ds refinery. D dumped several large
quantities of noxious gases/odors in the area these gases invaded Ps land.
Holding: Court used threshold test and did not consider the utility of Ds conduct. Court stated
that anyone who creates/intentionally creates a nuisance is liable regardless of the degree of care
or skill exercised by him to avoid such injury.
Standard for unreasonableness is measured by sensibilities of the AVERAGE PERSON
Estancias Dallas Corp v. Schultz (p. 646) (1973)
Facts: A/C unit from Ds apartment complex is loud and interferes w/ Ps (Schultz) sleep,
ability to converse in house; noise has contributed to Ps lost value of land.
Holding: Court supports a balancing of equities to determine if an injunction should be
granted. No evidence that the necessity of others compels Ps to seek relief by way of an action
for damages, rather than for an injunction (NO shortage of apartments in City of Houston).
Private financial benefit is not sufficient in this case to justify applying the rule of necessity for
Ds benefit. D ENJOINED.
Boomer v. Atlantic Cement Co (p. 649) (1970)
Facts: D operating large cement plant near a large community. Suit brought by Ps for injury to
land due to smoke, dirt & vibrations.
Holding: Factory a nuisance but allows injunction but awards P damages.

22

Rule: courts can grant an injunction conditions on the payment of permanent damages to a
complaining party in order to compensate him or her for the impairment of property rights
caused by nuisance.
Reasoning: General rule is where damages are substantial, an injunction will lie to abate the
nuisance. However, to grant an injunction in this case would close down a business important to
commerce; instead, court grants permanent damages in lieu of injunction.
If the harm is serious and the D can compensate w/o going out of business, then let D pay
damages.
Spur Industries v. Dell E. Webb (p. 656) (1972)
Facts: Spur (D) is a cattle feedlot in rural Arizona. Webb (P) buys land next to lot and ten
years later decides to develop it w/houses. Spur develops toward Webb and Webb develops
toward Spur. P brings suit for public nuisance because of noxious odors and flies.
Rule: an otherwise lawful activity can become a nuisance because others have entered the area
of activity, and thus be enjoined; if the party requested the injunction, however, is the one that
creates the need for the injunction, that party can be required to provide compensation for the
cost of moving or shutting down the activity.

2. TAKING-EMINENT DOMAIN
Step 1: Is the
government
exercising its
power of eminent
domain (aka
condemnation
proceeding)?

Federal, state, and local governments are prohibited from taking private property
unless the taking is for public use and the property owner receives just compensation
(Constitutional Law). This is referred to as the power of eminent domain.
The Fifth Amendment of the U.S. Constitution provides that private property
[shall not] be taken for public use, without just compensation. This is the
so called Taking Clause made binding on the states by means of the
Fourteenth Amendment.
There is no limit on the power of government so long as it is (1) for public
purpose and (2) just compensation.
Any private property can be acquired through eminent domain.
o Tangible and intangible personal property are also subject to
condemnation.

Berman v. Parker (1954): plaintiffs owned a department store that was in a rehabilitation zone and claimed its store
was not blighted. Supreme Court found eminent domain should be decided as a whole, and not in a piecemeal
fashion.

23

RULE: Government can use eminent domain to rehabilitate blighted area, even if they intend to simply
give the land to a private developer, and even if not every single building within the area is blighted.

Step 2: Is there a
taking at the
outset?

Step 3: Is the
taking for a
legitimate
public use?

The government has physically taken land under its power of eminent domain
in the first type of taking. This is the traditional use of the power.
A temporary physical invasion of land authorized by the government or an
overly-restrictive land use regulation may be compensable takings.

-Supreme court has shifted to a new standard of pubic use: the public purpose test.
-Public purpose test: as long as the property is taken for a legitimate public purpose
(a purpose within the scope of government police power) the public use requirement
is satisfied.
Berman v. Parker: public purpose test gained prominence in decision.
Hawaii Housing Authority v. Midkiff: court broadened the scope of public
purpose standard as equal scope to the scope of police power.
Court established that condemnation decisions are judicially reviewed under
the deferential rational basis standard.
o A court can only inquire whether the decision is rationally related
to a conceivable public purpose.
Rule 1: Is there evidence of illegitimate purpose?: Government cannot use
public use as pre-text to confer a benefit on a private party.
Rule 2: Was the transfer of private property to another private owner
aimed to benefit the public good? Government can transfer property used
privately to other private user to serve public good. Kelo v. City of New
London.
o Strict public use is not necessary rather public purpose is the
standard which is broader and more flexible.
o Public purpose: some use that benefits public at large based on the
legislatures rational (highly deferential to the legislature).
o In essence public use is whatever the legislature rationally thinks is
conducive to the public welfare.

Kelo v. City of New London (2005): City of New London condemned owner-occupied homes and conveyed them
to a private company as part of an economic development project.
HOLDING: the development plan of taking from one private party and given to another for economic
redevelopment unquestionably served as public use.
MAJORITY RULE: takings of private property for use by other private citizens pursuant to an economic
development plan intended for a public purpose are valid under the Fifth Amendment.
o Position is judicial deference and rational basis: while a private party may benefit, it is most
important to consider the public purpose served and if the overall public good is enriched.
o Expanded the power of eminent domain since Berman (1954) to rehabilitate ANY area that was
not blighted at all.
MINORITY VIEW: CONCURRENCE (OCONNOR): majority significantly expands the meaning of
public use and may allow government to take property so long as it can offer some plausible possibility that
the new private user would (1) make it more economically productive and (2) a secondary benefit for the
public.
o Public use requirement is to protect the weaker property owner from arbitrary governmental
takings for private business use (does not happen here).
EXCEPTION: several states have enacted post-Kelo reform laws either banning both blight and economic
development takings, or defining blight so broadly that virtually any property can be declared blighted
and taken. Other states have enacted reforms that provide no real protection to any property owners because
of other types of shortcomings.

24

o
Step 4: Was
there just
compensation?

E.g., California limits takings to blighted areas.


Fair market value standard: Supreme Court defines just compensation as the fair
market value of the property when the taking occurs.
Sentimental value or special need are NOT taken into account.
Future land uses/potential ARE taken into account.
o Three facts are important in making this determination:
Physical condition of the land (location, topography, etc.).
Current and reasonably probable future zoning of the parcel.
Market demand for the particular future use.
Partial takings:
o Severance damages: if the partial taking affects the rest of the parcel,
the government must pay severance damages.
o If there are positive effects made by the taking, then the positive effects
minus the severance damage cost is what the government will have to
pay the owner.

Institutional Competence (Policy):


Legislature:
-Legislature knows local conditions better and
can take entire situation into account by
deliberative process.
-Legislative body can be voted in and out.
-Democratic process that can listen to
expertise and represents needs of people.
-General worry on the part of courts making
these decisions b/c these line drawing
questions are difficult.
-Supreme Courts highly deferential standard
reflects a sense that theres no reason to
substitute their judgment for the legislatures
judgment.

Courts:
-Developers may contribute to city councils= land use
decisions.
-City councils dont deal with a lot of other issues besides
land use.
-If there are transfers to private property owners, courts
will be suspicious of public or private purpose.
-Needs higher order of review.
-Government must show that the property is being used
for public purposes.

REGULATORY TAKINGS
Governments frequently regulate land use by requiring landowners to obtain a permit for the use.
A typical example is a building permit. The regulation requiring a building permit is NOT problematic, so
long as the condition of obtaining the permit is compliant with reasonable health and safety standards or the
like.
Step 1: Did the
government
regulation produce
a permanent
physical
occupation of all
or a part of the
property?
(CATEGORICA
L TAKINGS)

A permanent physical occupation authorized by the government is a taking without


regard to the public interest it may serve.
Under certain circumstances, a government regulation will be considered a
per se taking.
Analysis:
(A) Permanent Occupation:
o MAJORITY VIEW (LORETTO): focus on effect of activity
being regulated (wire permanently on property v. transient
protesters).
o DISSENT: focus on character of activity being regulated (the box

25
If YES, taking
(Loretto)

will always be there v. the protestors can always protest).


(B) Physical occupation
(C) Government mandated occupation
(D) Facilitating a 3rd party occupation
Questions to ask:
(1) Is the owner left with any right to possess, use occupy, or exclude?
o Courts disagree with limitations on rights to exclude.
(2) Can owner use property to further a private interest, financial or
otherwise?
o Was there interference with reasonable backed expectations?
(3) Does any economic benefit remain after the government regulation?
(4) Is a stranger granted right to directly enter and invade owners property?
NOTE: Temporary occupations are not per se takings which should be analyzed
under the Penn Central balancing test.
The temporary occupation idea still involves a physical occupation, not a
restriction on the right to use. So if you saw a regulation that, for example,
required landlords to allow the homeless to sleep in their lobbies only on
days where the temperature dropped below freezing you might have a
temporary physical occupation.

PER SE TAKINGS
Loretto v. Teleprompter Manhattan CA TV Corp. (1982): TAKING. Loretto (P) claimed that a forced cable
installation on her building that was authorized by a NY state statute was a taking of her property without just
compensation.
o HOLDING: respondents installation of cable is a taking b/c cable occupies space within and upon
building.
o RULE: a permanent physical occupation (PPO) of an owners property authorized by the
government constitutes a taking of property which requires just compensation, regardless of the
public interests it may serve.
o REASONING: such an occupation effectively destroys the owners basis property rights; that is,
the right to possess, use and dispose of property, and the right to exclude.
Pruneyard Shopping Center v. Robbins (1980): NO TAKING. P (a mall) was required to allow people to hand
out political flyers, temporary occupation.
Northern Transportation Co. v. Chicago (1879): NO TAKING. P sought to recover damages sustained by reason
of the construction by the city of a tunnel under the Chicago River along the line of La Salle Street. Owner said it
obstructed access to business. The temporary dam in river to permit construction of tunnel was not a taking, no
entry made on Ps lot.
Step 2: LUCAS TEST
(1992): Was there a
100% diminution in
property value?

If a government regulation leaves the owner with no economically viable use of


his property, and the regulation does not abate a common law nuisance, a
taking has occurred.
QUESTION: Are there other economically beneficial or productive
uses of land?
o If the land could be rented out to campers, mined on, harvested,
est., then it does not trigger the Lucas Test.
o Court suggested that only land required to be left substantially
in its natural state would deprive an owner of all economically
beneficial or productive options for land use.

26
LUCAS LEFT OPEN EXCEPTIONS TO THE PER SE RULE: Even if the property owner loses 100% of the
value of the property, the government may be able to side-step its duty of compensation if (1) background principles
exit OR (2) a common law nuisance is proven to exist.
A. Background principles that
limit use if a state statute places
a prohibition on a property use
may be considered valid. Even
if a restriction was in place at the
time the property owner acquired
title and the restrictions were
apart of the background title,
one can still assert that they
constitute a taking.

B. Nuisance
Exception: If a
government
regulates property
to abate activities
that are common
law nuisances,
there is no taking,
even though the
regulations might
bar all
economically
viable uses of the
property. [A
restriction that is
imposed to protect
the public health,
safety, or morals
is NOT a takingDissent (Brandeis)
in Penn Coal.] If
court were not to
find a nuisance

Palazzolo v. Rhode Island (2001): NO TAKING/TAKING. RI (D)


argued that regulations designating most of Palazzolos (P) land as
protected coastal wetlands did not effect a taking partly b/c
regulations predated Ps title to the land.
HOLDING: RI S. Ct. erred in holding that enactment of
wetlands act was automatically valid b/c Petitioner succeeded
to ownership after regulation passed b/c regulation may still
accomplish a taking under constitutional precedents. Court
did not fully address the issue of whether RI Supreme Court
correctly held that petitioner did not endure a total taking b/c
some of the parcel remain economically usable.
RULE: the acquisition of title after the enactment of a
regulation does not bar a challenge to that regulation under the
Takings Clause.
Lucas v. South Carolina Coastal Council (1992): TAKING. 2 years
after Lucas (P) purchased two beachfront properties, SC enacted a
statute that prohibited construction along the beach, including Lucass
lots.
HOLDING: The statute that restricted building on barrier
island property was a taking without just compensation b/c it
deprived Lucas (P) of all economically productive use of his
property.
RULE: Regulation depriving landowner of all economically
viable use of property by prohibiting uses that are permitted
under background principles of property and nuisance law
results in a per se taking and thus requires compensation.

Through acting within bounds of law, abiding by all zoning rules, the activity
conducted is so bothersome to those in immediate vicinity of property owner
that it is within police power of state to prevent property owner from
performing that activity even if it diminishes expectation of investment,
greatly reduces property value, or in some sense physically takes portion of
property.
o Police power: power of the sovereign to enact legislation which
limits conduct to protect the health, welfare, and safety of its
citizens (states have a robust police power inherent in
sovereignty, allows them to regulate for their citizens).
Apply Threshold Test and Restatement Test to determine if a nuisance
exists.
o Gravity of harm
o Utility of Ps conduct
Hadacheck v. Sebastian (1915): NO TAKING. L.A. enacted an ordinance
forbidding Ps operation of a brick-making business, on the grounds that the
continued activity was annoying and inconvenient to his newly arrived
residential neighbors.
o RULE: a regulation that deprives an owner of property for the
purpose of prohibiting a nuisance is an exercise of the states police
power, and therefore does not result in a taking which requires just
compensation.

27

and not 100%


diminution, then
move to Penn
Central Test.

o
o
o
o
o

C.
Conceptual
severance:
the 100%
diminution
rule applies
only to a
regulation
that strips the
owner of
ALL
ECONOMIC
ALLY
VIABLE
USE of the
ENTIRE
property.
Usually need
a state statute
for
conceptual
severance. If
distinct
property
interest and
can sever,
then there
may be a
taking
claims.

Because the ordinance allowed Hadacheck to remove his clay (but


not to make bricks), there was no taking.
If there is 100% diminution + not a nuisance TAKING
If there is 100% diminution and a nuisance NO TAKING
The ordinance MUST be a nuisance-controlling to escape
having to pay just compensation.
DO NOT APPLY the old Hadacheck idea that any regulation that is
harm preventing or involves the exercise of police power is exempt.
LUCAS INSTEAD says that if the regulation is preventing a
common law nuisance, even if it eliminates 100 percent of the
economic value, no taking.

-Precedence favors looking at the parcel as a whole.


-There is a stronger case for conceptual severance if separate owners of discrete parcels.
Pennsylvania Coal Co. v. Mahon (1922): TAKING. Penn. Coal Company (D) sold
surface rights to Mahon (P), but retained the right to mine underneath the land. Several
years later, PA enacted statute forbidding mining of coal in such a way to cause subsidence
of homes. Kohler Act went too far and destroyed the economic viability of Penn.
Centrals property. The underground coal was required to be kept in place and was
deemed to effect ENTIRE property. (Separate owners)
HOLDING: Diminution is large and public interest is not sufficient to warrant so
extensive a destruction of Ds rights to mine the coal. Court measured
diminution saying it was a total diminution in support estate.
RULE: while property may be regulated to a certain extent, if that regulation
goes too far in diminishing the economic value of the property, it will be
recognized as a taking.
DISSENT (BRANDEIS): Diminution was only small amount of coal to support
it. It was little diminution, it prevented a nuisance, and protected public health
and safety; thus, NOT a taking. Diminution should be measured by whole parcel,
not separate estates (e.g. surface, mineral, and support estates).
Keystone Bituminous Coal Assn. v. De Benedictis (1987): NO TAKING. Court
adopted Brandeiss approach in Penn Coal (1922) to uphold validity of a later
Pennsylvania law, the Subsidence Act.
HOLDING: court required coal miners to leave sufficient coal in place to support
surface and distinguished the Subsidence Act from the Kohler Act on two
grounds: (1) miners failed to prove that they were denied the economically viable
use of the property; (2) coal only small fraction of entire coal deposit owned.
Penn Central v. City of New York (1978): NO TAKING. Penn Central made plans to
construct a 55-story office building over Grand Central Terminal, but was blocked by a
Landmarks Preservation Law. Court unable to conceptually sever air use. Court said it
was not a total taking of the airspace rights, and the court would considered the impact of
the law on the rights in the parcel as a whole; not just its impact on airspace rights.
RULE: a law which does not interfere with an owners primary expectation
concerning the use of the property, and allows the owners to receive a
reasonable return on his or her investment, does not affect a taking which
demands just compensation.
Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency (2002):
NO TAKING. Tahoe casts serious doubt on the idea of conceptual severance. TPRA
(D) issued 2 moratoria prohibiting development on substantial portion of property for 32
months. P claimed taking. Lucas Test only applies to permanent deprivation of use, not
temporary takings. Dist. Ct. was wrong by conceptually severing into temporal
segments. Must look at the whole parcel; temporary restriction cannot render the parcel
valueless.

28

RULE: a regulation that prohibits economic use of land for an extended but finite
period of time does not constitute a taking requiring that the owner of the
property be compensated.

If there is not a 100% diminution in value (only a large diminution), then apply PENN CENTRAL TEST.
Step 3:
Case-bycase
balancing
analysis of
the
regulation
using the
Penn
Central
Test. Courts
weigh the
public
benefits
achieved by
the
regulation
against the
private costs
imposed. A
regulation is
not a taking
if it
substantially
advances a
legitimate
state
objective.

1.

2.

3.

ECONOMIC IMPACT of the regulation on the particular owner (Two-Sided


Analysis).
Subjective:
o Can this particular property owner continue to receive a reasonable
economic benefit from this property? (Economic impact on the claimant)
o Lost opportunity cost rather than an actual deprivation of an economic
benefit
o Loss of a current use or activity versus loss of a potential use or activity
Objective:
o Loss of value of property pre- and post-statute
o No total fixed loss % est. that turns a valid use of police power to a taking
o Diminution of market value is not dispositive unless value is reduced to
zero
o Analysis: How should the property be valued? Are there transferable
development rights (TDR-owners of restricted land are given TDRs
that can be used for development)? (2 perspectives)
How should the property be value? TWO VIEWS:
1. Entire property: analysis in terms of entire property
(lost value)
2. Component part: analysis in terms of aspect affected.
The extent to which the regulation interferes with the claimants reasonable
DIRECT INVESTMENT BACKED EXPECTATIONS (intent of the landowner).
Reliance interest: If the property owner purchased with the reasonable
expectation that they would be able to invest in property and employ that property
in a manner that would allow a return on the investment that would be reasonably
expected to continue.
What was the status quo at the time of the purchase?
o Was the expectation based on what had been at the time of the purchase a
permissible interest which changed only subsequent to that purchase?
o Owners are not entitled to the most beneficial use of their property.
CHARACTER OF GOVERNMENT ACTION (Is it arbitrary?):
Interference with the right to exclude and physical invasion (most important),
right to use, dispose, or possess. (Loretto and Penn Central).
EXCEPTION: RECIPROCITY OF ADVANTAGE: if the reciprocal benefits or
advantages of the regulation compensate for its burdens, then it may not be
found to be a taking.
o A regulation was justified when the burdens it imposed on landowners
were offset by the benefits it conferred on them.
E.g., a local ordinance may prohibit A from building above a 3story structure which places a burden on A. But A also receives
benefits since it prohibits As neighbors from building high and
restricting his light and air.
o Is there a gain and a downside of the regulation? Or does the regulation
single out a class of property owners?
o PENN CENTRAL DISSENT (REHNQUIST): no reciprocity of

29

STEP 4: Did the


government demand
an exaction in
exchange for a
building permit?
EXACTIONS: a
requirement that a
development provide
specified land,
improvements,
payments, or other
benefits to the public
to help offset the
impacts of their
development projects.
The question is: May
the state condition the
grant of a building
permit on the
landowners consent to
what would otherwise
be an uncompensated
taking?
-The logical order of
analysis is: (1) to
establish that the
condition would be a
taking if imposed
independently; (2)
prove that such a
condition satisfies the
essential nexus test;
(3) show that such a
condition exacts
concessions that are
roughly proportional
to the developments
impact.

advantage, only a few buildings were singled out with considerable


burdens and no comparable benefits.
EXCEPTION: NUISANCE/NOXIOUS USE: if the regulation is put in place to
prevent harm or nuisance (public health, safety, or welfare), it may not be found to
be a taking.

QUESTION 1: Would the exaction otherwise be a taking absent the development


approval process?
If no NO TAKING
If yes Move to QUESTION 2
QUESTION 2: Is there an ESSENTIAL NEXUS between the purpose of exaction and
the impact of the development? OR is the condition wholly unrelated to the reason for
limiting development?
If connection Move to QUESTION 3
If no condition TAKING
o A regulation advances a state interest ONLY IF there is an essential
nexus between an exaction and a state interest that the exaction is
intended to serve.
o Nollan v. California Coastal Commission (1987): NO NEXUS.
California Coastal Commission (D) granted Nollan (P) a building permit
on the condition that Nollan allow the public to pass across his property
to access a public beach.
HOLDING: easement requirement for building a house on the
beach did not have an essential nexus to the state interest of
protecting the publics ability to see the beach or allowing
people to use the beach. The easement would merely help
people already on the beach and not advance a legitimate state
interest.
RULE: if a regulatory condition is imposed on a development
permit, the condition must substantially advance the same
governmental purpose that refusing the permit would serve or
else the action will constitute a taking and require just
compensation.
QUESTION 3: Even if there is an essential nexus, the exaction will be a taking unless
the government prove that a ROUGH PROPORTIONALITY exists between the proposed
development and nature and extent of the exaction. Is it ROUGHLY
PROPORTIONAL?
Exactions must substantially advance the state interests.
Though it is similar to the deferential reasonable relationship test, the rough
proportionality test is more stringent.
o Burden of proof is shifted to government to justify the exaction.
Dolan v. City of Tigard (1994): NOT PROPORTIONAL. In exchange for the
approval of a building permit, a city attempted to force Dolan (P) to convey 10%
of land to limiting development on the floodplain to prevent floods, and dedicate
an easement for a pedestrian/bicycle pathway to ease traffic. Court held that there
was no evidence that justified the floodplain dedication or evidence that the
pedestrian/bicycle path was adequately related to the increased traffic.
o RULE: exactions are constitutional provided the benefits achieved are
reasonably related and roughly proportional, both in nature and extent,
to the impact of the proposed development.
City DID NOT meet burden of demonstrating that the
additional number of vehicle and bicycle trips generated by

30

Dolans business reasonably related to the citys requirement


for a dedication of the pedestrian and bicycle pathway
easement. Also, difficult to see why recreational visitors
trampling along Dolans (P) floodplain easement is sufficiently
related to the Citys (D) legitimate interest in reducing flood
problems.
NOTE: Rough proportionality test applies only to exactions.

SUMMARY: The essential nexus and rough proportionality tests are cumulative, not alternatives. Each
test must be satisfied for an exaction to be valid without compensation.

STEP 5:
REMEDIES FOR
REGULATORY
TAKINGS

-A remedy for regulatory taking is compensatory damages.


-The successful P receives compensatory damages for the temporary taking that occurred
for the period between the date the regulation first adversely affected the land, and the date
of the judgment.
If the government chooses to cancel the regulation, the owner only receives
compensation for the temporary taking that occurred during the period when the
regulation was effective.
o The measure of damages for a temporary taking is the fair market value of
the use of the property during the taking period.
o Generally the court forces the government to pay the value of property
not burdened (-) the value of property burdened (x) market rate of
return = payment
If the government elects to keep the regulation in place, the owner is entitled to
compensation for a permanent taking (i.e. the fair market value).
ACADEMIC PERSPECTIVES ON TAKINGS

Joseph Sax: when governments act as sovereigns to resolve disputes about land use there should be no compensation requirement, but when governments act as
entrepreneurs performing functions that are functionally indistinguishable from private economic activity there should be compensation.
Frank Michelman: offers an abstract utilitarian calculus to determine when compensation should be paid with respect to any given regulation: Compensation should
be paid whenever demoralization costs exceed settlement costs, [and demoralization costs are less than the efficiency gains from the regulation], and not otherwise.
Bruce Ackerman: if government takes physical possession of property away from its owner, compensation is required. But if regulations diminish the value of
property, no compensation is required unless the diminution is so severe that it would be a bad joke to claim that the property owner is left with something of value.
Richard Epstein (Takings: Private Property and the Power of Eminent Domain): regulations that redistribute wealth are presumptive takings. Epsteins views are
sweeping; much of the social welfare state would be constitutionally suspect under his view of the scope of the Takings Clause. argues that public use should be
confined to the provision of public goods items from which nobody can be excluded from consuming and the consumption of which by one person does not
affect other peoples ability to consume the good and quasi-public goods.
Jed Rubenfield: argues that a compensable taking occurs when a regulation enables the government actually to use the property in question. Without public use,
there would be no compensable taking. He grounds this view in a theory that the function of the Takings Clause is to prevent people from being forced to become
instrumentalities of the state.
William Fischel: thinks that the legislative process is adequate to protect against overreaching government regulation, except when that process is distorted. Courts
are good at overseeing process, so Fischel argues that courts ought to examine regulatory takings claims most to see whether insiders are using their political muscle to
extract gains from outsiders, people who cant protect themselves either by exit (leaving the jurisdiction) or voice (voting).
Thomas Merrill (The Economics of Public Use): advocates means analysis urging that forced transfers should occur only when transaction costs are
sufficiently high to prevent voluntary transfers.
o
Michigan Supreme Court: adopted a means test asking whether the taking is necessary to accomplish the public end.

VOLUNTARY CONVEYANCE OF PROPERTY (ESTATES)

31

OVERVIEW
o Estate system concerned with ways private people divide property.
o Most estates are concerned with disposal of property due to death of testator.
TERMS
o Testator/testatrix: person who is willing the property.
o Devising property: act of leaving real property to a benefactor.
o Devisee: person who receives real property from testator (can be called beneficiary)
o Bequeathing property: act of leaving personal property to a benefactor.
o Beneficiary: person receiving personal property.
o Intestate: if you die without a will, you die intestate.
o Heirs, next-of-kin: those who receive property if you die intestate are called heirs or next-ofkin.
o Escheat: the passing to the state of title of real or personal property when the owner dies with
no heirs.
o Per stirpes: type of statute distribution system that divides property evenly among children
(dead or alive).
o Possessory interest: has the right to possess currently; is the possessor.
o Future interest: MIGHT or WILL have the right to possess in the future.
o Per capital: type of statute distribution system that divides property among descendents
WILL SUBSTITUTES (OR TRUSTS)
o Will: a document by which a person directs his or her estate to be distributed upon death.
o Trusts: allows settlors to arrange their assets in ways that maximize flexibility in property
management as well sa transfer wealth to future generations.
A property interest held by one person (the trustee) at the request of another (the
settlor) for the benefit of a third party (the benefactor)
o Devising property: act of leaving real property to a benefactor.
Devisee: person who receives real property from testator (can be called beneficiary)
o Bequeathing property: act of leaving personal property to a benefactor by will.
Beneficiary: person receiving personal property.
o Settlor: established a trust.
o Trustee: holds legal title to the property and manages the property on behalf of the trusts
beneficiaries.
Separates the burdens of property management from the benefits of property
ownership.
Trustee is someone designated by the person who establishes the trust, who is known
as the settlor; the trustee manages the property on behalf of the beneficiaries.
The trustee is also a fiduciary and thus subject to stringent duties in managing trust
property. Most important is the duty of loyalty. The trustee must act for the
exclusive benefit of the beneficiaries and is not permitted to benefit personally.
o Others include:
Joint checking accounts
Life insurance
Pensions
All these instruments allow you to designate a beneficiary and you can avoid probate
altogether.

32

Possessory Estate
Fee simple absolute
Fee Simple Determinable
Fee Simple Subject to
Executory Limitation
Fee Tail
Life Estate

Language
to A and his heirs to A
Durational language (so
long as, while,
during)
Durational or conditional
language but if
to A and the heirs of his
body
to A for life

Future Interest
None
Possibility of Reverter

Future Interest Holder


None
Grantor

Executory Interest

Grantee

Reversion Remainder

Grantor, Grantee

Reversion Remainder

Grantor, Grantee

I. ESTATES GENERALLY: one does not really own Blackacre. Instead one owns an estate in Blackacre.
Traditionally, there are two types of estates: freehold and non-freehold.
1.

2.

Freehold estates: The three freehold estates are:


a. the fee simple (which may be either absolute or defeasible)
b. the fee tail: allows the owner of land to ensure that the property remains within his or her family
(bloodline).
i. Specific words of creation: O to A and the heirs of her body
c. the life estate: is an interest which lasts for the lifetime of a person.
i. Default estate at old common law
ii. Specific words of creation: O to A for life
Non-freehold: the non-freehold estates are:
a. the estate for years;
b. the periodic estate; and
c. the estate at will.

II. THE FEE SIMPLE:


A. Fee simple absolute: is the most unrestricted and longest estate with infinite duration. Fee is the interest in the
land. Simple connotes that ownership is for unlimited duration. Absolute no future interests that could cut
short the ownership of the future possessor.
No restriction on use.
Specific words of creation: O to A and her heirs.
B. Fee simple defeasible: the holder of a fee simple defeasible may hold or convey the property, but the holder and
those who take from the holder must use the property subject to a restriction. Defeasible estates provide leverage
that the donors intent will be followed even after death.
Defeasible fees: can be cut short by later events.
Three types of fee simple defeasible:
o 1. Fee simple determinable: is a fee simple which automatically comes to an end when a stated
event occurs (or, perhaps, fails to occur).
Example: To A and her heirs as long as they do not sell alcohol on the land.
Other words needed for creating:
so long as
until
during
unless
while

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The transferor holds the possibility of reverter: the creator of a fee simple
determinable is always left with the possibility that title will revert to him if the stated
event occurs.
2. Fee simple subject to a condition subsequent: a fee simple where the granting words are
followed by a limiting condition in favor of the transferor.
The transferor holds a future interest called right of entry or power of termination
if the condition is broken.
Example: To City, but if the land is not used as a park, W may re-enter and retake the
premises.
Fee simple subject to condition subsequent is created with granting language indicating
the event or condition.
Other words needed for creating:
on the condition that
but if
provided however that
3. Fee simple subject to an executory limitation: a fee simple subject to an executory limitation
provides for the estate to pass to a third person (one other than the grantor) upon the happening
of the stated event.
Example: O conveys to A and his heirs, but if A dies without children surviving him,
then to B and his heirs. A has a fee simple subject to an executory limitation.
Does the transferor hold any interest after giving a fee simple subject to an executory
limitation? If there is a breach of condition, then the fee automatically terminates.

III. LIFE ESTATES: a life estate is an interest which lasts for the lifetime of a person. Ordinarily, the lifetime by
which the life estate is measured is that of the holder of the life estate.
Example: to A during his life or to A for life
Defeasible: a life estate may be defeasible, just as a fee simple may be.
Life estate pur autre vie: designates the ownership of land for the duration of a persons life. It is
the duration of the life of a third party.
o E.g., Joe gives property to Sam for the life of Pete. Joe has created a life estate pur autre
vie for Sam, but when Pete dies, the property automatically reverts to Joe.
Life estate determinable
o Example: To A for life, so long as
Life estate subject to condition subsequent
o Example: To A for life, but if, then.
RESTRAINTS ON ALIENATION
o Courts have found that restraints on alienation, or restraints on transfer rights, are
repugnant to fee simples and void for that reason.
o Why repugnant? Restraints make the property unmarketable, the land may be unavailable
for its higher and best use; the restraints tend to perpetuate the concentration of wealth;
restraints discourage improvements on the land; restraints prevent owners creditors from
reaching the property.
o 3 types of restraints:
Promissory restraint
You convey to A and A promises not to convey.
This restraint is enforceable by the contract remedies of damages or an
injunction however usually rare except in landlord-tenant context.
Forfeiture restraint
If grantee attempts to transfer his interest, it is forfeited to another person.
Forfeiture restraints are generally allowed more than disabling restraints;
why? Because they allow some sort of transfer.
Disabling restraint
Holds from the grantee the power of transferring his interest.

34

Generally, absolute restraints are void, but partial restraints may be upheld (ie: limiting
conveyance to certain persons or putting a time limit on the restraint)
o For life estates, it has generally been held that forfeiture and promissory restraints are valid,
but not disabling restraints.
RESTRICTIONS ON USE: WASTE
o Waste doctrine restrains the present estate owner from acting in a manner that unreasonably
injures the affected land and thus reduces the value of the future interest.
o The law assumes that the original grantor intended the estate holder to pass on the
possession of the land to the future interest holder in approximately the same condition as it
was received.
o Two principle types of waste:
Affirmative waste (or voluntary waste)
Occurs when the voluntary acts of the present estate owner significantly
reduces the value of the property.
EX: possessory interest wantonly destroys valuable residence, or opens a
new mine and mines all the minerals, collapses land, etc.
Permissive waste
Stems from inaction; failure of the possessor to exercise reasonable care
to protect the estate.
EX: life tenant fails to repair a dwelling or pay property taxes, mortgage
payments, related expenses.
Kimbrough v. Reed (1997): life tenant let the water pump fall into
disrepair with a resulting loss of lawn, shrubs, and trees. The life tenant
was assessed damages for waste.

IV. FUTURE INTERESTS: a future estate is a right to receive possession of property at a future time or, more
precisely: An interest in land or other things in which the prvilege of possession or of enjoyment is future and not
present. There are five future estates:
Why create a future interest?
o Usually seen in family gifts to ensure that the estate remains in the family and is useful
to the family.
o EX: To G for life, then to D; G cannot gamble away or sell the estate or do anything
to prejudice Ds interest. Ensures that D will get something later.
o Or in charitable or economic motives, can ensure that the estate is used as the testator
wanted.
Five basic types of future interests (1) reversion, (2) possibility of reverter, (3) right to entry,
(4) remainder, (5) executory interest.
A. FUTURE INTERESTS IN THE TRANSFEROR
o Rule of perpetuities does not apply to a transferors future interests.
o Reversion: When an owner conveys an estate deemed smaller than the estate he owns, then
he retains a future interest called a reversion.
o EX: O has a fee simple and he conveys to A for life, then to B for life. O has a
reversion because after A and B dies the estate will revert to him since it is not willed
to anyone else.
o A reversion does not have to be certain to become possessory in the future.
o EX: O has fee simple and conveys to A for life, then to B and her heirs if B survives
A. O has a reversion, that may become possessory but only if B dies before A.
o Possibility of reverter: When a transferor creates a fee simple determinable, the future interest
retained is called a possibility of reverter.
o EX: O conveys to L so long as the property is used as an orphanage. O has a
possibility of reverter. If the estate is not used for an orphanage the estate will revert
back to O and will trigger the statutory period for adverse possession. If O does not

35

o
o

kick off L in the statutorily created period of time for adverse possession then L will
own.
Right of entry (or power of termination): When a transferor creates a fee simple subject to
condition subsequent, the future interest retained is called a right of entry (or power of
termination).
o EX: O conveys to L, but if L fails to use as an orphanage, then O may re-enter and
retake the premises.
Transferability of these future interests?
o These future interests can mostly all be conveyed, transferred and devised in most
jurisdictions.
Valuation/other rights of future interests in the transferor
o Preventing waste: Os rights as a reversion holder allow him to secure damages for
past waste and enjoin for future waste. However, if O holds a possibility of reverter or
right of entry, his ability to prevent waste is almost non-existent.
o Right to eminent domain proceeds: Majority view is that a holder of a reversionary
interest takes no eminent domain proceeds. Rest. of Property takes a slightly different
view: if the defeasible fee would probably not end within a reasonably short period of
time, the fee owner should have the entire award.

B. FUTURE INTERESTS IN THE TRANSFEREEE


Remainders: a remainder is a future interest created in a transferee that is capable of becoming a
possessory estate upon the natural termination of a prior estate created by the same instrument.
o Thus, a remainder can only follow a life estate, a fee tail, or a term of years.
o Any future interest in a possessory estate created in a transferee other than a remainder is an
executory interest.
o Vested Remainder: a vested remainder is a remainder that is (1) given to an ascertained person,
AND (2) it is not subject to a condition precedent (except the natural termination of a prior
estate).
o 1. Indefeasibly vested remainder: the identity of the holder is certain and the
remainder is certain to become a possessory estate.
EX: To A for life, then to C and her heirs. Cs remainder will someday
become a fee simple absolute. The holder of the interest is a known person, C.
No future event can intervene to stop Cs remainder from becoming an estate.
o 2. Vested remainder subject to divestment: vested remainder that is subject to a
condition subsequent. If the condition is not met, then it is subject to divestment.
EX: To A for life, then to B and her heirs, but if B ever smokes a cigar during
Bs lifetime, then to C. B has a vested remainder, because C is ascertainable
and his interest is not subject to a condition precedent, but it is subject to
divestment if he smokes.
o 3. Vested remainder subject to open: a vested remainder in one or more ascertainable
members of a class that may be enlarged by the addition of presently unascertainable
persons (e.g. persons that may be born in the future).
The remainder is certain to become possessory, but the size of the holders
share in the estate is uncertain.
EX: To B for life, then to the children of C and their heirs. If C has only one
living child, D, then D has a vested remainder subject to open.
o Contingent Remainder: a remainder is contingent if it is either (1) given to an unascertained
person, OR (2) it is made contingent upon some event occurring other than the natural
termination of the preceding estates.
o Occurs if remainder will take effect only upon the happening of an event that is not
certain to happen (that makes it contingent).
o Remainder will go to a person who cannot be ascertained at the time of the initial
conveyance.

36
Contingent remainder can become a vested remained if the contingency or condition
precedent is removed prior to the end of the last estate before the one in question.
o Contingent remained can also become vested if the persons become ascertained (class
of people when the children are born a child, has a remainder subject to open b/c the
person could have more children.
o EX: To K for life, then to L and his heirs if L reaches the age of 21. L is an
ascertainable person, but an event must occur before his remainder is eligible to
become possessory.
o EX: To K for life, then to Ks heirs. There is no subject to condition precedent, but if
K has no heirs, it is impossible to determine who gets it. Thus, Ks heirs hold a
contingent remainder.
Executory Interest: is a future interest in a transferee that must, in order to become possessory:
(1) divest or cut short some interest in another transferee (this is known as shifting executory
interest); or (2) divest the transferor in the future (this is known as a springing executory
interest).
o An executor interest is a future interest in a transferee that must cut short or divest
another estate or interest in order to become a possessory estate.
o EX: to A for life, then to B and his heirs, but if C returns from France, then to C and his
heirs. Cs interest may cut short Bs interest, and therefore he has a springing or
shifting (?) executory interest.
o

PPE Summary:
Fee simple absolute: never ends
Defeasible fees: might end
Life estate and fee tail: will end
Present Possessory Estate
Fee Simple Determinable
Fee Simple Subject to Condition Subsequent
Life Estate & Fee Tail
Fee Simple Subject to and Exec. Limitation

Future Interests
Possibility of Reverter
Right of Re-entry/Power of Termination
Reversion, Contingent and Vested Remainder
Executory Interest

VI. RULE AGAINST PERPETUITIES: applies to all contingent future interests to prevent uncertainty about
future ownership and possession from continuing so far into the future that land would become inalienable.
Rationale: reflects the idea that property should be controlled by the living, not by the dead hand. Thus,
an interest that remains contingent once the perpetuities period expires is void.
Common law version of the rule by John Chipman Gray: No interest is good unless it must vest, if at
all, no later than 21 years after the death of some life in being at the creation of the interest.
To comply with the rule it must be logically provable that within a specified period (equal to the length of
one life + 21 years) a covered interest will either vest or forever fail to vest (never vest after the period
ends).
If there is a possibility, however, remote, that a covered interest might remain contingent after this
perpetuities period expires, the interest is void.
FIVE STEP APPLICATION OF THE RULE
1. Determine if the rule
applies to the future
interest

The rule applies only to three types of future interests:


1. Contingent remainders;
2. Vested remainders subject to open; AND
3. Contigent executory interests

2. Decide when the


perpetuities period

Different types of interests become effective at different times.


A will becomes effective when the testator dies.

37

begins

A deed is effective when it is delivered by the grantor.


The perpetuities period being when the interest becomes effective.

3. Determine what must


happen for the interest
to vest or forever fail to
vest

Figure out why is the interest contingent? What must happen for the interest to vest
or forever fail to vest?
E.g. To A, then to the first child of A to reach age 30: For the interest to vest,
A must have a child that reaches the age of 30; to forever fail to vest, A must die
without having a child.

4. Identify the persons


who can affect the
vesting- Look for one
person who will enable
you to prove that the
contingent interest will
vest or fail within the
life, or at the death of
that person or within 21
years after that persons
death.

Consider who are the validating lives:


Length of perpetuities period is equal to one life plus 21 years, so it is crucial to
identify the persons whose lives can be used in the formula.
These persons who can potentially be used as yardsticks to measure the length
of the period are called validating lives or lives in being.
o Validating lives must have been in being at or before the time at which
the interest in question was created.
o Can almost always affect whatever has to happen for vesting to occur.
o May include:
Preceding life tenant.
The taker or takers of the contingent interest.
Anyone who can affect the identity of the takers (such as A in
a gift to As children).
Anyone else who can affect events relevant to the condition
precedent.

5. Test each relevant life


to determine if any one
validates the interest

Does any relevant life validate the interest?


Each relevant life is tested to see if the interest will necessarily vest or forever
fail to vest during the period equal to that persons life plus 21 years.
The goal is find one relevant life (called the validating life or measuring life)
which will validate the interest.
o A party seeking to uphold the interest must meet a difficult standard:
she must prove as a matter of logic that the interest will definitively
vest or forever fail to vest within the period.
o Conversely, a party must invalidate the interest by meeting a very
easy standard, one based on mere suggestion or imagination.
Easy standard: if the creative legal mind can invent any possible scenario
under which the interest might first vest after the perpetuities period expires, no
matter how unlikely, the interest is invalid.
o E.g. O transfers a sum in trust for A for life, then to As first child to
reach 21.
A is the validating life. You can prove that any child of A who
reaches 21 will necessarily reach 21 within 21 years of As
death. The remainder must vest of fail within this period; it
cannot possibly vest more than 21 years after A dies.
Remainder is VALID b/c it will vest either in period or
forever fail to vest. RAP does NOT invalidate.
o E.g. O transfers a sum in trust for A for life, then to As first child to
reach 25.
A has no child age 25 or older. There is no validating life; the
contingent remainder is VOID.
You cannot prove that As first child to reach 25 will do so
within 21 years after As death.

38

VI. THE PERPETUITY REFORM MOVEMENT:


Criticism of RAP:
1. Disregards the intent of the transferor and thereby frustrates the right to transfer property freely.
2. Condemned as serving obsolete policies; the original goal of the Rule was to ensure the marketability of
the land, which requires little protection today.
3. The Rule is increasingly unimportant b/c it can be circumvented by drafting.
o E.g. to A for life, then to B and his heirs if anyone goes to Saturn would be invalid, but if it was
changed to: to A for life, then to B and his heirs if anyone goes to Saturn, but if no one goes to
Saturn within 21 years after the death of B, then the conveyance to B shall be null and void.
Modern Reforms:
1. First approach departs from common law rule by focusing on actual rather than possible facts existing
at the end of the estate preceding the future in interest in question.
2. Second stage of reform attended to this difficulty by the method of specific statutory repairs designed to
avoid purely technical violations by altering the common law conventions in certain specific circumstances.
3. Immediate reformation: jurisdictions taking this approach have statutes authorizing (or sometimes
directing) courts to reform a disposition in a way that avoids any perpetuity violation while effectuating the
transferors intent as nearly as possible (called cy pres in Law French).
Most states have modified the common law RAP through legislation a process that began in the 1970s.
The measures fall into two basic categories:
o 1. Permitting reformation to validate the interest where consistent with the transferors intent.
Other states retain the common law rule, but mitigate its impact by adding a new feature:
a reformation or cy pres remedy.
If an interest is invalidated by the Rule, a court may rewrite the language of the
conveyance or devise to carry out the transferors intent as closely as possible and
thereby validate the interest.
o 2. Adopting a wait and see approach in lieu of the what might happen rule; and
Basic wait and see approach: under this approach, the validity of the interest is not
determined at the onset. Instead, the parties merely wait and see whether a contingent
interest actually vests within some permissible vesting period.
The interest is valid if it actually vests during the common law perpetuities
period and is invalid if it fails to do so.
Arguments in favor:
1. Better implements the transferors intent and;
2. Protects the transferor from the malpractice of an incompetent attorney who
fails to draft a will or deed in conformity with the Rule.
Arguments against:
1. Impairs the marketability of the land;
2. Keeps wealth out of the flow of commerce for decades;
3. Also practically difficult to identify the relevant lives to be used in the wait
and see formula, absent litigation.
Uniform Statutory Rule Against Perpetuities:
o USRAP is in force in many states.
o Under USRAP, a covered interest is valid if either (1) it meets the requirements of the common
law Rule; OR (2) using the wait and see approach, it actually vests or terminates within 90
years after its creation.
Jesse Dukeminier & James E. Krier: The Rise of the Perpetual Trust:
The two reforms the wait and see doctrine and USRAP may have weakened RAP, but they honored its
purpose, taking power away from the dead hand. However, recent waves of state legislation permitting
perpetual trusts have undermined these reforms.

39

o
o

1. Generation-Skipping Transfer Tax: first enacted in 1916, levies a tax on any property interest
transferred by will, intestacy, or survivorship to another person, except for transfers to spouses and
charities.
2. State legislation: the list of states enacting legislation permitting perpetual, or almost perpetual
trusts, within some significant variation in statutory terms is certain to grow.

Problems and Palliatives of Perpetual Trusts:


1. Problem of Inalienability: transferability (or alienability) of property promotes efficiency.
Perpetual trust do not give rise to a problem of inalienability, the trust assets are freely marketable.
2. Problem of First-Generation Monopoly: problem of first-generation monopoly, meaning by first generation
the generation of settlor who sets up a perpetual trust.
3. Future of Perpetual Trusts: Congress has come to be in charge of trust duration. Future of perpetual trusts is in
its hands, to be dealt with through the tax system.
Types of Rule Against Perpetuities statutes:
1. Common law Rule in effect unchanged (e.g., Alabama).
2. Common law Rule completely abolished with no other rule replacing it (e.g. Rhode Island);
3. USRAP in effect unmodified.
Rachel Emma Silverman, Amid Congressional Scrutiny, Huge Sums Pour Into States That Allow Dynasty
Trusts
A wave of states started to allow so-called dynasty trusts to last for hundreds of years or even forever
undoing a centuries- old law that prevented perpetual trusts.
Congress is considering repealing estate and generation-skipping taxes altogether, which would eliminate a
majority motive for setting up their trusts: saving taxes from generation to generation.
Possible Reforms:
1. Wait-and-see for the perpetuities period
a. Lets see if all of As children are vested within the perpetuities period.
b. Problem: keeps a cloud on the title.
2. Wait and see after the devise.
Future of RAP:
Common law RAP is fading away.
Many states have recently adopted legislation that permits the perpetual trust, regardless of the Rule.
o This particular reform movement began in the early 1980s when Wisconsin, followed by South
Dakota and Idaho, abolished the common law Rule Against Perpetuities.
Saving clause in a trust: in drafting a trust creating future interests, experienced lawyers almost always
include a perpetuities saving clause.
o Savings clause is designed to terminate the trust, and distribute the assets, at the expiration of
specified measuring lives plus 21 years, if the trust has not earlier terminated.

40

1. COMMON LAW CONCURRENT INTERESTS


The nature of concurrent ownership: a present estate in real or personal property can be simultaneously owned by
two or more persons, each holding the right to concurrent possession. Three basic types of concurrent estates are
generally recognized:
1.

Tenancy In Common:
a. Characteristics:
i. A form of concurrent ownership wherein each co-tenant is the owner of a separate and
distinct share of the property, which has not been divided amongst the cotenants. Thus,
each cotenant owns a separate undivided interest in the property.
ii. There is NO right of survivorship in a TIC, unlike joint tenants or tenants by the
entirety.
1. E.g., if A and B are tenants in common and A dies, As tenancy in common
interest will pass to his devisees or heirs, NOT to B.
iii. Only unity of possession is required.
iv. There may be unequal shares (although it is the presumption they are equal).
1. E.g., A and B are tenants in common. A owns 25% undivided interest and B
owns 75% undivided interest. Either can be tenants in common even if they
acquired their interest at different times and by different instruments, and even if
fractional sizes of their shares are different.
b. Creation:
i. Any conveyance or device to two or more unmarried persons is presumed to create a
tenancy in common, absent clear language expressing an intent to create a joint tenancy.
ii. A tenancy in common can also arise from intestate.
1. E.g., O dies intestate and leaves three children A, B, and C. The laws governing
intestate succession will award each children one-third interest in Blueacre as a
tenant in common with the others.
c. Transferability:
i. A tenant in common has the right to sell, mortgage, lease, or otherwise transfer all or part
of his interest without the consent of other cotenants; and such a transfer does not end a
tenancy in common.

2.

Joint Tenancy: (standard language to create JT: to A and B as joint tenants with right of survivorship, not
as tenants in common, look at the intent of the conveying party).
a. Characteristics:

41
i. A form of co-ownership between 2+ persons of an interest in real property whereby such
persons own the interests together and each person has exactly the same rights in that
interests as his cotenants.
ii. Each has the right of survivorship, the outstanding characteristic of a joint tenancy.
1. This means that if one joint tenant dies, the survivor(s) take his share, and the
ultimate survivor takes all.
iii. Can sever without the other tenant knowing. Swartzbaugh v. Sampson (1936)
iv. Elements required for Joint Tenancy (The Four Unities):
1. Unity of time: requires that each joint tenants interest must be acquired or vest
at the same time.
2. Unity of title: all joint tenants must acquire title by the same instrument or by
a joint adverse possession. A joint tenancy can never arise by intestate
succession or other act of law.
a. At [common law], the owner of a fee simple can NOT directly create a
JT in himself and another (requires a straw man).
b. At [modern trend], this is allowable w/o a straw man.
3. Unity of interest: all joint tenants must have equal undivided shares and
identical interests measured by duration.
4. Unity of possession: each joint tenant must have the right to possession of the
whole. After a joint tenancy is created, however, one joint tenant can
voluntarily give exclusive possession to the other joint tenant. (The unity of
possession is essential to a tenancy in common as well; none of the other three
unities is.)
a. In such, each joint tenant needs to be entitled to occupy the entire
premises, subject only to the same right of occupancy by the other joint
tenants.
b. Many people hold in joint tenancy to avoid probate.
i. Can be destroyed by simply conveying to third party.
b. Creation:
i. English common law required four unities in order to create (and continue) a valid joint
tenancy: time, title, interest, and possession.
1. Joint tenants had to acquire title at the same time, had to acquire title by the
same deed or will, or by joint adverse possession; each interest had to be
identical, meaning each joint tenant had to have the same fractional interest in
the estate; and each joint tenant had to have an equal right to possession of the
entire parcel.
2. Joint tenants can change their interest into a tenancy in common by a mutual
agreement destroying one of the four utilities.
3. Many states have eroded the four unities standard.
c. Transferability:
i. A joint tenancy interest is virtually inalienable. When joint tenant dies, it is immediately
transferred to the joint tenant.
ii. Due to the right of survivorship, a joint tenants interest ends upon death, so the interest
cannot be devised or descend by intestate succession.
d. Severance of Joint Tenancy:
i. Any joint tenant at any time can destroy the right of survivorship by severing the joint
tenancy. This in effect converts the joint tenancy into a tenancy in common. There are
several ways to sever a joint tenancy (but not exhaustive):
1. Conveyance of the interests by a joint tenant
2. Mortgage on the property
a. Majority = lien theory = no severance
i. Mortgage seen merely as a security for repayment, not a
conveyance
ii. Surviving JT generally takes subject to the mortgage
iii. What if mortgagor dies before not is paid?

42
1.

3.
4.
5.

Some ct = mortgage remains effective = can be


enforced against decedents interest
2. Some ct = mortgage not effective
b. Minority = destroy unity of title = severance
i. Granting a mortgage is deemed to transfer the title to the
mortgagor
Lease
a. Common Law= severance
b. Modern = no severance
Partition = dividing up and distribution of the land = severance
K to sell (some cts)

3.

Tenancy by the Entirety:


a. Characteristics:
i. A joint tenancy between husband and wife. A right of survivorship can only be
terminated by the divorce of the couple, death of one spouse, or the agreement of both
spouses.
1. More durable than joint tenancy
2. One spouse cannot unilaterally break the required unities and thereby transform
the estate into a tenancy in common.
ii. Like the joint tenancy in that the four unities (plus a fifththe unity of marriage) are
required, and the surviving tenant has the right of survivorship.
iii. The tenancy by the entirety is now abolished in many states.
b. Creation:
i. A tenancy by the entirety requires the four unities plus a fifth a valid marriage.
ii. Intent to create tenancy by the entirety must be clearly expressed.
c. Transferability:
i. Consent of both spouses is required to convey the estate.
ii. Presumption favoring joint tenancies has been abolished in all states (with an exception
in a few states where the conveyance is to husband and wife).

4.

Termination of Concurrent Estates:


a. Severance of joint tenancy: a joint tenant has the absolute right to end or sever the joint
tenancy without the consent (or sometimes even the knowledge) of the other cotenants.
i. The procedure is simple: joint tenant conveys his interest to a third person.
ii. Joint tenant CANNOT pass her interest in a joint tenancy by will. Inasmuch as the joint
tenants interest ceases at death, a joint tenant has no interest that can pass by will.
iii. Unequal shares: one of the four utilities of a joint tenancy is equal shares. At common
law if A owned a one-third share and B a two-thirds share, A and B could not hold as joint
tenants.
iv. Could a joint tenant covert the joint tenancy into a tenancy in common without
losing his interest? The formal answer is no.
1. Using a strawman a joint tenant could convey to someone interest who
conveyed back to him the interest, facilitating the severance and not losing the
interest.
2. Common law courts allowed this b/c facilitated free alienation and encouraged
productive use of land since interest was not burdened by right of survivorship.
2. RELATIONS AMONG CONCURRENT OWNERS/SEVERANCE OF JOINT TENANCIES

1. Joint tenancy can be severed without use of an intermediary device:


Riddle v. Harmon (1980): Mr. (P) and Mrs. Riddle, husband and wife, purchased some real estate and
took as joint tenants. Mrs. Riddle did not want her husband to get their land automatically when she died,

43
so she tried to sever the joint tenancy and right of survivorship without him. Lawyer prepared deed that
allowed Mrs. Riddle to grant an undivided one-half interest in the property to herself through her will.
o HOLDING: Ct. overruled common law doctrine and held that a joint tenant could unilaterally
sever the joint tenancy without the use of an intermediary device (e.g. a strawman) by conveying
her property interest to herself.
o NOTE: legislature forced transactions to be recorded after Riddle b/c otherwise there may be acts
of fraud as deeds may be destroyed or conveyed to different parties secretly.
o Tenancy by entirety cannot be severed by unilateral action of one spouse.
2. Joint tenancy can be severed by an action for judicial partition:
A judicial partition: the privilege of each co-owner to transform a concurrent estate into estates held in
severalty.
o Free partition is central to the effective use of land. If cotenants cannot decide what to do with
their land, the land may not be developed for its most productive use.
o Partition-in-kind: a court-ordered, physical division of land held by joint tenants or tenants in
common by which each tenants interest is converted into a parcel taken from the whole and each
tenant then takes exclusive possession of their share of the land.
Preferred technique by courts b/c favor protecting interests that already exist a physical
division of the property into separate equal parcels.
The value of the parcels might not be equal due to differences in land quality; however,
the court can equalize the distribution by ordering a money payment called owelty.
o Partition-by-sale: a court-ordered division of land held by joint tenants or tenants in common by
which the land is sold and the procedures are divided among the tenants according to the size of
their interests in the land.
If physical division of the land is impossible or impracticable, or inequitable, a court may
order partition by sale.
E.g., it is usually impracticable to divide a single family home.
Court also considers the interests of the owners that would be promoted or negatively
influenced by the sale.
Property is sold and the sale proceeds are divided among the cotenants according to their
respective shares.
Partitions (especially by sale) ignore concerns for respecting emotional attachment that
many owners feel toward family residences and other personhood property.
Delfino v. Vealencis (1980): William Delfino (Ps) and Helen Vealencis (D) owned real property as tenants
in common. Delfinos owned 99/144 of the property and wanted a residential development, while Vealencis
owned 45/144 and wanted to keep her garage business on it. Ps brought an action in the T. Ct. seeking a
partition of the property by sale. D moved for a judgment of in-kind partition.
o RULE: a partition by sale should only be ordered if the physical attributes of the land in question
are such that a partition is impracticable or inequitable, and the interests of the owners would be
promoted by a partition by sale.
Lower court failed to consider that a partition by sale would force Vealencis (D) to
surrender her home and business, both of which were located on the property.
o NOTE: present trend of court has been to order sales in partition in a great majority of cases. This
is usually done in deference to the wishes of all parties, involved, or b/c the courts believe that sale
of the property is actually the fairest means of ending any conflict between parties.

Ark Land Co. v. Harper: NO PARITION BY SALE involves 75 acres of farmland and buildings owned
by Caudill family for almost a century. S. Ct. ruled partition by sale was unfair because owners had
emotional attachment to land, as in the case of a homestead.
Johnson v. Hendrickson: PARTITION IN KIND Bauman left 160 acre farm to widow (1/3) and children
(2/9). Widow, Katie, remarried Karl Hendrickson and had twin sons by him. Bauman children grew up
and left him. Kate died and left remaining interest in land to Karl and children. Baum children brought an
action for partition, requesting sale of the whole farm. Karl and his two sons asked for partition in kind.

44

Court ordered a partition in kind and gave no weight to interest of Karl and his sons in remaining in
homestead.
Gray v. Crotts: PARTITION IN KIND one of the four cotenants argued that upon physical partition, he
should be awarded the part of the common property adjacent to his home. Court held that the property
should be divided into four parcels of equal value and then the cotenants should draw lots to determine
which parcel.
Alternative Options:
o Compensation: an alternative approach to sale in kind or by sale.
o Owelty: if there is a partition in kind and you cant divide evenly, then the person who gets the
bigger share can be required to pay the person who gets the smaller share.

3. Joint tenancy can be severed when a cotenant transfers less than her entire interest:
Swartzburgh v. Sampson (1936): Mr. and Mrs. Swartzburgh owned 60 acres of land as co-tenants with a
right of survivorship. Mr. Swartzburgh (D1) leased part of some land for a boxing pavilion to Mr. Sampson
(D2), but Mrs. Swartzbaugh (P), the joint tenant, never singed the lease and wants to cancel it.
o HOLDING: One joint tenant who has not joined in the leases executed by her cotenant and
another cannot maintain an action to cancel the leases where the lessee is in exclusive possession
of the lease property.
The leases between D1 and D2 are not null and void but are valid contracts giving to
D2 the same right to the possession of the lease property that D1 had.
o RULE: in a joint tenancy each tenant owns an interest equal in all of the fee, and each has a right
of possession of the whole.
o RULE: one joint tenant cannot oust a cotenant who is in full possession of the property, nor can
the joint tenant charge rent to a cotenant.
o RULE: a lease of all the joint property by one joint tenant to a lessee is not a nullity but is a valid
and supportable contract as far as the lessor in the joint property is concerned.
o OTHER OPTIONS FOR PLAINTIFF:
1. Seek partition of lease- put the lease up for sale
2. Seek partition of the entire property unlikely, as wife would not want to lose right to
survivorship.
3. Ouster- can only be used if wife attempts to enter leased land and is prevented from
entering by lessee
4. Accounting ascertain all rents paid, and seek equitable division, however, this action
results in wife giving up the option to challenge the lease.
If one joint tenant keeps one from entering onto the whole, through affirmative actions
(e.g. changing locks on doors) then the ousted tenant has a right to sue for ouster and the
remedy can be one of two things.
Two resolutions: injunction requiring access OR for money damages equal to the
value of half of the premises.
4. Remedies Available to Co-Tenants:
1. Repairs: some states hold that you cannot compel contributions from co-tenants for repairs
2. Improvements: in most jurisdictions, the person who pays for the improvements is not entitled to contribution.
3. Taxes/mortgages: a cotenant paying more than her share is entitled to contribution
4. Adverse possession: a cotenant who has ousted other tenants and has exclusive possession cannot take property by
adverse possession UNLESS she gives clear and convincing notice to other tenants that she is repudiating the title.
5. Owelty: in a partition in kind, if the court cannot equalize the tracts, it can order payment from the party getting
the more valuable portion to the party getting the less valuable portion to equalize.
5. Summary of right/remedies of joint tenants:
1. Rights: right to sell, lease, give away, but a joint tenancy cannot be devised. Right to survivorship is destroyed by
selling/giving away joint tenancy, but not by leasing.
2. Remedies: partition in kind or by sale; accounting (to ascertain assets and liabilities, with improvements measured
by value added to property, and repairs and rents from leases included)

45
3. Ouster: only if there exists affirmative evidence that you have been excluded by cotenant; remedy can be either
injunction (allows you to reenter property) or damage (equal to half of reasonable rental income).

3. MARITAL INTERESTS (DIVORCE CASES)


English common law system: husband and wife have separate property; ownership is given to the spouse who
acquires the property.
Upon divorce property of spouses remained property of spouse holding title.
Unity of marriage severed by divorce, so property held in tenancy by entirety was converted into a tenancy
in common.
TWO BASIC APPROACHES:
1. Continental system of COMMUNITY PROPERTY: rests on the notion that husband and wife are a marital
partnership (a community) and should share their acquests equally.
The community property idea of treating husband and wife as an economic unit has more or less triumphed
when spousal property is divided upon divorce, but it has less effect on division of property at the death of
a spouse.
2. Rights Upon Divorce: EQUITABLE DISTRIBUTION:
Recent trend towards equitable division of property upon divorce.
Conception of marriage shifted in the 1970s when divorce laws changed. California introduced no-fault
divorces.
o New York retained the fault-based divorce system.
Alimony was paid for two reasons: (1) The at-fault spouse was required to pay alimony to the non-at-fault
spouse in order to (1) compensate the other for the divorce; (2) support the spouse for a limited period of
time until the spouse could enter the job market or become self-sufficient (rehabilitative alimony).
o Alimony is now viewed as support for a limited amount of time until the spouse can enter the job
market and become self-sufficient.
o Courts have limited basis for defining alimony (same as maintenance or spousal support). Court
may grant a maintenance order for either spouse only if it finds that the spouse seeking
maintenance:
(a) Lack sufficient property, including marital property apportioned to him, to provide for
his reasonable needs; and

46
(b) is unable to support himself through appropriate employment or is the custodian of a
child whose condition or circumstances make it appropriate that that the custodian not be
required to seek employment outside the home.
o Pledge: the use of personal property as security for the payment of a debt.
Uniform Dissolution Marriage Act: does NOT define property; it is up to the courts to interpret.
o It is a no-fault divorce statute that has eliminate the old grounds for divorce and outlines all the
procedures for making custody, child support, maintenance or alimony and property division
decision.
o For the division property the trial court must determine the value of all the marital property and
make an equitable or fair division of marital property.
o Under UDMA, two different components to marital property: (1) property acquired during
marriage, other than separate property; (2) appreciation in value of any separate property acquired
by gift or inheritance, such as trusts or vested interests in trusts and property.
There are three different approaches to defining the property that are subject to equitable distribution:
o 1. In some states, statutes authorize a court to divide all property owned by the spouses, regardless
of the time and manner of acquisition.
o 2. A second group follows a more restrictive definition, limiting the scope of the marital property
to property acquired during marriage by either spouse from any source (earnings, gifts,
inheritance).
o 3. The third group applies equitable distribution only to property acquired from income earned
during the marriage (essentially the same definition followed in community property states).
Questions: are education degrees, professional licenses, or careers property that
are subject to equitable distribution upon divorce?

Arguments against
Education/Professional License as
Property (Majority Approach):
1. Has no exchange value
2. Is of personal value to the holder
3. Has no transferable value in an open
market
4. Ended on the death of the holder and
was not inheritable.
5. Cannot be assigned, sold, transferred,
conveyed, or pledged.
6. Human abilities shouldnt be
considered property since they are
inherent abilities that someone possessed
before marriage.
7. Also the practical difficulty of
appraising an education is so speculative
that it should not be done.
8. Is an intellectual achievement that may
assist in future acquisition of property, but
it is not property in and of itself.
9. Product of hard work that cannot be
bought.
10. In re Marriage of Graham (1978):
Anne Graham (P) was the wife of Dennis
Graham (D). P, a flight attendant,
supported D through business school,

Arguments for Education/Professional License as Property


(NY Approach):
1. Many types of property have no exchange value (e.g. old
love letters);
2. Some property rights expire when the holder dies (a life
estate)
3. Often property rights cannot be transferred (a tenancy for
years, prescription drugs, commercial images, social security
and pensions, rent controlled apartments)
4. Working spouse contributes substantial income and
sacrifices personal education, career, and childbearing
opportunities all to support spouses pursuits that are supposed
to ultimately benefit both.
5. Also, potentially unfair more to women since they usually
take the support role.
6. DISSENT (CARRIGAN) of In re Marriage of Graham
(1978): court should go beyond narrow concept of property in
order to promote equality; most valuable asset acquired during
marriage was Ds increased earning capacity from degree.
Graham should be compensated for loss of future earnings of
her husband which were made possible by her investment in
his education.
7. Elkus v. Elkus (1991): Mrs. Elkus (P), beginning opera
singer, married voice coach, Mr. Elkus (D). After Ps career
skyrocketed while D coached P during their marriage, D
attempted to get an equitable division of Ps career b/c D
scarified his own career in order to serve as a coach and care

47

covering seventy percent of their


expenses, and after D graduated, they got
a divorce.
RULE: an educational degree is
NOT property, and therefore is
NOT subject to division upon
divorce.
11. Mahoney v. Mahoney (1982):
declined to recognized a professional
degree as marital property. Held such an
item was too speculative to value.

for children.
HOLDING: the extent to which the appreciation in
the value of Ps career was due to Ds efforts was
marital property.
RULE: an increase in the value of one spouses
career, when it is the result of the efforts of the other
spouse, constitutes marital property and is thus
subject to equitable distribution.
8. OBrien v. OBrien (1985): whether a husbands medical
license constituted a martial property within the meaning of
the states equitable distribution law. Held that the product
was one of the parties joint efforts; the license should be
considered marital property.

Rule in other jurisdictions:


1. California rules: (1) basically requires the community (the couple) to be reimbursed for community contributions
to education or training that substantially increases a partys earning capacity; she would be entitled to half of the
contributions; if you are divorced 10 years or more after the contributions have been made.
2. NJ required reimbursement alimony
3. NY is alone as defining a professional degree as a martial assert (OBrien v. OBrien, 1985).

4. TERMINATION OF MARRIAGE BY DEATH OF ONE SPOUSE


The common law system:
With respect to personal property, common law gave surviving widow one-third if there were surviving
issue and one-half otherwise.
Idea that land should stay in patriarchal family, but surviving spouses should be supported for their lives.
Law accommodated these desires by the institutions of dower and curtesy.
Dower: on death of her husband, a wife had the right of dower.
A dower was the right to a life estate in one-third of each and every possessory freehold estate the
husband enjoyed at any point during the marriage which was capable of inheritance by children born of
marriage.
Any land owned in fee simple by the husband alone, or by H and a third person as tenants in common,
qualified for dower.
o Dower inchoate: while H was alive, W got a right of dower inchoate as soon as land became
seized. This meant that any conveyance of the freehold by H to a third party did not affect the
right of dower inchoate, so after H died W could still demand her dower rights from the person
who bought from H. Interest became perfect upon death of husband and may result in possession
and use.
Curtesy: common law gave a husband who survived his wife a right similar to dower, called curtesy.
o Curtesy attached to all possessory interests in land of the wife, including equitable possessory interests.
o Curtesy, like dower, attached to all freehold land of which the wife was seised during marriage and was
inheritable by the issue of husband and wife.
o However, unlike dower, curtest only attached if issue were born to the marriage. Once a child was born,
even if it later died, curtesy attached.
o Curtesy no longer exists in the United States.

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Modern Elective Share (aka four share provision): after Civil War it appeared that dower and curtesy were no
longer effective to protect the surviving spouse.
o Forced shared legislation: giving the surviving spouse an elective share in all property (real and personal).
o Form of deferred community property; one spouse does not receive a property interest in the other
spouses property during marriage, but only at the other spouses death.
Elective-share statute (aka four share provision): surviving spouse can renounce the will, if any, and
elect to take a statutory share (normally 1/2 or 1/3 of fractional share) of all property the decedent owned at
death.
o The modern substitute for dower and curtesy is elective share (statutory forced share is usually
larger than a dower).
o Effect: one effect of the elective share statute (which all common-law property states but Georgia
have) is that one spouse cannot disinherit the other.
o Size of share: generally one-half or one-third.
o Elective share ordinarily applies only to property that the decedent spouse owns at death.
o Elective share usually DOES NOT apply to property held by the decedent and another in
joint tenancy nor to life insurance proceeds.
o The elective share can be defeated by lifetime gifts of property.
Uniform probate code: surviving spouse is entitled to keep any property that the will devised to him or
her.

5. COMMUNITY PROPERTY SYSTEM


Equitable distribution (keep title separate depending on who earned it): what you earn during the marriage is
your property but the court can distribute equitably upon death or divorce.
o NOTE: Women tend to do better in community property jurisdictions versus equitable distribution
jurisdictions.
Community property (divides property in advance): American community property systems define community
property as the earnings during marriage of either spouse and all property acquired from such earnings.
o In eight states, the rights of husbands and wife in property is governed by civil-law concept of
community property. These states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico,
Texas, and Washington.
o General approach: the key tenet of community property is that property acquired during the
marriage (with exceptions) belongs jointly to husband and wife from the moment it is acquired.
Thus upon divorce or death, the property is treated as belonging HALF TO EACH SPOUSE.
Earnings of each spouse during marriage should be owned equally in undivided shares by
both spouses.
Cannot buy title or transfer something to separate property, if community when it was
earned.
Can hold real property as community property.
Can also hold as joint tenants or tenants in common.
CA: If couple owns property as joint tenants, and husband devises to the
children the property will still go to the wife. Tenancy by entirety it would go to
the children.

49

CANNOT convey to a third party without the other spouses consent if the
ownership is in community property (if a joint tenancy or tenancy in common,
either spouse can sell to a third party).
Transmute: in most states husband and wife can freely change (transmute)
the character of their property by written agreement and, in some states, by oral
agreement.
All property that is not community property is SEPARATE PROPERTY.
Separate property includes (1) property acquired before marriage or (2) property
acquired during marriage by gift, devise, or inheritance.

Three Regimes:
1. All property has separate ownership (common law system).
2. Property acquired from earnings as community property and inherited property as separate property
(American community property system).
3. All property from whatever source as community property (universal community property).
Divorce: generally, if divorce occurs, the community property is evenly divided.
o Some states require equal division of community property; others authorize a divorce court to make
equitable division of community property.
Death: upon death of one of the parties, the community property is treated as having belonged half to the deceased
spouse and half to the surviving spouse. A deceased spouses half is thus subject to his right to devise it b will to
whomever he wishes.
Community Property Compared with Common Law: Concurrent Interests:
Community property compared with tenancies in common and joint tenancies has these significant differences:
1. Husband and wife:
a. Community property can exist only between husband and wife.
b. A tenancy in common or joint tenancy can exist between any two people.
2. Conveyance of share:
a. Neither husband or wife can change community property into separate property without consent of
other.
b. Unlike TIC or JT, neither spouse acting alone can convey his or her undivided one-half share of
community property, except to the other spouse.
c. A TIC or JT can act alone and change the form of the estate and has the right to partition; action
unavailable to an owner of community property acting alone.
3. At death:
a. Each spouse has power to dispose by will of one-half the community property at death and no
survivorship feature exists, as with joint tenancy.
b. In most community property states, if spouse dies intestate, their share of community property
passes to surviving spouse.
4. Sale after death:
a. At death of one spouse, the entire community property receives a stepped-up tax basis for
federal income tax purposes.
b. There are possible considerable income tax advantages in holding property as community property
rather than in common law concurrent ownership form.
Management of community property: manager of community property is a kind of fiduciary. Community
property must be managed for the benefit of the community.
o Beginning in 1960s, community property state enacted statutes giving husband and wife equal management
powers.
o Most community property states give either the husband or wife, acting alone, the power to manage
community property.

50

o
o

However these statutes all differ:


o Some give either the husband or the wife acting alone the power to manage community property.
o However, in certain other situations only one spouse may be empowered to manage.
E.g., if spouse operating a business that is community property, or title of property is only
in name of one spouse.
Neither spouse acting alone may convey their interest in the community to a stranger.
o Community property can be conveyed to a third party only as an undivided whole.
Both spouses join in a conveyance of real property held as community property.
Equal management rule: permits either spouse to invest or otherwise deal with deposit or investment
accounts.

Mixing Community Property with Separate Property: the tracing rule applies to commingled property as well.
If the sources of commingled property can be identified accurately as separate or community funds, the commingled
property will be divided into separate community portions.
1. Inception of right rule: (Texas rule) if you buy a separate property, it remains separate property.
Character of the property is determined at the inception of the legal right to the property or when the wife
signed the contract.
2. Pro rata rule: (California and Washington) this approach holds that the percentage of the purchase price
paid prior to the marriage establishes the portion of the property that is separate, and the percentage of the
purchase price paid with community funds establishes the community interest in the property.
3. Time of vesting: this approach holds that the character of the property is determined when title passes
and installments are paid.
o Eg. A house bought on installment land contract by the wife paying 1/3 down before marriage,
with the remaining 2/3 of the installment paid after the marriage from community funds.
Inception of right rule: the character of the property is determined at the time the wife
signed the contract of purchase; the house is separate property.
Time of vesting rule: title does not pass to the wife until all the installments are made;
hence, the house is community property.
Pro rata rule: the community payments buy in a pro rata share of the title.

Migrating Couples:
Whether property is characterized in accord with the community property system or in accord with the
common law property system depends upon the domicile of the spouses when the property is acquired.
o E.g. suppose the wife earns 1,000 dollars and buys a horse with it. If the parties are domiciled in
NYC, the horse belongs to the wife alone.
o If domiciled in Texas, the horse is community property.
o Once the property has been initially characterized, the ownership DOES NOT change when the
parties change their domicile UNLESS both parties consent to the change in ownership.
Uniform Disposition of Community Property Rights at Death Act.
o The act provides that real property located in the enacting state, purchased with or traceable to
proceeds or income from the community property, will be treated as community property on death.
Hence, only half will be distributed through the decedents estate.
A move from a COMMON LAW property state to a COMMUNITY property state may leave a
nonworking spouse of a retired worker at a disadvantage.
o The community property laws in most states do not give the surviving spouse an elective share in
the decedent spouses property owned at death.
Upon death, the place where the person dies governs the distribution of personal property
and the law where real property is located governs the distribution of the land.

5. RIGHTS OF DOMESTIC PARTNERS-VARNUM v. BRIEN

51

Common law marriage:


o To have a common law marriage, the cohabitating parties must manifest their intent to be husband and wife
and hold themselves out to the public as husband and wife. If jurisdiction recognized common law
marriage, couples married by common law have same rights as a couple married with license and
ceremony.
o Common law was abolished in most states b/c thought to generate more litigation and encourage
perjured testimony about an agreement to marry by cohabitant seeking benefits of lawful
marriage.
Other reasons: with modern transportation it is not needed, certified marriage made proof
easy for government benefits, and common law marriage dignified immorality among
persons in lower socio-economic classes.
Modern Movement Toward Extending Property Rights to Unmarried Couples:
o Marvin v. Marvin (1976) (CA Law): held that a contract for property division or support can be implied
from the conduct of the parties. Nonmartial parties are not entitled to division of community property, but
courts instead enforce express agreements between parties to the extent that these agreements do not rest on
an unlawful meretricious consideration.
o OBJECTION #1: NY has rejected the implied contract idea. Morone v. Morone (1980): only a
written or oral express contract to share earnings and assets between unmarried partners is
enforceable.
o OBJECTION #2: Illinois has rejected enforcing any such contract. Hewitt v. Hewitt (1979):
contract between unmarried partners to share acquisition is unenforceable on the ground that this
would, in effect, revive common law marriage, abolished by the legislature.
o American Law Institutes Principles of the Law of Family Dissolution: legal rights and obligations may
arise from the conduct of the parties with respect to one another, even though they have created no formal
document or agreement setting forth such an understanding.
o The principles require that domestic partners of the same or opposite sex share for a significant
period of time share a primary residence and a life together as a couple.
Same-Sex Couples and Property Rights:
o Jurisdictions that recognize property rights between unmarried heterosexual couples have sometimes
extended this protection through case law to gay and lesbian couples as well, particularly where an express
contract is present.
o Rights and obligations of the marital state are entirely dependent on legislation.
o Even where enforceable, a contract cannot create the status benefits of marriage, such as the
(1) right to spousal benefits under social security, pension, and retirement plan;
(2) right to file a joint tax return;
(3) right to take the marital deduction for federal estate tax purposes
(4) right to inherit from ones spouse in case that surviving spouse dies intestate.
(5) right to surviving spouses elective share.
o Potential downsides of marriage:
Equitable division upon divorce, alimony
o

Varnum v. Brien (2009): six same-sex couples, who resided in Iowa, filed suit challenging the
constitutionality of Iowa Code 595.2 (1), which provided that only a marriage between a male and female
is valid. It was an amendment made to Iowas marriage statute in 1998.
o HOLDING: Iowa Supreme Court relied on the Iowa Constitutions equal protection clause to
strike down Iowas limitation on marriage to opposite-sex couples.
o REASONING: Iowa court applied so-called intermediate scrutiny in which the challenged
classification is presumed to be void unless the state can prove that it is substantially related to
an important state interest.
State asserted five interests: (1) promoting and protecting the traditional concept of
marriage; (2) conserving scarce resources that are expended upon marital status; (3)

52

promoting procreation; (4) promoting childrearing by a mother and father; and (5)
promoting stable opposite-sex marriages as cradles in which to raise and nurture children.
Court found the first interest to be circular and thus unimportant and found the
remaining interests, even if important, to be insufficiently related to the interest.

Steps in the Analysis of Varnum v. Brien (2009):


o Step 1: levels of scrutiny:
1. Rational basis: in most cases the Iowa Supreme Court applies this standard which is very
deferential to the legislature.
Only needs to be rational.
Plaintiff has the heavy burden of showing the statute unconstitutional and
must negate every reasonable basis upon which the classification may be
sustained.
2. Strict scrutiny: heightened level of scrutiny applied to statutory classifications based on
race, alienage, or national origin. In these cases statutes must be narrowly tailored to serve a
compelling governmental interest.
Law must be narrowly tailored and compelling.
Applies to the unequal opportunity of right- procreation, voting, travel
3. Intermediate scrutiny or heightened scrutiny: middle tier of analysis.
Based on gender and illegitimacy.
Groups entitled to this tier are often called quasi suspect groups.
To survive this scrutiny, the law must further an important government interest AND
be substantially related to that interest; it must be a genuine interest and must not
depend on broad generalizations.
o Step 2: Threshold Test: The requirement of equal protection that the law must treat all similarly
situated people the same has generated a NARROW THRESHOLD TEST.
Ps must show that they are similarly situated (to heterosexual persons) for the courts to
consider whether their different treatment under a statute is permitted under the equal
protection clause.
o Step 3: To determine if legislative classification warrants heightened scrutiny Supreme Court
looks to FOUR FACTORS.
1. Long and painful history of discrimination against gay and lesbian people.
2. Sexual orientation is not relevant to a persons ability to contribute to society.
3. Sexual orientation is highly resident to change (not immutable).
4. Political powerlessness of lesbian and gay people; absolute political powerlessness is not
necessary to subject legislative burdens on a certain class to heightened scrutiny and specific
issue lacks supports.
Conclusion: all factors pointed to a heightened level of scrutiny.
o Step 4: Consider the States Arguments (State Interests) and Refute Each Argument
1. Maintaining traditional marriage (circular argument)
2. Promotion of optimal environment to raise kids (not true based on research)
3. Promotion of Procreation (not substantially related to legislative purpose and many
heterosexual people who get married chose not to procreate)
4. Promoting stability in opposite-sex relationships (no reason why excluding opposite-sex
relationship secure same sex relationship)
5. Conservation of resources (same amount of resources used by different sex couples)
Conclusion: sexual orientation based classification under the marriage statue does
not substantially further any of the objectives.
o Step 5: focus on the constitutionality of the law (disregard the religious opposition b/c of separation
of church and state).
Conclusion: exclusion of gay and lesbian people from the institution of civil marriage does
not substantially further any important governmental objective.

53

If gay and lesbian people are denied marriage rights of others without constitutional
justification then the law is unconstitutional

Other Courts have reached different conclusion:


o California Supreme Court: ruled that governmental sexual orientation classifications are subject to strict
scrutiny, in which the government must prove that its classification is necessary to achieve a compelling
objective.
o California court ruling was reversed by a constitutional amendment (Proposition 8 added to state
constitution that marriage was to be between a man and woman).
o Massachusetts Supreme Judicial Court: struck down the states ban on same-sex marriage under
minimal, or rational-basis, scrutiny, in which the challenged classification is presumed to be valid, and the
challenger must prove that the government either lacks any conceivable legitimate interest for the
classification or that the classification is not rationally related to such a legitimate interest.
o New York Court of Appeals and Washington Supreme Court upheld bans on same-sex marriage under
minimal, or rational-basis, scrutiny.
o Only Iowa, Massachusetts, Connecticut, Vermont, and New Hampshire recognize same-sex marriage.
Congress:
o Defense of Marriage Act, 28 U.S. C.A. 1738C. provides that no state shall be required under the Full
Faith and Credit Clause of the Federal Constitution to give effect to a same-sex marriage contracted in
another state.
Several European Country: give domestic partners almost all the legal rights of a married couple.
Conflict of laws:
If a marriage is valid where contracted, it is valid everywhere.
VARNUM DISSENTING OPINION:
Main Points: (1) Institutional confidence issue (legislature should decide, not courts, who owe deference to the legislature to decide social
and policy issues); (2) there is a rational basis to restrict marriage between a man and a woman
In most of Iowas Supreme Court history, the court has been deferential to the legislature on issues that deserve to be considered in a political
forum. Although the court ultimately decided to invoke heightened scrutiny in Varnum v. Brien (2009) in reviewing the distinctions based on
sexual orientation in Iowas code 595.2, this level of scrutiny and the ultimate decision reached by Iowas Supreme Court were misguided. This
opinion argues that a rational basis exists for Iowas Code 595.2, which prohibited same-sex marriage, and that Iowas legislature is the proper
forum to make a decision on the issue of same-sex marriage.
First, although the Iowa Supreme Court can sympathize for the situation of same-sex couples, the judiciary is the improper institution to provide
relief. Moreover, as was persuasively argued in the concurring opinion written by Justice Baxter in In re Marriage Cases, 43 Cal. 4th 757 (2008),
the California Court expanded its constitutional power and violated the separation of powers by affording same-sex couples the opportunity to
marry. That is, the court considered an issue that motivates a response by the California legislature, not the courts. In the words of Justice
Baxter, If there is to be a further sea change in the social and legal understanding of marriage itself, that evolution should occur by similar
democratic means. The majority forecloses this ordinary democratic process, and, in doing so, oversteps its authority (emphasis added).
Moreover, Iowas legislature is the proper forum to create a right to marry for same-sex couples, and if evolving standards are the reasons to look
for a right for men to marry men or women to marry women, gay rights advocates should await recognition of same sex marriage by voter
referenda or legislation.
Second, Justice Cady wrote a well-reasoned opinion, but he fails to make the necessary connection between Iowas history of progressive civil
rights protections of certain classes of persons, such as African Americans or women, and the correlating civil rights that should be provided to
those seeking same-sex marriages. Further, it is true that Iowas Supreme Court has had a long history of progressive thought. Justice Cady
writes, In the first reported case of the Supreme Court of the Territory of Iowa, In re Ralph (1839), we refused to treat a human being as property
to enforce a contract for slavery and held our laws must extend equal protection to persons of all races and conditions. In addition, Cady notes
that thirty years later Iowa was the first state in the nation to allow women into its Bar. All of which were noble and praiseworthy decisions by
Iowas Supreme Court that supported the equal protection of different classes of persons. Here, we can all agree.
The disagreement is on whether the right to marry and the rights of marriage are the same. In its oral arguments before the Supreme Court,
the state noted that the historical definition of marriage has been between a man and a woman; Iowa did not create the definition of marriage.
Moreover, there is also a fundamental distinction between restricting the right to marry based on race or gender and one based upon differences
in sex (Love v. Virginia, 1967). The Kentucky Supreme Court held that limiting their state marriage statute to opposite-sex marriages did not
violate the fundamental right to marry, the First Amendment, or the Eighth Amendment (Jones v. Hallahan, 1973). The New York Court of
Appeals held that the state could not extend the right to marriage to same sex couples because such a right did not exist in New Yorks
constitution (Hernandez v. Robles, 2005). Likewise, based on Iowas historical understanding of the right to marry and the rights of marriage and
its constitution, these rights should only exist in application to opposite-sex couples.

54

Third, there is a conceivable rational basis to support Iowas Code 595.2. The state argued that the code promoted and protected the traditional
concept of marriage, childrearing by a mother and father, stability in an opposite-sex relationship to raise and nurture children, stable opposite
sex-marriages as cradles to raise and nurture children, and conserved scare resources that would be expended upon marital statuses. Justice Cady
in Varnum v. Brien dismissed these interests as either circular arguments or unimportant and held that there was not a rational basis for Iowas
Code 595.2. By doing so, Cady overlooks important reasons for protecting opposite-sex marriage in the state of Iowa.

D. NONFREEHOLD ESTATES
THE LEASEHOLD ESTATE
Leasehold estate: is a legal interest that entitles the tenant to immediate possession of designated land or real
property, either for a fixed period of time or for as long as the tenant and landlord desire.
Lease: a lease is the conveyance of a nonfreehold estate, which is a legal interest that entitles the leasee the
immediate exclusive possession of the designated property for a period of time.
Factors used to determine a questionable lease: (1) users permitted; (2) defined area; (3) rent reserved; and
(4) duration.
STEP 1:

Types of Tenancies:

55

Identify Type of
TenancyThis tenancy
would likely be
classified as a
[INSERT]
**Landlord
almost always
owns the fee
simple absolute.

1. Term of years tenancy: is an estate that (a) lasts for some fixed period of time OR
(b) for a period computable by a formula that results in fixing calendar dates for
beginning and ending, once the term is created or becomes possessory.
It can be determinable (ending on a event)
Does not expire on death estate would be liable.
Agreement from both the lessor and lessee.
Almost all commercial leases and some residential leases utilize the term of
years tenancy.
It expires at end automatically; specified ending and starting date.
o NO notice is necessary for termination b/c terms of agreement have
date.
2. Periodic tenancy: is a lease for some fixed duration that continues for succeeding
period until either the landlord or tenant gives notice of termination.
Classic example of a periodic tenancy is the month-to-month residential
lease.
o E.g. L and T enter into a month-to-month lease for an apartment, wit
the term to begin on Jan. 1. The initial period of the lease is 1
month, but the lease continues month after month until either L or T
gives notice of termination.
Creation of periodic term: Identify The Periodic Duration
o Expressly stated
o Implied stated
Fixed duration is measured by rental periods (when pay the
rent)
For annual rent that is payable monthly (majority
rule) is that it is an annual periodic lease.
Termination
o Occurs when either the L or T terminates by delivering oral or
written notice to the other.
o Year-to-year tenancy requires a half a year notice to terminate.
o A tenancy of less than a year requires a notice of termination given
equal to the length of the period, but not to exceed sixth months.
o Death does not necessarily extinguish.
o Also notice must terminate the tenancy on the final day of the period,
not in the middle of the tenancy.
Some states have statutes that shorten the length of notice
required and have permitted month-to-month tenancies to
be terminated at any time following 30 days notice.
If there is an invalid termination
(Split jx) the termination is treated as null or
invalid
(Split jx; Restatement 2nd of Property) the invalid
notice carries over and effectuates the next date for
termination (become valid).
3. In Tenancy at will, there is no stated duration. It is a tenancy of no fixed period that
endures so long as both landlord and tenant desire.
Common Law: either party can terminate it at any time (places a lot of power
into the hands of one party), without any notice, on the day the tenant
abandoned the premises or the landlord delivered notice of termination.
o A tenancy at will automatically terminates if either the landlord or
tenant attempts to assign it, or dies (treated a constructive notice to
terminate).
o However, payment of rent coverts to implied periodic tenancy.

56

o When in doubt, construe as periodic tenancy.


Modern Statutes: ordinarily require a period of notice say 30 days or a time
equal to the interval between rent payments, in order for one party or the other
to terminate the tenancy at will.

**A landlord is required to provide a (1) legal lease, has a (2) duty to mitigate and abide by
(3) statutory requirements, must maintain a (4) covenant of quiet enjoyment for the tenant,
and uphold the (5) implied warranty of habitability.

THE LEASE
STEP 2:
Identify the
duration of the
LEASEThus, the
duration of the
lease would be
[INSERT]
**Landlord
grants another
person or entity
(corporation)
the present right
of exclusive
possession but
less than a freehold estate.
**Landlord
cannot enter
into an illegal
lease. That is,
one where a
landlord knows
the property is
in violation of
many housing
codes (often
applied to
residential
properties).

Lease: a contract by which a rightful possessor of real property coveys the right to use
and occupy the property in exchange for consideration, usually rent.
Illegal Lease: unlike a claim based on quiet enjoyment and constructive eviction, the
tenant could withhold rent and still stave off the landlords inevitable action to evict for
nonpayment . (Alas, it appears that it is dead letter for the tenant).
The lease sets forth the agreed-upon terms that will govern the tenancy,
including the amount of the rent, the duration of the tenancy, and the location
of the leased premises.
Conveyance of Contract?
o Common law: lease is viewed as a conveyance.
o Recent trend: lease is increasingly viewed as a contract, governed by
contract law.
A lease transfers a possessory interest in land, so it is a
conveyance.
But it is also the case that leases usually contain a number
of promises (such as the promise to pay rent or promise by
landlord to provide utilities), so it is a contract too.
Statute of Frauds: if the duration of the tenancy is for one year or more, then the
Statute of Frauds requires that the lease be in writing.
This requirement applies primarily to the term of years tenancy.
Month-month leases can be oral, since the initial lease was only 30 days, not
long enough to trigger the Statute of Frauds.
Oral lease
o Any oral lease for a duration over 1 yr. is treated as a tenancy at will.
o Renewal of oral lease
For an oral lease that is renewable at the option of the
lessee, the lease is usually treated as extending to the end of
the option period.
Thus, the lease becomes void if the extension puts over the
short-term lease exception, thus creating a tenancy at will.
Form leases and question of bargaining power:
The legal rights of residential tenants have been dramatically expanded by
judicial decisions and statutes based in part on the perception that the
ordinary tenant is unable to protect his or her interests in lease negotiations
due to the superior bargaining power of the landlord.
o Due to shortage rental housing in many urban areas, the tenant was
effectively forced to acquiesce to the landlords terms without any
opportunity for meaningful negotiation.
1970s: tenants gained legal protection and most of the reforms tent to be

57

more pro-tenant; legislation recently put into play requires full disclosure of
landlords and tenants duties, rights, and remedies.
Difference between licenses and leases:
License: granting someone permission to use the land.
Difference between an assignment and a sublet:
Assignment: one tenant transfers entire interest to another in a lease.
Sublet: give up less than a full-interest in lease.
o **Note: a landlord could sue (privity in estate) if there is an
assignment.
o Landlord can only come after the renter, not the subletter for
breaking the law.
o Various doctrines have been interpreted to allow the landlord to go
after the subletter but it can still make a difference.
NOTE: If privity of estate exists, the landlord can sue the person in possession if
breach occurs (e.g. for nonpayment of rent).

**Where a lease requires a landlords consent, jurisdictions vary on whether such consent
can be withheld arbitrarily. For example, lets consider the case of Kendall v. Ernest
Pestana (1985).
Kendall v. Ernest Pestana (1985): Ernest Pestana (D) demanded increased rent from Kendall (P) in exchange for
consent to assign a lease. Bixler requested consent from Pestana (D) for the sublease to Kendall (P), but D contends
he may arbitrarily refuse consent. P contends that this provision is against public policy since it is an unreasonable
restrain on alienation.
MINORITY RULE: A commercial landlord may only withhold consent under such a contract if it
had a commercially reasonable objection to the transferee or the proposed use (even in the absence
of a provision in the lease stating that consent to assignment will not be unreasonably withheld).
o FACTORS the jury may consider in applying the standards of good faith and commercial
reasonableness:
1. Financial responsibility of the proposed assignee;
2. Suitability of the use for the particular property;
3. Legality of the proposed use;
4. Need for alteration of the premises;
5. Nature of the occupancy, i.e. office, factory, clinic, etc.
**Denying consent solely on basis of personal taste, convenience or sensibility is
NOT commercially reasonable.
o REASONING:
1. Rule benefits society by ensuring that the land is devoted to its highest and best
productive use (freedom of alienation).
Courts generally want property to change hands if it needs to and ensure
efficient use of the property is made.
2. Relationship between lessor and lessee has become more and more impersonal. Thus,
lessor is just as likely to find a high quality tenant in the assignee as the lessee.
3. Lessors interests are protected by the fact that the lessee remains contractually liable
to the lessor.
4. A lease is increasingly viewed as a contract. As a result, since the lessor has discretion
in withholding consent, the lessor can without consent only in good faith.
MAJORITY RULE: where a lease contains an approval clause (a clause stating that the lease cannot
be assigned without the prior consent to the lessor), the lessor may arbitrarily refuse to approve a
proposed assignee no matter how suitable the assignee appears to be and no matter how
unreasonable the lessors objection.
NOTE: Minority rule seems to be in favor of current trend in the law that supports tenants above landlords.

58

NOTE: Most residential tenants can withhold consent arbitrarily. However, if the tenant abandons, and the
landowner has the duty to mitigate, the landlord may need to accept a tenant that he or she does not
necessarily approve of (especially during hard economic times).

**If the landlord denied the lease assignment, the next question to consider is whether the
lease assignment was denied unreasonably? Also, consider whether the proposed use is
suitable in light of other commercial or residential uses of the property.
Pay N Pak Stores, Inc. v. Superior Court (1989): (REASONABLE DENIAL) shopping center landlords refusal
to consent to a sublease was held reasonable b/c subtenants sold products the landlord also sold and owner has
right to protect its property.
Kriger v. Helmsley-Spear, Inc. (1973): (UNREASONABLE DENIAL) court found for the tenant holding that it
was unreasonable for landlord to refuse consent b/c the proposed subtenant was a tenant of another building
owned by landlord and would create a vacancy in that other building. Court held that the clause is for the
protection of the landlord in its ownership of that particular building, not general economic protection.
American Book Co. v. Yeshiva Univ. Dev. Found. (1969): (UNREASONABLE DENIAL) some years after
American Book Company leased three floors and basement space in a commercial building, Yeshiva University
Development Foundation acquired the building. When American Book sought consent to assign its lease to Planned
Parenthood World Population, the new landlord (Yeshiva Univ.) denied its consent on basis that it considered
activities of proposed subtenant inconsistent with present use of premises and educational activities of university.
Court concluded that denial of consent was unreasonable b/c subtenant was financial responsible, engaged in a
respectable and legal activity, and intended to use the entire space of the prime tenant for identical purposes.
Giordano v. Miler (2001): (UNREASONABLE REFUSAL TO CONSENT TO ASSIGNMENT OF LEASE)
court held that landlords could not demand a fee as a condition precedent to granting their consent. Lease did not
provide for such a fee.
Walgreen Arizona Drug Co. v. Plaza Center Corp (1982): tenant breached its lease agreement when it ceased
operation at the premises and boarded up its location. Court found no implied covenant within lease agreement.
Language of contract did not give rise to any implication of an implied covenant. Ct. agreed with T. Ct. that
arrangement constituted a sublease, not an assignment.

TENANTS DUTIES & LANDLORDS RIGHTS AND REMEDIES


Step 3: What
are the
landlords
rights and
remedies?
-Tenants duties:
1. Cant Waste:
duty not to
commit waste is
breached if a
tenant makes
such a change
as to affect a

1. MODERN VIEW: Landlord may NOT use self-help for retaking possession:
Common law standard: a landlord entitled to possession could resort to self
help without fear of civil liability so long as he used no more force that
reasonably necessary.
o Tenant may be able to recover damages for wrongful eviction where
landlord had no right to possession or where the means used to
removed the tenant were forcible, or both.
Modern view: self-help banned by majority of states. Where self-help is
allowed there still arises the difficult issue of just what constitutes reasonable
or permissible force.
Berg v. Wiley (1978): landlord (D) leased to tenant (P) for a term of five years
during which P operated a restaurant. Dispute arose between P and D based on

59

vital and
substantial
portion of the
premises; as
would change
its appearance;
the fundamental
purpose of the
erection; or the
uses
contemplated;
or a change of
such a nature, as
would affect the
very realty
itself,
extraordinary in
scope and
effect, or
unusual in
expenditure
2. Sublease/
assignment:
some
responsibility
on the part of
the tenants/
some on the
part of the
landlords
-Landlord: (1)
summary
proceedings are
the alternative
to self-help; (2)
duty to mitigate
damages

Ps remodeling of restaurant without permission and violation of health codes.


After not remedying health code violations and failing to complete remodeling
within two-week period set by D, D changed locks without Ps knowledge.
o HOLDING: The only lawful means to dispossess a tenant who has
neither abandoned nor voluntarily surrendered, but who claims
possession of property, is by resort to judicial process.
o RULE: a landlord may NOT use self-help to regain possession of
land.
o TWO WAYS TO EVICT LEGALLY IN MINN.: (1) no more force
than reasonably necessary; (2) Use judicial proceedings.
Reasons in favor of modern move towards judicial proceedings instead of
self-help: (1) Judicial process (summary proceedings) are becoming faster; (2)
self-help is never peaceable; (3) discourage forcible taking of possession
(deter violence); (4) Protect families from being left with no where to go.
o Problems with Summary Eviction Proceedings: such judicial
proceedings are intended to be quick and efficient means by which to
recover possession (and in some jurisdictions, rent) after termination
of tenancy. But, such proceedings can still be time-consuming and
expensive, even if uncontested.
o Other downsides: (1) Tenant advocates argue that tenants are unable
to effectively represent themselves in litigation and have insufficient
resources to retain attorneys; (2) Landlord advocates complaint that
judges drag out summary proceedings b/c judges are biased in favor
of tenants.

2. MODERN VIEW: Landlord DOES have a duty to mitigate damages after


abandonment:
Traditionally: landlord did not have a duty to mitigate damages after
abandonment.
Modern Trend: require landlord to make a reasonable effort to mitigate
damages caused by a tenants abandonment in order to recover the rent due
under the lease. View lease in large measure as a contract so apply contract
principles.
Sommer v. Kridel (1977): L, Sommer (P), leased a two-year term to T, Kridel
(D). T wrote a note explaining that T would have to abandon, and L did not
respond to Ts letter. After T abandoned, a third party subsequently inquired
about the apartment, but P said that someone already had leased it. L failed to
make efforts to re-let the apartment and sued T for the full amount due under
the 2-year lease.
o RULE: a landlord is under a duty to mitigate damages by making
reasonable efforts to re-let an apartment wrongfully vacated by the
tenant.
o POLICY: rule promotes use of scarce housing resources and avoids
deadweight losses that can be mitigated by landlord.
Riverview Realty Co. V. Perosio (1976): T entered into a 2-year lease but
vacated after only 1 year. L wanted back rent from T who abandoned. Court
held that landlord must treat apartment as if it was any of his vacant
apartments, and he must prove he used reasonable diligence.
Burden of proof: burden of proof that landlord used reasonable diligence to
re-let the premises differs from different jurisdictions. Most require the tenant
to prove that the landlord has not mitigated the damages others put burden on
the landlord (as in Sommer, may be minority rule).
o Austin Hill Country Realty, Inc. v. Palisades Plaza, Inc. (1997):
burden of proof mitigation or its absence on tenant.

60

o Snyder v. Ambrose (1994): burden of proof on landlord.


Questions to consider if landlord used reasonable diligence: (1) Whether
advertisement for space in apartment? (2) Whether there was a market for
housing? (3) Consider the sophistication of the landlord.
NOTE: some jurisdictions allow landlords to contract around duty to mitigate.
New Jersey law does not allow parties to contract around such a duty.
o Sylva Shops Limited Partnership v. Hibbard (2006): a nomitigation clause in a commercial lease has been upheld where there
was no inequality of bargaining power and public policy did not
forbid such clauses.
o NYs highest court opted to stick with the old common law rule where
landlord need not mitigate.

Arguments against Mandatory Mitigation


1. Tenant has purchased an interest in real estate
and is stuck with it;
2. Landlord should not be forced into a personal
relationship with new tenant he does not wish to
accept;
3. Landlord should not be required to seek out new
tenants continually;
4. Law should not encourage abandonment of
property by putting a duty of mitigation of damages
on the landlord (Rest.).

Arguments for Mandatory Mitigation


1. Utilitarian arguments focus on waste of housing resources;
2. Traditional rule effectively removes many units from the market, decreasing
availability of rental housing;
3. Landlord is in a better situation to re-let the unit then the abandoning tenant
they are familiar with it and may have programs already in play for marketing;
4. Mitigation is justified as a matter of basic fairness, equity, and efficiency to
interested in renting or purchasing the housing.

Other Landlord remedies and devices:


Rent and damages: if landlord terminates because of a breach of lease, he may recover in
addition to back rent and other damages the present value of the amount by which the unpaid
rent for the balance of the termexceeds the amount of such rental loss that the lessee proves
could be reasonably avoided, provided the lease either expresses such a remedy or the landlord
has relet in mitigation (CA statute)
Security deposits: security deposits can be used to protect the landlord in the event that a tenant
defaults on rent, damages the premises, or otherwise breaches the lease. However, security
deposits are heavily regulated in order to prevent abuse.
Other techniques: Landlords can ask for deposits such as liquidated damages or other things
in order to avoid the legal strictures on security deposits, such as advanced rent or rent
acceleration (upon tenants default, all rent for entire term is due and payable).

LANDLORDS DUTIES & TENANTS RIGHTS AND REMEDIES


STEP 4:
What are the
Landlords
Duties?Covenant of
quiet
enjoyment/
Constructive
Eviction
The covenant
of quiet
enjoyment is

Common Law: duties to maintain premise fell almost entirely on the tenant; tenant took
the premise as is and landlords were under no obligation to warrant their fitness.
Modern Revolution: duty to maintain lease falls more on shoulders of residential
landlord.
COVENANT OF QUIET ENJOYMENT: under the covenant, the tenant has the right of
quiet enjoyment of the premises, without interference by the landlord.
- The covenant is always implied (although it is usually expressly provided in the lease).
- However, this covenant is dependent, which in this context means that landlord
performance of the covenant of quiet enjoyment is only in play if tenant fulfills his
covenant to pay rent. Generally includes a duty to make promised repairs, abate immoral
conduct or other nuisances on property.
- NOTE: if tenant wants to stop paying rent must leave.
Reste Realty Corp. v. Cooper (1969): L, Reste (P), leased the basement of a

61

breach if the
landlord
either
actually or
constructivel
y evicts a
tenant.

commercial office building to T, Cooper (D). The basement that T was leasing
flooded whenever it rained. Building manager promised to remedy flooding but
died, L failed to remedy and ignored Ts complaints. T vacated the premises.
o RULE: a tenant may vacate premises and terminate the lease if his quiet
enjoyment is interfered with by the landlord.
NJ STANDARD (Reste/Expanded standard of quiet enjoyment/Minority
Rule): court suggested that any act or omission of the landlord which renders
the premises substantially unsuitable for the purpose for which they are leased,
or which seriously interferes with the beneficial enjoyment of the premises
constitutes constructive eviction of the tenant.
TRADITIONAL COMMON LAW STANDARD Constructive Eviction (CE):
occurs when a landlord has substantially interfered with the tenants use of the
property, but has not actually barred the tenant from entering the leased property.
o The elements of CONSTRUCTIVE EVICTION are (1) the L breached
a duty owed to T which caused (2) substantial interference or breach
with the Ts enjoyment of the premises or rendered it unfit for the
purpose for which it was leased (3) the T vacates the premises (some
jurisdiction requires abandonment); (4) within a reasonable time after
the Ls actions.
o Breach of duty: (1) required a positive or affirmative act of interference
by landlord (not an omission); (2) Withholding something essential and
included in the terms of the lease.
NOTE: If tenant is aware of landlords wrongful conduct
when taking possession, the right to assert constructive eviction
in the future is waived.
o Landlords have a duty to disclose: (1) latent defects in the premises
that existed at the time the lease was entered into, were or should have
been known by the landlord, and were not apparent on reasonable
inspection by the tenant; (2) to maintain common areas; (3) undertake
careful any repairs; (4) abstain from fraudulent misrepresentation as to
condition of lease premises; and in some jurisdictions, (5) abate immoral
conduct, and other nuisances that occurred on property.
Two other remedies for tenant if premises are unsatisfactory: (1) she may
stay, continue to pay rent, and sue for damages; or (2) may vacate and be relieved
under his lease under the doctrine of constructive eviction.

Additional Cases on Constructive Eviction


- Eskanos & Supperstein v. Irwin (1981): (CE) held that landlords acts of omission constituted constructive
eviction regardless of lack of intent to evict b/c intent to commit the omissions was enough. Tenants repeatedly
complaint about noise in shopping center that interfered with business and tenants vacated.
- Fidelity Mutual Life Insurance Co. v. Kaminsky (1989): (CE) tenant, a gynecologist, abandoned leased
premises and claimed that landlord constructively evicted him by breaching the covenant of quiet enjoyment in that
landlord failed to prevent anti-abortion protestors from picketing his office. Court agreed with tenant; landlords
acts or omissions could form the basis of a constructive eviction b/c tenant was deprived use and enjoyment of
premises, and neither landlord made effort to prevent protestors.
- Sciascia v. Riverpark Apts. (1981): (NO CE) held that unless a lease expressly placed a duty on landlord to
provide security from criminal activity, there was NO constructive eviction of tenants who were victimized by
criminal activity and vacated premises without proper notice. Landlord took reasonable precautions to protect
tenants which arises from the covenant of quiet enjoyment.

62
- Kent v. Humphries (1981): (NO CE b/c tenant at will) held that although landlord could constructively evict
(since tenant was a tenant at will), tenant was deemed a periodic tenant who entered an invalid lease. Based on
her periodic tenancy, P had a sufficient interest in the property to maintain a nuisance claim.
STEP 4: What
are the
Landlords
Duties?Implied
Warrant of
Habitability
(inception of
the lease);
Implied
Continuing
Covenant of
Habitability

IMPLIED WARRANTY OF HABITABILITY (inception of the lease) (generally


applies to residential, not commercial, uses): are the premises safe and fit?
The implied warranty of habitability requires that the rental premises be
offered and maintained in a physical condition that provides safe, clean, and
habitable housing for tenants.
o One or two minor defects that do not affect habitability are
insufficient.
NOTE: do not necessary have to leave if tenant wants to stop paying rent.
Factors to consider whether there was a breach of warranty:
Was it a substantial breach?
Most states define the scope of warranty by reference either to: (1) local
housing codes; or (2) fitness for human habitation.
If no housing code exists in the jurisdiction, then the courts will look to the
safety of the dwelling.
o Must be so serious that a reasonable person would find the premises
uninhabitable; covers latent and patent defects, and common areas.
o NOTE: A tenant cannot waive the warranty
o NOTE: Tenant has a duty to inform the landlord of defects and
landlord is NOT responsible for defects created by tenant. Only if
landlord is (1) put on notice; and (2) fails to correct a substantial
defect, not caused by a tenant, is there a breach.
Main question: is there a substantial violation of the warranty such that the
tenants health or safety might be in jeopardy?
Hilder v. St. Peter (1984): L, St. Peter (D), leased an apartment unfit for habitability to
T, Hilder (P). T informed L of several defects, including broken window, broken door
lock, defective toilet, leaking water pipers, odors of raw sewage, etc. L failed to remedy
them.
RULE: Vermont S. Ct. held that there is an implied warranty of habitability in
every residential lease.
REASONING: court noted that local housing code may provide a starting
point for determining breach, but suggested that the key question was
whether the defect has an impact on the health or safety of the dress.
o NOTE: a landlord might breach the implied warranty even if the
premises comply with the code but fail to be fit for human
habitation.
o NOTE: generally do NOT allow landlords to contract around health
hazards.
Procedure to prove implied warranty:
1. T must first provide the L with notice of the defect, then allow a reasonable
time for the repairs to be completed.
2. Notice must be specific enough to inform L about nature of the defect.
Remedies for Breach of Implied Warranty:
1. Remain in possession and withhold rent
2. Remain in possession and use repair and deduct remedy
3. Remain in possession and sue for damages
4. Terminate lease and sue for damages

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**Damages = value of dwelling as warranted value of dwelling as it exists in


its defective condition (may include punitive and compensatory)
**Punitive damages may be available to a tenant in the appropriate case where the
breach is of such a willful and wanton or fraudulent nature.
**NOTE: some jurisdictions require escrow (proof you are not just trying to get
out of the lease); and L cannot evict T for complaining of defects.

Arguments against Implied Warranty


1. Compliance with warranty imposes extra costs on
landlords.
2. Landlords will tend to pass these costs onto
tenants through increased rents.

Arguments for Implied Warranty


1. Caveat lessee rule is ill-suited to address the needs of new urban
tenant.
2. Todays tenant usually lacks specialized skills needed to effect
repairs in complex modern buildings, nor does todays tenant have
time to inspect premises and pt them in tenantable condition.
3. Typical modern tenant cannot protect her interests through
negotiation disparity of bargaining power.
4. Landlord knows about defects and is in better position to remedy.
5. Housing codes already impose a duty on L and this is a way to help
enforce them.

Implied Warranty of Habitability Compared to Covenant of Quiet Enjoyment


1. Dont have to abandon with IWH.
2. Sue for damages and punitive damages above and beyond compensatory damages with IWH.
3. Any act or omission that renders it uninhabitable may infringe on IWH.
4. Covenant of quiet enjoyment is often the only remedy that commercial tenants have b/c most tenants will
not get an implied warranty of habitability (only for residents).
5. Protects against patent defects with IWH.

4. DISCRIMINATION IN THE SELECTION OF TENANTS


Common law: did not restrict a landlords freedom in selecting or evicting tenants.
Modern trend: federal and state statutes prohibit certain types of discrimination in the rental or sale of real
property.
History: with Great Depression many homeowners could not pay off loans.
o Homeowners Loan Corporation: formulated plans to refinance and systematized loans.
o Banks stopped financing red lined neighborhoods.
o Conclusion: led to homogenous housing and later housing acts to prohibit discriminatory housing
practices.
Anti-discrimination legislation The Fair Housing Act of 1968 (DOES NOT requires proof of intentional or
purposeful discrimination, but cap on damages):
o Principal federal statute affecting the landlord-tenant relationship is the Fair Housing Act.
o 3604 (c). Discrimination in the Sale or Rental of Housing and Other Prohibited Practices. It bars
discrimination based on race, color, religion, sex, familial status, national origin, or handicap in connection
with the sale or rental of a dwelling.
o The Act DOES NOT prohibit discrimination based on marital status or sexual orientation.
o The Act DOES NOT prohibit discrimination based on advertising, even if advertising for some unit for
which allowed to discriminate.
o 3604(a)- prohibits discrimination on the basis of race, color, religion, sex, familial statue, or national origin
for:
1. Refusing to rent or sell;

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2. Discrimination in the terms, conditions, facilities, or services involving in a rental or sale;
3. Falsely representing that the property is not available for inspection, rental, or sale; and
4. Publishing any advertisement that indicates any preference or limitation on prospective tenants
or buyers.
The definition of dwelling extends to most housing; however, two categories of
property are exempted from almost all of the Act (the advertising prohibitions apply to
all types of residential property):
EXCEPTIONS:
o 3603 (b)(1) [Exemptions]: single-family residence rented or sold without the
assistance of a real estate broker or salesperson; and
o 3603 (b)(2) [Exemptions]: an owner-occupied building with four or less units.
Whether one can discriminate depends on the size of the building.
POLICY: should be able to discriminate and have a right to associate.
E.g., a homeowner should have the opportunity to live with whom he
or she decides; one can make a strong constitutional argument on that
basis.
Pursuing a Claim under the FHA:
1. Discriminatory motive need not be proved in order to make a prima facie case under FHA.
2. Cap on damages
3. Claimants in Title VIII actions need merely demonstrate that an action or practice carries a
discriminatory or segregative impact in order to shift the burden to the defendant.

Civil Rights Act of 1866 (requires proof of intentional or purposeful discrimination, but NO cap on damages):
o All citizens of the United States shall have the same right, in every State and Territory, as is enjoyed
by white citizens therefore to inherit, purchase, lease, sell, hold, and convey real and personal
property.
o Jones v. Alfred H Mayer (1968): 1866 provision bars all racial discrimination, private and public, in
the sale or rental of property.
o The Act of 1866 prohibits discrimination based on race in the leasing or sale of ANY type of property.
Court construed 1866 act to ban discrimination based on race, which included nationalities
that were also considered races.
o The Act applies to all types of property, without any special exception for single-family homes or
owner-occupied property.
o The Act only applies to one type of discrimination racial discrimination, and it does NOT cover
advertising, sexual discrimination, or familiar discrimination.
o Also, the 1866 Act only seems to bar intentional discrimination.
o 1866 law is narrower than the FHA in that it reaches only racial discrimination; it does NOT deal with
discrimination in pro vision of services and facilities, and does NOT prohibit discriminatory
advertising it is broader, however, in that it contains none of the exemptions found in the FHA.
Proving Discrimination:
o Most courts agree that a plaintiff can establish a prima facie case under the Act by showing a
discriminatory effect.
Typically require testers to prove intent.
o The burden then shifts to the defendant to prove a good faith legitimate reason for the conduct in
question, such as a reasonable business purpose.
If such a reason is shown, then the burden shifts back to the plaintiff to prove there was a
pretext for discrimination.
State Legislation: many states and localities prohibit discrimination in the sale or leasing of housing. Some states
provide enhanced protection against discrimination (14th amendment)

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o
o

Minn., C.A., and other states prohibit discrimination based on marital status, which includes the
refusal to rent to an unmarried couple.
A number of states also ban discrimination based on sexual orientation.

COVENANTS & RACE


Real covenant: a formal agreement or promise, usually in a contract. A real covenant is a promise relating to land
use that runs with the land to successors in interest and is enforceable at law (damages). The covenant often (1)
benefits and burdens the original parties to the promise and also their successors; and (2) is enforceable in an action
for damages.
Covenants can be (1) affirmative (promise to perform a certain act) or (2) negative (promise to not
perform a certain act).
Types:
1. Building restriction or use restriction: covenants may restrict certain uses, or they may restrict
construction of certain types of buildings.
2. Residential purposes: many covenants limit use to residential purposes. The content of this term is
not self-evidence, b/c people commonly use their residences for a variety of purposes.
3. Racial restrictions: an unpleasant fact about our national past is racial bias manifested by covenants
restricting use and occupancy of property to white people. These covenants, while often still of record b/c
they were created years ago, are not enforceable.
o Shelly v. Kramer (1948): a black couple, the Shelleys (P), was buying a house while unaware of a
racially based restrictive covenant on the street. The white homeowners tried to stop them. 31 of
the 39 owners of the nearby property signed the covenant that restricted use and occupancy to
persons of the Caucasian race, and specifically barring ownership, use, or occupancy by people
of the Negro or Mongolian race. Ds brought suit to restrain the Ps from taking possession of the
parcel they bought.
RULE: judicial enforcement of a restrictive covenant based on race constitutes
discriminatory state action, and is thus forbidden by the equal protection clause of the
Fourteenth Amendment of the Constitution.
Once state action intervenes (here judicial enforcement) to uphold the restrictive
agreements, the 14th Amendment has been violated.
NOTE: under the Restatement (Third) of Property, Servitudes, 3.1 a racially restrictive
use covenant would be invalid even if it were not unconstitutional to enforce it.
FHA enacted by Title VII of Civil Rights Act of 1968 20 years after Shelly v.
Kramer.
o Barrow v. Jackson (1953): Supreme Court held that a court cannot give money damages against a
seller who breaches a covenant not to covey to a nonwhite. Such action is state action.
o Mayers v. Ridley (1972): the court permanently enjoined the District of Columbia recorder of
deeds from recording deeds containing racial covenants.

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E. EASEMENTS
1. SERVITUDES
Servitudes: an encumbrance consisting in a right to limit use of a piece of land or other immovable property without
the possession of it. Servitudes law draws a dichotomy between two major types: easements and covenants.
Easement: an irrevocable right to use another persons land for a specific purpose.
A limited interest in someone elses property.
Transferable/irrevocable/inheritable.
A permanent right to enter/control property owned by someone else.
Easements are classified as real covenants and equitable servitudes
1. Real Covenants (bind later land owners of same rules-enforceable at law): to promise or undertake in a
covenant or formal agreement or promise (usually in a contract).
a. Covenant enforceable at law (real covenants): principle issue concerning these covenants
(created only by express agreement) is whether they may be enforced by or against subsequent
owners of the land burdened or benefited by the premise.
i. Main question: does privity of estate exist?
2. Equitable servitude (bind later land owners of same rules-enforceable in equity): describes a
nonpossessory interest in land that operates much like a covenant running with the land.
a. Covenants enforceable in equity (equitable servitudes): may be created by agreement or, in
some states, by implication from a development scheme undertaken by a common owner.
i. Privity is not required for these promises to be enforceable by or against successors to the
estate.
ii. Enforced by damages and there are different elements to enforce one versus another.
Holders of covenants seek MONEY DAMAGES.
b. Enforced by injunctions. Holders of equitable servitudes seek INJUNCTIONS.
c. It is more difficult to get DAMAGES than INJUNCTIVE RELEIF.

Types
Appurtenant
or gross?

1. Appurtenant: benefits the dominant owner or possessor of a particular piece of land


(usually transferable). Requires both a dominant tenement (or estate) and a servient
tenement.
Dominant tenement or estate: property has the benefit of the use of the
easement
o Cannot bring ejection actions against third parties.
Servient tenement or estate: property that is burdened by the easement
2. Gross: benefiting a person whether or not the person owns any specific property,
such as benefiting business use/capacity (personal or commercial). Involves no
dominanet estate, only a servient state.
NOTE: if ambiguous, courts generally construe as appurtenant.
POLICY: parties usually have in mind easement will benefit a tract of land.
Land value is increased (dominant usually increased more than servient).
Court disfavors easements in gross.

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Affirmative or
negative?

1. Affirmative/positive (most common): owner has right to go onto the land of another
and makes active use of someone elses land.
2. Negative (limited and rare): owner can prevent owner of servient from doing
something on servient land that may harm another or preventing someone else from
making use of their land that they would otherwise be permitted to make.
Profit a prendre: right to enter anothers land without liability for trespass,
and remove minerals, animals, timber, other things constituting a natural part
of the land.
Courts disfavor enforcing negative easements (instead prefer restrictive
covenants/equitable servitudes).
U.S. does not recognize negative easements by prescription.

License?

License: privilege to go upon the land of another, but not an easement. It is an oral or
written permission given by the occupant of land allowing the licensee to do some act
that otherwise would be a trespass. A license is REVOCABLE where an easement is
NOT.
1. NOT an interest in land.
2. Statue of Frauds (SOF) does NOT apply
3. Revocable at the will of the licensor (revocable anytime/non-transferable/noninheritable)
EXCEPTIONS to Irrevocable licenses
o 1. Easement by Estoppel: if licensee invests substantial amounts of
money/labor in reliance on the license, it turns into equivalent of
affirmative easement. Licensors is estopped from revoking the
license. Licensee has developed a property interest and become an
easement by estoppel. Land may be used as long as it is improved.
Majority: only lasts until the owner receives sufficient
benefit to reimburse himself on reliance expenditures
Minority: potentially infinite duration
EXCEPTION: if dominant holder does not get authorization
from serviant holder either express or implied to make
improvements, and cannot establish reliance on serviant
holder. Court will allow revocation of license in spite of
improvements.
o 2. License coupled with an interest is one that is incidental to
ownership of a chattel on the licensors land.
Vendee of a chattel
Termination of tenancy (to get chattels)
Inspection for waste (owner of FI in land)
R(3) of Property, Servitudes 1.2(4)(2000): a license that
cannot be revoked is treated as an easement.
4. NOT alienable/assignable
Essential characteristics of a license is that it is personal to the licenseee

Creation
Statute of Frauds: no interest in land can be created or transferred without a written document.
EXCEPTIONS: leases for less than three years, estoppel, prescription (adverse possession), necessity,
implied from prior use.

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POLICY: reduce fraud, dispute, and perjury.

Five Ways to Create an Easement:


1. By an express grant (which generally must be in writing): in writing and comply with Statute of Frauds and if
pertinent they run with the land and transfer with the property;
2. By implication as part of a land transfer;
3. By strict necessity to prevent a parcel from being landlocked;
4. By prescription, similar to the obtaining of a possessory estate by adverse possession; and
5. By estoppel (Holbrook v. Taylor, 1976)

How is an Easement Created?


1. EXPRESS
EASEMENT:
easement over
grantors land may be
granted to a third
party voluntarily in a
deed, will, or other
written instrument.

The express easement may arise either by grant or reservation.


Grant: the deed conveying the easement by grant must comply with the
same SoF requirements applicable to all deeds.
Reservation: like easement by grant, but can be reserved for a third
person.
o Court generally frown on easements by reservation.
Statute of fraud is a written instrument signed by grantor.
Duration: called easement in fee simple
Ambiguous instrument: presumption of fee simple.

2. EASEMENT BY
ESTOPPEL OR
IRREVOCABLE
LICENSE: if the
licensee has
constructed
substantial
improvements on
either the
licensors/licensees
land, and relies on
the license. MUST
BE IN WRITING.

Holbrook v. Taylor (1976): Holbrook (D) gave permission to Taylor (P) to use the
road from 1964 to 1970. Then, D wanted P to put in writing that P would relieve D
of any responsibility in case someone were injured or otherwise damaged on road
and to buy the land on which road was situated for $500. D tried to block off a road
on property with no trespass signs after P did not comply and used it extensively
while building a tenant house for himself.
HOLDING: an easement can be established by estoppel, even when the
person making use of the property does not do so adversely, but with the
permission of the property owner.
RULE: a license cannot be revoked after the licensee has erected
improvements on the land at considerable expense while relying on the
license.
REASONING: P made improvements on land at considerable expense
with explicit consent from D; thus, license irrevocable and easement
established by estoppel.
Requirements for Easement by Estoppel:
1. Dominant tenement holder relies on serviant holder (either affirmatively gives
permission or acquiesces land by sitting back and doing nothing).
2. Consent implied or expressed by serviant holder.
3. Dominant tenement has spent money and made efforts to improve land in
reliance of license/behavior of servient holder to use land.
Ways to protect against Easement by Estoppel: get provisions in writing;
property interest transferred in writing.
Shepard v. Purvine (1952): (NO WRITTEN CONTRACT) held b/c word was
considered as good as bond, court ruled that Ps were not negligent in not insisting
upon a formal transfer of rights.
Henry v. Dalton (1959): (WRITTEN CONTRACT) held that better for law to
require interests in land to be evidenced by deed than to leave it to the chancellor to

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construe an executed license as a grant, depending upon what, in his view, may be
equity in the special case.

3. EASEMENT
IMPLIED BY
PRIOR USE:
(SEE BELOW
FOR TWO
MAIN TYPES
OF IMPLIED
EASEMENTS)

Implied from existing use: courts may find that the parties intended to continue such
use after the tract is divided. Courts will IMPLY an easement if the circumstances are
in place but there is no written agreement but upon sale of the benefited parcel the
purchaser could reasonably expect the use to be included in the sale. Courts try to be
true to what parties intended. Courts will frequently imply easements in situations
where property is subdivided, and some showing is made of necessity.
If PRIOR to division into lots
A VISIBLE/APPARENT use exists on the SERVIENT part
Implied by grant: large parcel divided by owner. When purchaser needs an
easement for something (e.g. power lines across part of newly divided lot),
the owner/seller impliedly grants to purchaser. Easement is implied in
favor of the grantee when the original owner subdivides (dominant tenement
is the new owner).
Implied reservation: when owner/seller subdivides and sells land but needs
and easement on the portion of newly subdivided land that is being purchased.
The seller/owner reserves an easement for herself (dominant tenement is the
seller).
There are TWO TYPES OF IMPLIED EASEMENTS:

1. An apparent and
continuous (or prior)
use of a portion of the
tract existing when the
tract is divided. (Van
Sandt)
Quasi-easement: part of
the pre-divided property
there existed an
easement. Use by
owner of two adjoining
parcels of land of one of
the parcels to the benefit
of other.
Quasi-dominant
tenement: part of land
that benefits from use.
Quasi-servient
tenement: part of the
land burdened with the
particular use.
A quasi easement may
become an easeent upon
transfer of one or both
of the parcels. Or courts
will look doctrinal

1. Easement by an apparent and continuous (or prior use):


Principle factors to establish an easement implied by prior use:
1. Common owner: prior to division, the quasi-servient estate and the quasi-dominant
estate must be owned by the same person.
2. Reasonable necessity: the prior use must be reasonably necessary for the use and
enjoyment of the quasi-dominant estate.
3. Continuous use: the prior use must be continuous, not sporadic.
4. Intended continuation: the parties must intend, at the time of division, to continue the
prior use.
5. Exisitng use: the prior use must be existing at the time of division, a requirement
implied by the element of intended continuation.
6. Apparent: the prior use must be apparent, which does not necessarily mean that it is
visible.
Van Sandt court gave rule that if it can be discovered by reasonable inspection, it meets
tests for apparent.
Van Sandt v. Royster (1938): (EASEMENT BY IMPLICATION) Van Sandt (P)
claimed he never granted an easement for a sewer drain which connected his house to
two others and flooded his basement. Original lot had sewer line built to reach a home
on the back Lot 4 owned by Gray (D) and Lot 20 owned by Royster (D). P claimed that
NO easement was ever created in his land and eat even if one was created, Ps property
could not be burdened with it b/c P had NO notice. Ds argued that easement was created
by implication when lot 19 was severed from Bailey lot (previous landowner) as a result
of sale to Jones.
RULE: the implication of an easement will depend on the circumstances under
which the conveyance of land was made, including the extent to which the

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requirements.

manner of prior use was or might have been known by the parties.
o Each party will be assumed to know about reasonably necessary uses
which are apparent upon reasonably prudent investigation; an
easement may be implied for a grantor or grantee on the basis of
necessity alone.
REASONING: when Jones bought lot 19 he was aware of lateral sewer drain.
Original owner implied through use that sewer line would be reserved and
easement for drain was necessary for comfortable enjoyment of property. (An
easement can be implied on basis of necessity alone.) Court found it
impracticable to rereoute or make a new sewer line. P also had notice of lateral
sewer b/c P made a careful inspection of property (easily detectable).
o NOTE: apparentness could be debated as there no real record of
sewage line.
Court considers the following factors from Restatement of Propert:
A. Whether the claimaint is the conveyer or conveyee,
B. Terms of the conveyance,
C. Consideration given for it,
D. Whether the claim is made against a simultaneous conveyee,
E. The extent of necessity of the easement or the profit to the claimant,
F. Whether reciprocal benefits result to the conveyor and the conveyee,
G. The manner in which the land was used prior to its conveyance, and
H. The extent to which the manner of prior use was or might have been known to the
parties.
Comment j: prior use must have been known to the parties at the time of the conveyance,
or, at least, have been within the possibility of their knowledge at the time.
Degree of necessity required to imply an easement in favor of the conveyance is
greater than that required in the case of the conveyee.
Previous use would aid both cases.

B. Claimed easement
is NECESSARY to
the enjoyment of the
claimaints land and
that the necessity
arose when the
claimed dominant
parcel was severed
from the claimed
servient parcel
(Othen)
This is an
EASEMENT BY
NECESSITY.

2. Easement by necessity: severance of land under common ownership creates


the need for an easement.
Principle factors to establish an easement by necessity:
1. A common owner severed the property just before a conveyance: an easement
by necessity can be created only over property owned by the person who also
owned the landlocked parcel and who divided the property to create access
problem.
2. The necessity came into existence at time of and caused by severance of
common ownership not prior use: necessity must exist at the moment the
property is divided. No prior use is needed to establish an easement by necessity.
3. The easement is strictly necessary for the egress and ingress to the landlocked
parcel
Easement by necessity terminates when the necessity ceases.
That is reasonably NECESSARY for the enjoyment of the DOMINANT
part
CONFLICT OVER DEGREES OF NECESSITY REQUIRED:
1. Mersac Inc. v. National Hills Condominium Assn., Inc. (1997): (NO EN)
holding retained land locked when developer inadvertently failed to retain an
easement of access; doctrine of implied reservation of easement by grantor not
recognized.
2. Simmons v. Timmons (1999): (NO EN) refusing to recognize an easement by

71

necessity when allegedly landlocked parcel had access to a public road on foot,
down a steep cliff; the fact that the cost of building a road over the cliff would be
$700,000 was deemed irrelevant.
3. Leo Sheep Co. v. United States (1970): (NO EN) the Court held that the
United States had no easement by necessity to reached landlocked government
lands because it has the power of eminent domain.
4. Weaver v. Cummins (2001): (EN) courts have granted easements by necessity
where access to the land exists but it is claimed to be inadequate, difficult, or
costly.
Duration: an easement by necessity lasts as logn as the necessity exists. If the
necessity is removed, the easement is terminated.
**(Majority) Reasonably necessity: easement must be reasonably necessary to
the enjoyment of what is claimed to be the dominant tenement.
**(Minority) Strict necessity: without the easement, the property must not be able
to be effectively used without disproportionate effort or expense. This is a
tougher-to-meet standard that the reasonably necessary standard for easements
by implication created by a grant.
Othen v. Rosier (1950): Othen (P) used a roadway on Rosiers (D) property to
access public highway, but Rosier (D) later built a levee which made the road
impassable for Othen (P) and deprived P of access to his farm. P wanted
temporary writ of injunction to keep D from maintaining the leveee and a
mandatory writ of injunction to keep D from interfering with Ps use of roadway.
HOLDING: no easement by necessity b/c no proof that when Hill, the
common owner, had conveyed the Rosier property to Rosiers
predecessor in interest it was that conveyance that landlocked the Othen
Parcel. Rather, it appeared that at the time Hill had conveyed the Rosier
parcel, Hill owned other land (never identified by Othen) that was
contiguous to both the Othen parcel and a public roadway. Thus, Othen
had an easement implied by necessity across some property, but not
Rosiers property.
RULE: An easement can be created by implied reservation only when it
is shown that there was (1) unity of ownership between the alleged
dominant and servient estates; that the easement is a necessity and not a
convenience; and (3) that the necessity existed at the time the two estates
were severed; an easement by prescription can only be acquired if the use
of the easement was adverse.
NOTE: (1) Test of necessity created by original subdivision cannot be
determined b/c no records that necessity was created upon conveyance of
land to Rosier as Hill owned other land contiguous to roadway; (2) Prior
use test not met b/c no records; (3) Easement by estoppel not met, no
exclusive use and D permitted P to use road. D also maintained road; (4)
Reliance is best argument for P as P invested in building a house and
relied on use of road to do so.

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4. EASEMENT
BY
PRESCRIPTION
: is drawn from
adverse possession
doctrine.
Easements are not
possessory
interests, so an
easement cannot be
acquired by
adverse
possession, but
adverse use for a
sufficient period of
time can ripen into
an easement by
prescription.
Elements: (1)
Actual use; (2)
Open and
notorious; (3)
Continuous use;
(4) Under claim of
right; (5) For a
statutory period
typically the same
period of time as
adverse
possession; (6) Can
be some notion of
exclusivity.

Doctrinal requirements:
1. Actual use:
o ONLY affirmative easement can be acquired by prescription
2. Open and notorious use: must be discovered by any reasonable
inspection.
3. Hostile/adverse use under a claim of right: not with the permission of
the owner.
o Objective test: whether a neutral observer would think the use is
under a claim of right and not permissive.
o Subjective test: requires adverse user to prove that she had a good
faith belief that she had a right to use the land, and not just
permission to do so.
o If dominant tenement is using the owners land with permission of
owner, then it may be considered permissive and not hostile use.
4. Continuous/uninterrupted use for the statutory prescriptive period:
engages in activity on property that is normal for an easement of that kind.
**NOTE: exclusive use element is so altered from its meaning in adverse
possession that it is effectively not required.
o For prescriptive purposes, exclusive use does not mean that the
adverse user was the only user; rather, it means that the adverse
users claim does not depend on a like right in others.
o Othen v. Rosier (1950): discussed under easements implied by
necessity. Others alternative argument was that he had aquired an
easement for right of way across Rosiers land by prescription, but
the Texas courts rejected this claim b/c Othen used the roadway in
common with Rosier.
Easements by prescription may be (1) appurtenant (as when one homeowner
acquires a driveway easement over his neighbors land); or (2) in gross (as when
repeated hunting or fishing create a prescriptive easement in gross in favor of the
hunter or fisher).
Public prescriptive easements: some jurisdictions permit the public at large to
acquire prescriptive easements in private lands, so long as the elements of
prescription are satisfied. Other jurisdictions achieved the same result through
implied dedication, custom, or the public trust doctrine.
Courts often place greater burdens on claimants to a public prescriptive
easement than they do on persons asserting private prescriptive
easements.
Some states do not recognize public prescriptive easements at all on the
ground that an unorganized public cannot establish rights for the
public as a whole.
E.g. Rockefeller Center, in NYC, a private street called Rockefeller
Plaza is situated between the GE Building and the sunken skating
rink. In order to preserve Rockefeller Centers right of ownership of
the street, each year the street is closed to all traffic, even pedestrian,
for one day. Lawyers for Rockefeller Center believe that this
formality is necessary to prevent the public from acquiring a
permanent right of way in the street.

73

Beach access: in state bordering the sea, the availability of coastal


beaches for public use is a matter of considerable importance. In most
states, the state holds, in public trust, the beach from the water to the
mean high-tide line (the foreshore or wet sand area).
o In CA, public prescriptive easements have been abolished by
statute except on land within 1,000 yards from the ocean.

Scope:
Depends on how the easement was made.
Scope of easement may be increased in scope to meet the needs of the dominant tenement as they develop
(express/implied easement).
Termination:
1. Terms of grant
2. Purpose of easement ends
3. Merger
4. Forfeiture for misuse
5. Release
6. Abandonment
Mere nonuse, no matter how long the duration of the nonuse, does NOT constitute an abandonment.
Need manifestation of an intent to abandon
7. Estoppel
8. Prescriptive
Servient estate owner must use the easement in a manner adverse to the easement holders right
9. Eminent domain