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WHAT IS PROPERTY?

Board of Regents v. Roth - Respondents property interest in employment at a public univ. was created and
defined by the terms of his appointment. He did not have a property interest sufficient to require a hearing
when they declined to rehire him.
In re Marriage of Graham - A graduate degree obtained after marriage does not fall under the definition of
property as intended by the legislature when it enacted the division statute. Except in NY!
Is it property? One helpful definition is that property has an exchangeable value or which goes to make
up wealth or estate. It is personal to the holder, terminates with death, not inheritable, and is cumulative product
of years of education.
Dissent: It is not the degree which constitutes the asset in question but the increase in earning power
connected to having the degree, partly a product of the other spouses efforts. In other contexts, future earning
capacity that has been wrongfully deprived, such as in torts, is compensable
Elkus v. Elkus (NY) To the extent that Ds efforts and contributions led to an increase in the value of Ps
career, this appreciation was a product of marital partnership, and therefore, marital property subject to
equitable distribution. The DRL broadly defines marital prop. as property acquired during marriage
regardless of the form in which title is held
ETW Corp. v. Jireh Publishing Inc. Right of Publicity TEST: If a painting has substantial transformative
elements containing much more than a literal portrait of the celebrity, it is protected by the 1 st Am. Where the
effect of limiting the celebritys right of publicity is negligible, societys interest in the freedom of artistic
expression outweighs the celebritys property rights. *BALANCE: PERSONS INTEREST V. SOCIETYS
INTEREST WHY: (1) Painting DOES NOT REDUCE Woods economic interest in value of his likeness. (2)
Societys interest in the freedom of artistic expression outweighs Woods property right Woods engages in an
activity that creates a lot more money unrelated to his right of publicity even without it, he would still earn a
lot of money
Moore v. Regents of University of California Body Parts - Plaintiff did not have an ownership interest in the cells
after they left his body. WHY: (1) No precedent and only property can be converted (2) CA law limits property interest in
cells that have been removed (3) The cell line is not plaintiffs (4) Extending theory would hinder medical research
*THE LEGISLATURE SHOULD DECIDE, NOT THE COURTS*

Comment [T1]: Justification for having rt of


publicity: to stimulate athletic and artistic
achievement; also to prevent unjust enrichment
(earning money at the expense of another)
Comment [T2]: Con: if the right to publicity is
strong enough that it trumps expression it chills
speech

METHODS OF ACQUIRING PROPERTY


CREATION:
White v. Samsung Electronics America D used robot as a proxy for Vanna White in Wheel-like circumstances
for a funny ad. H: D violated Ps right of publicity in using a robot that has characteristics that make it easily
recognizable as being about the plaintiff but without using her name or actual picture. WHY: Right of publicity is not
limited to using name or likeness. Because the most popular celebrities are also the easiest to evoke without using names,
likenesses, or voice, treating the means of appropriation as dispositive would effectively eviscerate the right of publicity
because they would not be protected. DISSENT: Overprotection of right of publicity stifles creativity. BALANCE: 1ST
Am. RIGHTS VS. RIGHT OF PUBLICITY

PURCHASE:
Stambovsky v. Ackley haunted house case RULE: When the seller deliberately created a condition [creates a
haunted reputation] that materially impairs the value of the contract and (1)is peculiarly within the knowledge of the seller
or (2) unlikely to be discovered by a prudent purchaser exercising due care, nondisclosure is a basis for rescission. WHY:
Caveat emptor is not unlimited. Existing cases involve physical condition but this is about ghosts! As-is clause in
contract fails because: (1) the facts are peculiarly within the knowledge of the party invoking it (defendant); (2) the
merger clause disclaims representations made with respect to the physical condition of the house not extended to
paranormal phenomena; and (3) defendant cannot be said to deliver the house vacant because it has poltergeists.

FIND:
Benjamin v. Lindner Aviation found money in plane wing Court will follow common law distinctions for
found property. $18k in plane wing was mislaid property, meaning it goes to the bank (the owner of the
premises) for safekeeping so the person who lost it would go to the bank. Property not likely abandoned b/c of
high value, not likely lost b/c suggests that it was intentionally placed, not treasure trove because money was
printed only 35 yrs ago [remember policy is to reunite found property w/ true owner]
Finders statutes place responsibility on the finder to follow rules to notify owner.
STATUS

PARTY

Lost unintentional parting

True owner retains property right.

Mislaid voluntarily placed and true


owner forgets it

Abandoned True owner clearly


intends to relinquish ownership
Treasure Trove

Prior finders have right of possession and first preference against all except
true owners. (Policy: Reunite lost property w/ true owners and prevent a
string of thefts if other finders exercise ownership over property lost by prior
finders).
True owner retains property right.
Property/Land owner where property was found has the right to possess it
(Policy: Reunite mislaid property w/ true owner who will go to owner when
he remembers).
Finder has right of ownership.
Same rules for lost property

GIFT:
Gruen v. Gruen Father promises painting to son, father dies, son tries to take back painting from evil
stepmother H: A valid inter vivos (between two living persons) may be made when the donor reserves a life
estate on the object and the donee after donor dies. RULE: An inter vivos transfer may be made while the
owner reserves a life estate and the elements gift are established: (1) donative intent, (2) delivery, (3)
acceptance. WHY: (1) Father wrote son letters showing intent, (2) delivery can be actual, constructive (f not
practical), or symbolic especially when donor retains a life estate, and (3) acceptance may be shown by
bragging to friends.
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Two types of gift:


1. Inter vivos between 2 living persons
2. Testamentary transfers transfer when one dies through a valid will or inheritance
Present intent by donor is required to transfer ownership rights, but actual possession does not have to
occur immediately. Owner can retain a life estate.
Life estate is the right to possess something until you die. The remainder is what is left after the life
estate. Remainders have present value (you can sell your remainder).
Wills need all sorts of formalities (witnesses, etc.) to make a valid will. The requirements prevent
disputes. They can be changed before the person dies. Wills only take affect after the person dies.
Promises are generally unenforceable. They are not contracts which are two promises that are
exchanged + consideration.
ADVERSE POSSESSION REAL PROPERTY:
Nome 2000 v. Fagerstrom patch of land in AK P held title to property. D have made seasonal use of the
disputed parcel for subsistence and recreation since 1966: 1970 built stakes and picnic area; 1974 trailer,
fishrack & outhouse; 1977 reindeer shelter 1978 cabin. H: Defendants met requirements for adverse
possession on a portion of the land. WHY?
1. ACTUAL adverse possessor must actually be on the land; relative to character of the land
2. EXCLUSIVE not shared with the true owner; kicked people off the property
3. OPEN & NOTORIOUS not in secret, structures to give owner notice
4. ADVERSE/HOSTILE without owners permission
5. CONTINUOUS like an actual owner would use the land (could be seasonally e.g., only good for 1
mo. of grazing)
6. DURING THE STATUTORY PERIOD
7. Optional: Color of Title adverse possessor has some document that says hes the owner of the land
but is actually invalid
No adverse possession claims against the government
**A Hooker ON Every Corner Actual, Hostile, Open & Notorious, Exclusive, Continuous +
Statutory Period
Policy: Property in question should belong to long-standing possessor this protects justified
expectations. Also, decreases the waste of resources. Negative: rewards theft. Societys sympathy for a
landowner who does not take care of land decreases over time and sympathy for squatters increases.
ADVERSE POSSESSION PERSONAL PROPERTY:
OKeeffe v. Snyder OKeeffes paintings went missing at a gallery in 1946, she did not inform anyone. In
1972, she reported it to Art Dealers Assoc. In 1975, she found that paintings were on consignment. D has had
possession for >30 yrs. H: The discovery rule says that the SOL starts to run after the title holders discovery
of the paintings location or reasonably should have discovered its location. The owner must establish that she
used due diligence to discover location. WHY: Chattels are portable so there are problems with the traditional
requirements of open, visible, and notorious possession when it comes to things other than real property.
Discovery rule prevents the harsh results that come with strictly applying the elements of traditional adverse
possession. Under the rule, the burden is on the owner to establish facts that would justify delaying the
beginning of the statute of limitations (due diligence).
Guggenheim Foundation v. Lubell expensive painting stolen from museum this was discovered in mid- to
late-1960s but the museum did not inform authorities (rationale: didnt want painting to go underground). D
bought painting in 1967 and exhibited it twice. In 1986, P demanded return of the painting. H: Demand-andRefuse Rule: Failure to exercise due diligence doesnt matter for statute of limitations, the only relevant factors
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Comment [T3]: The statute of limitations


stimulates activity, punishes negligence, and
promotes stability. To avoid harsh results from the
strict application of the statute, courts have
developed the discovery rule, where in the
appropriate case the statute of limitations will not
run until the injured party discovers or by
reasonable due diligence, should have discovered,
facts which form the basis of the claim.

are: the timing of the true owners demand to return the painting and the possessors refusal to return it (i.e.,
SOL starts after refusal). WHY: (1) Rejects Discovery Rule (2) NY case law has protected true owners right
even when bona fide purchaser has property (3) placing burden on owner to locate artwork would encourage
theft, it is better to place burden on bona fide purchaser to make sure that hes not buying something thats
stolen. (4) no proof that public disclosure wouldve helped find the painting *Perverse outcome: For an outright
theft, SOL starts on day of theft. For bona fide purchaser, SOL starts when demand to return is refused. *Owner
should not delay bringing suit after demand is refused, because the suit may be estopped by the doctrine of
laches.
Discovery Rule Tolling of S of L = f(reasonable diligence)
Demand and Refuse Rule S of L = f(opp to demand)
Cause of action does not accrue until the injured party discovers
S of L runs from when owner demanded and possessor refused
by exercise of reasonable diligence facts which form basis for it.
delivery of property.
Principle: Visibility intended to put owner on notice, but its
Principle: Offer maximum protection for true owners.
insufficient for chattel. Discovery rule makes up for it.
For: (1) Different visibility requirement discourages larceny in
For: Protects true owners. Important to foreign buyers, who are
art. (2) Encourage careful practice in art purchases. (3) Owner
not likely to have sufficient notice from domestically due
rights shouldnt be invalidated b/c of mechanical applic of law.
diligence. (2) Clarity & predictability.
Against: (1) Onus on owner to prove actions were reasonably
Against: Rewards inaction. Perverse: a thief has a better shot than
dilig. (2) Perverse: non-diligent search means possession = theft.
an honest possessor.
Purpose of S of L: (a) stimulate activity, (b) punish negligence, (c) promote repose.

Comment [T4]: A thief can never acquire good


title and no one can acquire good title from a thief,
even a bona fide purchaser who is unaware of the
stolen nature of the property.

SHARED OWNERSHIP
SYSTEM OF ESTATES
ESTATES AND FUTURE INTERESTS:
Policy tensions:
1. Allowing owners to disaggregate property rights and the policy of encouraging or mandating consolidation of rights in a land
owner. Consolidation arguably promotes fee use and transfer of land b/c buyers would rather deal with just one owner.
2. Problem of conflicts among generations the old want to control property even after they die and younger generation do not
want to be subjected to that control. How long can the dead control the property? There are rules invalidating unreasonable
restraints on alienation and the rule against perpetuities abolishes future interests that vest too far into the future.
There are four major categories of present and future interests:
1. Fee simple absolute potentially lasts forever, inheritable, alienable
2. Defeasible Fees could also last forever but terminates when some event happens
3. Life Estates last for the life of the owner and then passes on to grantor or 3rd party chosen at the time life estate was created
4. Leaseholds transfer possession for a fixed period of time
ESTATE PRESENT INTEREST
Present estate --------------------------------t----------------------------------

FUTURE INTEREST
Grantor
3rd Party

Fee Simple Absolute no one has a right to possess it in the future; you
own the whole timeline
Life Estate owner has a right to possess it until he/she dies; remainder
in the future (vested, contingent subject to open, divest.)

None

None

Reversion

Remainder

Leasehold leaseholder has the right to possess it until a date of


expiration; reversion to landlord in the future
Fee Simple Determinable grantor conveys property to grantee until an
event occurs in the future; at that point the property automatically returns
to grantor
Fee Simple Subject to Condition Subsequent like determinable but
grantor reserves right to reclaim; NOT automatic, relevant for adverse
possession clock (A from X to Y, but if Z, then X reserves the right to
reclaim the property)

Reversion

Remainder

Possibility of Reverter

None

Right of Entry

None

Fee Simple Subject to Executory Limitation like determinable but if


None
Executory Interest
event occurs the land goes to 3rd party, not to grantor
Fee Tail Right to possess property until biological line runs out; popular
way for aristocrats to tie up land forever
NOTES:
Fee Simple Determinable if grantor fails to assert rights, present owner retains possession and could adversely possess it
Fee Simple Subject to Condition Subsequent Many courts reject idea that owner of right of entry can wait as long as she
wants. Instead, SOL runs after the condition if violated (for adverse possession).
Life Estates:
o Vested remainders belong to a specific person and no conditions must be satisfied for remainder to become
possessory
Absolutely vested remained will not change (O to A for life, then B)
Vested remainder subject to open remainder belongs to class that may increase (O to A for life, then to
children of B)
Vested remainder subject to divestment can be divested after a later event happens (O to A for life, then to
B, but if B drops out of law school, then to C B has a vested remainder subject to divestment w/ executory
interest in C)
o Contingent remainders if it belongs to an unspecified person or a condition precedent that must be fulfilled before it
can become possessory.
Condition precedent O to A for life, then to B if she graduates from law school (contingent on law school)
Unascertained person O to A for life, then to 1st child of B (contingent on B having children)

Comment [T5]: Automatic transfer so adverse


possession clock starts.
Comment [T6]: Starts laches doctrine (failing to
act promptly to enforce a claim/right) or waiver.

THE RULE AGAINST PERPETUITIES:


PURPOSE: To prevent testators from tying up properties with contingencies too far into the future.
RULE: Future interests are invalid unless they are CERTAIN to vest or fail to vest within the lifetime of
someone who is alive (in being) at the creation of the interest or no later than 21 years after her death.
Creation of interest - created by conveyance or inter vivos transfer (moment of sale, delivery of gift, or
signing of trust document if its irrevocable or whenever trust becomes irrevocable). A future interest in
a will is created when the testator dies.
Vest When condition that made future interest contingent or uncertain to happen does happen
Life in being Is there a chance that the interest could vest more than 21 years after the death of anyone
alive at the creation of the interest (corporations dont count)
Perpetuities period time w/I which the interest must vest
STEPS:
1. Is there an executory interest, a contingent remainder (or a vested remainder subject to open)?
2. What is the contingency or uncertainty youre dealing with?
3. When will the contingency be resolved (when will the future interest vest or fail)?
a. The clock starts when the interest is created
4. The contingency must be resolved within 21 years after the death of someone who was alive at the time
the future interest was created. (Life + 21 years)
Examples: (Print RAP worksheet)
1. To A for life, then to As first child to reach 18. Contingent remainder & uncertainty: when does child reach 18? NOT
VOID b/c outside limit is 18 yrs (<21 yrs after death of A validating life).
2. To A for life, then to As first child to reach 25. Contingent remainder & uncertainty: when does child reach 25? VOID
(>21 yrs after death of A validating life).
3. To the Church as long as services are held every Sunday, then to Bush. Executory Interest (FSSEL) & uncertainty: when can
Bush get it? VOID (Estate in church can last >21 yrs after Bushs death).
4. To the Church as long as services are held every Sunday, then to Bush, as long as he is still alive at the time. Executory
Interest & uncertainty: when can Bush get it? NOT VOID (Bush is a validating life and uncertainty will resolve @ death).
5. To my wife for her life, then to my daughter Jillian on her 35 th birthday (Jillian is 5 @ time of my death). Contingent
remainder & uncertainty: when will Jillian get it? NOT VOID (Jillian is a validating life and the uncertainty will resolve
before her death).
6. To my wife for her life, then to our grandchildren in equal shares. There are two children 2 time of death but no
grandchildren.
ALTERNATE RULES:
Wait and see statutes: 90 year period
Saving statute: Any interest that would violate RAP shall be reformedto give effect to interest of creator.
Saving clause drafted by lawyer: Interest shall terminate, if it has not already terminated, no later than 21 yrs after death of
last survivor of my descendants who are alive at the time the instrument was creatd)
Uniform Statutory Rule Against Perpetuities Exempts commercial transactions from RAP & charities. Creates a 90 yr
wait and see period.
Cy Pres (equitable reformation) interpret a trust to achieve the donors intent (e.g., lowering contingency from 25 to 21 yrs
to validate future interest)

CONCURRENT OWNERSHIP
CREATION:
Kipp v. Chips Estate ambiguous deed Intention of the parties, gathered from the complete and entire
document, wins over technical terms or their formal arrangement. Legis. prefer tenancies in common over
joint tenancies. Gould conveyed land to parties. The granting clause provided that the conveyance was to
parties as joint tenants while the habendum clause (which names the grantee and defines the estate to be
granted) as tenants in common. H: The court looks at entire deed and here, found that the deed created a
tenancy in common. WHY: (1) State legislature prefers tenancies in common (TIC favors transferability and
discourages ill will. (2) Deed was unambiguous so no external evidence required. Interpretation steps: 1 st look at
the specific language, if ambiguous, then look at language of the whole doc, if still ambiguous, then all relevant
evidence can come in.
Types of concurrent ownership:
1. Tenancy in Common - most basic. Each tenant in common has a separate interest in the property,
which he can dispose of as he chooses. If A and B are tenants in common, and A sells his interest to C,
then B and C are tenants in common. The interest of each party does not have to be equal (i.e., A can
have 25% and B 75%)
2. Joint Tenancy similar to TIC except that joint tenants have rights of survivorship when one dies,
the other automatically gets the interest. If A and B are joint tenants, and A dies, B gets As interest
regardless of what As will says. Joint tenancy is useful because it keeps property out of the probate
process, saving time and money. Traditionally, to create a joint tenancy, parties need the four unities:
Unity of time - interest created @ same time
Unity of title interest created by same document
Unity of interest equal shares (50/50, 33/33/33)
Unity of possession each joint tenant had the right to possess property
3. Tenancy by the entirety like joint tenancy but available only to married couples. TBEs cannot be
severed unilaterally by one party. TBE is terminated by divorce. Exists in about of the states.
Benefit: creditors of one spouse cant go after the other spouses share.
PARTITION:
Delfino v. Vealencis A partition by sale should be ordered only when (1) it is clear that physical partition is
unfair or impractical AND (2) the interests of the owners are better promoted by partition by sale. parties are
tenants in common with P owning 69% and D 31%. Property is rectangular. D operates a garbage business but
P wants to develop property on his own share. H: Trial court made a mistake by ordering a partition by sale
and not a physical partition. WHY: (1) Courts favor physical partitions; (2) Partitions by sale should be
ordered only when: (a) it is clear that a physical partition is unfair or impractical; AND (b) interests of the
owners would be better promoted by a partition by sale. Court should balance and consider interests of all
tenants.
Partition legal remedy for co-tenants (tenants in common) who cant agree on how to use property.
Voluntary partition owners voluntarily partition property by physically dividing it or selling and
sharing the proceeds
Involuntary or judicial partition one of the tenants files a lawsuit for partition against other cotenants.
Order of court could be:
o Partition by sale forced sale and division of proceeds
Usually sold only if physical partition will result in great prejudice to one of the owners
o Physical partition preferred choice

Comment [T7]: IF A,B,C are joint tenants but C


sells his interest to D. A and B are still joint tenants
and C is a tenant in common with A and B.
Comment [T8]: If one unity is missing, the joint
tenancy is severed and becomes a tenancy in
common. If A&B are joint tenants and A sells his
interest to C, C&B become tenants in common.

Comment [T9]: Partitions by sale is an extreme


exercise of power and seems really unjust/unfair if
opposed by one party.
Comment [T10]: If there are multiple owners,
physical partition is harder. Here there are only two
competing interests. Also, the character of the land
rectangular makes it easier.
Comment [T11]: The trial court concluded that a
physical partition would cause great prejudice to the
parties since Ds garbage business would hinder Ps
proposed residential development. The trial court
based its conclusion on findings about the possible
harm on Ps interest. The court must consider the
interests of all tenants in common, not merely the
economic gain of one tenant. The D has lived on
the land for a long time and her business is on the
land. A partition by land would force D to give up
her home and risk her livelihood.

LANDLORDS AND TENANTS


LEASES:
Berg v. Wiley no self help repossessions! Property that has not been abandoned or voluntarily surrendered
may be repossessed ONLY by resorting to judicial process. P leased restaurant space from D on a 5 yr lease. P
closed restaurant to comply with order from D and Health Department. Before lease expired, D entered the
premises and changed the locks. H: Property that has not been abandoned or voluntarily surrendered may be
repossessed by owner ONLY by resorting to the judicial process (i.e., no self-help evictions). WHY: (1) policy
to discourage landlords from taking the law into their own hands & look with disfavor upon any use of self-help
to dispossess a tenant in circumstances which are likely to result in breaches of the peace (2) court provides a
fast-track process for evictions (3) even though entry was not forcible, if the court held that defendants selfhelp was legal, future tenants would be more vigilant to protect their property, and this would set the stage for
the violent confrontation that the state is trying to prevent
Old common law: Self-help may be used to retake property if (1) landlord is legally entitled to possession and
(2) landlords means of re-entry are peaceable
Pros of New Rule
chances for violence, problems w/ distrust
Preserves opportunity for quick resolution w/ fast track hearings.
Ensures Ts due process

Cons
W/ legal action come legal costs -> time and money
In practice, it could take L months to evict T legally
T has opportunity to abuse property.
L will probably pass on costs of potential litigation to all Ts (dist)

Can parties K around it? In theory, but (a) it could still be disputed in ct and (b) Ts are in weak bargaining position (adhesion)

Types of Leaseholds
Type

Characteristics

Term of years

Definite period which can last only days to a


Ends automatically at term. No notice
long time. Inheritable and alienable. If
necessary because the notice to terminate is
landlord transfers reversion, new owner takes
built in.
property subject to the lease and new landlord
cannot terminate lease unless agreement so
provides.
Indefinite in length, periodic rental payment.
Common law notice to terminate must be
Month-to-month or year-to-year
given at least one period in advance w/ max of
Automatically renews unless either party
6 mos. States have shortened this max notice
terminates arrangement. Transferable and
period to 1-2 mos.
alienable unless lease agreement provides.
Terminable by either party at any time and no
Most states require a notice to terminate, which
fixed period. If parties agree to a periodc
courts imply as a periodic tenancy.
payment, courts likely to interpret as periodic
tenancy. Transfer of title terminates this type of
tenancy.
When a tenant wrongfully holds over after termination of a tenancy. Tenant is liable for fair rental
value during period of wrongful occupation. Hold over tenant is still legally entitled to stay until
landlord gets an eviction order from a court.

Periodic tenancy

Tenancy at will (very rare)

Tenancy at sufferance (not really a leasehold)

Notice to Terminate

SUBLEASES AND ASSIGNMENTS:


Ernst v. Conditt go-kart assignment If the transfer is a sublease, no privity of K between landlord-owner
and sub-lessee (sub-tenant) thus, sub-tenant is not liable to landlord for breach. Ernst leased to Rogers.
Rogers operated a business on land and then sold business to Conditt. Conditt wanted a lease extension and
amended lease to lengthen term and to show that Ernst constented to subletting the premises to Conditt
(suggesting that Rogers would be liable for rent if Conditt did not pay. Conditt failed to pay rent H: The use of
technical words in the lease is not conclusive b/c facts and circumstances surrounding execution show that the
agreement was an assignment of the lease and not a sublease. WHY: (1) the court found that Rogers express
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Comment [T12]: Self-help for old common law,


2 elements must be met: (1) It was not
accomplished in a peaceable manner and therefore
could not be justified under the common-law rule,
and (2) any self-help reentry against a tenant in
possession is wrongful under the growing modern
doctrine that a landlord must always resort to the
judicial process to enforce his statutory remedy
against a tenant wrongfully in possession.

agreement to remain liable did NOT create a right of re-entry or reversion. (2) the term sublet is used in the
agreement, but it has been used to mean both assign and sublet (ambiguous) (3) Rogers parted w/ property upon
selling go-kart business and the landlord rented to Conditt for ALL of the extended term.
Privity
Privity of contract contract cannot confer rights or obligations under it on non-parties
Privity of estate interest of people who both have an interest in the same land.
Subleases vs. Assignments important b/c it affects remedies available to landlord if he stops receiving rent
Assignment when tenant (assignor) assigns all her interests under the lease for the entire unexpired
term of the lease to the transferee (assignee)
o If assignee fails to pay rent, landlord can sue either assignor or assignee
o Possession goes LTT1L
Landlord (L) has privity of contract with Tenant (T); L has privity of estate with assignee
(T1) so L can recover via privity of K or estate)
Sublease when tenant transfers the leasehold for a period less than the full remaining time of the lease
or reserves a right of entry
o If subtenant fails to pay rent, landlord can only sue original tenant
o Possession goes LTT1TL
L has privity of contract and estate with T, so L can only recover from T and not T1
Kendall v. Pestana Commercial leases: Where commercial lease provides for assignment only w/ prior
approval of lessor, consent may only be withheld if lessor has a commercially reasonable objection to the
assignee or proposed use. Concerns a hangar owned by the city, which city leased to Perlitch. Perlitch then
subleased it to Bixler who then sold his business to OHara. Lease provided that written consent of lessor
(Perlitch) was required before lesee (Bixler) can assign his interest (to OHara). Perlitch actually wants to rent it
out at a higher rent to Pestana! Perlitch argues that he has an absolute right to arbitrarily refuse request. Courts
says NO! Traditional majority that lessor has right to arbitrarily refuse has been eroding because:
1) Dual nature of lease as a conveyance of leasehold interest and a contract because of shortage of
housing and commercial space, allowance of lease clauses prohibiting assignments is being curtailed by
statutes
2) Restatment Second of Property adopts the minority view that landlords consent to alienation cannot be
withheld unreasonably. The preservation of values that go into personal qualities of tenant (like ability
to pay) does not justify allowing landlord the power to arbitrarily and without good reason to allow
transfer of property.
3) There are factors to refuse a contract: financial responsibility of proposed sub-lessee, the suitability of
use for the particular property, legality of proposed use, and need for alteration of the premises. Denying
solely on basis of personal taste, convenience, or sensibility is not commercially reasonable.
4) The market value of real property during the term of the lease properly belongs to the lessee. When
lesee executed the lease, he takes on the risk that he would be paying too much rent if the market
crashes. If the market is good, he shouldnt be deprived of the contractual benefits.
ABANDONMENT:
Sommer v. Kridel D entered lease w/ P from 1972 to 1974. D was discharged from army, lost engagement,
and become a student, supported by stepfather. Couldnt afford rent wo wrote landlord asking for sympathy and
willing to forfeit down payment of 1st months rent and security deposit. P doesnt reply and refuses to re-let
apartment to another prospective tenant who was willing and able to pay. H: Landlords have an obligation to
make a reasonable effort to mitigate damages if tenant wrongfully abandons a lease. Tenant is still liable for
back-rent and expenses incurred in re-letting. WHY: (1) Old majority rule is that landlords did not have a duty
to mitigate but law of estates has evolved to mirror law of contracts which emphasizes equity and fairness; (2)
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Comment [T13]: Note that T can sue T1 for rent


and can implead T1 in the same lawsuit. L still cant
recover twice.

Comment [T14]: Interest of owner to have


control over the person entrusted w/ lessors
property. You want to know who is going to be
renting the place.

Comment [T15]: Mirrors conventional rule in K


that non-breaching party has to make an effort to
mitigate damages.

Lost volume doesnt apply b/c prospective tenant requested Ds particular unit and none else; (3) L has burden
of proving that he used reasonably diligence (b/c hes in a superior position of information by taking out ads,
etc.) POLICY: Not imposing duty to mitigate is inefficient and allows valuable rental space to lie fallow.
POLICY AGAINST: Imposing a duty increases rent or security deposits on everyone, hurting lower income
people disproportionally + tenants are more likely to break leases, which will increase vacancies in short run.
Landlords remedies incl. suing for back rent, and below:
(1) Accept Tenants Surrender
(2) Re-let on Tenants Account

(3) Sue for Damages

(4) Sue for Rent at the End of the Lease

Leasehold terminates. No further obligations and landlord is free to lease the property
to someone else. Remedies still available for breaches prior to surrender.
Landlord refuses to accept tenants surrender and the tenant remains liable. But tenant
implies a wish to be relieved of the liability, which occurs if the landlord can find a
replacement tenant. Original tenant still liable if new tenant defaults.
Damages based on anticipatory breach. Breach must be unequivocal. Damages =
difference b/n reserved rent and fair rental value. Assumes that the landlord relets the
premises and suffers only the difference.
Landlord waits until the unpaid rent has accrued to the end of the term before he sues.
Modern courts impose a duty to mitigate, which could affect damages.
For duty: breach may be efficient and duty avoids waste
Against duty: L bargained for security of income; judicial interp tough; search costs
K around it: autonomy, mkt trusted. Counter: imbalance of power problem,
especially if acceleration clause

Stonehedge Square Limited Partnership v. Movie Merchants, Inc. (PA)-Stonehedge owns and operates
shopping center (L) and entered into lease with General Video Corporation (T) and T assigned its rights under
lease to Movie Merchants (T1), and L wanted to hold T1 liable on the lease and sued for rent under acceleration
clause in the lease.
a. Rule Non-breaching commercial landlord has no duty to mitigate (they are referring
to a commercial lease): REASONING:
Rule is firmly established in PA
Established rule is simple (less litigation)
Old Landlord & Tenant Act of 1951 does not modify landlords duty to mitigate
Fundamental unfairness in allowing breaching tenant to require nonbreaching
landlord to mitigate damages
Tenant was in a position to mitigate his own damages (by assigning, etc).
a. Could say that Sommer and Stonehedge are reconcilable since that one applies to residential
leases and this to commercial, but it seems like courts reasoning of common law rule of no
mitigation could just as easily apply to residential leases too (contradicting Sommer v. Kridel
even though most states require L to mitigate if lease abandon in residential leases):
i. Simple to apply; unfairness to L.
b. States split on duty to mitigate in commercial leases
c. Which is the better decision? Sommer because want to protect tenants and have fair results
(tenant could lose all their $ and have to move to cheaper place) and want to use housing
stock efficiently but argument for Stonehedge is that dont want to reward breachers and
punish no breachers.

IMPLIED WARRANTY OF HABITABILITY:


Green v. Superior Court slumlord nailed on breach SF public inspector cited 80 housing code violations of
landlords property incl. (1) collapse of bathroom ceiling, (2) absence of heat (3) plumbing blocked (4) rats,
mice, and roaches (5) faulty wiring (6) bad stove. RULE: **Once proper NOTICE to Landlord is given,
Tenant may lawfully withhold rent AND retain right of possession in a leasehold if landlord breaches the
implied warranty of habitability. STANDARD: the breach must materially affect health and safety. Damages
should be difference between actual rent and fair market value for property in poor condition. WHY: (1)
abandon traditional no warranty/caveat emptor policy b/c in the past land was more important than housing and
farmers generally could repair things, conditions are more like contract, landlords are better equipped to deal w/
issues (2) urbanization and population growth mean that low-rent tenants dont have bargaining power (3)
10

consumer expectations of renting a habitable home must be protected (4) housing codes suggest that legislature
wants to place burden of maintenance on landlord.
Major changes in landlord-tenant law from implied warranty of habitability:
1. Abandons caveat emptor
2. Landlord-tenant covenant was dependent partys obligations are contingent on other party complying
with their own obligation. Breach of this K relieves other party of obligation.
Bases for implied warranty:
1. Arises from contractual relationship between landlord and tenant where tenants expect that apt is
habitable during lease term
2. Housing code renting out a place is an implied representation that landlord would comply w/ housing
code
NOTE: Some violations of housing code are not serious enough to be a violation of the implied
warranty of habitability (it has to be material) but also some conditions that do not violate the
code can count as breach such as (no heat or hot water, broken windows, pest infestation)
Remedies available to tenant: ***Tenant needs to give landlord proper notice***
1. Termination of tenancy (Rescission of K)
2. Withholding rent
3. Rent abatement
4. Damages
5. Injunction or specific performance (court order to fix problem)
6. Repair and deduct
7. Housing code remedies inspector visit and inspection facility orders landlord to fix problem else fines
Implied warranty is non-disclaimable. Restatement allows parties to K as to condition as long as
agreement is not against public policy or unconscionable
Most courts refuse to extend implied warranty to commercial leases b/c
o Commercial tenants are usually sophisticated; and
o Have sufficient bargaining power to obtain fair terms; and
o Tenants often have the power to make repairs or improvements (per lease agreement)

Implied Warranty of Habitability


History. No responsibilities on L
Implications.
negative duty in an implied covenant of
(1) Leaseholds now more like K than
quiet enjoyment (no constructive eviction)
conveyances. In K product must
in early 20th century affirmative duty
conform to representation.
in an implied warranty of habitability
(2) L & T covenants become dependent.
No longer must T sue for injunction
Residential NOT commercial (where
first.
parties have = bargaining power & T has (3) T can seek a remedy w/o abandoning
an interest in making repairs)
the property.
(4) Perversity-T-friendly statutes may
Grounding: majority-assumed; minorityhave homelessness; Ls dont want
housing code or implied in circ.
to deal w/ poorer Ts, priced out
Burden: Strict for termination.
Negligence for damages.
Procedure. T must provide NOTICE. L
gets a certain time to respond.

K around it?
For: autonomy/free mkt; negotiating
could price
Against: majority of jurisdictions dont
allow it; social safety net; poorer renters
could be ramroded; loophole for mean Ls

RETALIATORY EVICTION:
11

Remedy.
(1) Repudiate the lease/rescind K most
allow it outright; some require Ls
breach to be material; Uniform Res L
and T Act allows it only if breach
materially affects health and safety.
(2) Rent withholding until problem is
fixed; allows T to stay in the property
(3) Rent abatement ct can reduce rent
owed; the diff b/n actual and fair
rental value given poor condition
(4) Damages T can recover rent + b/c of
violations of implied warranty
(5) Injunction
(6) Repair and deduct
(7) Housing code remedies housing
inspector may testify and ct may order
civil or crim fines

Building Monitoring Systems, Inc. v. Paxton UD action and D is asserting retaliatory eviction defense.
Shortly after moving in, D informed P that apt plumbing and wiring need to be repaired. Mgr tried but failed to
fix. Cty Health Dept determined that conditions violated health code and ordered P to fix. P served eviction
notice #1 but reinstated tenancy after accepting rent. D complained to health dept again. P served eviction
notice #2. Rule: Landlord cannot evict in retaliation if T exercises legal rights when L violates a protective
housing statute. H: Even without a retaliatory eviction statute, legislation for health and safety standards
show legislative intent to improve housing conditions, which might be frustrated by tenants reluctant to
report violations. ***Court adopts 2nd Restatement of Property Defense:
1. Theres a protective housing statute
2. Landlord is in business of renting
3. Tenant is not in default in performance of obligations
4. Landlord is motivated to evict b/c tenant complained about violation of #1
5. Tenants complaint was made in good faith
Once repairs are made, L may serve T w/ eviction notice and bring a UD action w/o submitting evidence of
intent, but landlord has burden to show that T has had reasonable opportunity to find other housing.
Retaliatory eviction does not apply to commercial leases
Housing codes run parallel to implied warranty of habitability
HOUSING DISCRIMINATION (FEDERAL LAW):
The Fair Housing Act (FHA)
Applies to all sales and rental of housing.
Exceptions: (a) Single-family homes, if owner owns less than four. If owner doesnt live in the home he can sell once every 2
years. (b) Cant use if seller advertised or used services of a broker, agent, etc. (c) Owners home, as long as not more tha n 4
families could live there independently.
N/A to ability of states and feds to regulate the max # of occupants.
Discrimination (applies to renter or buyer, or persons affiliated w/ them)
(a) Cant refuse to negotiate for sale or rental b/c of race, color, religion, sex, familial status, natl origin
(b) Cant discriminate through terms or conditions.
(c) Cant advertise to rent or sell dwelling by indicating preference based on race, gender, etc.
(d) Cant tell someone that a vacant unit is taken b/c of race, gender, etc.
(e) Cant misrepresent qualities of neighborhood (e.g., racial makeup) to induce into selling or renting.
(f) Cant refuse to make reasonable accommodations to afford equal access.
Equal Access
(g) Have to allow buyers to modify the premises to enjoy equal opportunity of use. Renter may need to restore it to its original
condition upon leaving, though.
(h) Covered multi-family buildings built after 1988 must be accessible by handicapped. Covered multi-family dwellings include,
generally, 4 or more unit buildings.
(i) Act sets a floor, not a ceiling. State may require more.
Excepted Groups
Religious organization can allocate property based on religious preferences. Private clubs can favor members. Elderly homes can
give preference based on familial status.
Enforcement
Private civil action.
U.S. DOJ can bring civil actions on behalf of the government. Officer w/in the civil rights department would get 3 testers, 2 white
and 1 black, and give them equal credentials.
Funky: Female seeks female for apt share. Inadvertently banned under 3604(c) of the FHA.

12

Comment [T16]: Uniform Residential Landlord


and Tenant Act creates a rebuttable presumption
that eviction is retaliatory if it comes w/I 1 year of
tenant taking action to assert rts protected by
implied warranty. If landlord is denied right to evict,
landlord has to show legitimate, nonretaliatory
business reason.

HOUSING DISCRIMINATION (STATE LAW):


Mister v. A.R.K. Partnership unmarried cohabitants lose out to religious objection Ill Human Rts Act of
1987 prohibits disc based on sex or marital status in real estate transactions. Marital status is def: legal status
of being married, single, separated, divorced, or widowed. A.R.K. refused to rent to Ps 2 male-female
cohabitating couples D claims policy reflects religious belief against unmarried cohabitation, but no evidence
supports this. H: Ill statute does not protect unmarried opposite-sex adults who cohabitate from
discrimination. Look @ statutory language for compromise.
For Ps/opposite-sex rentors (losers)
Textual interp: Relationship reflects sex and marital status. Ds
denial is totally related to sex: if they were of same sex, Ds
wouldnt object; or married of opposite sex, no objection.
History: Anti-fornication law is old, rarely enforced. Amendment
to act recently rejected to exclude unmarried cobhabs. It is not
the courts job to assume the legislative role in shaping policy.

For Ds/landlords (winners)


Textual interp: Refusal to rent based on couples consensual
relationship, not their sex or marital relationship. Act allows
denial of renting to persons of one sex.
History. Anti-fornication law still on the books (had not been
repealed), was echoed in 1979 Jarrett case->common law
marriages not recognized; against open & notorious cohabitation.
Consistency! Leg rejecting amend not the same as 1970s leg.
Counter: packing the record -> inaccurate portrayal of intent.
Leg history: bill sponsor said unmarried cohabitants not included
Remedial leg: generally construed liberally.
Counter: intended to protect on the class intended to be covered
Counter policy: alternatives to marriage allow efficient unions
Policy: Alternatives to marriage weaken the family.
Beyond the FHA? Diff defn for familial status; Ill includes ancestry.

Many state laws have statutes prohibiting discrimination based on marital status protecting tenants from denial of housing
because they are or are not married.
Can landlords refuse to rent to unmarried couple based on religious beliefs? Probably not.
o Claim of a federal constitutional right to an exemption from antidiscrimination laws have been struck down by the
SCOTUS:
o Employment Division v. Smith except in very unusual cases, generally applicable laws cannot be disregarded on
ground that compliance interferes with free exercise of religion
o Congress passed Religious Freedom Restoration Act (RFRA) prohibiting govt from substantially burdening free
exercise of religion unless theres a compelling state interest and no less-restrictive means (strict scrutiny) [struck
down by SCOTUS, see below]
In City of Boerne v. Flores, SCOTUS struck down RFRA b/c 14th Am gave Congress power to protect liberty of religion as
defined by 1st Am but to not go beyond it.
ARGUMENT: Had landlords been able to use religious belief argument to counter anti-segregation laws, then those laws
would lose their force. Same with FHA.

13

Comment [T17]: The court looks to similar


statutes as an aid and comparison of similar
enactments. The majority looks to the criminal
prohibition against fornication (the version in effect
at the time of the violation, which outlawed
cohabitation with another not his spouse that is open
and notorious) and also case law indicating the
public policy of promoting marriages (by renouncing
common law marriage).
Biggest flaw in majoritys reasoning: the
fornication statute is outmoded and in fact, the
statute was amended so as to not include
cohabitation by unmarried couples of the opposite
sex because its a crazy outmoded statute.
RESPONSE: the statute that should be interpreted
is the version that existed during the violation and
during the filing of the complaint and as recently
as 1979, the Supreme Court of Illinois affirmed
that criminal fornication statute (expressing public
policy against open and notorious nonmarital
cohabitation) so its not so antiquated
The concurring judge looks to the legislative history
the debate
Biggest flaw in concurring judges reasoning:
debates could be helpful but probably not
dispositive. Plus, this is only the response of 1
person among a ton of legislators. Not a good
guide of the whole legislators intent RESPONSE:
the responses to the questions show the
sponsors intentions of what the Act should and
should not cover

RELATIONS AMONG PROPERTY OWNERS


TRESPASS def: unprivileged physical invasion of someone elses property.
Intel Corp. v. Hamidi emails & trespass to chattel Over 2 yrs, D sent e-mails critical of P to current
employees on Ps email system. D did not breach any barriers and offered to and did remove from list-serv any
recipient who wished to be removed. Ds emails did not cause physical damage nor functional disruption to
companys computers. Contents did cause discussion among employees. H: Court will not find or extend
trespass to chattel law where plaintiff cannot show injury to property or legal interest in that property. (One
who intentionally interferes w/ anothers property is liable only if the interference is harmful to
possessors materially valuable interest. WHY: No actual injury proven. Servers not damaged or slowed. For
trespass to chattel, owner must show loss of possession and none exists here. Ps argument: transmitting signals
qualifies as physical contact w/ chattel + e-mails cause decrease in productivity.
NUISANCE unreasonable interference (non-trespassory) with the use and enjoyment of ones property.
Nuisance if harm is substantial (like decreasing property value) and conduct is unreasonable. (compare with
trespass which protects exclusive possession); harm must be substantial for liability
Prah v. Maretti solar panels P house had solar panels. D bought neighboring land and built his home. P
advised D that if D builds the home at the planned location, the house would substantially & adversely affect
Ps solar system. H: Plaintiff has stated a claim for nuisance and order granting Ds MSJ was incorrect.
WHY: (1) Many jx protect landowner from malicious obstruction of access to light (spite fence cases) under
common law private nuisance doctrine. (2) In the past, policies were accepted that limited access to sunlight [as
long as it didnt cause physical damage, right to use land was paramount, sunlight was only for aesthetic
enjoyment, and societys interest in not restricting development] these policies are now obsolete. (3) Society has
increasingly regulated land for general welfare (incl. alternative energy), (2) access to sunlight has gained more
importance, (3) and policy favoring unhindered pvt development is no longer in harmony w/ society. *The law
of private nuisance the reasonable use doctrine is best suited to adjudicate these types of conflicts.
DISSENT: Landowners right to use his property according to limits of ordinances, statutes, and
restrictions of record is fundamental to a free society. Harm only to a normal neighbor so people who dont
have solar panels.
Nuisance usually means offensive physically to the senses. Difference from trespass is that trespass is the
use of anothers property (physical) versus nuisance is a disturbance in the enjoyment of land.
Private nuisance
Public nuisance brought by gvt on behalf of public (supplemented by gvt regulations)
***Factors from Restatement = reasonable use doctrine case by case analysis:
1. Location relative (pig farm in rural area is reasonable but not in Beverly Hills)
2. Activity character and extent (blasting music at night may be unreasonable but okay during the day)
3. Harm suffered by P
4. Priority Who was there first? not dispositive
5. Relative Social Value of Enjoyment invaded
Remedies:
1. Injunction
2. Damages
a. Forced sale
b. Difference in fair market value
c. Purchased injunction
3. People can contract and negotiate with each other

CA v. General Motors nuisance re: pollution (complete); probably better for the legislature; manufacturers do
not directly pollute, they just sell cars
14

Comment [T18]: Trespass law protects current


possessors, so those w/o possessory rights (e.g.,
holder of a future interest) are not protected.

Comment [T19]: Contrast w/ Ebay v. Bidders


Edge D used a robot program to search eBay site.
Trespass bc if replicated by other search engines,
could have harmful impact on functionality of the
servers (access 100,000 times a day, 1-2% of info
requests) In the aggregate, such services will deny
legitimate users access.

Comment [T20]: The relevance is that the


access to light was uniformly rejected as being
inconsistent with the countrys need to develop.
(Ancient lights if P had received sunlight across
adjoining property for a specified period of time is
entitled to receive unobstructed access to sunlight
across adjoining property).
Long ago, ancient lights was uniformly rejected.
Court responds that the old policy reasons for
overriding ancient lights (development of country) is
obsolete. Sunlight has become more important
now.
It doesnt seem that they are bringing back the
doctrine of ancient lights. If he brought back
ancient lights, Prah would automatically win. The
other extreme would be to uphold Marettis rights
(FL court). Court says it depends on circumstances
and whether it is reasonable. So nuisance law would
resolve this on a case-by-case basis.
Spite fence cases have shown that many jx have
protected landowners from intentional & malicious
obstruction of access to light. Even w/o ancient
lights, an owners rights to sunlight is protected.

EASEMENTS right to do specific acts on someone elses land. Intended to be permanent or for a specified
period. Also not revocable at owners will. In the absence of any agreement, the owner of the easement has the
responsibility to maintain it. Usually created by a deed granted by owner of burdened land to easement owner.
Easements are transferable.
Different from licenses, which are temporary invitations where owners waive the right to exclude nonowners and simultaneously exercise their privilege to admit others. Licenses can be express (paper invitation)
or implied (shop owner allowing public to enter) ***MAIN DIFFERENCE: Licenses can be revoked at any
time by the owner.***
Two types of easements:
1. Easement appurtenant runs with the land
a. This easement benefits the dominant estate
i. The easement stays with dominant estate if title changes
b. Servient estate parcel where easement is located
i. The easement stays with servient estate if title changes
2. Easement in gross stops w/ person transferable; does not benefit another parcel of land
a. No dominant estate; only servient
b. Examples include: power lines, sewage, public easements
c. When sold, the easement in gross stays with the owner of the easement

CREATION - Easement created by express grant


Urbaitis v. Commonwealth Edison disputed land conveyed land to railroad who then passed the perpetual
easement to make a bike path. H: A court will interpret a transfer as a fee simple unless language in the
document, when viewed as a whole, explicitly states that it is an easement or right of way. WHY: Even though
the deed says right of way the wording convey and warrant in the granting clause controls.
EASEMENTS AND LICENSES
Easements created by estoppel turns a license into an easement if a party reasonably relied on continued use
of the license (+made reasonable expenditures). A license is merely permission to go on the land of another
(like sporting events). Difference is a license is revocable at any time and an easement is not. When a license is
not bare, naked right of entry, but includes the right to erect structures and acquire an interest in the land in the
nature of an easement by construction of improvements, the licensor may not revoke the license and restore the
premises to former condition after licensee has ecercised the privilege given by the license and erected
improvements.
Holbrook v. Taylor A license becomes an easement if P can establish that in the exercise of the license, he
spent significant money in uses connected with reasonable reliance on that license. Reasonable. Neighbor
lets other neighbor use driveway while building his house then puts up steel cable 5 yrs later to block him.
Court held that an appurtenant easement by estoppel was established because Taylor made improvements to
the land since easement. [reasonable reliance + investment]
***For an easement by estoppel, a claimant must show:
1. Action under privilege of license (had the right (permission or tacit approval to build)
2. Improved land or erected structure
3. At considerable expense
How to prevent license from turning into an easement:
1. Explicitly state in K that neighbor waives right to an easement by estoppel (P will argue that such
cannot be waived)
2. Prevent improvements on land or building anything
3. Agree on a temporary easement that expires in the future
4. Sell easement
Policy: against easements by estoppel bad to have land burdened by unrecorded easements; for
easements protects licensees
15

Comment [T21]: Affirmative (positive)


easements a right to do something on someone
elses land
Restrictive covenant or negative easement a right
to prevent others from doing something on their
own land
Affirmative covenant a duty to do something on
your own land to benefit other owners

Kitchen v. Kitchen (Michigan) Court ruled that Michigan will not recognize easements by estoppel. Rather,
statute requires that easements to be in writing. Irrevocable license (a/k/a easements) cannot be based on
oral promises alone.
WHY?
Easements constitute an interest in real estate and are not revocable they need to be clear and in
writing to prevent litigation based on he-said, she-said approach
Prevents owners from falsely claiming that others gave them oral permission to cross property and that
they relied on this promise to build their homes
Clarifies property rights, prevents fraud, and decreases needless litigation
Purchases will be placed on notice because easements would be recorded (prevents surprises for future
owners of the servient estate)
PRESCRIPTIVE EASEMENTS prescriptive easements is what adverse possession is to fee simples. Courts
are sometimes more lenient on some factors depending on character of land and use.
ELEMENTS: (**A Hooker ON Every Corner Actual, Hostile, Open & Notorious, Exclusive, Continuous + Statutory Period)
1. Actual courts tend to relax substantial identity clear line of path not necessary since there is a
substantial identity to the easement
2. ***Hostile against owners interests; w/o permission
3. Open & Notorious enough to give notice
4. Exclusive **for public prescriptive easements there is no exclusivity requirement owner can
still be there, as long as not completely in the way of others use. If a single individual wants to
claim a prescriptive easement, then they cannot share it with others.
5. Continuous depends on the character, for beaches, people dont use it during bad weather
6. For the statutory period
Concerned Citizens of Brunswick Cty. Taxpayers Assoc. v. Holden Beach Enterprises beachgoers won path
though exact placement (actual requirement) moved due to nature the path to beach is prescriptive easement,
attempts to exclude beachgoers were unsuccessful though reasonable attempts to prevent continuous use.
Owner has to successfully discontinue use.
How to defeat a prescriptive easement need to defeat just one element:
1. Block access one a day a year to prevent continuous
2. Put up a sign granting permission to defeat adverse/hostile
3. Bring suit before SOL is up problem: for public prescriptive easement, whom do you sue?
IMPLIED EASEMENTS
Implied: Easement by pre-existing/prior use.
Elements:
1. Common grantor (parcels used to be a single property)
2. Back when there was a single parcel, there was a quasi-easement (one part of the parcel was being
used by another part of the parcel) (note that this shouldve existed & used at the time of the severance)
3. The use was apparent, continuous, and reasonably necessary
o Apparent something that the buyer knew about or reasonably should have known about when
buying the parcel
o Continuous the use is still going on
o Reasonably necessary something like usefulness it confers a substantial usefulness to the
dominant parcel, implying that the parties intended to keep it in place after the property was sold
[see that courts interpretations of these elements, especially the reasonably necessary subelement, vary]

16

Comment [T22]: Note that beachgoers cannot


usually win or at least will have trouble meeting the
HOSTILE requirement.
In fee simple, exclusive is not shared with the
owner. For easements, however, you can share it
with the fee simple owner. So you cant have a
rule that would require strict exclusivity. This does
not tend to get applied for easements with
prescription.

Comment [T23]: Public prescriptive


enforcement its tough to sue more than a couple
of individuals, because filing a suit against
defendant A, only stops the statutory clock against
defendant A. Maybe one can file a lawsuit against
the government (who represent the people) BUT
the government is not trespassing on the land.

Comment [T24]: Schwab v. Timmons court


notes that implied easements may only be created
when the necessity for the easement is so clear and
absolute that without the easement, grantee cannot
enjoy the use of the property.

Russakoff v. Scruggs lake used by lot owners for frogging, sprinkler feed, court held that there was an
easement by prior/pre-existing use; plaintiffs met elements: (1) the Ps lot was part of a single tract, (2) when
Ps predecessors bought the track, the lake was the servient tract, and (3) there is evidence that the Ps used the
lake for recreation and to water their lawns (using a pump). That use was continuous and apparent. Plaintiffs
also had a legitimate expectation to use the lake for their enjoyment. The development company envisioned the
enjoyment of the lake by those who bought tracts around it.
Russakoff had an appurtenant easement (benefited his parcel) and when he moves, the person who
buys the house also gets to use the easement because it runs with the land.
Implied: Easement by necessity key points: (1) just showing want or need is not enough and (2) if it is selfinflicted, one is barred from claiming easement by necessity.
ELEMENTS:
1. Common grantor
2. Necessity (e.g., actual necessity to access a road or if a lake is the only source of water)*
3. Necessity has to have existed at the time of severance
RATIONALES
1. If seller and buyer of landlocked property, they wouldve included an easement in the deed (no one
would by a landlocked parcel), but maybe they forgot (i.e., if they had thought about it, they
wouldve created an explicit easement)
2. Its bad public policy to have landlocked parcels
Schwab v. Timmons no easement by necessity because P failed to satisfy prong #3 necessity should have
existed at the time of severance no easement by implication (prior existing use) or necessity because P can
access roadway by building over bluffs instead of going over Ds land (so not landlocked) although
inconvenient and because at the time of severance, P was not landlocked. P sold the bluff to someone else! R:
(1) Easement by necessity only if common owner severs landlocked portion of property and owner of
landlocked portion cannot access a public roadway US never severed a landlocked portion of property (2)
Owners had access to a public road, even though not ideal or convenient, but they sold it! landlock-ing
resulted not from grant of property but their own conveyance (3) policy of not sanctioning hidden easements
If P cannot show that he meets prong 3, he cannot have an easement by necessity.
Public policy disfavors easements by necessity implied easements in general because they are
hidden. There should be public records to prevent surprises.
Termination of easements:
1. Servient and dominant parcels are placed under one ownership
2. Abandonment
Pre-existing Use Elements
(1) Common grantor (former unity of ownership)
(2) Quasi easement one part of the land had to be benefiting the
land before the severance/split
(3) Apparent, continuous and reasonably necessary (more than
convenient, but not required to be absolutely necessary)
Goals: at least one party would have demanded it at the time of
severance

Necessity Elements
(1) Common grantor
(2) Necessity necessary for egress

(3) Necessity at time of severance necessity has to exist at the


time of the severance
Goals: (1) Logic: parties would probably have created an
easement themselves. (2) Public interest in not having landlocked
parcels. We want people to have access to roads.
Downside of implied easements (a) surprise buyers, (b) discourage alienability, (c) upset expectations of servient estate owners.

17

Comment [T25]: An easement by implication


can be destroyed, however, if the person who
buys the servient land did not have notice of the
easement or its use. When this happens, the owner
of the servient land is free from the easement. But
here, the record shows that the defendant had
notice of an apparent, continuous, and reasonably
necessary to enjoyment use. The defendant even
pulled water pumps that were feeding off the lake.

Comment [T26]: Not landlocked when he or she


has difficulty getting from his or her land to a public
road as long as he or she can get to land from a
public road.
Comment [T27]: Russakoff would not win under
this theory because hes not landlocked.

Comment [T28]: Courts analysis was really strict


since land was bordered to west by Green Bay, to
the south by another owner, and east and north
was bordered by a cliff and rocky terrain.

COVENANTS
CREATION
Covenants are negative easements (restrictions) intended to run with the land binding successors
agreements that bind owners and successors that give them the right to prevent others from doing something on
their own land. Real covenants are agreements among landowners like contracts with something extra because
they bind future owners. The most common real covenant is when it limits use of land to single family
residential use because people will buy more if they have some sort of guarantee that it will be residential
around them ( home values)
Real Covenants at Law Requirements:
1. Intent both parties [A-B] must intend to bind their successors
2. Covenant has to touch and concern the land (physically or economically affect the land)
3. Privity of estate:
Horizontal Privity relationship between original covenanting parties (A-B). Both must have a
mutual interest in the land subject to restriction (e.g., landlord & tenant, concurrent owners,
grantor & grantee, owner & owner of easement). Note that neighbors dont have horizontal
privity if they dont have a covenant.
Vertical Privity refers to relationship between original covenanting party and successor (AC::B-D). Parties are in vertical privity if the successor takes the entire estate in the land of
predecessor.
Burdens & Benefits every covenant has a burden and a benefit; most covenants involve reciprocal
burdens and benefits.
For a burden to run to a successor, you need horizontal and vertical privity
o A promises B to build only single-family homes (A has burden, B has benefit). A sells his
property to D. B, to enforce the covenant, has to show horizontal privity between A and B;
and vertical privity between A and D.
For a benefit to run to a successor, only need vertical privity
o A promises to build only sf homes (A has burden, B has benefit). B sells his property to C.
A starts building an apartment. C, to enforce the covenant, only has to show vertical privity
between B and C.
o A promises to build only sf homes. (A has burden, B has benefit). B sells property to C. A
sells property to D. D starts building an apartment. For C to enforce, has to show benefit has
run (vertical privity b/w B and C) and burden has run (horizontal privity b/w A and B;
vertical privity b/w A and D.)

18

Comment [T29]: The agreement between A-B is


grounded on contract, not covenant the covenant
binds subsequent owners.

Comment [T30]: If A owns land in fee simple


and coveys to C in fee simple, then A&C are in
vertical privity. If A leases to C or gives life estate to
C, they are not in vertical privity.

Runyon & Williams v. Paley (condo builders) D Paleys want to build condos on their property. Runyon and
Williams contend that Paleys property is subject to restrictive covenant prohibiting construction of condos.
HELD: Runyon had no vertical privity b/c they got their land before covenant was created. Williams met all
elements and proved that is is a real covenant b/c (1) economic impact on land (enhanced value of dominant
estate and decreased value of servient estate) (2) proves benefit and burden run (satisfied both horizontal and
vertical privity) and (3) proved that intent of parties was to run with the land and bind successors.
WILLIAMS: REAL COVENANT (RESTRICTIVE COVENANT)
1.
Intent
Clear from language of agreement that original parties intended for burden (restriction) to run regardless of who owns it.
YES
2.
Touch and Concern
Its a restriction on the use of the land.
YES
3.
Privity
FOR PRIVITY, SHE NEEDS TO SHOW VERTICAL & HORIZONTAL PRIVITY:
YES
For Burden: Paleys vertical to Brughs (yes, because Brughs they have fee simple ownership) and Burghs horizontal to Gaskins (yes, Brughs
has horizontal privity because both have mutual interest in same land)
For Benefit: Williams can show vertical privity (fee simple ownership of estate)
EQUITABLE SERVITUDE
3. Notice

YES

The Paleys would have read the deed that mentioned the restriction or referred to it (they wouldve had actual and constructive).

RUNYONS: REAL COVENANT (RESTRICTIVE COVENANT)


1.
Intent
When 1/9/1960 restriction was written, the Runyons are not successors to land Gaskin owned at the time, Runyons owned their land before
NO
Brughs bought their land
2.
Touch and Concern
3.
Privity
Runyons wouldnt have had the benefit because they dont have vertical privity. Theyre not successors to land benefitted by the promise.
NO
EQUITABLE SERVITUDE
3. Notice
NO
The Paleys would not have read the deed that mentioned the restriction or referred to it (they wouldve had actual and constructive).

Equitable Servitudes
Requirements:
1. Intent - Landowners have to intend to bind successors
2. Covenant has to touch & concern the land economic or physical
3. Successor has notice (actual or constructive does the person youre trying to enforce the restriction
against knew or reasonably should have known) when he bought the property [**look at deed first for
notice notice is taken care of so long as there was proper filing of the deed. Assume that everyone is
supposed to do a title search when they buy property]
See table above for Runyon v. Paley Williams won on real covenant. Runyons still dont win on equitable
servitude because they cannot prove intent.
Implied Reciprocal Servitudes based on a common scheme of restrictions (read this under the intent
element in a covenant or servitude) When a common grantor develops land and divides it and sells the lots and
includes a common scheme of restrictions on all the lots, the grantees acquire by implication the right to enforce
the same restriction on the grantor (if the grantors lot does not have an explicit restriction
Elements:
1. Intent common grantor
2. Touches and concerns the land
3. Notice common scheme obvious
D -> purchaser
[implied reciprocal servitude]
3 [explicit]
6 [explicit]

1 [explicit]

2 [explicit]

4 [explicit]
7 [explicit]

5 [explicit]
8 [explicit]

TERMINATION
El Di. V. Bethany Beach (booze seller just wants to sell his booze) Covenant to prohibit alcohol not
enforceable because conditions have changed so much. Changed Conditions Doctrine covenants will not be
enforced if conditions have changed so much inside the neighborhood restricted by the covenant that
enforcement will no longer be of substantial benefit to the dominant estate. Developers of Bethany Beach
restricted prop to residential use only and prohibited sale of alcoholic beverages. This covenant affected 2/3 rd of
the property. Alcohol is for sale at a packaging store 200 yds from El Dis business and several nearby
19

restaurants. Holiday House customers have followed a BYOB/brown-bagging policy for years. H: Covenant no
longer enforceable when conditions have changed so much (1) change need not be to the whole parcel, partial
change is sufficient (2) purpose of covenant was to maintain quiet, residential, church dominated community.
Now its a resort town w/ 85% of the municipality not subject to restrictions. (3) Town zoned Ds property for
commercial use in 1952. (4) Consumption of alcohol is tolerated by owners of similarly restricted lots (20 yr
brown bagging policy. + Public Policy to control the sale of liquor. (5) El Dis business is in the commercial
section.
Ways to Terminate a Covenant
1. By common ownership if same entity owns all affected parcels, he can terminate it
2. By release/agreement:
a. If all the parties agree to rescind covenant
b. Or if provided by the covenant, termination by a % vote or in a number of given years
3. Restricted duration covenant has an expiration or statute setting expiration
4. Abandonment widespread non-compliance
5. Estoppel (unclean hands) If P w/ right to enforce a covenant is himself violating it
6. Changed conditions if conditions have changed so much that enforcement of the covenant would no
longer benefit dominant estates; covenant is valueless to parties
7. Injunctive Relief if covenant is unreasonable
8. SoL when someone violates covenant, the right to sue stops
CONDOMINIUMS AND PRIVATE SUBDIVISIONS
Nahrstedt v. Lakeside Village Condominium Assn. COMMON INTEREST DEVELOPMENT cat lady
just wants to keep her cats! Covenants recorded in declaration of common interest are enforceable unless
theyre unreasonable. Unreasonable if (1) burden substantially > benefits of restriction, (2) arbitrary, (3)
contrary to public policy) P had 3 cats in her condo and wanted reasonableness test applied on a case-by-case
basis. Covenant restricts: No animals (which shall mean dogs and cats) livestockkept in any unit. P says
covenant not enforceable against her and that application of reasonableness should be on a case-by-case basis.
Court declines because covenant applies to whole (policy: decreases litigation). No pets policy is enforceable
as an equitable servitude because (1) intent to parties for it to run w land binding successors 2) touches and
concerns the land and 3) notice given since pet restriction was contained in condos agreement document and
recorded w county recorder before unites were fold. For common interest properties, the test is
reasonableness
COMMON INTEREST DEVELOPMENT encompasses a pvt subdivision (spread out condos) and condos
(every owner owning their place in fee simple and common areas are owned by HoA where all owners are
members or owned by owners as joint tenants). Common rules include the appearance of the exterior,
restrictions on ability to rent unity out (approval of HoA governing board). CCR-covenant, conditions, and
restrictions
TO ENFORCE Covenants of Common Interest by Equitable Servitude
1. Must have intent
2. Touch & Concern the land
3. Notice
4. Many states add an additional requirement that Restrictions must be reasonable (enforceable
equitable servitudes unless unreasonable)
a. REASONABLENESS some states have a dual approach. If a rule is created before the
units are sold, it does not have to be reasonable. Once the units are sold, all other rules made
after the sale must be reasonable.

20

Comment [T31]: COOPs building is owned by a


corporation and shareholders are the people who
live in units, renting units from corporation (ie they
are tenants of the corporation in which they hold
shares) so theyre their own landlord. In a condo,
every unit owner has their own mortgage. In a coop,
the corporation pays the mortgage, so if one person
defaults on their share of the mortgage, other
residents have to make up the difference.
Comment [T32]: Since Nahrstedt is an owner,
she can get together with her neighbors to abandon
the restriction.

Comment [T33]: Burden>benefit; arbitrary;


against public policy

RELATIONS BETWEEN PROPERTY OWNERS AND THE GOVT


ZONING: THE PLANNING PROCESS
Richardson v. City of Little Rock Planning Commission Landowners plans should be objectively measured
against ordinance standards. Planning commissions cant arbitrarily deny plans if not based on ordinance.
Zoning board overstepped bounds in arbitrarily denying app P wanted to build a subdivision. Plans were
rejected on the basis that the proposed cul de sac was too close to adjacent lots and that the marginal
development potential because of the restricted means of access and unusual lot shapes. P did not propose a
cul de sac and the ordinance does not contain any language about marginal dev use. H: A planning commission
does not have discretionary power to deny an application when the application meets the minimum
requirements set out by the zoning ordinance. RULE: Planning commissions authority is bound by zoning
ordinances so they cannot arbitrarily deny proposals if they dont have that kind of discretionary power
especially when the plan meets the minimum requirements.
Enabling Legislation Zoning Ordinance Planning Commission

Legislature

Enabling legislation

City Gvt (City Council)

Zoning Ordinance

Administrative Agency

Planning Commission

Comment [T34]: The can deny plans based on


things outlined in the planning ordinance. Point out
the ordinance being violated. The denial letter
should say the reason why it doesnt comply with
the ordinance with the ordinance cited. Write the
letter properly and it will be sustained show that
the commission is within its authority.

2 extra sources of law besides statutes and common law:


units of local gvt (cities, towns, villages) that enact ordinances (essentially statutes)
administrative agencies that promulgate regulations and by adjudicating cases
Local gvt and administrative agencies delegate power to local govts and administrative agencies and thats the limit of their power.
Their power is derived from whatever power is delegated to them. Usually these are broad delegations of power. Their power can be
delegated or taken away at any time by the legislature.
Zoning dividing land and placing use restrictions on land (e.g., residential, commercial, and industrial zones). Zoning restrictions
are usually cumulative: if theres a factory, you can put it in the industrial zone. If you have a business, you can put it in the
commercial and industrial zone. You can put a house in an industrial zone.

ZONING: NONCONFORMING USES [amortization retroactive restriction on land use]


PA Northwestern Distributors v. Zoning Hearing Board Amortization of a lawful pre-existing nonconforming use is per se confiscatory and violative of PA const. (taking w/o just compensation) adult book
store owner wins! H: No amortization period allowed in PA for lawful pre-existing non-conforming use as
long as it doesnt create a nuisance because amortization period violate the PA Constitution (or if its abandoned
or if gvt exercises eminent domain). Nude book store gets to stay because the requirement of amortization and
discontinuance of a lawful pre-existing (before zoning code) non-conforming use is confiscatory and violates
the PA constitution as a taking w/o just compensation. (1) Standing law is that munis lack power to force a
change in nature of an existing lawful use or property; (2) If nonconforming use is lawful, property owner has a
right which cannot be abrogated unless nuisance, abandoned, or extinguished by eminent domain; (3)
amortization is retroactive and is very different from ordinance restricting future use. It would prevent book
store owner of lawful use of his property by forcing him to cease using it as an adult bookstore w/ 90 days. If
gvt desires to interfere w/ owners use, where use is lawful and is not a nuisance nor is it abandoned, it must
compensate owner for resulting loss. Concurring opinion says as long as the time given for amortization is
reasonable, then amortization would be okay. Dont outlaw all amortizations.

21

Comment [T35]:
How to react to non-conforming use:
1.No special treatment no town tries to enact a
zoning ordinance that does this: its really harsh
to reverse an investment really quickly
2.Exempt them from ordinance (grandfather
them in)
3.Give them some time to phase out
Comment [T36]: Another way of dealing with a
non-conforming use so that owner will have
reasonable time to bring use into conformity
enough time for owner to get reasonable return on
their investment, find another place to set up shop,
etc.
Comment [T37]: Gvt can regulate property a
point. If gvt goes too far in infringing owners rts,
its a taking and gvt has to pay just compensation.
Comment [T38]: As a policy matter, not
allowing amortization hinders communities ability
to change. Would like to keep amortization and
would hold amortization in this cause unreasonable
because its way too short.

Rays Stateline Market, Inc. v. Town of Pelham (donut counter case) pre-existing non-conforming use is
generally exempted/grandfathered if the proposed change does not result in illegally expanding
nonconforming use and if the change wouldnt have an appreciable effect on the neighborhood. **A
zoning ordinance applies to preexisting use when use is altered for a purpose or in a manner that is substantially
different from the use to which it was put before alteration. F: changing donut counter to Dunkin Donuts
counter is not a substantial change. Court rules for market bc coffee counter permit would not result in a
substantial change or an illegal expansion of the nonconforming use and the sign permit would not result in any
appreciable effect on the neighborhood. Zoning ordinances can limit any extension, expansion, or enlargement
of a nonconforming use and prohibits its change to substantially different nonconforming use.
FACTORS IN EVALUATING EXTENT OF NON-CONFORMING USE:
1. Whether challenged use is merely different manner of using original nonconforming use; or
2. Whether it constitutes a different use AND whether the challenged use will have a substantially different
impact upon neighborhood
NOTE: Court has recognized that nonconforming uses may be expanded as long as expansion is a (1)
natural activity, (2) closely related to manner in which a piece of property is used at time of the enactment
of ordinance creating non-conforming use
ZONING: VARIANCES
Lang v. Zoning Board of Adjustment swimming pool case Variance (should) be granted bc of exceptional
property conditions (narrow shape & preexisting structures) + enforcement of ordinance would result in
exceptional, undue hardship or (2) if public benefits outweigh proposed changes variance due to undue
hardship granted variance bc backyard and lot was uniquely shaped and had been a non-conforming use
(the lots dimensions were smaller than subsequent zoning law) . The unusual narrowness of Calabreses lot,
combined w preexistence of paved driveway and garage along northerly side of propertys rear yard, and that
these unique attributes of property constituted exceptional and undue hardship w/I meaning of the statute.
Variance granted and allowed him to construct an in-ground swimming pool. Court supported variance because
of propertys unusual narrowness and shape justified the variance. Also, replacing an above ground pool with
average sized in-ground pool is consistent with the promotion of a desirable visual environment and would
advance the safety and visual purpose of zoning
***Reviewing courts also give wide latitude to zoning authorities because they have familiarity w/ community.
Absent clear abuse of discretion, the courts will not declare their decisions invalid
2 techniques to allow departures from zoning ordinances:
Variances permissions to deviate from zoning law when application of the ordinance would (permission to depart from the terms of
the zoning ordinance):
1. Impose an unnecessary hardship; and
2. The proposed use would not be contrary to the public interest and would not substantially impair the purpose of the zoning
plan and ordinance
Special Exception exception to the ordinance thats specified in the ordinance itself
*RULES VERSUS STANDARDS - Regulating by rules and by standards:
Rule hard line (minimum age for presidency, speed limits)
o Advantages: easy to apply, outcomes are predictable
o Disadvantage: inflexible, easy to imagine hardship cases where applying the rule doesnt seem right (speed limit
and emergencies)
Standards fuzzier, more fact sensitive classifications (law of nuisance (governed by reasonableness), negligence, implied
warranty of habitability, zoning with variances
o Advantage: allow shaping to accommodate hardship cases
o Disadvantage: outcome is hard to predict; how would the standards be applied in practice
Zonings have moved from being rules to standards (taking out rigidity of early zoning). With zoning, its hard to anticipate the best
outcome ex ante. There may be fact situations where we do not want a strict rule. Variances mitigate the effect of strict rules.

22

Comment [T39]: The zoning ordinance provides


that a variance may be granted on proof of undue
hardship based on 3 criteria:
1.exceptional narrowness, shallowness, of
shape of the property,
2.exceptional topographic conditions or
physical features
3.exceptional situation uniquely affecting
property;
The statute also provides that a variance may be
granted without hardship is the variance would
promote the purposes of the zoning Act and the
benefits of the variance would substantially
outweigh any detriment.
Undue hardship should focus on whether the strict
enforcement of the statute would cause undue
hardship based on the unique conditions of the
property (vs. whether a proposed structure like a
pool would be too large and that the size is the
reason for variance)
Undue hardship usually a strict test:
1.Will not be granted if self-imposed
2.Not found unless there is no economically
viable use of the property if zoning law is
enforced
Even w/o hardship, the Board also concluded that
the proposed pool would promote the purposes of
the zoning ordinance because in-ground pools look
better and the neighbors wouldnt be bothered by it
(visually)

ZONING: AESTHETICS
Stoyanoff v. Berkeley Pyramid house loses RULE: Aesthetic zoning is okay if not arbitrary and
unreasonable and serves the purpose of promoting the general welfare (w/I bounds of zoning ordinance and
is constitutional). Denial is reasonable if D can show that structure would (1) be detrimental to property
values, (2) not in conformity with character of the community, and (3) not in conformity w desirable land us
in community & furtherance of ordinance P applied for weird looking house in a snobby community. The
applicants were refused a building permit for the construction of their proposed residence upon the ground that
the permit was not approved by a city architectural board (board) which was set up to assure that plans for
buildings conformed to minimum standards of appearance. Almost all of the other houses have traditional
architecture. P challenged aesthetic criteria as (1) unconstitutional bc its too vague and allows for
unreasonable, unguided, and arbitrary choices violating due process and (2) city exceeded its statutory power in
enacting the ordinance/architectural review board which the enabling statute did not authorize. **in the
matter of enacting zoning ordinances and the procedures for determining whether any certain proposed structure
or use was in compliance with or offended the basic ordinance, the court would not substitute its judgment for
the city's legislative body if the result was not oppressive, arbitrary, or unreasonable and did not infringe upon a
valid preexisting nonconforming use:

Comment [T40]: Very common!

Stoyanoff arguments:
1. The creation of an architectural board for the purpose of maintaining general conformity with style is unauthorized by the
enabling statute
a. Ds response: The enabling statute provides in part thatsuch regulations shall be made with reasonable
considerationto the character of the districtwith a view to conserving the values of buildings
2. That Ordinances 131 and 281 are invalid and unconstitutional as being an arbitrary and unreasonable exercise of police
power (based on aesthetic values) Arbitrariness and subjectivity violates due process.
a. Ds response: Its not just taste but the ugliness affects property values, the Board is made up of architects, plus the
applicant has a chance to be heard and theres an appeals process
i. Problem is gauging the adverse effect on stability of values would be speculation because the house has not
been built
b. Enabling statutetownsare hereby empowered to regulate and restrict P ignores other parts of the
ordinance: unsightly, grotesque and unsuitable structures, detrimental to the stability of value and welfare.be
avoided and that appropriate standards of beauty and conformity be fostered and encouraged
3. That Ordinances 131 and 281 are invalid as an unlawful delegation of legislative powers
a. Ds response: There are public hearings with notice to the applicant, by the Architectural Board and the City Council
on appeal on the factual issues to be determined under the ordinance. So the realtors rights are protected in this
respect.

ZONING: EXCLUSIONARY ZONING


Southern Burlington County NAACP v. Township of Mount Laurel Munis must, through land use
ordinances, plan + provide reasonable opportunities to appropriate housing for low- and middle-income
families. When regulation has a substantial external impact, welfare of the citizens beyond the borders of
the muni cannot be disregarded and must be recognized and served! NAACP wins (on principle, practically
no effect, however) zoning required big lots ($$) and high % dedicated to industry H: Saving on property
taxes is invalid reason for exclusionary zoning bc it violates states equal protection by limiting adequate and
sufficient housing. Mt. Laurel Case a town must allow its fair shareof the regions demand for low & middleincome housing. Mt. Laurel also placed an affirmative responsibility on the town to cause such housing to be
built (density bonuses to developers who build low income housing, etc.). Also important are the spill-over
effects if towns argue in a similar way, this would pack all the poor people into a poor town, which would be
de facto segregation.
1. If munis pass zoning laws that exclude the poor, theres a prima facie showing of an equal protection
(state law constitution) violation
2. Zoning regulations must promote general welfare not just for the town of Mt Laurel but also surrounding
towns (CONTROVERSIAL)
23

Comment [T41]: COURT: w/o further


elaboration, our opinion is that the zoning
ordinance is presumptively contrary to the general
welfare and outside the intended scope of the
zoning power.

3. Court makes clear that it relies on state law, not fed constitution to foreclose on SCOTUS overruling and
not even on statute b/c amending state constitution is more difficult.
4. Remedy given: 90 days from date, or additional time, to adopt amendments to correct deficiency in
zoning code.
Cost of local govt = Property Taxes = (tax rate)(value of property)
See that elected officials have an incentive to lower the tax rate (so to keep property taxes coming, you want to keep the value
of property up by encouraging industrial and commercial uses AND for residential parcels you want them to be bigger and
more valuable) or keep the cost of local govt down (lower school population so lower density towns)
o Note that even if the mayor is not a snob or a racist, he would still have the same incentive to keep densities low,
lowers taxes, and increase property values

24

Comment [T42]: Has not worked well b/c theres


still a shortage of housing for low and middle
income people

TAKINGS CLAUSE
PUBLIC USE REQUIREMENT
Kelo v. City of New London economic (re)development plan for area = public use P are residents and
owners of homes in Fort Turnbull, a neighborhood in the City of New London. Pfizer announced that they
would build a facility near Fort Turnbull. Two mts later, New Londons City Council gave approval for a
development corporation to prepare a development plan. NLDC is a private non-profit w/ mission to assist the
city council in economic dev planning. NLDC also had eminent domain power. NLDC planned to build all sorts
of things parks, condos, offices, etc.(more tax revenue, more jobs)
DISSENT: No pre-condemnation use that was affirmatively harming society. Draws a distinction
between a public harm like blight (which is a public use) and getting rid of something that is not a public harm.

Comment [T43]: As a response to this decision,


many state legislatures passed statutes barring
takings for economic development some defining
this as taking of private property to give to another
private owner

Eminent Domain gvt power to take pvt property for (1) public use (2) w/ just compensation. When gvt wants
to take property, it has to be for a public use (in most cases, theres no serious dispute about the exercise of
ED)

Procedure: Gvt files a suit for condemnation proceedings against the property and one of the questions would be how much
would the owner be compensated
What is a public use there has to be some rational link between taking and some public purpose
CASE LAW before Kelo
o Poletown transfer of land to GM which wanted to build a plant. They threatened to move to another state unless
Poletown was condemned, Detroit agreed. Challenged as not being a public use. Majority said its a public use by
supporting the economy of Detroit.
o Hawaii Housing Authority v. Midkiff HI lots were owned by a small # of people. Gvt took land and sold that
land to tenants.
o Berman v. Parker gvt condemned poor neighborhoods (slums), take them, and sell them to private developers for
revitalization. Takings challenged based on not being a public use Court: renovation of cities is a public use and
courts will be very deferential to legislatures determination of what is in the publics interest
o NY CITY wanted to attract intl business so condemned old electronics district w/ a lot of small businesses to build
WTC

REGULATORY TAKINGS (govtal regulations) sometimes a taking, depends on ad-hoc analysis


Penn Central Transportation Co. v. City of New York NY City enacted a Landmark Preservation Law to
preserve historical buildings. The law places restrictions on the property so that the owner cannot change how
the landmark looks unless she gets approval from the Landmark Preservation Commission. The plaintiff owns
Penn Station a historic landmark and wants to build an office building on top of the station. The
Commission rejected the plaintiffs plans because the plan would destroy the silhouette and would change the
character of the station into nothing more than an aesthetic joke. HELD: Not a taking because it does not
interfere with present use of terminal. Denial of use of airspace is not an automatic taking because
takings jurisprudence does not divide parcels into discrete segments (underground, ground, airspace).
Court will focus on character of the action and interference in parcel as a whole:
1.

Economic impact of regulation and extent to which regulation has interfered w/ distinct investment-backed expectations
(note that the latter is narrower)
a. Just economic impact not having a skyscraper is probably a massive loss for the plaintiff; but if you look at it in
terms of investment backed expectations (they havent lost anything)
b. Interference Investment-backed expectations: In Penn Stn when they bought it, they expected to run a train
station, certainly not to raze it and build a skyscraper (see that this is more gvt friendly and economic impact is more
owner friendly)
c. The regulation does not interfere with the present use of the terminal; the law allows the

plaintiff to use the terminal for the same purpose used for the past 65+ yrs -> the law allows the
plaintiff to have a reasonable return on their investment
2.

Character of the governmental action


a. More likely to find taking when gvt physically invades a property than when interference arises from a governmental
program

25

Comment [T44]: Courts give great deference to


legislatures in determining what is a public use.
The deference includes that the court will not
require that there be a reasonably certainty that
the expected public benefits will actually accrue
from the development
WHY?
-legislatures are better equipped for fact finding to
decide whats in the public interest
-legislatures are democratically elected so they
represent their constituents
-matter of opinion
-public purpose is open to debate, where public use
is easier to define
SEE THAT W/O EMINENT DOMAIN, GVT WILL HAVE
TO NEGOTIATE WITH EACH OWNER, EACH OWNER
HAS AN INCENTIVE TO DELAY (LAST HOLD OUT GETS
MOST MONEY) STANDSTILL!
Comment [T45]: NOTE: Penn Central would
apply to personal property (i.e., not just real
property) because all property is treated the same
under the Takings Clause
Comment [T46]: If this isnt the case, claimant
can say that gvt took 100% of the air rights this
cant be. Court says that analysis looks at the whole.
Comment [T47]: Note that claimant will inflate
economic impact while gvt will play up the lack of
interference w/ investment backed expectations

Implicit in Goldblatt use restriction on property may constitute a taking if not reasonably necessary to promote a
substantial public purpose (i.e., could the gvt accomplish this goal in a way so as to not take property) or if it has
an unduly harsh impact on owners use of property
Extent to which a single property owner is being singled out or whether the burdens are being spread more widely
(say theres only one historical building except for over 400, then stronger argument for a taking)
a. In PA Coal average reciprocity of advantage where lots of people are burdened and everyone is enjoying
correspondent benefits -> if this exists, less likely that its a taking
b.

3.

b. Landmark laws are not like discriminatory or reverse spot zoning where a regulation arbitrarily
singles out one parcel for different, less favorable treatment than neighboring parcels
i. Its true that landmark law burdens some owners more than others but this does not
mean that the law effects a taking
ii. The plaintiffs argument that theyre singled out is unavailing because there are over 21
historic districts and over 400 historic landmarks in NYC
iii. POLICY: Private owner should not pay to provide a public good.
iv. **Offset by transferable development rights ordinance would allow owner of
burdened property to transfer the rights to another building (tack on an extra 10 stories to
another building)
**Note that Penn Central is very pro gvt and it is hard for a property owner to win under a Penn Central regulatory taking. P would
have to show a very large drop in the value of the property or great interference with investment backed expectations. He also will
have to show being singled out or having to bear the burden of a public benefit

Comment [T48]: The majority and dissent


disagree over whether Penn Central has been
singled out to bear the burden of a public program.
The majority finds that the burden is spread among
other parcels and properties that have been
designated as historical whereas the dissent found
that the buildings affected are separated from one
another (unlike a regular zoning regime) and they
are treated differently from their neighbors (Penn
Station versus skyscrapers). To the dissent, its
important to have reciprocity (and the decrease in
the value of the property is offset by an increase in
the value that flows from similar restrictions on
neighboring properties.
Whether the burden rests solely on Penn Central
rather than distributed among other property
owners makes a difference because 1) the gvt
should not make a private party pay by themselves
to improve the public condition (the public should
bear the burden for benefits that they will enjoy); 2)
if the costs are spread among the public, then its
probably not a taking

PHYSICAL TAKINGS STRICT RULE: Permanent Physical Occupation is a per se taking (regardless of
economic impact or purpose served). Hard line rule so P should first argue physical taking then regulatory.
Loretto v. Teleprompter Manhattan - Loretto owns building. Teleprompter company installed a small box on
her roof but its on her property pursuant to Citys laws that allows companies to install boxes and wires.
There are TV cables across her roof and a cable that drops down the front of her building. It is a taking bc it
destroys the owners rights to possess, exclude others, use, and dispose that part of the property. NYs statute
says landlord may not interfere with installation of CATV facilities and may not demand payment from any
tenant for permitting CATV or from CATV company in excess of what state commission says is reasonable.
DISSENT: Penn Central can say that they were more burdened because they lost millions of dollars,
and Loretto only had to give up a small piece of her roof. In modern times, govt regulations can diminish value
of property far more than minor physical touching. This rule (permanent physical occupation) is a poor way of
distinguishing significant vs. insignificant intrusions
Precedent

Policy

Administrability

MAJORITY

Pumpelly permanent flooding of property is a taking

Causby repeated low airplane flights is a taking

Kaiser Aetna gvt imposition of a public navigation


easement over pvt owned water is a taking
Rule has more than tradition to commend it, theres good
policy reason: a physical appropriation is more serious
(property is a bundle of rights: to possess, use, and dispose it)
and appropriation cuts off a part of the bundle
Easy to administer because there are no difficult line drawing
problems

DISSENT

A lot of the precedent is on a larger scale (flooded farm)


vs. small box on a roof

Penn Central most recent case held that all claims that
gvt action that reduces the value of property will be
evaluated by the Penn Central factors (economic impact,
etc.)

Penn Central lost a lot more than Loretto

This rule (permanent physical occupation) is a poor way


of distinguishing significant vs. insignificant intrusions

Comment [T49]: Loretto would lose her case


under Penn Central on balance.
1.Minimal economic impact & No interference
w/ investment-backed expectations b/c the
cables existed on roof when she bought the
building [Loretto loses]
2.Character of governmental action theres
actual physical intrusion in this property
(unlike Penn Central b/c that only dealt with
regulation) [Loretto wins]
3.Extent that she is being singled out the law
applies to every landlord in NY (the cable TV)
[Loretto loses]
Comment [T50]: Physical possession hacks
through all the sticks in the bundle of property
rights.

It would be difficult to form a definition for permanent and


what is a physical invasion

*Remember that govt/CATV can leave the box on the roof as long as shes justly compensated (to be
determined at trial). Having CATV probably increased her property value, so her compensation might be $0.
Also, govt mandated structures like fire escapes wouldnt be physical takings b/c the owner would still own
those items.
WIPEOUTS only for real property! 100% reduction in value from regulation per se taking
26

Comment [T51]: Two competing arguments:


1)Deprivation of all value = taking
2)Regulation to prevent harm bc no owner has
right to harm the public = not a taking

Lucas v. South Carolina Coastal Council beach house wipeout - State prohibited construction wherever the
beach has eroded in the past to prevent further erosion. This prevented Lucas from building houses on the
beach houses. The law was passed after Lucas bought the parcels. RULE: If regulation denies ALL
economically beneficial/viable use of the land in the name of the common good (i.e., to leave property
economically idle) per se taking. R: (1) similarly situated owners have engaged in same use, this imports
lack of any common law prohibition. Similarly situated landowners are permitted to continue use denied to
claimant. (2) Confiscatory regulations (i.e., those that prohibit all economically beneficial use of land) Any
limitation so severe cannot be newly legislated or decreed, but must exist in title itself, in restrictions that
principles of State property and nuisance law already place on ownership.
1) Where regulation denies all economically beneficial or productive use taking
2) Legislature can pass law which can be characterized as preventing harm so you can have an exception to
taking on basis of preventing harm
3) If forbidden use is already illegal under common law nuisance, then deprivation of value wont be a
taking
***NOTE: Distinguish by saying that here, the trial court found that the regulation have rendered the lots
valueless
**EXCEPTION: Chattels/Personal Property - Court uses Par. 17 for personal property: the holding of Lucas
does not apply to personal property (i.e., not real property) so like Andrus v. Allard prohibiting sales of eagle
feathers gvt does not compensate for this, since its not a taking **B/c of States traditionally high degree of
control over commercial dealingsWith personal property, you take your chance, because its a highly
regulated world and one risks having personal property rendered economically worthless (like the feathers or
machine gun dealer after machine guns are outlawed)

Comment [T52]: Note that parts of the opinion


describe extinguishment of value and denies all
economically beneficial or productive use of land.
These are not necessarily the same thing. Property
can have value even if you cant build on them.

*Practical effects:
Shifts power from legislatures to judges bc post-Lucas, regulations that would ban use of land to prevent
harm would need to persuade courts that public harm is a nuisance.
Question again is who should pay for the cost of the public benefit (protecting beaches)
Regulations must tie harm to existing nuisance law or leave some economically available use

Comment [T55]: Palozzolo v. Rhode Island


(2011) - Subsequent purchaser can still bring a
Lucas claim, even if the purchaser knew full well
that when he bought the property, the law has
already taken effect (2 camps of allowing Lucas
claim: 1) strong view that the timing of the purchase
doesnt matter for investment back opportunities 2)
weak: timing matters

JUST COMPENSATION Interest taking is a physical taking, BUT when there is no net loss to owner, just
compensation for taking = 0
Brown v. Legal Foundation of Washington - IOLTA Program/Accounts is for deposits that on their own would
not generate enough net interest after administrative costs. Precedent: Phillips v. Washington Legal Foundation
held that interest income from IOLTA accounts was private property of the owner of the principal. Phillips
Rule: Interest follows principal. MAJORITY: (1) State law requiring client funds that could not otherwise
generate net earnings for client is not a regulatory taking; (2) law that requires interest on those funds be
transferred to a different owner for a legitimate public use could be a per se taking requiring payment of just
compensation, but (3) because compensation is measured by owners monetary loss 0 net loss then no
violation of Just Compensation Clause. The focus is not on what gvt gains, but what owner has lost. The interest
only exists because of the IOLTA program, and if it was possible for moneys to earn interest on their own, they
wouldnt be in an IOLTA program.
DISSENT: Majority focuses on net loss while dissent focuses on fair market value. Mkt value is not
what owner lost, but the value of the good in the market. The decision counters Phillips precedent. Disagrees
with majoritys before picture IOLTA accounts are earning interest, theyre worth something, and according
to Phillips, its the owners property. Rationale (which is very bad) of majority: What the gvt hath given, gvt
may freely take away. ROBIN HOOD TAKING

Comment [T53]: Even if value is not technically


reduced to $0.
Trial court found that the value of property has
been reduced to 0 (i.e., taking). South Carolina
Supreme Court found no taking because the
regulation was enacted to prevent a public harm.
[Chances are trial ct was wrong that the actual value
of the parcels is $0. Strange because owner can still
use the land and theres possibility that he would be
allowed to build on the land in the future.
Comment [T54]: Pursuant to courts power it
already had to prevent the use, prohibition is not a
taking

Comment [T56]: Legal services for the needy


Comment [T57]: Pecuniary compensation is
measured by net losses rather than value of public
gain: If there was no IOLTA program, their interest
would have been 0 (before picture) if the money
would have been able to earn interest to begin with,
it wouldnt be in an IOLTA account *Because
compensation is measured by owners own
monetary loss 0 when Washington Law is obeyed
no violation of just compensation
Comment [T58]:
Bentham property follows law you would be
more for takings since property is a creature of the
law
Bastiat law follows property you would be more
against takings

27

Takings Clause - What constitutes a


taking?

Physical Takings (Loretto)

Regulatory Takings

per se taking;

(Penn Central)

any permanent physical occupation

Wipeouts (Lucas)
per se taking for confiscatory
regulations that deprive owner of all
economically viable use of land OR if
regulation doesnt substantially
promote legitimate govt end

Penn Central
requires balancing of three factors:
Economic Impact+investment backed
expectations, Character of Gvt
Action, Singling Out

HOW IT ALL STARTED


Johnson v. MIntosh - U.S. conquerors win, Indians lose-How it all Got started
Ps received land grant in Illinois from Piankeshaw Indians. D received grant from the U.S. for same land. Ps
seek ejectment. Chiefs of Indians were in rightful possession according to tribes. Proclamation of 1763, Virginia
law, and federal law prohibited private purchases of Indian land. Why the hub-bub? State govts were granting
lands in the West to settlers before govts purchased it from Indians. Major financially speculative question of
the day.
Court says the general principal was that discovery gave title to government. Said the British government
owned north America in fee simple and Indians had the right to possess the land until they sold it to the
government. After the revolution, Indians still had right of occupancy and since govt has fee simple,
government has right to sell land as fee simple even though Indians are still living thereso the buyer only has
the right to go on the land once Indians are bought out. The first half of the opinion is about purchasing the land
but second half also talks about purchase or by conquest. The second half is acquisition of Indian land by
conquest. The result of the case has been ambiguity on whether Indians right of occupancy can only be
extinguished by purchase or also by conquest. First half of opinion says its purchase, second half says its
conquest too and cases following have decided both ways.

28

Comment [T59]:
Ultimate Source of Law
1)Federal Constitution
2)Federal Statutes
3)Federal Agency Regulations & Decisions
4)State Constitutions
5)State Statutes
6)State Administrative Agency Regulations and
Decisions
7)Local Ordinances
8)Local Agency Regulations and Decisions
9)Common Law
a)Precedent
b)Analogies (indirect precedent, not binding but
can help things hang together)
c)Public policy