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Property Outline

Table of Contents

Trespass and Right to Exclude Original Acquisition Publicity Adverse Possession Servitudes Easements Covenants Homeowners and Condo Associations Restraints on Alienation Freehold Estates and Future Interests Life Estates Future Interests Future Estates Ambiguous Conveyances Rules that Regulate Future Interests Concurrent Ownership Three Forms Conflicts

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Leaseholds Percentage Rents Tenants Right to Assign or Sublet Constructive Eviction Right to Quiet Enjoyment Implied Warranty of Habitability Duty to Mitigate Retaliatory Eviction End of the Tenancy Nuisance Remedies Light, Air and Spite Zoning Exclusionary Zoning Takings Flow Chart Land Use Exactions Fair Housing

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Trespass and the Right to Exclude


I. Not an absolute right, mere ownership of property is insufficient for exclusion; trespass is not wrongful if a. Consent i. Desnick v. ABC, Inc., news reporters gained entry to an eye clinic on false pretenses b. Necessity i. Ploof v. Putnam, boat docked in severe storm to a private dock, no damage done c. Public policy i. State v. Shack, government aid visits migrant farm workers on farm d. Public access (minority rule) i. Uston v. Resorts Intl Hotel, casino cannot exclude card-counting blackjack player because they open their doors to the public and he doesnt threaten security nor disrupt operations ii. Majority rule absolute right to exclude without cause and limit the duty to serve the public to innkeepers and common carriers e. Condemnation, government taking f. Interest in question is not actually property Two ways of enforcing trespass and property rights a. Private enforcement property owner can sue; or b. Public enforcement state can pursue criminal penalties (a violation rather than a misdemeanor or felony) Remedies a. Property rules Intended as a deterrence, may allow for injunction or punitive damages b. Liability rules Allows for the trespass and then compensation afterward at an objectively determined market value c. Glavin v. Eckman i. If your neighbor has a tree on their property with branches that hang over to your property, you can cut the branches only to the extent of their interference with your property, so long as it doesnt damage the tree ii. Three types of damages discussed: 1. Loss of fair market value a. Problem with this, Glavin would get $0 because the cutting of the trees would probably have increased market value of his property 2. Price of the timber a. Would be only a very small award for plaintiff 3. Replacement value Migrant farm workers (State v. Shack) a. Migrant farm workers have a right to government or charitable aid; a landowner cannot use his property to injure others Right of reasonable access to the public a. If a person falls into protected class under Civil Rights Act can seek remedy for exclusion b. Majority rule if business is open to public they can exclude for no reason
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c. Minority rule (Uston v. Resorts Intl Hotel) if open to public, no right to exclude unless disrupting business Free speech rights of access to property a. Marsh When a corporation runs a company town, those areas which would otherwise be public property, no right to exclude exists i. Dedication is where a piece of private property is deemed given to the public b. Lloyd Center Marsh doesnt apply, because it is clear that Lloyd Center is private property whereas that is not the case in Marsh Beach access a. Public Trust i. Public must be given reasonable access even over private lands to get to beach ii. Right to use the beach between the mean high water mark and the ocean iii. Bay Head extended the public access to the dry sand area up to vegetation line b. Dedication i. A gift of real property from a private owner to the public; requires offer by the owner and acceptance by the public ii. Courts may find an implied offer by one who invites or permits the public to use his land for a long period of time, or it may be written or oral iii. Most courts hold that the owner must express an intent to make a gift, whether it be through a statement or conduct evidencing an intent to gift c. Prescription i. An easement is found when the public has used property possessed by another for a particular purpose for a long time d. Custom (Thornton v. Hay) this doctrine allows public use without a 5th Amendment taking and just compensation i. Limited by McDonald v. Halvorson, which held the doctrine of custom applied only to those beaches for which proof could be shown of actual public use ii. Elements 1. The custom must be ancient, so long that the memory of man runneth not to the contrary 2. The right must be exercised without interruption 3. Customary use must be peaceable and free from dispute 4. Reasonable, in that evidence that the public has always made use of the land in a manner appropriate to the land and usages of the community 5. Certainty, there must be visible boundaries of the dry-sand area 6. The custom must be obligatory, in that each landowner may not have the option whether or not to recognize the publics right to access the dry-sand area 7. Must not be repugnant or inconsistent with other customs or other law Homelessness

a. If you prohibit the homeless from sleeping in public places, since they cant do that on private property, and since all property is either public or private, youre in effect telling them that they are unfree to sleep

Original Acquisition
I. Original Acquisition a. Johnson v. MIntosh discovery alone is insufficient for fee simple ownership; here, the U.S. needed to either conquer the land or purchase it from the Indians i. J. Marshall held that the Indians have a right of occupancy but not a right to sell without consent of the U.S. government ii. Court said that civilized people get to keep their property rights even when conquered b. Tee-Hit-Ton discovery alone is sufficient because of their previous relationship w/ Russia i. Right of occupancy is not protected from a taking without just compensation; Indian occupancy may be extinguished by the Government without compensation ii. Discovery = conquest c. Nonintercourse Act i. Private citizens cannot purchase Indian land Labor and Investment a. INS v. AP, court held that APs articles were quasi-property; remedy AP got an injunction against INS b. Moore v. Regents of the Univ. of Calif., cell line case, conversion of property claim is dismissed because the cell lines are not unique to any one individual, the work comes from the doctors, whereas in INS v. AP, the work was unique and done by them c. Conversion a tort that protects against interference with possessory and ownership interests in personal property Right of Publicity (pp. 241-252) a. Defined as a celebritys right to the exclusive use of his or her name and likeness b. Cost of recognition of this right free speech and an economic cost c. If a state is going to recognize this right, there are options for how long it lasts for i. Until the death of the individual ii. For a fixed amount of years following death (10,20,50, up to 100) iii. Forever (Georgia in this case) Possession a. Pierson v. Post i. Pursuit alone vests no property rights; a wound would establish property rights in the animal ii. Ratione soli you have first claim to animals on your property (this case was on public land) iii. Ferae naturae the state has ultimate control of wild animals b. Popov v. Hayashi (Barry Bonds baseball) i. Possession requires both physical control over the item and an intent to control it or exclude others from it
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ii. Once the ball leaves the bat it is abandoned c. RULE (Popov) Where an actor undertakes significant but incomplete steps to achieve possession of a piece of abandoned personal property and the effort is interrupted by the unlawful acts of others, the actor has a legally cognizable pre-possessory interest in the property. That prepossessory interest constitutes a qualified right to possession which can support a cause of action for conversion Finders (pp. 168-177) a. Possession alone is prima facie evidence for good title; the burden is on the non-possessor (Willcox v. Stroup, Civil War documents case) b. Res derelictae things voluntarily abandoned by their owner with the intention to have them go to the first person taking possession c. Res nullius No owner (usually refers to things like wild game or fish) d. Goods buried with the deceased are not abandoned (Charrier v. Bell, amateur archeologist), there is no intention for the goods to be relinquished to a stranger e. RULE The finder may keep the property if the original possessor intended to abandon the property; if lost or mislaid, then the original possessor maintains ownership

Adverse Possession
I. Definition All states have statutes of limitation that eventually bar the owner of property from suing for ejectment from one who has wrongfully entered the property. Once the limitations period has passed, the wrongful possessor effectively gets title to the land, and this possessor is said to now adversely possess the land. Causes of Action Ejectment (plaintiff = record owner) or Quiet Title (plaintiff = adverse possessor) ELEMENTS a. Hostile i. The possession must be without the record owners true consent ii. Possession may begin non-hostile but then become hostile; in this situation, the period of possession begins to run at the moment it becomes hostile 1. For example, if a possessor holds a life estate per autre vie or a fee simple determinable, and continues to possess beyond the end of the life estate or fee simple determinable, this period of additional possession counts for adverse possession purposes iii. Absent permission or a No Trespassing sign, there is a presumption that possession of anothers property is non-permissive; no proof needs to be given, because lack of permission is presumed b. Actual i. Possession of the disputed property must be used for enjoyment, cultivation, residence or improvements (Brown v. Gobble)

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ii. Activities can include fencing, building on the land, living there, conducting a business there, farming, clearing the land, planting shrubs, cultivation, or owning roaming livestock (fencing, cultivation and livestock are common for large, rural parcels) iii. Although this is less common, the adverse possessor does not need to personally occupy the property; if he leases to a tenant, this element may be satisfied that way Open and Notorious i. The possessory acts must be sufficiently visible and obvious to put a reasonable owner on notice that her property is being occupied by a non-owner ii. The possessors use of the property must be similar to that of a typical owner of a similar property iii. The reason for this element is to afford the record owner an opportunity for notice iv. Examples on pg. 297 Exclusive i. Evidence must be presented which shows that possession of disputed property was used only by the occupant and that others were not permitted to use it or claim ownership during the entire period ii. The adverse claimants possession cannot be shared with the true owner Continuous i. The adverse possession must be continuous throughout the statutory period ii. If the owner re-enters the property in order to regain possession, this will be an interruption of the adverse possession; when this happens, the adverse possessor must start his occupancy from scratch iii. Seasonal Use Seasonal use qualifies if thats the only kind of use most owners of similar property would make iv. Intermittent activities Intermittent activities that are not the sorts of activities done only by true owners like occasional hunting on the property are generally not enough to constitute continuous possession v. Tacking Possession by two adverse possessors, one after the other, may be tacked if the two are in privity with each other; in other words, their periods of ownership can be added together for purposes of meeting the statutory period 1. Example of No Privity A adversely possesses Blackacre for 15 years. He then abandons the property. B then enters for another 7 years. B cannot tack his holding period to As holding period, since they had no continuity of interest. But if A had purported to give B his interest by oral gift, deed, bequest or inheritance, then B could tack. vi. Rural Property 1. In rural property, a lesser exercise of dominion and control may be reasonable (Nome 2000 v. Fagerstrom) Statutory period i. Many states will toll the statute of limitations if the true owner is under a disability such as infancy, insanity, or incompetence, by either
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1. Providing that the statute begins running only after the disability ends; or 2. Shortening the limitations period once the disability is removed; or 3. Providing a maximum period longer than the standard statute of limitations even if the disability has not terminated ii. In some states, color of title and paying taxes can decrease the statutory period g. The above elements are adopted by most states; some states have additionally adopted the following elements i. The hostile possession must be in good faith; he must have a bona fide belief that he has title to the property 1. In Oregon, the statute requires an honest belief that you own the property that was reasonable under the circumstances ii. Color of title iii. Property taxes paid on the land iv. The possessor must act under a claim of right 1. This means a possessors intention to appropriate and use the land as his own to the exclusion of all others h. Miscellaneous Notes i. There is tacking on the owners as well as the possessors side Color of Title a. An adverse possessor who has a deed that purports to transfer the land in question but is ineffective to transfer title because of a defect in the deed (e.g. lack of signature) or a defect in the process by which the deed was issued (e.g. lack of notice to the owner when the property is sold for failure to pay property taxes) has color of title to the property; In that case, occupation of any portion of the land described in the defective title is generally deemed to be actual possession of the whole lot described in the void deed b. Textbook definition: Color of title exists only by virtue of a written instrument which purports to pass title to the claimant, but which is ineffective because of a defect in the means of conveyance or because the grantor did not actually own the land he sought to convey (Hubbard v. Curtis, footnote of pg. 294) c. Color of title allows property to be acquired through adverse possession without actual possession d. When color of title exists, courts use the land area described in the title as conclusive evidence of the property that is being adversely possessed e. In the absence of color of title, where a lot has no definite boundary marks, adverse possession can only extend as far as claimant has actually occupied and possessed the land in dispute Standard of Proof a. Majority adverse possession must be shown by clear and convincing evidence b. Minority adverse possession must be shown by a preponderance of the evidence Prescriptive Easements a. ELEMENTS b. Basic idea If the scope of the non-owners actions is limited rather than general, he may be granted a prescriptive easement rather than adverse possession
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c. Line of travel i. When a prescriptive easement is claimed, the extent of the user must be proved not with absolute precision, but only as to the general outlines consistent with the pattern of use throughout the prescriptive period (Community Feed Store, pg. 313) ii. Where a claimant adduces enough evidence to prove those general outlines with reasonable certainty, it has met its burden on this issue (Community Feed Store, pg. 313) d. Negative easements, which are rights to limit or control the use of neighboring property, may not be acquired by prescription e. Public prescriptive easement Most states now allow this, e.g. an area of private property that has been used by the public, rather than a single individual, with the elements being met f. Presumption Like adverse possession, most states presume that use by a non-owner of ones land is non-permissive g. Differences between prescriptive easements and adverse possession i. ELEMENTS The same as adverse possession, except actual possession is replaced by actual use ii. When making a claim for a prescriptive easement, youre not arguing for the right to exclude the record owner, but just the right to continue to use the property iii. Most courts drop the requirement that the use be exclusive iv. Many courts require good faith (more common than in adverse possession) v. Prescription applies to non-fee interests, while adverse possession indicates that the interest claimed is in fee h. Acquiescence i. A significant number of states require the prescriptive easement claimant to prove acquiescence by the record owner as one of the elements of their claim ii. Definition The owner did not assert his right to exclude by bringing a trespass action 1. Some courts hold that the landowner must have known about the use and passively allowed it to continue without formally granting permission 2. Other courts hold that a reasonable owner should have known of the use Other Informal Ways to Transfer Title to Real Property a. Construction of a structure that encroaches on neighboring property i. Minority, traditional rule Property owner has the right to an injunction ordering the encroaching structure to be removed, no matter the cost or extent of encroachment ii. Majority, modern rule Relative Hardship Doctrine 1. Courts will refuse to grant an injunction ordering removal and will instead order compensatory damages if: a. The encroachment is innocent (the result of a mistake); AND b. The harm is minimal; AND c. The interference in the true owners property interests is small; AND d. The costs of removal are substantial. 2. If any of these elements are not met, courts may order an injunction b. An entire structure is built on land belonging to another
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i. Mistake varies by jurisdiction; two approaches: 1. Some courts hold that when a builder mistakenly constructs an entire structure on land belonging to another, courts generally rule that the landowner becomes the owner of the structure built on his land by another 2. Another approach (Somerville v. Jacobs, pg. 324) a. An improver of land owned by another is entitled to one of the following two options i. Recover the value of the improvements from the landowner and to a lien upon such property which may be sold to enforce payment; or ii. Purchase the improved land from the landowner of the value of the land less improvements b. IF the following elements are met: i. Reasonable mistake of fact by the improver ii. Good faith by the improver iii. Building erected entirely upon the land of the owner iv. With reasonable belief that such land was owned by the improver ii. Bad faith one who deliberately builds on someone elses property will not be granted a right to compensation and will be required to remove the encroaching structure iii. Betterment statutes Some states have betterment statutes which allow owners to choose between paying the builder the value of improvements or selling the land on which the improvement sits to the builder Boundary Settlement (pg. 328-329) a. Oral agreement i. Courts may uphold oral agreements between neighbors that set the boundary between their properties if 1. Both parties are uncertain where the true boundary lay or a genuine dispute exists over the location of the boundary; AND 2. The parties can prove the existence of an agreement setting the boundary; AND 3. The parties take and/or relinquish possession to the agreed line b. Acquiescence i. Courts may recognize longstanding acquiescence by both neighbors in a common boundary c. Estoppel i. Established when one owner erroneously represents to the other that the boundary between them is located on a certain line and the other owner, in reliance on the representations, builds improvements which encroach on the true boundary ii. The party who made the representations is then estopped to deny them, and the boundary is shifted accordingly d. Laches i. An owner who delays (e.g. procrastination) in asserting a property interest may be barred from asserting the interest by the equitable doctrine of laches
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ii. Laches applies when there has been an unexcused or unexplained delay in commencing an action and a corresponding change of material condition, which results in prejudice iii. Mere lapse of time is insufficient; there must be prejudice as a result of the delay

Servitudes
I. Basic Information a. Servitude definition A legal device that creates a right or an obligation that runs with the land b. Runs With the Land definition A right or obligation run runs with the land if it passes automatically to successive owners or occupiers of the land or the interest in land with which the right or obligation runs c. Licenses i. Definition If the permission is informal and revocable at will by the landowner ii. Not servitudes because they are generally revocable at will iii. No statute of frauds requirement iv. A store owner may not revoke a license on the basis of race per civil rights law Easements a. Contrary to licenses, easements are intended to be permanent or irrevocable b. Burden If the obligation is intended to continue even if the owner sells the land, the burden of the servitude runs with the servient estate c. Affirmative easement Entitles the holder of the easement to do a physical act on anothers land d. Negative easement Enables the holder of the easement to prevent the landowner from making certain uses of the land (these are rare) i. Restatement (Third), although not adopted by the majority, proposes to abolish this term; rather, it proposes that affirmative rights to do something on someone elses land should be called easements, and restrictions should be called negative or restrictive covenants e. Appurtenant easement Benefits the holder to the use of a certain piece of land i. Dominant tenement The land that benefits from the easement ii. Servient tenement The land burdened from the easement iii. TEST For an easement to be appurtenant, its benefit must be intimately tied to a particular piece of land iv. Cannot be transferred, runs with the land, whether or not mentioned in the deed f. Easement in gross An easement whose benefit is not tied to any particular parcel (utility companies) i. Only transferable if for a commercial or economic purpose; individual holder cannot transfer 1. In other words, the owner of an easement may license or authorize third persons to use its right of way for purposes not inconsistent with the principle use granted (Henley v. Continental Cablevision of St. Louis County) g. Creation of easements Two general ways: i. By an express grant (must be in writing) ii. By implication, of which there are five ways
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1. By implication from prior use 2. By necessity, to prevent a parcel from being landlocked 3. By prescription (see Adverse Possession, p. 5) 4. By estoppel 5. By constructive trusts (Technically not an easement, but like an easement) h. Express creation created by a deed or a will i. Basic elements 1. Writing Statute of Frauds requires an express easement to be in writing a. HOWEVER, an easement for a year or less can be oral 2. Intent Must have been the intent of the grantor that the easement run with the land 3. Notice Subsequent owners of the servient estate had notice of the easement at the time of purchase of the servient estate ii. Easement by reservation When a landowner conveys land to someone else and reserves for himself an easement iii. Stranger to deed When a landowner conveys land to one person and establishes in that deed an easement to a third person 1. Barred at common law, but many modern courts and the Restatement (Third) have abandoned this and will enforce it i. Implied creation, does not need to be writing; a Statute of Frauds exception i. Implication from prior use (see Emanuel, Creation by Implication pp. 80-810 1. May contradict the actual intent of the parties and be implied by law as a result of a public policy judgment 2. Three elements: a. Severance Land is being severed from its common owner; divided up so that the owner of a parcel is either selling part and retaining part, or is subdividing the property and selling pieces to different grantees i. The severance requirement: Will only be implied where the owner of a parcel either 1. Sells part and retains part; or 2. Sells pieces simultaneously to more than one grantee ii. See Emanuel, Severance from common owner p. 81 for example b. Prior use The use for which the implied easement is claimed existed prior to the severance referred to in element (a) and was apparent and continuous prior to that severance i. Two instances where prior use is not necessary: 1. In subdivision, buyers of lots have implied easements to access their lots 2. When individual granted permission to remove a valuable resource from land there is an implied easement
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c. Necessity The easement is at least reasonably necessary to the enjoyment of what is claimed to be the dominant tenement i. Courts require a lesser showing of necessity where the easement is created by grant (in favor of the grantee) than where the easement is reserved (in favor of the grantor) ii. Absolute/strict necessity is not required in an easement implied from prior use, but it is required in an easement by necessity 3. Light and Air An easement of light and air cannot be created by implication, it must be in a contractual agreement ii. Easement by necessity 1. Three requirements: a. The necessity must be strict rather than reasonable; and i. It must be the case that without the easement, the property must not be able to be effectively used without disproportionate effort or expense b. The parcels must have been under common ownership just before a conveyance; and c. The necessity must come into existence at the time of, and be caused by, the conveyance that breaks up the common ownership i. A necessity that comes into existence post-conveyance will not suffice ii. If the would-be dominant parcel has an alternative means of access at the time of the conveyance, and that alternative means disappears at some later date, the dominant holder does not get an easement by necessity 2. Landlocked parcels Most common example of easement by necessity iii. Easement by estoppel 1. A court may prevent a real property owner from revoking a license if the owner grants the licensee the right to invest in improving the property or otherwise induces the licensee to act in reasonable reliance on the license; the owner is estopped
from denying continued access to his land for whatever period is deemed just under the circumstances

2. Effectively converts a revocable license into an irrevocable easement 3. May be an oral promise, pattern of behavior, or a written document iv. Constructive trusts (Technically not an easement, but like an easement) 1. Trust A property arrangement where an owner (called the settlor) transfers property to another person (the trustee) who manages the property for the benefit of a third party (the beneficiary) a. The trustee has legal title to the property; the beneficiary has equitable or beneficial title

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2. Definition Most trusts are created through express documents, such as wills, but a constructive trust is where a court treats a particular property arrangement as if the grantor had created a trust arrangement, regardless of the grantors intent 3. When one party has been wrongfully deprived either by mistake, fraud, or some other breach of faith or confidence, of some right, benefit, or title of the property, a court may impose upon the present holder of legal title a constructive trust for the benefit of that party a. Rase v. Castle Mountain Ranch, Inc. (Cabins built on ranch property) i. Cabin owners had no adverse possession claim because they had permission ii. Not an irrevocable license because by recognizing it as a constructive trust, the Court was able to put a 13 year limitation on the land use iii. The cabin-owners were licensees on the property rather than tenants j. Scope of easements i. Development of dominant estate 1. Basic rule Regardless of how the easement is created, the court will allow a use that increases due to normal, foreseeable development of the dominant estate a. E.g. The dominant estate, which initially only had one home and family using the easement, now has three homes and three families using the easement; so long as the basic use remains unchanged, the two new families may use the easement 2. Excessive use An increased use that unreasonably interferes with the use of the servient estate, viewed in light of the parties original understanding about how the easement would be used, will not be allowed a. E.g. The dominant estate, due to a zoning change, erects a 40 story apartment building where a single family home formerly sat 3. Use for benefit of additional property The holder of the dominant estate is normally not allowed to extend his use of the easement so that additional property owned by him is benefitted 4. Servient owners right to relocate easement Courts are in dispute about whether the servient owner may relocate the path of the easement to a different part of the servient owners property a. Common law The path of the easement is fixed b. Modern (Restatement) The servient owner may relocate the easement so long as it doesnt materially inconvenience the dominant owner k. Repair i. The servient estate is not required to repair or maintain the property used in the easement ii. The holder of the easement (dominant estate) has a right to maintain the property used in the easement and can always enter the servient estate as required for repairs, so long as the maintenance is compatible with the intended use of the easement and does not unreasonably interfere with the servient owners use of the servient estate
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iii. If the servient estate uses the easement as well, then courts may apportion repair cost between parties; otherwise the easement holder is to pay for maintenance and repair l. Transfer and subdivision of easements i. Transfer of burden When the title to the servient estate is transferred, the burden of the easement remains with the property ii. Transfer of benefit Whether the benefit of an easement runs with the land depends on whether the easement is appurtenant or in gross 1. Appurtenant runs with the land, cannot be transferred separately, even if the deed of transfer does not mention the easement a. Subdivision If the dominant estate is subdivided into smaller lots sold to different people, and the geography is such that each of the smaller lots can benefit from the easement, then each will generally be permitted to do so (but this will not happen if this would result in an extreme increase in the burden to the servient estate) 2. In gross only commercial easements are transferable m. Termination of easements Six ways an easement can be terminated: i. By agreement in writing ii. By their own terms E.g. the deed expressly states that it is to last for 10 years iii. By merger When the holder of the servient estate becomes the owner of the dominant estate iv. By abandonment If it can be shown that the owner of the easement, by her conduct, indicated an intent to abandon the easement v. By adverse possession or prescription by the owner of the servient estate or by a third party vi. By frustration of purpose When an easement no longer serves its intended purpose or when the purpose of the easement has become impossible to accomplish 1. E.g. A parking easement terminated by frustration of purpose when dominant estate built a parking lot making the easement unnecessary Covenants a. Definition Contractual agreements between landowners by which they agree to restrict the use of their own land for the benefit of either their landlord or neighboring owners b. Elements: i. In writing ii. The grantor intends to be binding on future tenants 1. Language in the covenant may indicate that it is intended to be binding on future tenants a. If it states that it is made to the grantor or grantee and their heirs or assigns, and/or b. It is intended to bind future owners of the parcel described in the deed or explicitly states that the covenant is intended to run with the land iii. Touches and concerns both the dominant and servient land (TRADITIONAL APPROACH)
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1. Anti-competitive covenants satisfy this element because they limit land use and they enhance the market value of the benefitted land 2. It must affect the legal relationsthe advantages and burdensof the parties to the covenant, as owners of particular parcels of land and not merely as members of the community in general, such as taxpayers or owners of other land 3. Hard to define, modern courts use a reasonableness standard to determine whether a covenant meets this element 4. When the thing required to be done affects the quality, value, or mode of enjoying the property interest conveyed 5. The obligation and right must affect the parties interests as landowners 6. On the burden side, an obligation touches and concerns the burdened estate if it relates to the use of the land and the obligation is intended to benefit current and future owners of the dominant estates 7. On the benefit side, an obligation touches and concerns the dominant estate if it improves enjoyment of that land or increases its market value 8. MODERN APPROACH Reasonableness Test (replaces the touch and concern test) The covenant is reasonable if it its obligations benefit other owners in the community or if all owners are benefited by reciprocal obligations imposed on all owners in the community; eight factors on pg. 574 iv. Privity of estate exists between the covenanting parties (horizontal privity) and between those parties and succeeding owners (vertical privity) 1. Some courts as well as the Restatement (Third) are moving away from the privity requirement 2. The Restatement (Third) proposes an abolishment of the distinction between real covenants and equitable servitudes 3. Makes it possible for both the benefit and the burden to run with the land v. Notice 1. Actual notice a. A buyer or lessee is on actual notice of the covenant if he was actually told about it or was otherwise made aware of it 2. Constructive notice a. A buyer or lessee is on constructive notice if the covenant was recorded in the registry of deeds along with the deed or lease creating the covenant or if a declaration containing the restriction was recorded prior to sale 3. Inquiry notice a. A buyer or lessee is on inquiry notice if any condition of the premises indicated that the property was burdened by a covenant b. The observable condition is unlikely to put a reasonable buyer/lessee on notice of a restrictive or negative covenant c. Enforceability
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i. Traditionally enforced by damages, whereas equitable servitudes are traditionally enforced through injunction; if privity of estate is missing, a claimant may still have an equitable servitude cause of action and may seek an injunction, but will not be able to obtain damages ii. Restrictive covenants are not favored, and when there is any ambiguity or substantial doubt as to the meaning, restrictive covenants will be read narrowly in favor of the free use of property (Blevins v. Barry-Lawrence County Association for Retarded Citizens) 1. Today, the touchstone for interpretation of covenants is the intent of the grantor iii. A covenant will not be enforced where a fundamental change has occurred in the intended character of the neighborhood that renders the benefits underlying imposition of the restrictions incapable of enjoyment (El Di, Inc. v. Town of Bethany Beach)(the town was formerly a quiet town and a covenant existed prohibiting alcohol sales) d. More on privity i. In real property, the benefits of contract rights are assignable if they are somehow conceived as being attached to an ownership interest in land created by two parties who have simultaneous rights in that land ii. Horizontal privity 1. Relation between original covenanting parties 2. Two types of horizontal privity a. Mutual privity i. Exists when two owners have a simultaneous interest in the same parcel of land; e.g. landlord-tenant relationship b. Instantaneous privity i. A covenant intended to burden one parcel for the benefit of another can become attached to both parcels if it is created at the moment the owner of one parcel sells the other parcel ii. Adopted by most courts today iii. Privity exists if a covenant was created in the context of a transfer of property through a grantor-grantee relationship 1. Thus, a covenant included in a deed of sale restricting use of the parcel might bind future owners of the property conveyed 3. Relationships excluded by horizontal privity; two most important situations that dont satisfy horizontal privity a. Agreements between neighbors that are not part of a simultaneous conveyance of another property right i. E.g. A contract among all the owners in a neighborhood to restrict the property to residential uses neighbors are not in privity with each other merely because of their physical location near each other b. Agreements between grantors and grantees that are not made at the same time as the conveyance of the property interest burdened or benefitted by the covenant
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i. E.g. A covenant made one week after the sale of a parcel; no privity because at that moment the grantor no longer owns the property of the grantee iii. Vertical privity 1. Relationship between the original covenanting parties and subsequent owners of each parcel 2. Relaxed vertical privity Imposes the burden on any future possessor of the burdened land and the benefit of the covenant on any future possessor of the benefitted land 3. Strict vertical privity Grantor cannot retain any future interest in the land, privity present at sale but not lease a. In real covenants, the strict vertical privity doctrine requires that the grantor not retain any future interests in the land; thus, under strict, there is vertical privity when an owner sells his property but not when he leases it i. E.g. Kotseas had no strict vertical privity with CVS 4. Relationships excluded from the vertical privity idea a. Successors in interest who have an estate of lesser duration than the prior owner i. E.g. Landlord-tenant b. Neighbors who are intended beneficiaries of the covenant but are not successor owners or possessors of the parcels owned by the covenanting parties c. Owners who derive their title from the grantor who imposed the restriction but who purchased their land before the sale of the parcel burdened by the covenant iv. EXAMPLE (pp. 481-82, 485) 1. Kotseas had two properties; he leased one to CVS, and sold one to Trust, who then sold to Plaza 2. Courts will generally not allow the original covenantee (Trust) to enforce the covenant once it sells its parcel (to Plaza) unless if there is specific language to that effect 3. Courts will also refuse to impose the burden of a covenant on future owners of the servient estate if the benefit of the covenant is held in gross a. A common exception to this is when the covenant is held by an HOA 4. If a landlord fails to include the covenant in the lease or enforce the covenant, that constitutes a breach of covenant against the landlord 5. SEE NEXT PAGE FOR PICTURE EXAMPLE

17

e. Equitable servitudes i. Developed in the historic equity courts and applied when an injunction was sought ii. Exact same elements as real covenants, except no privity requirement 1. Also, historically equitable servitudes only afforded equitable (injunctive) relief f. Termination/Defenses i. Changed conditions Covenants will not be enforced if conditions have changed so drastically inside the area affected by the covenant that enforcement will be of no substantial benefit to the dominant estate 1. E.g. Bethany Beach case where ban on alcohol only subverted the public interest and served no benefit ii. Relative hardship Unlike the changed conditions doctrine, which focuses on whether the covenant remains of substantial benefit to the dominant estate, the relative hardship doctrine focuses on the servient estate 1. A covenant will not be enforced if the harm caused by the enforcement, that is, the hardship to the owner of the servient estate, will be greater by a considerable magnitude than the benefit to the owner of the dominant estate; if the hardship is great and the benefit small, the courts may refuse to enforce the covenant 2. Example pp. 524 iii. Unclean hands The complaining party may be barred from enforcement if the plaintiff has violated the covenant himself iv. Acquiescence The complaining party may be barred from enforcement if the plaintiff has tolerated previous violations of the covenant by the owner of the servient estate
18

v. Abandonment The complaining party may be barred from enforcement if the plaintiff has tolerated violations of the covenants by owners of other restricted parcels in the neighborhood covered by the covenant vi. Estoppel An owner of a dominant estate who orally represents to the owner of a servient estate that he will not enforce the covenant may be estopped from asserting his interests in enforcing the covenant if the owner of the servient estate changes his position in reliance on the oral statement vii. Laches If the covenant has been ignored or breached for a substantial period of timebut less than the time necessary to establish prescriptive rightsthe court may find that unexcused delay in enforcing the covenant prompted investment in reliance on the failure to object to the violation and that enforcement of the covenant would be unconscionable g. Implied reciprocal negative servitude When developer wishes to attach covenant to lands, court invented doctrine to get around problems of privity, uses principle of third party beneficiaries and said that early buyers were intended beneficiaries of later buyers when all lots are part of a common plan or scheme, all lots agree to conform to restrictions for the benefit of all other owners in the area, must be a common scheme and notice i. Today, developers record a declaration prior to the sale of the first lot describing the common plan; implied reciprocal negative servitudes are enforceable by and against all owners if the properties were all intended to be part of a general plan ii. The developers promise lives on through vertical privity with subsequent purchasers h. Statutes Many states have statutes regulating the enforcement of covenants and provide doctrines allowing those covenants to be removed over time i. Often the court will only enforce if there is an actually and substantial benefit from enforcement of the covenant ii. Court looks to changing societal norms, public policy arguments, and reasonable use of land iii. Declaration Requirements in many states that the developer describe the area covered by the common plan and recite the covenants applicable to the lots iv. Implied or express Courts differ whether they require specific definition of a common plan or development record to show which homes have restrictions prior to purchase, other states imply a common plan by looking at a number of factors, including restrictions present nearby, restrictions in previous deed, language of restrictions v. Intent of grantor Courts look to intent of the grantor when interpreting ambiguous covenants seen through express language in deed or other extrinsic evidence used to interpret, no longer modern view to support alienability of land because covenants relied on by others promotes their interest i. Anti-Competitive Covenants i. Since non-competitive agreements are geared to protect business profits rather than the use and enjoyment of the land, the courts have held them to not touch and concern the land and thus not be binding on subsequent purchasers

19

IV.

ii. Most courts now satisfy the touch and concern test because it materially affects the value of the land, and in Davidson Brothers, the Court concluded that covenants will run with the land if they are reasonable j. Racially Discriminatory Covenants i. Shelley v. Kraemer 1. The court takes an expansive view of defining state action so they could apply the 14th Amendment; the state action, as argued by the Court here, is that the agreements were secured through judicial enforcement by state courts 2. Today, a Court would likely find a racially restrictive covenant in violation of public policy under the common law, and covenants that prohibit sale or lease of dwellings to, or occupancy by, persons on the basis of race, violate federal civil rights statutes, including the federal Fair Housing Act and the Civil Rights Act of 1866 Homeowners and condo associations a. Basic Information i. Votes are limited to owners rather than tenants or other family members ii. Cooperatives (different than HOAs) 1. Entire building owned by a single nonprofit cooperative corporation and individual owners buy shares in the corporation and then lease their individual units from the corporation 2. The entire building is financed by one mortgage and individual owners pay a monthly payment to cover their share; if an individual owner fails to make his payment, the other owners must pay extra to cover it otherwise they risk foreclosure, although defaulting tenants may be evicted and lose their share b. Right of First Refusal i. In Wolinsky v. Kadison, the HOA had an alleged right of first refusal to deny plaintiff to sell her current unit and purchase a different unit in the building; a right of first refusal must be reasonable, and the test is: 1. Whether the reason for exercising the right of first refusal is rationally related to the protection, preservation or proper operation of the property and the purposes of the association as set forth in its governing instruments; and 2. Whether the power was exercised in a fair and nondiscriminatory manner ii. In Wolinsky, the Court found the right of first refusal was discriminatory against her marital status and thus unreasonable c. Amendments and Rules by HOAs i. Amendments passed by an HOA is presumed valid and will be upheld unless shown to be arbitrary, against public policy, or in violation of some fundamental constitutional right (Woodside Village) 1. Declarations have an even stronger presumption of validity than rules/bylaws, as they exist prior to the purchase of the first unit, and they are very difficult to modify; must be arbitrary, against public policy, or unconstitutional to overturn
20

V.

2. Amendments may be in the middle some deference, must be arbitrary, against public policy or a constitutional violation; can amend by 2/3 vote, one unit=one vote 3. Rules/bylaws are presumed less valid than declarations, may not have existed when the unit was purchased, usually are formed by the owners, and are easier to modify; least deference ii. A condo/HOA rule must be reasonable to withstand judicial scrutiny (OBuck) 1. Determined by balancing the importance of the rules objective against the importance of the interest infringed upon (a rule prohibiting satellite dishes even though it results in increased fees for cable TV is reasonable) Restraints on Alienation (pp. 560-564) a. Defined Covenants or conditions that restrict the ability of the owner of real property to sell or give away the property; there are three types of restraints on alienation of fee simple interests: i. Disabling restraints Directly forbids the owner from transferring her interest in the property no one may waive the restraint (unlike promissory or forfeiture restraints) ii. Promissory restraints A covenant by which the grantee promises not to alienate his interest in the property iii. Forfeiture restraints Provides for a future interest that will vest if the owner attempts to transfer his interest in the property b. No unreasonable restraints on alienation A public policy rule promoting economic growth and commercial development c. Reasonable restraints are upheld to promote freedom of contract; the buyer was not forced to sign the contract and accept the covenant attached to the property; he knew of the restriction and willingly agreed d. Courts generally allow for increased restrictions in HOAs, given the close-knit nature of the development e. Reasonable restraints on alienation are valid; unreasonable restraints are invalid i. Reasonableness is determined by weighing the utility of the restraint against the injurious consequences of enforcing the restraint. Restatement (Third) of Property f. DOES NOT APPLY TO GIFTS i. An express provision or condition against alienation contained in a gift made to a charitable trust or charitable corporation may constitute a valid restraint g. Condos i. May be more restrictive of residents rights, due to the unique character and promoting the good of the majority, but still must be reasonable (Neuman)

Freehold Estates and Future Interests


I. II. To determine what freehold estate is created by particular words of grant, see Flow Chart Emanuel 5. Four major categories of estates a. Fee simple absolute may be burdened, but ownership is not going to transfer as a result
21

i. EXAMPLE O to A or O to A and his heirs. b. Defeasible fees these contain some type of penalty for not doing what youre supposed to do; three categories of defeasible fees: i. Fee simple determinable A fee simple determinable is a fee simple which automatically comes to an end when a stated event that is not certain to occur, occurs (or, perhaps, fails to occur) (see Emanuel 39-40) 1. The only future interests are reversionary (they go back to the grantor) a. This leaves with the grantor a possibility of reverter 2. The grantor automatically gets the property back after the violation of the condition 3. Negative of this: theres a statute of limitations with regards to adverse possession 4. This may provide a way for the grantee to easily get out of the property if it is a toxic waste dump, for example 5. CREATING WORDS commonly used which signal a fee simple determinable are so long as, until, or during 6. FUTURE INTEREST Grantor has possibility of reverter (NEVER A REMAINDER!) 7. EXAMPLE O owns Blackacre in fee simple. He sells the property to A and his heirs so long as the premises are not used for the sale of alcoholic beverages. A then purports to convey a fee simple absolute to B, who builds a bar. When the first alcoholic beverage is sold, Bs interest automatically ends, and the property reverts to O (or his heirs). ii. Fee simple subject to conditions subsequent Also geared to the happening of a particular event, but unlike the fee simple determinable, this does not automatically end when the event occurs; instead, the grantor has a right of entry (a right to take back the property) but nothing happens until he affirmatively exercises that right (see Emanuel 40-41) 1. The grantor has the option to reclaim the property after the violation of the condition 2. Not as harsh as the fee simple determinable, because the forfeiture isnt automatic at the breach of the condition 3. CREATING WORDS commonly used which signal a fee simple subject to a condition subsequent are upon condition that, provided that, or if 4. EXAMPLE O to A but if X happens, then O/grantor reserves the right to re-enter and retake 5. FUTURE INTEREST Grantor has right of entry (a reversionary interest) 6. Statute of Limitations a. Traditionally, the statute of limitations clock doesnt begin until the grantor chooses to assert his rights, although the court may apply the doctrine of laches to prevent the holder of a right of entry from waiting too long to assert his right of entry i. Laches prevents recovery when an unreasonable delay in asserting legal rights unfairly prejudices another
22

b. Today, the modern approach is for the clock to begin when the condition is violated 7. Another benefit of this: the grantor may not want the property back, for reasons of having to take care of it, pay property taxes, there may be a lot of problems on the property that need fixing iii. Fee simple subject to executory limitation Provides for the estate to pass to a third person (one other than the grantor) upon the happening of a stated event 1. CREATING WORDS O to A, but if X event occurs, then to B 2. FUTURE INTEREST Shifting executory interest 3. E.g. A gives property to O so long as no alcohol is served; if alcohol is served, then property goes to B; B would have some kind of executory interest in the property, and there is a limit on how long that change in ownership can be around 4. E.g. O conveys to A and his heirs, but if A dies without children surviving him, then to B and his heirs. A has a fee simple subject to an executory limitation 5. The grantor retains nothing, there is an executory limitation that a third party owns c. Life estate An interest which lasts for the lifetime of a person; the life estate is measured by the holder of the life estate (see Emanuel 41-44) i. FUTURE INTEREST The grantor in a life estate has a reversion; the third-party in a life estate per autre vie has a remainder ii. EXAMPLE O conveys to A for his lifetime, then to B in fee simple. iii. A life estate may be defeasible, just as a fee simple may be 1. EXAMPLE O to A, for long as she shall remain my widow, then to my son B. A has a life estate determinable. iv. Life Estate Per Autre Vie A life estate measured by the life of someone other than the grantee 1. FUTURE INTEREST The third party has a remainder 2. EXAMPLE O to A for the life of B, then to C and his heirs. A has a life estate per autre vie. What happens if A dies before B? The balance of the estate is treated through personal property of As, and the property would pass through As will or under the intestacy statute. v. Reversions and Remainders GENERALLY Present ownership rights can be held during the life of a designated individual; a conveyance from A to B for life creates a life estate interest in B 1. If the property reverts to the grantor when B dies, the future interest in the third party is called a reversion 2. If the grantor designates a third party to obtain ownership when B dies, the future interest in the third party is called a remainder vi. Remainders are patient; they always wait their turn (SEE ALSO, PAGE 28) 1. Two kinds of remainders: a. Contingent remainders ARE subject to the rule against perpetuities i. Found if either of the conditions are met:
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1. If the remainder will take effect only upon the happening of an event that is not certain to happen, or 2. If the remainder will go to a person who cannot be ascertained at the time of the initial conveyance ii. In other words, remainders are contingent when created in as yet unknown takers (e.g. O to A for life, then to Bs first child, and B currently has no children; B has a contingent remainder) or when subjected to conditions precedent (e.g. O to A for life then if B graduates from college, then to B, and B currently is in high school; B has a contingent remainder) b. Vested remainders ONLY VESTED REMAINDRE SUBJECT TO OPEN is subject to the rule against perpetuities i. Any remainders that are not contingent remainders ii. They are therefore remainders to persons who are identifiable at the time of the initial conveyance and for who there are no conditions precedent (other than the natural termination of the prior life estate when the life estate owner dies) iii. Remainders are vested when created in a known taker and not subject to a condition precedent iv. To A for life then to B (B has a vested remainder; B is alive, there are no strings attached as prerequisites to Bs taking) v. Three categories of vested remainders: 1. Indefeasibly vested remainders the best kind of remainder to have a. Occurs when its taker is known and not subject to any conditions b. The holder is known, there are no strings attached c. To A for life, then to B; (B has been born and is known) d. Remainderman exists, he is not subject to a condition precedent (youre not waiting for him to be born); no prerequisite 2. Vested remainder subject to complete divestment a. Here, the remainder is subject to a condition subsequent b. A condition subsequent is some eventuality, that if it manifests, will divest the remainderman of his interest c. To A for life, remainder to B, but if B dies under 25, to C; Suppose that A is alive, but B is only 20, then B has a vested remainder subject to complete
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divestment, meaning that if B dies under 25, Bs estate loses everything 3. Vested remainder subject to open a. The remainder is vested in a group or category or class of takers; at least one of whom is eligible to take b. To A for life, then to Bs children; A is alive, B has two children, C and D; C and D have a vested remainder subject to open c. Always ask, is this class open or closed? A class is open when others can still join; a class is closed when no one else may join d. The class closes whenever any member can demand possession; in the example, the class closes when A dies 2. Destructibility of contingent remainders a. Modern approach: contingent remainders are indestructible 3. Remainders never follow defeasible fees vii. Powers of the Life Tenant 1. Right to keep income Life tenant has the exclusive right to lease out the premises (but not beyond the term of the life tenants own life) and the exclusive right to keep all rents 2. Conveyance of interest The life tenant may convey any interest in the property, but only up to the entirety of his own interest a. EXAMPLE If A holds a life estate, he may convey to B either for the life of A (which would give B a life estate per autre vie) or for a term of years b. But the life tenant may NOT convey a fee simple or anything greater than the life estate he holds; if he tries to do so, it will only be effective for the entirety of the grantors life estate c. Lease If a life tenant leases his interest for a term of years, and if the life tenant dies before the term is up, the lease will be cut short viii. Duties of the Life Tenant 1. No Waste Life tenant may not commit waste, that is an unreasonable impairment of the value which the property will have when the holder of the future interest takes possession; e.g. if the property includes a structure, the life tenant may not demolish it UNLESS he builds a new structure and: a. The value of the reversion is not decreased; and b. It is very unlikely that a rational person in the position of the future-interestholder would, if he owned the property outright today, want to continue the prior use c. Three kinds of waste:
25

III.

IV.

i. Voluntary waste/affirmative waste overt conduct that causes a drop in value 1. Look for willful acts of destruction ii. Permissive waste/neglect when the land is allowed to fall into disrepair 1. The life tenant must simply maintain Blackacre iii. Ameliorative waste the life tenant must not engage in conduct that will enhance the premises conduct unless all future interest holders consent 1. Recognizes sentimental value 2. Operating Expenses a. The life tenant must make and pay for reasonable maintenance repairs (though probably not major structural repairs such as a new roof), pay all property taxes d. Leaseholds (this is in another section of the outline) Fee tail a. A fee tail is an estate whose purpose is to keep the property in the family i. Traditional words: O to A and the heirs of his body b. Theoretically against the rule against perpetuities because heirs of his body may not vest until after 21 years (per Austin at least, so who the fuck knows) c. The fee tail has been substantially abolished in 46 states Future Interests
Present Interest Words Used to Create Grantor to A to A and his heirs as long as, while during, until unless provided that on condition but if until (or unless), then to but if, then to For life None Possibility of reverter Future Interest Third Party N/A N/A Subject to RAP? N/A NO

Fee Simple Absolute Fee Simple Determinable

Fee Simple Subject to Condition Subsequent Fee Simple Subject to Executory Limitation Life Estate

Right of entry (for condition broken) or power of termination

N/A

NO

Executory interest

YES

Reversion

Remainder: Vested contingent

ONLY contingent & vested remainders subject to open

a. Two problems associated with the ability to create future interests


26

b.

c. d.

e.

f.

i. Dead hand control 1. This arises because owners seek to control who owns the property long after they die 2. Unless regulated by the legal system, this could eventually clog up the market for real estate by attaching numerous and multiple conditions to property, restricting both what it can be used for and whether it can be bought and sold ii. Social hierarchy 1. The effect is that ownership will be concentrated in the hands of certain groups while excluding others Historical background: from Feudalism to the market i. The feudal hierarchy 1. Feudal tenures were either military, religious, or economic; most tenants-in-chief held military tenures, where in return for control of land, they were obligated to provide military services ii. Growth of the fee simple 1. The statute of Quia Emptores was passed in 1290, allowing fees to be freely transferred but prohibiting further subinfeudation iii. Avoiding feudal incidents 1. After 1290 A.D., tenants learned to avoid feudal incidents by making transfers during their lifetime 2. Many of the legal rules prevalent in our law today are designed to avoid this feudal system TODAY, THE PRESUMPTION IS THAT LAND IS OWNED IN FEE SIMPLE Third-party interests two main types, both of which are subject to the rule against perpetuities: i. Remainders 1. Contingent Remainders 2. Vested Remainders a. Indefeasibly vested remainders b. Vested remainders subject to open c. Vested remainders subject to complete divestment ii. Executory Interests There are five future estates: (Emanuel 44-48) i. Possibility of reverter (NO RAP) (fee simple determinable); ii. Right of entry (NO RAP) (fee simple subject to a condition subsequent); iii. Reversion (NO RAP) (life estate); iv. Remainder (MAYBE RAP) (life estate per autre vie); and v. Executory interest (YES RAP) Possibility of reverter (future interest of fee simple determinable) i. When the owner of a fee simple absolute transfers a fee simple determinable, the grantor automatically retains a possibility of reverter ii. All states allow this possibility of reverter to be inherited or devised by will
27

iii. RAP NOT SUBJECT TO RAP g. Right of entry (future interest of fee simple subject to condition subsequent) i. If the holder of an interest in land (e.g. fee simple absolute) conveys his interest but attaches a condition subsequent, the transferor has a right of entry ii. Most commonly, one who holds a fee simple absolute and who then conveys a fee simple subject to a condition subsequent has a right of entry iii. RAP NOT SUBJECT TO RAP iv. EXAMPLE O owns Blackacre in fee simple absolute. He conveys to A and his heirs, on condition that liquor never be sold on the premises; if liquor is sold thereon, O or his heirs may re-enter the premises. The conveyance to A is a fee simple subject to condition subsequent and O therefore reserves a right of entry. h. Reversions and Remainders GENERALLY Present ownership rights can be held during the life of a designated individual; a conveyance from A to B for life creates a life estate interest in B i. If the property reverts to the grantor when B dies, the future interest in the third party is called a reversion ii. If the grantor designates a third party to obtain ownership when B dies, the future interest in the third party is called a remainder i. Reversions are the catch-all i. This is the default answer choice, and arises whenever the grantor has something left over to him after conveying a present estate ii. Whenever the grantor conveys a lessor estate than what he started with, his future interest is a reversion iii. RAP NOT SUBJECT TO RAP iv. EXAMPLE O owns Blackacre in fee simple; O to A for life; O has a reversion j. Remainders are patient; they always wait their turn; two kinds of remainders: i. Contingent remainders ARE subject to the rule against perpetuities 1. Found if either of the conditions are met: a. If the remainder will take effect only upon the happening of an event that is not certain to happen, or b. If the remainder will go to a person who cannot be ascertained at the time of the initial conveyance 2. In other words, remainders are contingent when created in as yet unknown takers (e.g. O to A for life, then to Bs first child, and B currently has no children; B has a contingent remainder) or when subjected to conditions precedent (e.g. O to A for life then if B graduates from college, then to B, and B currently is in high school; B has a contingent remainder) 3. Doctrine of Worthier Title (applies only to contingent remainders) a. Applies when O, who is alive, tries to create a future interest in his heirs b. E.g. O, who is alive, conveys to A for life, then to Os heirs c. Two results:
28

i. If the doctrine of worthier title did not apply, A has a life estate, and Os heirs have a contingent remainder (again, a contingent remainder because we cant ascertain a persons heirs until their death); ii. Thanks to the doctrine of worthier title, the contingent remainder in Os heirs is void; the DoWT voids the contingent remainder in Os heirs and thus A has a life estate and O has a reversion d. This is applied today in most states; exists to promote the free transfer of land ii. Vested remainders Indefeasibly vested and vested remainder subject to complete divestment are NOT subject to the RAP, but vested remainder subject to open IS subject to the RAP 1. Any remainders that are not contingent remainders 2. They are therefore remainders to persons who are identifiable at the time of the initial conveyance and for who there are no conditions precedent (other than the natural termination of the prior life estate when the life estate owner dies) 3. Remainders are vested when created in a known taker and not subject to a condition precedent 4. To A for life then to B (B has a vested remainder; B is alive, there are no strings attached as prerequisites to Bs taking) 5. Three categories of vested remainders: a. Indefeasibly vested remainders the best kind of remainder to have i. Occurs when its taker is known and not subject to any conditions ii. The holder is known, there are no strings attached iii. To A for life, then to B; (B has been born and is known) iv. Remainderman exists, he is not subject to a condition precedent (youre not waiting for him to be born); no prerequisite v. RAP NOT SUBJECT TO RAP b. Vested remainder subject to complete divestment i. Here, the remainder is subject to a condition subsequent ii. A condition subsequent is some eventuality, that if it manifests, will divest the remainderman of his interest iii. To A for life, remainder to B, but if B dies under 25, to C; Suppose that A is alive, but B is only 20, then B has a vested remainder subject to complete divestment, meaning that if B dies under 25, Bs estate loses everything iv. RAP NOT SUBJECT TO RAP c. Vested remainder subject to open i. The remainder is vested in a group or category or class of takers; at least one of whom is eligible to take ii. To A for life, then to Bs children; A is alive, B has two children, C and D; C and D have a vested remainder subject to open
29

V.

iii. Always ask, is this class open or closed? A class is open when others can still join; a class is closed when no one else may join iv. The class closes whenever any member can demand possession; in the example, the class closes when A dies v. RAP IS SUBJECT TO RAP iii. Destructibility of contingent remainders 1. Modern approach: contingent remainders are indestructible iv. Remainders never follow defeasible fees k. Executory Interests i. An interest that follows an estate which may, but will not necessarily terminate, is an executory interest. ii. If you do stand to benefit by anothers forfeiture, you have an executory interest iii. Executory interests take effect by cutting short another or benefitting from anothers forfeiture iv. RAP IS SUBJECT TO RAP v. Executory interests are either shifting or springing vi. Shifting executory interests 1. Always follows a defeasible fee and cuts short someone other than O, the grantor 2. E.g. To A, but if B returns from Canada next year, to B a. Note that this is a limitless time of the land that A may enjoy; but that time may be interrupted by B if B returns from Canada in the year; B has an executory interest because he is capable of interrupting A b. A has a fee simple subject to Bs shifting executory interest 3. Why doesnt B have a remainder? Because remainders never follow defeasible fees; remainders typically follow life estates; only the executioner may cut short another vii. Springing executory interest 1. This cuts short O, the grantor 2. E.g. O conveys to A if and when he marries, and youre told that A is not married a. A has a springing executory interest; meaning, when A does get married, she has the power to cut off O the grantor Ambiguous Conveyances a. Two policies courts consider when interpreting an ambiguous conveyance: i. Intent of the grantor; or ii. If the grantors intent is unclear, courts turn to public policy considerations, they attempt to further the free use and alienability of property by a presumption against finding a future interest 1. When the language is ambiguous, most courts interpret the language in a way that avoids recognition of a future interest 2. This is especially the case if the present possessor lost her title to the future interest holder
30

VI.

VII.

b. If the court is trying to determine between a future interest and mere precatory language (a statement not intended to be legally binding), the presumption is to recognize a fee simple with no future interest i. The mere expression that property is to be used for a particular purpose will not in and of itself suffice to turn a fee simple into a determinable fee c. If the court is trying to determine between a covenant and a future interest, the presumption is against the future interest and in favor of the enforceable covenant because this will keep title with the current owner d. If the court is trying to determine between a life estate and a fee simple (defeasible or absolute), a fee simple interest is preferred Charitable Trusts (Cy Pres Doctrine) a. The Cy Pres Doctrine is used when a settlor establishes a charitable trust and for some reason the particular charitable purposes identified by the settlor becomes impossible or impracticable to achieve, courts try to carry out the settlors charitable intent by authorizing that the trust income be used for some other charity b. The courts then determine if the intent was general or particular i. If general, the courts will look to a similar, alternative charity ii. If particular, the courts will figure out to whom the trust principal belongs Rules that Regulate Future Interests a. The rule against the creation of new estates (the Numerus Clausus Doctrine) i. Intended to discourage the social hierarchy characteristic of feudalism ii. The rule against the creation of new estates: A conveyance that does not fit within any of the established categories (including fee simple absolute subject to covenants, defeasible fees, life estates, leaseholds, and in some states, fees tail) must be interpreted to create the most analogous estate 1. In other words, new categories may not be created b. The rule against unreasonable restraints on alienation i. Attempts by owners to impose covenants restricting the ability of future owners to transfer property are strictly regulated and often held to be invalid ii. Restraints on alienation are subject to a general test of reasonableness iii. Public policy here 1. Promote efficiency by allowing property to shift easily to a more valued use 2. Promote liberty by freeing current owners from undue restrictions imposed by past owners 3. Promote equality both by promoting dispersal of ownership and preventing arbitrary or exclusionary interests, such as schemes to engage in wholesale racial discrimination in access to homes in a neighborhood c. The interpretive rule prohibiting waste of the present estate i. Two kinds of waste: 1. Voluntary The result of deliberate affirmative acts of the possessory tenant
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2. Permissive The result of the failure of the possessory tenant to perform an affirmative duty imposed upon him for the benefit of the owners of future interests in the land ii. Life tenants may not commit waste that is an unreasonable impairment of the value which the property will have when the holder of the future interest takes possession; e.g. if the property includes a structure, the life tenant may not demolish it UNLESS he builds a new structure and: a. The value of the reversion is not decreased; and b. It is very unlikely that a rational person in the position of the future-interestholder would, if he owned the property outright today, want to continue the prior use d. The prohibition on invalid racial conditions e. The rule against unreasonable restraints on marriage i. The rule of construction is the main thing to get out of this case f. The rule against perpetuities i. DEFINITION Certain future interests are void if theres a chance that the interest might vest more than 21 years after the death of a measuring life ii. Policy reasons behind the rule 1. A partial response to the problem of dead hand control, as it places limits on the ability of current owners to create future interests 2. Promotes the free transfer of property in the marketplace 3. Presents a compromise between the policy of allowing owners to determine who will own their property in the future and under what circumstances and the policy of freeing owners from control by prior owners so that current owners can control both the use and disposition of their property iii. Technique for applying the RAP 1. Step 1 Classify your future interest a. The RAP applies only to certain contingent remainders, executory interests and vested remainders subject to open b. The RAP never applies to future interests in O, such as the possibility of reverter, the right of entry or the reversion c. The RAP wont apply to indefeasibly vested remainders or vested remainders subject to complete defeasance 2. Step 2 What has to happen for a future interest holder to take? 3. Step 3 Find a measuring life a. An entity alive at the date of the conveyance whose life or death is relevant to the conditions occurrence 4. Step 4 Will we know for sure, within 21 years of the death of that measuring life, if the future interest holder can take? a. If yesthe gift is good b. If nothe gift is bad
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iv. EXAMPLE O to A for life, then to As children; A is currently alive and currently has no children yet 1. Step 1 Future interest here is a contingent remainder because were waiting for a taker to become ascertained 2. Step 2 A must die leaving a child 3. Step 3 A is the measuring life 4. Step 4 Yes, we will know at the instant of As death whether or not A left a child or not 5. THEREFORE, the gift is good and the conveyance survives RAP scrutiny

Concurrent Ownership
I. More than one person owns Blackacre at the same time (Oregon is not a community property state, but Washington, California and Idaho are) a. Three forms: i. Joint tenancy Two or more own with the right of survivorship ii. Tenancy by the entirety A marital interest between married partners with the right of survivorship iii. Tenancy in common Two or more own with no right of survivorship b. Joint Tenancy i. Shares 1. Like tenants in common, joint tenants have the right to possess the entire parcel, but their fractions of interest must be equal ii. Right of survivorship the main difference between joint tenancy and tenancy in common 1. When one joint tenant dies, his share is automatically divided equally among the remaining joint tenants iii. Death 1. When one of the joint tenants dies, the others become owners of a larger interest than they previously had iv. Alienability 1. A joint tenant may only devise his interest to another non-joint tenant by severing the joint tenancy and creating a tenancy in common (because of the above right of survivorship) 2. A joint tenant may, however, sell his share during his lifetime 3. Selling your interest in a joint tenancy severs the joint tenancy 4. Consent of the other co-owners is not required to transfer ones interest v. A joint tenants interest is alienable; it is NEITHER devisable (you cant leave it in a will) NOR descendible (it wont go to your heirs intestate) vi. Creation of a joint tenancy; four unities must be met 1. Joint tenants must take at the same time 2. By the same title/in the same instrument
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3. With identical interests (identical fractions) that last for the identical amount of time 4. With the right to possess the whole vii. In addition to the four unities, the grantor must clearly state the right of survivorship viii. How to transform a joint tenancy to a tenancy in common 1. A joint tenant may convey his interest to a third party and then have that third party convey the interest back to him ix. Severance of a joint tenancy 1. This is done principally by sale; a joint tenant may sell or transfer her share during her lifetime; shes even allowed to do so secretly 2. One joint tenants sale of her share severs the joint tenancy as to the sellers interest a. This means that the buyer is a tenant in common x. EXAMPLE O to Phoebe, Ross, and Monica as joint tenants with the right of survivorship 1. Each owns 1/3 + the right to enjoy the whole 2. Remember that each joint tenant must possess an equal share and the right to enjoy the whole 3. Suppose that Phoebe sells to Chandler; so now we have a buyer; the exam asks, what is the state of the title? 4. Answer: Phoebes sale severs the joint tenancy as to Phoebes interest; The result, is Ross and Monica hold 2/3 as joint tenants, and Chandler holds 1/3 as their tenant in common 5. Suppose that Ross now dies and leaves behind is heir Rachel; current state of the title? a. Monica takes Ross share, meaning, Monica now holds 2/3 with Chandler who holds 1/3; Monica and Chandler are tenants are now tenants in common; Rachel takes nothing, as Ross heir because joint tenants interests are not descendible xi. Partition of a joint tenancy 1. The means available for co-owners to dissolve their relationship 2. Variations in partitions: a. Voluntary agreement a peaceful way to end a relationship; when seeking a partition, the parties can always voluntarily agree b. Partition in kind a court action for physical division of Blackacre, if in the best interests of all; works best when Blackacre is rural or agricultural and sprawling acreage and lends itself nicely to a physical division c. Forced sale the court can order that Blackacre is sold and the proceeds are divided up if in the best interests of all parties (this is preferred by the Courts) c. Tenancy by the entirety a marital interest; only exists between married partners who enjoy the right of survivorship; a fiercely protected form of co-ownership
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i. Neither tenant, acting alone can defeat the right of survivorship by trying to sell to another 1. So one tenant by the entirety is unable, unilaterally to sell his share to a stranger ii. Similar to a joint tenancy, except that 1. The co-owners must be married 2. The property cannot be partitioned except through a divorce proceeding 3. The individual interest of each spouse cannot be sold, transferred, or encumbered by a mortgage without the consent of the other spouse, with the result that the right of survivorship cannot be destroyed by transfer of the interest of one party 4. Creditors cannot attach property held through tenancy by the entirety to satisfy debts of one of the spouses 5. Only about 15-20 states (including Oregon) have them iii. Termination 1. The property must be sold with the consent of both parties; a tenancy by the entirety is non-severable iv. Marital Conflicts 1. See below, p. 36 d. Tenancy in common i. Three main points 1. Each co-tenant owns an individual part and has the right to possess the whole; the individual interest owned by an individual may be 5% or 80%; it does not need to be equal 2. There are no survivorship rights between tenants in common a. Each interest is descendible, devisable and alienable; it will pass to the decedents heirs 3. The presumption always favors the tenancy in common a. The common law disfavored joint tenancies because they allowed their holders to avoid the probate system, so the tenancy in common is always preferred b. This is the modern, presumptive form of concurrent ownership ii. Like a joint tenant, a tenant in common may transfer his interest without the consent of the co-owners e. Rights and duties of co-owners i. Possession Each co-owner is entitled to enjoy the whole, no matter his or her respective share 1. It doesnt matter if one person contributed only 10% to the purchase price whereas the other contributed 90% ii. Each co-owner receives his or her fair share of rental income from a third party 1. If part of Blackacre is leased to a third party, then the person who contributed 10% would only receive 10% of the rental income iii. Benefits and burdens of ownership must be shared with concurrent owners, but this may be varied through contract
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iv. A co-owner enjoys a right to contribution during the life of the co-tenancy for any repairs that she reasonably makes v. Improvements There is no affirmative right to contribution during the life of the cotenancy for improvements 1. Upside/downside doctrine At partition, however, the improving co-tenant gets a credit equal to any increase in value caused by her efforts; if the improvements decrease the value, then the improving co-tenant suffers a debit vi. Co-owners must not commit waste 1. No voluntary, permissive, or ameliorative waste is allowed a. This goes hand-in-hand with the note above on improvements vii. Trespass/visitors 1. Since each co-tenant possesses the whole, each is entitled to invite others onto the premises even if their co-owners object; an exception is police searches under the Fourth Amendment may not be allowed if a physically present resident objects, even if the co-owner agrees to allow the search viii. A co-tenant using an entire estate owes no obligation to another co-tenant if the other chooses not to use any of the estate, so long as the other is not excluded f. Conflicts i. Ouster 1. Ouster If a co-tenant denies the right of another co-tenant to jointly occupy the premises 2. Constructive Ouster If the character of the property makes joint occupancy impracticable or impossible 3. If either ouster or constructive ouster occur, then the dominant co-tenant can be liable to the servient co-tenant for rent 4. Divorce Applying constructive ouster to the martial context is another way of saying that when the emotions of a divorce make it impossible for spouses to continue to share the marital residence pending a property division; the spouse whooften through mutual agreementtherefore departs the residence may be entitled to rent from the remaining spouse a. This does not apply if only one spouse (e.g. the departing spouse) is hostile (e.g. if the non-departing spouse pleads with the other to come back); in this situation the departing spouse has abandoned his/her interest in possession rather than being excluded ii. Death Tenhet v. Boswell 1. Facts A joint tenant leased his interest in a joint tenancy property to a third person for a term of years, and died during that term a. The plaintiff is the surviving joint tenant b. The defendant is the lessee from dead joint tenant 2. Holding The lease does not sever the joint tenancy, but expires upon the death of the lessor joint tenant
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3. When one of the two joint tenants dies, his/her interest in the property vanishes and the other joint tenant becomes full owner (if there are two joint tenants) a. Whereas if you have two tenants in common and one dies, the deceaseds interest is devised through a will or intestate statutes Is one co-owners interest Is it independently independently alienable (selling)? devisable (can you put it in a will on your own)? Yes Yes Yes, but converts to tenancy in No, right of survivorship common No No No Yes Is partition available?

Tenancy in common Joint tenancy Tenancy by entirety Community property

Yes Yes No (you have to go through divorce) No (you have to go through divorce)

Leaseholds
I. Basics a. Definition A transfer of the possessory interest in a piece of property from the landlord for either a set or indefinite period of time, but a period of time that is not for someones life (that would make it a life estate) (it could be indefinite (month to month) or even a 99-year leasehold) b. Test to determine whether there is a leasehold (rather than a mere license) Whether the owner has transferred exclusive possession of a defined space c. Statute of frauds Leases less than one year may be oral Duties and rights of the tenant and of the landlord a. Tenants Duties i. Duty to repair 1. T must maintain the premises and make ordinary repairs 2. T must not commit waste (voluntary, permissive, ameliorative) 3. The law of waste in landlord-tenant waste walks with the law of fixtures a. When a tenant removes a fixture, he commits voluntary waste b. A fixture is a once-moveable chattel, that by virtue of its attachment to Blackacre, objectively shows the intent to permanently improve Blackacre i. E.g. Furnace, custom storm windows, certain lighting installations c. T must not remove a fixture, even when she installed it d. Fixtures pass with ownership of the land e. How do you know if its a fixture? Two ways to tell: i. Express agreement controls ii. If removal will cause substantial harm ii. Ts duty to pay rent 1. Two different settings
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II.

a. T breaches the duty and is in possession of the premises i. Landlords options: 1. Evict properly 2. Continue the relationship and sue for rent due ii. Landlord must not engage in self-help, such as changing the locks or physical removal of tenant or tenants possessions 1. Self-help is flatly outlawed and punishable civilly and criminally b. T is not paying rent and is wrongfully out of possession i. E.g. T leaves wrongfully with time left on a term of years lease ii. Landlords options: 1. Surrender L can view Ts abandonment as a tacit offer of surrender which L accepts a. Surrender simply means that the tenant is showing intent to relinquish the leasehold 2. Ignore the abandonment and hold T responsible for rent just as if T were still there a. This option is available only in a minority of states because of re-let 3. Re-let the premises on the wrongdoer Ts behalf and hold T liable for any deficiency a. The majority rule requires that L only try to mitigate and find a substitute tenant through reasonable good faith efforts iii. Percentage rents and commercial leases 1. The tenant has a good faith duty to operate; If the minimum rent is not substantial, a covenant to operate in good faith will be implied into the contract, to make a commercial lease mutually profitable when the rent is a minimum plus a percentage or based totally on a percentage 2. A covenant of continued operation can be implied into commercial leases containing percentage rental provisions in order for the lessor to receive that for which the lessor bargained, if that guaranteed minimum is not substantial or adequate 3. Express covenants to operate a. These are generally enforceable, but they will not force an unprofitable business to operate and are very likely to deny injunctive relief ordering the tenant to continue operating; damages are usually awarded 4. Implied covenants of continuous operation a. If the base rent is substantial, courts will usually refuse to interpret a percentage lease as containing this
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b. On the contrary, if the base rent is nominal or much less than the rental value of the premises, most courts will find such an implied covenant 5. Anchor stores do anchor stores have an implied obligation to continue operation? a. Varies by jurisdiction b. Tenants rights i. Tenants right to assign or sublet 1. When the lease is silent a. The tenant may transfer his leasehold b. The transfer of a leasehold is called either an assignment or a sublease/sublet c. An assignment conveys all the tenants remaining property interests without retaining any future rights to enter the property i. The new tenant (assignee) is responsible directly to the landlord for all the undertakings under the original lease ii. Landlord may sue either the lessee/assignor or the assignee or both (but cant collect double) for unpaid rent d. Under a sublease the tenant retains some future interest or the right to control the property in the future i. E.g. Tenant has six months remaining on lease, sublets the apartment to another party for four months; since the tenant retains a future interest, the transfer is a sublease/sublet ii. Unlike an assignment, here the landlord has no right to sue the subtenant to enforce any of the covenants in the original lease, including rent; he may only sue the lessee 1. Exception: If the subtenant expressly promises to pay rent to the landlord 2. When the lease prohibits assignment or sublease, courts will enforce the clause a. A lease may contain an approval/consent clause requiring consent of the landlord for any proposed assignment/sublease i. Majority rule: Where a lease contains an approval (consent) clause, the lessor may arbitrarily refuse to approve a proposed assignee no matter how suitable the assignee appears to be and no matter how unreasonable the lessors objection ii. Minority rule (adopted by California in Ernest Pestana): A refusal of consent by a lessor must be commercially reasonable ii. Right to habitable premises 1. Constructive eviction a. A tenant may assert a defense to a claim against him for non-payment of rent of constructive eviction, even if he has abandoned only a portion of the premises due to the landlords acts in making that portion of the premises unusable by the tenant
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i. Compelling considerations of social policy and fairness are the reason b. Punitive damages may be awarded in breach of habitability cases where the landlords actions or inactions were intentional and malicious c. Constructive eviction is when a landlord substantially interferes with the tenants quiet enjoyment of the premises d. This allows the tenant to stop paying rent and move out prior to the end of the lease term e. If a tenant stops paying rent but fails to move out, the traditional rule is that the tenant may raise a constructive eviction defense only if the tenant moves out within a reasonable period of time f. CONSTRUCTIVE EVICTION TEST i. The tenant must show that the landlords interference with the tenants quiet enjoyment of the premises is so substantial that nobody in his right mind would stay there; the place is uninhabitable and, therefore, the landlords actions are equivalent to barring the door ii. If the tenant stays, then this can be used as evidence that the interference is not sufficiently serious to justify allowing the tenant to stop paying rent or ending the leasehold g. PARTIAL CONSTRUCTIVE EVICTION (Minjak) i. Tenants can show that the landlords actions have substantially deprived the tenant of the use and enjoyment of a portion of the property ii. This defense may allow a tenant to continue living in the remaining part of the premises from which the tenant does not claim to have been constructively evicted iii. The remedy is a partial rent abatement, as was the case in Minjak h. The Restatement is a little different i. Defines constructive eviction as interference that is more than insignificant rather than requiring the interference to be substantial ii. It adopts the Blackett doctrine, making the landlord liable for the acts of third parties performed on property in which the landlord has an interest, which conduct could be legally controlled by him iii. It rejects the traditional requirement that the tenant abandon the premises before taking advantage of the constructive eviction doctrine, on the ground that it makes the law completely unavailable to tenants who for one reason or another cannot move 2. Relation to implied warranty of habitability a. The warranty of habitability obligates landlords to comply with the housing code and to provide premises that are safe and suitable for habitation

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3. Breach of the warranty entitles tenants to move out before the end of the lease term or to stay and either stop paying rent or pay a reduced rent until the improper conditions of the premises are fixed iii. Right to quiet enjoyment 1. The landlord may not recover rent if he has had ample notice of the existence of conduct of one tenant which deprives another tenant of the beneficial enjoyment of his premises and the landlord does little or nothing to abate the nuisance 2. However, the general rule is that a landlord is not chargeable because one tenant is causing annoyance to another 3. Tenants duties to other tenants a. URLTA requires tenants to conduct themselves and require other persons on the premises with his consent to conduct themselves in a manner that will not disturb his neighbors peaceful enjoyment of the premises b. Breach of this entitles landlord to eviction c. Landlords duties i. The duty to deliver possession 1. L must put T in physical possession of the premises at the start of the lease 2. If a prior tenant wrongfully holds over after the expiration of the lease term, the landlord has the obligation to remove the prior tenant within a reasonable period of time 3. Failure to deliver actual possession of the premises to the new tenant constitutes a breach of the lease, and the tenant who has been shut out may either terminate the lease or recover damages ii. Implied covenant of quiet enjoyment 1. An implicit promise that every landlord makes 2. Applies to residential and commercial leases 3. Every tenant has the right to quiet use and enjoyment without interference from L 4. Landlord may breach in one of two ways: a. Wrongful eviction i. If the landlord wrongfully evicts or excludes the tenant from possession, the landlord has breached this covenant b. Committing constructive eviction; elements: i. T must show substantial interference, due to Ls actions or neglect 1. Substantial interference means a regular recurring problem ii. T must give L notice of the problem and L must fail to act meaningfully 1. This is meant to impose fairness to the landlord iii. T must vacate within a reasonable time after L fails to fix the problem 1. This may impose hardship on a tenant who has nowhere else to go, but the rule persists 5. Landlords liability for the acts of other tenants
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a. Traditional rule, which is still the majority rule, provides that constructive eviction may be shown only if the landlord has acted in a way that interfered with the tenants interest in quiet enjoyment b. The landlord is not responsible for the acts of other tenants unless the lease specifically includes an obligation to control the conduct of other tenants iii. Implied warranty of habitability 1. Applies only to residential leases (remember the operative word habitable) 2. Non-waivable; any attempt to secure a waiver from tenant is unconscionable 3. The standard; the premises must be fit for basic human habitation a. Basic human living requirements must be satisfied 4. The appropriate standard can be supplied by local housing code or court conclusion a. E.g. No heat in winter, no running water, a lack of adequate plumbing 5. Ts entitlements when the implied warranty of habitability is breached; Ts options: a. Move out and end the lease i. The aggrieved tenant is within her rights to move out and end the lease b. Repair and deduct c. Reduce or withhold the rent until the court determines fair rental value i. Typically, T must place withheld rent into an escrow account; this ensures that tenant is a good faith player d. Remain in possession, pay rent, and sue for money damages i. This is where T plays it safe 6. Two-part test to determine what the tenant owes a. Whether the alleged violations existed during the period for which past due rent is claimed b. What portion, if any or all, of the tenants obligation to pay rent was suspended by the landlords breach i. If no part of the tenants rental obligation is found to have been suspended, then the landlord wins and he may regain possession ii. If the entire rental obligation has been extinguished by the landlords total breach, then the action for possession on the ground of nonpayment must fail 1. As soon as the landlord makes the necessary repairs, rent would again become due iii. One or two minor violations which have no effect on habitability are de minimis may not reduce rent iv. If only part of the tenants rental obligation has been suspended, then that part of the unpaid back rent is owed to the landlord 1. No judgment for possession should issue if the tenant agrees to pay the partial rent found to be due
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2. If the tenant refuses to pay the partial amount, then a judgment for possession may then be entered 7. Rationale for the implied warranty of habitability a. The old rule was based on certain factual assumptions which are no longer true b. The old rule is inconsistent with other consumer protection cases (implied warranty of fitness, implied warranty of merchantability) c. The nature of todays urban housing market dictates abandonment of the old rule iv. Duty to mitigate damages if a tenant breaches a lease for a term of years and moves out prior to the end of the leasethe Landlords options 1. General rule Landlord must mitigate damages through reasonable efforts to rerent the property 2. Accept the tenants surrender landlord may sue for damages (different from the amount of any future rent) a. Likely to be measured by an estimate of the amount the landlord lost because of the tenants failure to perform his obligations under the contract; this is the agreed-upon rental price minus the fair market price (again, not the remaining rent) b. The theory behind this measure of damages is that the landlord can re-rent the apartment, so all the landlord loses by the tenants breach is the difference between the amount the tenant agreed to pay and the amount the landlord can get from a replacement tenant, plus advertising and lost rent in the meantime c. If the rental price is the same as or below the market price, damages are limited to the cost of finding a new tenant 3. Re-let on the tenants account a. The landlord can refuse to accept the tenants surrender and re-let the apartment on the tenants account, and sue the old tenant for the difference between the old rental price and the new rental price (if the new rent is lower than the old rent) i. The new rent must be reasonable; the landlord cannot rent the apartment to his sister for $5/month b. If the new tenant moves out prior to the end of the old tenants lease, then the landlord may still sue the old tenant for those remaining months (assuming a reasonable effort to find a new tenant) c. A problem that arises is some states hold that a re-let is actually an acceptance of the old tenants surrender 4. Wait and sue for the rent at the end of the lease term vs. mitigate damages

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a. Almost all states reject the option of a landlord waiting until the end of the lease term to sue for all unpaid rent and require landlords to mitigate damages by reasonably efforting to re-letting the apartment b. If a landlord does try to do this, the amount of damages will be reduced by the amount that would have been avoided had the landlord mitigated damages by acting reasonably to find a replacement tenant v. Retaliatory eviction 1. The landlord is barred from penalizing a good faith whistle blower tenant through increasing rent, decreasing services, bringing an action for possession, or by failing to renew a rental agreement 2. This is to not dissuade a tenant from making complaints that ought to be made 3. Seven part factors test to determine whether tenant has established a defense of retaliatory eviction (Hillview Associates) a. The landlords decision was a reasonable exercise of business judgment; b. The landlord in good faith desires to dispose of the entire leased property free of all tenants c. The landlord in good faith desires to make a different use of the leased property d. The landlord lacks the financial ability to repair the leased property and therefore, in good faith, wishes to have it free of any tenant; e. The landlord was unaware of the tenants activities which were protected by statute; f. The landlord did not act at the first opportunity after he learned of the tenants conduct; g. The landlords act was not discriminatory 4. The retaliatory eviction defense must relate to activities of the tenant incidental to the tenancy (Imperial Colliery Co.) a. E.g. 1st Amendment rights of speech and association unrelated to the tenants property interest are not protected under a retaliatory eviction defense in that they do not arise from the tenancy prohibited 5. If this defense is asserted, the landlord carries the burden of proving the motivation is in furtherance of a legitimate business purpose (nonpayment of rent by a tenant asserting their rights is not a legitimate business purpose (Diamond Housing Corp.)) d. Landlords rights i. Three main rights of the landlord: 1. The right to receive the agreed-upon rent; 2. The right to have the premises intact and not damaged, subject to normal wear and tear (tenants duty not to commit waste); and

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3. The landlords reversion, or the right to regain possession at the end of the lease term (when the term of years ends or the landlord provides notice that a periodic tenancy or tenancy at will is to be terminated) ii. Right to inspect and repair under the Uniform Residential Landlord and Tenant Act 3.103 1. A tenant must not unreasonably withhold consent for the landlord to enter to make repairs, improvements, inspect, or show the dwelling unit to prospective buyers or renters 2. A landlord can enter the dwelling unit in the case of an emergency 3. A landlord shall not abuse the right of access. Unless of an emergency, the landlord must give 2 days notice of intent to enter and may only enter at reasonable times 4. A landlord has no other right of access except: a. Pursuant to a court order; b. To fix damage caused by the tenant or to enter in case of extended tenant absence; or c. Unless the tenant has abandoned or surrendered the premises. iii. Landlords right to transfer the reversion 1. What happens if the landlord sells the property or it is inherited by the landlords heirs? a. The new owner just steps in the prior owners shoes he receives the reversion subject to the tenants leasehold, with the contractual rights to collect rent and enforce the other terms of the lease; the tenants leasehold survives 2. What happens if the landlord loses the property due to foreclosure? a. If the lease was established before the mortgage, the lease takes priority b. If the mortgage was established before the lease, the mortgage takes priority iv. Eviction/forcible entry and detainer (FED)/summary process vs. ejectment The latter takes just as long as any other lawsuit, whereas the former is much quicker e. End of the tenancy landlords right to recover possession vs. tenants right to remain i. Although a tenant cannot be evicted without a breach of a lease, the landlord has no obligation to renew a leasehold; a refusal to renew need not be reasonable 1. Exception: A refusal to renew cannot be for discriminatory reasons ii. Tenants in units subject to local rent control laws are protected from eviction unless the landlord can show just cause iii. Federal law protects tenants of public housing from eviction without just cause iv. Tenants are protected from eviction if the landlords motivation is retaliation against them for asserting their right to habitable premises by calling the housing inspector to report housing code violations v. Many states and municipalities have laws limiting eviction when an apartment is sought to be converted into a condominium f. Conflicts between landlords and tenants
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i. Defenses a tenant may assert when sued 1. Implied warranty of habitability 2. Retaliatory eviction 3. Unlawful discrimination based on family status, disability, race or gender ii. Holdover tenants 1. If the landlord accepts a rent check a. Majority: A month-to-month lease is established b. Minority: The new lease term matching the previous lease term length begins 2. If the landlord refuses to accept a rent check a. The landlord may treat the tenant as a non-paying holdover tenant and sue for possession 3. The tenant may accept a check and write on the back of each check that the landlord is not agreeing to renew the tenancy but is merely using the check to cover the rental value of the property from the tenant at sufferance

Nuisance
I. II. Sic utere tuo ut dienum mon laedas One must use his property so as not to injure the lawful rights of another Black letter law (Emanuel 125-126) a. A landowner may sue another for private nuisance i. Private nuisance is an interference with a landowners use and enjoyment of his land b. Substantial interference i. The interference with the plaintiffs use and enjoyment must be substantial. Thus if plaintiffs damage consists of his being inconvenienced or subject to unpleasant smells, noises, etc., this will be substantial damage only if a person of normal sensitivity would be seriously bothered c. Defendants mental state i. There is no rule of strict liability in nuisance. Plaintiff must show that defendants conduct was negligent, intentional or abnormally dangerous. ii. Intentional If plaintiff wants to show that defendants conduct was intentional, plaintiff does not have to show that defendant desired to interfere with plaintiffs use and enjoyment of his land. Plaintiff merely has to show that defendant knew with substantial certainty that such interference would occur. iii. EXAMPLE Defendant, a factory owner, knows that his plant is spewing pollutants and smoke into the air over plaintiffs property. Plaintiff can sue defendant for intentional nuisance so long as plaintiff can show that defendant was on notice of what was happening, even if defendant did not desire this result to occur. d. Unreasonableness

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III.

IV.

i. Even if defendants conduct is intentional, plaintiff will not win in nuisance unless he shows that defendants actions were unreasonable. In determining what is reasonable, the nature of the neighborhood is likely to be quite significant. e. Remedies Plaintiff has a chance at both or either of the following remedies i. Damages If the harm has already occurred, plaintiff can recover compensatory damages ii. Injunction If plaintiff can show that damages would not be a sufficient remedy, he may be entitled to an injunction against continuation of the nuisance. To get an injunction, plaintiff must show that the harm to him actually outweighs the social utility of defendants conduct. (E.g. Job creation from the existence of a factory is considered as social utility.) Test The harm must be substantial and the interference deemed unreasonable before a nuisance will be found; factors the courts consider to determine whether an interference is unreasonable: a. They determine what interests are encompassed by the right to use and enjoyment of the land i. Includes freedom from pollution, noise, odors, and smoke b. Second, the gravity is considered, and traditionally the harm must be substantial to be legally protected c. Third, fairness and social utility are considered Four ways courts resolve land use conflicts: a. Privilege (all or nothing) i. In some cases, Courts hold that a defendant is privileged and at liberty to engage in an activity on his property even though it harms the property interests of the plaintiff ii. Damnum absque injuria means damage without legal redress b. Strict Liability (all or nothing) i. Plaintiff has an absolute right not to suffer a particular sort of harm caused by defendants activity ii. Defendant is not legally entitled to engage in the activity without liability unless he can get permission from the plaintiff c. Reasonableness (middle position) i. Defendant may engage in harmful conduct if it is reasonable, but not if it is unreasonable ii. Factors that may be considered to determine reasonableness: 1. The extent of the harm to the plaintiff and the social utility of the plaintiffs utility 2. The social benefits of the defendants activity, measured by what society would lose by preventing the defendant from freely engaging in the harmful activity 3. The overall relative social costs and benefits of the conflicting land uses of the plaintiff and defendant 4. The availability of alternative means to mitigate or avoid the harm, and which owner can do so at the lowest cost 5. The defendants motive 6. Which use was established first d. Prior use i. Sometimes legal entitlements are awarded to the person who established the first use
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V.

Remedies a. Four remedies have been adopted by the courts i. Dismissal of the complaint 1. The court will grant a 12(b)(6) motion if the land use is privileged or damnum absque injuria ii. Damages 1. Compensation for the harm already done iii. Injunction iv. Purchased injunction 1. This is where the plaintiff would reimburse the defendant for the opportunity loss occasioned by ceasing the activity; sometimes awarded in cases where it would be unfair to place the financial burden of stopping the activity on the defendant, e.g. if the defendants activity was established first and plaintiff settled near defendants land b. Three different types of remedies i. Property rules 1. Either an absolute entitlement to engage in the conduct (no liability) or to be secure from the harm (injunctive relief) 2. Private bargaining rather than a court order ii. Liability rules 1. Prohibit each party from interfering with the interests of the other unless if they want to pay damages, either for harm resulting, or for being free from the interference iii. Inalienability rules 1. Prohibit entitlements from being sold or exchanged

48

Remedies (p. 380) Property Rule

Liability Rule

Plaintiffs Entitlement Plaintiff can get an injunction ordering to stop the harmful conduct; if wants to commit the harm, must offer enough money to induce to agree to give up s right to be free from harm. INJUNCTION Plaintiff would get an injunction against garbage pickup before 7. can get damages from for committing the harm, but no injunction; is free to commit the harm if is willing to pay a damages judgment. DAMAGES No injunction, but plaintiff would get damages, but defendant stays unrestricted. has no right to commit the harm; any agreement by to allow to commit the harm is unenforceable. Defendant could not have early morning garbage pickup, and any agreement between the two parties, e.g. if defendant wanted to pay off plaintiff, would be unenforceable.

Defendants Entitlement has legal liberty to commit the harm without liability; if wants to prevent the harm, must offer enough money to induce to agree to stop the harmful conduct. DISMISS THE COMPLAINT Plaintiff would lose lawsuit, store would have unrestricted garbage pickup rights. can stop s conduct if is willing to pay damages as determined by a court to compensate for s loss of profits. PURCHASED INJUNCTION Plaintiff can stop the early morning garbage pickup only if he compensates the defendant; plaintiff gets no garbage pickup before 7, and defendant gets damages (e.g. Spur Industries v. Webb). has the right to engage in the protected activity; any agreement whereby gives up the right to engage in the conduct is unenforceable. Defendant has the right to early-morning garbage pickup, and any agreement otherwise between the two parties is unenforceable.

Inalienability Rule

VI.

VII.

VIII.

IX.

Distinguishing nuisance from negligence a. Nuisance is not concerned with the conduct and whether or not the harm was foreseeable; nuisance focuses on the result rather than the conduct itself Distinguishing nuisance from trespass a. Trespass involves larger, tangible, and more permanent offenses; e.g. dust = nuisance; dogs = trespass b. Contrary to trespass, protection from nuisance is not absolute because the harm must be substantial and the interference deemed unreasonable before a nuisance will be found The unusually sensitive plaintiff a. The law does not protect the unusually sensitive plaintiff in the nuisance context; only the normally sensitive person (Page County Appliance Center, appliance store with TVs for sale) Light and air and spite fences a. Remember an easement for light and air may not be created by implication b. Majority rule In the nuisance context, a landowner has no legal right to the free flow of light and air across the adjoining land of his neighbor, in the absence of some contractual or statutory obligation
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X.

XI.

c. SPITE FENCES i. Where a structure serves a useful and beneficial purpose, it does not give rise to a cause of action, either for damages or for an injunction under the maxim sic utere tuo ut alienum non laedas, even though it causes injury to another by cutting off the light and air and interfering with the view that would otherwise be available over adjoining land in its natural state, regardless of the fact that the structure may have been erected for spite ii. HOWEVER, the structure must serve a useful and beneficial purpose; purely spite fences are prohibited iii. The rule against spite fences is because if purely motivated by malice, it lacks utility and the harm outweighs any social values iv. This is the only way that a landowners interest in sunlight is protected d. Minority rule (Prah v. Maretti, solar panel case) An unreasonableness test; here, Maretti was on inquiry notice that he couldnt block Prahs solar panels Private vs. public nuisance a. A private nuisance is when one landowners use of his property interferes with anothers enjoyment of his property b. A public nuisance is where city or county or state actually sues to shut down a property for nuisance, could be a harm to the entire community, such as drug houses, gun sales, porno c. In other words, a private nuisance is between two private parties, whereas a public nuisance involves something like a city, a broader harm Conflicts with zoning laws A landowners compliance with zoning law does not make it per se reasonable. (Prah v. Maretti)

Zoning
I. II. Constitutional source for zoning power The zoning authority was upheld in Euclid; states have the power to enact zoning laws that limit development rights under the states police power Legislative Process: Enacting the Zoning Ordinance a. Zoning Enabling Acts States delegate power to municipalities to regulate land use through general legislation called zoning enabling acts; These acts authorize municipalities to engage in two kinds of regulation: i. Use zoning 1. Dividing the municipality into districts and regulating the kinds of uses allowed within each district ii. Area zoning 1. Regulates the size of lots, the height of buildings, and requirements to set back structures a certain distance from the property borders b. The Comprehensive Plan and Zoning Ordinance i. A zoning enabling act generally requires the municipality, usually the city council, to establish a comprehensive plan for the municipality as a whole ii. Reasons for zoning
50

III.

IV.

V.

VI.

1. To avoid nuisances before they arise 2. Flexibility its easier to amend a zoning plan than negotiate with all landowners iii. A property owner wishing to develop in ways prohibited by a zoning ordinance may request rezoning from the city council c. Planned Unit Developments i. The zoning board establishes overall density requirements and then works directly with developers to construct a rational scheme that mixes uses in a desirable way d. Conditional or Contract Zoning i. Conditional or contract zoning is a process allowing developers to work with the planning board or city council to rezone a parcel resulting in the sought rezoning with conditions and limitations attached to the granted rezone so as not to harm the community ii. Bilateral agreements Involve promises on both sides, by the landowner and the city 1. E.g. A city may promise to rezone a lot in return for a promise by the owner to restrict the otherwise allowable development on her lot and perhaps to record the restrictions as covenants 2. Often struck down because they may bypass statutory procedures that require public hearings to amend the zoning law iii. Unilateral agreements Commitments by the landowner to agree to certain conditions (again, often recorded) in order to induce the municipality to rezone the land 1. Protects the rights of the public to attend a public hearing but may raise questions about corruption or unfair deviations from the comprehensive plan In reviewing zoning enactments, the court looks to whether a. It violates state/federal law or state/federal constitutional provisions; or b. Is arbitrary or unreasonable; or c. Is substantially unrelated to the public health, safety, or welfare (IDC Bellingham) Prior Nonconforming Uses a. An existing nonconforming use will be permitted to continue only if it is a continuance of substantially the same kind of use as that to which the premises were devoted at the time of the passage of the zoning ordinance (Parillos e.g. was the conversion from a restaurant to a discotheque a substantial change and thus improper?) Variances a. Most states allow zoning boards to grant variances only when application of the zoning ordinance to a particular owner results in exceptional and undue hardship i. The test for undue hardship is strict ii. A variance will not be granted where the hardship is self-imposed iii. Hardship will generally not be found unless there is no economically viable use of the property if the zoning law is enforced iv. Many states add the requirement that the property in question must be unique in some way from the surrounding properties Special exceptions a. Differences between a variance and a special exception
51

VII.

VIII. IX. X.

XI.

i. A variance grants the property owner the right to something ordinarily prohibited by the zoning law to avoid undue hardship, whereas a special exception describes a conditional use permitted by the zoning law ii. Unlike variances, there is a presumption that the owner can engage in the permitted use so long as the established conditions are met b. Special exceptions generally require specific direction to the zoning board; vague conditions may be struck down as an improper delegation of legislative power Spot Zoning a. Spot zoning refers to selective rezoning by the municipal legislative body of a single parcel or small group of parcels of land b. Landowners receive a discriminatory benefit that is inconsistent with the zoning of the surrounding area and is not justified as a police power measure designed to promote the public welfare SLAPP Suits Class Notes 75 Environmental Regulations Class Notes 76 Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) a. In 1997, the SCOTUS held unconstitutional a federal statute that had prohibited states from enforcing laws that had imposed a substantial burden on religious freedom unless the law was justified by a compelling state interest b. In 2000, the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) was signed and revised the unconstitutional impediments in the previous statute i. It protects religious exercise rights of prisoners and also prohibits governments from imposing or implementing a land use regulation in a manner that imposes a substantial burden on the religious exercise of a person, including a religious assembly or institution unless the regulation furthers a compelling governmental interest and is the least restrictive means of furthering that compelling governmental interest c. RLUIPA makes clear that cities may not ban religious institutions d. Applies to institutionalized persons and land use only e. RLUIPA profoundly changes zoning issues when you have a religious institution involved i. The plaintiffs in an RLUIPA lawsuit can get attorneys fees, so municipalities have to be very careful when zoning with regards to religious institutions f. How might RLUIPA be unconstitutional? i. Establishment Clause doesnt RLUIPA favor religious institutions over non-religious institutions? ii. Exceeds Congress powers Not justified under the commerce clause and 5 under the 14th Amendment Exclusionary Zoning Mt. Laurel a. Every municipality must, through its land use regulations, make realistically possible an appropriate variety and choice of housing for all categories of people who wish to live there b. Regulations must affirmatively afford the opportunity for low and moderate income housing
52

XII.

c. Municipalities wishing to not meet these obligations must sustain the heavy burden of demonstrating peculiar circumstances which dictate that it should not be required to do so d. The presumptive obligation arises for each municipality to affirmatively plan and provide, by its land use regulations, the reasonable opportunity for an appropriate variety and choice of housing, including low and moderate cost housing; it may not adopt regulations or policies which preclude that opportunity e. Considering the basic importance of the opportunity for appropriate housing for all classes of citizens, no municipality may exclude or limit categories of housing for the reason of creating a better economic balance for community and governmental costs; in other words, the zoning must be done primarily for the living welfare of people and not for the benefit of the local tax rate f. Because land use regulation is within the states police power, and all police power enactments must conform to the basic state constitutional requirements of substantive due process and equal protection, zoning regulations, like any police power enactment, must promote the public health, safety, morals or the general welfare i. The issue, then, is whose general welfare must be served 1. The answer is the states citizens, not merely the municipalitys citizens, because zoning power is a police power of the state and the local municipality is acting only as a delegate of that power Takings challenges When a property owner challenges the application of a zoning ordinance to his property, the judicial inquiry focuses upon whether the challenged restriction can reasonably be deemed to promote the objectives of the community land-use plan, and will include consideration of the treatment of similar parcels.

Takings
I. Basics a. Constitutional basis i. The 5th Amendment applies to state governments through the 14 th Amendment, which prohibits states from depriving persons of property without due process of law 1. Although the 14th Amendment does not include a takings clause in its text, the due process clause has been interpreted to include a substantive component that prevents the states from taking private property without just compensation ii. The police power (non-compensable; damage without redress) of the states encompasses the original power of the state governments to pass legislation regulating private conduct to protect the public health, welfare, and safety iii. Text of the 5th Amendment - Nor shall private property be taken for public use without just compensation th b. 5 Amendment, broken down i. Property Interpreted by the courts to mean more than real property, including interest in a bank account and intellectual property
53

II.

III.

IV.

V.

ii. Taken This is where most litigation occurs iii. Public use 1. SCOTUS has interpreted this as the furtherance of a legitimate public purpose (there was not much litigation on this until Kelo) iv. Just compensation (fair market value) The public use requirement rational basis a. Kelo A taking should be upheld as consistent with the public use clause so long as it is rationally related to a public purpose b. Berman v. Parker - A D.C. redevelopment plan to renew a blighted community, but a department store took exception to the condemnation and claimed that his store was not itself blighted; the Supreme Court upheld the taking c. Hawaii Housing Authority v. Midkiff - Fee title was taken from lessors and transferred to lessees to reduce the concentration of land ownership; the Supreme Court upheld the taking Just compensation a. Just compensation requires fair market value, as measured by the damage suffered by the owner; thus, any increase in value of property due to the taking is not owed to the owner b. Any costs associated with moving and any inability to move elsewhere are merely incidental results of the taking of the land and are uncompensable i. This includes any goodwill that a business may have by being in a particular location; if the business is unable to relocate due to a specific advantage from that specific location, it is a loss incurred by the business and uncompensable ii. EXCEPTION #1: Temporary takings Kimball Laundry Co. v. U.S. the government temporarily took over a factory for four years retaining most of the employees and using the laundry for military purpose; because the owner was unable to reestablish its business elsewhere during the takeover, the loss of going-concern value was compensable iii. EXCEPTION #2: If the property taken by either the state or federal government with federal funding, then moving costs, lost personal property occasioned by the move, and actual reasonable expenses in searching for a replacement business are compensable Property a. The Takings Clause applies where a specific interest in physical or intellectual property is involved (e.g. a certain part of a tract of land). No opinion for the Court, however, has decided whether the Takings Clause is triggered by a general obligation to pay money to the government or to a third party. (Eastern Enterprises v. Apfel) b. U.S. v. 564.54 Acres of Land, More or Less i. FACTS Owner had a Summer camp with buildings on the land ii. HELD Although the cost of building functionally equivalent facilities elsewhere was approximately $5.8mm, the Court found the value at $485k, and noted that fair market value does not include the special value of property to the owner arising from its adaptability to his particular use Partial takings
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VI.

a. If the state takes 40 acres from an owner of a 100-acre tract, it must compensate the owner not only for the fair market value of the 40 acres, but for any reduction in value to the remaining 60 acres caused by the taking of the 40 Regulatory takings flow chart a. First, state this: While property may be regulated to some extent, if regulation goes too far, it will be recognized as a taking. (Pennsylvania Coal) b. Is it a temporary taking? (Tahoe-Sierra Preservation Council) i. If yes, then skip step (c) and proceed to step (d) (this is because a temporary moratorium does not result in complete loss of value because it is temporary) ii. If no, go to step (c) c. Is it a 100% taking? (Lucas) Apply the following tests to determine: i. IN OTHER WORDS, the Lucas test is: A regulation rendering property valueless must be compensated UNLESS the regulation is just prohibiting uses that were not previously permissible under relevant property and nuisance law 1. This does not apply to personal property (e.g. if the propertys only economically productive use is sale or manufacture or sale); it only applies to land 2. E.g. The owner of a nuclear power plant is not entitled to compensation if it is directed to demolish the plant if found to sit on an earthquake fault; An owner of a lake bed is not entitled to compensation when denied a permit to engage in landfilling if it would result in flooding others land; the use of these properties was always unlawful and was not a right of the landowners title to begin with ii. A total taking analysis involves a factors test: 1. The degree of harm to public lands and resources or adjacent private property, posed by the claimants proposed activities, 2. The social value of the claimants activities and their suitability to the locality in question, and 3. The relative ease with which the alleged harm can be avoided through measures taken by the claimant and the government (or adjacent private landowners) alike 4. Whether or not a particular use has long been engaged in by similarly situated owners iii. Whether other similarly situated landowners are permitted to continue the use denied to the claimant iv. If yes (very rare), then ask, is the regulation merely prohibiting uses that were not previously permissible under relevant property and nuisance law? 1. If yes, then no taking; the action is permissible without compensation through police power 2. If no, then the action is a taking requiring compensation v. If no (anything less than 100%), go on to step (d) d. Is it a permanent physical invasion? (Loretto) Any permanent physical invasion, no matter now minute, is a taking. i. If yes, then there is a compensable taking
55

ii. If no, go on to step (e) e. Consider the following (Penn Central) The Supreme Court has said that it is unable to come up with a bright-line test for determining when fairness and justice require that economic injuries caused by public action be compensated by the government; rather, the Court looks at the particular circumstances of each case, engaging in ad hoc, factual inquiries, focusing on three major factors, while weighing private and public interests: i. Character of government action 1. Two components of this prong: a. The form (whether it constitutes a physical invasion, such as Loretto or in the Greenbay case with flooding) b. The reasons and purpose of the government action 2. The goal is to identify those regulations whose effects are functionally comparable to government appropriation or invasion of private property 3. Examples of regulations that were takings under this element: a. Construction of a damn that results in flooding of property; b. Government-mandated permanent physical invasion of property by the wires and boxes of a cable TV company; c. Low-flying military planes that made the property uninhabitable and destroyed the owners business; d. Conversion of inheritable property into a life estate effectively transferring part of a recognized estate in land from one person to another 4. Examples of regulations that were not takings, preventing owners from causing harm to their neighbors or the public as a whole: a. Mugler; b. Hadacheck (prohibition on operation of a brick mill in residential area); c. Schoene (cedar trees) 5. Examples of regulations that were not takings, as they benefit society and create an average reciprocity of advantage: a. Euclid Zoning laws restricting property to residential use; b. Penn Central Historic preservation statutes ii. Economic harm 1. The greater the diminution in value, the more likely the regulation will be deemed a taking 2. Complete deprivation of any economically viable use is likely to be a taking unless the regulation denies property rights that never existed in the first place, such as the right to commit a nuisance 3. Denominator theory a. x = the loss of property use resulting from a regulation; y = the sum of all usage rights inherent in a piece of property b. If x/y = 1 or close to 1, then a taking has occurred so long as the other elements of the Penn Central test also favor the claimant
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VII.

VIII.

IX. X.

XI.

c. In Mugler, the numerator is the equipment and the denominator is the land and equipment iii. Investment-backed expectations 1. The investment-backed expectations must be reasonable 2. If a citizen has already invested substantially in reasonable reliance on an existing statutory or regulatory scheme, a regulation is more likely to be held a taking 3. It is less likely to be ruled a taking if the regulation prevents the owner from realizing an expected benefit in the future, imposing a mere opportunity cost; see Euclid (no taking when owner purchased undeveloped property for industrial development purposes and the city subsequently enacted a zoning ordinance restricting future development of the land to residential uses, reducing its market value by 75%) and Penn Central What if the owner acquired the property after the regulation went into effect? a. It does not preclude the owner from a possible takings claim in theory, but in application it does because with a regulation already on the books it would be very difficult to prove investmentbacked expectations Stop the Beach Renourishment v. Florida Dpt. Of Env. Protection a. Accretions Additions of alluvion (sand, sediment, or other deposits) to waterfront land b. Relictions Lands once covered by water that become dry when the water recedes c. In order for an addition to dry land to qualify as an accretion or reliction, it must have occurred gradually and imperceptiblythat is, so slowly that one could not see the change occurring, though over time the difference became apparent; when, on the other hand, there is a sudden or perceptible loss of or addition to land by the action of the water or a sudden change in the bed of a lake or the course of a stream (e.g. a hurricane), the change is called an avulsion i. An avulsion permits the state to reclaim the restored beach on behalf of the public Judicial takings The Supreme Court has yet to secure a 5 vote majority for the validation of the existence of judicial takings (Stop the Beach Renourishment) Vested rights a. Once an owner invests substantially in reliance on applicable zoning and building requirements, the owner acquires a vested right to the existing use which cannot be changed retroactively unless the regulatory law is designed to prevent the owner from committing a nuisance or otherwise harming individuals or the public b. Retroactive regulations are lawful without compensation when the legislating body could have rationally believed that the regulation was needed to prevent the owner from committing a public or private nuisance or otherwise causing harm to individuals or to property Land use exactions (conditions) a. Municipalities often attempt to condition building or development permits on a landowners i. Conveying title to part or all of the property to the government, or ii. Granting the public access to the property (e.g. an easement across the property) b. Such a condition is commonly referred to as an exaction and constitutes an uncompensated taking unless
57

i. The government can show that an essential nexus exists between the condition and a legitimate government interest (qualitative); and ii. The adverse impact of the proposed building/development on the area is roughly proportional to the loss suffered by the property owner from the forced transfer of occupation rights (quantitative)

Fair Housing
I. II. A layered scheme, federal law including fair housing act combined with state law, then city law, then municipal law all compound restrictions Federal law including Federal Housing Act, applies to selling, leasing of property making it illegal to discriminate on race, national origin, religion, age, gender, handicap BUT applies to only more than four units, if four or less with landlord living in one then can discriminate a. Civil rights act of 1866 also federal law, applies to selling and leasing and deals only with race BUT no exceptions even if four units or less Shelley v. Kraemer, racially discriminatory covenants are invalid, private individuals may choose to abide but cannot seek judicial enforcement because it would be considered state action that would violate the equal protection clause of 14th amendment Question is what is NOT state action because ultimately the state police enforces nearly everything

III.

IV.

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