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Property refers to relationships among people with respect to things, not a relationship between
people and things
MAJOR QUESTIONS
Who owns it?
What can I do with the things I own?
How can property be transferred? gifts, lost objects, loans, sales
What can be owned? (mixed goods problem, components from many different
individuals)
MAJOR THEMES

Liberty: What are people allowed to do or not do with their possessions?
Equality and Redistribution: How much stuff can people accumulate? If they have a lot of
it, should we take some if it away and use it for public purposes or give it to people with very
little stuff?
Efficiency: How can people use their possessions in a way that makes everyone better off?
Fairness and Responsibility: Are people allowed to use their possessions in ways that harm
other people and other peoples possessions?
Access: Can other people also use and benefit from property that does not belong to them?
Policy: What consequences would an outcome have in terms of...
o Fairness
o Individual and Group Rights
o Social Utility, Efficiency, or General Welfare
o Judicial Economy- Will an outcome make it easier or harder for the next judge to
solve the next case? Will it create litigation?
o Individual vs. State
o Wealth vs. Poverty

WHO OWNS IT?

LAW OF CAPTURE:

Animals, oil, and gas are fugitive resources moving resources; as a result, they are mislaid
functionally, possession is an open issue
Three factual scenarios to which rule applies:
1. Actual physical possession holding the animal dead or alive;
2. Mortal wounding by one not abandoning pursuit; or
Piersons Rule of Capture:
Possession or occupancy of a wild animal requires that the hunter
(1) manifests an unequivocal intention of appropriating the animal
(2) has deprived the animal of his natural liberty AND
(3) brought the animal within the hunters certain control why nets and toils were
mentioned in the decision (if you capture the fish in the net, they are yours)

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3. Capture with nets or toils or otherwise intercepting them such a manner as to deprive
them of their natural liberty, and render escape impossible.

Policy arguments:
Ruling in Pierson v. Post is more administrable offers a more clear brightline to prevent
future interpretation disputes (otherwise, it is easy to argue that the person was not really
hunting or barely hunting)
Want certainty and order to incentivize hunters to pursue their prey effectively or risk losing
their prey to another (labor theory); should reward people who expend efforts
First in time regime first person to get there has a huge advantage Bagger in Pierson v.
Post was the first person to possess the property

Pierson v. Post: finding and chasing a wild animal does not give a person possession; animal
needs to be captured, killed, or mortally wounded
Facts: Pierson knew Post was pursuing a fox, and despite this fact, killed and captured the
fox. Post contends that Pierson trespassed, and that Post acquired title to the fox when Post
began to hunt it. Pierson argued that Post did not have any control over the fox, and did not
have any property interest in it. Ct. found for Pierson.
Dissent: by Livingston implies that Pierson stole the fox and that custom should inform rules
(hunters common rules), that Post was wronged on a basic level of decency and fairness, and
that this ruling will actually dis-incentivize others from pursuing foxes reasonable prospect
of capture should be the standard.
Note if the law is on your side, focus on the legal issues (Pierson) and if the facts are on
your side, make the fairness argument (Post)

ROLE OF CUSTOM:
*** This ONLY applies if third parties are not harmed by the custom. AND Ghen v. Rich seems
to suggest that it does not bind those that are unaware of the custom (no notice).

Ghen v. Rich: court ruled that norms in whaling need to be sustained, otherwise nobody would
engage in such dangerous work ! importance of custom
Facts: Ghen killed a whale at sea; his identifying bomb-lance was in the whale. Custom and
usage in the whaling industry in Cape Cod had been that the one who kills the whale using
We can rely on custom if it is of:
1) Limited Application: the customs of one place do not extend to others (only applies to
whaling industry here).
2) Long Duration: a social norm that people have known about for many years- meaning
that everyone has notice (people are informed of a rule, and thus have fair warning)
3) Necessity: once something has been put in place for a long time and people know about
it, they behave according to that norm
a. There is reliance: people make investments based on the norms in society,
expecting other people to behave accordingly
b. Necessity criteria: it has to be something that the industry needs (here you cant
kill a whale and bring it to shore in one action). If technology changes, this
custom may become unnecessary.

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the bomb-lance owns the whale. Ellis found Ghens whale, but sold it to someone else. Ct.
looked to custom and usage of the whaling industry to determine the rule of law regarding
ownership of property and held that Ghen, because he mortally wounded the whale, was the
owner of the whale.

Policy arguments:
Advantages from using customs: a real advantage to judges to pull from custom and things
that are generally accepted, that already reflects values of society; reliance on solid custom
encourages investment (stability and solidity of legal rules).
Disadvantages from using customs: societal goals might diverge a profit motive as opposed
to social welfare; narrow set of ideas represented.

Rule of Capture in Oil, Gas, and Water:
Oil and Gas Water
Traditional rule: you own what is under your
land
But w/ oil and gas, whoever brings it to the
surface owns it BUT you cannot cross the
property line with your equipment to get it
Policy: first to capture gets awarded b/c he
makes use of natural resources by bringing to
the surface; first in time we award who gets
there first b/c we assume there is an equal
opportunity for everyone to get there first
But, getting there first often means sloppy
extraction; choose speed over care and
environmental concerns
To reduce the negative effects of the rule of
capture, we can regulate who enters the
industry in the first place
English rule absolute ownership, allows
landowners to extract as much groundwater as
they want w/out regard of its effects on
neighbors; first to capture = owner
American rule reasonable use, people could
use as much water as they needed but their use
could not harm their neighbors
First in time/prior appropriation rule in
very dry states; first person who appropriates
the water and puts it to reasonable, beneficial
use has a right to it (not great at rationing when
supplies dwindle)
Riparian rights more of a East Coast rule
where there is no shortage of water; each
landowner along the water has the right to use
the strip of water next to his land subject to the
rights of the other riparian


LAW OF FINDERS:

The finder of an object, though he does not by such finding acquire an absolute property or
ownership, can keep it against all but the rightful owner (Armory v. Delamirie)

When a true owner has abandoned property, a finder is entitled to keep it. (Michael v. Chicago)

A landowner possesses everything that is attached to or under the land, but not necessarily that
which is lying unattached on the land. If a third party finds (landowner didnt know about it)
something lying unattached on the land, then ownership will depend on:
1. The landowners and finders relationship to the land, particularly who lives there and the
status of the finder
2. The meritorious behavior of the finder
3. Arguably, the public or private nature of the land (Hannah v. Peel)

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Hierarchy of ownership: Possession is not worth necessarily everything in law, but it is worth
a lot
o We can apply this rule even when there are two finders: invisible owners abandon
good ! F1 ! F2 ! rest of the world
o Ex Armory was finder; the goldsmith and the apprentice had possession of the
jewel, but court ruled that Armory had ownership

Evolution of Case Law:
Armory v. Delamirie: finder has a claim that is superior to everyone in the world except the
true owner
o Facts: P, a chimney sweep, found a jewel of value and brought it to D, a goldsmith
and his apprentice. D tried to keep the object.
Bridges v. Hawkesworth: even when he finds something on someone elses property
o Facts: P picked up a parcel with a bank note inside on the floor of the Ds shop; court
held that finder of lost article entitled to keep it against all persons, except real owner;
didnt matter where article was found
o If the person did not find it, the owner of the property would not know it existed; shop
was open to the public
South Staffordshire Water Co. v. Sharman: but not if its embedded in the land or underneath
the land
o Facts: D found two rings when cleaning out pool on Ps property at Ps request; court
awarded ring to P (even though couldnt find real owners)
o Made now difference that P was unaware of the ring it was on their property and P
demonstrated manifest intent to exercise control over land when asking P to clean it
o If a servant finds something, he finds it for his boss, not for himself
Elwes v. Brigg Gas Co.: not even if the finder has a lease for the land its embedded in or
underneath
o Facts: P leased land to D; P only leased mines and mineral; D found a buried boat;
court held that P should get boat because boat did not pass to D in lease
o Again, does not matter whether P knew whether boat was there or not
Hannah v. Peel: a person possesses everything attached to or under his land, but does not
necessarily possess everything that is unattached on the surface of the land
o Facts: P found a valuable brooch that appeared to have been abandoned on Ds
property, that likely would not have been found but-for his intervention (he was
occupying land for a military reason being housed there). Court found for P.
o Court reasoned that the brooch was lost and then found by P. D was never
physically in possession, and did not occupy the house, had no knowledge of it until P
found it (no possession).
o Also a policy consideration: P tried to locate the true owner and did the right thing
(fairness). P also lived in the house- was not just passing through, nor an employee of
the landowner (possession).
o This problem could have been solved through a contract- that the landowner owns
everything on the property.
Popov v. Hayashi: A bitter feud over Barry Bonds record-breaking 73rd homerun.
o Popovs arguments:
" Popov deprived the ball of its liberty- he had first contact with it
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" Custom would incentivize people to beat Popov- court should favor the person
who stopped the natural arc of the ball
" Popov did everything he could within the bounds of the situation
o Hayashis arguments
" Pursuit is not enough- the ball was not mortally wounded
" Popov did not establish certain control over the ball
" Hayashi was the first person who maintained control
o Ball ultimately sent to auction and profits split.


WHOS RIGHTS ARE PROTECTED BY PROPERTY LAW?

ACQUISITION BY DISCOVERY:

Johnson v. MIntosh: among European nations, their claim to dominion, in spite of ongoing
native occupancy- determines title; the first white person to arrive gives title to their government,
regardless of native people who got there earlier.
Facts: J purchased land from Piankeshaw Indians (they rightfully owned the land and the
correct people, chiefs, sold it to J). M later purchased this land from the U.S. government. M
tried to evict J from the land. J brought a cause of action against M, claiming that he owned
the land.
Indian right of occupancy only lasts as long as US discretion lasts, as soon as the US decides
to allow settlement of the lands, occupancy is revoked
Indians can only sell to one buyer- the U.S. government
Court held that b/c Js claim to the land was based on a purchase from Indians and not the
U.S. govt., his claim was not recognized by the court.
Law is given by law-makers (stepping away from natural law). The court of the conqueror
gets to decide what the law is (Law of Nations Positive Law) ! Marshall feels uneasy
about this, but his hands are tied
Property law distinguishes from the right to hold title from the right to use land


Doctrine of Discovery Discovery of a land gave settlers an exclusive right to extinguish the
Indian title of occupancy, either by purchase or by conquest.
Indian inhabitants are merely occupants and could not transfer absolute title to others they
had possessory rights and could occupy the land but these rights could be terminated at will
U.S. chain of title is the only rightful chain of title comes largely from the European idea
that discovery gave title to the government by whose subjects, or by whose authority, it was
made, against all other European governments, which title might be consummated by
possession.
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THEORIES IN PROPERTY LAW:
Ownership in property may mean different things; two theories of policy (1) labor theory, and
(2) first-in-time, which property law tends to favor

Labor Theory: labor makes property. Because we own our bodies, when we mix our bodies.
The court decides what is the kind of behavior that they will count towards possession. It is not
pre-existing, but is socially constructed.
Law of Accession: If you put labor into property, in certain circumstances, you create
property in yourself (like someone who paints on a canvas that he doesnt own). Key
factors to consider:
o Whether the final product increased in value a LOT
o Whether the laborer wrongfully seized the raw material, and intended to do wrong
o Whether we can restore the original owner to their position
o Whether there was an employment/contractual relationship
o Sometimes, if you put labor into someone elses property, you can effectively
appropriate it for yourself.
What can the legal system do to correct the harm?
o If the labor cannot be separated, then money damages.
o If the labor can be separated, can give it back.

First-In-Time Doctrine: spoils go to the first grabber

Advantages Disadvantages
Encourages investment and cultivation
Easy to administer and understand
Fewer disputes
Encourages competition that would benefit
society
Self-policing- objective
Intuitive
Fairness and distribution problems
Initial distribution sealed in- not a level
playing field, which seals inequity into
allocation (historic norms of land
distribution)
Encourages waste- allows unlimited
grabbing (more than you need)
Can exclude other people who would better
use it
People will exploit others in their efforts to
be first
Encourages monopolistic results
Doesnt care about labor
***Power and Property: Power begets property- if one conquers the land, they will own it;
property bestows power- once someone owns something; they can do whatever they want with it.


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WHAT IS PROPERTY? WHAT ARE LIMITATIONS ON PROPERTY?

Property - relationship among people that entitles owners the right to include (permit) or
exclude (deny) use of possession of their property
The bundle of property rights is not always concentrated in a single person- and sometimes
can withhold certain rights from certain types of property. Different objects have different
limitations on what people can do with them.
o If you own a Picasso painting, Picasso still owns the ideas a copyright, even if he
sold the painting- and he can reproduce it
o If you own a handgun, you have limited use rights and an obligation to exclude you
cannot leave gun out in the open where children are and there are limited transfer
rights
o If you have prescription drugs, you can use, hold, destroy, waste and abandon the
drugs BUT you cant transfer them or replicate them
Rights are hollow if not endorsed and enforced by the STATE

RIGHT TO EXCLUDE:

The right to exclude is well protected by legal doctrine, including:
Trespass (statutory)
Common law right to exclude (i.e. to refuse entry)
Intellectual property laws
o Federal: copyright, patent, trademark
o State: trade secret, contracts, right of publicity
Two ways to exercise right to exclude:
o 1. Prohibit other people from using land, objects, creations
o 2. Charge people money for using your land, objects, creation

Property is a bundle of rights and includes:
Right to EXCLUDE (foundation in our legal system)
Right to TRANSFER
Right to USE
Right to WASTE
Right to TRANSFORM

Trespass is an intentional intrusion on property possessed by another
Intentional = voluntary (mistake is NOT a defense...however if someone was
sleepwalking, it was not voluntary, so not liable)
Intrusion = over, under, on (a physical invasion by D or agents on property air space
doesnt count)
Possessed by another: trespass is against the possessor, not the title owner. Interest
protected is possession, not title ownership
Any physical intrusion is encompassed, whether by people, trees (right to self-help by
neighbors), objects, and structures

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Why would American law want to discourage trespass?
Want people to make their property valuable and keep property values nigh
Want people to buy and transact for access to land- encourage civilized, market-based
transactions w/ clear rules
W/out strong rights to exclude, we turn all lands into commons- which would lead to
maximum exploitation and depletion b/c everyone would be incentivized to consume

Jacque v. Steenberg Homes: the essence of private property is the right of the owner to exclude
others
Facts: In spite of Ps adamant protests, D plowed a path through Ps field to deliver a mobile
home- it was the easiest way for P, but NOT the only way. Ct. awarded $100,000 in punitive
damages and $1 in nominal damages.
Society has an interest in punishing and deterring intentional trespassers beyond that of
protecting the interest of individual landowners. Private landowners should feel confident
that wrongdoers who trespass on their land will be punished.

Policy Justifications for and against the Right to Exclude:

Justifications for Right to Exclude Dangers of Over Propertization
Privacy, autonomy: to control who has
access
Natural Rights/ Labor Theory: the right
to enjoy and protect the fruits of ones
labor
Tragedy of the commons (Hardin):
overuse (no reason to conserve) and
undercultivation (no incentive to
produce)
Personhood: human flourishing,
reputational interests. People make
things as an extension of their
personhood, and the law should protect
them from appropriation of these things
w/o their control
Legal Integrity: The right to exclude is
fundamental, and if the Ct. does not
enforce a right, then no one will obey
the law: a right is hollow unless a
legal system provides sufficient means
to protect it. If there is a right, there
must be a remedy.
Prevent vigilantism: courts want to
prevent self-help remedies
Tragedy of the Anti-commons: too
many property rights and rights to
exclude can lead to UNDERUSE and
UNDERCULTIVATION
o Eisenberg & Heller biological
patents
Present interests constrain future ones:
propertization of the 1st generation
creators works can harm/constrain
later generation creations
Infringement on Individual Rights: 1st
amendment speech rights, associational
rights, freedom from arbitrary
exclusion, discrimination (reasonable
access)
Right to exclude creates harm, it
reinforces the wealth gap and excludes
you from the market place; impaired
the right to contract, which reinforces
the wealth gap
o (Patricia Williams buzzer
article, is it really for public
safety or to reinforce righto
exclude?)


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LIMITATIONS ON RIGHT TO EXCLUDE:
* Very narrow rule only applies to things like charities and government services the idea is
that you cant use your right to exclude to harm others, particularly those who work and live on
your property (also particularly vulnerable population)

State v. Shack: under [NJ] state law the ownership of real property does not include the right to
bar access to govt services available to migrant workers and hence there was no trespass within
the meaning if the penal statute
Facts: D entered Ps private property to aid migrant farm workers employed and housed
there, refused to depart upon demand of owner. Owner would not allow migrant workers to
speak to D unless P was plaintiff.

Policy arguments: A mans right in his real property is not absolute. RIGHTS ARE
RELATIONAL: Property rights serve human values. Title to real property cannot include
dominion over the destiny of persons the owner permits to come upon the premises. Social
responsibility, human relationships- property law must conform to what society says is moral.
Cohen while the essence of private property is the right to exclude others, this right is not
inviolable
Macpherson we can understand the limitations on the right to exclude as supplementing the
individual right to exclude others by the individual right not to be excluded by others
On the other hand, some like Epstein, believes that market forces, so long as they exist, will
check abuses.
o Social sanctioning and individuals can contract around each others right to exclude.
You can essentially buy people out.
o But this requires that parties have some bargaining power but some people have
extremely week bargaining power b/c the first distribution was not fair. The market is
imperfect such that you cannot believe in the absolute right to exclude while wanting to
give fair wages (workers do not simply obtain market power through their own labor !
do you believe there is upward social mobility?)

COMMON LAW RIGHT TO EXCLUDE:
Right to Exclude (from Common Law): right of reasonable access vs. right to exclude

Minority Rule: from Uston: Absent disruption, a patron enjoys reasonable right of access to
any property open to the public (New Jersey)

Majority Rule: from Madden, All property owners except innkeepers and common carriers
have an absolute right to exclude (except on the basis of protected categories as stipulated in
the 14
th
Amendment and civil rights statutes race, color, national origin. NOTE: not
included here sexual orientation, age, class). (New York, Nevada, Arizona, Illinois, etc.)
From State v. Shack: Property rights serve human values. They are recognized to that end,
and are limited by it. Title to real property cannot include dominion over the destiny of
persons the owner permits to come upon the premisesthat the law will deny the occupants
the power to contract away what is deemed essential to their health

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* Default rules are important b/c they determine which party has the burden of proof if they want
to shift away from the default e.g. in the majority rule, the business does not have to give why it
discriminates.
** You can always meter entry on the basis of money; it is harder when you meter entrance by
other standards e.g. what people look like. So, you can always exclude in a private club for
instance.

Why the innkeepers and common carriers exception?
Our legal system favors the right to travel and labor mobility- enabling people to move
(liberty and choice)
Local monopoly concerns- certain businesses can be the only one in town. If they
exclude, nowhere for the person to go (so could a Wal-mart in some places be moving
toward common carrier status?).
These businesses provide necessities and excluding people from access could result in
physical harm (not having a place to sleep for the night)
Innkeepers and common carriers hold themselves out as ready to serve the public and
public relies on this representation

Uston v. Resorts Intl: when property owners, in pursuit of their own interests, open up their
property to the general public, they have no rights to exclude people unreasonably
The more a property is devoted to public use, the more it must accommodate the rights,
which inhere in individual members of the general public e.g. right of reasonable access
Do have a duty to remove disorderly or dangerous persons from their premises
NOTE duty applies not only to common carriers, innkeepers, owners of gas stations,
private hospitals BUT all property owners who open their premises to the public.
Facts: P, a non-disruptive patron of D, a casino- private business open to the public. P was
card counting and D wanted to expel him from the casino. Court held that P had a right to
reasonable access.

Spectrum of Rights to Exclusion - Recap
Because property rights are relational, it is important to find a balance b/t reasonable
access and right to exclude:
o Jacques private property, not open to public
o Shack private, not open, limited protection for those who live on property
(individuals bring their rights with them when the come onto a property)
o Uston open to the public, but for amusement (some states split on this type of
case)
o Innkeepers/common carriers open to the public and very important
services/essential services

Public Accommodations Law:
Round 1 (Reconstruction Era)
Civil Rights Act of 1866 ( 1981 & 1982)
o Section 1981: Statement of equal rights: same rights to make and enforce
contracts as white citizens ! this now also applies to private conduct
o Section 1982: All citizens of the U.S. shall have the same right to inherit,
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purchase, lease, sell, hold, and convey real and personal property ! Fair
Housing Act
o Also only offers declaratory and injunctive relief
o And plaintiff may be able to recover attorneys fees from the defendant if the
plaintiff prevails
Initially judicially interpreted NOT to apply to private conduct (in the Civil Rights
Cases); thus, no barrier to private racial discrimination
Round 2 (Civil Rights Era)
Civil Rights Act of 1964 (Title II): Congress creates antidiscrimination protection
applicable to private establishments
o Equal access w/out discrimination or segregation on the ground of race, color,
religion, or national origin
o Establishments which are considered public accommodation: inn, hotel,
motel, or other lodging; restaurant, cafeteria, or other food vendor; motion
picture house, concert hall, sports arena, and other places of
exhibition/entertainment
Alfred Mayer (68) and Runyon (76): 1981 and 1982 reinterpreted to apply to
private conduct
HOWEVER in Rodriguez, SCOTUS held that class discrimination is not prohibited by the
Constitution. Thus, the right to exclude prevails unless discriminating on account of one of the
protected statuses.

Homeless Hypo: Mall connected to subway. Homeless people are loitering in the mall because
its cold outside, making some customers uncomfortable. Mall creates a policy that says if you
look homeless, you have to leave.
Arguments in Favor of Malls Policy Arguments in Favor of Reasonable Access
Assert majority rule on right to exclude
theres a reason why it exists
Civil rights laws could rule against
excluding homeless people but havent
Reality: customers do not like this, bad for
business (distinguish from Uston)
Human values property as wealth
creation is also a value
Businesses are not set up to be homeless
shelters
Not fault of corporations that there are no
public places for homeless; its really the
fault of the government
Retail stores are not like inns and common
carriers e.g. they are not typically
monopolies, not essential in their service
(many other stores exist), and some stores
exist to serve a subset of the public (really
high end one are more like clubs)
No good reason to discriminate if the
individuals are not disorderly or otherwise
acting dangerously
Mall is very public b/c it connects to a
subway, which is essentially a common
carrier
Individuals dont necessarily have to spend
money in a department store; that cannot be
a dividing line so they have the
homeless/not-homeless dividing line
Kicking people out based on judgment that
you think they may be homeless is not
super enforceable; the rule is very vague
Is the common carriers distinction still
viable? Are department stores really
private? Does the distinct hold up?
Property law should serve human values
recognition of humanity, personal dignity
Store kind of serving as an inn because its
cold outside
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PEOPLE AS PROPERTY

Goals of the US Constitution:
o Protect individual liberty
o Promote democracy
Protection of property seen to serve both ends
o Give people the power to control their own labor; abolish feudal land hierarchies
o Owning property will poster participation and citizenship
However, if slaves are protected by the constitution, how can they be the property of others?
Individual liberty cannot apply to all people if some people are property. To have slavery,
some people must be removed from the guarantee of liberty.
o Antelope: it is law that takes men out of guarantee of liberty; morality knows that they
are men and entitled to liberty but law takes them out of community of men
o Dred Scott: it is nature that has removed them from community of men

Antelope: J. Marshall wrote that slavery violated natural law, however, it was justified through
positive law of the nations, through general acquiescence and long usage ! law may not be
moral, but we must follow it
Believes that law can take blacks out of the community of men but can also put them back in;
blacks, when freed, can have the liberties that white men have
Facts: pirate ship captured three vessels off the coast of Africa and took Africans from each
ship. SCOTUS had to determine whether to treat the captured Africans as slaves and return
them to their owners or treat them as free persons
o B/c US had outlawed slave trade but not slavery at that time, Court ruled that the
persons on the American ship be freed
o They attempted to return the men on the other ships to their owners (Spanish ship was
returned and Portuguese ship didnt have an owner that could be located so
individuals also released)

Dred Scott v. Sanford: (1) slaves were not intended to be included under the word citizens in
the Constitution and thus are not conferred liberties given to a citizen and states could not grant
them citizenship (not Federal citizenship anyway they can grant state citizenship but U.S. govt/
does not have to recognize it), (2) Missouri compromise is unconstitutional act cannot deprive
citizen of property just b/c he brought his property to a part of the country which does not
recognize it as property
Facts: P, slave sued D for freedom because D had taken P to free states and resided quite a
while in these free states.
o Court held that blacks couldnt become citizens protected by the Constitution, that the
Constitutional language of all men did not include blacks.
o Founding Fathers cant have meant for all men to include slaves b/c the right of
property in a slave is protected by the Constitution (Framers Intent) and they
owned slaves, they werent hypocrites. ! P had no standing in court

Decisions overturned by THE CONSTITUTIONAL AMENDMENTS (13
th
ends slavery, 14
th

gives equal protection. They were NOT enforced until after the Civil Rights Movement.
Constitution has to be able to grow and change with the times to some degree).
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Moore v. Regents of University of California: there is no property right to bodily fluids once they
are removed from the body
Facts: P was a patient at UCLA Medical Center with hairy-cell leukemia and had to get his
spleen removed. Doctors at UC (Regents), particularly Dr. Golde, used P's cells to create a
cell line and made lots of money off of it. D did not disclose his research interests to P. P
brought case against D, asking for damages.
Court ruled that Moores complaint of breach of fiduciary duty and lack of informed consent
may be proper but no action for conversion (unauthorized act depriving an individual of
his/her property)
Large issue at the time of excision, did Moore have property rights on the cells?
Arguments for and against a right to our cells/bodily fluids
Arguments for Moore Arguments for UCLA and Doctors
Personal dignity and privacy cells are his (D
did put skill in isolating cells but that should
factor into damages calculation)
Medical research will not suffer if doctors
simply require consent from a donor before any
bodily fluids are appropriated
At the time of excision, Moore may not have
had all the rights associated with property, but
he at least had the right to do with his own
tissue whatever the defendants did with it
Informed consent is not an adequate remedy
b/c it places burden on the plaintiff to prove
that if he/she was informed, he would have
made a different decision AND that a
reasonable person would have made the same
decision.
Informed consent doesnt give him a right to
say yes to commercial ventures.
It is inequitable and immoral that P should not
be compensated when without Moore's cells
the profitable cell line would have never been
created.
No court has ever held conversion liability for
cells (perhaps for good reason)
There are laws limiting continued interest of a
patient in excised cells some of they just for
health & safety reasons
Lymphokines have the same molecular
structure and function in every human being. It
is not like a name or a face, since they are not
unique to Moore.
Moreover, the patented cell line is factually and
legally distinct from the cells taken from
Moore's body. It is the inventive effort that
patent law rewards with a patent, not just the
discovery of a naturally occurring raw material
! Labor theory
Policy argument: court doesnt want to threaten
civil liability for medical research for those
researchers who have no reason to believe that
use of a particular cell sample is against a
donor's wishes.

INTELLECTUAL PROPERTY:

Right to exclude as applied to intangible resources

Tragedy of the Commons problem of OVERCONSUMPTION and UNDERCULTIVATION
1) If a pasture is open to all shepherds and sheep, everyone acting to maximize their own
consumption w/out bearing the cost of consumption ! overconsumption
2) If there is a field open to everyone for cultivation, there is not incentive for people to
US Constitution article I, 8, Cl. 8:
To promote the Progress of Science and useful Arts, by securing for limited Times to Authors
and Inventors the exclusive Right to their respective Writings and Discoveries.

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plant corn b/c they know that others will come and harvest it. People cant extract the
benefits of their investment ! under-cultivation (no one will invest)

Private Ownership internalizes many of the external costs associated with communal ownership
and creates incentives to utilize resources more efficiently. Tragedy of the commons is used to
justify private property rights.

Justification for Intellectual Property Law: intellectual property is particularly subject to
under cultivation; people may not make investments in creation unless they can extract some
benefit (not as subject to overconsumption b/t ideas are intangible and generally cannot be
exhausted non-rival)
Prevent under-cultivation through economic incentives: Exclusive rights give economic
incentive for socially beneficial creation by ensuring the creator/inventor does not have to
compete in the market w/ copiers.
Personhood: property is necessary for human flourishing. Intellectual work is an extension of
the authors personality, integrity
Natural Rights: People have the right to the fruit of their labor
Avoid consumer confusion (why we have trademarks they give consumers some
information as to the quality of a good)
Labor dessert theory prevent people from free-riding on others investments this protects
ones moral right to reward from ones labor

Tragedy of the Anti-Commons (Heller and Eisenberg): anti-commons describes when people
underuse scarce resources because too many owners can block entry !
UNDERCONSUMPTION
In the 1980s, in an effort to promote commercial development of new technologies, Congress
began encouraging universities and other institutions to patent discoveries arising from
federally supported research and development AND to transfer their technology to the private
sector (Bayh-Dole Act)
Biomedical anti-commons
o Concurrent fragments: (1) expressed sequence tags, (2) patents on receptors useful for
screening pharmaceuticals
o Stacking licenses: (1) reach through rights
There may be high transaction costs of bundling rights you may need a diverse set of
techniques and technologies to do anything
Heterogeneous interests of rights holders conflicting interests may also render it difficult to
reach an agreement.
Solutions?
o Patent pool (a consortium of at least 2 companies agreeing to cross-license patents
relating to a particular technology) as a solution. (But transaction costs would be high
b/c people tend to over-value their invention and people dont like negotiating with
competitors)
o Govt intervenes by funding research.
o Limit patent duration and/or limit upstream patents
o Compulsory licensing
o Communities agreeing to place things in the public domain synthetic biology
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Patents Copyright Trademarks
Limited period of monopoly
rights to copy/use
invention/product (usually 20
years)
Novel, useful, and
nonobvious processes or
products (inventions,
discoveries, methods)
Protects applications of ideas,
not ideas
Cannot patent nature or
scientific truths
Not automatic, must be
granted by the US patent and
Trademark Office
Open to copying after
monopoly rights expire

Protection for expression for
original works of authorship fixed
in any tangible medium of
expression
Can be performance based e.g.
creative arts
BUT not about ideas or facts
(newspaper reporters cannot
copyright their facts)
Protection is automatic and no
registration is required
Grants exclusive rights to
reproduction, derivative works,
copy, sell, perform, or display
Lasts for 70 years after death of
author or 120 if the work was
created for hire
Allows fair use by others e.g.
criticism, teaching, news reporting,
etc.
Protects terms, logos,
slogans, etc. identified w/
a particular product or
business
Gives owner of the mark
exclusive rights in
connection w/ sale of a
good or service
Goal: avoid consumer
confusion/mistakes
owner has property
interest in the mark (also
a consumer protection
angle)
Federal registration
system


Case Law:
Nichols v. Universal: one cannot copyright an expression, but can copyright an idea. One
person cannot have the exclusive right to express something that is fundamentally a part of
our common experience.
o Facts: P wrote a play about a Jewish family and a Catholic family living in NY.
Universal made a movie about a Jewish family and Catholic family living in New
York. Both stories had the children of these families, one female and one male as
lovers. P sued D for copyright infringement.
o The Court found that although the two plays shared a number of the same themes and
the general plot, the similarities tended to be general things, universal concepts, and
stereotypical characters. There was nothing unique to Nichols' play that was found in
Universal's movie.
o As long as a defendant only takes the uncopyrightable elements of a plaintiff's work,
the two works will not be substantially similar enough to constitute copyright
infringement.
White v. Samsung: majority held that P had a right to publicity and that it should be protected
(we primarily read the dissent though)
o Facts: S makes an advertisement depicting a robot that is dressed like W and standing
next to a Wheel of Fortune board. W neither consented to the ads nor was paid.
o Majority decision:
" Labor theory: P had worked to build her image. If did not protect Ps rights,
other people can use her likeness w/o compensating her.
" Theres also a privacy and personhood issue.
" Also avoids consumer confusion some people might have thought P was
endorsing D when she really hadnt.
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o Dissent (Kozinsky):
" Copyright has limited peoples freedom of expression and speech/ 1st
amendment rights
" Concerned about the costs imposed by right of publicity and that if everyone
has exclusive right to their identity, would limit creation. Super strong IP
protection would generate a 1st generation of creativity, but would stop future
generations from building upon the 1st generation
" There has to be some shared spaces in land, otherwise, there is no way to pass
from one place to another.
" Majoritys ruling conflicts with the Copyright Act and Copyright Clause,
which allow parodies and fair use.
" Also, if we cannot evoke the image of Vanna White how, it would be the
courts controlling our minds (and they supposedly dont have that power)

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ADVERSE POSSESSION:

If, within a number of years specified in the state statute of limitations, the owner of land does
not take legal action to eject a possessor who claims adversely to the owner, the owner is
thereafter barred from bringing an action in ejectment and loses his right to the land. Once the
owner is barred from suing in ejectment, the adverse possessor has title to the land. ! really
just a statute of limitations on your right to exclude
* Once acquired, the new title relates back to the date of the event that started the statute of
limitations running and the law acts as though the adverse possessor were the owner from that
date

Hostility Element:
Basic rule: no permission given by title owner, adverse possessor has claim of right
Two types of claims:
o Claim of title: adverse possessor claims the property based on use and applies in ALL
STATES
o Color of title: adverse possessor claims the property based on use and a written
instrument (contract, will etc. that turns out to be invalid).
" This is mandatory in a MINORITY of states (those who require color of title
have a mistake/good faith standard)
1) Entry and Exclusivity: Adverse possessor must actually enter the property and take
exclusive possession
a. FOCUS: nature of use; area of parcel in use
b. Cant just hide in the owners basement, or tunnel under the owners land, and
need to use it in the way the average owner of such land would use it.
2) Open and notorious: possession must be open and notorious
a. FOCUS: visibility of use
b. Constructive notice is sufficient, unless a minor encroachment (then actual notice
is required) (Mannillo)
c. It must be obvious to anyone that you are using the land, and protects the true
owners by giving the true owner a chance to see if anyone is on their land.
d. A good and responsible land owner should be able to tell that someone is on their
land if they are using it openly and notoriously.
3) Continuity: Possession must be continuous for the statutory period
a. FOCUS: timing of use and average use under the circumstances (hunting on
hunting land, etc.)
b. Use does not have to be constant, depends on the character of the land and how it
is typically used by the average owner
4) Hostility, Adversity: Possession must be adverse (no permission from owner) and under a
claim of right (AKA claim of title)
a. FOCUS: lack of permission + state of mind of adverse possessor
b. If AP had claim under color of title (he had a document that he thought gave him
title), he gets the whole parcel
c. If AP had claim w/o color of title, he gets only the part he actually used and actual
possession is required
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" Most states make adverse possession easier to obtain if you do have color of
title
Adverse Possessors State of Mind (WHEN YOU DONT HAVE COLOR OF TITLE):
o View 1: Mistake/good faith (I thought I owned it)
" Subjective standard: examines mind of adverse possessor
" Requires a color of title or good faith mistake on part of the adverse possessor
" New York (Lutz and 2008 reforms)
o View 2: Aggressive Trespass (I knew it wasnt mine, but I intended to make it
mine)
" Subject standard: examines mind of adverse possessor
" Requires claim of title NOT under color of title
" Often comes with compensation requirements
o View 3: State of Mind is Irrelevant
" Objective standard
" Claim of title or color are ok
" Mistakes are also ok Manillo

Arguments for and against Adverse Possession:

Reasons for Adverse Possession Disadvantage of Adverse Possession
Labor Theory/Personhood: man gets attached to land (its
his home) and law should honor it
Reward those using the land in a way that is beneficial to
the community.
The state expects landowners to maintain the land and use
or at least visit it in return for the states guarantee to
enforce property rights
Punishes landlords who sleep on their rights- you
snooze, you lose!
Keeps the states records up to date with reality so that it
reflects actual ownership and reduces uncertainty about
titles ! encourages investment
Certainty about title helps keep peace and can help
resolve disputes on land
Incentivizes landowners to be diligent and take care of
their land
AP can level the playing field b/c the negligent owner is
likely to own lots of land, and give title to someone who
might need it more than the land owner
Aging claims make it difficult to adjudicate
AP is a method of reallocating property (land); adverse
possessors may be socially and economically
disadvantaged in the first place, so this helps relocate
some of the unfair initial distribution
Land can change value over time, people hold it as
investment, so they may not use it for 20 years; the statute
of limitations may be unfair
Landowners should have security AP
encourages land-grabbing
AP potentially encourages over-
cultivation rather than conservation
AP is theft- plain and simple

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Cases:
Van Valkenburgh v. Lutz: in NY, adverse possession requires substantial enclosure and
usual cultivation or improvement
o Facts: D built a garden and some structures on land later acquired by P. P sued b/c
D did not remove the house and garage encroachment. L agreed but claimed
easement on footpath through Ps land (easier to get to his home by using
easement). P put up a fence, blocking this path. D sued not only for easement but
for adverse possession. Court did not grant it.
Mannillo v. Gorski: if an innocent trespasser of a small portion of land adjoining a
boundary line cannot w/out great expense remove or eliminate the encroachment
o If an encroachment is minor, actual notice to the original owner is required.
Actual notice will then trigger the beginning of the statutory period
o Adverse possessors improve the land at their own risk b/c they might be removed
from the land (common law approach tear it down)
o Modern approach
" Forced sale to encroacher: The true owner may be forced to render a
conveyance at market value of the land to the improver
" Forced purchase by title owner: requires title owner to pay for any benefits
encroacher has conferred onto his land
o State of mind here is irrelevant court did not really want to spend time figuring
out trespassers mindset
o Facts: D built steps that encroached 15 inches on Ps land, had made significant
improvements to land, and contended adverse possession.


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JOINT OWNERSHIP:

Economic rationale: people can pool their resources to buy something together that they
couldnt buy alone

Personal: ability to establish family relations that are reflected in property ownership, shared
space

Joint Ownership Summary:
Tenancy
Type
Right of
Survivorship
Undivided
Interest
Unities
Present
Creation Destruction
Joint
tenancy
YES YES Time
Title
Interest**
Possession*
4 unities -One party sells their
interest
-Convert to TIC
-Partition
Tenancy in
Common
(Default)
NO YES Possession -Sales, wills,
etc.
-Destruction of
JT or ToE
-Subdivision (condo
conversion)
-Reunification of title in
single owner
-Partition
Tenancy
by the
Entirety
YES YES Time
Title
Interest
Possession
Marriage
Older CL:
presumption of
any property
conveyance to
married couple
***
-Divorce
-No partition outside
divorce
-No right to sell,
encumber ones share
without consent
* Unity of possession is present in all three types of ownership; everyone on the deed can use
100% of the property
** Modern view: unequal interest is no longer necessary.
*** No longer assumed that spouses want survivorship; before, marriage was automatically a
TBE, but this is not necessarily the case

Note on adverse possession: one cotenant cannot obtain adverse possession against another
unless the possessing tenant makes clear to the non-possessory tenant that he is asserting full
ownership ! there has to be some affirmative act that puts the co-owner on notice

JOINT TENANCY:
Each co-tenant owns an undivided share of the property and each has the right to
possess the entire property (100% possession)
o Everyone owns the whole thing UNLESS they contract around it (i.e. one person
has possession of 1st floor, other possess the 2d floor)
o Each co-tenant has an equal interest UNLESS they contract around it (i.e. A has
70%, B has 30%)
Requires the 4 unities for formation: time, title, interest, possession
o Time: interest must be acquired at the same time (thus, sale defeats JT b/c it
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disrupts this unity)
o Title: the same instrument vests ownership (can happen through AP)
o Interest: Undivided interest and equal shares (everyone has the same amount of
interest; modern rule is that you CAN have an unequal JT (60%-40%, etc.)
o Possession: each has the right to possess the whole thing (everyone has the right
to live there, rent it out, etc.)
o It is difficult to create these b/c the default is TIC (w/out right of
survivorship) so you need to actually use the magic words as joint tenants
with rights of survivorship
o If any of the unities are broken at the time of forming a JT, you automatically get
a TIC
Right of survivorship: upon death of a joint tenant, that joint tenants interest in the
property is extinguished and goes POOF! The property automatically transfers to the
surviving joint tenants. MOST IMPORTANT feature of JT. You dont even look at the
will (without this, you just have a TIC).
o Also, property does not go through the probate courts, so this is nice b/c that can
be very expensive and take a lot of time.
Destroying a JT:
o One party sells or gifts out their interest (breaks the time unity this used to be
done with strawmen, but not necessary anymore after Riddle v. Harmon. You can
gift it to yourself to break it. No notice is necessary to the other party.) ! new
owner now owns it as a TIC with old owner
o Convert to TIC (mutual agreement)
o Seek judicial partition a court will get involved
" Partition-in-kind: physically divided
" Partition by sale: sell whole property and each seller gets cash- forces
monetized value of property

Policy Advantages of JT:
The law wants people to be able to sell property and devise it to their heirs and does not like
instruments that bind us to a particular outcome that would prohibit us from selling
Attractive for married couples- ensure that the interest in the property will be able to pass to
the surviving spouse w/o legal hassle
May have some fairness issues other person may be relying on the arrangement and you
can sever JT without notice (though in most places, you do have to change the deed ,which is
then equivalent to notice)

Riddle v. Harmon: one joint tenant may unilateral sever the joint tenancy without the use of an
intermediary device; no longer have to go through straw man
Facts: P wanted to grant herself a ! interest to convert a JT into TIC.

Hypos:
1) HYPO: if both JT die at the same time, would become a TIC among their heirs
2) HYPO: If there are 3 JTs, and 1 of them sells to another person, the JT is now a TIC.
However, the 2 original still have a JT with each other (and the right of survivorship),
but the new owner doesnt have right of survivorship with the original two.
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TENANCY IN COMMON: DEFAULT
Separate but undivided interest (and can be unequal) in the whole property
o Each co-tenant has title to the whole and can rightful occupy the whole unless the
other co-tenants assert their possessory rights (Spiller)
o TIC contracts usually provide for: (1) exclusive use areas and (2) shared use areas
o From the purpose of the city, however, the address is 1 singular building and all TICs
pay taxes together
The interest of each tenant-in-common is descendible and may be conveyed by deed or will
(entirely alienable)
No right of survivorship between tenants-in-common
Destroying a TIC:
o Conversion into condos (sometimes not permissible) condos buildings are legally
subdivided and each owner has a different title. They are a form of communal
property behavior, but what each person owns has been legally divided. Typically
MUCH more expensive than TICs (you dont have to share paying the tax w/ your
neighbors, so you arent responsible for them).
o Reunification into single owner.
o Judicial partition (in-kind or by sale)

TENACY BY THE ENTIRETY & COMMUNITY PROPERTY MARITAL PROPERTY

Tenancy by the Entirety:
Only between a husband and wife- the law treats them as one person
Creation requires time, title, interest, possession, and marriage
No right to sell or encumber ones share without consent since you cannot unilaterally
alienate the land, creditors will not take a house that is TBE.
Upon death of one spouse, the other spouse has right of survivorship- immediately and
automatically
SEVERANCE BY ONE TENANT IS IMPOSSIBLE (key difference between TBE and JT-
neither tenant acting alone can destroy the right of survivorship) ! you need to get a divorce
to sever a TBE
Destruction
o Divorce automatically converts TBE into TIC: equitable/discretionary division of all
property (some states) or only marital property (other states)
o Virtually no partition outside of divorce
Marital Property in TBEs:
o Always: earnings during marriage
o Sometimes: gifts, inheritances during marriage
o Degrees/Increased earning capacity:
" Not marital property (In Re Graham)
" Not marital property but other spouse should get reimbursement in form of
alimony (Maloney, NJ)
" Martial property (OBrien, NY minority view)
In Re Marriage of Graham: a degree is not property because it cannot be exchanged, inherited,
conveyed, or pledged; a degree is personal to the holder and terminates upon the death of the
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holder (not something that you can inherit) plus, he earned the degree, labor theory
Facts: Wife working full time and supporting husband through grad school. Paid for 70%
of expenses through a very short marriage. Invested in future earning capacity, but the
divorce took place before there was any yield.
Arguments in favor of Graham: its a gift, given out of love; we dont want to affect
Grahams choices in the job market; and it is more administrable
Dissent: some legal settings will monetize earning capacity;

Separate Property:
Property acquired before and during marriage is owned individually/separately, but duty
of support applies
No right of survivorship here, but there is a notion that there is a share of the decedents
estate (even if the will sets to skip the spouse, the surviving spouse will be entitled to
something in the statute, usually 1/3 or ! of the estate)
Divorce: equitable division of all property (some states) or only marital property (other
states)
o Marital property: earnings during marriage and sometimes gifts/inheritances
during marriage
Equitable factors include: need, rehabilitation allow spouse to obtain marketable skills,
contribution during marriage (what one did in a home used to count for zero but that is
slowly changing), fault/marital misconduct (some states) most state has a no fault
divorce law, age (lots of divorces occurring late in life, around 60s), health, occupation,
income, vocational skills, length of marriage, etc.

Community Property:
Couple is viewed as a partnership (10 states); rationale wife no longer subsumed in
husbands identify and w/in the period of marriage, the things they acquire belong to both of
them equally
Community property distinguished from separate property:
o Community property in a marriage: earnings, rents, profits during marriage +
anything purchased with those earnings, with a presumption in favor of community
property
o Separate property: property acquired before marriage and property acquired during
marriage by gift/inheritance
Upon death, no right of survivorship, but can be left by will to heirs you can only leave
what you own though, which is ! of community property and 100% of separate property
o Can have a prenuptial agreement and contract around the states rules BEFORE the
couple gets married
Upon divorce, either ! to each spouse (CA) or equitable division
Management: either H or W, acting alone, can manage community property; either can sell
it, lease it, invest it BUT must be done in good faith, not good judgment; joint management
(e.g. mortgages) except special expertise. Each is a fiduciary and must manage CP for the
benefit of the community
o Ex: 1 spouse runs a shoe-repair business. That spouse can manage the assets of the
shoe-repair, even though those assets are technically CP
Mixing CP and SP: CA rule is pro rata sharing- CP buys in a pro rata share of title
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Mingling/Conversion: buying something with your own money (SP) for the family turns it
into community property (community property cannot be converted into separate property
w/o consent).
o If it is a big investment, you might inscribe a contract that it remains your SP (ex: the
house)
o Income is ALREADY CP, so if it is your income that is financing a house, it IS CP
o If you are financing the house out of your SP, you are converting it, UNLESS you
specifically title it as your separate property

SHARING THE BENEFITS & BURDENS OF CO-OWNERSHIP:

Often, concurrent owners will enter into an agreement concerning their rights and duties.
However, there might arise a problem that is not covered by the agreement and that is where
independent property rights step in to resolve the issue.

Ouster: Wrongful dispossession of a person from their own property (being ousted also starts the
clock on adverse possession for the other person).
All cotenants have right to possession of the whole, until that right infringes on the right
of the other cotenants- and ouster is how the law marks that injury

Remedies when your co-tenant does something wrong e.g. tries to occupy the entire property
and exclude you from using it OR renting it to somebody else:
a. Try moving in and using the land (force an ouster) ! if D does not allow P to
share the land (because they both technically have 100% possession), then P has a
claim for ouster and can obtain ! the reasonable rental value from D
i. Swartzbaugh v. Simpson: wife could have brought her choir into the
boxing ring, or bulldozes part of a parking lot or something to annoy the
lessee and see if he might force an ouster on her
b. Judicial partition ! judge will either physically divide the property (partition in
kind), which doesnt happen very frequently OR sale the land and divide the
proceeds b/t the co-owners (partition by sale)
i. If JT, will lose any rights to survivorship on the partitioned property
c. Sue for accounting: entitles P to ! the actual rent paid under the lease (if P
accepts the money, P has then approves the lease)
i. If the lessee knew that P also owned the property, then it would be better
to ask lessee for reasonable rental value
ii. Ex if Joe is paying $100 in rent to D and at the time of renting, knows
that P also owns interest in the property, P can ask for market price of her
share
iii. If the lessee didnt know that P also owned property and didnt know
about the lease, the then D defrauded P in a sense and he owes her fair
market rental value
d. If its a TIC, P can share his share of the TIC since TICs are freely alienable

Spiller v. Mackareth: (Majority) In the absence of an agreement to pay rent or an ouster of a
cotenant, a cotenant in possession is not liable to his cotenants for the rent/value of his use and
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occupation of the property. Liability for rent thus requires ouster, which in turn requires a
PHYSICAL denial of entry.
Facts: P and D were TIC co-owners of a building that was being rented to a lessee. When
that lessee moved out, P moved in. D demanded on paper that P either vacate or pay half
the rental value. Court did not award rental b/c P could not show he was oustered.
* Policy Argument: ouster is kind of hard to get. You have to be physically denied entry
(lockout, etc.). We want to give meaning to the notion of undivided possession of the whole.
Encourages productive use of property (cant kick out for no reason), but it also encourage self-
help remedies or confrontations.

Swartzbaugh v. Sampson: a cotenant can enter into a lease without the permission of the other
cotenant, and the lessee has the right to possess the entire property. The non-leasing cotenant still
retains right of entry and right of use, and upon ouster, can access certain legal remedies.
Facts: Husband and wife are joint tenants. Husband leased to D, who wanted to build a
boxing ring and take out the walnut trees. Wife wants to cancel the leases- doesnt want
rent. Incompatible visions of what to do with the land: boxing pavilion or walnut trees-
both tenants have the right to use the land the way they please.
If Mr. S dies, his property rights die with him, so the lease with Sampson is terminated.

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LAND TRANSFERS:

Transfers of Land: free (unfettered, not costless since transactions are never costless) and
voluntary exchanges permit resources to move to higher valued uses, thus the law strives to
reduce the transaction cost burdens

DUTY TO DISCLOSE DEFECTS:
Steps in Buying a Home:
1. Buyer investigates affordability, pre-qualifies for a loan, consults with a real estate
broker or search through multiple listing service
2. Buyer makes an offer, seller makes a counteroffer, parties negotiate terms of a written
purchase and sale agreement that preserves contingencies for the parties to take certain
steps during the escrow period
Buyer usually will:
Conduct a title search
Inspect the property with a contractor to discover any undisclosed defects
Obtain her financing
If Buyer discovers something wrong with the property, and she has covered her
bases with a property contingency, she can walk away or renegotiate the
purchase price.
3. Parties sit down together (or with an escrow agent to transfer the deed)
The lender of the buyers mortgage funds the loanmoney goes to seller (most
of it usually will go to sellers bank to pay off their mortgage loan)
Title transfers to buyer
4. New title and the buyers mortgage are recorded in the county clerks office.
Latent Defects Rule
o Narrow (MINORITY): seller must disclose latent, material defects that he caused; most
physical defects are not latent. Stambovsky
o Where the condition which has been created by the seller materially impairs the
value of the contract and is peculiarly within the knowledge of the seller or unlikely to
be discovered by a prudent purchaser exercising due care with respect to the subject
transaction, nondisclosure constitutes a basis for rescission as a matter of equity
o Does not apply when the owner did not cause the defect.
o Broad (MAJORITY): Seller must disclose latent, material defects. Johnson
o Where the seller of a home knows of facts materially affecting the value of the property
which are not readily observable and are not known to the buyer, the seller is under
a duty to disclose them to the buyer. You can always contract around this stuff by
saying that you take the property as is.
" Promotes the policy of wanting to have efficiency and resolving anything that
might cause a problem before court; buyers have to go to many houses whereas
sellers are usually only selling one house think buyers markets from sellers
markets
" Also encourages sellers to make sure that they know everything about their
property
" But also a bit problematic b/c this standard is a knowledge standard

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Defect must be material to be actionable two tests of materiality:
Objective test of whether a reasonable person would attach importance to it in deciding to
buy
Subjective test of whether the defect affects the value or desirability of the property to the
buyer
Other things that might need to be disclosed:
o California must disclose if you have loud or unruly neighbors
o Psychological or prejudicial factors that might affect market value e.g. murder in the
house, former occupant died of AIDS
o Megans Law convicted sex offenders are required to registered and sometimes,
house sellers who are aware of these individuals in their vicinity might be asked to
disclose them
o And sometimes, off-site conditions e.g. being near a hazardous dump, needs to be
disclosed as well (depends on state laws)

Dwindling minority rule (common law) Caveat Emptor
No duty to disclose
Buyer must act prudently to assess the fitness and value of his purchase
Policy for why caveat emptor is dwindling:
o Most of what is physically in a building, you can see; when you get into apartment
buildings, a lot of things is not visible the more technology that we have, the more
invisible items/objects are involved in a sale
o Dissuades buyers from entering markets b/c of many items that seller may try to hide
from the buyer
o Favors buildings that are simple and can be inspected
o Strong safety interest want the buyers to know about any potential safety issues in
the building, dont want sellers to be able to hide this
o Sellers have more information about their buildings this is a transaction w/
asymmetry in information
o Now, law is starting to correct for those asymmetries and protect unknowing buyers
from defects we are implying at some point that the seller is blameworthy
o Shift in larger system of law: courts used to have an idea that it would protect against
affirmative acts of harm but not convert a court into an institution forcing me to help
out each other

Cases:

Stambovksy v. Ackley: a condition that impairs the value of property, known to the seller and left
undisclosed to the buyer can constitute a basis for recission of the contract
Facts: D knew a house was haunted when she sold it to P but did not disclose it. P later
learned that the house had a reputation for being haunted. D had actually perpetrated the
rumor by reporting various occurrences to Readers Digest and the local press.
In this case, D was outside of the escrow period, so he is looking for a rescission. If you
were inside the escrow period then the contract is just annulled. He gets the rescission
because the old owner created a reputation for the house and so there was an actual
economic disadvantage.
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Johnson v Davis: when a seller of a home knows of facts materially affecting the value of the
property, which are not readily observable and are not known to the buyer, the seller is under a
duty to disclose them.
Facts: P entered into a contract to buy a house for $310,000. D knew that the roof leaked,
but affirmatively represented to the P there was no problems with the roof. After P paid
the deposit, they discovered water gushing into their new home after a heavy rain. Court
ruled in favor of P.

MORTGAGES:

A mortgage is simply a loan secured by real property. You use real property (usually the land
that you are buying with the money you are borrowing) as collateral for your mortgage loan)


HYPO:
Buyer takes $100,000 mortgage for property. Buyer falls behind on payments. Balance still
owed on loan is $75,000. Lender forecloses on property (judicial foreclosure or private sale,
depending on state law)
What happens if the property is sold for $125,000? ! Lender gets its $75,000 and buyer gets
$50,000 (Buyers equity)
What happens if the property is sold for $75,000? ! Lender gets $75,000 and buyer gets
nothing
What happens if the property is sold for $50,000? ! Bank gets $50,000, and buyer may still
owe the bank $25,000 (the deficiency- collection of deficiencies depends on state law

Multiple Mortgages
Second mortgages might be needed as:
Bridge financing where the borrower cant find enough cash to provide all of the down
payment for the first mortgage
Equity line of credit: second mortgage to take advantage of equity they have in the house
(i.e. the amount of appreciation to date) so they can fund home improvements, education,
etc.)
Two Conditions to Refinance: 1. You have to be in good shape as a borrower. 2. Your house
has to be in good shape in terms of value.
3d or 4th mortgages can also be found in our current housing meltdown
Types of mortgages
o Traditional fixed rate mortgage: interest rate and monthly payments are the same over
the entire mortgage term (15-30 years)
o Adjustable rate mortgage: interest rates fluctuate up or down according to the interest
rates in the economy and according to the loan product (may have a teaser rate followed
by spike)
o Hybrids: fixed period in the beginning (3, 5, 7, or 10 years) and then they revert to an
adjustable rate mortgage

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Multiple Mortgages (stacking mortgages get mortgage for both down payment and the actual
loan) in Default
1st in time rule applies: the first mortgage (senior mortgage) will be paid off in full before
subsequent (junior mortgages) are paid off
Thus, subsequent mortgages carry higher interest rates
Equity = Amount the property owner has earned/paid. Equity is tied to the market value of
the home.

Mortgage Crisis:
1990s: increasing automation, growth of secondary mortgage market, desire to extend
homeownership to underserved groups ! profusion of mortgage instruments
Borrower goes to a mortgage broker to figure out which loan is perhaps best for the !
mortgage broker sells mortgage to local mortgage bank ! small bank takes the loan and
sells to bigger bank (some sell it further, some dont)
Mortgage securities trade-able access that are bundles of mortgages; you bundle a
pack of 30 year mortgages and you sell shares to this bundle (once you own a share of a
mortgage backed security, every month, you get your share of the borrowers monthly
payments). Aka Collateral Debt Obligations.
Pre-2003: MBS used to be predictable and fairly modest, very steady
2003-2006: lending guidelines loosen (lots of brokers/investors and even from politics
put pressure to make the guidelines easier to fulfill) ! housing boom b/c there are just so
many investors who want to be involved: NINA loan no income no assets
Sub-prime mortgage:
o Borrower has been subject to fewer credit checks and fewer verifications AND
inherently more risky
o Loans that are very undesirable designed to be re-financed or to bury someone
interest rates keep going up.
o Negative Amortization: Your payment isnt enough to pay interest. So, every
month, the principal grows.
2006: some securities start to perform poorly
2006 2007: Housing prices plunge
Feb. 2007: Valentines day massacre
2007 2008: Mortgage company and bank closures e.g. Bear Sterns, Lehman brothers
(loans are also coming out of teaser periods and people cant pay them) ! people are
underwater, value of property is less than value of loan
Public sector effects:
o When property rates fall ! taxes from these property falls and thats problematic
for governmental revenue
o Foreclosure decreases value of entire neighborhood
o Periods of absentee ownerships super expensive for local government
maintenance costs, blight in general is expensive
o The whole neighborhood is not worth less and local governments will thus see
falling revenues (yet rising costs) related to foreclosure



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ESTATES:

While joint ownership describes concurrent relationships, estates describes relationships with
property over extended periods of time and multiple generations

PRESENT AND FUTURE ESTATES:

HYPO: father gives his son a painting, but father wants to retain possession of the painting until
his death (Gruen)
Father owns: a present interest and the right to current possession. The type of present
interest he has is a life estate.
Son owns: a future interest, an interest in which possession is postponed and in some
cases, may or may not occur at all. The son DOES own a property interest now, but his
right of possession will not take place until the future.
*Both have alienability and have something they can sell. BOTH OWN SOMETHING OF
VALUE (both would be entitled to compensation if purchased).

TYPES OF ESTATES:

There are two types of fee simple: (1) Fee simple absolute and (2) Defeasible Fee Simple
both have a present interest that has a future interest component. Use these if you favor a
specific form of land use.

Type of Estate Words of Creation
Fee Simple (Default):
Right to ownership now and in perpetuity
Heritable and freely alienable (yours
forever largest package of rights)
The law will always assume a fee simple
(if not otherwise stated)
O grants B to A in fee simple
O grants B to A and her heirs
O grants B to A

Fee Simple Determinable:
Right to ownership ends automatically
upon the occurrence of a named event- a
certain event occurs or fails to occur
Heritable, devisable, and alienable
Possibility of Reverter: grantor
automatically takes the property back of a
stated event occurs
This interest is retained by the grantor
O grants Blackacre to A so long as no
alcohol is sold on the premises
O grants Blackacre to A during its use as a
school

Words of Creation: so long as, as long
as, while, until, during


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Type of Estate Words of Creation
Fee Simple Subject To Condition
Subsequent:
Fee simple estate that may be terminated at
the grantors election (NOT
AUTOMATIC) when a certain condition
occurs or fails to occur
Heritable, devisable, and alienable
Right of (re)Entry/Power of Termination
o An elective future interest held by a
grantor after creating a FSSCS
o Transfer upon happening of a stated
condition is NOT automatic
o Text will say right to reenter
This interest is retained by the grantor
O grants Blackacre to A for use as a
church, but if not used for church purposes,
then O has right of re-entry.

To [...]; but if [...]

Words of creation: provided that,
but if, on the condition that, if
Fee Simple Subject To Executory
Limitation:
Fee simple estate where the right to
repossess the estate upon happening of the
stated condition is given to a third party
instead of the grantor
Heritable, devisable, and alienable
Executory Interest: interest of a 3d party
that cuts short an estate if a stated event
happens (we arent always clear if this is
automatic)
This interest is created in a grantee
O grants Blackacre to A while it is used as
a school, then Blackacre to C

Same words as FSD or FSSCS, but
provides for a future interest in a third
PARTY!

Life Estates:
Type of Estate Words of Creation
Life estate
Duration measured by a particular human life.
Alienable, but its length is still measured by
the life of the original holder
o If you lease your life estate to another,
that person has it pur autre vie
CANNOT pass by will b/c there is nothing to
transfer when the holder dies
Once you give a future interest it is of value,
you cant just take it back, you have to buy it
back.
The present interest holder can milk the land
for all its worth or not take care of it, etc. It
does bring current and future interests into
conflict.
O grants Blackacre to A for life
O grants Blackacre to A for life, then to
C

Example: I hereby grant my home to LK
for life, and then to JP
LK: life estate
JP: vested remainder in fee simple

Example: M grants her home to D for life,
and then to C and her heirs
D has life estate
M has nothing
C has an indefeasibly vested
remainder in fee simple

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Future Interests of Life Estates

Reversion: grantor (or his heirs) keeps interest himself- the land reverts back to the grantor at the
end of the measuring life as a fee simple.
This interest is retained by the grantor.

Remainder: grantor transfers future interest to someone else at the end of the measuring life.
This interest is created in a grantee
Both remainders and reversions are essentially the same future interest- a fee simple when
measuring life dies
(reversions also exist in situations besides life estates, wherever the grantor gives less than
the full estate that he holds and wants the balance back. Ex: landlord gives you a term of
years lease and holds a reversion on the land)

Is the remainder contingent or vested?
If we are unsure who the 3rd party is and/or there is a condition that must be fulfilled before
the interest becomes possessory ! a contingent remainder (you may not get it).
o Example: O to A for life, then to the heirs of B person who ultimately takes the
estate is unascertained at the time of conveyance (B does not have heirs until he dies).
o So it is either given to an unascertained person and/or subject to a condition
precedent.
o Possession not given UNLESS [condition] ! To [] if []
If we know who the 3d party is ! a vested remainder (given to an ascertained person and
not subject to a condition precedent may be subject to a condition subsequent)
o If the class subject to no conditions by which he/they could lose it after possession
and no possible addition of other class members !indefeasibly vested (i.e. they
cant lose it)
" O to A for life, then to B and his heirs.
O = nothing
A = life estate
B = indefeasibly vested remainder
o If more people be added as holders of the interest? ! vested subject to open
(subject to partial divestment) (you will get it, but you might be forced to share it).
We have one ascertained person, but more may come along.
" O to A for life, then to Bs children and their heirs (B has one child and B is still
alive).
O = nothing
A = life estate
Bs kids = vested remainder subject to open.
o If the class could lose it if they fail a condition ! vested subject to complete
divestment (they could lose it).
" O to A for life, then to B; but if B doesnt graduate before 19, then to C
O = nothing
B = vested remainder subject to complete divestment.
C = executory interest.

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LANDLORD/TENANT LAW:

TYPES OF LEASES:

With leases: (1) there is always a reversion back to owner, (2) leases longer than 1 year have to
be written down (statute of frauds), and (3) all leases must fit w/in one of these three categories
numerous clauses principle.

Term of Years Periodic Tenancy Tenancy at Will
A fixed period of time
The beginning and ending
dates are set in the lease
Automatic termination
(no notice required)
Can be any length of time
Can be terminable earlier
upon happening of some
event or condition


Example: L leases Blackacre
to T for one year, starting
10/1/2010

Period fixed duration that rolls
over until L or T terminates
Termination at common law:
year-to-year lease requires 6
months notice; month-to-month
requires 1 month notice;
termination must fall at the end of
a period e.g. termination on
March 20 means your last day is
April 30th
Modern Rule says 30 days notice
e.g. tenant wants to leave Nov.
15, it would have to notify
landlord by Oct. 15
Continues until proper notice.
MUST BE IN WRITING.
If notice of termination not given
! tenancy automatically
extended for another period
If T pays L on a monthly basis !
usually indicates a periodic
tenancy

Ex: L leases Blackacre to T from
month-to-month, starting 10/1/2010
No fixed period, endures as
long as both L and T desire
Either party can terminate at
will - from Garner: parties
can create a unilateral right
to terminate a tenancy at will
Rebuttable presumption is
that termination rights are
bilateral
Modern statutes require
notice equal to 30 days or
interval between rent
payments
Tenancy at will ends when
one of the parties terminates
it; also ends, at the death of
one of the parties

Ex: L leases Blackacre to T.

Garner v. Gerrish: a lessor can create a lease in which the lessee possess the sole power to
terminate the lease; creates a life tenancy in the lessee
Facts: D leased property by a printed form w/ blanks that were filled in by the landlord,
as well as provisions to terminate the lease at the date of his own choice! problem b/c
it looks like an asymmetrical tenancy at will or a life estate, violating numerous clausus
principle; court allowed it and said that it seems like a life estate terminable at will of
tenant or death of tenant

LANDLORD AND TENANT DUTIES:
Landlords Duties Tenant Duties
Covenant of Quiet Enjoyment
Implied Warranty of Habitability
Pay rent
Not to damage premises beyond fair wear
& tear
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LANDLORD REMEDIES:

Holdover Tenants: when a tenant remains in the apartment after lease (holds over); the land
lord has two common law options
Eviction - plus damages
Consent to the creation of new tenancy (some jurisdictions have changed these rules)
o Typically periodic tenancy length of the original period of term with maximum
length limited to one year
o But sometimes (minority) new lease term
o Same lease terms and conditions apply
Many states have adopted legislation to deal w/ holdovers, some restricting the length of
the holdover, others convert the holdover tenancy into a tenancy at will

Tenant who Defaults: tenant remains in apartment but is alleged to have broken his lease terms;
tenant in occupancy
Common law rule: L may rightfully use self-help to retake leased premises from a tenant
provided that the
o (1) landlord is legally entitled to possession (tenant is breaching or a holdover)
and
o (2) landlords means of reentry are peaceable
* Facts: LL leased property to T for restaurant; lease term was five years and required T to bear
costs of repairs and remodeling; T allegedly remodeled the restaurant w/out LLs approval; per
advice of LLs counsel, LL changed the locks on the restaurant in order to keep out T; court
found that LL wrongfully locked T out b/c T hadnt abandoned the premises

Policy arguments in favor of modern rule (against self-help):
o Keeps the peace there may be conflict as to whether landlord is actually entitled
to possession at the time ! could end up in physical conflict b/t the LL and T
o Protects against crazy Ls by providing a third party forum to arbitrate the dispute
o Eviction via self-help creates no public records. Evictions via judicial proceedings
generate public records, which could make things difficult for T to rent again
o Legitimacy in the law
o Procedural fairness is awarded by going through the courts.
o If you let people use self-help, it puts the burden of legal remedy on the T
o Gives more opportunity to keep people in homes (interests at stake for T are very
strong: where they live, personal belonging (personhood), extension of self,
family life, shelter)

Tenant who has abandoned possession: apartment is empty, tenant is gone and tenants lease is
not yet expired
Common law rule: no duty to mitigate and find another T; property conception of leases
Modern rule: from Berg v. Wiley*, self-help is NEVER available; only lawful means to dispossess
a tenant who has neither abandoned nor voluntarily surrendered, but who claims possession of the
property, is by resort to judicial process
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(land is not LLs problem for term of tenants estate). LL can just let the property remain
vacant and sue T for rent.
* Facts: T signed two year lease and paid security deposit and first months rent; prior to
obtaining the keys, T broke off engagement, became a student, and attempted to terminate the
lease ! LL did not attempt to re-let the apartment until months later, court ruled that LL should
have attempted to relet the apartment, as a matter of basic fairness concerns

Primary Legal Remedies Post Breach:
(1) Terminate lease and get possession of property back through eviction proceeding
(2) Sue for damages caused by breach, such as:
o Back-rent until L can re-let premises (or until end of lease, depending on
mitigation rule)
o Expenses of searching for new T
o Damages to premises caused by T, etc
Protective remedies pre-breach:
o Security Deposit
o Advance Rent

TENANT REMEDIES:

Tenants Rights Revolution (Background):

1960s and 70s Antipoverty Movement
o Welfare Rights Revolution (Subsistence) new programs and procedural rights to
subsistence benefits (you dont get subsistence benefits automatically but have
procedural rights to get them back if govt takes them away)
o NO positive right to welfare
Tenants Rights Revolution (Housing)
o Federal subsidized housing program began after WWII
o Regulatory polices arose: rent control and just cause eviction ordinances, condo
conversion ordinances, implied warranty of habitability, housing codes and
enforcement, duty to mitigate damages (Sommer v. Kriedel)
o But no right to housing Lindsey v. Normet (except New Jersey, which had a softer
approach to the right to housing)
o Govt does not provide housing but has regulatory policies to help people get private
housing


Modern rule: from Summer v. Kridel*, A landlord has a duty to mitigate damages by
attempting to re-let an apartment vacated by a tenant at fair market value.
Contract view of leases (T bears cost of mitigation)
L must treat unit as vacancy
L must use reasonable diligence in re-letting the premises (cant turn away a potential
tenant; courts vary about what is considered reasonable); LL has burden of showing
reasonable diligence
Policy Rationale: more fair to T and keeps the property in use, efficiency
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Condition of Leased Premises:
Common law rule: caveat emptor/caveat lessee
o L has no obligation to put the premises in habitable condition before lease term
and no duty to repair during lease
o T takes possession of the premises irrespective of their state of disrepair
o Covenant of quiet enjoyment still applies though, T has a right of quiet
enjoyment of the premises, w/out interference by L
o Covenant of quiet enjoyment and covenant to pay rent are independent if
quite enjoyment is violated, you still have to pay rent but then can sue for
damages
W/out doctrines of quiet enjoyment and constructive eviction, breach of obligations
would ordinarily entitle the tenant only to sue for damages; but with the doctrines, the
tenant may also abandon if the breach is substantial
Covenant of Quiet Enjoyment
Breach of covenant of quiet enjoyment can amount to constructive eviction (Ls conduct
compels T to move when T otherwise would not move)
o Constructive eviction can either be partial or complete (unless full, or considered
full, a partial lease obligation might still be owed)
o Occurs when 1) there is a substantial interference with Ts use and enjoyment of
the premises, 2) L knows or should have known about the condition, 3) L fails to
remedy the condition, 4) T moves out within a reasonable time
o If covenant of quiet enjoyment is breached ! T can stop paying rent if T told L,
but L failed to remedy the situation, T abandons the premises and terminates the
tenancy
o Reste Realty Corp. v. Cooper: Constructive eviction occurs when an act by the
landlord render the premises substantially unsuitable for the purposes for which
they are lease and seriously interferes with the beneficial enjoyment of the
property
" Facts: T leased house where basement flooded, old landlord cleaned up the
problem every time it occurred and new landlord ignored requests; after
waiting patiently, T sent letter of vacation to LL and LL sued for rest of
rent
Many states stop at this, but some go further and use the implied warranty of habitability
Implied Warranty of Habitability
Standards of habitability- housing and building codes, general impacts on health and
safety, specific L-T provisions
Hilder v. St. Peter*: When the landlord breaches the implied warranty of habitability,
Modern rule: covenant to pay rent and covenant of quiet enjoyment are mutually dependent;
breach of one justifies cessation of performance of the other (tenant should only pay rent if she
is getting quiet enjoyment from property)
Modern rule: L must deliver and maintain (affirmative obligation) premises that are safe, clean,
and fit for human habitation. Usually only applies to residential leases (cannot contract around
this).
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tenant can withhold rent, repair defects and deduct this cost from rent payments, seek rent
already paid, and seek punitive damages in the appropriate cases.
o Ts obligation to pay rent is mutually dependent on L providing habitable
premises. If L fail to provide habitable premises, then Ts obligation to pay 100%
of the rent is diminished in proportion to how much L breached warranty of
habitability
Both covenant of quiet enjoyment and implied warranty of habitability can be used
defensively and offensively:
o Defensive shield protection against eviction
o Offensive sword affirmative habitability suit
* Facts: slumlord case, court found that apartment was so unlivable and noted that T could get
back entire rent, compensatory damages, and even punitive damages (this is rare though); usually
damages calculated as value of property as warranted current value of property (which was
zero for that house)

Californias Implied Warranty of Habitability:
1941: Buildings for human occupancy
o The lessor of a building intended for the occupation of human beings must, in the
absence of an agreement to the contrary, put into a condition fit for such
occupation, and repair all subsequent dilapidations thereof which render it
untenable
1941.1: Untenable dwellings
o A dwelling shall be deemed untenable for purposes of 1941 if it substantially
lacks
" Weather protection
" Legally conforming plumbing or gas facilities
" Water supply w/ hot and cold running water
" Connected to sewage disposal system
" Working heating facilities
" Electrical Lighting and Wiring
" Building and Common areas free of debris and filth
" Adequate # of receptacles for garbage
" Floor and stairways in good repair
T can contract away certain obligations BUT L might still be held liable (cannot contract
around IWOH).
Ts remedies for breach of IWOH (contract remedies):
o Rescind contract- vacate premises and no more obligation for rent
o Reform contract- stay in premises but at reduced rent or fix problems and set off
expenses against rent
o Damages- get difference between value of dwelling as warranted (usually look at
agreed upon rent) and value of dwelling as it exists (includes damages for
discomfort and annoyance
o Retroactive rent abatement- if T proves breach of IWOH, can sue for all rent they
overpaid and interest on that money
o Discrimination ! punitive damages
o Medical bills, compensation for time off work, moving expenses
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Retaliation: unlawful for L to retaliate by raising rent or cutting services if T lawfully
exercises her rights.
o T can sue if L attempts to retaliate, and can get attorneys fees

Unlawful Detainer: when T stays put and stop paying rent, T might be hit w/ an unlawful
detailer, which is a high-risk move
Most commonly asserted reason for eviction: T has not paid rent that L says he is due
o L serves 3-day-notice (pay rent or move)
o If T does neither in 3 days, the next day, L can sue for unlawful detailer
A lawful written eviction notice is the legal prerequisite for L to claim unlawful detainer:
o L must demand the precise amount of rent due
o T must respond within 5 days (including weekends)
o In abandonment, the LL cannot take property w/out a detainer order (unlawful
detainer) from the court (unless the abandonment was voluntary

TENANT SELECTION FEDERAL FAIR HOUSING ACT:
* FHA is a FLOOR and states the minimum protections that must be provided to tenants and
states can offer increased protection (for age, sexual orientation, source of income). To sue under
FHA, P only needs to prove discriminatory impact or disparate treatment


The Fair Housing Act of 1968; Title VIII of the Civil Right Act; 42 U.S.C. 3601-3619 sought
to take race out of the housing context. Section 3604: It shall be unlawful...
1) To refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate
for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person
because of race, color, religion, sex, familial status, or national origin
2) To discriminate against any person in the terms, conditions, or privileges of sale or
rental of a dwelling, or in the provision of services or facilities in connection therewith,
because of race, color, religion, sex, familial status, or national origin (however, half
of circuits read this services component as only applying to the actual sale and rental
process, not services after the transaction (no trash puck-up, etc.).
3) To make, print, or publish or cause to be made, printed, or published any notice,
statement, or advertisement, with respect to the sale or rental of a dwelling that
indicates...discrimination based on race, color, religion, sex, familial status, or
national origin (Communications Decency Act dont hold website advertisers
responsible for passive publication of discriminatory ads, so internet discrimination is
pretty common).
4) To represent to any person because of race, color, religion, sex, familial status, or
national origin that a dwelling is not available for inspection, sale or rental when such
a dwelling is in fact so available
5) [Blockbusting- real estate agents going to white neighborhoods and scaring everyone
into selling]
6) [Unlawful to discriminate against any person in sale or rental b/c of disability]
Sex added in 1974
Family status and disability added in 1988 (though cap on # of inhabitants likely ok)
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Exceptions:
o Religious organizations and private clubs under certain circumstances
o Provisions re: familial status do not apply to housing for older persons
o Single-family homes sold or rented by the owner provided that the owner doesnt
own more than 3 such single-family houses at any time and that the sale or rental of
any such single-family houses is excepted from the application
o If owner lives there, they can discriminate (if under 4 units)
o Roommates b/c of privacy interests
o Advertising sex preference is okay
o Only for residential property
Despite these rights:
o 1972: Lindsey- no fundamental right to housing under the U.S. Constitution
o 1973: Rodriguez- class discrimination is NOT prohibited by the U.S. Constitution

Public policy values in tenant selection:
1) Avoid the creation of zones of segregation and exclusion
2) There is a basic right to accessing housing and shelter across the economic spectrum
3) Access to the ability to purchase an asset that will have future value- class mobility
4) The law should provide protection for people of a certain race who are often forced into
certain professions
5) Everyone has the right to purchase property
* Property ownership is a core value of the U.S. and owning land is an assertion of democratic
participation

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NUISANCE: these are judge made land decisions

Uses of property that hurt people. Guiding common law principle: one should use ones own
property in such a way as to not injure the property of another. But here, neighbors are engaged
in incompatible land uses, so somebody as to give.
Private nuisance is a substantial nontrespassory invasion of anothers interest in the use or
enjoyment of land (can be intentional or unintentional)

Substantial = offensive or inconvenient to the average person or ordinary use (not the eggshell P or
abnormally sensitive use; law does not concern itself with trifles
Depends on the context
A drive-in theatre that requires quiet and dark that sues an amusement park for light and noise is an
eggshell plaintiff. Ct. found the amusement park = ordinary use
Essentially a question of who really belongs on the land
Includes moral offense, but even if you have moral offense (like brothels), you need to prove more
than just stigma. Stigma damages alone are not sufficient and will require proof of physical harm.

Nontrespassory = no physical invasion by a tangible thing; however, things that neighbors experience
physically (e.g. dust, insects, pollutants, noise, etc.) or things that affront sensibilities (e.g. brothels or
funeral parlors may be nuisances)
Not a physical encroachment, but can be physical particles or odors

The invasion must be 1) intentional and unreasonable OR 2) the unintentional result of negligent,
reckless, or ultrahazardous activity

Intentional = D knows what he is doing with his property. But what is unreasonable?

1. Threshold test (Morgan, Jost, Estancias, Boomer): does the level of Ds interference with Ps
enjoyment of his land exceed the acceptable threshold of interference?
Pro-plaintiff because utility does not matter, one small person could sue a huge producer.
Gives judges a lot of discretion because thresholds are not usually a bright line.
Focus on (1) harm to P and (2) harm above ordinary use of Ds property

2. Balancing Test (Old Restatement): does the gravity of the harm outweigh the social utility of the
conduct?
Gravity of harm factors: harms extent and character, social value of Ps use, the suitability of the
use to the locality in question, and the burden on P of avoiding the harm
Utility of Ds conduct factors: Ds social value and suitability to the locale; burden on D of avoiding
harm to P
First-in-time (coming to the nuisance) is one factor to consider. As well as dominant land use.
o Efficiency is central to this test- to maximize social utility
o If the gravity of harm to P outweighs social utility of Ds activity ! Unreasonable
o Favors D

Use and enjoyment of land = physical condition of the property and personal health/safety of
occupants. Stigma damages (property value losses) and aesthetic harms are generally not enough.
Is there some kind of concrete harm?
Can include odor

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2 distinct stages that must be treated separately
o 1) Liability- is there nuisance?
o 2) If so, what remedy will the court grant?
o In a jurisdiction that employs the balancing test to determine liability, a balancing test
will usually be conducted again to determine the remedy.
Remedies:
o If P loses at the liability stage: there is no relief for P (D can use his property has he
wishes)
o If P wins at the liability stage there are three types of remedies:
1. Injunction abate the activity in question by granting P injunctive relief
(Morgan, Estancias)
a. This is regardless of the higher costs for D (Estancias)
b. P gets to use her property as he wishes and free from harm
2. Damages let the activity continue if D pays damages (Boomer)
3. Purchased Injunction abate the activity if P pays for damages and buys out D
(Spur)
a. Here, this is where coming to the nuisance is likely to be an issue if P
knew that there was a nuisance but chose to move to the area anyway,
there is often a purchased injunction
b. P must compensate D for injunction/relocation
Injunction vs. Damages
o If there is liability (a nuisance has been established), and P seeks an injunction, the
courts will balance the equities before granting an injunction rather than damages
(this is the second balancing test)
o Balance the harm to D of an injunction v. benefit to P of an injunction
o Efficiency/Comparative economic costs to the parties. Compare Estancias (higher
cost losses to D will not bar injunction) with Boomer (higher cost losses to D will bar
injunction)
o Fairness
o Incentives (who does society want to push to avoid the conflict here? Which party
might be able to innovate to avoid the conflict here? Burden?)
***In jurisdictions that balance at both stages (liability and damages) they often get pushed
together. To some degree, courts are deciding what the best use of the land is.
***Note that economic consequences of property use fall most heavily on the poorest with the
most to lose. Nuisance is the area of property law closest to public health and environmental law

Case Law:
Morgan v. High Penn Oil: a person who intentionally (doesnt actually have to intentionally
want to harm neighbors, but must know that actions will result in harm) creates or maintains
a private nuisance is liable for the resulting injury to others regardless of the degree of care or
skill exercised by him to avoid such injury.
o Facts: D operated an oil refinery since 1950, near Ps dwelling, that emitted
nauseating gases and odors in great quantities and failed to put an end to it after P
demanded they abate it. P got an injunction.
o Note houses were on the lot first; they had first in time right on the lot court wants
to encourage this initial investment and provide homeowners some type of security
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Estancias v. Schultz: even when there is a jury finding of a nuisance, there should be a
balancing of the equities in order to determine if an injunction should be granted.
o Facts: Appeal from court order granting permanent injunction of Ds noisy air
conditioning equipment on property next to Ps residence. Jury found that noise
constituted nuisance and awarded damages to P. Ct. very sympathetic to P, even
though the purported cost to D was greater than the cost to P. Affirmed injunction.
o Anderson does not believe court conducted a true balancing test: economic factors are
not necessary dispositive; there was also a policy factor here because there wasnt any
housing shortage in the area Ds apartment complex was not badly needed
o The court will consider any injury, which may result to the Defendant and the public
by granting the injunction, as well as the injury to be sustained by the Plaintiff if the
injunction is denied.
Boomer v. Atlantic Cement: an injunction is not the appropriate remedy in a nuisance case
when the defendant is providing an essential product or service to the public. An award of
permanent damages is better suited.
o Facts: D operated a cement plant that emitted a large amount of dirt, smoke, and
vibrations, affecting a group of landowners. P brought suit to enjoin D from operating
the plant. Court found that the cement plant constituted a nuisance, and that there was
substantial damage to P. But rather than awarding an injunction b/c of the important
work of the cement plant, court awarded permanent damages.
o Ct. intended to preserve the cement plant, so they granted a temporary injunction that
was to be vacated when D paid P permanent damages. Not really an injunction, but
was a damages remedy- just came up with a price tag where D must purchase and P
must sell.
o Dissent in this case said this was bad because you are licensing a continuing wrong.
Spur v. Del E. Webb: in the proper circumstances, an owner of a lawful business that is
enjoined from operating because his business is found to be a nuisance can seek
indemnification from the individual successful in claiming the nuisance.
o Facts: Arizona case! ! D operated a cattle feedlot that was near Ps development. D
was there before P moved in. D began to expand feedlots, which P did not like. Ct.
found that the feedlot was a nuisance ! an example of second-in-time winning over
first-in-time b/c the court recognized the new use of land.
o Ct. granted a purchased injunction to P, where P had to compensate D for a
reasonable amount of the cost of moving or shutting down, but got to keep the land
the way he wanted it.

Policy Factors: why do we have nuisance laws?
Balance of personal property rights with societal interests e.g. maximize utility, jobs
Trying to incentivize technological advancements to decrease nuisance
Public health and safety issues
Internalization of externalities properties that are creating costs/externalities for people
around them e.g. spillover effects, externalities ! we want them to be responsible for those
costs
In the heart of zoning separating incompatible land uses, heart of Euclidian zoning

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LAW OF SERVITUDES: EASEMENTS and COVENANTS (private restrictions on
land use)

Summary of Servitudes:
Easements Covenants Licenses Profits
A non-possessory
interest that gives one
person or an entity the
right to enter someone
elses property for
some purpose (2 main
types below). There is
no fixed duration.
Legally binding promises
that bind future
generations without
future litigation.

Real Covenants: a
promise that attaches to
the land and binds future
owners. Only provides
relief in damages.
Creation of a real
covenant must be in
writing- CANNOT
happen through estoppel,
implication, or
prescription.

Equitable Servitudes:
permit injunctive relief
ONLY. They can be
created by implication, as
in Sanborn
Oral or written permission
given by the occupant of
land allowing the license to
do some act that otherwise
would be a trespass.
Resembles an easement,
but generally is freely
revocable. It is not a
property interest.
*Unenforceable, gratuitous
promise.

Examples: invitation to
dinner, baseball tickets

EXCEPTIONS:
1) If a license is coupled
with an interest, it cannot
be revoked
2) Under the rules of
estoppel, a license can
become irrevocable (i.e. if
the landowner induces
reliance on the part of the
licensee and then attempts
to revoke the license
becomes an easement)
Rights to take off the
land things that were
thought of as part of
the land (timber,
wild game, fish,
minerals)
Examples:
1) A given the right to enter Bs land (affirmative easement)
2) A given the right to enter Bs land and remove something attached to the land (profit)
3) A given the right to enforce a restriction on the use of Bs land (restrictive covenants,
equitable servitudes, negative easement)
4) A given the right to require B to perform some act on Bs land (restrictive covenants,
equitable servitudes)
5) A given the right to require B to pay money for the upkeep of specified facilities
(restrictive covenants, equitable servitudes)

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EASEMENT:
Definition: Non-possessory interest in property that gives a person the right to enter someone
elses property for a certain purpose.
o Many times you buy easements.
o A use right that can be of any duration and can be narrow or broad.
o An easement holder can thus use a property without owning title to it, but he cannot
exclude others from it.
o Usually the servient estate has maintenance rights/responsibilities.
o Dominant estate is not excluded from using the land (non-exclusive agreement).
o Parts of easements: Right of way; time period; types of use; spatial location; liability
issues.
Policy: easements are very important particularly in rural areas where there is a lot of
interdependence b/t neighbors
Two main forms of easements:
o (1) Affirmative Easement: A given the right to enter Bs land (almost all easements
are of this type)
o (2) Conservation Easement: A given the right to enforce a restriction on the use of
Bs landA restricts B from doing something on Bs own land.
Easement vocabulary:
o Easement in gross: benefits the easement owner personally rather than the land
itself. It is attached to the person, no matter where they live or if they own any kind of
land (servient estate here, but no dominant estate). ! If Prof Andersons mother
allows her to fish on her property
o Appurtenant Easement: benefits the easement owner in the use of the land
belonging to the owner. It is attached to the land, rather than the person. Does not
need permission to sell the easement.
" If it is unclear as to what kind of easement something is, the law will construe
in favor of the easement appurtenant over the easement in gross
o Servient estate: the land burdened by the easement. Serves the dominant estate.
Servient estate owners can use the easement BUT cannot unreasonably interfere with
the dominant estate owners use of the easement. (seller of easement)
o Dominant estate: the land that the easement benefits, served by the servient estate.
The dominant state has the legal right to enforce the easement. (purchaser of
easement)
o Reciprocal easement: both parties using easements-appurtenant across each others
land.
o Grant: grantor grants easement across her own land -- grantor has servient estate; and
grantee has dominant estate.
o Reservation: created when the owner of a piece of property conveys the land to
another but reserves an easement on that property.
" Both of these can be implied or express.


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Creation of Easements:
EXPRESS: parties can always agree to an easement ! if so, the express terms cannot be
exceeded
o Hierarchy of Easements:
" Written Down
" Estoppel
" Implied (see below)

EASEMENT BY ESTOPPEL: Results from failure to get easement in express writing
pursuant to Statute of Frauds
Holbrook v. Taylor: The use of the roadway with the consent of the owners and general
improvements to the road and construction of the house on the land, creates a easement by
estoppel and cannot be revoked.
o Facts: P originally gave D permission to cut a haul road across his land for a mine.
The mine closes and D purchases the property. In reliance on P, D invested $25,000
in a house on the parcel that D could not access public road without crossing Ps land
(old haul road).
o Court ruled it would be an unfair loss to Taylor b/c he relied on the roadway and built
a house ! gave D a permanent easement appurtenant
Policy Arguments for and Against Easement by Estoppel:
Policy in favor:
1) Mitigate harm to 2nd party
2) Unfair to revoke after reliance and
investment
3) Dont want to create a bunch of properties
that are unusable just to preserve pure
property rights.
Policy against:
1) We dont like oral agreements, we want
things written down.
2) Courts dont have right to strip property
rights. We dont want govt. stepping in
Implied Easements:
o If A owns 2 adjacent parcels of land and sells the upper parcel to B while retaining
the lower parcel and knows that B cant get to their parcel without crossing As
parcel, and she does not grant an easement in writing, B can still have an implied
easement. As A sells, she has given B an implied grant across her land.
o If C owns 2 adjacent parcels of land and sells the lower parcel to D while retaining
the upper parcel and C cannot access the upper parcel without crossing the parcel she
sold to D, and has forgotten to put an easement in writing, C may still have an
implied reservation- she is reserving, keeping something for herself.
Easement by Estoppel Requirements (Majority):
1. Initial Permission
2. Reasonable Reliance
3. Unfair to revoke the permission granted (fairness = cost and burdens of both parties)

Minority jurisdiction: requires a written license; license is revocable at the option of the
licensor; law requires interests in land to be evidenced by deed
Reliance is irrelevant if the easement is not in writing
If one expends money in reliance on oral permission, it is at ones own peril

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IMPLIED EASEMENT BY PRIOR EXISTING USE: unified ownership + use existed at
time of severance + continuing use that is reasonably necessary
Van Sandt v. Royster: an easement is implied when there is a single tract of land and the tract
is divided, and there is continuous or apparent use of the easement (here, there was initially a
quasi easement one part of the land benefited from the other, and then the land was
divided)
o Facts: P sued to enjoin Ds from using and maintaining an underground lateral sewer
drain through and across Ps land that had been built when P and Ds lands were all
unified. P did not have notice of the sewer when he bought the land (but his
predecessor did). There was nothing in writing. Ps predecessor had notice of the
sewer when he bought the parcel.
o Plus: court noted that Ds must have known that they had a sewage line on their
property
Graveyard Rights: If gravesite is on one part of property an home is on another, this could
be an implied easement (it would be in gross)
Quasi-easement: When one utilizes part of his land for the benefit of another part of his land

EASEMENT BY NECESSITY: unity of ownership + necessity + necessity at the time of
severance


Implied Easement by Prior Existing Use Requirements (Majority):
1) At the time a tract of land is divided (at one point, it was unified)
2) There is a continuing, existing use of one portion of the land
3) That would be apparent upon reasonably prudent investigation or inquiry notice or is
known to the parties [inquiry notice]
4) And that use would be considered an easement if the land were divided into two lots
5) And if that existing use is reasonably necessary (reasonably necessary = very
expensive alternative, minimal expense doesnt count here) for the enjoyment of the
benefitted portion of the land,
Then, the law implies an easement on the grounds that the parties probably intended this use to
continue

Easement by Necessity Requirements:
An easement by necessity can only arise from an implied grant or implied reservation and
REQUIRES all of the following
1. Unity of ownership prior to subdivision
2. Necessity*
3. Necessity existed at the time of severance of the two estates

*What qualifies as necessity?
MAJORITY RULE (Othen, TX, NY): Strict Necessity- NO ALTERNATIVE access (a
very harsh standard. If you can boat or fly in, you cant get necessity)
Minority Rule: Reasonable necessity alternative access would require disproportionate
effort and expense

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Othen v. Rosier: in order to find an implied easement, you must look back to the time of the
common owner and determine whether the easement was a necessity and not a mere
convenience at the time of the severance of the dominant and servient estate.
o Facts: P and D are adjacent landowners on land that was once united. P claimed an
easement (by both necessity and prescription) and sued to enjoin D from maintaining
a levee that made it impossible for P to use the roadway. P did not show easement by
necessity he could take a long route up and to the road.
Note we always stick the person who created the situation in which another individual
seeks an easement with an easement ! e.g. if A sold B a piece of landlocked land, then B
would have to claim an easement against A (he cant claim the easement against his other
neighbors, b/c they didnt do anything wrong)
This is why we have unity, so we can charge the mistake (the creation of landlocked
property) to someone

PRESCRIPTIVE EASEMENT: to stop someone from acquiring a prescriptive easement
over your land, exercise your right to exclude them (you can give them permission)
o Similar to adverse possession, a prescriptive easement allows a person or group to
gain an easement to use land in a certain way without purchasing it if they have used
it for a certain period of time
A public prescriptive easement can be obtained in most states by a long continuous public
use under a claim of right.
We do want public easements b/c we might want things like public use trials. BUT we dont
want to reward trespassers.

CONSERVATION EASEMENTS: concerned w/ controlling the development of land and
the inhabitation of the parcel
o These are negative easements (which we now call restrictive covenants).
o Developed to preserve scenic and historic areas and open space (fairly effective)
o Landowner gives a public body or private charitable organization a conservation
easement, preventing the landowner (now servient owner) from building on the land
except as specified in the grant.
o Value of the conservation easement (usually the development value of the land) is
tax-deductible though sometimes donors overvalue easements (sham easements of
questionable public value)
o Perpetual in duration, transferable, always appurtenant - very difficult to terminate
o Ex: (1) not developing something, (2) not fencing something, (3) not hunting/fishing
Prescriptive Easement Requirements:
1. Open and notorious- must be ordinary use
2. Continuous for statutory period
3. Exclusive (MAJORITY: exclusive to the world, but can be shared with owner;
Minority: must be exclusive with respect to EVERYONE, including owner)
4. Adverse and under a claim of right (no permission and you are claiming you have a
right to use it. Hard to reconcile with majority exclusivity standard, because if youre
sharing it with owner, you likely have permission)

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COVENANTS: private contractual agreements (like easements)

Definition: A covenant is a promise that runs with the land to bind future owners. The original
promisee/owner of the benefited land and his successors can enforce it against the original
promisor/owner of the burdened land and her successors
Creation of Covenants:
o Developer buys a large area of land, subdivides it, and includes covenants in
each parcels deed (harder to sell properties is someone comes in and builds a
factory, so developer has a financial interest here: maximize profit; theres also a
residential interest here).
o Owners in a neighborhood sign an agreement restricting use of their land, and they
record the agreement to put future owners on notice
o A landlord includes a covenant in his written lease (e.g. no sublease)
Covenants are contractual, but they bind to property that is subject to the promise; an be
between two people or a neighborhood of people (homeowners associations)
Once in place, very hard to remove (can write in duration but not common)
Unlike easement:
o Easement refers only to affirmative easements exception: conservation easement
o Every negative encumbrance on land is a negative covenant exception: there are
positive covenants like homeowners dues but for most part positive = easement and
negative = covenant
Covenants vs. servitudes (in the old days):
o Servitudes were created to avoid demanding rules regarding privity, such that owners
in an existing neighborhood could more easily agree to place restrictions on their
property that would run with the land.
o Where covenants only provided relief in damages, equitable servitudes permitted
Requirements for Covenants (from Restatement):
1. Covenant is in writing
Must be recorded properly Sanborn is no longer ok (there has to be a written
restriction on the land, owner is not expected to refrain from building gas station b/c he
can look around and see suburban neighborhood)
When someone buys a house, they want to know about any easements/covenants
2. Intent that covenant runs w/ the land
3. Successors have notice of the covenant (more robust than inquiry notice in Sanborn)
4. Covenant is enforceable (not a violation of public policy, e.g. not Shelley v. Kraemer
situation)

* Remedy for violation: damages or injunctions
** Enforcement rights; benefited parcel gets to enforce
*** IF there is poof, the covenant does not go away since it transfers w/ the land. Also, if one
adversely possesses land, the covenant does not go away.

NOTE: if you are in a covenant question apply above elements; do not worry about touch and
concern, horizontal and vertical privity

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injunctive relief.
o BUT, covenants have changed now such that privity requirements are largely gone
and both injunctive relief and damages are awarded.
Vocabulary:
o Servient estate- the parcel restricted by the covenant (Example: parcel A which
cannot put up a factory)
o Dominant estate- parcel benefited by the covenant (all of the neighbors that dont
have to live by the factory that A wanted to put up)
o Burden- the obligation to take (or not take) an action b/c of a covenant (Parcel A may
not be used for a factory or Parcel A must maintain the fence between our properties)
o Benefit- the right for one party to force another property owner to take an action (or
not act) under a covenant (Parcel B can stop A from building a factory (B has the
right not to live next to a factory) (negative covenant); Parcel B gets the benefit of a
fence built by A (affirmative covenant))
o Horizontal privity (old requirement of covenants): original promisor and promisee
are in privity w/ each other (land sale)
" First two landowners are in a land transaction together
o Vertical privity (old requirement of covenants): chain of title defines successors
(engage in land transaction on single piece of land)
" Adverse possession is not vertical privity its not a type of land transaction.
" Vertical privity is also now disfavored restatement says that when you take
land, you take the covenant that comes w/ it
o Touch and concern (old requirement of covenant): the covenant must be related to
the use of land, rather than an unrelated infringement on personal liberty
(reasonableness standards applycase law all over the place)
Pros and Cons of Covenants:
Pros Cons
Allocate resources efficiently in a way that
makes things better for both parties
Minimizes harmful impacts that arise from
conflicting resource use
Bind future generations w/o future
litigation
Private land use control- to create a private
land use regulation system, like Houston,
where there is no local govt zoning
Covenants can be made more quickly than
zoning
Covenants allow parties to supplement
what the govt is doing
Allows owners to maximize their property
value
Notice requirements are high
Reciprocal rights and obligations
Contractual freedom
Allows communities to self-define
Dead hands- only the contractual
freedom of the 1st generation is enforced
and everyone afterwards is bound.
Preferences, surroundings can change
People can exercise their biases and might
be wrong about how to best use their land
Individuality, diversity, and personal
freedom ! covenants might make
everything homogenous reduces
adaptability
Property liberty is infringed
Theyre hard to undo.
Inhibits alienability
Super inflexible times have changed and
so have individual preferences
May also be used for discriminatory
purposes racial covenants
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Case Law:
Tulk v. Moxhay: An equitable servitude is enforceable by injunction with no regard to privity,
so long as the promise is intended to run and the subsequent purchaser has actual or
constructive knowledge of the covenant.
o Facts: D wanted to alter the character of the square garden, contrary to a covenant
created by Ps predecessor. Ct. found an equitable servitude (which had no privity
requirements) and granted Ps injunction against D. However, D ended up buying
the injunction and then using the land how he wanted to. (Leicester Square case!)
Sanborn v. McLean: A reciprocal negative easement is created in all real property conveyed
by a common grantor even if the restrictions are explicitly contained on some but not all lots.
o Facts: Wealthy subdivision- most of the lots in which were deeded with a restriction
such that the land could only be used for residential purposes. D wanted to build a gas
station, claiming that he a covenant on his land. Court ruled that there was an implied
covenant. All he had to do was look around and see that he was in a residential area.
o Really, a rather dubious concept.
Neponsit v. Emigrant Industrial Bank: For the covenant to touch and concern, it must
affect legal relations the advantages & burdens of the parties to the covenant, as owner
of particular parcels of land and not merely as members of the community in general.
o New touch and concern rule The burden of such a promise to pay dues touched and
concerned the lot owners land, because the dues were necessary to maintain the
roads, beaches, parks and other common areas
o Facts: D purchased land at a judicial sale. Land was originally conveyed by P.
Covenant upon it stipulated land was subject to annual charge. D did not pay fee, and
P sought to foreclose the lien.
o Homeowners association was given standing in the case ! acting on behalf of actual
individuals
Shelley v. Kraemer: restrictive agreements, standing alone, could not be regarded as a
violation of any 14th Amend. Rights (b/c private actions are not regulated) BUT if you try to
get courts to enforce it, then there is a violation of the 14th Amend. (b/c now the state is
involved)
o Facts: P, who were black, bought a property in a neighborhood with a restrictive
covenant at time of purchase; D, other owners, sought to enforce the covenant
o Petitioners claimed that they were denied equal protection of the law under the 14th
Amendment by a covenant that barred Negroes and Mongolians for the use and
occupancy of a house. Shelley says it violates 14
th
Amendment (state actions cannot
violate the constitution)
o Shelley does NOT prohibit discriminatory covenants as long as you dont bring it to
the court to enforce. Private discrimination wasnt eliminated here until the Fair
Housing Act.
o Note: If a covenant is against public policy, a court cannot enforce it.

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LAND USE & ZONING:

Recap of controls on land use:
Nuisance: judicial enforcement among finite parties
Covenants: contract based, private agreements b/t parties (what can and cant parties do with
their property?)
o You could theoretically use covenants to achieve the same effects Houston" #$%&%'
&( ) $%*+,&-* ./)%
Zoning: governmental land use (when nuisance is inadequate states usually give local govt
authority for zoning no power unless enabled by state govt)

Zoning ordinances are the primary tools used by the government in controlling the use of land.
In a sense, tries to decrease nuisance by keeping potentially incompatible uses apart
Zoning does not displace, but can change land values in a way that effectuates change
o Ex when there is up-zoning (going from single family R1 to triplex R3), nothing
changes immediately (except perhaps your property value, since R3 gives you more
option w/ what you can do w/ your land)
" Up-zoning: lifts the ceiling such that you can file a request to build a triplex
" All properties are grandfathered in, even if houses were re-zoned as industrial
area, nothing would happen but it does mean that the property owners can get
together and potentially sell their property to an industrial organization
o Zoning can set the table for growth if someone who, as a property owner, decides
he wants higher density; he should be able to pull a permit for that density (Mount
Laurel solution)
o Usually, its the neighbors that oppose density and up-zoning (property owners want
up-zone b/c this increases property values)
The power of states to authorize regulation of property use by zoning laws and the power of
local governments to enact such laws were specifically upheld as valid uses of police power
(regulatory power to ensure health, safety, welfare)! zoning is a valid exercise of
authority
Terminology:
o Inclusionary zoning: Voluntary or mandatory programs to include affordable
housing within new residential developments
o Aesthetic Zoning: zoning code says that only certain building character types are
permitted in a downtown commercial zone
Policies For Zoning
o Central purpose is to minimize or eliminate unwanted effects externalities in a
given district
o Zoning measures typically do not ban use but relegate nuisances to where it would be
proper for the community
o 0*)//1 )/($ *%,2&%*3 2&,4 ,4* &3*) $5 ,4* 6-*7&8)% 37*)- *9'9 :;1&%' ) 4$-*
2&// )//$2 1$; ,$ (*%3 1$;7 <&3( ,$ 8$//*'*= *,89 ! 1$; <%$2 ,4), 1$;7 4$-* &(
)%3 &,>( &-.$7,)%, ,$ <**. ,4), ?)/;* 4&'4
Exclusionary Zoning:
o All zoning is exclusionary by definition
o Euclid case challenged constitutionality of zoning ! it was upheld and is utterly
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imbedded in our cities and environments
o Zoning has been used to exclude low-income groups who cannot afford the housing
permitted in the city
o Affordability- zones people out through restrictions on size of the units (real property
consumption).

Southern Burlington County NAACP v. Mt Laurel: A municipality must, by its land use
regulations, presumptively make realistically possible an appropriate variety and choice of
housing. It cannot foreclose the opportunity of low and moderate income housing, and its
regulations must affirmatively afford that opportunity.
Context: decades proceeding case lots of conflict with racial integration in suburbs
o White flight and racial polarization of inner city and suburbs
o Vociferous, sometimes violent opposition to racial integration
o Camdens decline (inner city manufactured areas with concentrated poverty, tons of
superfund cites, post-industrial waste issues) & increasing land wealth of its suburbs
o Lindsey v. Normet: 1972 no fundamental right to housing under U.S. constitution,
rejects a positive right to housing
o San Antonio SD v. Rodriguez: 1973 class discrimination is not prohibited by the
U.S. constitution, rejects a positive right to education
Facts: Ps obtained land and funding for the construction of low-income housing. They are not
seeking public housing, they just want to build a specific type of housing (the zoning
restrictions say all homes must be single family, detached, house w/ minimum lot area (too
expensive for these people, so they are excluded from living there). They are asking for
permission to build more density. D says no.
o Ds argument: Mt. Laurel says were trying to keep taxes low by restricting the public
services and education we have to provide the state forced us to do this because we
dont have enough funding.
Holdings: Housing is a basic need and thus protected by the New Jersey constitution.
o State constitution guaranteed housing as a constitutional right of the state (minority
view). The zoning in this case is predominant in most states.
o However, while not followed by many courts, this judicial opinion has been very
influential in public policy and thinking about social integration and class integration
in the urban planning context
o Any police power must promote health, safety, morals or general welfare (it is
about the general welfare of the individual people, not the welfare of the
township) the state and feds gave you money, you owe the state and the people
Remedy:
o 1. Fair Share Housing every municipality must bear their fair share of affordable
housing corresponding to the number of poor people in the region.
o 2. Court send municipality back to amend their regulations to comply.

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Courts and Exclusionary Zoning Problems:
Arguments for Using Courts Arguments Against Using Courts
1. Political will might not be there to change
it.
2. Judicial independence legislature is more
biased to rich, voting people, they want to
get re-elected. Thus, courts are particularly
well-suited to protect discreet and insular
minorities
3. If issue is discrimination, you want courts
to protect minority rights
4. If fewer than ! of the people living in NJ
or Mount Laurel is poor, then there
interests will never be protected in
representative processes
5. Also note that legislatures can override
certain court decisions courts is a way of
getting it done and the decision is not
definitely binding
6. Lots of states adopted Mt. Laurel remedies
1. Court may not know what is best for the
community not enough expertise or
knowledge
2. Separation of Powers: not judicial business.
3. Expertise what do judges know about
housing? Judges are competent at many
things but maybe not housing law
4. Implementation how would you enforce a
court decision?
5. Tension b/t majority of Mount Laurel and
the minority views the court might be
promoting ! court says that police
power is the entire state of NJ and not just
Mount Laurel

Dont have to know this but:

Euclidean Zoning: Separation of conflicting uses, which are classified on a scale from highest
use to lowest use. Highest use = least harmful to others. Lowest use = most harmful.
1) Highest use: housing. Assumption: wholesome housing (the central objective) must be
protected from harmful neighbors. Within residential zones, there is a hierarchy of
desirable use- single-family houses are protected from duplexes, apartments.
2) Commercial districts- lower than residential
3) Industrial districts- lower than commercial.
4) Principle of cumulative use: higher but not lower uses are permitted in any district.
+ In an apartment district, single0family and duplexes are permitted
+ EXCEPTION: sometimes, an ordinance may exclude higher uses


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EMINENT DOMAIN & KELO CONTROVERSY:

The government has 2 main ways of land use control: regulating through zoning and taking
through eminent domain.


Eminent domain is the power of the government (or other entities commonly invested with the
power of eminent domain, i.e. public schools, public utilities) to force transfers of property from
owners to itself through condemnation.
Measure of last resort - only after the govt has offered as much money as legally possible for
the land.
o Useful if there are: (1) holdout problems, (2) large-scale redevelopment (especially of
blighted areas), (3) achieve land assembly/redevelopment subject to public
transparency laws and public input
Controlled by state law 5th Amend constrains it; states get to choose how to allocate the
power of eminent domain among their agencies (or not give local govts ED), when it can be
exercised (i.e. freeways only, or emergency hazard abatement)
Tends to be very volatile, b/c those who hold out can get a better deal than those who sell
early.

What is public use?
Broad view: that it means advantage or benefit to the public
Narrow view: that it means actual use or right to use by the public
Two tests:
o Ends-test: permits an act of condemnation so long as the objective it serves is in the
public interest, as an exercise of police power would be.
o Means-test: is the power of eminent domain really necessary?
5th Amendment constraints: Not shall private property be taken for public use without just
compensation- does not grant this power, but confirms it.
1. What is taken?
Eminent Domain: govt takes title- forced transfer of ownership govt condemns
land. (not to be confused with a building in disrepair) this is ALWAYS a taking
Regulatory takings: govt doesnt take your land, but restricts what you can do with it
(controversial- some regulations are so extreme so that they do amount to taking, but
others are milder, like zoning.) A fact-intensive test to determine if something is
regulatory
Physical occupations: govt authorize someone else or maybe the general public to use
your land or intrude on it kind of like the govt taking an easement for itself or for the
public. Ex: govt mandate that you put a satellite on your roof. They did kind of take
something.

2. What is public use? (Kelo): govt is NOT allowed to take property from A and give it to B
for a private use, even if it does pay just compensation

3. What is just compensation?
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Kelo v. City of New London: a city can condemn private lands with the intent of giving that land
to private developers to encourage economic development because economic development is a
public purpose.
Pre-Kelo Rules:
o (1) condemnation for public use (e.g. road, hospital) is legal ! classic ED scenario
o (2) condemnation for public use is still permissible, even if land is turned over to
private ownership (e.g. common carriers) ! turning over property to private
corporation but which services public e.g. Amtrak
o (3) Condemnation for private ownership and private purpose is impermissible
o Berman + Midkiff give you list of things that qualify as public purpose:
" Harm abatement/public heath
" Beautification/aesthetics
" Emphasis on whole plan, not specific parcel you dont just focus on Pfizer
as a private transfer, you focus on the whole plan (look at redevelopment of
contaminated areas)
" Public need defined by government, not landowner
" Eliminate land oligopoly/end unequal and dysfunctional distribution of land
" Defer to legislative judgment on worthiness of project sunshine and
transparency laws have exposed them to scrutiny
o There is no way to come in favor of Susan Kelo UNLESS you are willing to overturn
Berman/Midkiff
Facts: New London, CT declared a "distressed municipality" due to decades of economic
decline. State and local officials targeted New London for economic revitalization. State
authorized bonds to support planning activities including a state park and private
development - projected to create 1,000+ jobs, increase tax and other revenues, to get rid of
the blight. Ps argued that benefits dont qualify as public use b/c land would be taken and
given to private corporation for private use.
Kelo really pushes the boundaries b/t points 2 and three above.
o Public use includes public purpose land does not have to be open to the public in
order for it to be public use (Berman v. Parker)
o Public use has to have broad meaning in order to serve the diverse and always
evolving needs of society ! we privatize what the public needs (we dont build
affordable housing anymore, we support the private sector in affordable housing)
Justifications: 1. Economically beneficial to public; 2. Must defer to legislative judgment
about what is best; 3. Look at plan as a whole, not individual uses of particular parcels within
the plan.
MINORITY opinion: Distinguished Kelo from Midkiff and Berman
Midkiff and Berman concerned programs to cure public harms
Kelo does NOT- this is a slippery slope to allowing eminent domain for any purpose that
might generate incidental public benefit, likely to be those with disproportionate influence
and power in the political process
Post Kelo: Many states enacted statutes against regulatory takings


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What is just compensation?
Standard rule: govt pays full market price- determined by the court. Parties present
evidence, and judge makes determination. There may be relocation costs included
Market value " full compensation.
o Does not take into account subjective valuation problems: i.e. sentimental
attachments.
o Timing issues: housing market might be depressed at some points
o Post-assembly problems: many of the people will sell sooner, but others will
holdout for the highest price- an exponential rise in value- should the govt pay for
the surplus value of the land? Or is fair compensation just to pay each owner for only
his land; suitability of the property for their idiosyncratic needs. Many owners value
their property at more than market value
o SCOTUS rejected including personal value in just compensation because of
practical difficulties

Rationales for Eminent Domain:
1) Sovereign states had original and absolute ownership over land prior to possession for
citizens; individual possession derived from grants from the state and was held subject to
an implied reservation that the state might resume its ownership
2) Public participation/Transparency- ED allows the public to participate and give input on
how they think the land should be used. In contrast, if citizens negotiate privately, there is
no public participation.
Ex: the Transbay Terminal in SF- highly publicized, has gotten a lot of media
attention, citizen input
3) Natural law/Political - Eminent domain an inherent attribute of sovereignty that is
necessary to the existence of the govt. (most common rationale today)
4) Economic Efficiency (Posner) - Eminent domain as an anti-monopoly device to
overcome holdouts. W/o ED, landowners incentivized to charge excessive prices for a
RR or pipeline, which is inefficient. Ex: building a highway in a setting of high-
transaction costs allows resources to be used in the most efficient way; that would
otherwise not be possible in just a free market setting
5) Planning expertise argument: private landowners have no incentive to use their land for
the public good; thus, there should be a mechanism for the state to use the land in the way
that would achieve the most public benefit