Property Banner Fall 2008

Lauren Calton: Banner Fall 2008
Property Outline
I.
Introduction
A. Theories of Property:
i. Bentham: prevailing theory
1. Property is not natural it is a creation of law. Property exists because of laws which
allows for strong and permanent expectations of enjoyment. Laws come before
property, without laws there would be no property/
ii. Bastiat
1. Property doesnt exist because of laws but laws exist because there is property.
Property comes before and creates laws since man is born a proprietor and its in
human nature.
2. role of legislature to guarantee and safeguard property rights
iii. Why does it exist? Justifications/reasons
1. moral protect product of labor
2. utility economic, political incentive
a. ex. right of publicity
3. social provide liberty from discrimination
iv. approaches to property:
1. utilitarian cost/benefit analysis
2. social relations relationship b/w property rights and social relations
B. Bundle of rights
i. Owner has power to control the property they own
1. right to exclude, use, transfer, immunity from taking/harm without just compensation
ii. Can be disaggregated
1. pieces of property may have multiple owners of different sticks in the bundles
2. just because you have the right to do one thing doesnt mean you have the right to do
something else
iii. Limited to protect the property rights and personal rights of others
1. right to exclude not absolute; balance of interests
C. Hohfelds four types of legal rights:
i. Rights: claims enforceable by state power; correlative is duty
ii. Privileges: permission to act in a certain manner without being liable for damages or state
interference
iii. Powers: state-enforced abilities to change legal entitlements (e.g. title-transfer)
iv. Immunities: security from having ones own entitlements changed by others
II.
What is property?
A. Job? No: a non-tenured job is not property
Board of Regents v. Roth-Facts: Roth sues Wisconsin State University Board of Regents because he
was not re-hired to teach after 1 year and was not given a reason why. He asks for a reason and a
hearing. Issue: Is his job considered property, as under the 14th amendment right to liberty and
property? If he can show that his job was property, then they would have started to argue whether due
process guarantees him a hearing.
To have property interest in a benefit, one must have a legitimate claim of entitlement (more
than an abstract need or desire for, and more than a unilateral expectation of).
Because Roths contract ended at a certain date, he did not have entitlement to it, unlike a
continued recipient of welfare recipients (property which if govt cuts off, it needs to give you
reason and hearing) or where teacher without tenure/formal contract had implied promise of
continued employment.
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th
Property is protected by the 14 amendment

1. If Roth had worked for a private institution, 14th amendment wouldnt have applied
Dissent-Property should just be something that is important to you, like a job.
Hypo-A client tells you he just got fired from a job similar to Roths. What advice can you give
him? No case for him unless.
Hypo-drivers license going to get revoked because I was in accident dont think was my fault but
state wont give me chance to prove that. I can argue that this is a property right because the right to
drive is more like a welfare benefit or the right to stay in a tenured job than it is Rothps job because
driver has legitimate entitlement to keep on driving. The license was revoked before it expired. But
state can argue the right to drive is like Roths job since holder of license has no expectation that it
is to continue and both issued by the government.
B. Degree?/Career? Depends on the state
Colorado Degree Not Property! In re Marriage of Graham- MBA is not property because it
does not have an exchange value or objective transferable value, came from an individuals hard
work.
In re marriage of Graham- The Grahams were married for 6 years and did not accumulate any
marital property. P woman worked while he went to school for MBA, 70% of her income went
to support them. He got his MBA and then they wanted to divorce. She says that the MBA is
marital property and should be divided between them. If it counts as property, then the state
could divide the MBA equally.
Held: No, MBA is not marital property. Property is everything that has exchangeable value
or goes to make up wealth of estate.
distinguished from Greer v. Greer because didnt actually divide the degree but divided the
property acquired after the degree in consideration of relative contribution to the degree,
whereas here no marital property acquired and here she did not seek alimony.
dissent: future earning potential is exchangeable; rule created injustice. Property is the
increased earning capacity not the MBA itself.
NY Career Is Property! increased earning power (b/c of degree or celebrity status) is
property that can be divided
Elkus v. Elkus-Facts-P woman moved for order determining whether her career and/or
celebrity status constituted marital property subject to equitable distribution.
Extent to which D husbands contributions and efforts led to an increase in the value of Ps
career (he was her voice coach and teacher for 10 years), this appreciation was product of
marital partnership and therefore marital property subject to equitable distribution. Her
earnings went up as opera singer once they were married, he contributed, and gave up his
own earnings.
This holding is different than Colorado Graham because New York has State statute
(Domestic Relations Law) that defines martial property broadly things of value acquired
during the marriage regardless of form (doesnt have to have exchangeable value)
C. Name? An appearance?
ETW Corp v. Jireh Publishing, Inc
Held for Dimage of Woods is protected freedom of expression and outweighs right to
publicity. Work commemorates historical event and has a message that Woods will someday
join that revered group of golfersnot just reciprocation of Nike ad (transformative
elements are present).
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i.

Court does not rely on Ohio Statute that recognized the right to publicity in 1999 because
litigation was commenced before the statute and statues are not retroactive (This is different
for common lawwhen courts change common law, its usually retroactive.)
Compares this case to Cardtoons which involved parody baseball cards which used
recognizeable pictures of famous baseball players (1st amendment protected-social
commentary) and Comedy III Productions about 3 stooges, where court set up
transformative elements test.
There is analogous Rosa Parks case where Outkast violated her right of publicity by entitling
song Rosa Parks with line about moving to the back of the bus and Parks won
(contradicting Woods since name was used creatively, providing social commentary) but
court held right of publicity outweighed right to free speech.
publicity rights in general [a type of intellectual property]
1. Publicity right is a right in the use of a persons name and image (has value)--gives
people the commercial use of their name through licensing; or preventing people from
using it (right to privacy). Leads to product endorsements and celebrity merchandises.
2. encourage creativity and effort
3. limited by:
a. 1st amendment free speech
b. public domain
4. if federal claim must show intent to deceive in advertising
5. if common law claim can just show unauthorized use
6. CA statutes grants right of publicity to successors in interest of the deceased.
Arguments for Right of Publicity: Encourages effort on part of the celebrity since they can
make more money, reap benefits, consumer has confidence in the product since it is backed
by the celebrity, seems morally right that a person should own his own image, identity
belongs to you, reputation could be diminished by how people use your image
Against Right of Publicity: Freedom of expression, suppresses effort, fame belongs to the
public---by becoming a celebrity, you give up control of how identity is used, encourages
wrong effort on part of celebrity, encourages litigation
Utilitarian arguments (for bettering the world) vs. Moral arguments (what is right/wrong for indiv).
For Right of Publicity
Against Right of Publicity
Utilitarian argumentsEncourages effort
Freedom of Expression
Consumer confidence
Suppress effort
Encourages wrong effort
Moral arguments
Reap benefits
Identity belongs to you
Fame belongs to public
Hypo: Elvis impersonator suedwhat happens?

Legal: For impersonator, like CA Supreme Court said in 3 stooges case, this is not advertisement or
endorsement of a product but he is creatively expressing himself as Elvis. Free speech outweighs
right to publicity. Ex. Schwarzenegger Bobble Heads-provide social commentary
Not Legal-He is simply impersonating Elvis, using his name and likeness, no transformative
elements, so right to publicity outweighs right to free speech.
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D. Body parts? No-P has no property right in his excised cells. (however court doesnt say cells
cant ever be property)
Moore v. Regents of the UC (CA Supreme Court making common law here since no law previously in
this area of conversion liability for the use of cells in medical researchhappens when there is
technological change) Facts: Moore sued his physician and others Ds for using his cells in potentially
lucrative medical research without his permission and court held there was good cause of action for
breach of physicians disclosure obligations, but not for conversion (tort meaning wrongful exercise of
ownership over personal property belonging to another)
i. No conversion because no interference with a property interest; no property interest in
Moores cells because
1. no expectation to retain cells because Moore let go of all property rights (i.e.
abandoned); and
2. it was someone elses labor that made it valuable
a. Policy justifications:
i. want to encourage future research so classified cell-line as a product of
invention (utilitarian argument)
ii. P. has other remedy breach of fiduciary duty
b. Concurring Judge-Its morally wrong to sell body parts
could lead to clones, selling children, exploiting the poor who
have no other options.
3. P Moore argues that if you have right to appearance and your name, then you have
right to your genetic material, but court says no, these cells are not unique. Majority says
if the scientific users of human cells are to be held liable for failing to investigate,
legislature should make that decision to give people property rights in their cells since
complexy policy choices are involved and legislature has ability to gather empirical
evidence, ask experts, hold hearings, etc.
Dissent: Says giving property right in excised cells is not going to deter medical research
because in most circumstances, cells wouldnt be taken under shady circumstances. Its not
morally wrong to have property rights in cells and its not about property rights of cells after
removed from body, but before they are removed from body. P had property rights when in the
body and contradictory to say no property rights and then allow doctors to profit from the cells.
ii. Hecht v. Superior Court left semen to girlfriend in will and children wanted it treated
semen not as property but as a privacy issue and gave it to girlfriend
III.
Methods of Acquiring Property

A. Creation
i. Policy Debate:
1. recognizing property by creation
a. reward labor; incentive [utilitarian]
b. fairness
2. not limiting property rights
a. limits access/creates inequality; intellectual property not just the fruit of one
persons labor [moral]
b. limits creativity by limiting whats in public domain [utilitarian]
ii. Right of publicity a person cant use a celebritys name, likeness, voice or signature for
profit without the celebritys consent
Main types of intellectual property, each governed by own statutes
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B.
C.
D.
E.

Patents: for inventions, the patent lasts 20 years, not forever
Copyrights: for creative work of all kind. Books, movies, music, art, computer
programs. Creator now gets it for his/her life plus 70 years.
Trademarks: for ways of identifying products, mostly names/brands but the shape of
a package could be a trademark.
Right of publicity, trade secrets, etc are smaller types of intellectual property
Vanna White v. Samsung Electronics America Facts: Vanna White sues the Samsung
and Deutsch companies for attempting to capitalize on her fame to enhance their
fortune, that they infringed on her right to publicity. Held: White has exclusive right to
her name and likeness (or anything that evokes her identity like a robot ad.) Even
though didnt necessarily use her name or likeness, evoked her identity for commercial
purposes; right of publicity includes identity as long as
a. D. used P.s identity, name or likeness
b. appropriation is for D.s advantage,
c. there is no permission,
d. and it results in injury
*Dissent: They are not using her identity but making point she was replaced by robot, so
precedent shouldnt restrain the court. (It might not even be her identity since Wheel of
Fortune created it)
2. imitation of voice if distinctive and deliberately conjures up celebrity = infringing on
right of publicity Middler. There, Ds didnt appropriate name or likeness but Ps right
to publicity was upheld because Ds appropriated her identitiy.
1.
When should we give people property rights?

1. Property rights give people credit for labor
2. To encourage innovation
3. Efficient resources (Posners point)
Why shouldnt we give people property rights?
1. Stifle innovation/creativity because people wouldnt get credit for it
2. Public domain (people cant afford medicine because its under patent)
3. Results in inequality (Roseeau)
F. Purchase
i. Caveat emptor: traditional common law rule-Let the Buyer Beware (most states now
have statutes requiring sellers to disclose certain things but Stambovsky just made
exception to it.
1. seller doesnt have to reveal
2. exceptions: seller cant lie (no fraud); and cant have fiduciary relationship
3. policy argument re caveat emptor: decreased litigation; protects buyers since sellers
could lie; incentives for sellers not to investigate defects, easy to administer (but a rule
of disclosure could also be easy to administer if it specifies what things seller must
inform buyer about)
ii. Exception to caveat emptor a condition impairs the value of the contract and is peculiarly
within the knowledge of the seller and unlikely to be discovered by a reasonably prudent
buyer [otherwise unfair burden on buyer]
Stambosky v. Ackley: Facts- The buyer, the plaintiff once he discovers that his house was
possessed by ghosts, commenced action seeking rescission of the contract of sale. Held: For
P. Where a condition which has been create by the seller materially impairs the value of the
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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.
1. an out of town person who did not know of poltergeist rumor started by the seller
could rescind the contract
2. unclear if it applies to physical defects that are unlikely to be discovered
3. unclear if condition has to be created by the seller
iii. Many states moving away from non-disclosure required disclosure
1. policy argument against caveat emptor: wasted cost for buyers; fairness, disclosure
easy to administer if it specifies what things seller must inform buyer about; would
minimize costs for buyer to learn about defects and improve quality of houses because
sellers would be more inclined to fix things. On average, sellers are going to know
more about the defects.
iv. Zaschak v. Traverse Corp., buyer knew there were oil reserves below property, court held that
buyer is under no duty to disclose
1. CA said that buyers do have a duty when a fiduciary relationship exists
v. exception to caveat emptor could be interpreted as.(but many ways to interpret)
1. Seller made a false representation and knew or should have known it was false
2. Intended to induce the buyer to rely on the statement
3. Buyer did justifiably rely on the statement
4. Buyer Suffered harm as a result of the reliance
5. Non-physical defect?
6. Seller-created reputation defect?
7. Condition created by the seller and unlikely to be discovered by the buyer
8. Anything a prudent buyer wouldnt contemplate
9. Haunted Houses
G.
Find
What do we think of finders keepers losers weepers in sense of lost property? Not good cuz it would
encourage theft, people could find things when the owner just set it down, would lead to wasteful
expenditures of time and money on trying to protect your stuff.
What do we think the rule should be? True owner beats owner, then finder over other people would get
the found property. Who should get possession-previous finder or current finder if finder misplaces it?
Previous finder in the chain of finders because if the later finder wins then we would be giving people
incentive to go hunting things that they could
i.
Categories of found property:

1. Lost:
a. Owner parted with property unintentionally so has no idea where it would be
b. Owner then finder get is (finders fee may be awarded), unless trespass.
Finder gets it if true owner doesnt claim it.
c. *Stolen property found by someone who didnt participate in theft is lost
2. Abandon:
a. Owner intentionally parted with property, leaves it there on purpose
b. Finder gets it if owners intent was clear. Finder beats everybody for abandoned.
3. Mislaid:
a. Owner placed it somewhere intentionally but then forgot to retrieve it or
Forgot where he put it.
b. Goes to owner of premises where property was mislaid, not to finder.
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4. Treasure Trove
a. Money/gold/silver intentionally buried long ago.
b. True owner beats everyone again but original owner is probably dead or
undiscoverable so it goes to the finder.
Benjamin v. Lindner Aviation because the money was carefully concealed court inferred it was
probably mislaid. $18,000 found in airplane by worker from Lindner Aviation. Benjamin, the
finder, says he is entitled to it but court finds that it is mislaid property (since wrapped in aluminum
foil, tried to conceal, wouldnt just abandon that much money) and so it belongs to the owner of the
plane in case the true owner comes forward. Iowa has statute Code Chapter 644 which says if any
person shall find any lost goods, money, bank notes, or other goods or things of any description
whatever, of the value of 5 dollars or over, such person shall informer owner and if finder doesnt
claim it in 12 months, the property vests in the finder. Court says that this statute does not apply to
mislaid property, that it only applied to lost property. Court says if the legislature had meant it to go
to the finder for all found property, then they would have said so, but it uses the word lost so that is
what they meant. It is a battle between the technical meaning of lost and the common law meaning
of lost.
ii. General rules for finders:
1. prior possessor prevails over later possessor
2. If personal property is embedded in soil, it is part of real property and awarded to
landowner
a. Finder wins if object is found on property open to the public
H. Gift: transfer of property from one person to another without payment (more enforceable than
promises; not as formal as wills). Person trying to claim the gift has to prove the 3 elements.
i. 3 elements of a gift: Valid gift is irrevocable but mere promise is unenforceable.
1. intent to transfer/donative intent (intent to give a gift)
a. can be remainder interest in a life estate
b. must have present intent to transfer ownership rights (if a future interest)
c. may be a writing
2. delivery
a. physical; or
b. constructive
i. may be accomplished through a writing
ii. some courts only accept constructive delivery if actual delivery is
cumbersome/difficult
iii. need delivery since otherwise people could just say that someone intended
to give them a gift. If they dont actually have it, its suspicious and a
promise to give gift in future is unenforceable.
c. courts split if joint control able to establish delivery (some courts say if intent is
clear then it will be sufficient)
3. acceptance
a. if gift is of value assume acceptance
b. any other evidence allowable
c. acceptance required because you wouldnt want to give a gift of nuclear waste,
ii. Types of transfers:
1. inter vivos: from one living person to another. The opposite of a will, since you
convey it when you are alive, like a gift. Less stringent requirements than will.
2. Testamentary transfers through valid will which takes effect only upon persons
Death and many more requirements, like having witnesses.
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Gruen v. Gruen: all 3 elements (intent, delivery, acceptance) satisfied to make the Klimt painting a
gift. This case involves a life estatethe right to possess something for your life. If one person has
a life estate and when the life ends, there is the remainder. This division of the right to possess
something between owner of life estate and owner of the remainder. Victor Gruen gave Michael
remainder of life estate for painting by Austrian modernist upon his death. Ps stepmom says that
Victor was acting as the true owner/never filed gift tax return so no intent/delivery (but prob didnt
do this since was committing fraud). The value of the life estate plus the remainder is the total
value of the painting. But once the person with the life estate dies, the value is no longer divided
and it goes all to the owner of the remainder.
Writing sufficient to transfer remainder interest of the title while retaining life estate (intent
clear from 3 letters)
constructive (or symbolic) delivery accomplished through the letter. Stepmom says was
never delivered but the gift was the remainder of the painting so cant physically deliver it.
acceptance proved through friend conversations, since its valuable, and said he liked it
when he was a child (he didnt list painting as assets during divorce-fraud).
Hypo: Suppose dad changed his mind before he died and hed rather give the painting to the
museum. Can he do it? No, because a valid gift is irrevocable. One Victor made the gift of the
remainder in the painting, Victor no longer owns the remainder.
Hypo: Suppose you have a Rembrandt and want to give it to your son but Dad wants to be able to
change him mind and Dad says in letter I want to give you this gift and has son write letter saying I
accept it but will give it back to you whenever you want. But the sons words are just a promise
and are unenforceable so this would not work. Instead, dad could write a condition into the letter
saying you will get this gift as long as you graduate from Harvard.
iii. Conditional (precedent) gifts usually unenforceable
1. unless condition certain (ex. death bed promise) court likely to find gift because
present intent to convey a future interest
2. courts may hold gift made and condition not enforceable if gift delivered
a. some courts hold engagement rings were given and are irrevocable
3. courts may hold no gift if not delivered
a. some courts hold engagement rings are conditional on marriage and must be
returned
iv. Condition subsequent (such that donee will lose their right to the gift) usually enforceable
(ex. gift of car but will take away if in an accident)
I. Adverse Possession: If you stay on someones land long enough and meet certain requirements,
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after a certain amount of time it becomes yours (ex. Squatting).
Why do we allow this? Over time, our sympathy for the trespasser increases as our sympathy for
the land owner decreases because where is he? At some point, more sympathy for the trespasser and
would say that the true owner has lost the ability to evict the trespasser. We wouldnt want the 40th
generation of owner to be able to evict 40th generation of trespasser. This is a statute of limitations
on Ls suit to eject T from the land and it is a transfer of title from L to T---once enough time passes,
the statute of limitation runs, the land is now Ts.
Two types of adverse possession suits-mostly come up when there are boundary disputes between
neighbors
1. Less Common-T sues L after time period has run and is seeking full possession since he should
be rightful owner. This way, T can one day sell land.
2. More Common (as in Nome2000)-L sues T, asking court to kick T off land and T raises adverse
possession as a defense.
i. Real Property: Elements of Adverse Possession
1. 6 elements: trespasser gets all property rights if possession is
a. actual T has to actually be on land (otherwise people could claim land
anywhere.
b. open and notorious give a reasonably diligent owner notice that theres
someone on the land. Not in secret, so owner can take action if wants to.
c. exclusive not shared with owner or public as a whole(otherwise house guest
could claim possession and landowner cannot sue public as a whole)
d. continuous adverse possessor has to possess the land as continuously
as true owner/occupier would. (otherwise person who comes to land once a
year could claim the land and owner could have no idea)
e. adverse (hostile) without owners permission
f. beyond statutory period legal requirement (in Nome2000 its 10 years).
Successive adverse possessors may tack to meet it. Trespassers can add their
years, so if T was on it for 7 years and sold it to V who was on it for 3 years, they can
tack their years. But if there is no transaction (sell or gift) you cannot add the years
and V is just a new trespasser. *Each statute of limitations has exceptions for certain
people (like child or detained/insane personthe toll of years doesnt start running
until they are capable of claiming their land since they are rightful owner.
Some states have Color of Title or payment-adverse possessor can only win if they have
mistakenly shows them to be the owner of the land, or they have property taxes that they
have been paying on the land.
In most states, there is no adverse possession against the government, about public land. It
would be hard for govt to monitor who are the potential adverse possesssors and who are not
because public land is made for people to come on. Plus, you dont want adverse possessors
to take up all the public land. Plus, a lot of public land is vast and remote and inaccessible
and it would be very hard to monitor a mountain.
As owner, how do you prevent adverse possession?
o Send letter to trespasser or put up signs on property to give them permission
(negating adverse requirement)
o Go up and hunt with them/be on property/rent it out (defeats exclusive requirement)
o Kick out the hunters/have police eject them (defeat actual & exclusive elements)
o Sue them to stop clock from running and defeat beyond statutory period element
o Show that they are using the land only sporadically so not continuous
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Nome2000 v. Fagerstrom (cabin in Alaska) P sued to eject Charles and Peggy Fagerstrom
from disputed parcel and Fagerstroms claimed their use of parcel had been acquired by
adverse possession. Fagerstroms established adverse possession of northern portion of
disputed lot but not southern portion. On northern, placed camper on land for 3 months each
year, built outhouse, fish rack, reindeer pen and lived there periodically in warm season
(held to be actual possession, continuous, open/notorious, adverse and exclusive passed
SOL) but did nothing on southern portion of parcel except pass over it occasionally
(insufficient for actual possession).
Adverse Possession of Personal Property: unsettled law
2. Discovery Rule
OKeefe v. Snyder (NJ)-OKeefe alleged she was true owner of
Paintings and that they were stolen fro a NY art gallery in 1946. Paintings missing in
1946, reports as stolen in 1972, learns on display in 1975, and files suit in 1976. Snyder
had purchased paintings from Frank in 1975 (who said he had them in family for over 30
years) and urged adverse possession and court initially found summary judgment for him
since 6 year SOL had passed but this court reversed summary judgment and sent it back
for trial to see who got painting and OKeefe would have to show that she diligently
searched for paintings to delay the start of the clock. (If court were to simply apply the
elements of adverse possession, Snyder would still not meet open and notorious since
Franks did not advertise it (just kept it in house so OKeefe could not have known). Under
this, there is more protection for art owners than real property owners under adverse
possession).
a. SoL period begins when owner discovers or should have discovered where
stolen property is
i. Owner must show they used due diligence to discover
b. Evaluation of rule:
i. For: encourages careful practice in art purchases
ii. Against: burden on owner
c. 3 ways to integrate this rule with 6 element test of adverse possession:
i. Discovery rule replaces the doctrine of adverse possession for paintings, so
6 years after the clock starts running, Snyder gets to keep the paintings,
regardless of whether he has satisfied the elements of adverse possession
ii. Discovery rule tells you when the clock starts running on an adverse
possession claim, 6 years after the clock starts running, Snyder gets to keep
the paintings only if he has satisfied the elements of adverse possession
iii. Discovery rule replaces the "open and notorious" element of adverse
possession, so that 6 years after the clock starts running, Snyder gets to
keep the paintings only if he has satisfied the elements of adverse
possession
3. Demand & Refuse Rule: (more protective of owner)
Solomon v. Guggenheim (NY)-Facts: Chagall gouache stolen from P in the late 1960s. P
not to report theft to authorities or to art world, fearing that it would drive the gouache
farther away. P de-accedes painting in 1974. Ds bought the painting from a NY gallery in
1967, displaying it in their home for 20 yrs, unaware of theft. Issue: Is Ps failure to
exercise due diligence relevant to SoL? Held: No, held for the plaintiff because
1. NY rejects discovery rule in OKeeffe b/c governor vetoed bill claiming it would
provide insufficient notice to foreign owners before action must be taken. Protect NY
as cultural center and dont infuriate foreign governments!
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2. No proof that public disclosure would have helped the museum locate the property. Ct
not ready to set down steadfast rule for all situations.
3. Perversion: for an outright theft the S of L runs from time of theft, regardless of
owners awareness; for a good-faith possessor, the S of L runs from the time the owner
makes demand of the property. SoL begins when owner demands return and
possessor refuses. Says discovery rule of when it is missing would encourage theft
and that putting the burden on owners is unfair and that instead the burden should be
on prospective possessors.
Which rule do we like better and why? NY (Guggenheim) rule or NJ rule of discovery (OKeefe)
where the burden is on the true owner to search for art. I like NY rule because there is more
protection for the true owner and it is much more clear. But the NJ rule might be a more balanced
rule because it protects the true owner while also protecting the good faith purchaser since owner
has to exercise due diligence to find the art. The NY rule would make it a lot harder to buy art since
there would be so much burden on the purchaser to find out if it was stolen.
IV.Shared Ownership
A. Estates and Future Interests
Estate present interest
Fee Simple Absolute ownership of full timeline [O and
heirs]
Future Interest
Grantor
3rd party
Rule against
perpetuities
None
none
n/a
Reversion
Remainder*
~Vested
remainder
~Contingent
remainder
applies
Reversion
Remainder
n/a
Reversion (grantor)/
Remainder (3rd party)
Fee Simple Determinable grantor conveys property to
grantee until an event occurs in the future; then property
automatically returns to grantor SoL clock starts
running automatically
Possibility
of reverter
none
n/a
FSD
possibility of reverter
Fee Simple Subject to Condition Subsequent grantor
conveys property to grantee until and event occurs in the
future but grantor reserves right to reclaim, not automatic
(SoL clock starts when person begins to reclaim?)
Right of
entry
none
n/a
FSSCS
right of entry
Fee Simple Subject to Executory Limitation grantor
conveys property to grantee until and event occurs in the
future but if event occurs goes to 3rd party, not grantor
none
Executory
interest
Applies
Life Estate owner has right to possess it until they die;

future interest = remainder or reversion [O A for life]
LE
Reversion (grantor)/
Remainder (3rd party)
Leasehold leaseholder has right to posses until a date of
expiration; reversion to landlord in the future
Tenancy
FSSEL
Executory interest
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There are four major categories of interests. The first three are classified as freehold estatates that
were protected by royal courts in England and a leasehold is a nonfreehold estate that was not
granted common law protection until much later. There are 6 current possessory estates.
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Now
Future
1)
Fee Simple Absolute-have the whole timeline (no one else has the right to property)
a) Ownership potential lasts forever and owner can leave it to their heirs or write a will
determining who will get it when the owner dies
b) Can be inherited
c) Is alienable-the owner has the power to transfer ownership during her lifetime. Restrictions
on the alienability of a fee simple interest are almost always void.
Defeasible Fees-Like all fee interests, is inheritable and alienable, and lasts forever but unlike fee
simple absolute, will terminate upon happening of some event named in original conveyance (some
event that may or may not happen) at which time ownership passes to the owner of the future
interest. (3 types of defeasible fees)
2)
Fee simple determinable-future interest vests in grantor automatically when the condition
occurs. Suppose Banner says he will give it to UCLA so long as property remains a required
course, so if UCLA got rid of Property, Banner has possibility of reverter and it would go back
to him automatically when the stated event happens. Until then UCLA has a fee simple
determinable.
3)
Fee simple subject to condition subsequent-future interest vests in the grantor if she
asserts it after the condition occurs. Suppose Banner says, I will give it to UCLA but if Property
is no longer a required course, I have the right to go back and claim it. Now Banner has given
UCLA a fee simple subsequent and Banner the grantor has a right of entry.
*Difference between fee simple subject to condition subsequent and fee simple determinable is
the slight different in wording and whether it automatically goes back to grantor (simple
determinable) or has to claim it (fee simple subject to condition subsequent). Under subject to
condition subsequent, it protects grantor against adverse possession because grantor may not
know that they took property out of the curriculum. When the grantor dies, his property the
right of entry or possibility of reverter would go to whoever he says in his will the rest of his
property goes to.
Here, the grantor (or the heirs) must claim a right of entry or power of termination.
Example: O may convey property to A, but if the property is ever used for anything
other than school purposes, O shall have a right of entry for condition broken. Language
used to let us know its fee simple subject to condition are on condition that and
provided that combined with a right of entry.
4)
Fee simple subject to executory limitation-just like the other two, except that when the
stated event occurs, the property, instead of going back to grantor, goes to third party. Future
interest vests in a third party other than that grantor after the condition occurs. Future interest
belongs to a third party rather than the grantor.
Example: O conveys to A, but if the property is not used for school purposes, then to B.
The present estate in A is called a fee simple subject to executory limitation while the
future interest in B is called an executory interest.
5)
Life Estates-right to possess property for your life. When you die, someone else has
The right to possess property, and this is called the remainder or reversion depending on
who owns it. If its grantor holding it, he has reversion but if third party then its a
remainder.
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a) Last for the life of the owner and then pass either to the grantor or her heirs (as a reversion)
or to a third party chosen by the grantor at the time the life estate was created (as a
remainder).
b) Unlike the owner of a fee simple, the owner of a life estate has no right to pass on the
property when she dies, rather, it will go to the reversioner or remainder person identified by
the grantor.
Example: A transfer from O to A for life gives a life estate to A and a reversion to O or her
heirs, while a conveyance from O to A for life, then to B, gives a life estate to A and a
remainder to B. Life estates are transferable.
Types of remainders:
i) Remainders are either vested or contingent
(1) Vested remainder-belong to an ascertainable person and there are no conditions
precedent that must be satisfied before the remainder is certain to become
possessory. O to A for life then to B is example because B is named person and no
conditions must be satisfied before Bs interest will take effect (other than death of
A). Bs interest is a vested remainder. If give land to Hillary Clinton until she dies,
and then to Chelsea Clinton, then Chelsea has a vested remainder.
(a) absolutely vested
(b) subject to open class can increase (ex. children of B)
(c) subject to divestment ex. O A for life, then to B, but if B drops out of school,
then to C
(2) Contingent remainder-when not yet certain if hold of remainder is ever going to
possess the land, belongs to an unascertained person or there is a condition precedent
that must be fulfilled before it can become possessory. For example, a conveyance
from O to A for life, then to B if she has graduated from law school, creates a
contingent remainder because B will never get the interest unless graduates from law
school.
6)
Leaseholds (nonfreehold)-a present possessory estate and the landlord has the future
interest of reversion.
a) Transfer possession for a fixed period of time (a term of years) or a renewable period
(periodic tenancy) or exist at the will of the owner (tenancy at will).
b) All estates may be held in their legal form or in an equatiable form as trusts. A trust splits
ownership between trustee (legal owner) and a beneficiary (the equitable owner). The
trustee is obligated to follow the instructions of the grantor to use or manage the property in
particular ways for the benefit of the beneficiary.
The Rule Against Perpetuities future interest invalidated unless they are certain to vest within
the lifetime of someone who is alive at the creation of the interest or no later than 21 years after her
death. In other words, no interest is good unless it must vest, if at all, not later than 21 years after
some life in being at the creation of the interest.
i. Steps:
1. is there an executory interest, contingent remainder or vested remainder subject to
open? It only applies to these and does not apply to future interest held by the grantor
(so does not apply to reversions or rights of entry).
2. What is the condition, contingency, or uncertainty? What condition has to be satisfied
before the interest will vest? It could be age or something happening.
3. When will the uncertainty be resolved (failed or passed)? When are we going to know
for sure whether or not the person with the future interest is ever going to get the property?
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When is the contingency going to resolve itself? It usually is within a certain number of
years, or within the lifetime of X.
a. Not concerned with actual possession, just when well know if the person will
possess the property
4. Is that date <21 years after the death of any lives in being?
b. Look for a validating life it is certain to vest within 21 years of their death
The uncertainty/contingency has to be resolved within 21 years of a life in being.
Within 21 years after the death of someone who was alive at the time it was created,
this contingency has to be resolved. The person that you pick is called the measuring
life. It it works then it is valid, if it doesnt, it is invalid. All of this calculation is
done at the moment when the future interest is created, you dont wait and see how
long people will live. An interest is either valid or invalid at the moment it is
created. We are not concerned when the person within the future interest is actually
going to possess the property within life +21, we are concerned about whether we are
going to know whether they will possess the property within life +21. We are going
21 years from the death of a person who was alive at the time it was created.
The rule isnt an issue at creation because some states have Wait and See statutes:
1) court will not invalidate future interest until perpetuities period has passed and the future
interest hasnt vested (wait and see until 21 years after death of last person alive at time
interest was created).
2) Will wait for 90 years, if resolved within 90 years then future interest is valid.
*Some states have perpetuity saving statutes. Ex. Oklahoma-Any interest in real or personal
property that would violate the rule against perpetuities shall be reformed, or construed within the
limits of the rule, to give the effect to the general intent of the creator.
*Saving clauses drafted by lawyers. For example will often include a clause laong these
lines.The interest hereby created shall terminate, if it has not already terminated, not later than
21 years after the death of the last survivor of my decedents who are alive.
B. Concurrent ownership
Concurrent Ownership-Creation:
Types: multiple parties with right to possess all of the property:
1) tenancy in common: Most concurrent interests are these--separate interest in
property which he can dispose of/transfer (sell, lease, etc.) without permission
as he chooses, no survivorship; can have unequal share
Example: If A and B are tenants in common, and A sells his interest to C, now
B and C are tenants in common. If B dies, and in his will gives his interest to
D, now C and D are tenants in common.
2) joint tenancy: separate interest in property; but right of survivorship so if one
dies, the other automatically gets his interest
i. 4 unities necessary for joint tenancy:
a) Time joint tenants must acquire property at same time
b) Title acquired through same instrument/document
c) Interest have equal shares
d) Possession each joint tenant must have right to possess all of the
property
ii. If a unity is severed (can be done unilaterally) tenancy in common
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Example: If A and B are joint tenants, and A dies, B gets As interest
regardless of what As will says.
Example: If A and B are joint tenants, and A sells his interest to C, B and C
are now tenants in common. They cant be joint tenants because did not
acquire interests at same time or through same document.
c. tenancy by entirety: Not very common, most states dont have it. Like joint
tenancy, but is available only to married couples and cannot be severed
unilaterally by one party. Both husband and wife have to get together to convey
tenancy by the entirety.
i. if divorce tenancy in common
Example: If A and B are tenants by entirety, A cannot sell interest to C. A and B
have to sell together. Benefit is that if one starts running up debts, creditors
couldnt go after A because it is both of them.
3. Hypotheticals:
a. Example 1:
i. A, B, C are joint tenants. A sells to D.
a) B, C joint tenants (2/3)
b) D, B, C tenants in common (1/3)
ii. B dies and leaves interest to E
a) B cant do it, interest automatically goes to C
b) C has 2/3
b. Example 2:
i. A, B, and C are tenants in common. A sells his interest to D.
a) D, B, C are tenants in common (1/3 each)
ii. B dies and leaves interest to E
a) D, C, E are tenants in common (1/3 each)
c. Example 3:
i. A and B are tenants in common. A leases interest to C without telling B. C
shows up, B brings suit to evict him. Who wins?
a) C because A does not need permission from B
ii. If and A and B were joint tenants?
a) Same result
d. Example 4:
A and B are joint tenants. A leases to C, for 10 years and doesnt tell B about
it. Six months later, A dies. C says he still has 9.5 years left on his lease and
B says no, that all the property is his. Lawyer for C would say that As death
has no bearing on this. Lawyer for B would say that you cant convey more
than you have and A had an interest until his death and Cs interest died with
As. CA Supreme Court held that B win, that lease didnt sever the joint
tenancy, that it expired on As death and the rational was that B cant do much
to stop A from negotiating secret leases, but C, before entering into the lease,
can check if A was sole owner or joint tenant.
Kipp v. Chips Estate ambiguous deed (both tenants in common & joint tenants); legislature
prefers tenants in common. Kipps sues saying the deed said joint tenancy (then she would get all
property) and Chips son wants tenancy in common because then it would go to his fathers heir
(him). Court decides that it was tenancy in common because legislatures favor it and because it
doesnt matter what clause says what, but that look at language as a whole. Court said overall intent
was tenants in common since it said to their heirs and assigns forever and lawyer made the
drafting mistake of putting in joint tenants. Court also says that by statute, in cases of doubt, go
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with tenancy in common rather than joint tenancy. If you are tenants in common, and you want to
leave the property to the other person you can, but if you are joint tenants, and you dont want to
leave your interest to the other person, it takes some work to sever a joint tenancy. So by favoring
tenancy in common, you are more likely to fulfill this wishes of the deceased and would satisfy
most people most of the time by using this rule.
How to interpret deed: (1) specific language, if ambiguous (2) whole document extrinsic
evidence
Concurrent Ownership-Partition when co-tenants cant agree on how to use land main legal
remedy is partition
Types:
1. In kind physical partition (default), dividing property into two pieces
2. By sale hold auction, or list in as broker as one unified piece of property
Test: Delfino v. Vealencis (garbage business - no special factors to mandate partition by
sale). Ps/Delfinos and D/Vealencis owned property in Bristol, CT, as tenants in common. Ps
share=99/144. Ds share=45/144. D has a dwelling on prop from which she runs a garbage
hauling business. Ps seek to develop prop into residences; want partition by sale to get it all.
Court held partition in kind, not by sale, is appropriate.
Burden is on party that wants partition by sale and can get a partition by sale when you can prove
1. Partition in kind is impractical and inequitable (due to physical attributes of land/# of
owners/access).
Ex. It would be impractical to physically partition if it was a house, when there are too many
owners, or if one part of land had gold mine on it, was more valuable (it would be hard to
physically divide it).
2. The interests of the owners would better be promoted by the partition by sale.
Vealencis wins on prong 1 since it would be easy to physically divide it. Judge could end here but goes on to say that
interests are not better served by partition by sale since D merely stores containerized dumpsters on her property,
suggesting city would probably still grant P permits. If best use of land is for residential development, for policy
reasons, why should we let Vealencis stand in the way? She actually possesses the land. Helens subjective value of the
land is higher than the objective market (residential ) value of the land because it is her familys business on the land,
and her home, sentimental attachment, she has goodwill associated with her business location and if she moves she will
have to change her contract, tell her clients, etc., she has autonomy there, there is a cost of moving, it is not surprising
that she values her property more than the market does because otherwise she would have sold it already, and
possession value (WTP<WTA meaning willingness to pay is less than willingness to accept, just having something
makes your value of it go up, people are less willing to lose something, people place a higher value, subjectively, than
the market does.
B. Landlords and tenants

i. Leases
1. Types:
a. Term of years:
i. Fixed time (doesnt have to be years)
ii. Inheritable and alienable
iii. Ends automatically, expires at end of period and reverts to L
iv. If lease continues turns into either periodic or at will most courts prefer
periodic
b. Periodic:
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i. Rolls over, for fixed period of time that continues for successive periods
ii. Inheritable and alienable
iii. Ends when tenant has to give notice at least one period in advance
a) Ex: one months notice to end a month-to month lease
b) One years lease tends to need 6 months notice
c. At will (rare today)
i. Not fixed
ii. Not transferable; terminates at death
iii. Ends when either landlord or tenant gives notice.
Hypo: If tenant moves out on month to month lease without giving notice
and landlord brings suit to recover rent for September, who wins? Landlord
wins because had to give notice. But what is he wants to collect for the next
months.could say that tenant moving out and not paying rent was notice
enough.
2. Ls recourse:
Modern Rule/Berg v. Wiley: (changed the locks - MN)- cant change the locks w/o the
courts permission/ Modern Rule Bars landlord self helpmust go through judicial process.
Lease was for 5-yr term w/ conditions that (a) tenant bear costs of repairs, (b) tenant make
no changes w/o permission, (c) tenant operate the restaurant in a lawful and prudent manner.
Lessor reserved right to retake possession if conditions violated. D objected to P tenant
remodeling w/o permission and violating health codes. P tenant put up a sign: closed for
remodeling. W/o permission from P or the courts, D landlord changed locks. Issues: Did P
abandon the property? Was Ds entry forcible and wrongful? Holding: No abandonment.
Wrongful entry=wrongful eviction. Affirmed for P tenant.
i. L.s recourse for breach of a (residential?) lease is through the courts, not
through self-help if T hasnt surrendered or abandoned property (takes 3-10
days) because
b. Old common law test for self-help: (no states allow landlord self help anymore)
i. L. legally entitled to possession when tenant holds over lease term or
Breaches lease containing reentry clause.
ii. Ls means of reentry are peaceable (even under common law this would
Not be peaceable because if tenant there, possibility of violence)
c. Policy implications of getting rid of self-help for L.s:
i. Against modern rule:
a) Modern rule protects bad tenants by giving them time
b) Will be more expensive to be an L, lose money on rent plus lawsuits
Are not free.
a. pass costs onto T since Ls will increase security deposits
b. stop renting to T.s who cant put down security deposit
c) takes more time for L. Even if landlord gets judgment in 3-10 days,
landlord may depend on income to pay mortgage and might not be
able to rent out again until the 1st of the month.
d. with new rule, if registry of who is evicted, will be harder for tenant
to get another apartment.
e. People who benefit from the rule are breaching, bad tenants and
it hurts good tenants because landlords can increase security
deposits or rent.
ii. Pro Modern Rule:
a) promote safety
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b) give T.s due process, protects long term tenant since landlord could
be mistaken, buys tenants 2-3 months on average
c. follow legislative intent
d. dont want landlords to take law into their own hands
e. if tenant is doing damages during judicial process, landlord can get
temporary restraining order and law enforcement protection are
available to landlord.
With modern no self help rule, should the ban on self help be waivable, meaning could landlords be able to
write in a reentry self help clause? Landlord could say, if you agree to this self help clause, Ill take $100 off
the rent. But, landlords could take advantage of tenants, since they have more information about the market
and the apartment and could be more experienced bargainers, and landlords could sneak these clauses in
because most tenants dont read leases that closely. Also no, because landlords could just search for a tenant
who would allow for the clausetenants need landlords more than landlords need tenant.
ii.
Subleases and assignments: ways T. can transfer interest

1. Affects who L can go after for rent: L can recover from anyone he has privity of
contract with (most likely L) or privity of estate (successor in land)
a. T is always on the hook because there is privity of contract.
b. Sublease: only T is on the hook (T1 on the hook to T)
c. Assignment: both T and T1 on the hook
d. Default rules superceded by explicit agreements (ex. T1 to assume all obligations
of T to L)
2. Types:
a. Assignment T assigns T1 all interests for entire unexpired term [vertical
privity] L can recover from T1 in case of assignment but not sublease.
i. Privity of estate: L T1 (b/c T1 returning land to L)
ii. Privity of contract: L T (b/c they signed contract)
iii. L can sue T or T1 since L has privity of estate with T1.
b. Sublease T assigns T1 leasehold for < full unexpired term [no vertical privity]
i. Privity of estate: L T
ii. Privity of contract: L T
iii. L can ONLY sue T because L does not have privity of contract or estate
with T1.
3. Ernst v. Conditt (go cart transfer) lease to Conditt was an assignment even though
ambiguous language b/c he surrendered all rights (no reversion) therefore L can go
after T1.
Enrst (L)Rogers (T)Conditt (T1)
Conditt stops paying rent and Ernst sues Conditt. Conditt wants it to be sublease
because then Ernst can only go after Rogers. Court holds that although they called it
sublease 3 times in the contract, they were not lawyers so it is common usage and
since Conditt took over whole term, it was assignment and Ernst landlord can
recover from Conditt (T1)
*If Rogers hadnt agreed to be personally liable, would he have been personally liable? Yes
because he would have been liable under the obligations of the original lease.
*When Rogers assumed to be personally liable for the faithful performance, did that let
Conditt off the hook? No, because there still is privity of estate between Conditt and Ernst
and more than one person can be liable for same obligation when it is an assignment.
*What if Rogers wanted completely out of it, what could he have done? Rogers could have
terminated his lease and get Ernst to rescind the original lease to get out of the lease and
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then Ernst and Conditt could have signed new lease together and Conditt takes place as T
and there is no T1.
Landlords Consent When Subletting/Assigning
Landlords want a consent clause because they want to choose whose on property and want someone that will pay and
wont destroy the property. It is common to ban subleasing all together or to require consent (but consent could
ultimately be a ban). These are enforced a lot, but commercial landlords cannot withhold consent unreasonably
(residential landlords can withhold consent for any reason).
iii.
Abandonment: Landlords have an obligation to make a reasonable effort to mitigate

damages if a tenant wrongfully abandons a lease. Tenant is liable for backrent and expenses incurred in re-letting
1. If T abandons Ls options:
a. Accept T.s surrender- Leasehold terminates. No further obligations and landlord
is free to lease the property to someone else. Remedies still available for
breaches prior to surrender.
b. Re-let on T.s account T liable if L cant find replacement or replacement
defaults. Landlord refuses to accept tenants surrender and the tenant remains liable.
But tenant implies a wish to be relieved of the liability, which occurs if the landlord can
find a replacement tenant. Original tenant still liable if new tenant defaults.
Sue for damages- Damages based on anticipatory breach. Breach must be

unequivocal. Damages = difference b/n reserved rent and fair rental value.
Assumes that the landlord relets the premises and suffers only the difference.
d. Sue for all remaining rent at end of lease wait and sue Landlord waits until the
unpaid rent has accrued to the end of the term before he sues. Modern courts
impose a duty to mitigate, which could affect damages.
2. Sommer v. Kridel (Vietnam vet. gets ditched at the alter but another renter was
interested) (NJ) D was discharged from the Army, lost engagement, and became a
student, supported by stepfather. Couldnt afford rent; wrote landlord on May 19,
1972, asking for sympathy, and willingly forfeited down payment of first-months rent
and security deposit and never received key. P doesnt reply. P refuses to re-let apt to
another (willing and able to pay) until Sep 1973 for $345 and landlord tries to collect
12 months rent from him.
a. Rule L. has duty to mitigate in residential leases (reasonable effort)
i. Duty on L to show good faith
ii. Trend in thinking about lease as contract, not present interest with full
ownership
iii. Pretty much all states have this modern rule
b. Changed old common law rule when L had no duty to mitigate, could wait and
sue b/c T has complete present interest. Under common law, landlord conveyed a
stretch of time to the tenant and it is of no concern to the landlord what the tenant is
doing with the property. This old common law contradicted contract law, which said
that if someone breaches a contract, you must mitigate the damages. This case
Sommer changes this common law rule in 1977, switching to a broader trend of
treating leases more like ordinary contracts.
c.
3.
Policy implications of duty to mitigate:

a. Pro duty to mitigate:
i. Fairness to T
ii. Allows tenants to move apartments more easily and find something cheaper
iii. Incentivizes using real estate efficiently because property wont sit vacant
iv. Landlord can find new tenant at lower cost than tenant can, so there is
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b.
Lesser burden on the landlord.

Anti duty to mitigate:
i. Unfair to require L to do work when T breaches
ii. Messy to apply what is due diligence?
iii. Rent/security deposit increase b/c more expensive to be an L
iv. May decrease housing supply
v. L.s can easily adjust:
What can you do as landlord to protect yourself?

a) Acceleration clause
b) Clause in lease, no duty to mitigateand that tenant is responsible for finding
New tenant.
4.
Stonehedge Square v. Movie Merchants Rule: (PA)-Stonehedge owns and operates

shopping center (L) and enetered into lease with General Video Corporation (T) and T
assigned its rights under lease to Movie Merchants (T1), and L wanted to hold T1
liable on the lease and sued for rent under acceleration clause in the lease.
a. Rule Non-breaching landlord has no duty to mitigate (they are referring to a
commercial lease)
b. Could say that Sommer and Stonehedge are reconcilable since that one applies to
residential leases and this to commercial, but it seems like courts reasoning of
common law rule of no mitigation could just as easily apply to residential leases
too (contradicting Sommer v. Kridel even though most states require L to
mitigate if lease abandon in residential leases):
i. Simple to apply; unfairness to L.
c. States split on duty to mitigate in commercial leases
d. Which is the better decision? Sommer because want to protect tenants and have
fiar results (tenant could lose all their $ and have to move to cheaper place) and
want to use housing stock efficiently but argument for Stonehedge is that dont
want to reward breachers and punish no breachers.
Implied warranty of habitability (IWH) implied promise of residential L that guarantees a

habitable domicile that meets basic standards of living (doesnt guarantee will be perfect or
aesthetically pleasing). T may lawfully withhold rent AND retain right of possession in a leasehold
if L breaches the implied warranty of habitability. Standard: materially affects health and safety.
Damages should be the difference b/n actual rent and the fair market value for property in poor
condition. Housing codes alone do not allow for reduction in rent.
Until 20th century, landlords had no obligation to provide habitable premisesit was caveat lessee
let the lessee beware. Starting in 1960s, courts went even further and applied the implied
warranty of habitability (IWH). This keeps with a couple of changes.1) gradual trend of trading
leases 2)change in contract law, meaning over the course of the 20th century, courts apply warranties
on the parts of sellers (that they are substandard goods, and applies same standard to real estate). 3)
there was a time when tenant was renting land and would build their own house, but with
urbanization, leases are typically for apartments, landlords are better able to repair things in the
apartment, and if something goes wrong, in order to fix it, tenant would have to go someplace that
he cant access (problem not contained in own unit).
iv.
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1. Ts available remedies for L.s breach of IWH L must 1st give notice in some states
[Utah Building Monitoring Systems v. Paxton]; other states the breach happens
immediately and no notice required [CA Green v. Superior Court]
As tenant, what options do you have?
1) *repair and deduct (repair it yourself and deduct it from the rent)
2) *Leave (rescission of the contract/lease) (mimics old constructive eviction)
3) Pay rent, sue for damages ($)
4) *Withhold rent and wait for landlord to sue you for unlawful detainer action. Court could
reduce rent to fair market value (Green)
5) Sue landlord for an injunction
6) Report housing code violations
*1, 2, and 4 are the most common
other facets:
a. cannot contract around implied warranty of habitability in most states
b. T. doesnt have to move out to take advantage (like in old common law)
c. How do you calculate the damages? If leak in one bedroom of two bedroom
apartment then the damages might be what it would cost to rent a similar ONE
bedroom apartment, or you could calculate it by square footage (more favorable
to landlord then a whole room
d. Does IWH help tenants? It maintains health and safety but on other hand
landlords could increase rent that many couldnt afford.
2. Green v. Superior Court (slum landlord, 80 housing code violations) T. can use
breach of IWH as a defense in a suit for past rent (breach can be raised as a defense in
unlawful detainer action). Collapse and nonrepair of bathroom ceiling, rats mice and
cockroaches, lack of heat in 4 rooms, plumbing blockages, exposed and faulty wiring,
and dangerous stoveunder old doctrine of implied covenant of quiet enjoyment,
tenant would not be liable for any of the rent because these are pretty bad conditions to
meet that standard. Remanded to trial court (after lower court found for landlord) to
decide if landlord has breached the IWH and then damages would be difference
between fair rental value of premises as they cost and as they were. Tenant already left
premises so only question is of money damages owing to the landlord.
3. Implied Covenant of Quiet Enjoyment: Precursor to IWH; still rule for commercial
leasestreats as constructive eviction/
a. T. has right to rent premises for what was intended
b. If L. breached (high standard) constructive eviction
i. T. could leave without being liable for rent
ii. All or nothing proposition for T: (Leave or stay and pay full rent)
iii. Main difference between this and IWH is that under IWH conditions dont
have to be so bad and tenant does not have to move out
c. Policy reason why residential leases have IWH and commercial leases dont:
i. better able to repair/maintain
Should implied warranty of habitability be waivable by tenants?
o Should be waivable:
Adults should be able to make informed decisions/arrangements.
May prevent homelessness by making substandard housing available.
o Should not be waivable:
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v.

Low income tenants, or tenants with otherwise limited housing options and
low bargaining power, will be forced into waiving this right in order to secure
affordable housing.
Public interest in a certain level of housing.
Only benefits L- most Ts will not be aware that theyve waived this right or
aware of the full implications of waiving this right (unlike L).
Retaliatory eviction only applies to residential leases

1. L. can evict for any legal reason or no reason at all
a. 3 exceptions:
i. L cant evict for discriminatory reasons
ii. In cities with rent control, Ls cant convict without due cause.
iii. L cant evict in retaliation for T.s report of housing code violation or
asserting legal rights protected by IWH. Most states retaliatory eviction is
banned by statute, but in Utah (Building Monitoring Systems) it is banned
by court decision.
a)
otherwise would make housing codes
ineffective
b) Courts sometimes put burden on L; sometimes on T
c) How long does T. get to stay?:
a. Some courts: T can stay until landlord can show that eviction is
not caused by retaliatory motives (hard to show L is not still
retaliatory) Tenant can still say that eviction is retaliatory since
if you complain once, you can complain again.
b. Some courts: L. can evict as soon as problem fixed and give T.
sufficient time to find other housing (intent doesnt matter).
(this undermines the rule against retaliatory eviction since T will
be deterred from complaining in first place)
c. Neither approach is satisfactory--CA statute that says you cant
evict until 180 days after the complaintbut if time is too short,
you have to worry about deterring complaints and if its too long,
you have to worry about burdening landlords.
Building Monitoring Systems v. Paxton (Utah)- Ds sign a month-to-month (periodic) tenancy. D

tenants complain to Health Department about plumbing and wiring in apartment. Upon receiving
second notice in October, P landlord gives Ds notice of termination at the end of the month. Ds stay.
P files for unlawful detainer. Trial ct says the eviction was retaliatory. Issue: Is retaliatory eviction a
valid defense to an unlawful detainer action? Holding: Yes; reversed for D tenant.
2. Retaliatory eviction is an affirmative defense to an unlawful detainer action if:
a. protective housing statute in that state (confirming intent of the legislature)
b. L in the business of renting property
c. T is not in material breach
d. T not in default of rent
e. Ls primary motivation is retaliation since tenant complained alone or with
organization about Ls breach of housing code (hard to prove primary motive)
f. Ts complaint made in good faith
i. Implied (though not stated) that complaint should be made to government
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vi. Housing discrimination

Federal: Fair Housing Act (FHA) 42 USC 3601- It is enforced in 2 different ways.
1. By private suit. If you are prospective tenant/purchaser and you feel you have been
discriminated against, you can bring a lawsuit.
2. Justice Department sues landlords
This statute prohibits practices that have discriminatory effects as well as practices that engage in
discriminatory intent.
a. Rule
i. L cant discriminate based on race, color, religion, sex, familial status,
national origin in housing transactions (selling, renting, advertising,
financing)
a) Applies to intentional and neutral policies with disparate effects
b) Could discriminate against T.s that dont speak English unless pretext
for national origin discrimination
ii. handicapped must make reasonable accommodations
a) example seeing eye-dog allowed in a no-pet building
b. Exemptions:
i. Owner of single-family house rented out w/out broker/agent/advertisements
If owner owns less than 4.
ii. Owner-occupied and no more than 4 units/families living there
iii. Religious organizations and private clubs can limit sale, rental and
occupancy to persons of same religion, unless membership in such religion
is restricted on account of race, color, or national origin.
2. state can have stricter laws than federal government, but cannot repeal any of the
federal protections
a. States can regulate max. # of occupants if for health/safety reasons City of
Edmonds v. Oxford House
Mister v. ARK Partnership (unmarried cohabitants lose b/c of public policy against
fornication). unmarried cohabitants lose out to religious objection
Illinois Human Rights Act of 1987 prohibits discrimination based on sex or marital status in
real estate transactions. (Federal act prevented discrimination on familial status) Marital
status is defined: "the legal status of being married, single, separated, divorced or
widowed.".A.R.K./D landlord refused to rent to Ps, two male-female couples cohabiting
(one couple was engaged). $150 to process application and hold the apt returned to both. D
landlord claims policy reflects religious belief against unmarried cohabitation, but no
evidence supports this. D appeals costly TRO. Issue: Does the Ill statute protect cohabitation
of unmarried opposite-sex adults from discrimination? Holding: No. Rev for D landlord.
Prohibition on discrimination on the basis of sex or family status does not apply to
rule against letting to unmarried cohabitants [looked at the relationship between the
people, not from one T.s perspectiveeven though D is clearly discriminating
23

against them based on sex and marital status-if married would rent to them and if
same sex would rent to them]
a) Ambiguous statute so looked first to language of statute to find intent of
legislature then to other laws to interpret legislative intent (looks to criminal code
prohibiting fornication and Marriage & Dissolution of Marriage Act (against
unmarried cohabitation) Flaw in majority reasoning- the statutory fornication
provision of the criminal code was amended, eliminating cohabits from its
previous version, and court should uphold the current legislative intent since times
change
b) Concurring judge looks to legislative debate that once guy said unmarried
cohabitants dont fall into it
Useful: not just 1 guys opinion, often a committee report
Not useful: could be just 1 guys opinion; conflicting people; people plant comments
V. Relations Among Property Owners

A. Trespass
i. Real property:
1. Rule physical invasion (w/out owners permission)
2. Can be above ground or below ground. Under common law, your land ownership
Includes the airspace and down to center of earth.
-So branches or phone lines can be trespass, but once airplanes invented, courts
changed common law so doesnt include up to the heavens anymore. If planes fly 5
feet above land, that would be a trespass.
3. hard case: business open to the public tries to exclude people
a. ex. good gamblers/card counters at casinos cases have gone both ways
4. remedies:
a. damages available but rarely awarded
b. injunctive relief more common
ii. Chattels:
1. Rule using someones personal property without their permission and damaging or
threatening to damage it
2. Intel v. Hamidi (CA Supreme Court) (ex-employee creates send anti-intel emails to
employees and Intel sues Hamidi for trespass to chattels no trespass because email
didnt damage system or impair its functioning) It is trespass by email when it
a. damages computer system or impairs its functioning/large burden to get rid of
it/costs the company money; (***has to interfere with functioning of system,
cant just be an objection to the content)-there is no damage to the system and
does not slow it down. Majority says it is only trespass to chattels if there is
damage to computer systems, not to productivity (this is now CA law) Majority
says that Intel is not objecting to the number of messages, it is suing because of
the content of the messages. Majority says you need damage before you can get
injunction, but dissent says you cant get past damages but you should get an
injunction even if no damage, if there is loss in productivity or economic loss.
b. Interferes with possessors use or possession of
c. Interferes with any other legally protected interest in the property itself
d. (2) significant portion of total;
e. (3) outside of owners contemplation; and
f. (4) not used for its intended purpose
3. *unclear if there has to be actual damages courts disagree
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4. had been a rare cause of action until internet gave it new life
a. unwanted email
b. unauthorized access to websites-eBay, Inc. v. Bidder's Edge-a court enjoined Bidder's Edge
from using a "robot" (a program that conducts searches automatically) to search eBay's site, on
the ground that the robot was trespassing. When the trespass, if replicated by other searches,
could have harmful impact on the functioning of a Web sites computer equipment. Robot
accessed the ebay website 100,000 times a day, making up 1-2% of the requests for information.
Court found proof of threatened harm in the potential for others to imitate Ds activity, so
supported prelimianary injuciton. You dont want so many similar robots to crawl the ebay site
and deny effective access to ebays customers.
5. If email can be trespass, what about

Phone lines? It could prevent them from using the lines but doesnt damage them so
Unwanted faxes? Yes, it prints off using their paper/ink
iii. License permission to enter property possessed by another, revocable at will; runs with
person not land [if license no trespass]
iv.
B. Nuisance
i. Definition substantially (decreases value) and unreasonably interferes with anothers use
and enjoyment of their land
1. usually means offensive physically to the senses (ex. odor, noise, smoke, dust, etc.)
Ex. Draining waste is both trespass and a nuisance
*Difference between nuisance and trespass- trespass is the use of anothers property
(going on land or using anothers personal property) and nuisance there is no use of
anothers property but rather a disturbance in the enjoyment of property.
2. factors for unreasonableness:
a. location (pig farm in rural area is reasonable but not in Beverly Hills)
b. Ds activity-character, extent of activity (blasting music at night may be
unreasonable but not during the day)
c. Ps harm (if Ds oil refinery is preventing P from growing orchids)
d. priority (temporally who got there first-being there 1st doesnt automatically
mean you win)
e. relative social value (courts insert policy reasons into decisionsif crack house
probably not sympathetic unlike to hospital)
3. intent and negligence are not factors in determining nuisance
4. Nuisance suits usually come up between neighbors, but someone who doesnt live in
neighborhood and is just honking horn is still nuisance.
5. 2 Types of nuisances-private and public. Private is like in Prah v. Maretti and public is
like global warming case. But can be both public and privateex. If you run a factory
it can be private nuisance to neighbors but public nuisance because of pollution.
ii. Land use regulation: (1) zoning laws; (2) statutes; (3) building codes; (4) contracts by owners;
(5) common law that defines kinds of land uses that may be limited
iii. Remedies for private nuisance:
1. Types:
a. injunction
i. Activity causes substantial harm and is unreasonable; and
ii. Social costs outweigh social benefits
b. no relief
i. Harm not substantial or unreasonable so courts will let nuisance continue
c. damages
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i. Forced sale of entitlement to be free from substantial, unreasonable
interference with use and enjoyment of land
a) Doesnt stop use
ii. Amount determined by decrease in fair market value or jury
d. purchased injunction
i. Granted for fairness and efficiency reasons
2. *parties always free to negotiate with each other for a different outcome
3. damages v. injunction:
a. damages better if easy to calculate
b. injunction better if nuisance affects a large number of people; is difficult to
calculate
Prah v.v. Maretti-Prah (P) has a solar panel on his roof and Maretti (D) wants to build his
house, blocking sun from reaching Prahs solar panel. Maretti says you dont have to apply
the nuisance because court has rejected the doctrine of ancient lights.
o Court does not bring back doctrine of ancient lights but rather says obstruction to
access to light could be nuisance under certain circumstances (reasonable use
doctrine) but Prah doesnt have right to unobstructed access to light
o Spite fences cases show that although court has rejected doctrine of ancient lights,
blocking sun can still be a nuisance (here out of spite so unreasonable.
o Court says Prah (P) has good claim and he should get trial. Ds home causes
shadowing effect on the solar collectors which would reduce the efficiency of the
system and possibly damage the system and D could simply have moved his house a
few feet over, so he was unreasonable. He could also build a shorter house. Society
has interest in developing alternative sources of energy.
o Dissent-Marettis best argument (dissent) is that nuisance only applies when there is
harm to a normal person, that Prah is not normal neighbor, and that Marettis house
under normal circumstances would not interfere with an ordinary neighbors use of
land.
California v. General Motors
o It is similar to typical nuisance case it is nontrespassory invasion of anothers interest
in use and enjoyment of land, but it is more of a public use rather than a private use.
o Majority might not find that car companies were unreasonable in making cars
because there is high demand for cars and people need rely on them for ways to get
around.
o Car companies filed motion to dismiss, meaning that even if all facts were true, it is
too big and complicated of question to be decided by the courtcourt agreed that it
should be left up to the legislature.
C.
Easements Right to use/do specific acts on land owned by someone else; intent to be
permanent or for a specified period; not revocable at will of owner but by their terms (the one
difference with licenses). In absence of any agreement, the servient tenement (B) has responsibility
to maintain the easement because otherwise A might have to trespass onto property (like brining in
bulldozers) to maintain the easement.
i. 2 types of easements:
1. easement appurtenant runs with the land
a. easement benefits a parcel of land
b. dominant estate (parcel that is benefiting)
i. if transferred easement stays
c. servient estate (parcel that easement is on)
i. if transferred easement stays
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d. has to have touching land (usually talks about neighbors)
e. Example: If A has house on land and easement (path) to cross Bs parcel to get to
well, this is easement that benefits parcel A (dominant tenement) and burdens
parcel B (servient tenement)
f. When sold, easement appurtenant will stay with the dominant tenement (the land)
2. easement in gross stops with person transferable/alienable (reasonableness
standard)
a. doesnt benefit a particular parcel of land but rather particular person
b. no dominant estate
c. only a servient estate
d. ex. public easement, power lines, sewage, reailroads
e. ex. If person has right to cross parcel Bs land to get to well, it is easement in
gross because it does not benefit particular parcel of land but a person (no
dominant tenement but only a servient estate.
f. When sold, easement in gross stays with the person.
5 ways to get an easement:
1. Easement by Expressed Grant:
Urbatis v. Commonwealth Edison (fee simple to RR) court held it was fee simple since language
must be explicit to create easement; fee simple interpretation of conveyance preferred. A court will
interpret a transfer as a fee simple unless language in the document, when viewed as a whole,
explicitly states it is an easement or right of way. Parcel of land in Kane County is 100 ft wide and
2713 ft long. 1909 deed from Dodson to Railway. Railway operations stopped in 1946. Forest
Preserve District now using the land in form of a permanent easement from Commonwealth Edison,
who got the interest from Western United Gas & Elect Co. (deedholder since 1946). Ps claim to be
successors in interest, neighbors in land. Issue: Did the Dodson deed convey a fee simple or an
easement for railway purposes? Holding: Fee simple, for Ds.
Easement (Ps claim)- Deed says right of way in granting clause, but court says this was just to locate where railroad
requirements were to be constructed. If Dodson deed conveyed only an easement fr railroad purposes, then when the
railway stoped using land for railway purposes in 1946, the easement was abandoned, so the title to the land (fee
simple) then vested in the plaintiffs since whey were the adjoining land owners. Upon abandonment of the easement,
the land reverted to Dodsons heirs, whose interest have been deeded to the plaintiffs. P says that the railroad company
abandoned the easement and if court finds that it was an easement, P would have to show that it was easement ended
when railroad service terminated, or that ripping up the track abandoned the property. *If court found it was easement,
it would be easement in gross because no dominant tenement and rather benefits the public.
Fee simple (Ds claim-D wins)-Defendants argue that Dodson deed conveyed an estate in fee simple (says convey and
warrant in granting clause and that therefore, Commonwealth Edison now has the fee simple and has the power to
grant a perpetual easement to the Forest Preserve District to create bicycle path on the land.
2.Easement by Estoppel turns a license into an easement if reasonable reliance. A license is

merely permission to go on the land of another (like to sporting events). Difference between license
and easement is that license is revocable at any time and easement is not. When a license is not
bare, naked right of entry, but includes the right to erect structures and acquire an interest in the
land in the nature of an easement by the construction of improvements thereon, the licensor may not
revoke the license and restore his premises to their former condition after the licensee has exercised
the privilege given by the license and erected the improvements at a considerable expense.
f. Holbrook (owners) v. Taylor (licensees) (neighbor lets neighbor use driveway
(license) while building his house but then puts up steel cable 5 years later to
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block him court held appurtenant easement by estoppel was established since
Taylors made improvements to the land and since easement, could not be
revoked. Taylor sought and won injunction to remove the cable. For easement
by estoppel must show
i. (1) action under privilege of license (had right to build)
ii. (2) improved land or erected structure
iii. (3) at considerable expense
g. What to do to prevent license from turning into an easement:
i. Explicitly state in contract that neighbor waives right to easement by
estoppel (P. will argue it cant be waived)
ii. Dont let them improve land/build anything
iii. Temporary easement set to expire
iv. Sell him an easement
h. Policy arguments: against SoF; bad to have land burdened by unrecorded
easements; for protects licensees
Kitchen v. Kitchen (Michigan)-court holds they will not recognize easements by estoppel,
and rather has statute that requires easements to be in writing. Irrevocable license cannot be
based on oral promise alone.
o Because easements constitute an interest in real estate and are not revocable, they
need it to be clear and in writing to create interest in land
o Prevents owners from falsely claiming that others gave them oral permission to cross
the property and that they relied on this promise to build their homes
o Clarifies property rights, prevents fraud, and decreases needless litigation
o If easement created by contract in writing, it would be filed with property records,
but if it is easement by estoppel, when purchasers come to buy the land, the probably
wont see that it was easement by estoppel and there would be no way to know that
there was an easement there. Future purchaser of Holbrooks property (in other case)
could be in for a big surprise when Taylor starts coming onto his land.
3. Prescriptive Easement prescription is to easements what adverse possession is to fee

simples. Courts are sometimes more lenient on some factors of adverse possession. If you are
person claiming the prescriptive easement, you have to prove the following
6 elements:
i. Actual courts tend to relax to substantial identity, clear line of path
not necessary since there is substantial identity.
ii. Open and notorious
iii. Exclusive for public prescriptive easements there isnt an exclusivity
requirement--owner can still be there, as long as not completely in the way
of others use. But if single person claims prescriptive easement they cant
be using it with the public. Concerned Citizens case grants prescriptive
easement. Since public, it is okay for owner to be there.
iv. Adverse
v. Continuous (people dont use beach in bad weather, so thats okay)
vi. For the statutory period
28
i.
j.

Concerned Citizens of Brunswick City Taxpayers Assn v. Holden Beach
Enterprises-Beachgoers won path even though exact placement moved--holds
that the path to the beach is prescriptive easement and according to majority,
unsuccessful even though reasonable attempts to prevent continuous use do not
negate easement, they have to successfully discontinue use.
i. Usually beachgoers lose because they cant prove adversity
For owner to defeat prescriptive easement, just have to defeat one element:
i. Block access one day a year to prevent continuous/actual
ii. Put up a sign granting permission to prevent adversity
iii. Bring suit before SoL is up- however, cant bring suit against the public
Implied Easements:
4. Easement By Pre-existing Use (3 elements)
1) common grantor
2) Use was in existence at the time of the severance-quasi-easement-when before tracts were
separated, one future bit was being used to benefit the other. Back when it was single
parcel, the future servient part was being used to benefit the future dominant part.
3) apparent, continuous, and reasonably necessary-its apparent if it is something the buyer
should know about, like seeing a path. If it is sewer pipes underground, you should also
know that the house is going to be connected to sewer system. Continuous-is the use still
going on or is there evidence that the parties intended to stop the use once severed.
Reasonably necessary-useful
*courts have more sympathy for grantee than grantor
*protecting probable intent of parties
Rusakoff v. Scruggs (lake used by lot owners for frogging, sprinklers, court held easement by
pre-existing use; court didnt actually make a good argument establishing quasi-easement, we
argued that perhaps the lake had been used as promotional). Court finds that easement by
implication (pre-existing use) exists in favor of the P Rusakoff for use of the lake because
1) common grantor
2) use was in existence at time of severance (although Rusakoff hadnt built home yet, land was
bought because lake was there so no existing path in usual sense of benefit but benefitting in
more of expected sense) and
3) when D Scruggs purchased the lake, its use was apparent, continuous, and reasonably
necessary to the enjoyment of Ps property surrounding the lake. When D Scrugg bought
property, it was clear that Rusakoff was using lake, for sprinkler system, bought canoe, using
lake for boating and ice skating, construction of dock/piers. D had knowledge of their use,
demonstrated since he sent letters to them.
* Russakoff has an easement appurtenant (benefits particular parcel of land) and when he
moves, the person who buys his house gets the easement because the easement stays with the
land.
5. Implied Easements-Easement By Necessity (3 Elements):
29

1. Common grantor
2. Neccessity (not reasonably necessary like in implied easement by prior existing use)
Must show his parcel is landlocked and cannot access roadway from his property.
*Rusakoff won on easement by prior existing use, but would not win here since his land was not
landlocked, it only interfered with his enjoyment of his property.)
3. Necessity existed at the time of the severance

*If you landlock yourself, you can still claim easement by necessity.
*Just showing need is not enough.
Easement by necessity exists for 2 reasons.
1. Protects intent of the parties-if parties had thought about it they would have created
An explicit easement because why would anyone create a landlocked parcel
2. There is public policy against landlocked parcels even if people want them because it is a
Waste of land.
Schwab v. Timmons (Wisconsin) (no easement by necessity because prong (3) - they sold
access to road post severance therefore they created their own necessity). Court finds no
easement by implication (prior existing use) or by necessity because of actions by the United
States or by geographic barriers because P can access roadway by building over bluffs
instead of going over Ds land (so not landlocked) although inconvenient, and because at the
time of severance, P land had access to the road.
o For easement by necessity, Schwab shows 1) common ownership of parcels prior to
severance of landlocked parcel 2) necessity since he is now landlocked, but cant
prove 3) that necessity existed at time of severance because at that time, Ps owned
land to the east of the bluffs and could access public roadways by stairway or
elevator going over bluff (although inconvenient) instead of using/extending road
over Ds land.
o Wisconsin public policy has long disfavored implied easements because they are
hiddenwants public records so there would be no surprises when buying land.
Termination of Easements
-Parcels back to one owner
-Abandonment
-For other property finder gets right over abandoned property; but not true with an easement,
would just go to owner
D. Covenants negative easement right to prevent others from doing something on their own
land. Real convenants are agreements among landowners like contracts with something extra
because they bind future owners. The most common real covenant is when it limits use of land to
single family residential use because people will buy more if they have some sort of guarantee that
it will be residential all around them.
i. Creation:
1. Real Covenants: (from common law)
3 elements:
1. Intent (two parties must intend to bind their successors)
2. Touch and concern-the promise must concern the land (not simply the
Individuals. This can physically or economically affect the land.
3. Privity of Estate
30

Horizontal Privity-relationship between the original parties of the agreement.
For A and B to have horizontal privity, they have to have mutual interest in the
land. Typically A and B are Grantor and Grantee so have mutual interest, but
they could be landlord and tenant, owner and owner of easement, etc. The main
people not in horizontal privity are when they are only neighbors. So the point of
horizontal privity is to draw line between neighbors and everyone else.
Vertical Privity-relationship between the landowner and that landowners
successor (A and C) or B and D. Parties are in vertical privity when the
successor takes the entire estate in land that his predecessor had. If A owns in fee
simple and conveys to C in fee simple then A and C are in vertical privity, but if
A leases to C or gives life estate to C, then they are not in vertical privity.
a.
Burdens and benefits: Every covenant has a burden and a benefit.

i. For a burden to run to a successor you need both horizontal and vertical
privity
a) A promises B to build only single-family homes (A has burden, B
has benefit). A sells his property to D. B, to enforce the covenant,
has to show horizontal privity between A and B; and vertical privity
between A and D.
ii. For a benefit to run to a successor you need vertical privity
a) A promises to build only sf homes (A has burden, B has benefit). B
sells his property to C. A starts building an apartment. C, to
enforce the covenant, only has to show vertical privity between B
and C.
b) A promises to build only sf homes. (A has burden, B has benefit).
B sells property to C. A sells property to D. D starts building an
apartment. For C to enforce, has to show benefit has run (vertical
privity b/w B and C) and burden has run (horizontal privity b/w A
and B; vertical privity b/w A and D.)
Runyon & Williams v. Paley (condo builders) The D Paleys want to construct
condos on their property but P neighbors Runyon and Williams maintain that Ds
property is subject to restrictive covenants that prohibit the construction of condos
and file suit to prevent Paleys from building condos. The issue is whether Ps are
entitled to enforce the restrictive covenants. Held: Runyons had no vertical privity
b/c they got their land before covenant created; Williams met 3 element test, proving
it is real covenant since 1) economic impact on the land (enhance value of dominant
estate and decrease value of servient estate). 2) proves benefit and burden runs
(proving horizontal and vertical privity) 3) proves intent of the parties was to run
with the land and bind successors by the convenant (even though Williams wins,
could prevent Paley building condos but could settle, Paley could pay them to let
them build) so still need to address Runyons claimRunyons lose because cant
prove privity of estate since no vertical privity between Runyons and Gaskins since
they bought land before deed/promise was made.
2.
Equitable Servitudes: (from equity law-3 elements)

1. Intent (two parties must intend to bind their successors)
31

2. Touch and concern-the promise must concern the land (not simply the
individuals). This can be physical or economically affect the land.
3. Notice (person you are trying to enforce restriction against must have
actual or constructive notice). They actually know or reasonably
should have known. This can be found in routine title search of
deeds. Everyone is supposed to do a title search when they purchase
property. So notice is taken care of so long as there was proper filing
of the deed.
Runyon & Williams v. Paley
i. Williams won on real covenant, Runyons didnt and dont win on
Equitable servitude either since didnt establish intent or notice
Implied Reciprocal Servitudes: common scheme of restrictions
a. 3 elements:
i. (1) intent common grantor
ii. (2) touches and concerns the land
iii. (3) notice common scheme obvious
b. Usual situation person living on land divides up into lots with covenant on
each of the parcels; later sells original plot without covenant
ii. Remedies people usually wants injunctions, not damages
3.
iii.
Termination of Covenants
1. Ways to terminate a covenant:
a. Common ownership-If same person owns parcel A and parcel B it can easily be
Terminated.
b. Release can work in situation with small # of parties
i. Some covenants/state statutes allow for a majority vote release by
homeowners
ii. If simple covenant with small # parties, neighbors (like 2 people) can agree
to release one another from covenant
c. Restricted duration by their own terms; or some states have statute that limits
it. More often now, covenants written to only last for certain amount of time
(like 20 years) until homeowners refile it with property records.
d. SoL clock starts running when person begins violating; if SoL runs out for
action against them, doesnt mean covenant is not enforceable
e. Abandonment widespread noncompliance. Landowner conduct can terminate
f. Estopppel P. also violating/letting others violate(?); let D make a lot of
investments in reliance on non-enforcement; but in a neighborhood just because
one neighbor is estopped, doesnt mean the others are
g. Changed Conditions conditions have changed so drastically it would no longer
benefit dominant estates to enforce (defeat essential purpose) BethanyBeachcovenant should be terminated when conditions have changed so drastically
within neighborhood that it defeats the essential purpose of the covenant or
renders the covenant valueless to the parties or against public policy.
El Di v. Bethany Beach (church community no more) Covenant to prohibit alcohol not enforceable
because conditions had changed so much spring breakers, alcohol stores, etc. Round that
covenant was no longer good and that El Di could keep business (commercial building ) and sell
32

alcohol. In 1900 developers of Bethany Beach restricted the property to residential use only and
prohibited the sale of alcoholic beverages. Affected 2/3 of the property. Since 1920s there have been
commercial developments on the land in question. Alcohol is also for sale at a packaging store 200
yards from Holiday House and several nearby restaurants, and Holiday House customers have
followed a BYOB/brown-bagging policy for years. Issue: Is the restrictive covenant against alcohol
sales still enforceable? Holding: No. Changed conditions since (1) Change need not be to the whole
parcel; partial is sufficient. (2) Purpose of covenant was to maintain the quiet, residential, seaside,
church dominated nature of the community. Its now a resort town, w/ 85% of the 750 acre
municipality not subject to restrictions and many commercial establishments. (3) Town zoned Ds
property for commercial use in 1952. (4) Consumption of alcohol is now tolerated by owners of
similarly restricted lots; evidenced in 20-yr brown-bagging policy. Policy: public best served by
allowing D to control the sale and consumption of dangerous substance. (5) Ds section is
commercial.
Covenants--Common Interest Developments: condos; private subdivisions- For condos, the

common areas (land beneath, floors, ceilings, etc) are owned by all the condo owners as tenants in
common or through the homeowners association. Each owns their own condo and owns a (air
space), and they sign onto homeowners association agreement of self-government with different
rules. Common rules include what exterior would look like, restrictions on ability to rent your unit
(you might need approval of governing board before you can rent it out). Conflicts arise between
an individual unit owner and the group. These are covenants, binding on current user but all future
owners. CC&Rs=covenants, conditions, and restrictions
enforce covenants of common interest by equitable servitude: (1) touches and concerns the
land; (2) intent; (3) notice; and
rules present in declaration of initial agreement enforceable even if unreasonable (but for
common interest communities has to be reasonable since want to protect those who dont
read the rules and dont want to burden some but benefit others, only want to infringe on
peoples freedoms if it is reasonable)
rules created after initial declaration enforceable unless unreasonable:
o burden substantially > benefit
o arbitrary
o against public policy
Nahrstedt v. Lakeside Village Condominiums Assn:(3 cats in a condo) P wanted reasonableness

test applied on a case by case basis; but applied it condo wide and benefit > burden. Condo
convenant says No animals (which shall mean dogs and cats), livestock, reptiles or poultry shall be
kept in any unit. P Nahrstedt says that pet restriction is not enforceable against her since she has
cat that it should be discussed on case by case basis, court says no, it applies to the whole (decreases
amount of litigation)-No pets policy is enforceable as equitable servitude because 1) intent of
parties for it to run with land/bind successors 2) touches and concerns the land 3) notice since pet
restriction was contained in condos declaration which was recorded with county recorder before
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any of the units were sold AND for common interest properties it has to be reasonable court says
yes it is for the whole
*Since she owns, P can get together with her neighbors to vote to get rid of this restriction. *CA
legislature overturned this decision and said that common interest owners are allowed to have one
pet.
VI.
Relations between property owners and the government
A. Zoning land use regulation

i. The planning process: How do places get zoning ordinances?
1. Legislature passes a Zoning Enabling Act which authorizes cities to zone if they want to
and usually authorizes cities to create administrative agencies (P 5 in case). The
administrative agencies that do zoning are usually called planning commission.
2. City council passes zoning ordinance saying what sorts of uses are permitted in which
places
3. Planning Commission enforces the ordinance and approves or disapproves (ex. Like
would decide if nail salon fits under the approved beauty salon category)
4. Someone who is turned down by the planning commission can appeal the decision
straight to trial court OR maybe first to zoning board of appeals if there is one (set up by the
zoning ordinance in some places-can grant variances/special exceptions). If someone
appeals to zoning board and loses there, they can still appeal to the trial court.
Richardson v. City of Little Rock Planning Commission (steep hill zoning appeal)
Rule Planning commissions authority bound by zoning ordinance cant arbitrarily
deny proposals b/c they dont have discretionary power so had to approve development b/c
met minimum requirements set forth in ordinance.
*Planning commission (derives power from legislature) rejected Ps application for developments b/c (1)
proposed cul-de-sac too close to adjacent lots; (2) marginal development use given restricted means of access.
Yet P didnt propose a cul-de-sac and the ordinance doesnt contain any language about marginal development
use. P had land on a steep hill w/o easy access; wanted to maximize the # of usable lots on property. Issue:
Does a planning commission have discretionary authority to turn down subdivision plat which meets the
minimum standard in the zoning ordinance? Holding: No. Reversed, held for P developer--marginal
development potential was not in the ordinance so P developer did not have to comply with that and once
compliance is had, no discretionary power to disapprove exists.
*Legislature could take power away from the local government or administrative agency at any time, like if
they dont like something city is doing legislature can pass new statute to limit it/stop it. Once the commission
has exercised its authority in drafting regulations pertaining to subdivision development, it is bound by those
regulations and shall administer them. The Commission is guided by standards which can be uniformly
applied and which give notice to developers of the minimum requirements with which they must comply in
order to obtain approval. Once compliance is had, no discretionary power to disapprove exists.
*Planning commission could have won by just saying unusual lot shapes, that it didnt
comply with the zoning ordinance instead of using that marginal language.
ii.
Pre-existing Nonconforming Uses

1. generally exempted/grandfathered in if
a. was lawful and in existence at time the zoning ordinance passed
PA Northwestern Distributors v. Zoning Hearing Board zoning ordinances
34

can only prohibit future uses, amortization is not okay (unless use is a nuisance,
abandoned, or eminent domain) so nude book store gets to stay; finds that a zoning
ordinance which requires amortization and discontinuance of a lawful pre-existing
nonconforming use is confiscatory and violates the constitution as a taking of
property without just compensation. It would derive adult book store owner of the
lawful use of its property by forcing him to cease using it as adult bookstore within
90 days. If govt desires to interfere with the owners use, where the use is lawful
and is not a nuisance nor is it abandoned, it must compensate the owner for the
resulting loss. Majority says that any phasing out provisions are unconstitutional,
and can only create such amortization periods for future uses (most places try to
phase out over time, but not in Pennsylvania). Concurring opinion says reasonable
amortization time period OK.
b. doesnt substantially change and change doesnt have an appreciable effect
on the neighborhood. A zoning ordinance applies to pre existing use when use
is altered for a purpose or in a manner that is substantially different from the use
to which it was put before alteration.
i. Rays Stateline Market v. Town of Pelham changing donut counter to
dunkin donuts counter not a substantial change. Court finds for the market,
because coffee counter permit would not result in a substantial change or an
illegal expansion of the nonconforming use and the sign permit would not
result in any appreciable effect on the neighborhood. The zoning
ordinances limit any extension, expansion, or enlargement of a
nonconforming use and prohibited its change to a substantially different
nonconforming use.
2. some courts allow amortization fixed reasonable time to bring use into conformity
enough time for owner to get reasonable return on their investment, find other income,
etc. (up to 50 years if you bought a big building).
iii.
Variances permission to deviate from the zoning law/terms of ordinance. In some cities
zoning boards grant variances and in others its planning commissions.
3 element test to grant dimensional variance: doesnt apply to use variances (most
places dont allow use variances (CA has statutes that ban them but if you want to build
building that could be too tall, that could be allowed.
a. Application of zoning law results in undue hardship OR (prove b/c)
i. topographic conditions or physical features affect property
ii. extraordinary situation
iii. Lang v. Zoning Board of Adjustment granted variance to allow pool because his lot was
uniquely shaped and had been a non-conforming use. found that the unusual narrowness
of Calbreses (Ds) lot, combined with preexistence of a paved driveway and garage along
northerly side of the propertys rear yard, and that these unique attributes of property
constituted exceptional and undue hardship within the meaning of the statute, granting the
variance and allowing him a permit to construct an in-ground swimming pool. Court
supports the Boards conclusion that the properts unusual narrowness and shape justified
the variance grant under subsection c(1). Replacing above ground pool with average sized
in ground pool is consistent with promotion of a desirable visual environment in the
Borough and is found to advance at least the safety and visual purpose of zoning.
b.
c.
Proposed use would not be contrary to the public interest

Proposed use would not substantially impair purpose of zoning plan.
*This effectively replaces a rule with a standard-Zoning is governed now more by standards than by rules
because there is a desire for flexibility and the dissatisfaction with strict zoning and cookie cutter houses. But,
the disadvantage is that zoning is now less predictable and zoning boards have more discretion (which can
35

result in abuse). There are two ways to regulate any situation, with a rule and with a standard. Rules are hard
clear classifications (ex. You have to be 55 to be president or you cant build apartment in residence zone). A
standard is fuzzier classification, like the law of nuisance and the implied warranty of habitability, negligence,
zoning with variances. The advantages of rules are that they are easier to apply, give people good notice, and
you can conform your conduct to them clearly, but the disadvantages are that they are inflexible, might result
in hardship for some (like a wise and mature 34 year old cant be president). Advantages of standards are that
they can be applied to individual, unique cases (no hardship) but disadvantage is that they are harder to predict
and give greater discretion to people making the decisions (like judges, boards) and might not be applied fairly.
Whenever you have a rule, people argue that it would be better for there to be a standard and visa versa.
Special exception = exception built into ordinance itself. Unlike special exceptions, which
are uses permitted by the zoning law as long as specified conditions are met, variances are
uses prohibited by the zoning law but nonetheless alllowed because the ordinance, as
applied, would effectively constitute an unconstitutional taking of the owners property
rights.
Why permit variances? With zoning, it is hard to anticipate the best outcome whereas in
criminal law we know the outcomes we want. There may be fact situations in which we
wish we didnt have such a strict rule. Variances mitigate the effect of strict rules.
iv.
Zoning-Aesthetics
1. Rule okay if not arbitrary and unreasonable and serves the purpose of promoting
the general welfare (because is within bounds of ZEA and is constitutional)
2. Stoyanoff v. City of LaDue (snobby community won against pyramid house)-Ps
applied for building permit to construct a single-family residence. Although it
complied w/ existing regulations, it was unusual: Community is wealthy, w/ restrictive
conditions to ensure that it looks that way (most homes two-story Colonial, French
Provincial, or English. Ps challenge the aesthetic criteria as (1) unconstitutional in
being too vague since allows for unreasonable, unguided, and arbitrary choices, and
(2) the city exceeded its statutory power in enacting the ordinance/ordinance
architectural review is not authorized by statute
a. zoning ordinance said: (1) Whether house meets architectural requirements; (2)
Whether it conforms to surrounding structures; (3) Whether it lends itself to
proper architectural development of city
b. Ordinance said its purpose was to promote the health, safety, morals, and general
welfare of the public (Stoyanoff says it doesnt say anything about aesthetics, its
lists things they can regulate, like building height).
c. building permit denied because not arbitrary because:
i. (1) detrimental to neighboring property values;
ii. (2) not in conformity; and
iii. (3) doesnt further ordinance
*Nowadays, aesthetic zoning/architectural review is very common and
Constitutional.
v.
Zoning-Household Composition
1. single family zoning/maximum # of occupants generally OK
Many zones are restricted to single family housing.
36
vi.

City of Edmonds v. Oxford House-city has single family housing ordinance
defining family as person without regard to number related by genetics, adoption,
or marriage, or a group of 5 or fewer unrelated people
Oxford House asked zoning board to make a reasonable accommodation for them
but city said no, probably because dont want drug addicts in neighborhood.
o FHA did not talk about #of people but amendments to it made it against the
law to discriminate against handicapped persons, many of which have to
live in group housing so Congress gave exception from FHA (meaning not
discrimination) to any reasonable federal or state restrictions regarding the
maximum number of occupants permitted to occupy a dwelling.
FHA excludes alcoholics and drug addicts but many make argument that it should
include those recovering as handicapped.
The ambiguity is about the word regarding the maximum number of occupants,
and whether that means to be exempt it has to be a restriction establishing an
absolute maximum number of occupants (the majoritys view) or if the
restriction only has to regard the max number of occupants in some cases and not
all cases (dissents view).
Majority says 20+ people could technically live there, so it is not a restriction
establishing an absolute max number of applicants and therefore is not exempt and
Oxford House gets the accommodations.
Majority says that the purpose of the FHA is to prevent discrimination so we
should interpret the Fair Housing Act broadly and the exemption narrowly, but
Scalia dissent says that the purpose of the Fair Housing Act is to prevent
discrimination WHILE allowing for cities to zone.
Implication: City ordinance not necessarily void but the zoning code provision
describing who may compose a family is not a maximum occupancy restriction
exempt from FHA. Its subject to FHA scrutiny. The City could still stonewall,
arguing that the accommodation is not reasonable. Its a tougher road though.
Exclusionary Zoning
Cost of government=financed primarily by property taxes. If you are a mayor of your town, you
can spend how much you can get back from property taxes.
Property taxes=(tax rate) x (value of the property)
Cost of govt=property taxes=(tax rate) (value of the property).
A mayors goal (since wants to be reelected), is 1) to keep the tax rate down. To do this, must
keep the value of the property up by encouraging expensive residential uses, encourage industry,
stores, commerce, etc. or 2) keep the cost of government down and since education is major cost
of government, discourage high density residential uses since that would discourage kids or
have non-residential uses to keep kids out. So he encourages non-residential uses or high end
residences.
Southern Burlington County NJ NAACP v. Mount Laurel (big lot requirements and high %
dedicated to industry---Court holds saving on property taxes is invalid reason for exclusionary
zoningviolates equal protection under constitution by limiting adequate and sufficient
37

housing) The most important such cases are the two Mt. Laurel cases, in which the New Jersey
Supreme Court held that a town must allow its "fair share" of the regions demand for low and
middle-income housing. According to the Mt. Laurel principle, not only may zoning not be used
to keep out the poor, but affirmative measures must be taken by a town to cause such housing to
be built (e.g., density bonuses given to developers who build some low income housing;
cooperation with developers seeking federally-subsidized housing; allowing of mobile homes,
etc.) Also, builders must be allowed to seek site-specific relief (in which the court orders the
builders parcel to be rezoned to allow the particular project, if the court finds for the
developer).
1. if municipalities pass zoning laws that exclude poor people from living in the area
prima facie showing of violating equal protection/due process burden shifts to
municipality to show valid basis for zoning
a. exclusionary zoning to keep taxes down is not a valid reason unconstitutional
2. zoning regulations must promote general welfare for whole state
3. Court makes it clear it is relying on state law, not federal constitution because NJ has
final say and if it was in federal court, it could be appealed to US Supreme Court and
could lose. The zoning power is a police power of the state and local authority is
acting only as a delegate of that power and is restricted in the same manner as in the
state. When regulation does have a substantial external impact, the welfare of the
states citizens beyond the borders of the particular munipality cannot be disregarded
and must be recognized and served. General welfare comprehends the benefits not
merely within the municipal boundaries but also those to the regions of the State
relevant to the public interest served.
4. Remedy? Court disagrees with the trial courts judgment and sees no reason why the
entire zoning ordinance should be nullified. It is invalid only to the extent set forth in
this opinion and township is given 90 days from date, or additional time as trial court
finds reasonable, to adopt amendments to correct the deficiencies. Court says it is the
local function and responsibility, in the first instance, rather than the courts to decide
on the details of the same within the guidelines we have laid down. If Ps desire to
attack such amendments, they may do so by supplemental complaint filed in this cause
within 30 days of the final adoption of the amendments.
B. The Takings Clause (5th amendment) nor shall private property be taken for public use
without just compensation = must be (1) for public use; (2) justly compensated
i. Public Use Rule there just has to be some rational link between the taking and some public
purpose
ii. usually government bring a lawsuit (condemnation) against owner
1. easy public use cases actually used by public or owned by government (highways,
military bases, schools)
2. public use can be met if serves a legitimate public purpose courts give deference to
legislatures to determine if a public use [can be transfer to private owner ex.
Poletown v. City of Detroit transferred land to GM which wanted to build a plant.
They threatened to move to another state unless a certain tract of land was condemned
and given to them. Detroit gave in and did it. This was challenged as not being a
public use. Majority said this is a public use by supporting the economy of Detroit.
3. Berman v. Parker (court said revitalizing slum neighborhoods in DC is public use)
4. Hawaii Housing Authority v. Midkiff (forced land sale to break up monopolies = public
use)- It is taking A and giving to B not just for benefit of B but for benefit of the public
purpose. (In both Parker and Midkiff, court deferred to government and said it was
okay if for public purposewere not seen as controversial, unlike Kelo even though
38

Kelo did not change law and applied deferential standard just as two previous cases
did! Many people identified with Kelo as middle class homeowner but could not
identify with slum lords or Hawaiian aristocracy)
Kelo v. City of New London, Conn economic redevelopment plan for area = public use. Finds
that the citys redevelopment plan to rejuvenate the city (more revenue from taxes, more jobs) for
economic development is a public use under the takings clause of the 5th amendment and leaves it
up to the legislature. Although owners are getting compensated, they value their homes more than
market value and argue that the economic development is not public use (but court decides it is by
deferring to the legislature). Owners further argue that it benefits private parties but court says
private ownership can promote public use as well.
a. Dissent: there was no precondemnation use that was affirmatively harming society;
unlike other cases, Ps homes were not causing harm and economic development
takings are unconstitutional since anyone could turn motel 6 into a Ritz. slippery
slope argument government can take property that isnt being used to its maximum
potential
b. Legislative Response: After Kelo, a lot of state legislatures (agreeing with the
dissenters) passed statutes to bar taking for economic development (undoing Kelo).
Or some would specify like no takings for economic development but made
exceptions for certain things, like Dallas Cowboys stadium. Or some would define
blight. A lot said that the governments shall not exercise its power of eminent
domain for economic development and then defined economic development as
taking private property from one private person to another private person for
economic reasons. States can do thisallow more protection than the Constitution
provides, they just cant mandate less
economic development = private property from one to another to increase tax base etc. excluding
gov.t owned, common carriers
What constitutes a taking? Owners can always apply PC test

Penn Central standard test is being carved away
Physical
(Loretto)**
Regulatory
(Penn Central)
Wipeouts
(Lucas)*
Penn Central
*no carve out for temporary moratoriums only applies to real property
**real or personal property
If you are property owner, you want to first say that it is a physical taking under Loretto,
and then 2 )a regulatory taking that bans all viable economic use under Lucas, then 3)
argue that you win under Penn Central
39

iii. Regulatory takings sometimes a taking ad-hoc factual inquiry into whether regulation
requires compensation. You can claim regulatory taking when something government does
(other than actually physically taking the property) deceases the value of the property
1. Penn Central Transportation Co. v. City of NY (wanted to build tower on top of
grand central station) P claims City law has taken their property in violation of fifth
amendment and urge that the restriction imposed pursuant to landmark law must be
accompanied by just compensation if it is to be constitutional. Says that city has taken
their right to air space, entitling them to just compensation measured by fair market
value of these air rights. Second they say that the taking has diminished the value of
the Terminal site. Held: for City-NOT A TAKING- it does not interfere with present
uses of the terminal and Penn Central can continue to receive a reasonable return on
its investment. They have not been prohibited from occupying any portion of the
airspace above the terminal.
a. 3 factor test:
i. (1) Economic impact + investment backed expectations (court here says no
interference since when bought it intended for it to be railroad station
and they still have that)
a) still profitable or not
b) denominator question in general look at tract of land as a whole,
but hasnt been resolved by the Supreme court
ii. (2) Character of government action-a taking is more burdensome and more
taking like when physically interfering with property rather than
creating a public program that adjusts the benefits and budens of
economic life to promote the common good
iii. (3) Extent to which owner is being singled out-the more people who are
Being burdened, the more fair it seems. The fewer, the less fair it
Seems. (Court says Penn Central is not being singled out because
Over 400 buildings are landmarked and everyone gets the benefit of
Having the neighbors.
* It is pretty hard for a property owner to win under Penn Central regulatory taking, it has
to be a very large drop in the value of the property or great interference with the
investment expectations. And for property owner to win, he usually (or small number) are
being singled out to bear burden to benefit the public.
iv.
Categorical per se takings: permanent physical occupations (Loretto) or deprivation of all

economically viable use (Lucas)
Physical takings
1. rule: permanent physical occupation = per se taking (regardless of economic impact or
purpose served). Loretto creates strict rule for physical takings whereas there is no
strict rule for regulatory takings so most Ps go for physical takings first then
regulatory.
a. Loretto v. Teleprompter Manhattan CATV Corp (cable box and wires = taking)
Loretto is complaining about cable tv lines running along her house. Court says
any permanent physical occupation of property is a per se taking (regardless of
public purpose) and therefore requires compensation. It is a taking because is
destroys the owners rights to possess (and exclude), use, and dispose (decreases
value) that part of the property. NY has state statute that says that a landlord
may not interfere with the installation of cable tv facilities upon his property or
premises and may not demand payment from any tenant for permitting CATV,
or demand payment from CATV company in excess of any amount which the
40

State Commission onCable Tevelsion, shall by regulation, determine to be
reasonable. This case is a takings claim against state of NY by authorizing
cable company to run its cables (if it was just a trespass suit, it would be against
against the cable company. THIS LAW ONLY APPLIES TO LANDLORDS..IT
WOULD NOT APPLY TO LORETO IF SHE OCCUPIED THE BUILDING
HERSELF OR USED IT FOR COMMERICIAL PURPOSE/OFFICE.
b. Dissent: (But other side could say that Penn Central was more burdenedlosing
hundred of millions of dollarsthan Loretto because these are measly little
wires! Dissent says that in modern times, government regulations can diminish
the value of property far more than minor physical touchings. But dissent says
that these past cases are old, that they were during agrarian times and Penn
Central has superseded all that and that we should balance these things and
consider a cable line in a more mushy way
c. Because the cable lines are permanent physical occupation of property and
therefore a taking, Teleprompter has to compensate the landlord but the amount
is up to the state courts to consider on remand. Just compensation is The value of
her property without cable minus the value of her property with cable but the
value of her property goes up with cable so her compensation is 0!
d. Physical invasion slices through all sticks in bundle
e. Distinguish physical structures that government requires of landlords (fire
escape, mailbox, etc.) because no 3rd party ownership
2. seems more simple to apply but there have been debates over permanent; physical;
occupation
Wipeouts 100% loss in value = loss of all economically viable use.
Regulation is a taking requiring just compensation if reg (a) doesnt substantially advance
legit govt end OR (b) denies the owner all economically viable economic use of the land.
EXCEPTIONS: N/A if (1) use would have been proscribed by pre-existing nuisance common
law, (2) chattel (eagle feathers).
v.
1.
rule: regulation is per se taking if denies owner all economically viable use; doesnt
matter if taking is to prevent public harm
a. exception: not applicable if regulation bans a use that was not allowed (ex.
nuisance) shifts power of determining what a nuisance is to courts
Lucas v. South Carolina Coastal Council (SCs ban on beachfront building = taking; doesnt
matter what the regulation was preventing a public harm). 1)Diminution in value-prior cases
suggested that if you had 100% diminution in value then that would be a taking2) Other line of
cases said that if government is preventing a public harm, then it is not a taking. Ex. Preventing
people from operating brickyards and explosive things and 7/8 reduced in value. Lucas is at the
intersection of these two lines, so court has to reconcile the twoScalia in majority shifts the
description from 100% diminution of value and instead says that the regulation denies all
economically beneficial or productive use of land. So he is saying that you can deny all
economically beneficial or productive use of land without complete 100% diminution of value. It
can still be a taking even if preventing a public harm. (But Justice Brennans description of
economic impact of interfering with investment backed expectations allows for more regulations,
whereas Scalias wording allows for more property rights.) Relying on state nuisance law, Lucas
shifts power from legislature to judges because then have to demonstrate it was a nuisance. Gives
more power to the courts and ignores legislatures decisions on what is harmful or noxious and best
for the public health, safety, and welfare.
41

Legislatures reaction to pass legislation without it being a taking-Tie statutes preventing harm to
existing nuisance law or leave some economically available use (like can build small house).
for personal property no per se taking apply Penn Central regulatory taking test
b.
vi.
vii.
Ankus v. Allard government could ban eagle feathers and wipeout 100% value
of eagle feather inventory
i. Every owner on notice that they have accepted a risk
Moratoria Temporary Restrictions

1. First English-court decided the remedy once something is established to be a taking, it
didnt decide if temporary regulation was a taking. Court held that government does
have to compensate during the time the legislation was in effect. Once you say
something is a taking, compensation must be paid no matter how temporary it was.
2. temporary moratorium not a taking under Lucas because not permanent; not a taking
under First English because only applied to remedies; have to apply Penn Central test
Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agenc- TRPA
imposed a moratorium on a new construction in much of the basin while it formulated
a plan to protect the lake. Majroity says it was 3 years and dissent said it was 6. Ps
claimed a temporary regulation denies a property owner all viable economic use of her
property giving rise to an unqualified constitutional obligation to compensate her for
value during that period since it should be a taking. Ps want a per se rule that it is
enough that a regulation imposed a temporary deprivationsno mater how brieffor
all economically viable use to trigger a per se rule as in Lucas and First English. Held:
Not a per se taking because its temporary. Says Lucas and First English dont apply
since Lucas only applies to permanent takings and First English only discusses
damages once something is a taking, rather it should be analyzed under Penn Central
regulatory use framework. Says takings jurisprudence focus on the parcel as a whole
and a destruction of one bundle of property rights is not a taking.
Policy Reasons: Financial constraints of compensating property owners during a
moratorium may force officials to rush through the planning process or to abandon the
practice altogether. There is in interest in protecting the decisional process when
agency is developing a regional plan to protect the environment more than when just a
permit for a single parcel.
Dissent: this case is no different than if government had taking a 6 years lease on their
property, which would require compensation. Under majority, there is every incentive
for govt to simply label and prohibition on development temporary so wont have to
compensate.
Conflict of the decision: Government has to compensate A because permanent
regulation that was then repealed after 5 years, and B cant be compensated because
there was 5 year moratorium.
*People worried after First English since ordinary process of government takes time
(like applying for building permits) and govt would have to compensate but TahoeSierra puts this to rest because temporary regulation is not a per se taking.
Just compensation if owners net loss = 0 no compensation
1. measured by what property owner loses, not what government gains
42

2. Phillips v. Washington Legal Foundation interest in IOLTA accounts is private
property of whoever owns the principal [dissent: interest wouldnt exist if no IOLTA
program no property interest]
3. remaining issue: was interest taken; if so what is just compensation
a. 5th cir. physical taking of money, per se taking under Loretto
b. 9th cir. regulatory taking and under Penn Central test no investment-backed
expectation so not a taking
Brown v. Legal Foundation of Washington (US Supreme Court) the taking of the interest
for IOLTA accounts is physical taking under Loretto however no compensation b/c no loss
couldnt have earned interest. Compensation is about what P loses, not what government
gains. The interest only exists because of the program and if it was possible for clients
money to gain interest, they wouldnt be in these accounts so the clients didnt lose
anything. In doctrinal sense, this case is about the meaning of just compensation. In a
practical case, this is a case that saved the IOLTA programs, which are a big source of public
interest lawyer funding. The money could only earn interest if the interest was to go to a
charitable organization. A lot of law school clinics are funded this way.
Dissent: argues that if property would not exist without a government program, then the
government under this decision can now take property away if it was created by the
government, like government could take welfare away from recipients. Is this a legitimate
concern? Yes, but it is different because welfare recipients have already been awarded it
and the Ps in this case never received the interest, it never belonged to them and did not have
a reasonable expectation of receiving that interest. Distinction is also that recipients of
welfare expect that they will be able to keep it, as we expect to be able to graduate and earn
living as lawyers, and these Ps did not expect it. Dissent says logic of majority program is
that any wealth created by a program, whether received or not, could be taken back because
it is interest that couldnt exist but for the government program.
Concern about majority decision: If this is a physical taking then what about taxes? The
distributing of the interest in this case was found to be a physical taking but taxes cant be a
taking (even though physically taking from people) but why under the decision? Banner says
on the one hand, you want to characterize things as taxes rather than other programs to avoid
having to compensate, but if you are elected government, you want to avoid taxes.
Bentham-says law comes from government (law comes before property) so would agree with the
majority because he wants government to redistribute property because but for this government
regulation, there would not be any interest in the first place and that the property is created by law.
The more bentham like you are, the less likely you are to find that something is a taking.
Bastiate-would agree with the dissent because he says that the law exists to protect property, that
property comes before law (writing against socialism). He thinks government is wrong to
redistribute property.The more bastiat (Scalia) you are, you are more likely to say that something is
a taking because law exists to protect property
viii.
Wave of the future in takings law:

1. states have passed statutes; come up in house but never passed:
a. People are entitled to government compensation if government regulation
reduces the value of your property by more than x% (ex. 25% in Texas)
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i. To be more generous to property owners than Penn Central would be (ex.
takings too small to be classified as a taking under PC)
ii. Have exceptions for nuisances
Johnson v. McIntosh (1823), U.S. conquerors win, Indians lose-How it all Got started
Ps received land grant in Illinois from Piankeshaw Indians. D received grant from the U.S. for same
land. Ps seek ejectment. Chiefs of Indians were in rightful possession according to tribes.
Proclamation of 1763, Virginia law, and federal law prohibited private purchases of Indian land.
Why the hub-bub? State govts were granting lands in the West to settlers before govts purchased it
from Indians. Major financially speculative question of the day. Possible results: (1) void b/c
Indians have the property rights; (2) valid as Indians have no property rights; (3) conditional upon
Indians right to stay. Issue: Do the Indian tribes have the power to give a title of land to private
individuals in the United States? Holding: No. Affirmed for D (who got grant from US).
Now compare to Indian property systemsthere is no sense of perpetual individual control (no fee
simple). Property rights were not in the land, but in particular resources of the land. A person who
killed animal had the right to the animal, or person who group crops had right to the crops. No one
owned the land itself, land was not bought and sold but the resources were.
Sovereignty means that you have the right to govern it. English colonists arrive in North America
and see Indians and lots of land. They start living on empty land. A lot of the time, English bought
land from Indians. Indians thought they were coming into the indians property system.
What decides this case? After 1763, private purchases from Indians were banned. This is easy case
answer but this case addresses something elsefrom Indians perspective, revolution was the worst
thing that could have happened. States began granting land to new settlers. The question isdid
state governments have the right to do this when they never bought the land from the Indians. 3
possible answers.A. State government did not have the right, it belongs to the Indians. B. Indians
have no rights and these grants are valid.C. (in the middle) Grants from states to settlers are valid
but settlers dont have the right to actually go and possess the land until the federal government
pays the Indians.
Court says the general principal was that discovery gave title to government. Said the British
government owned north America in fee simple and Indians had the right to possess the land until
they sold it to the government. After the revolution, Indians still had right of occupancy and since
govt has fee simple, government has right to sell land as fee simple even though Indians are still
living thereso the buyer only has the right to go on the land once Indians are buyed out. The first
half of the opinion is about purchasing the land but second half also talks about purchase or by
conquest. The second half is acquisition of Indian land by conquest. The result of the case has been
ambiguity on whether Indians right of occupancy can only be extinguished by purchase or also by
conquest. First half of opinion says its purchase, second half says its conquest too and cases
following have decided both ways.
The case is still important in a legal sensesome say that there is still some property in which
Indian tribes hold the right of occupancy (never purchasedheld in aboriginal title). The case is
also important in broader sense in that it is the root of all land ownership in the United Statesif
trace land title, the origin is a European or settler government rather than Indians because of this
case.
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Ultimate Source of Law
1. Federal Constitution
2. Federal Statutes
3. Federal Agency Regulations & Decisions
4. State Constitutions
5. State Statutes
6. State Administrative Agency Regulations and Decisions
7. Local Ordinances
8. Local Agency Regulations and Decisions
9. Common Law
a. Precedent
b. Analogies (indirect precedent, not binding but can help things
hang together)
c. Public policy
The bigger the federal government grows, the less important the local government is as a source of
law. The more ordinances are enacted, the more that administrative agencies do their work, the less
important the common law becomes. (If we were property class 100 years ago, it would have all
been common law we were studying).
If you are a legislator, all you have to think about is what makes the best public policy, while judges
care about public policy but only as a last resort, but court decisions are often discussed in the
media as what judges think is the best public policy.
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Property is protected by the 14 amendment

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Fame belongs to public

Hypo: Elvis impersonator suedwhat happens?

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Methods of Acquiring Property

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When should we give people property rights?

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Categories of found property:

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Life Estate owner has right to possess it until they die;

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B. Landlords and tenants

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Subleases and assignments: ways T. can transfer interest

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Abandonment: Landlords have an obligation to make a reasonable effort to mitigate

Sue for damages- Damages based on anticipatory breach. Breach must be

Policy implications of duty to mitigate:

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Lesser burden on the landlord.

What can you do as landlord to protect yourself?

Stonehedge Square v. Movie Merchants Rule: (PA)-Stonehedge owns and operates

Implied warranty of habitability (IWH) implied promise of residential L that guarantees a

Lauren Calton: Banner Fall 2008

Lauren Calton: Banner Fall 2008

Retaliatory eviction only applies to residential leases

Building Monitoring Systems v. Paxton (Utah)- Ds sign a month-to-month (periodic) tenancy. D

Lauren Calton: Banner Fall 2008

vi. Housing discrimination

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V. Relations Among Property Owners

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5. If email can be trespass, what about

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2.Easement by Estoppel turns a license into an easement if reasonable reliance. A license is

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3. Prescriptive Easement prescription is to easements what adverse possession is to fee

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3. Necessity existed at the time of the severance

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Burdens and benefits: Every covenant has a burden and a benefit.

Equitable Servitudes: (from equity law-3 elements)

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Covenants--Common Interest Developments: condos; private subdivisions- For condos, the

Nahrstedt v. Lakeside Village Condominiums Assn:(3 cats in a condo) P wanted reasonableness

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Relations between property owners and the government