Documente Academic
Documente Profesional
Documente Cultură
I. INTRODUCTION
a. Legal Positivism: property only exists to the extent that it is recognized by government
b. Theories/Justifications
1. Protect first impression
2. Encourage labor
-personal labor + un-owned resources = created value
-assumes unlimited supply
3. Maximize social happiness
-promotes social welfare not just for the property ownerownership provides security/incentive for owner to
use property for best-use economic efficiency
4. Ensure democracy
-right to own property has an important effect on citizens relation with the state
5. Facilitate personal development (personhood)
-each person has a close emotional connection to certain tangible things
II. PROPERTY RIGHTS (Bundle of Sticks)
a. Generally
-property rights are defined by government (legal positivism)
-property rights are not absolute (one is not free to do absolutely ANYTHING with his property)
-bundle of rights property consists of rights rather than things
-property rights evolve as law changes
b. Right to Transfer (Alienability)
(1) TEST: generally, any owner may freely transfer or alienate her property to anyone BUT the law can restrict
who, what, and how based on public policy
(2) alienability vital to efficiency allows property to flow to its best-use
(3) chain of title: succession of ownership over time
(4) Johnson v. MIntosh (1823) p. 29 cannot transfer w/o title to property
-FACTS: P claimed title to property conveyed to them by the Native Americans D contends land grant
came directly from the U.S. government
-HOLDING: Native Americans did not have title to land; they only have possession. Since they do not have
title, they cannot convey title to others.
-First Impression: U.S. has exclusive title to land b/c of the discovery and conquest of America by
Europeans (discovery gave exclusive title to those who made it)
-for all parcels of land in America, the chain of title begins with the U.S. government.
-Policy: to leave and in possession of Indians, is to leave this country a wilderness wasting assets
(5) Moore v. Regents of U.C. (1991) p. 36 Presumption against taking away right to transfer
-FACTS: D used Ps cells in potentially lucrative medical research w/o Ps permission (conversion: strict
liability tort that protects against interference w/ ownership interest in personal property)
-HOLDING: conversion should not extended in re human cells
-Policy: should not threaten innocent parties engaged in socially useful activities (strict liability subjects
innocent third parties to liability for acts which may not be under their direction and control)
-problems in this area better suited for legislation
-conversion not necessary to protect patients rights (can opt for breach of fiduciary duty claim)
-CONCUR: effects of recognizing property interest in body tissue is unknown (slippery slope)
-DISSENT: there is a policy against unjust enrichment at the expense of another
-at the very least P had had the "right to do with his own tissue what the D did with it" That is, as soon
as the tissue was removed Moore at least had the right to choose to sell it to a laboratory or have it
destroyed (right to exclude/right to destroy)
-can remove sticks in bundle and still recognize property b/c each stick in and of itself is an entitlement
C. Right to Exclude
(1) TEST: each owner has a broad right to exclude any other person from his property, even if trespassor is not
causing any harm; but this right is limited by consent (invitation) or necessity
(2) typically, implemented through the tort doctrine of Trespass
- R.2d158: one is subject to liability for trespass, irrespective of whether he thereby causes any harm to any
legally protected interest of the other, if he intentionallyenters land in the possession of the other or causes
a thing or a third person to do so (trespass is like strict liability)
- no trespass if there is a privilege (ex. consent, necessity)
-ex. in many states, owners of rural/undeveloped land must post no trespassing signs otherwise hunters
have an implied right to enter the land
(3) changing economic/social landscape increased importance of excluding others from using ones land b/c
trespassers may interfere with the efficient use of land
(4) Jacque v. Steenberg Homes, Inc. (1997) p. 50 General right to exclude rule (No Invitation)
-FACTS: Despite protests by owners, trespasser intentionally plowed a path through their snow-covered field
and delivered a mobile home to the neighbor w/o damaging Ps land P awarded $ 1.00 in nominal
damages and $100,000 in punitive damages.
-HOLDING: Each owner has a broad right to exclude any other person from his property regardless of harm
-the actual harm of trespass is not the damage done to the land (nominal damages) but in the loss of the
individuals rights to exclude others from his property (punitive damages)
-Policy: both the individual and society have significant interests in deterring intentional trespass of land
-court doesnt want parties to resort to Self-help want them to believe in legal system
-maliciousness/disrespectfulness of company strikes the court as more important than efficiency
-a right would be worthless if the legal system provides insufficient means to protect it
-repeated intentional trespass could lead to adverse possession
(5) State v. Shack (1971) p. 58 Limitation of right to exclude (Invitation/Necessity)
-FACTS: an attorney and health service worker (D), entered on private property to aid a migrant farmworker
housed there. Employer (P) refused.
-HOLDING: mans right to his property is not absolute necessity may give 3rd party right to enter property
-under state law, the ownership of real property does not include the right to exclude governmental
services available to migrant workers
-employer may not deny the worker his privacy or interfere with his opportunity to live as normal citizens
-when bought land, didnt buy stick to exclude people from coming on (property invited people to
work on his landcannot isolate them from help/necessities of life
-Policy: these rights are too fundamental to take a back seat to an interest in property
-court does not want to open up employers land to ALL parties, just those that are justifiable
-NOTE: owner is angered b/c normal people just dont let random people wander in his home
D. Right to Use
(1) TEST: Owner has the right to use his property in any way he desired so long as he did not harm the rights of
others (nuisance/spite fence) b/c owner knows best how to use land productively for the benefit of all
(2) private nuisance: (1) an intentional (2) non-trespass (3) ***unreasonable and (4) substantial interference
with (5) the use and enjoyment of plaintiffs property
***unreasonable test = gravity of tortfeasors harm outweighs the utility of tortfeasorss conduct
(3) Hardest reasoning is in the remedy stage; 4 options:
i. no nuisance, no compensation
ii. enjoin party from nuisance
iii. enjoin unless X amount paid
iv. not enjoined but X price paid
(4) Person that owns injunction can sell it to other owner/if there is no injunctions parties can negotiate outcome
-court can step in when they see transaction costs barriers that would prevent negotiated outcome (ex. you are
animals (ex. Kneller : public policy forbids living owner from right to destroy her own healthy dog)
(3) Eyerman v. Mercantile Trust Co. (1975) p. 82 Limitations despite very clear intent to destroy
-FACTS: Neighboring property owners seek injunction to stop demolition of house in wealthy community
(deceased will called for demolition and sale of land)
-HOLDING: The taking of property by inheritance/will is not an absolute right the state may foreclose the
right absolutely and may say what becomes of the property of a person, when death forecloses
the deceaseds right to control it. A testator may not impose conditions that are uncertain,
unlawful, or opposed to public policy
-40k property $650 after demolition and sale (loss for the estate of deceased destroying value)
-neighboring property will depreciate by 10k (loss to the community)
-historical value to neighborhood/community
-vacant lot would likely give rise to uses that are detrimental to the neighborhood
-there was an increased need for housing units (housing decline by 14% in area)
-no reason given in the will destruction useless and wasteful
-DISSENT: majority assumes deceaseds reasons are senseless/capricious majority lets sympathies
interfere with recognized legal right to destroy
-NOTES:
-living person may dispose of his money/property with fewer restraints than a decedent by will
-we dont know the scope of the holding. (This is an unusual fact pattern)
-decedent most likely got advice when drafting will (inference is the clause was not immaterial)
-perhaps, you can destroy property when you are still alive because you live with consequences but you
cannot destroy property when you die b/c you dont have to live with consequences (timeline argument)
-problem is no intent was given (counter: you shouldnt have to explain yourself when your
will is clear explaining yourself implies you have a limited right)
(4) The Right to Destroy (Prof. Strahilevitz)
-preventing destruction can create waste as well (ex. lock inefficient land uses into place)
-rational people usually do not destroy valuable propertycourt should presume that if the person is rational
than there is an underlying meaning for destruction (this forces the opponent of destruction to provide
evidence to the contrary)
(5) eminent domain: government has the power to take private property for public use upon just compensation
-tool government can use to prevent right of owner to destroy
-drawback = expensive
III. ADVERSE POSSESSION (Real Property)
(1) Definition if A occupies Bs land for a long enough period while meeting certain conditions, A acquires title to
the land w/o Bs consent
(2) Theories adverse possessor has earned right + owner did not act reasonably by not kicking A.P. off land despite
having ample time to do so
(3) Elements of Adverse Possession an occupant obtains title to land through A.P. if her possession is:
1. Actual must physically use the land in the same manner that a reasonable owner would, given the lands
character, location, and owner
2. Exclusive possession cannot be shared with the owner/public
3. Open & Notorious obvious enough where if an owner made a reasonable inspection, he would be aware
of the adverse claim (dont have to necessarily see the adverse possessor)
4. Adverse & Hostile possession authorized by owner does not qualify
-View #1: met only if claimant believes in good faith he owned land
-View #2: claimant must intend to take land/act in bad faith (rare)
-View #3: state of mind is irrelevant (majority view/modern trend) element satisfied as long as owner
has not authorized the occupancy
5. Continuous
6. For statutory period (established by statute whereas other elements arise from CL)
(1) actual not necessary to occupy/use every foot of land at every minute
(2) exclusive they posted no trespassing and no hunting signs which indicated intent
(3) open and notorious Gurwit cut firewood, picked up trash, etc. in the sight of passerby (low standard)
(4) adverse and hostile they posted no trespassing and no hunting signs which indicated intent
(5) continuous for a required period as continuous as nature of property would admit (does not
require continuous occupation/use 24/7)
(8) Van Valkenburgh v. Lutz (1952) p. 105 Minority Approach A.P. (statute specific)
-FACTS: For several years Lutz had traveled over land they did not own adjacent to their lot. Several years later,
V.V. purchased that land through a foreclosure sale that Lutz was not aware of Lutz won suit for
easement to cross the land V.V. sued Lutz to obtain possession TC found for Lutz (A.P.)
-HOLDING: no clear and convincing proof reverse adverse possession judgment
-the essential elements of proof are that the premises are 1. Protected by a substantial enclosure (here there is
no proof) or 2. Usually cultivated or improved
-proof fails to show that cultivation of the garden utilized the whole of the premises claimed
-proof fails to show premises were improved
-no claim of title (hostile possession)
-Lutz prior easement suit implies he conceded that V.V.s legal title conferred actual ownership
-DISSENT: there are significant facts that the majority ignores
-there is no requirement in either statute that proof of A.P. depends upon cultivation of the whole plot
-cultivated nearly all the wild and overgrown lots (planted fruits/crops, cut timber, built one-room
dwelling)
***not mentioned in case but NY requires the traditional CL elements be proven as well as statutory requirements
***color of title: deed, judgment, or another written document that is invalid
(9) Fulkerson v. Van Buren (1998) p. 114 A.P. w. intent requirement
-FACTS: Landowner of record sought ejectment of church congregation from church building located on his
property church claimed it owned the property by A.P.
-HOLDING: congregation did not possess land adversely with requisite intent for seven years
-testimony showed that the church congregation was unsure of the precise nature of its interest in the land
and, moreover, recognized that the landowner owned the land
-NOTE: mindset requirement can be expanded/narrowed to increase/decrease adverse possession
(10) Tioga Coal Co. v. Supermarkets General Corp. (1988) p. 120 Modern trend to override intent requirement
-FACTS: P controlled gate to private street that belonged to D TC found that Ps possession did not meet A.P.
requirements b/c possession was not hostile/adverse to the true owner (P believed City owned the
street when, in fact, D did)
-HOLDING: if true owner has not ejected the interloper within the time allotted for an action, and all other
elements of A.P. are met, hostility will be implied w/o analysis of intent (modern trend)
-one reason courts reluctant to award A.P. w/o intent is that they are reluctant to award title to a known
trespasser (land pirate)
-but there are sound reasons not to consider intent
-determining intent = guesswork at best
-objective tests promote use of land against abandonment
-Holmes: trespasser has put down roots we should not disturb (personhood theory)
-NOTE: the effect is that more people can now quiet title
(11) Howard v. Kunto (1970) p. 126 Tacking & Continuity
-FACTS: Ds house stood upon on an adjacent lot to the one his deed described P, whose deed dictated they
owned the land upon which Ds house stood, commenced an action to quiet title TC denied Ds A.P.
claim b/c failed show continuity of possession to permit tacking from predecessors
-HOLDING: if person who is trying to seek A.P. can show privity (a close connection with previous owners in
the transfer of the land) tacking is permitted to show possession of the land for the statutory period
-Continuity: summer possession does not destroy continuous element we have to examine this element in
terms of the nature of the property/surrounding owners (property was a beach home)
-Tacking: successive purchasers who receive record title to tract A under the mistaken belief that they were
acquiring tract B and where possession of tract B is transferred and occupied in a continuous
manner for more than 10 years by successive occupants, have established sufficient privity of estate
to permit taking and thus establish adverse possession (showed a close enough relationship).
-privity req. was satisfied b/c D's claim of right as the last of successive purchasers who received
title under the mistaken belief they acquired a contiguous track was sufficiently above that of a
trespasser
-in other words, court will allow them to tack if they believe they acted in good faith; if no good
faith = trespass (here, it was good faith b/c they purchased deed; land was previously surveyed)
IV. ADVERSE POSSESSION OF CHATTEL (tangible movable property)
(1) Common Law Rule: statute of limitations begins running at point of theft, as long as there is no concealment
-like A.P. in re real property, focus is on whether the adverse possessor earned the property
-concealment is introduced in re chattels b/c real property cannot be hidden/moved
-Bryants problem with CL rule: thieves can acquire title through A.P.
-counter: thief earns property through A.P. elements NOT from theft (where ownership would be automatic)
-policy: eliminate stale claims (court more sensitive to market certainty than to owners rights)
(2) Discovery Rule (Modern Trend): limitations period begins to run when reasonably owner should have
discovered where the chattel is (requires owner to exercise due diligence)
-no clear standard for diligence/no clear definition of who/what a reasonable owner will do
-if owner stops being diligent then statute begins to run (b/c reasonable owner would have continued)
(3) Demand and Refuse Rule: S of L is stalled until the owner demands the return of her property from a good faith
purchaser and purchaser refuses
-possible good faith purchaser exception: one who gives valuable consideration for an item w/o knowledge
of adverse claims (beg the court to apply civ pro doctrine of laches b/c of unfairness)
-law typically provides added protection for good faith purchasers
(4) Other Rules
A. NY rule demand and refuse, BUT
-excuses owners from being diligent (the rationale is that they are innocent and shouldnt be burdened)
-issue rises as to which owners we are protecting (good faith downstream owners are also harmed)
-ex. Guggenheim art stolen art serendipitously found after many years w/o exercise of due diligence
Lubel, however, was a good faith purchaser that purchased item through reputable dealer advice: standard
is demand and refuse but there is a compelling equitable reason to use discovery rule b/c they were so
unreasonable about their diligence that it would substantially harm me/gross unfairness (civ pro doctrine of
laches)
B. UCC 2-403 rule
-narrower than demand and refuse
-usually between innocent owner and innocent purchaser
-void title = no rights
-voidable title = people that did nothing wrong but rights are limited (if someone with superior title comes
along the title could be voided)
(5) NOTES
-statutory period for chattel typically shorter than land (typically 2-6 years)
-typically, tacking is still permitted in re chattel as long as there is privity between possessors
-some courts argue it isnt b/c: (1) each transfer w/o title constitutes a separate conversion or (2) increases the
difficulty that the owner has in finding her property
-thief cannot transfer valid title to a good faith purchaser unless the thief gains a new title by A.P.
-A.P. can apply to intangible property
(6) Reynolds v. Bagwell (1948) p.196 Traditional CL approach to A.P. of chattels
-FACTS: Violin stolen purchased by established dealer purchased by D for daughter
-NOTE: grantor could put property in a trust to ensure all the future interest holders interests are sought
after (otherwise we dont usually have ability to protect future interest holders)
(5) Fee Tail
a. scope/duration: limited right of alienability (ex. B transfers to C. Once B dies, Cs interest still transfers to Bs
bloodline) duration determined by the lives of the lineal descendants of a particular person
(reversion to grantor when blood line runs out)
b. language
-and the heirs of his body
-the heirs of her body by X Special fee tail restrict fee tail to only the descendants of the transferee who
are parented by a particular person
c. notes
-rarenot valid in most jurisdiction (only available in DE, MA, ME, and RI) concerned that it would
undercut democracy and impair freedom of alienation
-disentailing the tail: holder converts estate into fee simple by an inter vivos transfer (gift) to another person
-if fee tail created in a state in which it is not permitted, court assumes fee simple
-C and her children = FSA not substitute for C and the heirs of her body
(6) Fee Simple Defeasible
a. Generallyestate that may end upon the occurrence of some future event (allows owner to control future)
b. Fee simple determinable: fee simple that automatically ends when a certain event or condition occurs
-scope/duration: freely alienable, devisable, and descendible / duration automatically ends upon condition
-consider A.P. element of open and notorious when it automatically reverts
-possibility of reverter can only be retained by the transferor (or his heirs) today, it is freely alienable, etc.
c. Fee simple subject to a condition subsequent: fee simple that may be terminated at the election of the
transferor when a certain condition or event occurs
-scope/duration: freely alienable, devisable, and descendible (any transferee will be bound by condition) /
potentially infinite
-right of entry is alienable, devisable, and descendible
-transferor can physically re-enter (self -help), give notice, or filing a quiet title action
d. Fee simple subject to an executory limitation: fee simple created in a transferee that is followed by a future
interest in a another transferee (3rd party)
-scope/duration: duration ends upon condition
-present interest is alienable, devisable, and descendible
-future interest is alienable, devisable, and descendible
e. Mahrenholz v. County Board of School Trustees (1981) p. 333 F.S.D. v. F.S.S.C.S.
-FACTS: this land to be used for school purposes only; otherwise to revert to Grantors herein used for
storage space grantor transferred reversionary interest to Jacqmains which transferred to P
Grantor also transferred overlapping interest to School Board TC = F.S.S.C.S. (right of re-entry)
-HOLDING: Use of the word only in granting clause regarding a condition establishes that a grantor
intended to create a fee simple determinable rather than a fee simple subject to condition
-if grantor had only a right of reentry for condition broken, then Grantor could not own the property until
he had legally re-entered the land.
-if the possibility of reverter existed, then he owned the land as soon as it ceased to be used for school
purposes.
-INTENT: The grantor used the word only indicates that the grantor wanted the land to be used for
school purposes only for as long as it was needed and no longer. It suggests a limited grant, rather than a
full grant subject to condition subsequent
-NOTE: when language ambiguous, courts usually adopt fee simple subject to a condition subsequent b/c
policy dislikes forfeitures of estates (affects marketability)
f. Metropolitan Park v. Unknown Heirs of Rigney (1965) p. 340 Adverse possession issues in re F.S.D.
-FACTS: Rigney conveyed property to Tacoma Light Co. undisputed fee simple subject to a condition
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subsequent Tacoma Co. conveyed property to city which discontinued use as intended by deed
Rigney failed to re-enter and claim property for several decades
-HOLDING:
-can the grantee acquire title by A.P. after breach of condition but before claim of forfeiture? NO
-grantee remaining on land after breach of condition does not become adverse to possessory interest
of the grantor until the grantor declares a forfeiture
-NOTE: A.P. SofL would begin to run in a fee simple determinable as soon as condition breached
-if not, does the lapse of an extensive period of time between breach of condition and claim of forfeiture
waive the condition? YES, waiver doctrine
-not economically efficient discourage productive use of land
-unreasonable delay in owner leads possessor to detrimentally rely
-NOTE:
-there are 3 civ pro remedies (waiver, laches, estoppel) when black letter law is not fair
-doctrine of waste does not apply to fee simple defeasible
g. Modern Future Interests (future interests may not become possessory many are contingent or uncertain)
Future Interests (Transferor)
Reversion
Possibility of reverter
Right of Entry
(1) Future interests retained by transferor transferor conveys an estate to a 3rd party which is smaller
than the estate transferor holds
a. Reversion: transferor retains reversion when she conveys a smaller estate than the one she has
-reversion is freely alienable, devisable, and descendible
b. Possibility of Reverter: future interest retained by the transferor who holds a FSA, but conveys a
fee simple determinable (automatic conversion)
c. Right of Entry: future interest retained by transferor who holds a FSA, but conveys a fee simple
subject to a condition subsequent
-NOTE: right of re-entry does not become possessory until the holder takes affirmative steps
(2) Future interest in a transferee
-TIP: future interests have to be either a remainder OR an executory interest
A. Remainder: future interest in a transferee that is:
i. Capable of becoming possessory immediately upon the expiration of the prior estate; and
ii. Does not divest (cut short) any interest in a prior transferee
1. indefeasibly vested remainder: a remainder is indefeasibly vested if:
i. It is created in an ascertainable person (alive + identifiable at time of transfer); and
ii. It is not subject to a condition precedent other than the natural termination of prior estate
2. vested remainder subject to divestment (complete divestment): remainder that is vested but
subject to a condition subsequent (interest has potential to be terminated)
3. vested remainder subject to open (partial divestment): vested remainder held by one or more
living members of a group/class that may be enlarged in the future
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Jee) filed an action to secure their benefit TC found Ps interest was too remote, as the interest was
not confined to daughters living at the death of the testator and could extend to after-born daughters
-HOLDING: early version of the rule the limitations of a personal estate are void, unless they vest, if at all,
within a life or lives in being and 21 years and 10 months
-the interest is void as it was not certain to vest within 21 years after the death of some life at the creation of
the interest.
-class gifts: class gifts are not valid to ANY members, unless it is valid to ALL members
-here, gift invalid to the four living daughters b/c possibility that other class members (unborn
daughters) might vest after 21 years
-rule of convenience: a class closes when the prior estate ends and identified class members are
entitled to possession
(6) R of P Reform:
a. Wait and See interest is void if it does not actually vest within a life in being plus 21 years (wait to see if
the event actually happens)
b. Uniform Statutory Rule Against Perpetuities (USRAP) interest is valid if it satisfies the common law
rule OR if it actually vests within 90 years after its creation
c. Cy Pres court re-writes the language of the conveyance so that the future interest no longer violates the
common law rule in order to honor the transferors presumed original intent
d. Future of the Rule some states have abolished the common law rule
(7) Notes
a. Savings Clause: prevents any potential violation of the rule by requiring that every interest must vest
before the end of the applicable perpetuities period simple way to avoid RAP problems
b. unborn widow (spouse): widow has child with another man this childs interest vests when new man dies
possibility of vesting outside of the period
c. slothful executor: wills can be probated after the perpetuities period thus, void
d. fertile octogenarian: owner that conveys to his own children then to grandchildren, bears possibility that owner
may have additional children, which in turn would have grandchildren after period
VII. CONCURRENT OWNERSHIP AND MARITAL PROPERTY
(1) Modern concurrent ownerships (each co-tenant has the right to use and possess the entire property):
1. Tenancy in Common
2. Joint Tenants
3. Tenants by the Entirety
(2) Tenancy in Common: each tenant has an undivided, fractional interest in the property + right to use and possess
the whole parcel
a. scope: alienable, devisable, descendible
b. to A and B as tenants in common
(3) Joint Tenancy: each tenant has an undivided right to use and possess the whole property but each joint tenant also
has the right of survivorship
a. scope: alienable (however severs joint tenancy b/c breaks unities of time and title)
-ex. A, B, and C = joint tenants. A transfers title to D. D has 1/3 interest as tenant in common with B + C.
B + C, however, retain a joint tenancy with one another. D dies tenancy in common rights goes to Ds
heirs. B dies interest transferred to C via right of survivorship (C has 2/3 interest)
-ex. A + B = joint tenants. A transfers title to C B + C are tenants in common
-any joint tenant can sever the joint tenancy destroying the right of survivorship and converting his interest
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-NOTE: modern trend is to focus more on the grantors intent and less on formulaic language
(7) Tenhet v. Boswell (1976) p. 382 leases do not sever joint tenancy w/o explicit intent; upon death, leases invalid
-FACTS: P and Johnson owned land as joint tenants Johnson leased the property to D Johnson died after the
execution of the lease to D P sought her right of survivorship + demanded D vacate the property
-HOLDING: joint tenancy will not be severed by a lease to a 3 rd party w/o clear intent to sever
-b/c joint tenancy created through explicit intent/language, a court will refuse to sever joint tenancy unless it
is explicit that either tenant wanted to terminate the estate (dont need the others consent to sever)
-P and Johnson could have converted it to a tenancy in common by written agreement; jointly conveyed
the property to a third person and divided the proceeds; or one of them could have conveyed his entire
interest, which would have clearly indicated intent to terminate.
-sole ownership of the property vests in P b/c of her right of survivorship.
-in a joint tenancy, the interest of the deceased joint tenant ends at his death, so the lease of the joint
tenancy property ends when the lessor dies.
-during a joint tenants life, he may grant rights in the property without severing the tenancy, but when he
dies, his interest dies with him, so any encumbrances he placed on the property becomes unenforceable
against the surviving joint tenant. Otherwise, the benefits of the right of survivorship would be nullified.
-NOTE: in re mortgages, joint tenancy depends on title theory or lien theory under title theory, mortgage severs
joint tenancy b/c it destroys the unities of time and title; under lien theory, joint tenancy is preserved
(8) partition: judgment that ends co-tenancy and distributes assets (applies to tenancy in common AND joint tenancy)
a. division of land held in co-tenancy into the cotenants respective fractional shares if land cannot be fairly
divided (partition in kind), then the entire estate may be sold and the proceeds are appropriately divided
(partition by sale)
b. today, most courts allow agreements NOT to partition if it is reasonable in duration and purpose
c. Ark Land Co. v. Harper (2004) p. 387 Presumption is partition in-kind over partition by sale
-FACTS: Harper owned land that was passed through the family over 1100 yearsArk Land, started buying
up the property from each tenant and obtained 68% share of propertyArk sued for partition
-HOLDING: court holds and makes a new rule that emotional attachment to a piece of property is a factor in
deciding whether to force a sale for partition
-fact that the corporation's proposed use of the property caused it to be worth more money did not control
when deciding partitioned in kind vs. partitioned by a sale.
-rather, the long ownership/emotional attachment should control when it is shown that there can be a
partition in kind, regardless if there is some economic inconvenience to the party seeking sale
-partition in sale can be extremely harsh for the party that doesnt want to sell there is generally a
presumption that the court should partition in kind
-here, it would have cost millions for the coal company to partition in kind as they couldnt mine
However, economic interests are not the exclusive test and must be balanced with evidence of
longstanding ownership/ emotional interests
-Ark took a gamble expecting them all to sell, and lost.
-DISSENT: agrees that emotional interests should be a fact, but doesnt believe they outweigh the economic
interest present in these facts (family only used the land a couple times a year this was not
enough to put many mine workers out of work and cost the company millions)
-NOTE: partition in kind tends to fragment property rights could lead to the under-utilization of land
(9) Esteves v. Esteves (2001) p. 394 Each jurisdiction will supply default rules when parties do not have an
agreement in re rights/duties
-FACTS: Parents and son owned a house together and parents lived in the house, paying the mortgage and
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upkeep, but paid no rent to son for their occupancy. The parties sold the house and parents brought
an action for the equitable division of the proceeds of the house TC held that parents were
entitled to reimbursement from son for of the sums they had paid, w/o any offset for the value of
their occupancy. Son appealed
-HOLDING: son is obligated to contribute of the mortgage expended by parents. However, against that
obligation, son was offset a credit for the reasonable value of the occupancy enjoyed by parents
while they, and not their son, occupied the property the obligation to present evidence of that
value (normally represented by rental value of the property) rested on son.
-Baird Principles:
1. In re sale of a commonly owned property, a cotenant that has paid less than his pro-rata share of
operating/maintenance expenses must account to cotenant who has contributed more than his pro
rata share (even if one was in possession and the other wasnt)
2. All tenants in common have the right to occupy all of the property and if one chooses not to do so,
that does not give him the right to impose an occupancy charge on the other
3. Fairness dictates that one seeking contribution (for mortgage/upkeep) allow a corresponding credit
for the value of his sole occupancy of the premises
-NOTE: in re ousters (cotenant in possession refuses to allow other cotenant to occupy), ousting party
is liable to the ousted party for the pro rata share of the rental value of the ousting partys occupancy
following ouster, ousting party becomes adverse possessor and statutory period beings to run (9)
(10) Rent
1. Generally not owed to non-occupying co-tenant from occupying co-tenant
-exception: ouster demand rent; partition; do nothing (AP clock runs)
2. Rent from 3rd parties is generally shared
(11) Types of Improvements:
1. Invisible Improvement (owner believes it should increase value; purchasers think they should come standard)
2. High-end Upgrades
-NOTE: purchasers might not like improvements + improvements can highlight non-improved areas
3. Expensive Landscaping (improvement depends on specific purchasers and circumstances)
4. Swimming Pools (beneficial to property in the right neighborhood but generally it decreases value)
5. Overbuilding for Neighborhood (people will not pay for a property that is substantially more expensive than the
average home price of the surrounding market)
6. Wall-to-wall Carpeting
(12) HYPO: A adds swimming pool for 25k
-three jurisdictions:
1. no credit/no penalty everyone shares profit/losses
2. A increased value by 50k; house nets 150k but would have sold for 100k w/o pool
-A gets 50k (for increased value) + 50k (half value of house w/o pool) = 100k
-B gets 50k
-downside risk example: decreased value by 50k (would have been 200k) A gets 50k; B gets 100k
3. Hybrid
(a) increase value: A must share A and B get 75k
(b) decrease value: A bears whole risk
(13) NOTES: A.P. typically not available b/c both parties have right to the property (need clear exclusion)
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-in notice and race-notice states, the purchaser must have no actual, record, or inquiry notice of the prior
interest
**note: recording act statutes protects purchasers for value, NOT donees (gift recipients) purchasers for value
need to offer proportional consideration for property (ex. $1 for $500k property is not proportional)
(5) Messersmith v. Smith (1953) p. 617 No constructive notice b/c deed was improperly recorded
-FACTS: C conveys quitclaim deed to F C conveys mineral deed to Smith Smith conveys to Seale Smith
records his deed but this deed was not properly acknowledged Seale records his deed from Smith
F records his deed from CF filed suit to quiet title to the land
-HOLDING: the recording of an instrument affecting the title to real estate that does not meet the statutory
requirements of the recording laws, does not give constructive notice.
-the deed that Seale relied upon was defective and thus could not give notice and is invalid
-a deed must be acknowledged to constitute acknowledgment, the grantor must appear before the officer for
the purpose of acknowledging the instrument and make an admission to the officer of the fact that he had
executed such instrument
-NOTES:
-forged deeds are void (even subsequent bona fide purchasers receive no interest)
-deed induced by fraud is voidable by the grantor; but if the grantee proceeds to convey title to a bona fide
purchaser, the subsequent purchaser prevails
-shelter rule: bona fide purchaser is allowed to transfer his protection to a later grantee even if later grantee is
not a bona fide purchaser (will not work in a malevolent way)
(6) Title Registration (Alternative Approach)
-government assumes the role of title assurer by maintaining an authoritative registry of title purchaser simply
examines the registered title
-ex. Torrens System
-initially ownership of each parcel would be litigatedowners granted certificates
-owner can transfer interest only by registering title to recipient
-unregistered interests are invalid
-Failed for 3 reasons:
1. Not mandatory
2. Initial judicial determination of title was expensive
3. Undercut by statutory and judicial exceptions
(7) Chain of Title Problems
-the following do not provide notice in jurisdictions that require a normal title search:
a. Wild Deed not in the chain
-ex. S to B (does not record) B to C (wild deed) C records S to D D records
-result: D will not discover Cs interest w/o unreasonable burden; BC deed improperly recorded
does not provide notice D owns property
b. Deed Recorded Too Late -- in the chain
-ex. S to B (does not record) S to C (who has actual knowledge of B) C records B recordsC
conveys to D D records
-result: D will not discover Bs recordation b/c it occurs later than in the chain that he is reasonably
expected to look (just needs to look up to SC recording) thus does not provide notice D owns
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property
-NOTE: some jurisdictions require a more extensive search (require to D to look under each grantors
name from the time grantor received title until present; here D would find SB deed)
c. Deed Recorded Too Early -- in the chain
-ex. S owns greenacre B conveys to C C records S conveys to B B recordsB conveys to
DD
records
-result: D will not discover Cs interest b/c he will look at recorded SB, then will check under Bs name
from the time B received title (Cs interest occurs before this) D owns property
-NOTE: some jurisdictions require searcher to each grantors name for every year the grantor is alive (D
would look at Bs chain not just when B received title but for whole life and would find BC deed)
d. Deed From A Common Grantor
-ex. S owns greenacre and forestacre S conveys greenacre to B, granting and easement to cross
forestacre to access greenacre B records S conveys forestacre to C (unaware of easement) C
records
-result: C will look at Ss chain from time S received title until present but b/c C is only purchasing
forestacre, he will only look at those conveyances C would not discover Bs easement C owns
easement
-NOTE: some jurisdictions require C to inspect all of common grantors properties that are deeded out
(8) Board of Ed. Of Minneapolis v. Hughes (1912) p. 629 wild deed
-FACTS: The Hoergers first owned the property in question. D sent a check for the price of land to the Hoergers
along with a deed to be signed by them with the name of the grantee left blank. The Hoergers signed the
deed w/o filling in the grantee name and sent it back to D via mail. D recorded 12/11/1910 prior to
Ds recording, real estate brokers approached the Hoergers and obtained a warranty deed to the same
land and recorded their interest 12/21/1910 Real estate brokers conveyed interest to P who recorded
real estate brokers deed to P (1/27/1910) P filed suit TC found for the P
-HOLDING: It was necessary not only that BrokerP deed be recorded, but that the deed to HoergersBroker
should first be recorded (race-notice jurisdiction)
-Did the deed from the Hoergers to D become operative?
-deed that does not name a grantee is a nullity and wholly inoperative until the name of the grantee is
legally inserted Ds deed became operative when he inserted his name
-D was the subsequent purchaser in good faith and is protected by the recording of his deed before the prior
deed was recorded (became a purchaser when he inserted his name)
-the deed of the first grantee must be recorded before the deed to a subsequent grantee is recorded real
estate brokers should have recorded their deed to the lot before conveying the lot to P. B/c they failed to
do this, the chain of title was flawed and although D had purchased the land first, under the recording
laws, D became the subsequent purchaser for value and was protected by the recording laws
-Although P recorded before D, the recorded BrokerP deed was a wild deed
-NOTE: if a deed is not properly recorded, it is considered not recorded therefore, does not provide notice and
does not count as being recorded before subsequent proper recordings
-Zimmer rule: a subsequent purchaser is deemed to have recorded his conveyance only if all prior conveyances
in his chain of title are properly recorded (no wild deeds)
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-the bona fide subsequent purchaser only needs to 'close the chain'
-so he should make sure the person he bought from should record
(9) Notice
a. actual notice: knowledge of a prior interest
b. record notice: notice of prior interest that would be discovered by a search of the public land records
c. inquiry notice: notice of prior interest that would have been found by investigating suspicious circumstances
-NOTE: potentially expands buyers search to off-record matters which increases costs, imposes delays, and
increases litigation
d. record notice and inquiry notice are considered constructive notice
e. when good faith is mentioned in the statute, takes cares of all three types of notice
10 Raub v. General Income (1970) p. 634
-FACTS: Both P and D were victims of fraud by General Income (GI convinced P to execute and deliver to the
company a warranty deed to her home in return for company stock. P would remain on the property as a
tenant paying rent. Ds took mortgages on this property from GI)
-HOLDING: the mortgagees were entitled to enforce their mortgage liens b/c they were bona fide purchasers
-a bona fide purchaser was one who took a conveyance of real estate in good faith from the legal title holder,
paying a valuable consideration for it without notice of outstanding equities
-both mortgages were taken from the legal title holder, and each mortgagee paid valuable consideration for its
mortgage + there was nothing about the mortgage transactions to arouse the mortgagees' suspicions as to the
conditions under which the mortgagor's title had been obtained.
-P's possession of the property did not impart notice to the mortgagees of her claim b/c possession here was
by the grantor of a recorded deed (even if Ds investigated, they would have found GI had proper title and P
was simply a tenant w/o possession)
-NOTE: expansive inquiry notice that may have given Ds notice of fraud is extremely expensive creates risk
in the market
IX. PRIVATE LAND USE PLANNING
(1) Generally land use was primarily a private matter and landowners were free to use their property as they wished
at times this caused conflict with encouraging the productive use of land
(2) Solutions
a. Easements: provide nonpossessory right to use the land of another person
b. Land Use Restrictions
-real covenants: promise concerning the use of land that benefits and burdens the original parties to the
promise and their successors (remedy is damages)
-equitable servitude: also a promise concerning the use of land that benefits and burdens the original parties to
the promise and their successors (remedy is injunction)
c. Nuisance Law: resolves the rare situation where one owners use seriously interferes w/ another owners use
(3) Easements
a. Generally
-dominant tenement/land: the land benefited by easement
-servient tenement/land: the property burdened by easement
-appurtenant easements: benefits the dominant estate (benefit runs with land)
-b/c appurtenant easements are attached to land, the transfer of dominant land automatically transfers
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severance
3. Reasonable necessity for that use (easement must be beneficial or convenient for the use of the
dominant tenement, but need not be essential)
-NOTE: R.3d Approach
1. Severance of title
2. Existing use of one parcel for the benefit of another
3. Reasonable grounds to expect that the conveyance would not terminate the right to continue the
prior use
g. Berge v. State of Vermont (2006) p. 665 Easement by necessity (landlocked)
-FACTS: owner conveyed land to VE but reserved a lotdeed reserved no express easement for access to the
excluded area across the land that was conveyedowner later conveyed the excluded area to
developers (deed again contained no reference to any easement)buyer purchased two lots in the
excluded area. He accessed his property by car over a gravel road that crossed the wildlife area (he
owned a boat but did not use it to access property)State placed a gate across the access road and
deprived buyer of overland access to his propertylandlocked: no legal right to access property
from a public roadTC rejects easement-by-necessity claim
-HOLDING: TCs holding was based on the erroneous conclusion that water access defeated the buyer's
easement-by-necessity claim Thus, TC erred in awarding summary judgment to the State
w/o addressing additional elements of the easement-by-necessity claim.
-CL: when, as a result of the division and sale of commonly owned land, one parcel is left w/o access to a
public road, the grantee of the landlocked parcel is entitled to a way of necessity over the land
easement remains in effect as long as the necessity exists
-court defines necessity as lack of reasonably practical access
-since easement by necessity is based on encouraging land use, its scope ought to be sufficient for the
dominant owner to have the reasonable enjoyment of his land for all lawful purposes.
-w/o use of the road, landowner would have no reasonably consistent, practical means of access for
the reasonable enjoyment of his land.
-access by water, while adequate at one time, is generally not sufficient to make reasonably effective use
of property, and land access will almost always be necessary, even though water access is available
-DISSENT: doesnt believe there is a bright line between water and road accesspublics interest in access to
landlocked property must be balanced against granting landowner an uncompensated interest in
his neighbors property
-NOTE: A Closer Look at Easements by Necessity
a. justifications for easements by necessity
1. implied intent of parties
2. policy favoring land use
b. easement by necessity requirements
1. severance of title to land held in common ownership; and
2. strict necessity for the easement at the time of severance (strict necessity found only when the
owner has no legal right of access to her land); OR
3. minority of courts require reasonable necessity (easement must be beneficial or convenient for the
use of the dominant parcel but not necessary)
c. scope and duration easement by necessity only applies in one situation: road access to a landlocked
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3. The licensor knows or reasonably should expect such reliance will occur
-NOTE: in most jurisdictions, easements by estoppel = irrevocable license
j. Marcus Cable v. Krohn (2002) p. 685 Interpreting easement language
-FACTS: property owners brought action against cable company for trespass and negligence (the owners'
predecessors granted to an easement that allowed the cable company to use the property to maintain
an electric transmission or distribution line
-HOLDING: if a use does not serve the easement's express purpose, it becomes an unauthorized presence on
the land whether or not it results in any noticeable burden to the servient estate.
-express easement encompasses only those technological developments that further the particular purpose
for which the easement was granted
-a potential purchaser must be able to rely on the granting language/those who grant easements should be
assured that their conveyances will not be construed to undermine private property rights
-the manner, frequency, and intensity of an easement's use may change over time to accommodate
technological development, but such changes must fall within the purposes for which the easement was
created, as determined by the grant's terms (Restatement)
-DISSENT: cable television falls within literal meaning of the easement
-NOTE: court considers who gets to capture the value added? (easement holder or the servient land owner)
k. Terminating Easements
1. Abandonment: easement ends if nonuse + present intent of dominant owner to relinquish OR purpose
inconsistent w/ its future existence (need to take clear affirmative steps or use dominant
land that indicates intent to abandon)
2. Prescription: servient owner blocks use of easement in open and notorious, adverse & hostile, and
continuous many for prescriptive period
3. Condemnation: condemnation of servient land terminates easement holder entitled to compensation
4. Estoppel: easement ends when servient owner substantially changes his position in reasonable reliance on
the holders statement that the easement will not be used in the future
5. Merger: easement ends if one person obtains title to both the easement and the servient land
6. Misuse: if holder seriously misuses easement, it may be ended via forfeiture
7. Release: easement holder may release easement by writing that conforms to Statute of Frauds
l. Preseault v. U.S. (1996) p. 693 Terminating Easements
-FACTS: Railroad Co. opened its line but stopped service Congress enacted Act which converted unused
rails into recreation trails portion of the old line was converted 2 servient owners claimed that
the railroads easement had been abandoned and sued for damages on takings theory
-HOLDING: recreational trail was not within the scope of an existing easement for railroad purposes thus,
the conversion was a taking of a new easement for a new purpose, for which the landowners are
entitled compensation In addition, since the easement was abandoned, the opening of the
public recreational trails was also a physical taking of the Ps property rights
1. Did the Railroad acquire only an easement or a fee simple? Just easement
-if FSA, then state could do as it wanted with the property
-if easementwithin the scope? Yes (State wins) abandoned? Yes (P wins); No (State wins)
No (P wins) prescription? Yes (State wins); No ill (P wins)
2. Was the easement limited to railroad purposes only or was it broad enough to encompass future use as
public recreational trails? Limited to railroad purposes
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-while a recreational trail can be described as a roadway for the transportation of persons, the
nature
and usage of recreational trail is clearly different than commercial railroad
3. Had the easements terminated by abandonment prior to the taking for public recreational trail use?
-if abandoned, state could not resurrect easement w/o just compensation
-under abandonment, owner of the servient estate is relieved of burden
-abandonment = nonuse + present intent of dominant owner to relinquish OR purpose inconsistent
w/ its future existence
-removal of the tracks was inconsistent with future existence and no attempts made to reconstruct
-NOTE: the scope issue is very ambiguous and could just as easily been argued the opposite way (see Chevy
Chase, p. 698)
-can use prescriptions to create, expand, and terminate property rights
-RR Co. could avoid abandonment by continuing to maintain tracks (this would be costly advice: if RR Co.
unsure they want to maintain rails, they should at least try to make some money by selling the property)
-to protect against prescription, you must monitor the area (this will also incur costs)
-some jurisdictions allow you to put up clear signs to defeat abandonment
Equitable Servitude
Benefit to run
Burden to run
Benefit to run
Statute of Frauds
Burden to
run
O
Intent to bind
Notice
Horizontal Privity
Vertical Privity
A. Real Covenant: a promise (k) concerning the use of land that (1) benefits and burdens both the original parties to
the promise and their successors (runs with the land); and (2) is enforceable in an action
for damages
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a. Generally
-a real covenant seeks monetary damages (w/o monetary damages = equitable servitudes)
-an easement is a right to go on someone elses land; a real covenant is a promise concerning use of own
land
-could be characterized as negative easement of four traditional channels of air/light/water/subsidence
-damages and equitable relief possible
b. elements of real covenants:
1. Compliance with statute of frauds put key features in writing (including property description)
2. Intent to bind successors can be explicit (successors and assigns; runs with the land) or inferred
(see Deep Water)
3. Touch & Concern must relate to the enjoyment, occupation, or use of the property. If not T&C,
never ran in the first place. Reasonableness of intent to bind successors
i. Burden
-use restrictions, K not to compete, payment to HOA satisfy T&C
ii. Benefit
-right of developers to build on land is a benefit in gross. Does not T&C any property
retained by the developer, only a commercial advantage in operation of his business (ex.
construction, management ks)
-water supply k may T&C if water was to come solely from identified land
Now, moved away from literal meaning; Payment of money to create something that T&C
R3d: T&C if not violative of public policy. Violates public policy if:
(1) arbitrary, spiteful, or capricious
(2) unreasonably burdens a fundamental constitutional right
(3) imposes an unreasonable restraint on alienation
(4) imposes an unreasonable restraint on trade or competition OR
(5) is unconscionable.
Even if no T&C, can run for a while at the beginning, but may become against policy (burden
> benefit), e.g. Eagle Enterprises: at CL, water supply never T&C (but if water supply still had
benefit, e.g. brought suit the next day, may have said T&C). R3d: wont shut off the water
supply if there is still utility. More realistic decision.
4. Notice required only for BURDEN to run, not benefit. Assume original party will inform successor
of benefit (seller feature)
-actual, record, inquiry notice
-BUT one who acquires interest by gift is not a bona fide purchaser, so bound even w/o notice
5. Horizontal Privity concerns relationship between original parties to the promise
-mutual interests, ex. landlord-tenant, cotenant, common grantor
-successive interests, ex. grantor-grantee, conveying fee simple , lease, or easement
-no requirement, easily circumvented by a straw transaction; some states have abolished HP
requirement
-not a requirement for equitable servitude
6. Vertical Privity successor succeeds the ENTIRE estate (ex. FSA FSA, even if partitioned)
-in some jurisidictions, strict VP is required only for BURDEN to run (unlike Deep Water)
-for BENEFIT to run, only need possessory interest (physical use, possession)
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-R.3d: if occupier must trim trees, shouldnt the tenant be answerable? Look below the surface
-no privity of any kind of AP
c. Deep Water Brewing v. Fairway Resources (2009) p. 705 (this case is an outlier)
-FACTS: owners' predecessor granted the developer a right-of-way in exchange for money and the
promise to restrict the height of houses so as not to impair the view of a lakeTC concluded
that the developer breached agreement
-HOLDING: owners were entitled to enforce the height restriction covenant as one that ran with the land
-SOF: in writing but no legal description of property. Homeowners took w/o notice, so must sue
Developer, who doesnt own the land (still owns some). Switch to monetary damages claim.
-Intent to bind successors: hard to read b/c Alquists thought Developer was going to build, so didnt
try to bind successors. But Kenagys probably paid for benefit. Also T&C
implies intent.
-T&C: satisfied. What you can actually do on the property
-Notice: not required b/c directly suing Developer
-HP: successive interest, easement was given in exchange.
-VP: added Kenagys to suit. Would not have satisfied if only Deep Water.
-NOTE: if homeowners had notice, could have suied for injunction on an equitable argument court
would likely force transaction by ordering injunction (lower height)
d. open ended covenant to pay money
i. Neponsit
-FACTS: Neponsit Realty developed a common interest community with covenant to pay dues (for
roads, sewers, etc) to a HOA to be formed later. Bank foreclosed Ds home, refused to pay
Ds unpaid dues.
-HOLDING: HOA can enforce covenant against D
-VP: HOA is made up of property owners, even though HOA itself doesnt own land. HOA meets
VP req (otherwise HOA would have had to keep small land for itself).
-T&C: paying money to HOA so that it can hire people to maintain land this is the same as
HOA doing the actual maintenance.
ii. Eagle Enterprises moving in the direction of R3d (unconscionability, arbitrariness)
-FACTS: Covenant that Orchard Hill would supply water to Baum, and Baum would pay $35/year.
Orchard HillEagle Enterprises; BaumGross. Gross builds his own well and doesnt
want to pay for the water.
-HOLDING: Water supply agreement does NOT T&C land.
-land will not be waterless just because EE doesnt supply. Other homeowners wont be harmed.
-EE argument: we spread out the infra development costs over time.
-Ct: There is no end to agreement, goes on in perpetuity. Undue burden, less marketable.
-this is a benefit in gross. Can dig own well
-NOTE: EE argument could have been that if supplying water was seen as a burden, court would not
have let EE stop. Asymmetry in T&C argument.
e. covenant not to sue
i. Lakeview Blvd
-FACTS: city conveyed to developer, allowed to build on land with landslide risk, provided
developer would not to sue. P took with notice.
-HOLDING: T&C met b/c covenant was specifically about landslide risk and P was an informed
downstream purchaser with full notice.
-NOTE: court not convinced by public policy args. Formal T&C (building), buyer beware.
f. covenant not to compete
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i. Davidson
-FACTS: P sold property to merchant with covenant not to operate supermarket. Merchant sold to
City, which had notice but leased to a supermarket.
-HOLDING: covenant did not run as it adversely impacts public interest (not violative on its face)
-hardships on citizens who lost opportunity to purchase food at close location
-court points to NJ Urban Enterprise Zone Act (poverty) as basis for public policy claim
-this is an odd result, context based (these specific factors, although rejected this approach in
Nahrstedt)
-impacts peoples trust in City. Should have paid P. (Remember Palm Springs)
-NOTE: public policy arguments need some basis in the law.
E.g. State v. Shack migrant worker statute; Nahrstedt had no basis so lost
-P realized hardship argument, so switched from equitable relief to monetary damages claim.
-Economic loss measured by (1) decrease in sales income (2) cost of K to P
B. Equitable Servitude: a promise concerning the use of land that (1) benefits and burdens both the original
parties to the promise and their successors and (2) is enforceable in equity (injunction)
a. Generally
-compared to real covenants easier to meet requirements, more defenses, injunctions not damages
-differences between real covenants and equitable servitudes
1. Remedies (RC = damages; ES = injunction) modern courts blur these
2. Standard equitable defenses available for ES claims
-NOTE: strict vertical privity is not required but there needs to be some relationship to land (relaxed VP)
b. Tulk v. Moxhay (1848) p. 711 Notice is key
-FACTS: P sold property w/ restriction that it be maintained as a garden person who originally
purchased property had notice of the covenant contained in the deed years later D acquired
title with actual notice and sought to build upon the land on the squareP seeks injunction
-HOLDING: since a covenant is a k between the vendor and the vendee, it may be enforced against a
subsequent purchaser who has notice of the contractual obligation of his vendor, even
though it does not run with the land (no HP b/c LL-T only)
-an equitable servitude is enforceable by injunction with no regard to privity as long as the promise is
intended to run and the subsequent purchaser has actual or constructive knowledge of the covenant
-in future, original purchaser could buy for lower price then sell for higher to D (pure equitable
reasons)
-benefit runs b/c P owns lands around park, and his land value goes up
-also may be public policy: building on park burdens P more than it benefits D
-NOTE: horizontal/vertical privity not needed for equitable servitudes
-common plan exception: where a developer has manifested a common plan to impose uniform restrictions
on a subdivision, all lots are burdened and benefited by the restrictions even if
they do not appear in the chain of title to every lot (use sales literature, statements
by the developer, and percentage of deeds containing restrictions to determine
whether common plan exists)
C. Restatement Approach: combines the real covenant and the equitable servitude into 1 doctrine. A servitude
arises when (1) intent to create servitude (2) SofF (3) not arbitrary, unconstitutional,
unconscionable, or violative of public policy
-NOTE: abandons touch and concern and horizontal privity
D. Common Interest Communities: planned residential development (1) where all properties are subject to
comprehensive private land use restrictions and (2) which is regulated by a
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-entire condominium standard: enforcement of restriction does not depend upon the conduct of a
particular condominium owner, rather the restriction must be uniformly enforced in the entire
development UNLESS P can show that the burden it imposes on affected properties substantially
outweigh the benefits of the restriction that it should not be enforced against any owner
-condos have common interest: individual owners enjoys many benefits of traditional individual
ownership but also acquires an interest in common with others in the amenities and facilities:
1. Subordination of individual property rights to the collective judgment of the owners
association
2. Restrictions on the use of real property
-equity will not enforce any restriction that violates public policy or arbitrary restrictions (bear no
rational relationship to the protection of the land)
-presumption: uphold recorded use restrictions (provides assurance to prospective buyers that they
may rely on the promises recorded on the CC&Rs AND protects all owners against unexpected
increases in association fees)
-DISSENT: cherished benefits derived from pet ownership, would have found the restriction arbitrary and
unreasonable; analysis should focus on the burden on the use of land (and on the
objecting owner) and not the health and happiness of the development
-NOTE: on its face, drawing impermissible distinctions between different types of animals and the
owners that would own these different animals is arbitrary b/c they cause the same nuisance
-condominium committees tend to f(x) like petty governments who are accountable to noone (make
decisions w/o regard to what is best/fair) Narhstedt takes away some of their deference
f. Fink v. Miller (1995) p. 727 Restrictions can be voided if abandoned
-FACTS: covenant wood shingles shall be required 23/81 homes have shingles of other
materialsMillers requested to use fiberglass shingles and were denied used fiberglass
anyway committee sought injunctive relief to stop installation of Ds fiberglassTC denied
-HOLDING: committee may lose their right to enforce restrictions if they have been abandoned
-abandonment test: party opposing enforcement of restriction must prove that existing violations are
so great as to lead the average person to reasonably conclude that the restriction
has been abandoned (party must be aware of restriction and inspect property)
-Step 1: analyze violations as to their number, nature, and severity; if abandonment still in question,
then
-Step 2: consider prior enforcement efforts and possible realization of the restrictions benefits
-here 23 houses is a substantial number for a subdivision, property owners record of enforcement
is erratic
-abandonment of the covenant does not suggest abandonment of other similar covenants in the
agreement
-NOTE: tension between number of violations and severity of violation (ex. only one violation but it is a
50-foot tall brigfound ht yellow duck is this obvious enough for abandonment?) most courts
hold a single violation would not constitute abandonment
-Travasos: no abandonment b/c restriction couldnt be seen from the front of the building
-Also, if committees continually make exceptions for individual home owners, they run the risk of
abandonment
-Fink Test: equivocal number (23/81) + poor enforcement + no real benefit = abandonment
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g. Vernon Township v. Connor (2004) p. 732 Changing conditions can void restrictions
-FACTS: restriction prohibits sale of alcohol on land VT purchased land to build a social hall that
would sell alcohol VT tried to obtain a Limited Release of Restrictions from all
owners68/77 owners signedVT brings action to quiet title based on changed
conditionsTC ruled for D AC reversed b/c conditions changed so that restriction no longer
had significant value to appellants
-HOLDING: community intended to protect themselves and their heirs from the vices of alcohol
consumption community will continue to benefit from restriction as long as alcohol is not
sold within restricted tract
-changed conditions test: burden of proof is on party opposing restriction to show that the original
purpose of the restriction has been materially altered/destroyed by conditions
and that substantial benefit no longer extends to other party
-policy: land should not be burdened by restrictions that are no longer beneficial to anyone
-when evaluating changed conditions, one should only consider the immediate location (neighborhood);
this includes restricted tract as well as adjoining tracts
-DISSENT: 3 alcohol serving establishments that cropped up + 71/77 unopposed members is proof that that
restrictive covenant outlived its usefulness
-NOTE: VT could have compensated landowners to lift restriction
h. Schaefer v. Eastman Community Association (2003) p. 740 Beware of declarations that give broad power to
home owners association (reliance issue)
-FACTS: declaration reserved to its board the authority to (1) take steps necessary to protect the association's
assets and insure its financial stability, (2) buy and sell property when deemed in the best interest of
the association, and (3) take actions deemed necessary to further the declaration's purposes or to be
in the best interests of the association closed ski area (core component of property) TC found
closing was beyond its authority b/c its declaration did not provide for the closing of an amenity
-HOLDING: association's board of directors' decision did not violate an express provision of the declaration,
nor was it a decision reserved to the association members
-board's action was valid and within the scope of the board's authority
-homeowners may have relied on assertions in the community's promotional materials that it had a
downhill ski area, and on the overall general purposes of the association when they bought their homes,
but neither limited the broad authority granted to the association in the declaration
i. Fountain Valley Association v. Dep. of Veterans Affairs (1998) p. 746 restrictions cannot substantially
infringe right to privacy
-FACTS: Petition horded items P association sued claiming that the condition of petitioner's property
constituted a fire hazard (authorities deemed there was no fire hazard); Petitioner filed a crosscomplaint for invasion of the right to privacy and breach of the association covenants
-HOLDING: associations micromanagement was unreasonable
-no legitimate police concern (no safety hazard)
-association essentially telling owner how to live his personal life
-NOTE: compare this to the pet situation in Nahrstedt
-modern view is that CC&R provisions should be interpreted to give effect to the intention of the parties
ascertained from the language or the circumstances surrounding the creation of the servitude and to carry
out the purpose for which it was intended
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(6) Transferring the Tenants Interest (landlord tenant section is an application of real covenants)
a. Generally
-both tenant and landlord are entitled to transfer their interest to 3 rd parties
-tenant may transfer interest via either an assignment or a sublease (assignment is a full substitution)
-assignment: the transfer of a tenants entire remaining lease term
-sublease: the transfer of less than the entire term is a sublease
-modern trend: if the lease requires the landlords consent, landlord may without consent only if he has a
commercially reasonable objection
-typical commercial lease = base rent (total yearly rent) + x% gross receipts
-novation: replacing an obligation to perform with a new obligation; or replacing a party to an agreement
with a new party (release of liable from privity of k)
-privity of contract and privity of estate are standing requirements needed to bring party to court
-privity of contract: gives someone the legal right to bring legal action to party even if that person is not the
person responsible for violation
-privity of estate: privity of estate can be created with less than a full assignment
-NOTE: there can be multiple privity of k relationships, but privity of estate can only occur once
-reversionary interest is an umbrella term for time remaining on lease, obligations, etc.
-parties can contract not to allow transfer, or transfer only via consent
1. Sole discretion clause: original grantor may refuse consent for any reason
2. Reasonableness clause: original grantor may refuse consent only on a commercially reasonable basis
3. No standard clause: lease may require consent, but provides no standard guide for consent decision
(silent consent clause)
b. Ernst v. Conditt (1964) p. 483 Assignment vs. Sublease determined by the parties INTENT not lease language
-FACTS: Complainants leased land to Rogers. Lease contained provisions prohibiting subletting, assignment and
a duty to clear any construction/improvements at the end of lease Rogers sold his business to D and a
new lease was created with an accepted sublease agreement D ceased paying rent and the
Complainants brought suit. P argues lease was an assignmentthus, D liable; D argues lease was a
subleasethus, Rogers liable (b/c no privity of estate)
-HOLDING: the words used in an instrument are not conclusive; rather, it is the intentions of the parties that
govern whether the instrument is a sublease or assignment
-general rule in re distinction between assignment and sublease is that an assignment conveys the whole term,
leaving no interest nor reversionary interest in the grantor/assignor whereas a sublease is a transaction where
a tenant grants an interest in the leased premises less than his, or reserves a reversionary interest
-CL rule is if the instrument purports to transfer the lessees estate for the entire remainder of his term, it is an
assignment, regardless of its form or the parties intentions.
-NOTE: majority adopts an objective test that simply looks at whether the tenant transfers the lease for the entire
remainder (time length) other jurisdictions have adopted a subjective approach that looks at intent
-D could have entered into K directly with P to be liable this negates the assignment/sublease question and also
protects further downstream assignees (creates privity of k with multiple parties and landlord has flexibility in re
who to sue. This gives the landlord leverage)
-3rd party beneficiary theory: if A makes a k promise w/ B in order to benefit , then C may enforce against A
-many jurisdictions say in regards to rent money, lessee 2 regardless of whether he is a sublessee or assignee, is
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liable to original landlord for rent b/c the landlord needs the rent to operate the property
c. Kendall v. Ernest Pestana, Inc. (1985) p. 492 Silent Consent Clause
-FACTS: lease stated that before the lessee could assign his interest, he had to obtain written consent from the
lessor, otherwise the lease could be voidable Bixler wanted to sell his business to Kendall (P) and
requested consent from D, who refused to give it, claiming it had the right to arbitrarily refuse
-HOLDING: in re commercial lease, landlord can withhold his consent to assignment by the tenant only if the
landlord has a commercially reasonable objection to the assignment (minority view)
-some of the factors that the trier of fact may consider in re commercial reasonableness are:
1. financial responsibility of the proposed assignee
2. suitability of the use for the particular property
3. legality of the proposed use
4. need for alteration of the premises
5. nature of the occupancy
-denying consent solely on the basis of personal taste or convenience is not commercially reasonable
-court rebuts arguments in favor of majority view
1. Majority argues that lessee could have bargained for reasonableness clause modern trend is that
approval clauses are not clear and ambiguous
2. Tradition and sound public policy dictate lessor has the right to capitalize on increased value of his
property lessor is trying to get more than he bargained for in the lease (law in place when we entered
into k was #2)
-NOTE: Four options to deal with people not paying
1. Tenant has no right to substitute for herself/ landlord has no duty to mitigate damage (no longer viable
option b/c it allows property to be wasted) most landlord friendly
2. Tenant has no right to substitute for herself/ landlord has duty to mitigate (seems like a good option b/c
landlords are in the business of being landlords-easier for them to mitigate than place the duty on the
tenant)majority rule
3. Tenant has duty to substitute for herself/ landlord has no duty to mitigate (tenant is the one causing the
problem so let the tenant replace herselfthis type of deal is not void for public policy but has to be in
clear language and landlord must be reasonable in re substitution)
4. Tenant has duty to substitute for herself/ if she doesnt, landlord has the duty to mitigate most tenant
friendly
-Kendall resolves around shift from #2 to #4 (this is problematicforces attorney to research what is going on in
other states and best-guess which minority view will be adoptedcreates risk)
-had right to rely on law as it was and should not have burden of predicting some other minority rule would
be adopted
-only time we have seen restraint on alienation is for unreasonable period of time or for bad reasons this
creates a lot of litigation in re what is reasonable
-Reasons why Kendall decision has no pragmatic effect:
1. several bases for landlord to claim rejection of tenants
2. majority of leases put in sole discretion clauses
3. Ttenant bears the responsibility for proving unreasonability
-generally landowner can pick and choose tenants based on personal preferences when a landlord has to replace
34
a current tenant in trouble (mitigation), then landowner needs a commercially reasonable standard to object to
replacements (look at the jurisdiction)
(7) Nuisance
(1) Generally
a. private nuisance: an intentional, nontrespassory, unreasonable, and substantial interference with the use and
enjoyment of land
b. public nuisance: improper interference with a right common the public
c. remedies for nuisance:
-the traditional remedy for nuisance is an injunction
-today, courts usually balance the equities to determine if the appropriate remedy is an injunction or damages
(2) Private Nuisance Elements:
1. Intentional act is intentional if D acts for the purpose of causing harm or D knows harm is substantially
certain to result from his conduct
2. Nontrespassory interference must not involve physical entry into land (ex. noise, vibration, light, odor, etc.)
3. Unreasonable
-gravity of harm test: conduct is unreasonable if it causes substantial harm, regardless of its social utility
-restatement test: conduct is unreasonable if the gravity of harm outweighs its utility
4. Substantial interference real and appreciable invasion of Ps interests
5. Use and enjoyment of land conduct must interfere with use and enjoyment of land
(3) Boomer v. Atlantic Cement Co. (1970) p. 753 Gravity of harm standard
-FACTS: D operated a large cement plant. Ps, neighboring property owners, filed suit seeking an injunction and
damages for injury to property from smoke, dirt and vibrations from the plant. Lower courts ruled that
there was a nuisance, but found that the value of Ds operation outweighed the consequences of the
injunction; injunction denied. Plaintiffs appealed.
-HOLDING: Issue injunction which can be vacated if D makes permanent payments to Ps
-court used version of substantial harm that was satisfied if P showed quantitatively that damages over $100
-NYs decision framework:
-substantial harm no no nuisance
yes nuisance remedies injunctive relief (old approach)
social utility analysis damages/injunction or both
-remedy options:
1. Grant injunction but enforce at a future date to allow D to eliminate nuisance
2. Grant injunction until D makes payment of permanent damages to Ps which would compensate them
for the total economic loss to their property court chooses this one
-no assurance technological improvements will occur
-rate of technology research is beyond D; it is an industry wide problem
-parties could settle this if D paid enough money injunction would pressure D to do so
-payment would be incentive for D to spur research
-when a nuisance is of such a permanent and unabatable nature that a single recovery can be had, there
should be only one recovery
-DISSENT: agreed with the reversal, but disagreed with the award of damages in lieu of a permanent
injunction where substantial property rights have been impaired believes this allows parties to get
away with wrongs as long as they pay
-once permanent damages have been paid, there is not incentive for D to alleviate pollution
-NOTE: Types of Remedies
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36
-generally defined to mean fair market value (the amount that a willing buyer would pay a willing seller
on the open market)
-problem arises when a government seeks to buy from an unwilling seller
b. Professor Merrill Approach (p. 907): better approach is to ask whether ED is an appropriate means to achieve a
particular end (means approach demands a more narrowly focused and
judicially manageable inquiry than the ends approach b/c ends analysis
requires a high political theory)
c. Berman: radical shift from traditional ED view now can take property when there is economic/blight conditions
and transfer to a private owner (here, Ps property was doing fine unlike surrounding properties) for long term
economic health, effective markets, respect for private property
d. Hawaii Housing Authority v. Midkiff (1984) p.891 ED must be rationally related to a conceivable purpose
-FACTS: concentrated land ownership was responsible for skewing the states residential fee simple market,
inflating land prices and injuring the public welfare; current federal tax laws hindered landowners from
selling land (leased instead) Act condemned property and transferred ownership to existing lessees
(lessened tax burden) allows lessees to petition for ED lessors filed suit
-HOLDING: ED power for public use will be constitutional so long as it is rationally related to a conceivable
public purpose. The Government itself does not have to use the property. Only the purpose, not the
mechanics will be relevant to the takings constitutionality
-legitimate police power interest: reduce the perceived social and economic evils of land oligopoly
-act doesnt have to actually achieve its proffered purpose; legislature simply must believe that it will
e. Kelo v. City of New London (2005) p. 898 Limitations on Hawaii Housing
-FACTS: City approved a development plan to revitalize an economically distressed city purchased property
and seeks to enforce ED to acquire the remaining parcels from unwilling owners city did not plan to
open the condemned land to the general public, nor were the private lessees of the land required to
operate like common carriers
-HOLDING: Hawaii Housing held that economic development qualified as a valid public use must meet two
burdens for ED: (1) the takings of the properties were reasonably necessary to achieve the
intended public use and (2) the takings were for reasonably foreseeable needs
-public use in this case was broadly interpreted to mean public purpose
-in Berman, P argues his individual property was not blighted court ruled must defer to legislature/agencies
to create entire plan (cant review by individual parcels)
-determination that city is economically distressed is entitled to deference
-given comprehensive plan, thorough deliberation that proceeded its adoption, and limited scope of our
reviewmust resolve issue in re entire plan (not re individual properties)
-plan unquestionably serves a public purpose
-long tradition of justifying economic development
-no way to distinguish economic development from other recognized public purposes
-CONCUR: adding that even with a deferential standard of review, a taking should not survive the public use test
if there is a clear showing that its purpose is to favor a particular private party, with only incidental
or pre-textual public benefits (not present in this case)
-NOTE: state can impose more restrictive requirements to constitute public use
1.define public use as a possession or enjoyment of the property by the public
2. Restrict ED to blighted properties that harm the public health
3. Require compensation greater than fair market value for condemnation of a primary residence
4. Place a moratorium on the use of ED for economic development
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-Horney: court held (1) ED requires heightened scrutiny standard and (2) economic or financial benefit, alone, is
not sufficient to satisfy public use
f. Poletown v. City of Detroit Broad definition of public use (aka public purpose)
-FACTS: Detroit planned to acquire site for GM under Economic Development Act (use of condemnation to
acquire property) P argues transferring land to private company is a private not public use; D
contends that the purpose behind the taking is to alleviate unemployment (serves public welfare)
-HOLDING: condemnation for the public welfare cannot be forbidden, even if there is incidental private gain
-alleviate unemployment and revitalize economic base of community is a public purpose
-benefit to private company is merely incidental
-DISSENT: right to own and occupy land must not be subordinated to private corporate interests unless the use of
the land condemned for the corporation is invested with sufficient public attributes
-public will retain no control over business operations; GM will remain liable to its stockholders, not public
-those with control have conflicting interests (profit v. unemployment)
-eminent domain and taxes are fundamentally different
-while both include financial losses, eminent domain also attaches intangible losses (personhood)
-NOTE: government can pay above market value to first takers to leave earlier to break spirit of the tougher
ones (can also take away public services to make living unpleasant)
g. County of Wayne v. Hathcock Departure from Poletown; three public use situations
-FACTS: County used federal grant money to purchase properties through voluntary sales (condition of thefederal
grant money that was properties acquired with the funds had to be put to commercial usecounty
planned to build a technology and business park expected to create 30,000 jobs and generate $350 M
in tax revenue. After purchasing 1000 acres, the county began condemnation proceedings to purchase
19 additional lots so that it would have contiguous property for development (as opposed to having
checkered lots Holdover owners contested the condemnations as not being for a public purpose
-HOLDING: unconstitutional b/c it is not a public use
-transfer of condemned property is a public use when:
1. Extreme Necessity; OR
-inability of market to operate on its own depends on the use of land that only government can
assemble
2. Private entity remains accountable to the public in its use of that; OR
-public retains some control
3. Selection of land is based on public concern
-underlying purpose of condemnation, rather than the subsequent use of condemned land must satisfy
public use requirement (public benefit cannot come solely from the private enterprise, benefit must
come from condemnation itself)
-ex. unfit housing
-Poletown is a departure from ED understanding (overrules Poletown but does not establish new law
revitalizes law before Poletown)
XI. LAND USE REGULATIONS (Inverse Condemnation w/o just compensation)
A. Zoning
(1) Generally
-reformers argued that government had the inherent police power to protect the public health, safety, morals
and welfare through zoning laws
-each city would be divided into geographic zones where different uses were permitted, with limits on the size
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39
40
-DISSENT: relationship of individuals living together has no relationship to their character or behavior
should focus on conduct not relationship
-disadvantages those most likely to live with roommates (poor and elderly)
-Belle Terre no longer appropriate because of modern demographic changes
B. Takings
a. Generally
-while government may regulate an owners use of her property under the police power, a regulation that goes
too far is an unconstitutional taking.
-takings clause is designed to prevent government from forcing certain owners to bear public burdens which
in fairness and justice should be shared by the public as a whole
-when doing a takings analysis, the property is defined as a the whole parcel and not just the portion that is
affected by the regulation
-appropriate remedy for a taking is compensatory damages, not invalidating the regulation
b. Takings Test (General)
-historical approach: regulations through police power have limits and will be considered a taking when the
diminution in value of the property reaches a certain magnitude, which depends upon
the particular facts (Penn Coal)
-modern day standard: Balancing Test (Penn Central)
1. Economic impact of the regulation on the landowner
-court suggests that diminution in property value caused by regulation that is reasonably related to
the general welfare is not a taking
2. Extent to which the regulation has interfered with distinct investment-backed expectations
-consider the landowners reasonable expectations when he invested in the property
3. Character of the government action
-a taking is more readily found when the government has physically invaded the property than when
interference arises from some public program adjusting the benefits and burdens of economic life to
promote the common good
4. Average Reciprocity of Advantage (guarantee not be singled out)
-all property in the area is subject to the same burden, so no individual property owner is at an
unique disadvantage (zoning justification)
-idea is that landowner actually benefits from the regulation b/c it is applied to all other owners
c. Situation-Specific Taking Tests (Categorical Rules)
-a taking will be found under these tests if government entity:
1. Authorizes a permanent physical occupation of land; or
-a permanent physical occupation authorized by government is a taking regardless of the reason for
the governments action
-Step-by-Step:
1. Physical use
2. That constitutes occupations (allowing 3rd parties to enter is more intrusive than telling
landowner to do something)
3. Which is permanent (for practical purposes, it is b/c owner would have to change nature of the
use of the property)
4. If there is any ambiguity in these factors then we have to do a Penn Central analysis
2. Adopts a regulation that causes the loss of all economically beneficial or productive use of land, unless
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No
Penn Central
Yes
Nuisance
(grounded in common law)
No Taking (no
compensation)
Not Nuisance
(grounded in common law)
This is a taking
(compensation needed)
If facts are not as strong as
Lucas (which will likely be
the case) apply Penn Central
3. Demands an exaction that has no essential nexus to a legitimate state interest or lacks rough
proportionality to the impacts of the particular project
-exaction: government requires developer to provide land or fees to offset the impacts of the project
in order to approve land use
-an exaction is a taking if either (1) there is not an essential nexus between the exaction and a
legitimate state interest or (2) the exaction is not roughly proportional to the impact to the project
d. Judicial Takings (did not cover in class)
-hypo: A satisfies all of State Bs adverse possession requirements to obtain Cs landsupreme court of State
B changes the AP law so that As interest is invalid SC took As land and gave it to C
-law is unclear on judicial takings
e. Nuisance Exception: a regulation enacted to prevent a nuisance or other harm to the public was not a taking
f. Pennsylvania Coal Co. v. Mahon (1922) p. 914 Diminution in value test (standard unclear)
-FACTS: Act prohibited mining that would cause subsidence of homes near residential properties Penn.
Coal had relied in K and deeds to retain the valuable estate in the land beneath the surface.
Property
owners sought to enjoin the Penn. Co. from mining beneath their homes TC sought prevention by
injunction b/c the subsurface estate could not be valuably mined for profit and still support the
safety of surface abovelandowner had consented to the deed with the express reservation of the
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coal rights. This, deed gave Penn. Co. both k and property rights which the Act rendered useless
-HOLDING: limitations on the use of land through police power have limits and will be considered a taking
when the diminution in value of the property reaches a certain magnitude, which depends upon
the particular facts
-in order to protect themselves, Ps should have contracted to acquire more than the surface rights.
-Act could not have been used to terminate the valid k rights D received, nor could the Act be used to take
D's k rights without adequate compensation.
-general rule is that property may be regulated to a certain extent, but if regulation goes too far it will be
considered a taking
-DISSENT: legislature should have the power to prohibit use of land that seriously threatens public welfare
w/o any just compensation; restriction upon a particular use does not become inappropriate
whenever it is not compensated, even though it could alternatively be prevented through such
compensation (Nuisance Exception)
g. Penn Central Transportation Co. v. NY (1978) p. 926 Basic standard used in regulatory takings cases today
-FACTS: P owned the Grand Central Terminal, which was designated as a landmark and owners of
property designated as landmarks are given transferrable development rights. P entered into a lease
to construct a multi-story office building on top of the terminal. The plans were submitted for
approval and were in conformity with existing zoning regulation, but the Commission denied the
applications P filed suit seeking damages for the temporary taking
-HOLDING: P could not establish a "taking" simply by showing that they had been denied the ability to
exploit a property interest that they had believed was available for development
-Balancing Test:
1. Economic impact of the regulation on the landowner
-court suggests that diminution in property value caused by regulation that is reasonably
related to the general welfare is not a taking
2. Extent to which the regulation has interfered with distinct investment-backed expectations
-consider the landowners reasonable expectations when he invested in the property
-may be relevant how long P has held the property
-consider whether government takes property right after purchase (unfair) vs. landowner has had
time to accrue value on his investment
-applies to sale of property as well
3. Character of the government action
-a taking is more readily found when the government has physically invaded the property than
when interference arises from some public program adjusting the benefits and burdens of
economic life to promote the common good
1. Is government physically intruding?
-consider how long and how intrusive (Causby: military planes flying over chicken farm
was permanent intrusion b/c of their frequency)
2. Does the government authorize 3rd parties to come onto your property
-Kaiser-Aetna: nullifying right to exclude is a significant taking
-lagoon shallow pond neighbors contacted by group that wants to clean it out if
cleaned, pond becomes navigable, thus giving public has access to neighbors sue
as a taking
-Pruneyard Shopping Center: however, right to exclude is not decisive
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-private owner has business with a shopping center on itlaw prohibits owner from
excluding pamphleteers court held owners rights are not as severely infringed
still has right to regulate time, place, and manner of who enters his private property
-Application:
-did not interfere in any way with the terminal's present uses and P's primary expectation concerning
the use of the parcel (direct investment)
-shifted airspace above Penn Central to other locations via transferrable development rights, thus they
did not take them (character of government action)
-dissent argues this just gives owner right to sell property (not real property rights) and TDR
means taking has occurred and TDR is just compensation
-restrictions imposed did not prevent Penn Central from ever constructing above the terminal in the
future NY's objection was to the nature of the proposed construction and not to construction in
general implemented to "enhance" the Terminal (character of government action)
-preventing the construction of a 50-plus story addition above the station was a reasonable restriction
substantially related to the general welfare of the city (preserving landmarks)
-precedent holds that diminished value as the result of rezoning did not amount to a taking
-DISSENT: does not equate the Landmarks Law with a zoning regulation. The dissent argues the effect of
the Landmarks Law is to place an affirmative duty on the owner of a designated property to
maintain the property as a landmark at his own expense
h. Loretto v. Teleprompter Manhattan CATV Corp. (1982) p. 941 Permanent Physical Occupation
-FACTS: NY law provides that landlord must permit a cable company to install its cable facilities upon his
property Appellant did not discover the existence of cable until after she had purchased the
building. She brought an action against Teleprompter, alleging that the installation was a taking
w/o just compensation AC decided this was not a taking SC reversed
-HOLDING: a permanent physical occupation authorized by government is a taking without regard to the
public interests it may serve
-the historical rule that a permanent physical occupation of anothers property is a taking has more than
tradition to commend it. Such an appropriation is a serious invasion of a property owners interest:
-owner has no right to possess the occupied space to himself
-no right to exclude others
-forever denies the owner any power to control the use of the property
-the size of the area occupied under the taking is not important in this context
-DISSENT: there has not been a taking b/c the invasion is slight and does not amount to a large intrusion
-NOTE: Loretto decision can extend to the taking of personal property too
i. Lucas v. South Carolina Coastal Council (1922) p. 950 Regulation erodes all economically beneficial uses
-FACTS: Petitioner purchased 2 beachfront lots. He intended to build single-family homes on each lot but the
legislature passed an act that barred it and rendered property valueless. The Acts stated purpose
was to protect property from storms, tides and beach erosion and as an environmental protection
Petitioner did not challenge the states right to pass the Act or its justifications Petitioner just
claims that the Act resulted in a taking b/c he cannot use it for the intended purpose
-HOLDING: if a regulation prohibits all economically beneficial use of land and the proscribed use could not
have been prohibited under a given states nuisance law, the regulation is a taking which
requires just compensation to be paid to the landowner
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-it is unreasonable for a state to prohibit the owner from using the land as he originally intended, unless it
can be shown that this use results in a nuisance or that general property law prohibits such a use
-mandated preservation of private land looks like a conversion of private property to public (a classic
taking)
-regulation of land use must account for owners traditional understanding as to the states power over
their property rights.
-ex. the owner of a lake bed is always aware that he may be stopped by law from flooding adjacent
property. However, here, since a states common law principles would not prohibit one from
building on the land, a taking has occurred
-DISSENT (Blackmun): the majority has created a new rule and exception that are not based on precedent and
would apply in a very situation that does not exist in this case (100% valueless
cannot be defined objectively)
-DISSENT (Stevens): majoritys rule is arbitrary b/c 95% diminution in value receives nothing while 100%
recover the lands full value + two practical effects: (1) courts will alter the definition
of the denominator to render the categorical rule meaningless OR (2) investors will
manipulate the relevant property interests giving the categorical rule sweeping effect
-NOTE: court does not define economically beneficial useis there a difference between economically
beneficial use and economic value?
-Palazzolo p. 963
-removing 100% economically beneficially uses only temporarily does not constitute taking away all
economically beneficial uses
-landowners who obtain property after regulations are already in place can still bring a claim to challenge
regulation
-reinforced zero-value requirement (rejected Ps claim when there was a 94% reduction)
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What should Seale (the grantee from Smith) have done to make sure his deed was validly recorded? He should have recorded
the Smith to Seale conveyance before recording his own, or he should have had Seale record first before he took the property
from Seale. Did he have the responsibility to discover the hidden defect in the deed from Caroline Messersmith to Smith? No,
he just needed to connect the dots. Wouldn't that have been a huge burden? Yes, it would have. But, had the correct links in
the chain been recorded, his deed would not have been wild (outside the chain of title).
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