PROPERTY

POSSESSION AND THE INTIAL ACQUISITION OF PROPERTY RIGHTS THE RIGHT TO EXCLUDE

ACQUISITION BY OCCUPATION, “DISCOVERY,” AND CAPTURE [1-12]- occupation doctrine …the capture of an item is sufficient to gain possession, but the chase of such an item is not sufficient to gain possession

-sometimes applies to wild animals, oil, gas resources, and sometimes water -this goes against the principle of first in time -in close cases, courts may look to customs or usages prevailing in the activity or trade involved (Ghen)-malicious interference with a chase is not acceptable, but if the injury is a consequence of fair competition then one may not be liable (Keeble)

-power to exclude (bundle of sticks), not achieved in Post-creates incentive for competition

-accession doctrine…-the ownership of one thing sometimes depends on the ownership of another…

-applies to hard rock minerals, and sometimes water-ownership of animal may depend on whether or not it is on one party’s land

-rationale soli doctrine…constructive possession of animal-rarely used doctrine

ACQUISITION BY CREATION [12-14]-labor theory…expenditure of work, time, and cost into creating property provides ownership for the creator

-rewards labor and investment-the absence of property rights can dampen production, but recognition of hem can create costly monopoly power

-too many property rights (IP) can stifle competition

PROPERTY IN ONE’S OWN PERSON [14-18]

Type of remedy sought

Invasion of Personal Property

Invasion of Real Property

Action for damages Conversion Trespass

Action for specific relief

Replevin Ejectment

-Conversion-To establish a conversion, P must establish an actual interference with his ownership or right of possession….Where P neither has title to the property alleged to have been converted, nor possession thereof, he cannot maintain an action for conversion

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-rejection of conversion claim pertaining to usage of biological materials extrapolated from P’s body (Moore)

-decision rests on economic incentives (research), do not want to commodify the body

THE RIGHT TO EXCLUDE AND ITS LIMITS [18-21]-the right to exclude (others from the use of your property), and the related right to include (arguably the power to transfer)-- the power to allow selected others to enjoy the use of your property -- together are necessary and sufficient conditions of transferability

-depending on what you are doing with your property, you may waive your right to exclusion

-i.e. the ownership of real property does not include the right to bar access to governmental services available to migrant workers and hence there was no trespass within the meaning of the penal statute. (Shack)

-also, civil rights legislation forbids various forms of discrimination- Some argue that limitations on the right to exclude can be defined by the reliance interest in property

POSSESSION AND THE ACQUISITION OF PROPERTY RIGHTS IN OTHER’S PROPERTY

FINDERS OF PERSONAL PROPERTY [21-28]-The finder of the lost property holds it, at least for a certain time, in trust for the benefit of the true owner; thus he is a custodian, or “bailee” for the true owner. What is important for our purposes here is that the finder has right superior to those of everyone except the true owner.

-prevents disorderly scrambles for possession-this goes against the principle of finders, keepers-Property ownership is relative

-Finder may have property right relative to third party but not to the true owner.-jus terii (defense)

-in an action to recover real or personal property (either for specific relief or for damages) a party will acknowledge that he or she is not the owner and thus isn’t really the person most entitled to the property, but argues that opposing party should not recover because the he also isn’t the owner.

- some courts conclude that concern about protecting the true owner A (when and if s/he shows up) counsels against allowing B (the prior possessor) to recover damages from C (the second possessor) in the first lawsuit-- but most courts do not draw this conclusion. That is, in a damages context, the jus tertii defense is sometimes treated as valid, though the majority rule is to the contrary (we do not want to risk having C having to pay double damages). On the other hand, almost all US courts would allow the non-owner/prior possessor of land (B) to recover the land in an ejectment action against C.

-Analysis of finders cases-Is the finder contending with an owner?...owner wins-Is finder contending with subsequent possessor?...finder wins-Is finder contending with premises owner?

-Is property lost or mislaid?2

-Lost…-if it is in or attached to the ground…premises owner wins (PO constructive possession)-On the ground…

-Finder is working for the owner…premises owner-Anyone else…

-Open to public-And owner doesn’t know its there…finder

-Bridges-Closed to public (private)

-And owner does know its there…premises owner

-SSW, Hannah-Owner does not know object is there, finder is meritorious, owner is not in possession of land…finder (Hannah)

-Without one of these factors…maybe premises owner (although we do not have a case here)

-Mislaid…premises owner

ACQUISTION BY ADVERSE POSSESSION [28-46]-AP both clears title of Owner and also grants title to Possessor

-we should always have one owner-AP comes into play when statute of limitations (for trespass or ejectment) runs-Once acquired, this new title “relates back” to the date of the event that started the statute or limitations running, and the law acts though the adverse possessor were the owner from that date.

-It is useful, in thinking about the law of adverse possession, to consider the doctrine from different PERSPECTIVE: (1) the perspective of an owner of property who may lose it by adverse possession, and (2) the perspective of a possessor of that property (not the owner), who may be about to become the owner by adverse possession.

-review AP problem from side of perspectives of lax/non-lax owners and diligent/non-diligent possessors-policy rationales: punish owners, reward possessors, clarify ownership-pragmatic rationales:

-SOL has run out and Owner cannot sue-We do not want to create an incentive for self-help- Possessor has the rights to the property against anyone except the Owner (jus tertii)…once the Owner loses his right due to SOL, the Possessor gains all rights and becomes the Owner.

-AP is usually used as a defense, but sometimes in declaratory judgment actions-Five qualitative elements of AP:

(1) the possession must be hostile-Hostility= lack of possession + lack of estoppel (i.e. cannot say “don’t worry about me, I’m not an AP”)-standards

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-objective standard-current standard-state of mind is irrelevant

-good-faith standard (subjective test 1)-aggressive trespass standard (subjective test 2)

-possession can start as hostile and become non-hostile (2) it must be actual

-Possessor must be doing something that Owner can sue him for…Possessor must assert actual possession by using land as a reasonable owner would

(3) it must be open and notorious-Most courts are going to say that the test is actual or reasonable (constructive) knowledge (in the exercise of due diligence) of AP

-minor encroachment may not suffice(4) it must be exclusive

-Possessor must be the only one has been in possession-if the ownership is collective it may indeed be enough determine the ownership as exclusive-must exclude as a reasonable owner would

(5) it must be continuous-Possessor’s stream of possession cannot be broken by the owner

-it would not be considered discontinuous if a reasonable owner would not have been continuous in a particular situation

-and one quantitative element…SOL (SOL runs when all 5 other elements are in place)-the owner cannot break the possession of the possessor

-The claim of AP may continue unbroken by a succession of tenants and where this occurs the adverse possession may be just as effectual as though the premises were held during the whole period by one person. All that is necessary in order to make an adverse possession effectual for the statutory period by successive persons is that such possession be continued by an unbroken chain of privity between the adverse possessors.

-privity allows Possessor to tack on time of possession from previous Possessor (only when transfer is voluntary)

-thus, if the transfer is not voluntary, the time cannot be tacked on by the subsequent Possessor

-cannot tack if property was abandoned -sometimes if original Possessor regains possession from third-party possessor, he may be able to tack on the third-party possessor’s time of possession onto his own claim for AP-Possessor may be able to tack on time even if land changes the original Owner devises his life estate

-Most American states say that if the SOL of has occurs entirely during the life estate, the claim of the individual being granted remainder has not expired

-In sum, a change of ownership does not restart the clock. A change of possessorship, if voluntary and intentional (thus establishing privity), does not restart the clock. A change of possessorship, if involuntary, does restart the clock.-to be a possessor requites that you act like an actual owner

-disability and AP4

-Statutory provisions often are extended (“tolled” is the technical word) when the Owner has a legal disability

-Disability must be present when the action accrues-focused on “laxness” of owner

-owner + disability…owner with disability= 10 year toll (for example)-you either get the full 21 year SOL or you get 10 years from the removal of he disability, whichever comes later

-when a continuously disabled person dies, the heir inherits that owner’s toll and may bring the action within 10 years of the end of the owner’s disability or death-when you have two disabilities when the claim accrued, you get the 10 year toll from whatever disability is removed later

ESTATES IN LAND

FEE SIMPLE [47-50]-The fee simple is as close to absolute ownership as our law recognizes. It is the largest estate in terms of duration. It may endure forever.-inheritance of a fee simples

-If a person dies intestate (that is, without a will), the decedent’s real property descends to his issues, if no issues then heirs, if no heirs than a spouse, if not spouse then collateral kin -if no next of kind can be found, then the property escheats to the state

-fee simples absolute-could last forever; present estate; inheritable; no conditions, it is absolute-no limitations to inheritability

THE FEE TAIL [50]-A fee tail is an estate in land created by a conveyance “to A and the heirs of his body.” It is an estate precisely tailored to the desires of the medieval dynasts. The fee tail descends to A’s lineal decedents (“heirs of the body”) generation after generation, and it expires when the original tenant in fee tail, A, and all of A’s descendants are dead.

-Fee tail is not really important today-most states will give the grantor a fee simple if today he says “to A and his heirs”

TRANSFER VOCABULARY [50-51]

-Property can be transferred either while the transferor is living (inter vivos) or effective upon death of the transferor. Transfers in the second category – those effective upon death of the transferor – can be done by will, or in the absence of a will (intestacy), happen by operation of law. Each situation has its own special vocabulary:

-Transfers effective while the transferor is living (inter vivos)-Real property (land and building) is granted or conveyed to grantee by a written instrument called a deed

-Generally deeds are not used to transfer personal property inter vivos

-If personal property is transferred inter vivos by gift it is given to a donee5

-Transfers upon death by operation of law in the absence of a will (intestacy)-Real property descends to heirs-Personal property is distributed to distributes

-Transfers effects upon death by will-Real property is devised to devisees-Personal property is bequeathed to legatees

OVERVIEW OF THE ESTATES SYSTEM [51-54]

-Estate classification variables-(1) how long it can potentially last-(2) when it begins-(3) how and by whom it is inheritable-(4) whether there are conditions that must be satisfied in order to take possession of the property (conditions precedent) and/or conditions that, if violated, cause the possessor to lose the right to the property (conditions subsequent)

-A tip about nomenclature : Future interests must be created originally in either the grantor or in a third party (that is someone other than the grantor and other than the grantee of the present interest). If a future interest created originally in the grantor or in a third party is subsequently transferred to the other kind of grantee, it still keeps its original label

LIFE ESTATES [54-56]-A conveyance “to A for life” gives a A a life estate that lasts for the duration of A’s life. A can transfer his life estate to B, in which case B has a life estate pur autre vie – that is, an estate that is measured by A’s life span, not B’s. If B dies during A’s lifetime, the life estate passes to B’s heirs or devisees until A dies. Every life estate is followed by a future interest – either a reversion in the transferor or a remainder in a transferee. -Words needed to create life estate… “to A for life”

-O could also say “to A for the life of B”-4 Attributes:

-duration: life of the person the estate is measured by-cannot leave life estate to corporation

-inheritability: life estate is inheritable when it is a life estate pur autre view-present or future interest: you can stack life estates

-to “A for life, then to B for life”-to A…present estate-to B…future estate

-conditions-usually absolute-but life estates can be conditional

-rare though because the interest is relatively short term-Reasons for the life estate

-Person gets to control land after his death-Reflects past institution of gender roles

-Husband often gave wives a life estate, but in essence took away the power to dispose of it

-Relationship between AP and life estates6

-ex: Suppose that O wishes his wife, W, to have the use of his land for the rest of her life after he dies and wishes his son S to have the land after W dies. He devises a life estate to W with the remainder to S.

-Now suppose that after O dies, W tires of the old place and moves elsewhere. AP enters and possesses for the statutory period. Now W dies and S brings an action of ejectment against AP. What result? Most courts hold in this situation that S's action is not barred by the statute

-you cannot “devise” a life estate

WASTE DOCTRINE [56-59]-In the absence of any contract, express or implied, to use the property for a specified purpose, or to return it in the same condition in which it was received, a radical and permanent change of surrounding circumstances, such as is presented in the case before us, must always be an important, and sometimes a controlling, consideration upon the question whether a physical change in the use of the buildings constitutes waste.-Two policies behind waste doctrine:

-(1) maintaining economic interests of future/concurrent owners-the preservation of property for the benefit of the owner of the future estate without permanent injury to it-an improvement for one purpose, may be a waste for another

-(2) maintaining identity of the property-somewhat obsolete… in the past, one concern was the present owner would not be able to tell what property was his because land markers have been changed (this is before the emergence of recording)

-Remedies in waste cases-(1) injunction if you get there in time-(2) damages if you don’t get there in time-(3) if present owner commits waste, they forfeit the property to the future owner

-Two categories of conduct amounting to waste-Affirmative waste

-Voluntary acts-Permissive waste

-Failure to take responsible care of the property

DEFEASIBLE FEES AND ACCOMPANYING FUTURE INTERESTS [60-63]

(1) Fee Simple Determinable

-Language: G grants “To A and his heirs so long as (or: while, until) the land is used for school purposes” {+ optional (nonessential) addition: “if the land is used for other purposes it shall revert to G and his heirs”}

-FSD + (optional and nonessential POR)-A violation of the stated condition is said to automatically give the holder of the possibility of reverter the right to possession of the property; the holder of the possibility of reverter does not have to assert his/her right.

-Important: This means that if the holder of the P.O.R. takes no action to re-enter or retake the land after the condition is violated and this goes on for the period of the statute

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of limitations the P.O.R. expires and the fee becomes absolute by operation of adverse possession

-associated future interest: in the above grant G has the “possibility of reverter” (P.O.R.)-POR-when condition is violated the property automatically comes back to the grantor

-main attributes-normally a present fee, but you could make it future-could last forever as long as you keep to the conditions-inheritable-vested estate because there is no condition precedent, but you can lose it

-FSD can transferred inter vivos or by death by will or by intestacy -most states allow transfer of the possibility of reverter inter vivos

(2) Fee Simple on Condition Subsequent

-Language: G grants: “To A and his heirs, but if (or: “provided that if”, or upon the condition that if) the land is used for other than school purposes, G shall have the right to enter and declare the estate forfeit.”

-associated future interest: in the above grant G has the “power of termination or “right of entry” (ROE)-FSCS + (“power of termination” or “right of entry”)

-A violation of condition is said to confer on the holder of the power of termination a discretionary right to take back the land which has to be asserted to take effect. But there is no fixed time limit for asserting this right of entry. The traditional view is that the statute of limitations on an ejectment action to retake the property does not start running until the right of entry is asserted. This means the statute of limitations on the action to recover the land after a violation of the stated condition is less likely to run out than the statute of limitations on the action to recover the land after a violation of the stated condition where the estate was a Fee Simple Determinable.

-SOL runs only when the holder of the reversionary right has asserted that right and has been refused

-Note that this means that if a condition has really been violated, and the Grantor is trying to take the property back, and a lot of time has passed since the violation first occurred, it is better for the grantEE if s/he can show that s/he had a fee simple determinable, and not a fee simple on condition subsequent. This may seem counterintuitive, but is nonetheless true. Students often reason that it is better for the grantee to have a fee simple on condition subsequent, because that does not terminate automatically. But that doesn’t matter once the grantor is trying to take the land back. As a practical matter, the main difference that flows from the fact that a violation of the condition terminates the fee simple determinable automatically is that the statute of limitations on the grantor’s right to take it back is more likely to have run out

-grantor may often argue for FSD and grantee may argue for FSCS-FSD…SOL starts running when the conditioned is violated

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-FSCS…SOL starts running when the right of entry is asserted (3) Fee Simple Subject to an Executory Limitation

-Language: G grants “To A and her heirs so long as (or while, until) the land is used for school purposes; if the land is used for other purposes to the Greenspace Conservancy.”

-associated future interest: in either version of the above grant, the Greenspace Conservancy has an executory interest-FSSEL + executory interest

-A violation of condition is said to automatically trigger the executory interest at the time the condition is breached even without any action by the holder of the executory interest. This means that if condition is violated and the holder of the executory interest takes no action to re-enter or retake the land for the period of the statute of limitations that interest expires and the fee becomes absolute by operation of adverse possession

-if executory interest is transferred back to the grantor, it is still called an “executory interest”

-You might think there should be a 4th kind of Defeasible Fee, but there isn’t. Let me explain. If you think about it, the Fee Simple Subject to an Executory Limitation (“FSSEL”) (#3, above) is a variation on the Fee Simple Determinable (“FSD”). They both terminate automatically when the stated condition is violated, and they use similar language. The difference is that when an FSD is created the associated future interest is placed in the grantor; when an FSSEL is created, the associated future interest goes to a third party.-So what if G granted “to A and her heirs, so long as the property is used for school purposes; if the land is used for other purposes the Greenspace Conservancy may enter and declare the property forfeit.” G is trying to create an interest like a Fee Simple on Condition Subsequent, but with the future interest in a third party. You’d think this would terminate in the discretion of Greenspace, not automatically. That apparently is what G wants, but it not what will happen. If G does this, G will create a FSSEL; Greenspace will get the future interest, but it will take effect automatically if the stated condition is violated.

-Why? We are not respecting G’s intent.-The short answer is that if we let Greenspace have a discretionary power to take the property back after the condition is violated we would create a serious Rule Against Perpetuities problem. So we treat this language as creating a FSSEL even though that is not what G wanted, so far as we can tell.

-Convenants distinguished-Conditions imposed by the grantor in creating defeasible fees must be distinguished from covenants (promises) made by a grantee. A condition is much more onerous than a covenant. If a condition is breached, the land is or may be forfeited to the holder of the future interest. A covenant is a promise by the grantee that a specified act will be performed. If a covenant is breached, the promisee may sue for an injunction or damages.

-note: don’t forget that the present estate owner must still observe the waste doctrine (for the future interest), along with the conditions of their estate if they exist

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-note: there are defeasible life estates and defeasible leaseholds as well

FUTURE INTERESTS [63-75]

-Future interests can only be created when there is a present interest less than a fee simple absolute. So the present interests we have already met come packaged together with associated future interests that “follow” the present interest.

-present interests: fee simple absolute (most impt estate by far); fee tail (obsolete), the life estate; three kinds of defeasible fees; LL/T….the estate for years, the periodic tenancy; the tenancy at will; the tenancy at sufferance

-Each of the defeasible fees has a particular accompanying future interest: -the FSD is followed by a Possibility of Reverter; -the FSCS is followed by a Power of Termination (or Right of Entry, another name for the same thing)-the FSSEL is followed by an Executory Interest

Catalogue of Future Interests-future interests created initially in grantor

-Reversion -a future interest created initially in a grantor who himself/herself starts off with a vested interest and then transfers less than all of it to a transferee who also gets a vested interest -- the reversion is the left over future interest-following Life Estate or Fee Tail or Leasehold-note: if O grants a life estate to A, and then a contingent remainder to B, O implicitly retains a reversion, which takes effect if B does not satisfy the condition imposed on his remainder.-all reversions are technically vested

-Possibility of Reverter -following FSD

-Power of Termination -following FSCS

-future interests created initially in a third party-Remainder

-is a future interest created in a third party, following immediately a present interest (or another remainder)-following a Life Estate or a Fee Tail-These can be further classified as

-vested remainder- A vested remainder is a remainder created in a specific (ascertained) person and is not subject to any condition precedent (pronounced pre-see-dent) other than the expiration of the preceding estate. It is transferrable inter vivos by deed, upon death by will, and upon death by intestacy

-the condition that you have to wait for the expiration of the preceeding estate does not make the interest condition

-contingent remainder-A contingent remainder is remainder where the identity of the

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person to take it is not definitely ascertained, OR where the right to possession is made contingent on some event that must take place in order for the grantee to take possession (a condition precedent). In the heyday of the common law (“at common law”), contingent remainders were transferrable by intestacy or by will but not by deed. But almost all most US states now allow these transfers

-executory interest-If a future interest does not fit the definition of a remainder because the interest does not follow the life estate immediately, then we call the interest that results an executory interest-following a fee simple subject to an executory limitation-others that are a subtle variation on a contingent remainder (they would be contingent remainders but follow a life estate after a gap in time, rather than immediately)-Executory interests either divest (that is, take away) some other interest in another transferee, or divest the grantor at some point in the future after the end of the present interest granted by the grantor. -most (but not all) executory interests are also contingent

-why contingency matters-Transferability: Under the traditional common law rules, contingent remainders could not be conveyed inter vivos, while vested remainders could be. Both kinds of remainders could be devised by will, or descend by operation of law to an heir in the event of intestacy.

-Today this has changed in almost all states so that contingent remainders can be conveyed inter vivos as well.

-Destructibility and Merger: Next, contingent remainders (but not vested remainders) were subject to doctrines known as destructibility and merger at common law, which are explained further below-Perpetuities: Contingent interests, including both contingent remainders and executory interests that are contingent, are, however, still subject to the rule against perpetuities. Vested remainders (and all reversions) are not subject to the rule against perpetuities.

-examples…distinguishing vested and contingent remainders (p. 68)-destructibility

-Under traditional common law rules, and today, contingent remainders are destroyed and G’s reversion becomes absolute and possessory if the condition precedent isn't satisfied, and cannot, in its nature still be satisfied, when the preceding estate expires.

-Such destruction is intentional in the sense that it appears to effectuate the grantor's intent.

-counter-intentional destructibility-At common law, that is under the classical common law rules, contingent remainders were also destroyed if the condition precedent had not been satisfied at the time of the expiration of the immediately preceding estate, even if the condition is one that might, given its nature, still be satisfied in the future.

-this was done at CL in order to foster freer alienability of land-today, the grantor takes an interim reversion if and when the life estate expires before the condition has been satisfied. The reversion

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continues until the condition is satisfied.-most states have abolished counter-intentional destruction so as the effectuate the original intention of the grantor

-within this context, the contingent remainder has converted into an executory interest

-merger-intentional (simple) merger

-i.e. G grants to A for life, and retains the reversion, but G subsequently conveys the reversion to A

-counter-intentional (squeeze out) merger-i.e. G grants to A for life, then to B if he shall have attained the age of 21, and retains the reversion; G subsequently conveys the reversion to A-no longer really exist

-CL allowed them to foster freer alienability of land by getting rid of a contingent interest where possible; this was viewed as limiting the impact of the dead hand of the past-No longer exist in order to effectuate the apparent intent of the original grantor

RULES AGAINST PERPETUITIES [75-86]

-another doctrine designed to foster freer alienability of land-RAP applies separately to uphold or invalidate each separate interest created by a grant, rather than to determine the validity of the grant as a whole.-RAP… A future interest (created in a person other than the grantor…not vested present interests…when analyzing problem mention that the present interests there cannot violate RAP), if it is to be valid, must be certain to vest, if it is ever going to vest, within a period equal to 21 years plus the duration of someone’s life who is alive at the time of the conveyance.

-RAP does not apply to vested interests-policy behind the rule… so you could also think of the RAP as a prohibition on creating perpetual uncertainty as to who will own the property

-Practical observation: When A FSSEL is created, placing the executory interest in a third party (that’s what makes it a FSSEL!), the executory interest will usually violate the RAP if the condition stated in the FSSEL is open-ended that is, perpetual in nature

-the remedy for an invalid Executory Interest following a FSSEL effectively turns the FSSEL into an FSD followed by a POR.

-measuring lives-Instead we can restrict our consideration of candidates for a validating measuring life to the persons granted an interest in the property (either a future interest, or a present interest) by the instrument that creates the contingent interest being tested under the RAP, plus one more group of potential measuring lives.

-That additional group consists of another person or group of people expressly named for this purpose in the instrument.

-note: When the language is contingent, but the condition has already been satisfied, the interest is no contingent and thus RAP is not violated-note: the law traditionally assumed that a woman could have children no matter what her age

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-note: In property law, a child is considered as in being from the time of conception if later born alive

RAP Problem-Solving Strategy1) Is there a contingent future interest? -- that is, a contingent remainder or executory interest: If so, go on; if not, there can be no RAP violation

2) Is every person who might ultimately satisfy the grant condition definitely a person alive at the time of the grant? If not, skip to step 4; if yes, continue with step 3

3) Is the condition one that must be fulfilled within the grantee’s lifetime if it is ever to be fulfilled?- If so, there is no RAP violation; if not, go on to step 4

4) Is the condition one the satisfaction of which will conclusively be determined within 21 years of some other measuring life that is in being at the time of the grant -- usually the life tenant? If so, there is no RAP violation; if not, the interest violates the Rule Against Perpetuities.- What happens if the contingent interest is void?

-if the void interest is a contingent remainder and the previous interest is a life estate, then grantor takes a reversion-if the void interest is an executory limitation following a FSSEL phrased like an FSD most courts will give grantor a possibility of reverter

-if the void interest is an executory limitation following a FSSEL phrased like an FSCS, most courts will give the holder of the FSSEL an FSA

-You can derive these results for yourself, by looking at the original conveyance, and literally crossing out the void interest.

Policy overview-Pro: dead-hand control/intent of the original grantor

-Fee tail-Contingent remainder-Abolished destructibility

-Anti: Dead-hand control/pro-free alienating-Fee tail…Abolition of the feel tail-Contingent remainder…destructibility of contingent remainders & counter-intentional merger-Abolished destructibility….rule against perpetuities

CONCURRENT INTERESTS [86-90]-Exam tip: you can make just about any type of interest a concurrent interest-Four “unities” were essential to a joint tenancy – time, title, interest, and possession

-Time-The interest of each joint tenant must be acquired or vest at the same time

-Title-All joint tenants must acquire title by the same instrument or by a joint adverse possession. A joint tenancy can never arise by inestate succession or other act of law

-Interest13

-All must have equal undivided shares and identical interests measures by duration

-Possession-Each must have a right to possession of the whole. After a joint tenancy is created, however, one joint tenant can voluntarily give exclusive possession to the other joint tenant. (The unity of the possession is essential to a tenancy in common as well none of the other three unities is.)

Tenancy in Common (“TiC”)

Joint Tenancy (with right of survivorship) (“JT”)

Tenancy by the Entireties (not recognized in all states)

rt. of survivorship

no yes--but can be defeated by unilateral conveyance or partition

yes--not easily defeated

severable by unilateral conveyance (to defeat the right of survivorship)

(already"severed")

yes: creates tenancy in common.

no

partitionable by court without consent of other party

yes yes no

requirements unity of possession (undivided common interests in same property)

“four unities”: unity of possession, time, title and interest(see p. 276)

four unities plus grantees must be a lawfully married couple at the time of the grant

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remarksmodern constructional preference presumption favors TiC

common law’s constructional preference presumption favored JT

divorce dissolves into T/I/C; asset distributable in divorce proceeding

Language used to create today

To A and B (as tenants in common)1

To A and B as joint tenants and not as tenants in common

To A and B(, husband and wife) (as tenants by the entireties)

1 Language in parentheses is desirable, but not essential15

Joint Tenancy with right of survivorship you can convey property while you are living, but you cannot devise it or

transfer it by will UNLESS you are the last owner living (but it isn’t even a concurrent interest anymore because you are no longer sharing it)

moite…one’s share of a concurrent interest example

o A + B + C C….D

o (A + B) + D A + B are still joint tenants with right of survivorship D is not a joint tenant with right of survivorship Therefore, the survivor of (A+B) gets the entire 2/3 of

property held between the two of them, and D continues to hold the 1/3 conveyed to him

You need the four unities…look above Language… “to A and B as joint tenants and not as tenants in common”

Tenancy in common There is a right of survivorship unless one of the concurrent interest

holders makes a unilateral conveyance or partition of his share Only one unity required: A and B must be given an undivided share in

some piece of property Tenancy in common is the default interest

Tenancy by the entireties Need four unities plus legal marriage Language: To A and B, husband and wife as tenants by the entireties

o Some jurisdictions assume the a concurrent interest will be held as a tenancy by the entireties on the basis if the two people are legally married (even if they did not specifically ask for it)

CONVEYANCING: INTENTIONAL TRANSFERS OF EXISTING RIGHTS IN REAL PROPERTY

-What do you want your system of conveyancing to do?-Provide a system of notice concerning property rights… “who owns what”-Eliminate conflicting claims of ownership-Make it difficult to inadvertently transfer property-Make transfers possible without undue expense for the parties at interest (buyers/sellers)

-Minimize transaction costs

CONTRACTS FOR SALE OF LAND [90-92]

- Minimum elements of a real estate sales contract 16

-the purchase price and how it is to be paid, including mortgage financing-a legal description of the property to be conveyed; a street address is NOT an adequate description-a description of the quality of title to be provided by the seller, and the evidence to be supplied to document that the seller meets this standard, including any abstract of title to be furnished, and title insurance to be available-Warranties regarding the title provided by the seller, and any limitations or exclusions or defects in the title to be provided-Date of conveyance-Provisions prorating responsibility for utility bills and property taxes-Provisions allocating the risk of destruction of or loss to the property between the time of contracting and the time of closing-itemization of what is being conveyed along with the real estate-the terms of any escrow arrangement -provisions regarding the return of any deposit if the transaction is not successfully completed-the signatures of the parties-In addition, the contract should be in writing

STATUTE OF FRAUDS [92-96]-Both contracts and deeds must be in writing

-Remember throughout these materials that sometimes property is transferred by deed without the preliminary step of a real estate sales contract. Indeed, a valid deed is sufficient to transfer the property, and in donative (non-sales) transactions, such as intra-family transfers, a deed is likely to be the only document. In commercial transactions, including sales of residential property, there ordinarily will be, first, a real estate sales contract, and then, if the deal goes through, a deed

-Keep in mind that you want to separate deeds and contracts for real estate-The SOF requirements for deeds and real estate contracts are different

-The statute of frauds as applied to real estate sales contracts typically requires, either that the contract itself be in writing or that “some memorandum or note thereof” shall be in writing. Not that much detail need be included in such a memorandum: (1) a description/identification of the real estate involved, (2) the signature of the party against whom the contract is to be enforced (the party to be charged), and (3) the price, if agreed on. More information can be, and typically is included, but these are the key elements required to satisfy the statute of frauds as it applies to real estate sales contracts.-As for deeds, the typical requirement imposed by the statute of frauds is that any conveyance of an interest or estate in real property (more than a relatively short term lease) be “made” in writing. Key elements to be included in the writing are discussed in a subsequent portion of the materials (for Assignment #23).

-For deeds, SOF cannot be a “memorandum”….conveyance must be “made” in writing-For deeds, only the signature of the grantor is needed

-exceptions to the SOF requirement for a writing as applied to real estate contracts-part performance/estoppel

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-Part performance-Do not need detrimental reliance

-i.e. buyer going into possession-Estoppel

-Need detrimental reliance-i.e. detrimental reliance on the transfer of land going through

-two types of SOF cases -technicality cases

-it is admitted that there was an oral agreement, but there is a question about the paperwork

-cases where one party denies ever going into any kind of contract with the other party

-two steps to SOF cases-try and find some writing to satisfy SOF-try to find some exception to the SOF if one cannot find a writing

-note: keep in mind the transfer of deeds to “straw” persons

MARKETABLE TITLE [96-98]

-Defects making a title unmarketable-Anything in the record chain of title indicating that the vendor does not have full interest which he purports to convey may be a defect-Encumbrances

-An outstanding mortgage or lien would be an encumbrance making the title unmarketable

-However, the vendor has the right to pay off the mortgage at the closing, out of the sale proceeds

-An easement will be a defect if it reduces the full enjoyment of the premises-Similarly, privately-negotiated use restrictions (e.g. a covenant whose burden runs with the land, to the effect that only residential structures will be built) can be a defect

-Default rule: covenants (even if not violated) render titles unmarketable

-Default rule can be overcome by a contract provision (as in Lohmeyer)

-Violation of covenant (encumbrances of record) overcomes contract (or assumption of noticeable defect) and renders title unmarketable

-Most courts hold that violations of building codes are not encumbrances on title, but a violation of a zoning ordinance usually is treated as an encumbrance.

-Zoning ordinance does not render a title unmarketable, but a violation of a zoning ordinance may

-zoning ordinances only render a title unmarketable if they

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are violated, while covenants render title unmarketable even if they are not violated

-Agreement-But the parties may agree that certain kinds of defects will not constitute unmarketable title. This agreement will normally take place in the contract of sale.-Buyer on notice of defect

-Also, the buyer may be held to be on notice of certain defects, and therefore held to have implicitly agreed to take subject to them (e.g. where a right of way across the property is very visible to anyone who looks even casually at the property)

-Sometimes if a physical inspection of the real estate would have put a reasonable person on notice that a title may be unmarketable, then courts will sometimes hold that the title cannot be held to be unmarketable

-Time for measuring marketability -Unless the contract specifies otherwise, the vendor’s title is not required to be marketable until the date set for the closing. Thus the vendor may sign a contract to sell property he does not yet own (or on which there are several defects in the title), and the purchaser cannot cancel the contract prior to the closing date because of this fact.

-If title is unmarketable, the normal remedy is rescission of contract and return of title to the Buyer

-Remedy is not specific performance or equitable damages-Unmarketable title is not so hard to establish and the damages are not so severe

-Defects might not make title unmarketable…but it may bring about other problems…implied warranty of quality

IMPLIED WARRANTY OF QUALITY [98-100]

-privity of contract is not necessary for a subsequent purchaser to sue a builder or contractor under an implied warranty theory for latent defects which manifest themselves within a reasonable time after purchase and which cause economic harm

-this evidences a movements away from the doctrine of caveat emptor-limitations

-(1) latent defects which become manifest after the subsequent owner’s purchase and which were not discoverable had a reasonable inspection of the made prior to the purchase-(2) latent defect must manifest in a reasonable time-(3) P still has the burden to show that the builder caused the defect

-a warranty of quality is not normally implied where the seller is not a “merchant of housing,” that is, a builder, subdivider, or commercial vendor. Suits against a person who sells his home to another ordinarily must be based on fraud, misrepresentation, or failure to disclose.

-implied warranties are usually limited to the original builders

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DEEDS [100-107]

-Deeds v. Contracts-The deed typically replaces the contract as the embodiment of the parties’ relationship. Under the doctrine of merger, most obligations imposed by the contract of sale are discharged unless they are repeated in the deed. Thus, if the contract calls for merchantable title, as embodied in a warranty deed, but the purchaser carelessly accepts a quitclaim deed, the buyer will not be able to sue on the contractual provisions if the title turns to be defective he is limited to the provision of his deed. Thus, the contract is relevant only during the gap between its signing and the delivery of the deed.

-It is not so much that the deed and contract govern separate things, but thatthey govern the respective rights of the parties for different intervals of time. The contract governs the rights of the parties between the time it is signed andthe closing.  The deed governs the rights of the parties thereafter.

-SOF-1) names of the grantor and grantee, 2) language indicating a present intention to transfer the land (not just a promise to do so in the future), 3) an intelligible/legal description of the land involved and the estate granted, and 4) the signature of the grantor. Note that the signature of the grantee is not required. However, as you will see later in the semester, particularly in the units on easements and covenants, it is not unusual for a deed to contain provisions whereby the grantee grants back to the grantor, some lesser interest in the land that was conveyed. Many, if not all, states require the grantee to sign the deed in at least some of those situations. So it is a good idea to have the grantee sign the deed.-The part performance and/or equitable estoppel exceptions to the statute of frauds are applicable to the requirement that a deed be in writing (as well as to the requirement that a memorandum of a land sale contract be in writing, covered in the last assignment.)

Parts of a deed-example on pages 514-515

-(1) premises clause-the names of the grantor and the grantee-verbs/words of conveyance, such as “grant” (These are often multiplied unnecessarily, out of an abundance of caution. This was a legacy of a system in which (formerly) there was a particular verb of conveyance that was appropriate for each kind of estate in land. To make sure a grantor used the right one, often, grantors used many or all of them.)-an adequate geographical description of the land conveyed-often times a statement of consideration is put forth

-no actual consideration needed, though-(2) habendum clause

-generally starts with “to have and to hold”-traditionally names the type of estate granted

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-To deal with this possibility, the rule arose that in the event of a conflict between the premises and the habendum clause as to the estate granted, the habendum is allowed to modify the premises clause description, but not to directly override it. Thus, if there is an irreconcilable conflict between the two, the premises clause controls.

-warranties of title Please make sure to note the distinction between the three present

covenants (covenant of seisin, covenant of right to convey, and the covenant against encumbrances), and the three future covenants (covenant of general warranty, covenant of quiet enjoyment, covenant of further assurances). While these are all traditional covenants, the covenants of seisin, right to convey, against encumbrances and quiet enjoyment are perhaps the most standard. In some states, a reference to “the usual covenants” in a contract for the sale of land or even in a deed itself will invoke these four covenants, but not the covenant of general warranty or the covenant of further assurances.

six express warrantieso (1) a covenant of seisin

the grantor warrants that he owns the estate that he purports to convey

o (2) a covenant of right to convey the grantor warrants that he has the right to convey the

property. In most instances this covenant serves the same purpose as the covenant of seisin, but it is possible for a person who has seisin not to have the right to convey (e.g., a trustee may have legal title but be forbidden by the trust instrument to convey it)

o (3) a covenant against encumbrances the grantor warrants that there are no encumbrances on the

property. Encumbrances include, among other items, mortgages, liens, easements, and covenants.

The deed might say free of all encumbrances free of record, not listed, etc.

o (4) a covenant of general warranty the grantor warrant that he will defend against lawful

claims and will compensate the grantee for any loss that the grantee may sustain by assertion of superior title

grantor will pay for litigation against meritorious claims i.e. claims of adverse possession

if meritorious claim wins, there is an implied indemnification of the buyer by the seller

the seller will make the buyer whole o (5) a covenant of quiet enjoyment

the grantor warrants that the grantee will not be disturbed in possession and enjoyment of the property by assertion of

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superior title. This covenant is, for all practical purposes, identical with the covenant of general warranty and is often omitted from general warranty deeds.

o (6) a covenant of further assurances the grantor promises that he will execute any other

documents required to perfect the title conveyed-when covenant is breached is important for SOL purposesTypes of deeds and the warranties of title-three types of deeds: a general warranty deed, a special warranty deed, and a quitclaim deed.

-A general warranty deed contains most or all of the traditional forms of warranties of title and warrants against title problems, whether or not the grantor created them. -A special warranty deed protects only against defects in title that the grantor created. -A quitclaim deed, distinguished by the use of the verb of conveyance “quitclaim” does not create any warranties (it disclaims warranties, in essence). If a deed does not expressly contain any warranties, but does not use the quitclaim language, some states will imply into the deed some of the standard warranties. The details of that practice will vary from state to state. Some states refer to a deed without any express warranties as a “bargain and sale deed.” As noted, however, some warranties of title may be read into such a deed by operation of law. These labels have no bearing on whether warranties about the physical quality of the property are to be read into the deed.

-Formalities at the end of a deed-signature/testimonium clause

-grantor’s signature-attestation by witnesses

-not required, but desirable-certification of acknowledgement

-note: courts hold that until such time as one holding paramount title assert their right, there can be no constructive eviction and, therefore, no breach of the covenant of quiet enjoyment. (Brown).

ESTOPPEL BY DEED [108]

$ Assume that: A who does not own Blackacre, grants Blackacre to B. Shortly thereafter, O, who does own Blackacre, grants it to A. Under the doctrine of estoppel by deed, B ends up the owner. As the casebook explains this result was originally based on the existence of covenants of general warranty and/or further assurances in A’s deed to B, but apparently this result no longer depends on the presence of that covenant.

-O…A….B-A doesn’t own B before transfer-A later buys land from O

-O’s title later flies through A straight to B

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DELIVERY [108-110]

-In order for a deed to effectuate transfer, the deed must be delivered either directly by grantor to grantee, or by grantor to an escrow agent, who is instructed to deliver the deed upon the occurrence of stated escrow conditions that are provided to the agent as instructions.-Note that when the delivery is made through an escrow agent, the effective date of the transaction for various purposes is said to relate back to the date of the delivery to the escrow agent, even though the delivery by the agent to the grantee occurs, or was supposed to occur, later. This relation back doctrine raises some difficulty in connection with the recording acts, as we may see subsequently.-once a dead is given to the escrow agent, the grantor cannot get it back as it is considered“delivered.”-If one wants to make an effective, but conditional, delivery, one normally must use an escrow agent. In some cases a present grant of a future interest may accomplish what is wanted. But where the escrow condition is delivery upon the grantor’s death, some states may hold that this is an invalid substitute for a will.

THE RECORDING SYSTEM [111-120]

-Provides a means to look into the records of the past and also gives an incentive to make a recording of your own-Recordings are made in the time between the signing of the contract and settlement-Policies supporting the recording system (like AP)

-Penalize those who have not recorded-reward those who have recorded

-this is not a system of equity, it is one of exceptions-the system is structured for A to win, but provides for B to win under certain exceptional conditions-deeds do not have to be recorded

-Remember, always, that a recording act creates a defined exception to the common law priority rule of “first in time, first in right.” Under the common law first-in-time rule, if O conveys to A, and then conveys the same interest in the same property to B, A (not B) owns the property. The common law rule remains the “default rule.” So unless the second-in-time purchaser, B in this example, is protected by the applicable recording act, A wins out.

-If A “promptly records” then its property interest is secured-“promptly records”…recording before another person closes on the same property

Four Step Analysis1) Is the first in time interest (A’s interest) one that is required to be recorded under the applicable recording act?

-if not, the common law priority rule is unaltered and the first in time grantee (A) prevails and the recording act analysis is complete; if, however, the first in time interest was one required to be recorded, go on to step #2

-consider broad and narrow types of recording acts-Whether a particular interest is required to be recorded is determined by interpretation of

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the language of a recording statute. Some recording acts are narrow, requiring only conveyances of a fee simple estate to be recorded, others are broad requiring all interests in real property to be recorded. Note that this attribute of a recording act is independent of its character as a race, notice or race-notice statute. See the examples of broad and narrow coverage recording acts on page 5 of this handout.

2) Is the first in time interest (A’s interest) promptly recorded?-If it is, the first in time, A, prevails; if it is not, go on to step #3 -We will see, in connection with our problems in this handout, that “promptly” recorded means recorded before a competing conveyance can take place. -Note that "chain of title" problems can enter at this step—in determining whether an interests counts as recorded-- in cases with more complicated fact patterns.

3) Did the second in time (B) acquire his/her interest by purchase (rather than a gift) so as to make him/her eligible for protection under the recording acts?

-Recording acts in the United States are interpreted to protect only second in time purchasers, even if the language does not say so explicitly. Most of them do say this explicitly. -If the second in time is not a purchaser, common law priority prevails: A, the first-in-time wins; if, however, the second in time grantee (B) is a purchaser, go on to step #4.

-Second in time must be a purchaser, not a donee

4) Has the second in time (B) done the things necessary to beat out the first in time under the particular kind of recording act in effect in the particular jurisdiction?

This is determined by 1) examining the particular recording act and determining what kind it is: a “race statute,” a “notice statute” or “race-notice statute, and then 2) applying the applicable requirements of the specific kind of recording act. -If the second in time (B) has done all the things necessary to beat out the first in time, under the applicable kind of recording act, the second in time (B) wins the priority contest; but if the second in time has not done all that is required under the applicable statute, common law priority still prevails and the first in time wins

Major Types of Recording Acts-Note that differences between the 3 major kinds of recording acts matter only when, and if, the recording act analysis comes down to step 4 of the 4 step analysis that I have outlined above. For each type of recording act, I give sample language, a paraphrase, and some key observations about which second-in-time purchasers win thereunder.

1. Race Recording Act

Sample Language: All conveyances of any interest in real property shall be recorded in the office of the county recorder in which the land is located. If two or more

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instruments are presented for recording concerning the same land, they shall take effect in the order of presentation for recording.

OR

Every conveyance of real estate within the state, which shall not be recorded as provided in this section, shall be void as against any subsequent purchaser from the same grantor, whose conveyance shall be first duly recorded

Paraphrase: No conveyance is valid as against competing purchasers for value unless and until it is actually recorded

Key features:

If A (1) was supposed to record, and (2) did not promptly record, and (3) B is a purchaser, (4) B wins if and only if B records before A

As long as B records before A does, in this situation, B wins even if, at the time B purchases, B already knows about O’s prior conveyance to A.

Conversely, if B does not record before A does, B loses to A; the fact that B does not know about O’s prior conveyance to A when B purchases does not help B.

Makes extra-record notice irrelevant; B can rely on the state of record title; if A hasn’t recorded, B can buy the property and record it immediately and win

B can win even though he has reasons to know about Ao Incentivizes purchasers to record o May have what many consider to be wrongful outcomeso Do not exist in many states

2. Notice Recording Act (example: Florida statute on casebook p. 582; or see sample language here)

Sample Language: Every conveyance of real estate within the state, which shall not be recorded as provided in this section, shall be void as against any subsequent purchaser in good faith from the same grantor

Paraphrase: An unrecorded conveyance of a kind that was required to be recorded is invalid as against competing purchasers for value who take without notice

Alternative paraphrases of a notice statute using the term bfp (as defined on page 2 of this handout):

An unrecorded conveyance of an interest that was required to be recorded is invalid as against a subsequent bfp from the same grantor

or

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No unrecorded conveyance of an interest that is required to be recorded is valid as against a subsequent bfp

Key features: A second in time (B) who is a bfp beats a prior unrecorded deed (to A) even if the bfp B does not record first--i.e., even if the first in time, A, records after subsequent purchaser has purchased but still before the subsequent purchaser records

-under a notice statute, B does not have to win the race to record, B only must be a bfp

-any of the 4 types of notice (LISTED IN CHART BELOW) may can eliminate B’s identity as a bfp

-shelter rule…-A person who takes from a bfp purchaser protected by the recording act has the same rights as his grantor. This rule is necessary if the recording act is to give B the benefit of his bargain.

-The shelter rule does not extend to B’s grantor, O, however. If O repurchased Blackacre from B, O would not prevail over A.

3. Race-Notice Recording Act (example: California statute on casebook page 582 or sample language here)

Sample Language: Every conveyance of real estate within the state, which shall not be recorded as provided in this section, shall be void as against any subsequent purchaser in good faith from the same grantor, whose conveyance shall be first duly recorded

Paraphrase: An unrecorded conveyance of an interest that was required to be recorded is invalid as against a subsequent bfp ---- if and only if the subsequent bfp records before the prior purchaser does.

Comments: To win, the second in time purchaser (B) must both be a bfp at the time of purchase and s/he must also win the “race” to record first. Note that, if B receives actual notice of the prior purchase by A after B purchased and before B records the second in time bfp purchaser B prevails if s/he records first.

-if both criteria are not meet, we refer to the CL default “first in time”- recording acts can be broad or narrow in their coverage—as to which first-in-time interests are supposed to be recorded

- certain smaller “sticks” do not have to be recorded under the narrow statute that have to be recorded under the broad statute

A “universal” recording act template: Distinguishing Race, Notice and Race-Notice Recording Acts

The following is a template that can be adapted to produce a race, race-notice, or notice recording act, depending on which of the two boldface inserts is included:

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“Every conveyance of any interest in real property within the state, which shall not be recorded as provided in this section, shall be void as against any subsequent purchaser (1) in good faith from the same grantor, (2) whose conveyance shall be first duly recorded.”

Insert #1 is present in a notice statute and in a race-notice statute

Insert #2 is present in a race statute and in a race-notice statute

Only the race-notice statute has both inserts.

-structure of recording statutes1) what types of transfers must be recorded2) what types of subsequent purchasers that will void the interest of the first-time purchaser

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E. Types of notice

(All of these kinds of notice would render a second-in-time purchaser NOT a bfp.)

-notice is evaluated at the time of purchase

record notice non-record notice

actual notice actual record notice(second-in-time has checked the records and learns of prior conveyance to first-in-time)

actual non-record notice(e.g., second-in-time reads newspaper account of prior conveyance by grantor to first-in-time)

constructive notice constructive record notice(second-in-time did not check records, but should have and if s/he had would have learned of the prior conveyance to the first-in-time)

constructive non-record notice--includes inquiry notice(second-in-time did not walk past property; but if s/he had; s/he would have seen sign stating “Coming soon on this site: the world headquarters of the First-in-Time Corporation)(example of inquiry notice: second-in-time did not walk past property, but if s/he had she would have found property occupied by someone other than the second-in-time’s grantor, and if the possessor had been asked, s/he would have explained that s/he had just purchased the property from the second-in-time’s grantor)

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A hint about organizing your answers: If B is a purchaser, and there is a recording act, for each of the 3 kinds of recording acts, you can make a table that tracks the factual variations as to whether B is a bfp, and as to when B records. Each cell should record an answer saying who wins, A or B. The tables should look something like this:

Race statute B records before A does (bef. Jan. 5)

B records after A does (after Jan. 5)

(Contrary to the assumptions stated above, A records before B buys on Jan. 3)

B is a bfp ______ wins ______ wins _____ wins

B is not a bfp ______ wins _______ wins _______ wins

Assuming that B is a purchaser you should end up with 3 tables like this; one for each kind of recording act. On the other hand, if B took by gift, OR if there is no recording act, you don’t need this table.

-related problems on page 120.

CHAIN OF TITLE PROBLEMS [120-130]

-Generally refers to the recorded sequences of transactions by which title has passed from a sovereign to the present claimant-It also has a more technical meaning: the period of time for which records must be searched and the documents that must be examined within that time period-a deed that does not name a grantee is a nullity, and wholly inoperative as a conveyance until his name was inserted as grantee

-however, a deed which is a nullity when delivered because the name of the grantee is omitted becomes operative without a new execution or acknowledgement if the grantee, with either express or implied authority from the grantor, inserts his name in the blank space left for the name of the grantee (Hughes)

-We ask whether the second-in-time purchaser acted reasonably in going ahead with his/her closing in light of what s/he should have known if a standard title search had been correctly performed prior to the closing. Usually, if the second in time acted reasonably, the second in time will be given priority. If the second in time acted unreasonably in light of what s/he should have known, the first in time will take priority. -Title search

-What title search methodology tells you is how to work your way through title records in order to locate conveyances that threaten the title to property that you are searching.

-The chain of title principle: a conveyance that cannot be discovered by the title search methodology described here is said to be “outside the chain of title” and is to be treated as non-recorded and thus not protected by the recording acts, even if it is, literally speaking, recorded.

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-Under the traditional system, each deed is indexed twice; once alphabetically by the name of the grantor (in “the grantor-grantee” index) and once according to the name of the grantee (in “the grantee-grantor index”)-constructing chains of title (in notes)

-check both the ascending and descending chains-note: if X discovers that B has no title that shows up in the records –this break in the chain of title—X is not acting reasonably in going ahead and purchasing from O. X will not be protected by the recording act if X goes ahead with the purchase from O.-note: The reason that this check must be made is that if there is such a side branch with priority in time over any link in the chain of title leading to X, that person would be first in time as compared to the grantee who leads to X. Moreover, if such a prior grantee promptly recorded his conveyance (which is the only way he'd show up under the described search methodology) he or she will also be entitled to priority under the recording acts. If this happened, in short, O would be unable to give X a good (marketable) title.-Recap: It is generally said that a conveyance that cannot be discovered by this search methodology is outside the chain of title and is to be treated as non-recorded and thus not protected by the recording acts, even if it is, literally speaking, recorded.

-shelter doctrine-win a party falls under the shelter doctrine, every party in the chain below it also falls under the shelter doctrine

-however, you have to keep in mind that other problems may arise aside from that party faced in the original fork we are considering

LANDLORD AND TENANT

LEASEHOLD ESTATES AND CREATION OF LEASEHOLDS [130-150]

-A term of years is an estate that lasts for some fixed period or for a period computable by a formula that results in fixing calendar dates for beginning and ending, once the term is created or becomes possessory

-no notice of termination is necessary to bring the estate to an end-if T stays in place beyond the end, the holdover doctrine comes into play

-A periodic tenancy is a lease for a period of some fixed duration that continues for succeeding periods until either the landlord or tenant gives notice of termination.

-I.e. “to A from month to month”-Fixed start date, no ending date, continues in intervals-The notice must terminate the tenancy on the final day of the period, not in the middle of the tenancy

-Thus if a month-to-month tenant who began his tenancy on 1/1 decided on 3/20 to terminate, the earliest termination date would be April 30.

-You have to get at least a full month’s notice in regards to the period of the lease

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- A tenancy at will is a tenancy of no fixed price that endures so long as both landlord and tenant desire

-If the lease provides that it can be terminated by one party, it is necessarily at the will of the other as will if a tenancy at will has been created

-Normally both parties are given the ability to end the lease under a tenancy at will

-Garneri seems to think otherwise (aberrant caselaw)-Tenancies at Sufferance

-No one ever means to create a tenancy at sufferance. Rather this is the label we give the interim state that exists when a tenant holds the lease property beyond the end of his/her term. This behavior by the T creates a tenancy at sufferance only for the interim period while the L is deciding whether to evict the tenant or treat the tenant as a holdover tenant. As your casebook explains, p. 372, once the L opts to treat the tenant as a holdover tenant, assuming that s/he is within his/her rights in doing so, either a periodic tenancy or an estate for years is created.

-2 things to watch for:-sometimes the agreement contains a provision determining actions to be take if a tenant overstays

-sometimes it will be to collect double-rent-often times, the L maintains a choice to charge double-rent or hold T over for a new term

-Two situations in which holdover doctrine plays a role-L may have another T coming in and does not want to allow the T to continuing staying

-sometimes, though, L may not have anyone coming in but is merely playing “hard to get”

-L may not have another T coming in and is willing to allow the T to stay-Jusifications for holdover doctrine

-implied-in-fact contract theory-unjust enrichment-in terrorem (incentive)

-Crechale… the court is of the opinion that once a L elects to treat a T as a trespasser andrefuses to extend the lease on a month-to-month basis, but fails to pursue his remedy of ejecting the tenant, and accepts monthly checks for rent due, he in effect agrees to an extension of the lease on a month-to-month basis.

-His acceptance of monthly rent created the month to month lease-If the holding over isn’t voluntary, then the holdover doctrine doesn’t apply

-You must not be physically capable over leaving-Leases and the Statute of Frauds

-Leases are generally subject to the statute of frauds that applies to deeds. All states recognize an exception that permits shorter term leases to be made validly orally. But the exact language of these statutory exceptions varies in ways that frequently creates a trap for the unwary

-In some states the short term lease exception that allows oral leases applies to leases of less than one year; in others it applies to leases of one year or less. The details are critically important, as most leases, at least most residential leases, are

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for exactly one year. So the validity of an oral one year lease depends on which of these two approaches is taken.-But there is another ugly complication. Some states have short term lease exceptions –that is exceptions that allow oral short term leases—that cover leases “of not more than one year from the making thereof.” This language might make you think that a lease for exactly a one year term may validly be made orally. But not so fast! Leases are almost always signed (“made”) on a date before the start of the lease term-even if only by a few days. Those few days can make all the difference under a statute of frauds worded as indicated in this paragraph. For instance, a lease signed by LL and T on June 20, 2008, covering a lease term from July 1, 2008 to June 30, 2009 is MORE than one year long from the making thereof. So such a lease would have to be in writing, if the statute of frauds uses the language described in this paragraph.-Some states have the simpler rule that if an oral lease is made that is too long to be valid under the statute of frauds it is simply cut back to an estate for years of the longest permissible duration-often exactly one year.

Assignments and subleases-Assignment: If there is an assignment T2 becomes liable to L for performance of theobligations under the original lease; but T1 also remains liable to L for the obligations under the original lease; also T2 is liable to T1. So the L can enforce against either T1 or T2. T1 can enforce against T2.

-The only way to get T1 off the hook to L is an assignment to T2 accompanied by a novation Ban agreement by L that expressly substitutes T2 for T1 as the person responsible for performance of the obligations of the tenant under the original lease.

-Sublease: If there is a sublease, T2 ordinarily does NOT become liable to L for the obligations under the original lease. T1 alone remains liable to L for the obligations under the original lease. T2 is, however, liable to T1 for the performance of the obligations under the sublease.

-privity of estate/privity of contract-Under an assignment, privity of estate with L is transferred from T1 to T2; but T1 remains in privity of contract with L. Accordingly both T1 and T2 are liable to L.

-There is still privity of contract between LL and T1-Privity of estate has been extended down to T2…privity of estate is between T2 and LL

-Under a sublease, privity of estate and privity of contract remain between T1 and T2, so only T1 is liable to L; T2 has privity of estate and privity of contract with T1 (not with L) .

-LL and T1 still have privity of contract and privity of estate-This is because the contract is between T1 and T2 and because T1 is T2’s LL

-Modern Rule from Nashville: Courts don't look at the language or technicalities of the instrument as much as the intent of the parties in making the instrument. Intent is all that matters in determining if it is a sublease or assignment.

-CL test…reversionary interest test

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-The first (and most commonly used) approach is formalistic: an assignment arise when the lessee transfers his entire interests under the lease – when, that is, he transfers the right to possession for the duration of the term. If the lessee transfers anything less than his entire interest (if two years remain on the lease and the lessee transfers for a terms of one year) a sublease results. In the latter case, the lessee is said to have retained a reversion the right to possession goes back (reverts) to him at the end of the period designated in the transfer.

-An increasing number of jurisdictions now hold that an absolute bar to subleasing and assignment is unreasonable and unenforceable. Moreover, these states tend to hold that where L is given approval power over assignment and subleasing, permission may not be withheld unless the L has a commercially reasonable basis for doing so. A commercially reasonably basis for withholding approval of a proposed subtenant or assignee usually would be any reasonable basis for thinking the proposed assignee or subtenant is not financially responsible.

Landlord’s Remedies to Remove a Tenant in Possession who is in Default-The common law allowed a landlord who was substantively entitled to recover possession to do so by either of two procedures: 1) a self-help repossession, or 2) by filing an ejectment action.

-often took too long and we no longer want to promote self-help-modern… summary eviction statute

-First, they create the summary eviction procedure, intended to give the landlord a quick way of recovering possession through judicial process. Quickness is achieved by 1) accelerated timetables for pleading, 2) accelerated calendars for hearing such cases, and 3) limiting the issues that can be litigated-especially the tenant’s defenses that can be raised. The goal of making this accelerated summary eviction proceeding available to landlords is to wean them away from using self help repossession. -Second, such statutes typically limit the landlord’s right to use self-help repossession. Most disallow use of forcible self-help.

-Where self-help repossessions are permitted, the issue may be whether the creative means amount to the use of force, or of unreasonable force. Where self-help repossessions are not permitted, the question may be whether a termination of services or removal of a door amounts to a self-help termination.

-when a LL has a right to recover possession-CL…doctrine of independent covenants

-This means that neither party was allowed to withhold its own performance (paying rent or providing services) of its own duties even if the other party was in breach - unless the lease said otherwise.-exceptions

-(1) lease expressly reserved the right to the L-(2) forcible entry and detainer statutes (summary eviction statutes)-(3) constructive eviction

-section below

-Landlord’s Options When a Tenant Abandons

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-abandonment and mitigation cases often run together with holdover cases-whether the LL has the right to holdover the T

-CL…three options1. To accept the T’s "offer of surrender" that was considered to be implicit in the tenant’s abandonment: This terminates the T's obligations under the lease. However, the L can still recover rent that was due (or overdue) before the termination. LL is free to relet the premises, but if s/he fails to get as good a rental as the old tenant promised to pay, the old tenant is not liable for the difference, unless the tenant had explicitly covenanted not to abandon.

2. To refuse the T’s surrender and to sue the tenant for the rent due, under the lease. The LL was not obligated to mitigate damages at common law. The LL could sue for the full rent due, but could only sue for sums of rent as they came due. In other words, acceleration was not allowed, even if there was an acceleration clause in the lease.

-two sub-options:-with rent acceleration or without rent acceleration

-LL’s write into leases rent acceleration clauses that allow a LL to refuse a surrender, not mitigate damages, and sue for the full rent

3. The Landlord could agree to re-enter the premises and to relet them, but without accepting the T's surrender. In this case the LL is viewed as reletting the premises on behalf of the old tenant. Any rental revenue that the LL derives from reletting will reduce the old tenant's obligation to the LL under the lease. The existence of this option (#3), coupled with the immediately preceding one (#2) meant that the LL could mitigate if s/he wished to when the tenant abandons, but was not obligated to do so.

-if LL is only mitigating, rather than surrendering, than the T would be liable for the difference (assuming that the rent had gone down)

-Sommer- Court overruled old precedent and held that a LL does have an obligation to make a reasonable effort to mitigate damages when a tenant abandons possession

-The court held that antiquated real property concepts which served as the basis for the pre-existing rule, shall no longer be controlling where there is a claim for damages under a residential lease. Such claims must be governed by more modern notions of fairness and equity. A landlord has a duty to mitigate damages where he seeks to recover rents due from a defaulting tenant.

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-LL/T reform cases…moving from traditional principles to a new contract model-The mitigation model is accepted for residential property in many Js, but for commercial property the traditional rule of no duty to mitigate exists in the majority of Js

-LL must use reasonable diligence in attempting to mitigate-policy rooted in fairness and efficiency

RIGHTS AND REMEDIES ABOUT THE CONDITIONS OF THE PREMISES [150-173]

-Doctrine of independent covenants-Promotes the use of the courts to settle LL/T disputes. One can sue for damages or specific performance

-constructive eviction-look in the section above

The Problem of Habitability and Maintenance-Ts had limited rights at CL

-there were generally no implied warranties of habitability, or fitness for intended use, and no implied covenant to repair and maintain. While this situation has changed substantially with respect to residential leases in recent years in most jurisdictions, it is unchanged with respect to non-residential leases in most jurisdictions.

-habitability vs. fitness: We should use the term “warranty of habitability” to refer only to leases of residential property, because habitability means suitability for residential purposes. The analogous concept for leases of non-residential property is the “warranty of fitness for intended use.” But as noted here, at common law, neither of these warranties was implied into a lease.-Exceptions: As noted, under the common law, there was generally no implied warranty of habitability in residential leases and no implied warranty of fitness for intended use in leases of non-residential premises. However, several exceptions were generally recognized:

-Latent defects: A landlord was generally held to warrant the absence of undisclosed latent defects-Short- term leases of furnished premises: Many courts did read an implied warranty of habitability into short term leases of furnished premises.

-you cannot waive an implied or explicit warrant of habitability in a leaase

Tenants’ Duties regarding Maintenance: Not only did the landlord make no implied covenant to repair and maintain, the duty to repair and maintain was placed on the tenant under the common law rules.

-The basis for placing the obligation to repair on the tenant was the waste doctrine that we covered when we talked about estates in land, especially the life estate. Like the holder of a life estate, the holder of a tenancy has a present interest, and the landlord has the future interest. Thus the tenant was required to make sure that the use and condition of the premises was not altered during the tenant’s occupancy.

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-remember: the warrant of habitability does not apply here because the property in question is not a residential lease

Constructive eviction-a covenant of quiet enjoyment is implied in every lease and cannot be waived or disclaimed-The covenant of quiet enjoyment was breach when the landlord (or persons under his/her control) took action that was either intended to drive the tenant out, or which had the reasonably foreseeable effect of driving the tenant out-also, inaction constituted constructive eviction when:

-inaction + affirmative duty to act (from lease or statute, but not from housing code) + assimilated to quiet enjoyment + prompt abandonment by T

-usually required prompt abandonment by T-usually employed as a defense, similar to AP

-sometimes used as a declaratory judgment-only exception providing aid to T at CL

-provided means to break lease, not reduce or withhold rent-Reform…three things done by Burt

-Allows T to sue LL-Declaratory judgment-Gives client a little extra time so that the T does not have to gamble

-At that time, if T guessed wrong, T is liable for the rent and the LL did not have to mitigate at that itime

-Gives T time to abandon-Provides that T has reasonable time to abandon after the suit is filed

-Provides a bit of a bright line rule for constructive eviction-In cases of inaction, it defines more clearly “assimilated to quiet enjoyment”

-Burt test: Something the LL knew or should have to known to be material to T’s enjoyment of the premises

-Note: you can read Burt more radically or not-Reform…Reste

-Rule: any act or omission that challenges the use of the property constitutes a constructive eviction

-Radical move: blending the first two categories of action that may constitute CE into the one category of inaction that may constitute CE

-thus there would not have to be an independent duty when inaction is being used to constitute CE

-However, most courts will look to Reste as having a holding related to latent defects or the implied warranty of habitability rather than implying that action and inaction fall under the same standard when evaluating CE

-Part of the reason of this is because the courts have found better way to institute T’s rights

The Illegality Doctrine

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-The illegality doctrine was another mechanism that was tried by tenants’ lawyers to acquire leverage to force maintenance of the premises and establish broader rights and remedies against the L. Review notes in the casebook carefully.-a tenant under an illegal lease is a T at sufferance, and the LL is entitled to the reasonable rental value of the premises, given their condition-it does not apply if code violations develop after the making of the lease

-defects must exists at the moment of leasing-Perhaps the most important contribution of the cases under the illegality doctrine cited in the casebook is that they established a precedent for using the local housing code-where one exists-as a benchmark for determining whether the condition of the premises are acceptable in a dispute between landlord and tenant

-If you take into consideration that an illegal lease made it void (rather than voidable), the illegality doctrine becomes a two edged sword in that LL or T could use it void the lease

IWH (post-Hilder)-IWH covers all latent and patent defects in the essential facilities of the residential unit (including common facilities)-IWH cannot be waived by any written provision in the lease or by oral agreement.-In determining whether there has been a breach of the IWH, the courts may first look to an relevant local or municipal housing code; they may also make

-A substantial violation of an applicable hosing code shall constitute prima facie evidence that there has been a breach of IWH

-In determining whether there has been a breach of IWH, courts could inquire whether the claimed defect has an impact on the safety or health of the tenant-In order to bring a cause of action for breach of IWH, the T must first show that he or she notified the LL “of deficiency of defect not know to the LL and allowed a reasonable time for its correction.”-Because it is a contractual relationship between LL and T…

-The standard contract remedies of rescission, reformation and damages are available to the T when suing for breach of IWH. The measure of damages shall be the difference between the value of the dwelling as warranted and the value of the dwelling as it exists in its defective condition. In determining the fair rental value of the dwelling warranted, they may look to the agreed upon rent as evidence on this issue-The court also found persuasive the reason that damages should be allowed for a T’s discomfort and annoyance arising from the LL’s breach of IWH-Another remedy available to the T when the has been a breach of IWH is to withhold the payment of future rent

-T must show:-(1) the LL had notice of the previously unknown defect and failed, within a reasonable time, to repair it; and -(2) the defect, affecting habitability, existed during the time for which

rent was withheld

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-The T’s obligation to pay rent is contingent on the LL’s duty to provide and maintain a habitable dwelling, it is no longer necessary for the T to first abandon the premises; thus, the doctrine of CE is no longer a viable or needed defense in action by the LL for unpaid rent-of course, once the LL correct the defect, the T’s obligation to pay rent becomes due again

-also, the court held that when the LL is notified of the defect but fails to repair it within a reasonable amount of tie, and the T subsequently repairs the defect, the T may deduct the expense of the repair from future rent…compensatory damages

-punitive damages can be awarded when the breach is so willful and wanton or fraudulent as to make them necessary

-when a LL, after receiving notice of a defect, fails to repair the facility that is essential to the health and safety of his or her T, an award of punitive damages is proper

-T may withhold future rent, and may also seek damages in the amount of rent previously paid

Rent abatement calculations

-FMV…fair market value

Formula 1: Abate (reduce) the rent by the amount of the leasehold rental rate minus FMV (as is). This is mathematically and logically equivalent to abating the rental rate to FMV (as is) -this approach can be very favorable to LLs

-pro-LL when unit was substandard at the start-law and economics people would say that this is how it should be…people should get what they paid for

-socially conscious people would think otherwise

Formula 2: Abate the rental rate by the amount of the FMV (as warranted) minus FMV (as is) -this approach can be very favorable to tenants

-law and economics people say that this will reduce the supply of affordable housing

Formula 3: % abatement of actual rent: abate to: FMC (as is)/FMV (as warranted) times rental rate

-this approach also favors T, but not as much as Formula 2

The Debate over the LL-T Reforms (1960s/1970s)-Law and economics approach says that this extension of T’s rights will disincentivize LL’s to keep up their property…often times LL’s will be so burdened as to abandon

Recap EXAM NOTE: no Js extends the IWH to commercial leases Right and Remedies

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o Independent covenants Damages

Assuming that you have a right Termination/rescission

But only if its CE Injunction Housing code enforcement

If possibleo Dependant covenants (we do we add)

Damages Termination

Without CE We have lowered the standard

Injunction Rent abatement Rent withholding Repair and deduct

EXAM NOTE:o Does J follow traditional or modern common law?o Does T have a right?...remedieso Do we look to the longer IC list or shorter DC list?

LAND USE CONTROLS AND THEIR LIMITS

COMMON LAW LAND USE CONTROLS: THE LAW OF NUISANCE [172-188]

-An important question that courts ask in nuisance cases is who got their first? Who is rocking the boat, trying to change the neighborhood?-Nuisance

-An interference with use and enjoyment of land, in order to give rise to liability, must be substantial; it must also be either intentional and unreasonable, OR the unintentional result of negligent, reckless, or abnormally dangerous activity

-Note: intentional fault under nuisance just means that you intended to do the activity, not intended to do the harm

-Unreasonableness tests-(1) Jost…whenever you cause substantial harm to your neighbor

-Deciphering simply whether D is injuring P-(2) R…Weigh the equities

-Aimed to figure out overall social benefits-factors

the extent and character of the harm to the plaintiff, the social value of the plaintiff’s use, the suitability of the plaintiff’s use to the particular location, and

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the burden on the plaintiff of avoiding the harm

against

the social value of the defendant’s activity, the suitability of the defendant’s use to the particular location, and the burden on the defendant of preventing the harm.

-(3) Alternative R test-D’s conduct is unreasonable when D comes out on the short end of the balance of equities, OR if your are causing substantial harm to P and D can pay P without knocking himself out of business

-Another consideration that is sometimes said to form part of the reasonableness inquiry concerns the relative chronological priority of the initiation of the plaintiff’s use and the defendant’s use.

-Trespass v. nuisance (similar, but different)-Trespass…physical invasion of the land-Nuisance…interference with the use and enjoyment of the land

Remedies in nuisance cases-In thinking about liability and remedies in nuisance cases there are three variables that might be considered important: fault, efficiency, and transactions costs-Coase’s v. Rabin…remedies

-Professor Coase in effect says we should forget about fairness, and have the court enjoin the result that produces the more efficient solution to each land use conflict.

-focus: efficiency and transaction costs-Professor Rabin’s solution attempts to decide what the fairest outcome is, and still reach the efficient result.

-focus: efficiency and fairness-fairness assessment is based on first in time principle

-Professor Coase would undoubtedly point out that Rabin’s solution might be tripped up by transactions costs, especially where there are multiple plaintiffs. Plaintiffs may not be able to agree on paying the defendant, even when in would be in their collective best interest to do so. So Rabin’s approach sometimes fails to achieve efficiency. -Rabin would counter that Coase’s approach sometimes achieves efficiency at the expense of fairness.

-The difference between a private nuisance and a public nuisance is generally one of degree. A private nuisance is on affecting a single individual or a definite small number of persons in the enjoyment of private rights not common to the public, while a public nuisance is one affecting the rights enjoyed by citizens as a part of the public. To constitute a public nuisance, the nuisance must affect a considerable number of people or an entire community or neighborhood.

-Then, the difference between public and private nuisance lies in the interests protected: public nuisance protects public rights; private nuisances protects rights in the use and enjoyment of land

-In private nuisance cases, only owners of the land can bring suit

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-In public nuisance cases, any citizen suffering special (greater) damages can bring suit

-“coming to the nuisance”-though there are cases to the contrary, the prevailing view is that moving into the vicinity of a nuisance does not completely bar a suit for damages or injunctive relief, but it is a “relevant factor” (much like when an area is zoned for the activity in question or has come to be commonly used for such an activity).

-A conventional view of long standing held that nuisance claims could be resolved in one of three ways: abate the activity in question by granting the P injunctive relief (Morgan; Estancias); let the activity continue if the D pays damages (Boomer); let the activity continue by denying all relief (the converse of the first alternative); abate the activity if the P pays damages (Spur…converse of the second alternative).-note: granting an injunction may simply provide a means for private bargaining between the parties

COMMON LAW LAND USE CONTROLS: EASEMENTS [188-217]

-an easement…an interest in land, not held at the sufferance of the grantor, that does not give a general right to possession, but which confers on the easement holder the right to use property that is possessed by someone else for a specified purpose, or the right to restrain the use of the possessor in some respect.

-not freely revocable-either permanent or for a term of years, etc.-owner of the property is passing one of the bundle of sticks to another person

-use is for a specified purpose-O has the right to use the property granted as an easement so long as he does not interfere with the specific purpose granted

-notes on easements-Every easement has a servient estate: the property that is subject to, or burdened by, the easement

-the burden of an easement is always tied to a servient estate-the burden of any easement transfers along with a servient estate

-Easements that we call appurtenant also have a dominant estate: the property whose owner gets the benefit of the easement. Thus an appurtenant easement is one whose benefit is tied to the ownership of a particular dominant estate.

-the benefit of an appurtenant easement will transfer with the dominant estate-An easement in gross does not have a dominant estate; rather the benefit of such an easement is personal to the beneficiary of the easement.

-the benefit of an easement in gross usually will not transfer -The burden of any easement (whether appurtenant or in gross) normally transfers along with ownership of the servient estate.-The benefit of an appurtenant easement transfers along with the ownership of the dominant estate.

Types of easements

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-An easement must be either affirmative or negative. The difference is explained next: -affirmative easement: An affirmative easement is one for which the dominant party has the right to make a specified use of the servient estate (or -less commonly- a right to use the dominant estate in a manner that would otherwise be a nuisance to servient estate)-negative easement: A negative easement is one for which the dominant party has the right to restrain or restrict the burdened party's use of the servient estate in some respect

-An easement must also be either appurtenant or in gross. The difference is explained next:-appurtenant easement: An appurtenant easement is one that complements a particular dominant estate; the easement is wedded to the dominant estate, and is transferred along with it-easement in gross: An easement in gross is one the benefit of which is not tied to a particular dominant estate. Traditionally the benefit of an easement in gross was not transferrable at all; today transfer is sometimes allowed

-Methods (7) of creation of easements

(1) an express (written) grant -which is subject to the statute of frauds. An easement may either be expressly granted by itself or together with the grant of some other interest (usually a fee simple). For instance, A might sell B in fee simple the back half of a larger lot that A owned in fee simple, including in the grant an easement to use a driveway across the front half of the property, the fee of which A retains.

-can be an easement just of itself or it can be an easement that comes with a fee

(2) an express (written) reservation: If A sells B the front half of a larger lot that A had owned, thus keeping the back half for herself, A would normally want to expressly reserve (that is retain in the deed) the right to use the driveway across the front half in order to access the back half. Note that common law courts often conceptualized a reservation as two transfers folded into one document: first A grants B the front half of the lot and then B grants back to A the easement to use the driveway.

-Some of the practical consequences of creating an easement by reservation are:-First, easements by reservation are subject to the statute of frauds, just like easements by grant. But the statute of frauds requires a deed to be signed by the grantor. If one considers the reservation of an easement to consist of these two steps, in this example B (as well as A) must sign the deed because A is granting B the fee, and then B is granting A the easement. -Generally speaking, English courts have accepted this rationale and require B (as well as A) to sign the deed to make an easement by reservation valid under the statute of frauds, but most American courts have not accepted this doctrine.-Second, in construing (the scope of) an ambiguous conveyance/deed, the constructional preference is said to normally favor the grantee. But-I hope you can see this coming now- if an easement by reservation consists of a grant of a fee by A to B, and the grant of an easement by B back to A, which party, A or B, is considered “the grantee” for this purpose when there is a dispute about an ambiguous easement? Arguably A is the grantee of the easement. Most states appear to reject this reasoning. However, California appears to accept this reasoning.

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(3) an express (written) exception: A third way that you could create an easement was by “express exception.” At common law A could grant B the front half of his property, excepting the use of a driveway crossing the front half so as to get to the back half-which A retained. Sometimes when one carves out an exception from a grant, that means the grantor, A, retains the fee of the driveway, but in other instances it is held that, A is just retaining an easement.

-if you do not honor the additional rules (double signing, structure of the agreement) related with reservations, then reservations and exceptions are in essence the same-When A retains an easement by exception, this looks almost like an easement by reservation. -Perhaps the only difference was that the common law did not think of this transaction as a grant from A to B followed instantly by a grant of the easement by B back to A. Rather the common law envisioned that A kept the easement all along. -What difference, if any, does it make whether an easement is created by exception as opposed to a reservation? Quite possibly it makes no difference at all today. But the strange rules that apply to easements by reservation (i.e., that A must sign the deed; that the constructional preference favors A) discussed above, that some jurisdictions recognized, did not apply to easements created by exception.-In order to create an easement by exception instead of by reservation, the common law said there had to be a “pre-existing quasi easement.” -So, you ask, quite understandably, what in the world is a “pre-existing quasi-easement”? Believe it or not, this is worth learning.

-A pre-existing quasi-easement is something that would be an easement, except for the fact that the same person owns the dominant and the servient rights. Say A owns a large tract of land, which has road access on the north side, only. While A owns the whole large tract, A uses a certain driveway to access the south half of the property from the road on the north side. So, the driveway is in place even before the property is split up for sale. Then, if A sells the north half to B, and keeps the south half, A can retain an easement in the driveway by exception-because there was a pre-existing quasi-easement.

-On the other hand, if the driveway was not in existence before A sold half the land to B, or if A had not been in the practice of using the driveway to access the back half of the land, then A could reserve an easement over the front half of the property, but could not create the easement by exception.

-If we no longer apply special rules to easements by reservation-and many states no longer do-there would appear to be NO reason to continue to observe a distinction between easements created by reservation and easements created by exception. That said, some states may nonetheless make this distinction.

-note: easements must be recorded

(4) Easement by estoppel -oral grant/license + estoppel

(5) Easements by prescription

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(6) Easements by Implication from Necessity1. easements by grant implied from necessity2. easements by reservation implied from necessity

(7) Easements by Implication from Prior Use3. easements by grant implied from prior use4. easements by reservation implied from prior use.

Licenses and Easements; Easements by Estoppel-Easements normally are perpetual. However, they can also be made defeasible, or granted for life, or for a term of years.-A license is a like an easement, but instead of having some assured duration, is revocable at the will of the grantor. A license can be given orally or in writing.

-exceptions when a license isn’t revocable-(1) when a license is coupled with an interest-(2) a license that becomes irrevocable under the rules of estoppel

-A license can become irrevocable if a person puts work into a property or relies on the use of the property for sufficient time with the servient estate's consent.-Oral conveyances become enforceable due to detrimental reliance

-a license that cannot be revoked is treated as an easement in R-The doctrine of estoppel may also be used to make a valid and enforceable easement in a situation where there is an oral grant the language of which would create an easement, but for the fact that there is no writing satisfying the statute of frauds. In these cases estoppel merely makes up for the lack of a writing. It is probably fair to say that in many cases of easements created by estoppel, it is hard to be sure whether the parties intended to create an oral easement that would be irrevocable except for the failure to comply with the statute of frauds, or whether they intended a revocable license.

Easements created by prescription Creating an easement by prescription is a variation of adverse possession

o Prescription has the same 5 qualitative elements and the same one quantitative element as AP

o The party that is subject to the easement would have the same amount of time to bring a trespass or ejectment action

Key point: same amount of time for APo how do the doctrines differ at all?

Actual, exclusive, continuous, hostile, open and notorious Is the defense is prescription, the party does not have to show that they

possessed the land like an owner of the land, but rather as if they were a user of the land

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If owner keeps coming onto the property, then it may not be continuous enough for AP, whereas someone using the property as an easement may remain continuous enough

o We have in effect lowered the bar The bar is also lowered for the exclusive element

Hostility is presumed in AP and it is not presumed in easements Open and notorious Hostility and open/notorious are harder to fulfill in AP than in easements,

and exclusive and continuous are easier to fulfill in easements than in AP Prescriptive easements come into to play when it is a use for a

particular purpose-From an advocacy point of view, whenever you spot a potential case of adverse possession, you should consider the alternative possibility that the facts establish a prescriptive easement if they don’t establish adverse possession.

-The time period for prescription and adverse possession should always be the same. Why? Because the time period for either one is simply the period of the statute of limitations on the owner’s claim for ejectment or trespass (which will be one and the same.) Adverse possession and prescription are alternative defenses that a possessor/user could raise where the owner brings an ejectment or trespass claim.----it is pretty common for those claiming an easement to assert a variety of alternative theories as to how the easement could have come into being

Easements by Implication from Necessity and Easements by Implication from Prior Use

1. easements by grant implied from necessity2. easements by reservation implied from necessity3. easements by grant implied from prior use4. easements by reservation implied from prior use.

Implied easements doctrines are safety doctrines that come into play when people do not do what they are supposed to do

Drawing on assignment 36 sheet These doctrines are meant to be implied-in-fact doctrines Its not about whether one needs the easement now, it is about the need for the easement

at the moment of severance

1. Easements by grant implied from necessity

(1) the dominant and servient properties were formerly one property owned by the same person(2) the two properties were subsequently split into separate ownership(3) the act of splitting the properties is what created the need for the dominant property to have an easement over the servient property(4) the dominant property has a strong need for the easement because it lacks other access to the

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property.

2. Easements by reservation implied from necessity(1) the dominant and servient properties were formerly one property owned by the same person(2) the two properties were subsequently split into separate ownership(3) the act of splitting the properties is what created the need for the dominant property to havean easement over the servient property(4) the dominant property has a very strong need for the easement because it lacks other access to the property.

-“strict necessity”-An easement of necessity endures only so long as it is necessary

3. Easements by grant implied from prior use

-the test of easements implied from prior use is essentially the same as the test for easements implied from necessity. But we add one element: the pre-existing quasi-easement, and we soften one element: the showing of necessity required.

-Thus the elements for an implied grant of an easement from prior use are:

(1) the dominant and servient properties were formerly one property owned by the same person(2) there was a pre-existing quasi-easement

-evidence of intent-“easement” was in use prior to the spitting of the land

-can’t be technically called an “easement” because the servient and dominant properties were one

(3) the two properties were subsequently split into separate ownership(4) the act of splitting the properties is what created the need for the dominant property to have an easement over the servient property(5) it will be significantly more advantageous for the dominant property to have the use of an easement over the servient property because other access to the dominant property is excessively expensive or inconvenient.

-strong preference rather than strict necessity-what was the person who bought the land with the easement thinking

-did they factor the easement into their purchase, then they probably have a good case

4. Easements by reservation implied from prior use(1) the dominant and servient properties were formerly one property owned by the same person(2) there was a pre-existing quasi-easement(3) the two properties were subsequently split into separate ownership(4) the act of splitting the properties is what created the need for the dominant property to have an easement over the servient property(5) it will be very significantly more advantageous for the dominant property to have the use of an easement over the servient property because other access to the dominant property is

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excessively expensive or inconvenient.

Sliding scaleo Implied reservation with no pre-existing use…hardest argumento Implied grant with a pre-existing use…easiest argument

-note: pretty much all implied easements are appurtenant -for an easement to be implied, the necessity of the easement must be great and this generally comes from the fact that the estates are adjacent

-note: if arguing for an implied easement, might as well thrown in a claim for prescriptive easement

Transfer of Easements-The benefit of an appurtenant easement transfers along with a transfer of the dominant estate.

-you can split up the dominant estate, but not too much because it would otherwise exceed the intended use of the easement-There is no per se rule forbidding such subdivision, but the rule is that the subdivision cannot materially increase the burden that the easement places on the servient estate. Such an increased burden is known as “surcharging” the servient estate.

-this can be exempted if the owner gives his express permission to transfer-At common law, the benefit of an easement in gross could not be transferred. Some jurisdictions held that an attempt to make such a transfer destroyed the easement.-Most jurisdictions today allow transfer of the benefit of the easement in gross, but recognize a class of easements in gross that are not transferrable (personal easements in gross) and a class that is transferrable (commercial easements in gross). Most probably have a presumption that the easement in gross is commercial and thus transferrable.

Scope of the easement-Most disputes about the scope of an easement are resolved by construing the language that created the easement. (Note that implied easements --for which there is no such language--tend to be narrowly construed.) Scope of easement cases

o Qualitative You are using this easement for an unintended purpose Presault

o Quantitative You have divided the easement up to much

The easement is being used too intensively Qualitative and quantitative easements usually concern issues with

regards to reading the language of the scope of the granto Geographic

You are using this easement to benefit the wrong property Brown

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-The scope of an easement may be...adjusted in the face of changing time (tempora motondo) to serve the original purpose, so long as the change is consistent with the terms of the original grant (can't convey more interest in property than you have

Termination of Easements

$ Release : requires an express written surrender of the easement by the dominant party; this is essentially the dominant party “giving” the easement back to the servient party in whose hands it “merges” back into the fee simple that the servient party holds

$ Expiration : If an easement is created for a finite time period or for the life of a person, it terminates automatically at the end of that time period.

$ If an easement is made defeasible (like the easement in Willard, for instance) it expires when the stated condition is violated.

$ Note however, that courts are reluctant to hold that a perpetual and nondefeasible easement is terminated just because the primary motivation for creating the easement seems obsolete.

$ Thus one sometimes has to distinguish between cases, like Willard, in which the easement is expressly made defeasible (it is granted “to run with the land only so long as the property for whose benefit the easement is given is used for church purposes” (p. 672)) and cases like First National Bank v. Raphael-the note case mentioned directly above-in which the easement was not expressly made defeasible but it apparently had a limited purpose. Another lesson to learn from this is that it usually is a bad idea to state the purpose of granting an easement or another interest in property unless one actually wants to make the granted interest defeasible or create some kind of covenant restricting the use of the property. More on this point in connection with the Preseault case.

$ Merger : If the same party comes to own the servient and dominant estate, the easement merges out of existence

$ Condemnation/Exercise of the power of Eminent Domain by a governmental entity : The exercise of the power of eminent domain by a governmental entity to take the servient estate will also destroy the easement if the government’s use of the servient estate is inconsistent with the use of the easement by the easement owner. If this happens, the owner of the easement is entitled to just compensation for the taking of his/her easement by the government entity.

$ Estoppel : Where the servient owner takes action inconsistent with the continued existence of the easement while acting in reasonable reliance on a statement by the dominant party encouraging or allowing that action B the easement is lost. For example:

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the easement holder says “I won’t be needing your driveway anymore, I’ve built my own driveway to reach the public road.” If the servient owner then starts to build a swimming pool that requires elimination of the driveway, the easement over the driveway is terminated. It appears that these are cases in which there would be termination by release, except that the purported release is oral and thus not enforceable under the statute of frauds. The detrimental reliance by the servient party makes an “oral release” enforceable, however.

$ Prescription : No matter how the easement was originally created (whether by prescription or otherwise-that is, by any other method), if the servient owner prevents usage of the easement for the period of the statute of limitations the easement is terminated by prescription. Note: the period of the statute of limitations for this purpose (only!) usually will be different than the time period that applies to create an easement by prescription (which is the same as the period for adverse possession). The reason is that the relevant statute of limitations in the present situation is the statute of limitations on a claim by an easement holder to enjoin interference with the easement. That is usually shorter than the statute of limitations on an ejectment or trespass action by the owner of a fee estate. Bottom line: the period of time for prescription to create an easement is typically longer than the period of time for prescription to terminate an easement.

-losing an easement is a lesser interest than an ejectment or trespass action, thus the shorter SOL

$ Abandonment : Termination by abandonment is discussed in Preseault. As indicated there, mere non-use does not usually establish abandonment. Usually some act that indicates an intent to abandon is required. Note that this means that an oral statement of release-which would not be enforceable because of the statute of frauds - becomes enforceable when there is an action by the dominant party indicating an intent to abandon.

Negative easements, including Conservation Easements

-A negative easement gives the dominant owner the right to preclude the servient owner from acting in a particular manner on his/her own land

-what really distinguishes a negative easement is that the dominant party has no right to use the servient estate; s/he has only the right to preclude the servient owner from using the land in a certain respect.

-English courts recognized light, air, and support negative easements-conservation easement…this is an easement in gross that can be given to a public body or a private conservation organization that bars development of the servient estate except as specified in the granting deed.

-because of doubts about the validity and transferability of negative easements in gross at CL, statutes have been enacted in almost all states authorizing conservation easements-CEs are perpetual in duration, are transferable, and can be in gross-i.e. novel easements in some Js in US

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-solar easements -conservation easements-agriculture use easements

-there are significant exceptions to the fact that you cannot create new negative easements, but they are sanctioned by legislation

-Remember that in the United States almost all courts hold that a negative easement cannot arise by prescription.

-solutions: zoning, nuisance, covenants/equitable servitudes

COMMON LAW LAND USE CONTROLS: REAL COVENANT AND EQUITABLE SERVITUDES RUNNING WITH THE LAND [217-246]

-Today, in most states, the only difference between a real covenant running with the land and an equitable servitude is the remedy sought

-If the plaintiff seeks damages (legal relief) then the plaintiff must show that the “law rules” or “legal rules” for covenants running with the land have been satisfied.-If the plaintiff seeks injunctive relief, then the plaintiff must show that the “equity rules” for equitable servitudes have been satisfied.-Note that, in this context, the opposite of “legal” is “equity” (not “illegal”)-almost all modern litigation seeks equitable relief

-Diagramming/Diagnosing Cases-Assn. 39/page 743-Your objective is to determine who is trying to enforce against whom.

-if there is a promise/reciprocal promise situation, the promisor/promisee are determined by who is trying to enforce against whom

-also, we must consider what damages they want-this will determine if we are going the law or equity route

-lastly, we must consider who are we dealing with (original promisor, etc.)-you often will have to do four distinct analyses: to determine 1) whether the burden runs and 2) whether the benefit runs under the law rules for a damage claim; then to determine 3) whether the burden runs and 4) whether the benefit runs under the equity rules for injunctive relief.

-Terminology-If the burden and/or benefit runs (whichever is involved in a particular case) under the law rules, we say that there is a valid and enforceable real covenant or covenant running with the land.-If the burden and/or benefit runs (whichever is involved in a particular case) under the equity rules, we say that there is a valid and enforceable equitable servitude.-Thus the very same promise may very well create both a real covenant and an equitable servitude, and will do so if the promise runs with the land in both law and equity.-Accordingly, it is better practice to say that a promise is “enforceable as a real covenant” or “enforceable as an equitable servitude” or both-instead of saying that the promise IS one or the other or both.

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-Requirements for a burden, or a benefit, to run with the land in an action for damages- in other words, at law.

(1) the promise (between original promisor and original promisee) must be in writing -general

(2) the intent of the original parties to the covenant must be that the burden or benefit (or both) of the promise (whichever the case involves) run with the land

-side-specific(3) the burden, or benefit (or both) of the promise (whichever the case involves) must “touch and concern” the land-must affect the use or value of the particular land that is burdened or benefitted

-side-specific(4) there must be horizontal privity between the original promisor and promisee under one of four tests that different jurisdictions apply (see below)

-general

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(5) there must be vertical privity between the original promisor and the successor, between the original promisee and the successor, or both (whichever the fact pattern involves)

-side-specific(6) there must have been notice at the time of purchase to the successor on the burden side for the burden to run;

-a successor on the burden side is bound even if s/he had no notice if the successor took by gift or devise or inheritance instead of purchase;-notice to the successor is not required on the benefit side for the benefit to run with the land

Notes on these elements

-Intent-The intent for the burden to run is very commonly explicitly stated (e.g., “this covenant shall bind successors, heirs and assigns”). -The intent for the benefit to run is too often left unclear. To make this intent explicit, the deed should state something like “this covenant shall inure to the benefit of successors, heirs and assigns.”

-Touch and Concern-the basic idea is that the burden, or benefit (whichever is at issue) of the promise must affect the use or the value of the land . On the burden side we are looking for promises that limit the use of the land; on the benefit side, we are looking for promises that enhance the value or enjoyment of the land.

-Horizontal Privity-The requirement of "horizontal privity" governs the relationship that is required to exist between the original promisor and the original promisee in order to give rise to a real covenant that can run with the land. The whole idea of any horizontal privity requirement is that the original promisor and promisee have to have some relationship in addition to that of promisor/promisee in order for them to have the capacity to enter into an agreement affecting their respective property rights that may run with the land. -Unlike all of the other elements, the horizontal privity requirement is not side-specific. Instead it governs the relationship that must exist between the original promisor or promisee. -Historically, four different versions of this requirement have been employed at different places and times. They are listed in the order running from most restrictive to least restrictive. Each successive test broadens the class of relationships that will be held to constitute horizontal privity:

(1) The English test: This is the oldest and most restrictive version of the horizontal privity requirement. It dictates that horizontal privity exists only when the promisor and promisee are respectively landlord and tenant or reversioner and holder of a life estate. [Note that in these cases the promisor and promisee simultaneously own interests in the same property; one holds a present interest and the other a future interest.]

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(2) The Massachusetts test: This test is satisfied whenever the English test is satisfied but it also is satisfied whenever one of the original parties holds an easement in the other's property. [Note that this is another instance in which the promisor and promisee simultaneously own interests in the same property.]

(3) The Successive Interests test/First Restatement of Property test: This test is satisfied whenever the Massachusetts test (or English test) is satisfied and in addition it is satisfied whenever the promisor and promisee are grantee and grantor on a conveyance of property that accompanies the creation of the promise. [Note that this test is satisfied if the promisor and promisee are the successive owners of interests in the same property, as well as when they are simultaneous owners.]

(4) The abolitionist position: Under this test no special relationship other than that of promisor and promisee is needed to give rise to a covenant that can run with the land. (Of course, under this approach, if any of the first three tests is satisfied, the covenant is permitted to run with the land, because some kind of horizontal privity is present. But this test says that even if there is no relationship between the promisor and promisee other than the promise itself, the covenant can still run with the land because horizontal privity is not required under this approach.)

-The successive interests test is probably the most commonly applied test. But the Third Restatement adopts the abolitionist position: that horizontal privity should not be required, so this may be the trend. Most importantly, you will see that horizontal privity is not required for a benefit or burden to run under the equity rules.

-Vertical Privity-Generally, the traditional understanding was that for there to be vertical privity, the successor had to have the same estate, or a closely related one (“an estate of the same potential duration”) as the original party to whom s/he is the successor.

-someone who is merely renting or has a short term interest in the property, does not suffer the burden or get the benefit associated with the land

-Some courts use a more relaxed test of vertical privity on the benefit side-Under this approach, as long as D gets some interest in the originally benefitted land that B held, D is in vertical privity.

-note: an adverse possessor is not in vertical privity with the original promisor (therefore, a burden will not run against an adverse possessor)

-AP does not begin to run against either a real covenant or an equitable servitude until the promise (between the original promisee and the original promisor) is breached

-Notice

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-Note that notice to the successor on the benefit side is not required for the benefit to run.-Traditionally, notice was not required for a burden to run at law-this element was introduced by the equity courts. See Tulk v. Moxhay-Because states all have recording acts, and because a covenant is an interest in land that is required to be recorded to be valid against a subsequent purchaser under most recording acts, most states hold that the burden does not run against a subsequent purchaser, unless the purchaser has either record or non-record notice of the existence of the promise (at the time of purchase). But a donee, devisee, or heir takes subject to the covenant, even without notice.

-example: Assn. 40 (Tulk)

-Summary of the equity rules

(1) the promise must be in writing

(2) the original parties must intend the burden or benefit (or both-whichever is involved) to run with the land

-A benefit can be subdivided so long as each subdivision is touched and concerned (with regards to the original land’s benefit and burden)

(3) the burden or benefit or both must touch and concern the land on the respective side

(4) the successor must be in vertical privity with his/her respective predecessor under a relaxed test (The successor need only own some interest in the originally burdened or benefited land.) (Your casebook says that there is NO vertical privity requirement (p. 748); but don’t take this literally. In fact, the casebook says all subsequent owners and possessors on the burden side are bound—but that IS a vertical privity requirement, although it is not as strict as the legal requirement for vertical privity.)

(5) horizontal privity between the original promisor and promisee is not required; thus the original parties need not have had any special relationship above and beyond being promisor and promisee

(6) for the burden to run against a successor who is a purchaser, the purchaser must purchase with actual or constructive notice of the promise. There is no notice requirement on the benefit side.

-Note: the existence of a common plan of restrictions may provide the required notice for the burden to run, and may also substitute for a writing in the burdened party’s chain of title.

-There are very few damages cases today because you can always get the injunction and then negotiate for money

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Common plans of restriction-common plan of restrictions…situations in which the same restrictions are put on each lot of a development-uses (listed below and on Assn. 40 back page)

1. everyone who is subject to the restrictions should be able to enforce against all the other people who are subject to the same restrictions2. the burden was placed on a lot where the restriction is not in the chain of title3. using the common plan as evidence that the benefit was intended to run backwards

-implied reciprocal servitude-Most of the cases in which courts find a covenant does not touch or concerns land involved monetary obligations and tying arrangements. Although the results are not always predictable, almost all cases approve monetary obligations in a common interest community.-Special defenses

-(1) Circumstances are sufficiently changed so that the Ps no longer have the right to enforce the covenant

-Most Js says that not only must the change be extreme, but also that the restricted area has already been changed to some degree-the original purpose must be frustrated

-(2) Abandonment argument-In order for community violations of a restrictive covenant to constitute abandonment, they must be so GENERAL as to frustrate the original purpose of the agreement. The court found that the violation of the ONE house was too sporadic and isolated to constitute general consent.

-these kinds of restrictions tend to have a perpetual life time-does not violate RAP because RAP is concerned with future owners, and that is not at issue here

-in a sense, these kinds of restriction substitute for future interests-in this way, we see that if you use proper legal construction, you cannot create a perpetual restrictions

-In common interest communities, any requirement of horizontal or vertical privity is met because the original purchasers are all in privity with the developer and subsequent purchasers are in privity with the original purchasers. Any requirement that a covenant touch and concern the land is usually satisfied. Negative covenants restricting use are almost always held to touch and concern, as are affirmative covenants to pay dues to a homeowners association. But, because the rules of a common interest community and the powers of the homeowners association can adversely affect the interests of individual members, courts have been called upon to determine whether individual members shall be protected from imposition by those who control the association. The emerging issue is by what standard the common interest communities’ rules and regulations should be judged.-restrictions passed under the common interest’s original declaration are given more deference than those passed subsequently

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-Restrictive covenants enforced by the state are discriminatory and violate the 14th Amendment, thus they should be overturned (Shelly)

LEGISLATIVE/ADMINISTRATIVE LAND USE CONTROLS: THE LAW OF ZONING [246-259]

Key provisions of the Standard State Zoning Enabling Act Section 1, the “General Purposes” for zoning: to protect the public health, safety,

morals, general welfare. Note what is missing from this list that you might have expected to find here: aesthetics. As we will see in Asst. #44, whether zoning may effectuate purely aesthetic objectives is controversial.

-these limitations are reflective of the constitutional limitations under thesubstantive due process clause

$ The types of regulation permitted include regulation of lot size, setbacks, height, use, and density.

Section 2, establishes a norm of uniform districts –with separate district for different types of functions. Thus zoning is implemented by placing these districts onto a map.

-often times there are issues at the boundaries-there is a norm of uniformity and a norm of separation

On the other hand, this norm of “segregation” of uses is undermined by what is known as “cumulative” zoning—the common practice of allowing “higher uses”—such as residential use—in “lower” use districts, such as industrial use districts. (Such mixing of uses is not allowed in higher districts—no factories in residential areas.)

-you can put residential uses in commercial and industrial zones-residential zones are the only pure zones

-you can out commercial uses in industrial zones-you can only put industrial uses in industrial zones

Section 3: Restates in detail the purposes of zoning: again note that aesthetic objectives are not permitted purposes. Appears to allow “fiscal zoning”—zoning designed to maximize the property taxes that the municipality takes in.

Section 5: Creates a mechanism for Amendments to allow some flexibility in the operation of the zoning system.

Section 7: Creates a Board of Zoning Adjustment, which hears appeals and also grants variances to provide additional flexibility where strict application would produce hardship

-when you get turned down by the zoning board for a variance, then you go to court

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-Elements of a constitutional ordinance: (Euclid)-(1) rational relationship with the municipality’s public health, safety, morals, general welfare.-(2) serves as a reasonable means of achieving this measures-The standard of a review for a zoning ordinance is deferential in that the government gets the benefit of doubt

-Ordinance must appear clearly arbitrary, and unreasonable to be struck down

-There must not be any rational relationship between the zoning ordinance and the municipality’s public health, safety, morals, general welfare.

-There is a very strong presumption of municipal autonomy, but in some cases a particular municipality is doing something so at odds with the public interest that the court will strike it down

-zoning ordinances provide for restriction where nuisance law and restrictive convenants often proved unenforceable-Perhaps a majority of jurisdictions today accept aesthetics as a legitimate police power goal in itself. But a good number still waffle on the issue, and a few are opposed to aesthetic regulation.

-aesthetics + property value = permissible regulation-Mt. Laurel

-zoning that was formerly upheld as a reasonable means to achieve permissible (Local) ends is now subject to invalidation because it directly frustrates what would be in the interest of the broader community. (Changes the frame of reference!)-So the court holds that once a developing community has been shown not to have accommodated a range of housing types AND THAT THE MUNICIPALITY’S ZONING HAS ERECTED BARRIERS TO INCLUSION OF ALL HOUSING TYPES AND SOCIAL GROUPS, IT IS PRESUMPTIVELY UNCONSTITUTIONAL-Role of fiscal considerations/motivations: essentially the court says that while it had previously upheld fiscally motivated zoning, and it is still a legitimate objective in zoning, it cannot justify exclusionary zoning (comes close to rejecting fiscal motivation as a permissible kind of zoning)-remedies

-the first decision mostly mandated elimination of barriers-the second decision translates this into a mandate to create low and moderate income housing

-this approach has not really caught on in other states

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TAKINGS AND PUBLIC USE

EMINENT DOMAIN AND THE PUBLIC USE LIMITATION [260-266]

Kelo Only a “public purpose” is required

o Stevens began by saying that the requirement of public use did not mean that the property had to be made open to, or used by, the public at large. All that was required was that there be a “public purpose” behind the taking. Furthermore, the concept of “public purpose” was to be broadly defined, reflecting the Court’s “longstanding policy of deference to legislative judgments in this field.”

Applicationo Stevens then quickly concluded that New London’s plan here met the

requirment of public purpose. The city’s economic development plan was “carefully formulated,” and “comprehensive in character.” The city believed that the plan would create new jobs and increased tax revenue. Therefore, Stevens concluded, it easily met the requirement that it serve a public purpose.

For all practical purposes, the public use provision no longer meaningfully binds government.)

o “public use” is redefined as “public purpose”

PHYSICAL OCCUPATION TAKINGS AND REGULATORY TAKINGS [266-288]

Inverse Condemnation

-In one category of cases, it was recognized fairly early on that, when the government seizes or occupies an owner’s property, the owner may bring a claim against the government asserting the right to be paid just compensation. Such cases are called “inverse condemnation” cases. Inverse, meaning backwards, refers to the fact that the owner is suing the government. By contrast in a classic eminent domain case, the government sues the owner -or more precisely, the land itself - in an in rem proceeding.-This first category of inverse condemnation cases has not provoked much

controversy. For in these cases the government has essentially grabbed your property, without having used the proper legal procedures. So the only thing novel about “inverse condemnation” cases in this first kind is the procedure: the owner sues the government.

-You will note, however, that one of the two per se rules, the one that comes from Loretto v. Teleprompter Manhattan CATV Corp., deals with a category of cases that might well be regarded as a halfway point between classic inverse condemnation cases and typical regulatory takings cases.

-One other basic point should be mentioned in this introduction. The Fifth Amendment takings clause is directly applicable only to the federal government.

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But the Fourteenth Amendment, which applies to the states (and thus to local governments which are regarded as parts of the states) provides: “Nor shall any State deprive any person of property without due process of law.” Like many other protections in the Bill of Rights amendments to the Constitution, the requirement of just compensation for governmental takings has been applied to the States through the Fourteenth Amendment. Chicago, Burlington & Quincy Ry. v. Chicago (1897)

Loretto Permanent occupations of land by such installations as telegraph and telephone

lines, rails, and underground pipes or wires are takings, even if they occupy only relatively insubstantial amounts of space and do not seriously interfere with the landowner's use of the rest of his land.

o Per Se bright line rule: Any permanent physical occupation by the government is always a taking no matter how small

Does not apply to temporary physical occupations If Loretto added anything new, it is the distinction between

permanent occupations, as to which the finding of a taking necessarily follows, and the temporary invasions that the Court says calls for a balancing process

o Balancing process…the severity of the interference with the owner’s use as opposed to the countervailing governmental interests

o The Court feels this rule is right because it offends the right to exclude It aides in avoiding line-drawing problems

o It doesn’t matter if the government has a good reason In this respect, the government is treated like a trespassing neighbor

Hadacheck A second categorical rule

o Recall the categorical (or per se) rule of Loretto: If government action is seen to work a permanent physical occupation, then a taking ALWAYS follows (nuisance controls aside). The Hadacheck line of cases stands for another categorical rule, one that cuts in the opposite direction and holds that nuisance control regulations are NEVER takings.

“nuisance exception”

However, because most regulations will not fall under the categorical rules, we will have to apply a balancing test

PA Coal PA Coal limits Hadacheck in the sense that if the diminution of the property is

great, there must be just compensation even if the taking of property is done through an exercise of police power motivated by ensuring the public interest

o Police power regulation is not immune from the takings analysis There are exceptional cases where a large diminution of value does not require

just compensation

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o i.e. when you blow up a house to stop a fire there is some category of extreme cases where destruction of

property may not constitute a taking because there is a greater interest in maintaining the public interest

Holmes wants to narrow and restrict the idea that if there is a really strong justification for regulation, that even a large diminution of value may not stop regulation maintaining public interest

Takings testso We have thus far considered two categorical tests or per se rules of decision

for takings cases: Permanent physically occupations are always takings Nuisance-control measures are never takings

o PA Coal is the classic statement of a different sort of test, softer around its edges, concerned with differences of degree rather than differences in kind, inquiring whether – on balance – matters have gone “too far.” The test says, in essence, that when governmental regulation of a use that is not a nuisance works too great a burden on property owners, it cannot go without compensation.

Penn Central There is no single factor that determines a taking…balancing test (factors)…

where we areo (1) Extent of the economic impact of the regulation

This is measured by the nature of the expectations that one had What did you invest, when did you invest it, and what were the

expectation when you did thato (2) Strength of the government’s purpose (moving from public down to

private) preventing nuisance preventing other harm exacting a public benefit rearranging property rights acquiring resources

o (3) Miscellaneous Regulation that applies to few is likely to be a taking, regulation

that applies to more is less likely to be a taking Singling out High degree of singling counts in favor in finding a taking

Is there reciprocity? Does the regulation help the people being regulated? High degree of reciprocity counts against finding a taking

Qualitative restriction The more expansive the restriction, the more likely it is

viewed to be a taking

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Are residential and commercial uses protected differently?o A covert factor that may be hiding is that we are more protective of

residential properties than commercial properties

Lucas in essence, if there is a really large economic diminution there is a taking unless

there is an really large nuisance The unit problem

o Penn Central says do not employ conceptual severance and that we must look to the unit as a whole (as it would be traded in the marketplace)

o State law matters in figuring out what the appropriate unit is You cannot look at a the regulation of a novel aspect of a parcel of

property as a taking, but you can look to a traditional aspect of a parcel of property as a taking

The Court’s new categorical rule as developed in Lucaso Land use regulations that prohibit all economic uses of property are

takings unless the prohibited uses are common law nuisances If you don’t use Lucas or Loretto, then you use the balancing test set forth in

Penn Station

Palazzolo The SC held that the subsequent buyer may proceed with the suit just as the

original owner could have. A contrary rule, the Court held, would enable the state in effect “to put an expiration date on the Takings Clause.” This ought not to be the rule, the Court continued, because “future generations, too, have a right to challenge unreasonable limitations on the use and value of land.”

You cannot lose a takings claim simply because the regulations were there first No geographical severance

Tahoe-Sierra the Court concluded that the adoption of a categorical rule that any deprivation

of all economic use, no matter how brief, constituted a compensable taking would impose unreasonable financial obligations upon governments for the normal delays involved in processing land use applications.

Tahoe rejects the idea of temporal conceptual severanceo The Court says that they do not do conceptual severance

This might not be entirely true…kind of wishy washy

EXACTIONS

Exactions…local government measures that require developers to provide goods and service or pay fees as a condition to getting project approval

Nollan The “substantially advance” requirement

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o First, in Nollan, the SC required that the means chosen by the government (the land-use regulation) “substantially advance” the governmental objective being pursued.

o there had to be an “essential nexus” between the permit condition exacted by the city, and the “legitimate state interest” being pursued

Dolan The “rough proportionality” requirement

o Then, in an even nmore striking use of rigorous review, the Court held that when a city conditions a building permit on some “give back” by the owner, there must be a “rough proportionality” between the burdens on the public that the building permit would bring about, and the benefit to the public from the give back. This “rough proportionality” standard was announced in Dolan.

o there must be a “rough proportionality” between the trade-off demanded by the city and the burden to the public from P’s proposed development. The Court found that the city here had not satisfied this requirement.

o There must be some rough proportionality between the size of the problem that the development is making and the size of the exaction imposed

Two-step testo An exaction can only be upheld if it is a logical response that is calculated

to alleviate a particular problem caused by a development, and the scope and size of the exaction must be roughly proportional to the scope and size of this problem created by the development

o two-prongs (1) essential nexus (2) roughly proportional

FLOW CHART

Takings analysis flow chart Loretto comes first because it is the most categorical rule of all

o The weasel word in there is permanent Does not have to be physically permanent…look to Nolan, the

permanence applies to the on-going liability Everything thereafter focuses on regulatory analysis Is the economic value of the property wholly destroyed?...Lucas

o Unit…how something is bought and sold in the marketplaceo Consider what a state considers to be a unit

Nuisance exceptiono If the regulation simply prohibits something that would not be permissible

under state property law, including the law of nuisance, then you are allowed to destroy the value of someone’s property

Whole bottom half of the page is the Penn Central analysis

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o The rearrangement of private rights without a purpose. PA Coal. Does regulation deprive owner of a reasonable return on investment

o Diminution of valueo Unit…how something is bought and sold in the marketplaceo Low restriction of use…Hadacheck (you only cannot do this one thing)o High restriction of use…Mount Vernon parking case

RETURN TO THE BIG PICTURE [289]

Whyo God’s will/morality/natural lawo Reduce disputeso Reward labor, investmentso Defend expectationso Increase efficiency

Internalizing costs and benefitso Protect autonomy

Whato Power to exludeo Power to transfero Right to compensationo Freedom from discriminationo Right to enjoy the profits of your labor/investmento Right to exclude: privacy

Short Summaryo Larger questions

What is property? Why is it desirable? Why is it undesirable?o Retain perspective on big picture questionso Property rights serve human interests

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