Property Outline S11 Sharfstein

7/30/2019 Property Outline S11 Sharfstein

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Contents

Contents...................................................................................................................................................................1

What is Property?.....................................................................................................................................................3

Trespass and Nuisance.........................................................................................................................................3

Property and Equity.............................................................................................................................................3

Coase Theorem................................................................................................................................................3

Repeated Trespass and Injunctions..................................................................................................................4

Building Encroachments..................................................................................................................................4

Coase, Calabresi and Melamed........................................................................................................................4

Ex-Ante/Ex-post problem (page 63)................................................................................................................4

Restitution and Mistaken Improver.....................................................................................................................4

Original Acquisition.................................................................................................................................................5

First Possession....................................................................................................................................................5

Discovery.............................................................................................................................................................6

Land Grants from the Federal Public Domain.................................................................................................6

Acquisition through Creation...............................................................................................................................6

Accession.............................................................................................................................................................6

Adverse Possession .............................................................................................................................................7

Disabilities and the Statute of Limitations.......................................................................................................7

Sequential Possession..........................................................................................................................................8

Value Subject to Ownership....................................................................................................................................8

Property and the Human Body Moore v. Regents of the University of California......................................8

Owner Sovereignty and its limits.............................................................................................................................8

Protecting the Right to Exclude...........................................................................................................................8

Self Help..............................................................................................................................................................8

Exceptions to the Right to Exclude......................................................................................................................9

Necessity Affirmative Defense.....................................................................................................................9

Custom.............................................................................................................................................................9

Public Accommodation Laws..........................................................................................................................9

Anti-Discrimination.........................................................................................................................................9

Fair Housing Act............................................................................................................................................10

Owner Sovereignty and its Limits.........................................................................................................................10

Abandonment.....................................................................................................................................................10

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Destruction.........................................................................................................................................................10

Transferability ...................................................................................................................................................11

Forms of Ownership..............................................................................................................................................11

Numerus Clausus...............................................................................................................................................13

Waste..................................................................................................................................................................13

Alienation...........................................................................................................................................................13Rule against Perpetuities....................................................................................................................................14

Methodology..................................................................................................................................................14

Concurrent Ownership.......................................................................................................................................14

Tenancy in Common......................................................................................................................................15

Joint Tenancy.................................................................................................................................................15

Entity Property.......................................................................................................................................................15

Leases.................................................................................................................................................................16

Implied Warranty of Habitability (IWH).......................................................................................................17

Duty to Mitigate.............................................................................................................................................17

Transfer of Tenant Interests...........................................................................................................................17

Condominiums, co-ops, and common-interest Communities............................................................................19

Condo.............................................................................................................................................................19

Co-op..............................................................................................................................................................19

Title Recording......................................................................................................................................................19

Nemo Dat v. Good Faith Purchaser for Value...................................................................................................19

Types of Recording acts.....................................................................................................................................20

The Law of Neighbors...........................................................................................................................................20

Nuisance.............................................................................................................................................................20

Easements..........................................................................................................................................................21

Negative Easements.......................................................................................................................................23

Termination of Easements.............................................................................................................................23

Covenants...........................................................................................................................................................23Notice and Common Plan..............................................................................................................................24

Termination by Changed Circumstances.......................................................................................................24

Termination by Abandonment.......................................................................................................................25

Takings...................................................................................................................................................................25

Eminent Domain................................................................................................................................................25

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Regulatory Takings............................................................................................................................................26

Takings Test...................................................................................................................................................26

Property OutlineWhat is Property?

Trespass and Nuisance

Trespass is interference with possession of land

Nuisance is an unreasonable infringement of the right to use and enjoy ones land

o Requires a certain degree of intent

o An injury (interference with enjoyment)

o Must be substantial and unreasonable (balancing test)

Jacque v. Steenberg Homes, Inc.

No damage in trespass, gave punitive damages (mobile home across land w/o permission)

Intentional, no harm, unreasonable refusal by a vulnerable plaintiff,

Generally: no punitive damages for a nominal award

o Right to exclude is hollow unless it comes with sufficient means to protect it

Why is right to exclude so important?

o Self-help fears

o Autonomy

o Possible liability issues

o Privacy

o Efficient use

o Really goes to the core of dignity, humanity and citizenship

Merest v. Harvey: W/o right to exclude people with more means resources will victimize those with less

Categorical/essentialist view of the right to exclude

o Whatever consequences that flow from that are okay as long as they protect the right

Hinman v. Pacific Air Transport

No real damages, planes flew low around dudes house (settled forever by Causby)

Ad coelum rule not law, column of space above and below, guy loses

Functionalist utilitarian view (contrast withJacques)

Hendricks v. Stalnaker(classic private nuisance case)

Cant have a well and a septic system in the same place; very unneighborly dynamic Neither one was a nuisance, well was a reasonable use, had his permit first (good faith an issue?)

Property and Equity

Coase Theorem

Basics: In the absence of transaction costs parties will agree to maximize net wealth. Baseline entitlement

irrelevant; two parties will find the most efficient joint use of the resources (always most valuable use, come

to agreement that is mutually beneficial)

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Extension of Coase: courts should try to resolve cases in the most efficient way. Almost amorally. In issues

of incompatible uses, courts should give entitlements to minimize transaction costs and be clear (parties will

negotiate in the shadow of the law)

Issues

o Bilateral monopoly two parties hate each other (hard to negotiate)

o Endowment people overvalue what they have

o Assembly costs hard to get people together (holdouts/free riders)

Repeated Trespass and Injunctions

Baker v. Howard County Hunt

Dogs run across farm during hunt, attack family, destroy things; Baker seeks injunction

Injunction granted, dogs were a repeating trespass (may be reasonably foreseeable test for property that

creates a trespass while not in exclusive control)

Building Encroachments

Pile v. Pedrickand Golden Press v. Rylands

Footings of buildings were encroaching on land due to poor survey (good faith)

Liability rule in GP (found for D no injunction); property rule in Pile (injunction granted)

Coase, Calabresi and Melamed

#1 Protected by property rule if plaintiff must voluntarily sell their entitlement to another person at a price

the P agrees to

o People have a duty to respect the rights of owners and whatever value they attach to it

o Jacques,Hinman, Smith, Pile

#2 Protected by liability rule if state determines the objective value for someone to compensate the Owner

for their entitlement

o Recognize that issues with negotiation often arise and courts better resolve conflict

o Golden Press; Weatherbee

#3 D gets entitlement, P can only stop D with Ds consento Hinman

#4 P can force D to transfer the entitlement to P for a payment of money compensation.

o Spur D wins but not really

Ex-Ante/Ex-post problem (page 63)

Ex-ante refers to analysis of the situation before some critical event takes place

Ex-post refers to analysis that takes place after critical event

o Courts drawn to this, breeds liability rules because costs are so high

Restitution and Mistaken Improver

Restitutions require 3 thingso Defendant is enriched

o At plaintiffs expense

o Under unjust circumstances

Producers Lumber v. Olney Bldg. Co.

House built on wrong land (good faith questionable), builder destroyed house in cover of night

Options for Good faith improver (all liability rules)

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o May recover for the amount of enhanced value

o Improver may remove the building if it can be done without great expense to land or building

o Improver can buy out the landholder of the original value of the land

o If neither can pay for land/improvement, court can sell to highest bidder

A good faith improver is a trespasser, bad faith destruction breeds liability to the original landowner,

building becomes a part of the land

Original AcquisitionFirst Possession

1. Actual Possession

2. Intent to Control communicative act

3. Series of acts intended to communicate that one controls a piece of property

4. Effective exploitation through control

Mineral rights - Some pre-possessory interest if using due diligence to explore for the mineral in an area

When should the court find a clear winner early in the process:

o If there is heterogeneous knowledge and ability, give it early and make it clear

o If there is homogenous knowledge, best if protected by a governance scheme

Pierson v. Post

D kills fox while P is hunting it on unpossessed land; Actual capture, wounding, or killing of the animal is

the moment of possession, dissent wants intent to control as possession

Ghen v. Rich

P kills whale, leaves it to float to shore, D finds whale and sells it. Court has to decide between fast fish

loose fish (salvager) and iron holds the whale (killer owns the whale)

IHTW incentivizes whaling, but FFLF would promote new technology but may be inefficient

Courts defer to custom in narrow circumstances

o General use everybody knows about it

o Longstanding custom

o Limited application to field and area

o Not deferring to custom would otherwise destroy the industry

o Not contrary to general law

o Cons: out group externalities, evidentiary difficulties but People will rape an open resource

Keeble v. Hickeringill

D scaring ducks from Ps decoy pond with gun, this is Keebles livelihood, sues for the disturbance

This was unfair competition, court does not like that, would protect fair competition

Eads v. Brazelton

Sunken boat, P marked trees and left a buoy which washed away, D finds ship and salvages it

Have to demonstrate an ability to recover the property and show/communicate due diligence to exercise

control over the resource to other parties

We want actual possession because it rewards those who have produced the most for society

Abandonment Property is abandoned when owner intentionally and voluntarily relinquishes all right,

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title, and interest in it

Popov v. Hayashi

Popov caught ball, got mobbed, dropped it and Hayashi got it. In rare move, court sold ball and split profit

Popov deserved a chance to finish acquiring possession of the ball (pre-possessory interest)

Discovery

Johnson v. MIntosh (1823)

Indians sold land to Johnson ancestor. Later, Indians grant land to US. US sells to MIntosh. Johnson sues

for ejectment of MIntosh

Nemo Dat (cannot give what you do not have) Johnson would win, because his title is better

Discovery conquest/custom allowed peace between European powers (general broad intent)

Cultural labor theory of value whites will use land better (functional argument)

Necessity system built on shafting Indians, have to continue to do so (functional argument)

Built a monopsony, only federal govt could buy their land

Positives? State law could have been much more hostile, it actually protected their land

Land Grants from the Federal Public Domain

It is a huge source of entitlement but only for the people who belong

o Gives an enormous source of endowed wealth

Property regime has enormous consequence on those without voice and the disenfranchised

Acquisition through Creation

International News Service v. Associated Press

INS could not get news from Europe stole APs research and rewrote it

Majority News is a quasi-property which gains value in its acquisition/creation

o Very Lockean perspective on acquisition of property

o This is a right only against competitors, not the general public

Brandeis leave it to the legislature Holmes wants misattribution not misappropriation; value does not make property

Accession

Principle of Accession: doctrine where you acquire property that is intimately connected with objects that

are already our property

Doctrine of Accession: someone mistakenly takes up a physical object that belongs to someone else and

transforms it through her labor into a fundamentally different object (Weatherbee)

Doctrine of Increase: General rules absent agreement to the contrary; Carruth offspring follows mother

Weatherbee v. Green

W (good faith improver) converted Gs (true owner) timber into barrel hoops (hoops worth 28x more)

When D acts in good faith, he may keep improved property but must make original party equal through

damages Must also have substantial transformation (physical or value hard to prove)

o This is about driving a conceptual wedge between the true owner and the object

Edwards v. Sims (ad Coelum rule revisited)

Edwards starts soliciting cave he found, part of it lies below Lees land

May allow intrusion if the person that applies for it shows a bona fide claim and alleges facts showing a

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necessity for inspection and examination of the adverse partys property ad coelum applies, intrusion is

allowed because his property may lie inside the cave that Edwards is profiting off of

Dissent possession theory, only have rights to what you can subject to dominion or use.

Adverse Possession

Adverse possession is:

o Actual

o Exclusive

o Open and notorious

o Adverse under a claim of right

Why do we require a lot more than mere trespass to confer property ownership?

o Owners might allow some trespass

o Trespasses on undeveloped land: owner might never notice someone had been trespassing

o We don't want to remove a gatekeeper (even if it's not very good) with someone who would be a

terrible gatekeeper (adverse possessee).

Why do we permit adverse possession?

o Lockean Rationale : effectiveness of the gatekeeper, "sleeping on rights", TO has lack of desert

o Utilitarian Rationale : adverse possession lowers transaction costs by cutting need for prospective

purchasers to investigate ancient claims to property.

o Hegelian/Personhood Rationale : adverse possessor has a closer relationship to the property; reliance

interest and endowment effect.

Lessee of Ewing v. Burnet (194)

Man sells land twice, one man possesses it adversely, paid taxes, fenced in land, lived across the street

Plaintiff let SOL run, knew Burnet was on the land, he was open and notorious, D wins

Carpenter v. Ruperto

P on Ds land for 30 years, knew she was not owner; Court uses strict standard for good faith (rare)

P fails that test; good faith often analyzed by looking at the claim of right

Howard v. Kunto

Deeds of 3 properties did not correspond to where they built their summer houses, instead of switching, they

sue to take others land.

Must meet all adverse possession requirements:

Sufficient Continuity: sufficient when the land is consistently occupied during certain times of the year.

o Helps if there are permanent improvements on the land (i.e., home and dock).

Tacking: Rule: tacking of adverse possession is permitted if the successive occupants are in "privity" (i.e.,

contractual relationship) (ex: sale, gift, running of deed between parties suffices).

Disabilities and the Statute of Limitations

Typically, state statutes provide that the statute of limitations is tolled for owners suffering from certain

narrow classes of disabilities, including being under age, insane, legally incompetent or sometimes in prison

at the time the adverse possessor enters the property

Songbyrd, Inc. v. Estate of Grossman

Guy makes tape, P sues for conversion; SOL is the important issue in this case

3 possible rules for when SOL begins to toll

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o Conversion rule the moment the adverse possessor converts the property (court picks this, 3 year

SOL) makes most sense for adverse possession (Sporn)

o Refusal of a demand to return rule (Guggenheim)

o Subject Discovery test once P becomes subjectively aware of the adverse possession (OKeefe)

Sequential Possession

Armory v. Delamirie F1 v. C1 F1 has property right over anybody but true owner (jewelry found)

Clark v. Maloney F1 v. F2 F1 same logic asArmory (logs)

Anderson v. Goldberg C1 v. C2 C1 same logic asArmory (logs)

Value Subject to OwnershipProperty and the Human Body Moore v. Regents of the University of California

Dr. patents cell line from Ps spleen, makes $3 billion off of it, conversion suit fails, informed consent suit

proceeds; no precedent

There was no property right in the removed spleen; he wanted it removed had intent to abandon it

Policy concerns: hamper innovation, create disincentives to the conduct of socially beneficial research;

people may just start selling body parts (especially the poor people) functionalist argument

Mosk dissent = INS majority, INS Brandeis dissent = this majorityOwner Sovereignty and its limits

Protecting the Right to Exclude

Intel Corporation v. Hamidi

Fmr. Employee spamming Intel, causing lost time but not physical damage. Intel sues for trespass chattels

Will not sustain action for TTC without damage (lost time not enough); court says that Intel had self-help

remedies

Some policy concerns

o They opened themselves up to the internet; dont want to clog the internet

o

Technology is changing rapidly; let legislature deal with ito Do not need to squeeze the new technology into old laws

o Injunction would have been essentially hollow, would make court look bad (inability to enforce)

Self Help

Always permitted to some degree question of when/where the courts demand more of a monopoly right to

enforce right to exclude

Berg v. Wiley

D leased property to P for restaurant, reserved the right to retake possession should the lessee fail to meet

lease conditions; P broke lease; D locked P out when she left for the night and re-let the property

If D is legally entitled to possession then he can retake if he does so properly

Court decides that you cannot resort to self-help for eviction because it cannot be done peacefully

There was a forcible entry and detainer statute which provided a decision in 10 days or less this is peaceful

Williams v. Ford Motor Company

Guy and wife buy car, they divorce, he has to pay for car, she gets it, he defaults

Repossessors come at 4:30 a, and start to take her car, she gets things out of it with permission and no fight

UCC in taking possession a secured party may proceed without judicial notice if this can be done without

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breach of the peace (Tell your client to raise hell)

Why allow this type of self-help? Lower costs for financing, Easier way to gain collateral on default

Exceptions to the Right to Exclude

Necessity Affirmative Defense

Ploof v. Putnam

P moors boat to Ds dock. Storm comes, D removes boat, Ps ship and family are injured

Ps trespass is excused due to necessity, actual property right may shift (property rule- #3)

Necessity is fine when:

o There would be high transaction costs to litigate the permission to use the property

o Use of land is not onerous/destruction

o Consequences of forbidding the necessity would be grave

Matters what your purpose is, also matters what creates the necessity (danger vs. inability to go forward)

Ps only remedy is if the ship damaged the dock (while docked)

Custom

McConico v. Singleton

D hunted on Ps uninhabited, unimproved land against Ps refusal

Court holds that custom of allowing people to hunt had essentially become law default license

o Can be overcome by posting laws or fencing in land (statutes have codified this either way)

Posting laws are default rules that can curb transaction costs

o Only works when there is a clear demarcation of boundaries (may mean a fence is required)

Public Accommodation Laws

42 USC 2000(a): (1) inns, hotels, motels; (2) restaurants etc.; (3) entertainment

o Cannot exclude due to discriminatory factors because these are places of public accommodation

Uston v. Resorts International Hotel

P was banned for card counting, Casino could not do this without putting it in hotel rules

Court chose that default rule should weigh in favor of public access as opposed to owner sovereignty

Market may correct any negative effects of exclusionary policy courts need only step in when it is

discriminatory

Compare the right to exclude with the individual right, usually court will weigh in favor of stronger right

o Strength of right is a fact determinative test

o The more a place opens their doors to the public and benefits from said openness, the weaker the

interest in the right to exclude -Brooks v. Chicago Downs Assn.

o Schmidhad a very obvious disparity (1st amendment v. right to exclude on private university)

o Shackhad two strong rights (human rights v. right to exclude on private farm)

o Uston had 2 weak rights (right to exclude in casino v. public accommodations)

Anti-Discrimination

Courts acted conservatively (interpreted the 13,14,15 amendments very narrowly)

o Private actions did not fall under these clauses according to the court; only state action did

o Attempts to zone cities by race were discriminatory, but not private efforts to do so

Shelley v. Kramer(1948)

Ps sign a covenant agreeing not to let blacks into neighborhood. Ds (black) move in. State Supreme Court

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ordered enforcement. The Supreme Court said it was unconstitutional

Because state court enforced private covenant, a state action is implicated. Therefore, a state violated 14th

Amendment when State court ordered enforcement

Later Fair Housing Act eliminated unilateral discrimination in housing sales

Justifications for distinguishing this restrictive covenant from general right to exclude

o Covenants are a lot like zoning (functionally equivalent already held to be unconstitutional)

o Excluding an entire group for a long time is different than excluding one person

o Shellys are in possession, this would be an ouster (better have a great reason to do this)

o Diminished owner interest group dynamic makes interest weaker

o Judicial enforcement of non-natural property rights is state action

o Common Law / Norms: agreements about collective property concern the property, not the owner

FairHousingAct

Prima facie case

o Have to be one of the protected classes with no other outstanding issues (qualified)

o Denied housing with housing still available

Burden of proof shifts to D to show a non-discriminatory reason why the applicant was not approved

Evidence of pre-text? Defendants actions, Consistency, Ad hoc explanations, Available v. non-available

Advertising a racial preference is not allowed under this

Mrs. Murphy exception (houses 3 or less families and its owner) Can discriminate but cannot advertise it

Private clubs & religious organizations (so long as they dont take government money)

FHA and roommates Right to purchase property doesn't necessarily trump the constitutional rights of

privacy, free association etc.

Owner Sovereignty and its Limits

Abandonment

Look for signals of abandonment Location, condition, no name etc;Eads v. Brazelton How can people take control once the D walks away?

o First possession, Accession, Terra nullius barren wasteland, Reversion to state control

o There is no real mechanism for what to do with abandoned land

If a person DOESNT have perfect title: Property is abandoned when owner has voluntarily

relinquished all right, title, claim, and possession with the intention of terminating ownership without

vesting it any other

Traditional Rule: Real property cannot be abandoned (D had perfect title)

Pocono Springs Civic Association v. MacKenzie

Ds land became a negative value asset, they tried to sell it, let the government try to sell it. No buyers.

D had not fully abandoned the land, still belonged to them thus they owed damages for HOA fee

Destruction

Height of the right to exclude preventing of property from being used or resold against your will

Destruction is the ultimate in right to use and exclude, its complete dead hand control

You can do whatever you want while you are alive destroy a painting etc.

Eyerman v. Mercantile Trust Co.

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Lady wants house destroyed in will, neighborhood wants it kept, destruction was $39K net loss

Court says it would be against public policy to destroy this house hurt the aesthetical/historical aspects

There is no good reason for the destruction; AND the act is against public policy

Acts are against public policy when: they have a mischievous tendency so as to be injurious to the

interest of the state apart from illegality or immorality

Courts will almost never order the destruction of property causing substantial loss in value

Transferability Right to transfer

o Enhances owner autonomy- permits owner to shed gatekeeper responsibility for thing owner no

longer wants/needs

o Allows owner to appoint successor as gatekeeper of the asset.

Efficiency justifications - Allows for property to be reallocated to person who values its most (especially

without transaction costs Coase theorem)

Two types of transfer Exchanges (quid pro quo) and Gifts

Absolute restraints are void; limited restraints may be valid if reasonable

o Some evidence of an unreasonable restriction % of market covered

Whether there is invidious intent

Discrimination

Mechanism of alienation

Lauderbaugh v. Williams

Lauderbaugh wants to sell outside the association, there is a restriction on alienation

Court focuses on future holders of land instead of the present owners

Restriction unreasonable because it was arbitrarily applied, done by high percentage vote (easy to blackball)

Forms of Ownership Possessory Estate Owning an estate in land rather than land itself is legitimate legal right to occupy the

land immediately

o Freehold not a particular date but can still end

o Non-freehold ends on a particular date

Future interest possibility of right to possess in the future (does not include right to possession until some

future event)

Fee Simple Absolute O > A and his heirs or O > A

o Largest Estate permitted by law, full possessory rights, alienable, inheritable

o Courts assume fee simple today unless deed language looks like it is creating a lesser estate Life Estate O > A for life (reverter O); O > A for life then to B (remainder to B)

o Alienable by gift or sale and ends at the death of original owner (but not by will)

o Can only convey the life estate in yourself (O >A for life who sells to B, once A dies, it reverts to O)

life estate per autre vie

Fee Tail O > A and male heirs of his body

o Only when the family dies out is there a reversion or a remainder

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o Generally these are fairly easy to convert into a fee simple

o These are abolished by statute in most states

Defeasible Fees

o Fee simple determinable (FSD) As long as while during until

This is an automatic end if condition is not met

Future interest is a possibility of reverter if condition is not met

Occurrence of named event will trigger the start of statutory period for adverse possessiono Fee Simple Subject to Condition Subsequent (FSSCS) To A but if, right of reentry

Same as FSD but interest does not end automatically

Future interest is a right of reentry

Clock does not start for AP but still cannot sleep on rights (doctrine of laches)

o Fee Simple Subject to Executory Limitation (FSSEL)

To A, as long as she doesnt smoke, but if she does, to R

Gives an executory interest R (Check against RAP)

Future interest is an Executory Interest

Reversionary Interestso Reversion: (follows a life estate, some leaseholds)follows natural end of a life estate and in other

contexts which an owner has not disposes of the entire fee. to A for life (O implicitly retains a

reversion

o Possibility of Reverter : (Follows FSD) O will automatically get the property back if the built in

condition occurs. O grants to A as long as then to O

if the grantor dies, his successor takes interest

o Right to Entry/Power of termination: (Follows a FSSCS) Grantor has option to take action (nothing

happens automatically ) O grants to A but if then O has the right to reenter and take

Remainders

o Indefeasibly vested indentity of takers is known (O > A then to As 3 current Children)

o Contingent Remainder O > A for life then to As children if male (Reversion if not met)

o Vested Remainder Subject to Complete Divestment : identity of interest holder is certain and the

remainder is certain to become possessory, unless some specified event occurs

Magic Words: To A for life, then to B; but if B fails to graduate by 19, then to C. (A has

life estate, B has a remainder subject to complete divestment with a condition subsequent, C

has an executory interest. If B fails to graduate by 19 her remainder will automatically be

terminated ordivested)

o Vested Remainder subject to open vested remainders in one or more ascertainable members of a

class that may be enlarged

O > A and his kids (his current son B has a remainder vested subject to open if any more kids

are born)

Williams v. Estate of Williams

Holographic will left to 3 daughters unless they marry or die, in which case it moves to the surviving

daughters question is what happens when the all 3 daughters marry or die

This is a life estate determinable in each daughter with an executory interest in the sisters shares, with a

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reversion in fee simple to grantor and his heirs

Klamath Falls v. Bell

D&S (the corp) > KF so long as library. Executory interest in D&S (the people)

RAP does not allow this; D&S get crossed out; city ends up with an FSD instead of an FSSEL

The corp dissolved so their reversion went to the heirs of D&S the beneficiaries of the corp.

Numerus Clausus

Requires people to use a standard set of forms; New forms must come from legislature

Externalities Similar market participants and purchasers of property would have a bitch trying to find out

about everything that went with the land unless its one of the forms

Johnson v. Whiton

Royal Whiton does not want his property to go to his daughter-in-laws side. Too fucking bad.

4 grandchildren get 1/6 of a fee simple, 5th grandchild has a 1/3 fee simple to her and her heirs on her

fathers side

Did Royal create a Fee tail for Sarah? Looks like it, Holmes says that since fee tails are illegal, she has a fee

simple absolute

Garner v. Gerrish

Gerrish signed a lease that was year to year for the rest of his life

This was essentially a life estate determinable

Third party costs effected by this kind of tenancy

o Value is lost to purchasers and to his heirs

o Creditors of the estate are affected when the value of the property is compromised using the state as

security.

o Purchasers generally: people are buying properties that have been rented out. Future purchasers will

have to gather more information and terms of the leases relating to the property to make sure the

sort of property right ruled here isn't present.

Waste

Brokaw v. Fairchild

Brokaw leaves a house to each kid in life estate, George wants to raze it and erect an apartment

Daughter has contingent remainder is she outlives George, contingent remainder in other kids if she doesnt

Right of life estate is use, not complete dominion (Still have more rights than a lessee)

Ameliorative Waste increased market value impermissible if it destroys subjective value for

remainderman (not based on efficiency)

Alienation

Mountain Brow Lodge v. Toscano

Will grants land to Odd Fellows club with clause that if they dont use it or if they try to sell it then the land

reverts back to the grantors estate

Court rules that sale provision is an absolute restriction on alienation and is invalid

Balancing test between restraints on use and alienation limits

o Remedy involved

o Externalities on market how many buyers does the restriction eliminate?

o Does restriction benefit other land?

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o Does it discourage improvements?

o Does it encourage gifts to charity?

Rule against Perpetuities

No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the

creation of the interest

Vesting is eliminating any of the suspense elements regarding a future interest

Methodology

1. Classify All Interests

2. Any interests subject to RAP?

a. Contingent remainders - need to resolve the question of who the remainderman is and whether

remainderman will satisfy the conditions precedent

b. Executory interests - taking of possession or the executory interest becomes an indefeasibly

vested remainder

c. Open classes (Ex: To Amy and her children)

i. You could have many children and the class does not close until you're dead.

ii. So, to avoid RAP you need your class to be closed and specific.

3. What event has to happen for these interests to vest?4. Identify the life in being that validates (look when interest is created when testator dies in a will)

a. Reversions are exempt from the rule against perpetuities

b. The life in being at the time the interest is created doesn't have to be related to the interest

c. The fetus of a dead testator is considered a life in being at the time of creation.

5. If RAP, cross out interest and reclassify

Klamath Falls Revisited

City has an FSSEL, with D and S having an EI which is subject to the RAP

D and S are the lives in being, this interest does not have to vest within their lives and 21 years

RAP is invoked, strike out the EI and reclassify it as a FSD

Concurrent Ownership

Can reflect relationships of owners or usage

JT have no property rights vis a vis each other (no exclusivity of each other)

Both can exclude or include strangers, use property for profit or enjoyment, sell interest

Remedy for either party is exit with automatic right to partition, not judicial arbitration

o 2 types

Partition in kind (PIK) physical land division

Partition by sale (PBS) division of proceeds from sale according to the parties interest.

Partition has to be impracticable or inequitable and The interests of the owners would be better promoted by a PBS

o Can give any reason for partition and court will likely grant it

o Future interests have a weak incentive to arbitrate against partition, current interest is strong

Waste = future interests have incentive to arbitrate, weak incentive for current interests

Why are judges reluctant to entertain actions of waste (in comparison to suits by future interest holders)

o There are differences in transaction costs

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o Absentee/minor/unborn future interest holders

o Easier for cotenants to monitor other cotenants

o Easier coordination

o Cotenants are always holders of the same interest

Owelty payments that correct the imbalance of a PIK

Tenancy in Common

Siblings

Partition rights, contribution, etc. are the same for TIC and JT

Only significant difference is right to survivorship (there is no such right in TIC)

Goes to the heir of the person who dies (O > C, D, Es shares go to their heirs)

It is flexible, interests need not be equal

Joint Tenancy

Spouses right to survivorship

O > C, D, E (illustration of right of survivorship)

o If C dies his interest is split between D and E

o

If D dies, E gets 100% share; E dies > his heirs Only really appropriate for husband and wife or a family business

The Four Unities must be satisfied (T-TIP)

o Time Each interest must be acquired or vest at the same time

o Title Each must acquire title by the same interest or by joint adverse possession (not by intestate

succession or other act of law)

o Interest Each must have the same legal interest in property, such as fee simple, life estate, lease,

etc. although not identical fractional shares

o Possession Each must have the right to possess the whole

If any of these fail, it becomes a TIC (either person can sever and make the JT a TIC) Use a straw transaction to turn a TIC into a JT (sell TIC to one person who sells it back as a TIC)

There is a general bias against JTs, so be clear in your language if that is what you want

What if a joint tenant enters into a lease? unclear but would seem to violate TTIP

Delfino v. Vealencis

TIC, P wants to sell property, D wants to keep her chunk of the land, wants PIK, P wants PBS

PIK is given when physical attributes of land allow for practical and equitable division, when impracticable

or inequitable

PIK destroys a lot of wealth, has given way to PBS as more common

Gillmor v. Gillmor P sues her cousin because D is overgrazing the land

Ouster clear demand by cotenant for use that is refused by the other cotenant

o Acts that necessarily exclude the other tenant are an ouster

Determinative factor in this case is that the land only had one use and there was only so much grazing that

the land could take before it was an effective ouster

Entity Property

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Leases

Rent Landlord always expects to collect rent

o Regular interaction between landlord and tenant

o Increased landlord interest

o Leads naturally to some level of management and supervision

Often specified or permitted by lease agreement

Timingo Present value of a reversion is larger

o Leases are often used as an instrument for managing complex asset systems

o Permits a division of labor and a specialization of function

Leases can serve to diversify risk (important)

Leases in Numerus Clausus

o Term of years stated date of termination

o Periodic Tenancy renews on a cycle; must give notice at least equal to length of cycle

If lease is not terminated, it is renewed for entire cycle

o Tenancy at will either party can terminate when they wanto Tenancy at sufferance - individual that was once in rightful possession of property, holds after this

right has ended. Differs from trespass because original entry was permitted. This difference limits L

ability to use self-help to evict TAS. L can use FED or bring action in ejectment.

Options for Tenant suffering a potential breach

o Remain in possession and sue for lost profits

o Rescind the lease

o View breach as an end of the lease and sue for damages

Paradine v. Jane

Term of years lease, T kicked off land by army Court holds that T must pay rent since he would have been able to collect windfalls, has to take losses too

Smith v. McEnany

L builds encroachment onto Ts leased land, T stops paying rent

Covenant to pay rent is dependent on covenant to grant possession, T does not have to pay rent

Tenant had another independent covenant to repair the property not absolved from this

Sutton v. Temple

Does L owe T a warranty of fitness? Paint chips in grazing land bunch of dead cows

Caveat lessee, T liable for rent; beast raiser probably in best place to know land fitness

Blackett v. Olanoff L rents to residential and a cocktail lounge. Ts get annoyed, ask L to make it stop. He fails. They stop

paying rent. L sues for rent, Ts argue constructive eviction

Covenant to provide possession also comes with quiet enjoyment, when this goes away: constructive

eviction

L not typically responsible for other tenants unless L has power to control the offensive conduct that has

foreseeable effects Effect, not intent is the key issue

In re Kerr

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T has lease for 2 years, goes bankrupt, L finds new T 1 month after T stops paying

Old Ts only responsible for the time it went unrented, L wanted difference in rent between 2 tenants

Surrender implied K for a mutual release of obligations

o Tenant stops paying rent this is an offer

o L relets for a longer term this is an acceptance

Medico-Dental Building Company of LA v. Horton and Converse

T has agreement with L to not allow another drugstore in the building, rent reduced if there were vacancies L let doctor dispense drugs out of his office, T vacates. Court construes lease as interdependent

What factors were important to decide if this was interdependent?

o Boiler plate contract that came with a rider

o Reduction in rent when vacancies

o Breach was the essence of the bargain (economic importance)

Court finds two sets of rights in the lease:

o L-T relations of privity of estate

o Lease stipulations & privity of contract. (How important were these in making privity of estate?)

Implied Warranty of Habitability (IWH)Javins v. First National Realty Corp.

1500 housing code violations, Ts stop paying rent, claim L breached lease by allowing disrepair

IWH cannot be waived by either party, best invoked when there are ongoing violations

o Landlord cannot retaliatory evict (illegal lease doctrine did not do this IWH replaced it)

Landlord cannot go out of business to avoid IWH; question as to what violations should matter

Consequences

o Impact depends on enforcement levels (generally very low)

o Payouts are low does not attract lawyers, not much effect on housing for IWH

Duty to MitigateSommer v. Kridel

T sends letter to L surrendering his lease. L never responds, sits on his butt, does not mitigate

L has to mitigate breaching party has duty to prove he didnt (shift from farms to high rises)

Reasons to mitigate - Tenant couldnt pay before (judgment proof plaintiff); Steady income; Vacant

properties have their own issues; costs of litigation

Mitigation - T owes rent for reasonable time of vacancy plus difference in lower rent and advertising costs

Surrender L accepts surrender when locks changed etc., D pays for months vacant but nothing else

Transfer of Tenant Interests

Sublease: each sublease is a carving out of the previous lease & creates an interest of somewhat lesser extent

than the interest from which it is taken. (responsible to the person immediately above in the chain of leases)

o No privity of estate under a sublease because the subtenant's interest is not carved directly out of the

landlord's interest

Assignment: operates like alienation - prime tenant alienates prime lease to first assignee (assignee is held

responsible to the original landlord, instead of the tenant who transferred the property)

o Landlord and Assignee are in privity of estate because the assignee's interest is directly carved out of

the landlord's interest.

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o Privity of contract between the Landlord and the prime tenant is not destroyed.

o No privity of contract exists between the Landlord and the assignee.

Privity of Contract & Privity of Estate

o Privity of Contract - easy to identify - whoever has signed the lease

o Privity of estate - Two requirements:

Must have interests directly carved out of the interest of the each other

One of the parties must be in actual possession of the property. What Obligations run with privity of estate?

Any covenants that run with the land & define the leasehold interest.

Why does this matter:

o If you are an inactive landlord, you will prefer a sublease, because the prime tenant will serve as the

landlord to the sub tenant.

o If you are an active landlord, you probably prefer an assignment, because the tenant must pay you

rent directly and perform other obligations that run w/ the land.

o AND if the assignee defaults, the prime tenant is still under privity of K to the landlord (acts as a

surety for $$ owed)

Other Concepts in Assignment:

o Assumption If the first assignee expressly agrees to be bound by terms of the original lease (is

bound by privity of K AND privity of estate to the landlord.

o Novation Occurs when the parties agree to terminate any privity of contract between the prime

tenant & the landlord (landlord must agree)

Jaber v. Miller (1951)

L Leases to Jaber (Privity of Estate & Privity of Contract), Jaber creates an assignment to Norber & Son, but

includes a reversion clause, Norber & Sons agree to pay Jaber's rent, and in consideration for the contract

five additional promissory notes. Norber & Sons contracted to transfer the estate to Miller. The promissory

notes were split into monthly payments to make it more manageable for Miller to pay The estate burns

down!

Miller sues Jaber, arguing that the promissory notes are actually rent payments, and that because the transfer

was a sublease, rent obligations terminate when the property is destroyed.

Question: Is the transfer from Jaber to Norber & Sons an Assignment or a Sub Lease?

o Common Law: If there is any possibility of a reversion, then it is a sublease regardless of what the K

says.

o Massachusetts Rule: Should carry out the intent of the parties, rather than the strict common law rule

because laypeople will not understand how to properly structure an assignment under strict common

law rules. Because Jaberintendedto assign the property to Norber & Sons, it is an Assignment.

Because it is an assignment, the promissory notes are consideration to induce the assignment, rather than

rentfor an assignment.

o Because it is consideration for the assignment, it arises out of privity of contracts and is still owed to

Jaber, whereas if it was rent it would have arose out of privity of estate the duty would have ended

when the estate was destroyed.

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Kendall v. Ernest Pestana

San Jose leases to Perlitches, 25 year sublease to Bixlers Perlitches assign to Ernest Pestana

Bixler asks Pestana to assign to Kendall, Pestana refused, demanding increased rent and other terms

Had to ask per their lease CA goes with the minority rule (this is a default rule that you can K around)

o Majority CL rule Landlord can deny this for any reason at all

o Growing minority rule can only deny where lessor has a commercially reasonable objection

Suggest deference to landlord (subject to judicial review) This is an ex ante thing, they are screwing shit up by doing this

Condominiums, co-ops, and common-interest Communities

Landlord- Dictatorship

Unit-holder governance- democracy

Why rent? Financing, Diversification/risk, Specialization

Why own? American dream/personhood Autonomy, Investment, Tax-Preferred Ownership

Condo

Nahrstedt v. Lakeside Village Condo (1994) (Crazy cat lady)

530 unit condo complex - constitution contains Covenants Conditions & Restrictions for everyone incomplex. Enforced by home owners Association. CCR prohibited pets.

Main Argument - CCR is unreasonable - statute says they have to be reasonable - claims application to her

pets is unreasonable "as applied"; Argues no adverse effect on other residents

Florida Approach Rules in Project declaration (Constitution / CCR etc.): no reasonableness standard

unless completely arbitrary or it violates public policy New rules or interpretations must be reasonable

Ct. - Best interest of social fabric of complex's community to strictly enforce the contract

o Don't want residents to over litigate the issue - hurts fabric of condo's community

o Wouldn't be able to draw the line on a case by case basis (i.e. Cat okay, liger not okay)

Co-op

40 West 67th Street v. Pullman

Pullman being a huge dick to neighbors, they vote to remove him. He refuses, they sue him for possession

and ejectment

Court uses Business Judgment Rule (this can lead to bad evictions) deference to business unless:

o Board acted outside of its authority

o In a way that did not legitimately further the corporate purpose

o Or decision was done in bad faith

Do tenants need greater protection from commercial landlords?

o Landlord bears costs of eviction

o Coop board spreads out costs

o Court is ok with the double standard because its NY and landlords have incentives to change tenants

Title Recording

Nemo Dat v. Good Faith Purchaser for Value

Nemo Dat cannot give what you do not have thief does not gain good title

Courts have developed rules to protect the good faith purchaser for value

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o Good faith thought title was good

o Value actually purchased it

Recording is an ex post approach

o Organized by transacting parties names

o Records do not carry much presumption of validity

o Provides notice and protects purchasers

The title examination directly involves notice and good faith purchasingo You start at the immediate seller and see who sold it to him etc, then once you hit the statutorily

designed limit, then you go back the other way to make sure nobody sold it twice

o End up with a chain of title

Types of Recording acts

Race winner of race to record prevails

o Nothing to do with good faith purchaser for value

Notice subsequent good faith purchaser for value wins unless he has notice (actual, constructive, or

inquiry) and a recorded interest gives constructive or record notice

o

No way you can win if you have noticeo If neither party records, last purchaser wins

Race-notice subsequent good faith purchaser for value wins only if he has no notice and records first

o Still really strong incentive to record

Shelter Rule

o If O conveys to A who does not record, then conveys to B who does record then grants to purchaser

C not in good faith or value, the right belongs to C

o Original Owner Exception B cannot sell back to O using the shelter rule, right reverts to initial

purchaser

Hood v. Webster

1913 Hood deeds to plaintiff in escrow (his when she dies); 1928 hood conveys to nephew and brother

who record; 1933 she dies, plaintiff records (race-notice statute)

There was no evidence of consideration for nephew and brother (no value) - Dissent says work by the

nephew was consideration (followed by some courts)

Mugaas v. Smith

Plaintiff adverse possesses land, fences it in, it erodes, D claims land for value in good faith, claims P did

not record

Adverse possession cannot be taken away by a sale flag need not fly forever

Causes a huge rise in information costs for a purchaser, starts chain of title over

Zimmer v. Sundell (932)

Wild deed goes one direction, Gage sells to P who records in 1932, recorded by original claim in 1936, wild

deed recorded by earlier party in late 1936 (chart in the book)

Plaintiffs purchased an unrecorded deed, statute does not protect this (until Gage records)

The Law of Neighbors

Nuisance

Requires Actual/substantial injury

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o Effects property but less tangible in nature

o Invokes right of quiet enjoyment

o Have to balance nuisance with the suffering

4 Tests

o Was intrusion committed on plaintiffs land or outside the land?

o Was harm direct or indirect?

o Was the invasion tangible or done by some intangible substance?

o Did the intrusion deprive plaintiff or possession of the land or merely the use or enjoyment of such

Restatement

o Multi-pronged balancing inquiry to determine unreasonableness

o Nuisance is a substantial, non-trespassing, invasion, effecting the use/enjoyment caused by either an

ultrahazardous activity or intentional/unreasonable activity

Three approaches to unreasonable

Badness exceeds some threshold of wickedness

Becoming Worse dramatic change for the worse

Cost-benefit values of conflicting usesAdams v. Cleveland-Cliffs Iron Company

Iron Company operates 24/365 has over 200 employees; vibrations, dust, noise are bothering neighbors

Not a trespass because it was not tangible, trespass and nuisance should be kept distinct, could be nuisance

Boomer v. Atlantic Cement Company (956)

Ds plant damaging homes. Court gives damages to owners to allow plant to keep open

Court chose a type 2 Options if an injunction was granted

o Settle expensive

o Clean up expensive

This really screws the landowners because for a small fee, the company can just fuck their shit up forever This may have turned out differently if the landowners sought an injunction ex ante (cant pursue nuisance

because there is no harm)

Spur Industries v. Del E. Webb Development Co. (Coming to the Nuisance 964)

Spur has feed lot, Del Webb starts building towards it, Spur is building towards Del Webb

Developer sues for public nuisance (has a loss of sales)

Court decides on Rule 4, Del Webb must pay for reasonable costs of moving or shutting down, but right

given to plaintiff

Landowner may not have relief if he comes into a neighborhood that is reserved for industrial or agricultural

endeavors and has been harmed thereby Most of these end up as a 3. Defendant is not enjoined from operating his business

Easements

Voluntary restriction on exclusion rights

Easy way to create is by grant (put it in writing and record it)

Often involves neighbors; neighborly thing to do is resist formalities But informality leads to litigation

Two types of easements

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o Appurtenant most common (dominant and servient estate)

o Easement in Gross attached to a specific person (Non-inheritable, non-transferable)

Profit a Pendre one party has the right to remove a resource from anothers land

o Includes an implied license to access the land to get the resource (irrevocable as long as profit lasts)

Baseball Publishing Company v. Burton

Court has to define this agreement: license, lease or easement in gross? Numerus Clausus at work

D is servient estate, wants to remove sign from wall. This is an easement in gross because it was granted

only to the plaintiff. Not a license because it was not revocable

Schwab v. Timmons

Plaintiff landlocked his own parcel. He want an easement by implication or necessity

Easement by Implication prior use was continued for so long that it was meant to be permanent while

under common owner

o Quasi easement (not in this case)

o Would have to show that the road used to reach their home

Easement by Necessity land split by a grantor

o Has to be some level of necessity at the time of severance

o Has to be a high level of necessity to get an easement

o Common ownership followed by a severance that leaves one landlocked parcel

o Easement by necessity does not remain in existence if necessity is abated

Warsaw v. Chicago Metallic Ceilings Inc.

Trucks going onto Ds land every day, P wants easement by prescription

Elements of easement by prescription

o Actual

o Open and Notorious

o Not exclusive

o Not necessarily continuous (continuous use required not all the time though)

o No claim of right requirement

P given an indefinite easement in the form of an injunction (a rule 1 decision), D must tear down the

building he built when he relied upon the denial of the injunction

Reasons to require compensation for bad faith prescriptions (court opts for harsher rule)

o Would interfere much less with true owner deference

o Wouldnt interfere as much with issues of keeping title clear

o There are evidentiary problems, gets really complicated

Holbrook v. Taylor(998)

Taylors have permission to use a road, do so to bring supplies to build a house which Holbrooks are aware

of. Holbrooks revoke ability to use driveway once house is built, Taylors want easement by estoppel

Easement by estoppel

o Owner gives permission

o Non-owner relies to his detriment

o Owner revokes permission

o To the considerable expense of the non-owner

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Easement by estoppel is good as long as necessary, found in this case

Negative Easements

4 situations that are allowed in English Common Law

o Light window

o Air flowing

o Water flowing in artificial stream

o Lateral support building

Fountainbleau Hotel Corp. v. Forty-Five Twenty-Five Inc.

Fountainbleau is building a huge building to bloc Eden Rocs sunlight, too damn bad for the Eden Roc

Eden Roc does not get their prescriptive negative easement for the light American courts refuse to make

these

Spite Walls are now an actionable nuisance, but this was not alleged by Eden Roc

FB is acting reasonable but may be still a nuisance (compare toHickeringill)

Termination of Easements

By deed sell back the easement

End of term

Terminating Event

Merger common owner unites dominant and servient tract

Can be terminated by prescription (blocking easement)

Abandonment

Terminate by estoppel

Recording statute

Eminent domain kills your easement

Misuse

Penn Bowling Recreation Center v. Hot Shoppes, Inc. D is using the land for use of a different piece of land this is not allowed

If uses are too entwined, then the easement will be enjoined; court stops easement until it can be determined

what it can and cannot be used for

Intensity of use for dominant tract is judged on a reasonableness standard (factual inquiry)

Covenants

Real Covenant runs with the land

Equitable Servitude promotes fairness and equity because you cannot force somebody to perform if they

do not have notice

Tulk v. Moxhay Promises to keep and maintain garden, this is an affirmative covenant (AC)

Promises to keep it open/not build negative covenant (NC)

Promises to allow other people access to garden affirmative easement

Guy had notice, but it was not on the deed he wants to build on the land

o If not on the deed, you can look to the record through a title search

He cannot build on the land because he had notice

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Neponsit Property Owners Association Inc. v Emigrant Industrial Savings Bank

Covenants for payments for common amenities bank gets some land doesnt want to pay fees

What is required for a covenant to run with the land?

o Parties intend it to do so

o Must touch and concern the land with which it runs

Fee for communal improvements, not for land itself

No hard and fast rule for this matter

Is it a good distinction to say that only negative covenants touch and concern the

land? No.

Why negative but not positive? Less chance of irreparable injury

What about has to affect legal relations

o Land of burdened owner is benefitted by these improvements

o Work funded by fees directly affects the value of the land

Gives judges the discretion to decide whether this is the sort of agreement we allow parties to

enter to bind future parties

o Privity of estate between 2 parties, special and simultaneous relationship to the land relaxed in

this case

Notice and Common Plan

Controls use and enjoyment beyond land divisions

Neighbors can restrict your use of your land. Hard to change and hard to unbundle

What is the law of servitudes trying to balance?

o Trying to determine which covenants will run with the land/be enforced

o Trying to figure out which agreements are essentially personal in nature

o What level of notice is required?

Actual notice

Constructive would have known if you investigated the records

Inquiry notice simple looking around would make you see restriction

o What actions need to precede a valid contract?

o Which covenants are patently illegitimate? (racial)

o Which covenants have outlived their utility over time?

Sanborn v. McLean

D wants gas station behind house, enjoined by P to stop them from building it, nothing in chain showing a

restrictive covenant D had inquiry notice (pretty broad rule)

There was a reciprocal negative covenant/neighborhood plan that ran with the other houses in the

neighborhood

o Deeds from a common grantor in single subdivision give notice to subsequent purchasers

o Starts with first restricted sale Never retroactive (difference in courts as to how many lands must

have the restriction to start this

o Assures buyer of character of neighborhood and holds developer liable to those who have paid and

are relying on the plan

Termination by Changed Circumstances

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Restriction no longer a benefit to any landowner

o Not measured by mere market value deals with intrinsic values as well

o Very narrow doctrine has to affect every lot

o Does not look outside the area of the covenants or to zoning changes (unless it makes covenant

illegal)

Does not apply to Easements

Bolotin v. Rindge

D owns house, P owns lot. P wants to build commercial building, says house has no commercial value

Lower court gave the wrong test see correct test above, remands for jury trial

Termination by Abandonment

Peckham v. Milroy

P does not like D, seeks to enforce restrictive covenant against home businesses

Abandonment has to be habitually and substantially violating the covenant

o 4 businesses out of 1600 lots not habitual and substantial

Laches requires:

o Knowledge or reasonable opportunity to discover on part of a potential plaintiff that he has a cause

of action against a D

o An unreasonable delay by P in commencing said action

o Damage to D resulting from the unreasonable delay

Estoppel requires:

o An admission inconsistent with claim asserted afterward

o Action by the other party in reasonable reliance on that admission

o And injury to that party when the first party is allowed to contradict its admission, statement or act

Publicpolicy Private parties are allowed to restrict the land use as they see fit

Takings

Eminent Domain

Kelo v. City of New London

Town takes Ps land to build shopping center. P is pissed. Is this a taking for public good?

Properties are not blighted, no designated final private party. Private party will develop eventually

Court says that there is a deference to legislation about what is public good (public purpose)

o Berman ok to use eminent domain when end use is private use

Took over functional non-blighted land in a D.C. slum clearance

o Midkiff redistributed property to other people deemed ok

If there is pretext then the courts can overturn OConnors 3 horrible tests

o Govt takes title

o Open to public use (railroads, roads, etc.)

o Other public purpose (in Midkiff and Berman)

Thomas he would destroy Berman and Midkiff

o He identifies major issues with eminent domain its racist

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o Says public use is public use, not general welfare (still ok with government taking title

Regulatory Takings

May take land without compensation if done for the health and general safety and stuff

Line between eminent domain and regulatory takings is wavy and deals with compensation

Takings Test

Is there a public use? almost always yes

Is there a taking?o Permanent physical occupation taking per se

o Total economic waste unless it mimics what the CL nuisance would do

o Ad hoc Factual determination

Character of governmental action Harm prevention v. benefit

Economic impact diminution in value (Denominator problem)

Interference with investment backed expectations

Somewhat circular because expectations are determined by court action

Is also very pro-development

And focuses on property rights of people with money to invest

The more it seems to single out and destroy one person, the more likely it is to be found a taking

Pennsylvania Coal Co. v. Mahon

Coal Co. owns subsurface rights to coal mine, sells surface to Mahon w/o right to supports

Statute passes that forbids mining in ways that harms surface estate (cant take out supports)

Extent of diminution in value

o Holmes 100% of column rights

o Brandeis Columns are a small part of total coal mine

o Denominator problem how much of what? How much is too much?

Need to protect the public against nuisance like harmso Holmes this is not a public nuisance its the nature of the deed

o Brandeis gaping holes in the earth are a public nuisance, just like noxious fumes would be

Reciprocity of advantage among property owners if there is mutual benefit or mutual disadvantage then it

is not a taking that requires just compensation

Penn Central Transportation Company v. City of New York

Penn wants to build on its air rights but is restricted by a landmark preservation act

Brennan ad hoc factual inquiry for every case, but has factors

o Economic impact (Diminution in value) does not destroy discrete and whole property (Brandeisy)

o Investment Backed expectations expected to run a train station, not build on the surface rightso Physical invasion v. regulation

No regulatory taking in this case, they were allowed to transfer those air rights to others

Rehnquist there was a big diminution in value, there was no nuisance, and finds no reciprocity

Loretto v. Teleprompter Manhattan CATV Corp.

Teleprompter attaches cables and boxes to Lorettos building, benefits tenants

Supreme Court finds a taking creates a per se rule for permanent physical occupation - any government

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regulation that has the effect of imposing an easement on the land owner will be categorically considered as

a taking that requires compensation

Why is the court wrong?

o Negative burden based on rent increases compared to value of land

o Allows technology to spread efficiently

o Gives public information

Why is the court right?

o Gets rid of right to possess and right to exclude

o Strangers invade / removes autonomy

o Makes an easy to enforce bright line rule with low proof burden

Lucas v. South Carolina Coastal Council

Bought 2 beach front lots, SC legis. says no structures allowed]

RULE: Harm prevention can justify a regulation only if that regulation is of a type that is recognized as

permissible at the time the owner acquired title to the property.

2 categories where a taking could be found without fact-specific inquiry:

o Regulations that compel the property owner to suffer a physical invasion of his property (Loretto)

o Regulations that deny all economically beneficial or productive use of land

Government must show:

o Prohibited use would violate the background principles of State's law of property and nuisance that

govern land ownership.

o Right to engage in particular use not in bundle of rights owner acquired when purchasing land.

Statute clearly eliminated all economically beneficial or productive use of Lucas' land, rendered the lots

valueless. Concerns whether land can be used in a manner that is economically beneficial or productive.

Property Outline S11 Sharfstein

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