I. The Concept of PropertyA. Why Recognize Property?

1. Five Theories of Propertya. Protect First Possession

1. Property Rights: Philosophic Foundations2. Rule of Capture

i. Wild Animalsii. Acquired only by Occupancy

a. Deprive of Natural Freedomb. Take Controlc. Manifest Intent

b. Encourage Labor1. Owning the Land: Four Contemporary Narratives 2. Each person is entitled to the property he produces

i. Products he produces when combining work with natural resources

3. Relevant for newly created property alsoi. Copyrights

c. Maximize Social Happiness1. Property as an Optimal Economic Foundation2. Utilitarian Approach

i. Distributing and defining property in a manner to best promote the welfare of the citizens

a. If someone’s ownership is protected, he is then able to use the property in a manner that serves the common good

3. Law and Economics Utilitarianismi. Property is an efficient method of allocating

valuable resources in order to maximize a particular facet of societal happiness: wealth

ii. Property exists to ensure that owners use resources efficiently

a. Maximizing economic value is defined by a person’s willingness to pay

d. Ensure Democracy1. On Property and Constitutionalism2. Ownership provides people with the security necessary to

make decisions which serve the common good3. Property effects one’s relationship with the state and

understanding of that relationshipe. Facilitate Personal Development

1. Property and Personhood2. Personhood Theory

i. Property is necessary for individual people’s personal development

a. Each person has a close emotional connection with tangible things which become a part of that person’s self, which merits protection of those things

2. Pierson v. Posta. One man chased and pursued a fox, but another man killed it and

carried it away. A dispute as to who had possession of the fox arose.

b. Merely finding and chasing a wild animal does not give a person possession. Even merely wounding the animal will not give right to possession. The animal must be captured or killed in order to constitute possession.

3. White v. Samsung Electronics America, Inc.a. Defendant ran a television ad, which depicted Plaintiff for the

purpose of selling Defendant’s VCR. Plaintiff sued Defendant for appropriation.

b. The common law right of publicity cause of action may be pleaded by alleging: (1) Defendant’s use of Plaintiff’s identity; (2) the appropriation of Plaintiff’s name or likeness to Defendant’s advantage; (3) lack of consent; and (4) resulting injury.

B. What is Property?1. “Bundle of Sticks” Conceptualization

a. The Right to Transfer1. Although the law favors the free alienation of property an

owner’s right to transfer is sometimes limited for public policy reasons. The law regulates what can be transferred, how transfers are made, and who can transfer or obtain.

i. Right to Sellii. Right to Gift

2. Johnson v. M’Intoshi. Johnson inherited a tract of land from his father,

who bought the land from the Piankeshaw Indians. M’Intosh was later granted title from the United States government. Johnson and M’Intosh filed an action for ejectment.

ii. The United States has exclusive title to land because of the discovery and conquest of America by Europeans.

a. Thus, when title originally comes from the United States, that title has priority over any conveyance of land by an Indian tribe.

iii. For all parcels of land in America, the chain of title begins with the United States government.

3. Moore v. Regents of the University of Californiai. Plaintiff Moore was a cancer patient at U.C.L.A.

Medical Center where his doctor, over a period of

several years, removed blood and other bodily fluids from Plaintiff which were used to develop a “cell line” and was patented for commercial use, which aggrieved Plaintiff.

ii. The court found that the doctrine of conversion should not be extended to excised cells from someone’s body based on balancing of relevant policy considerations, because problems in this area are better left to the legislature, and because the tort of conversion was not necessary to protect the patient’s rights.

b. The Right to Exclude1. The law generally protects an owner’s right to exclude

others from his property, subject to privileges such as consent and necessity. Other exceptions to the right to exclude may exist, depending on jurisdiction.

2. State v. Shacki. A medical services provider and legal services

provider entered private land in order to aid migrant farmworkers. The owner asked them to leave, but they refused. They wanted to see the workers in their living quarters without being supervised by the owner. They were charged with trespass.

ii. Court held that title to real property cannot include dominion over the destiny of persons the owner permits to come upon the premises

iii. Though an employer of migrant farm workers may reasonably require the visitors of his employees to identify themselves, the employer may not deny the worker his privacy or interfere with his opportunity to live with dignity and to enjoy associations customary among our citizens.

3. Redefining the Landowner’s Bundle of Sticksc. The Right to Use

1. An owner is normally entitled to use her property as she wishes, as long as she does not injure the rights of other. The spite fence and nuisance doctrine define the limits of the right to use.

2. Sundowner, Inc. v. Kingi. Plaintiff sold a motel to defendants then built

another motel on property he purchased which was immediately adjoining that he sold to defendants. Two years later, defendants built a large sign 16 inches from the boundary line between the parties' properties. It paralleled plaintiff's motel, obscuring

80 percent of the building and restricting the passage of light and air to its rooms.

ii. No property owner has the right to erect and maintain an otherwise useless structure for the sole purpose of injuring his neighbor

a. Applicable to structures serving no useful purpose and are erected solely to injure adjoining property owners

3. Prah v. Marettii. Maretti (Defendant) planned to build a house, which

would obstruct Prah’s (Plaintiff) solar powered house from having an unobstructed view of the sun.

ii. A private nuisance occurs when one landowner’s use of his property unreasonably interferes with another’s enjoyment of his property.

iii. In analyzing a claim for private nuisance, balance the utility of use of the defendant to the gravity of harm to the plaint

d. The Right to Destroy1. The scope of an owner’s right to destroy is unclear. In

practice, the law rarely intervenes to prevent destruction. But concern arises when an owner seeks to destroy property that has substantial value to society, and some courts have limited this right.

II. Owning Real PropertyA. Real Property: Consists of rights in land and things attached to land, such as

buildings, fences, and treesB. Adverse Possession

1. Justificationsa. Preventing Frivolous Claimsb. Correcting Title Defectsc. Encouraging Developmentd. Protecting Personhood

2. Elements of Adverse Possessiona. Actual Possession: Claimant must physicall use in the same

manner that a reasonable owner would, given the character, location, and nature of the land

b. Exclusive Possession: Claimant must hold the land for himself, as his own, and not for another

c. Open and Notorious Possession: Possession must be visible and obvious, so the owner’s inspection would allow him to become aware of the adverse claim

d. Adverse and Hostile Possession: Possession must not be authorized by the owner; usually regardless to the claimants state of mind

1. Some states require claimant to believe in good faith that he owns the land

2. Rarely, states require bad faith, or the intention to take title from the owner

e. Continuous Possession: Claimant’s possession must be as continuous as a reasonable owner’s would be, given the land’s character, location, and nature

1. Statutory Period: Period for adverse possession ranges from 5 to 40 years; most commonly 10, 15, or 20 year periods

f. Gurwit v. Kannatzer1. The intent to possess, occupy, control, use and exercise

dominion over the property satisfies the requirementg. Van Valkenburgh v. Lutz

1. For several years the Appellee had traveled over land they did not own adjacent to their lot. Several years later, the Appellants purchased the land that the Appellee traveled over and erected a fence across the traveled way that the Appellee claimed a right to use. The Appellee initiated a lawsuit claiming his right of way was being interfered with.

2. The proof fails to establish actual occupation for such a time or in such a manner as to establish title by adverse possession. The premises were not protected by a substantial enclosure and there is no proof to show that cultivation incident to the garden utilized the whole of the premises claimed

3. To acquire title to real property by adverse possession not founded upon a written instrument, it must be shown by clear and convincing proof that for at least 15 years there was an "actual" occupation under a claim of title, for it is only the premises so actually occupied "and no others" that are deemed to have been held adversely.

4. The essential elements of proof being either that the premises (1) are protected by a substantial inclosure, or are (2) usually cultivated or improved.

3. Mechanics

a. The Adverse Possessor’s State of Mindb. Proving Adverse Possession

1. Howard v. Kuntoi. Descriptions in several deeds, including those of the

Plaintiff, Howard (Plaintiff), and the Defendant, Kunto (Defendant), did not fit the land occupied by the deed holders.

2. Other Procedural Issuesi. Disabilities

a. If someone is unable to sue an adverse possessor during the statutory period because of a disability (such as insanity, imprisonment, minority/age, lack of mental

capacity) the period for adverse possession will be extended

ii. Identity of the Partiesa. In situations where the adverse possessor

sues an owner who does not have a fee simple absolute, he only is able to receive what the owner had (for example a life estate)

III. Owning Personal PropertyA. Basics

1. Personal Property: Refers to rights in moveable items and other intangible things

2. Chattels: An item of tangible personal property3. Methods of Acquisition: Capture, Find, Adverse Possession, and Gifts

B. The Rule of Capture: Wild animals (ferae naturae) are owned by nobody and ownership may only be established through occupancy

1. State v. Shawa. Fisherman who, using another’s nets which have confined fish so

that escape is possible, but have made their capture practically inevitable, takes these confined fish for his own

b. To acquire a property right in animals ferae naturae, the pursuer must bring them into his power and control, and so maintain his control as to show that he does not intend to abandon them again to the world at large.

c. When he has confined them within his own private enclosure where he may subject them to his own use at his pleasure, and maintains reasonable precautions to prevent escape, they are so impressed with his proprietorship that a felonious taking of them from his enclosure, whether trap, cage, park, net, or whatever it may be, will be larceny.

2. Popov v. Hayashia. Baseball spectator Popov undertook significant but incomplete

steps to achieve possession of home run baseball that was hit in record-breaking performance. Mr. Hayashi was nearby, and also was involuntarily forced to the ground by a mob of peopleWhile on the ground he saw the loose ball. He picked it up, rose to his feet and put it in his pocket.

b. Conversion is the wrongful exercise of dominion over the personal property of another.

c. Where an actor undertakes significant but incomplete steps to achieve possession of a piece of abandoned personal property and the effort is interrupted by the unlawful acts of others, the actor has a legally cognizable pre-possessory interest in the property. That pre-possessory interest constitutes a qualified right to possession which can support a cause of action for conversion.

d. When multiple parties present legal claims to the same property of equal quality, the doctrine of equitable conversion allows the court to order the property be sold, and the proceeds be split equally between both parties.

C. Finders1. Found Chattels

a. Lost Property: Owner unintentionally and involuntary parts with itb. Mislaid Property: Owner voluntarily and knowingly places it

somewhere, but then unintentionally forgets itc. Abandoned Property: Owner knowingly relinquishes all right, title

and interest to itd. Treasure Trove: Owner concealed it in a hidden location long ago;

usually limited to gold, silver, coins, or currency2. Armory v. Delamirie

a. Plaintiff, a chimney sweep’s boy, found a jewel and took it to defendant’s jewel shop where he showed the jewel to an apprentice to find out what it was worth and upon hearing that the jewel was worth three halfpence, decided that he wanted the jewel back, which Defendant refused to return.

b. A finder of an object has a property interest which is not absolute, but is sufficient to allow the finder to keep the object against all claims but those made by the rightful owner.

3. Hannah v. Peela. Plaintiff, who was a soldier staying in the house owned (but not

occupied) by Defendant, found a brooch and then gave the brooch to the police who later, after not finding the rightful owner, gave the brooch to Defendant, who then sold the brooch.

b. Because Defendant was not physically present in the house at any time, Plaintiff’s find was defensible against all parties except the rightful owner.

D. Gifts: The immediate transfer of property rights form the donor to the donee without any payment or other consideration

1. Inter Vivos Gift: Ordinary gift of personal property that one living person makes to another

a. 3 essential elements: 1. Donative Intent: donor must intend to make an immediate

transfer of property2. Delivery: Property must be delivered to the donee, so that

the donor parts with dominion and controli. Types of Delivery

a. Manual Delivery: Donor physically transfers possession of the item to the donee

b. Constructive Delivery: Requires that donor physically transfer to the donee an object that provides access to the gifted item

c. Symbolic Delivery: Donor physically transfers to the donee an object representing or symbolizing the gifted item

3. Acceptance: Donee must accept the property, although acceptance of valuable items is usually presumed

b. Requirement of Delivery in Gifts of Chattels and of Choses in Action Evidenced by Commercial Instruments

2. Gift by Check: No gift occurs until check is cashed because donor retains dominion and control of the funds

3. Testamentary Gifts: transfers an interest to the donee only in the future when the donor dies

IV. An Introduction to Intellectual PropertyA. Common Law Approach: Intellectual property rights were not recognized at

common law, and become “as free as the air to common use” after voluntary communication

1. Cheney Brothers v. Doris Silk Corp.a. The Plaintiff, Cheney Brothers (Plaintiff), sought to enjoin the

Defendant, Doris Silk Corporation (Defendant), from copying its dress designs during the season.

b. Since there is no common law copyright law, the Plaintiff’s property right is limited to chattels that embody the invention, not the design pattern that has a short life. The Plaintiff has no property right to prevent any imitation of it.

2. Statutory Exceptionsa. Copyrights: Copyright law protects original works of authorship,

such as books, computer programs, plays, sculptures, and songs.b. Patents: Patent law protects new inventions such as cell lines,

machines, and medicinesc. Trademarks: Trademark law protects words, names, and other

symbols used by merchants to distinguish their goods and services from those offered by others

B. Copyright Basics 1. US Constitution (Art 1 §8): Authorizes Congress to “promote the Progress

of Science and the useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries

a. 1976 Copyright Act extends basic term for new works to the author’s life plus 50 years, which was extended 20 years by the Mickey Mouse Protection Act in 1998

2. Eldred v. Ashcrofta. Congress enacted the Copyright Term Extension Act (CTEA)

which extended the terms of all existing and future copyrights by an additional 20 years so the basic copyright term was the author’s life plus 70 years rather than 50 years. Eldred, who operated a website making public domain literary works available,

challenged, arguing that the constitution mandated that copyrights endure only for limited times.

b. In the context of the Copyright and Patent Clause, the word "limited" means: confined within certain bounds, restrained, or circumscribed. Thus understood, a time span appropriately "limited" as applied to future copyrights does not automatically cease to be "limited" when applied to existing copyrights .

3. 1976 Copyright Act protects “original works of authorship fixed in any tangible medium of expression.” 17 USC § 102(a)

a. Originality: Work must be independently created, not copied from another source. It also must possess at least a minimal degree of creativity.

b. Work of Authorship: Eight categories include a) literary works, including computer programs, b) musical works, c) dramatic works, d) pantomimes and choreographic works, e) pictorial, graphic, and sculptural works, f) motion pictures and other audiovisual works, g) sound recordings, and h) architectural works.

c. Fixation: Work must be written, recorded, or otherwise embodied in some physical form “sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.”

4. Feist Publications, Inc. v. Rural Telephone Service Co., Inc.a. A publishing company used information from a telephone

directory to publish its own directory.b. To qualify for copyright protection, a work must be original to the

author, which means that the work was independently created by the author, and it possesses at least some minimal degree of creativity. A work may be original even thought it closely resembles other works so long as the similarity is fortuitous, not the result of copying.

c. To establish copyright infringement, two elements must be proven: ownership of a valid copyright and copying of constituent elements of the work that are original.

d. Facts are not original. The first person to find and report a particular fact has not created the fact; he has merely discovered its existence. Facts may not be copyrighted and are part of the public domain available to every person.

V. Chapter 7: Leasing Real PropertyA. Discrimination

1. A land owner has a broad right to exclude any other person from her property, but modern federal and state statutes which prohibit discrimination have limited this rule

2. Fair Housing Act 42 USC § 3601a. It shall be unlawful to

1. Refuse to sell or rent after making a bona fide offer, or negotiate, or otherwise make unavailable or deny a

dwelling to any person because of race, color, religion, sex, familial status, or national origin.

2. Discriminate against any person in the terms, conditions, or privileges of sale or rental or in the provision of services or facilities in connection therewith because of the above stated qualities

3. Intend, make or cause to be made, printed or published any notice, statement or advertisement (with respect to sale or rental) that indicates any preference, limitation or discrimination based on the above stated plus handicap

4. Discrimination of a handicap person includes a refusal to permit, at the expense of the handicapped person, reasonable modification of existing premises if such modifications may be necessary to afford such person full enjoyment of the premises

i. Landlord can insists that interior restored after lease termination

ii. A handicap includes either:a. A physical or mental impairment which

substantial limits one or more of the person’s major life activities

b. A record of having such an impairment, orc. Being regarded as having such an

impairment, but does not include current, illegal use of or addiction to a controlled substance

3. Proving Discriminationa. P must establish prima facie case by showing:

1. He is a member of a protected class and that the defendant knew or suspected that he was

2. He applied for and was qualified to rent the property in question

3. The defendant rejected his application, and 4. The property remained available thereafter

b. P must provide sufficient evidence to show he was rejected under circumstances which give rise to an inference of unlawful discrimination

c. Burden then shifts to the defendant, who must articulate some legitimate, nondiscriminatory reason for the rejection

d. If the defendant satisfies this burden, the burden shifts back to the plaintiff who must show either that the defendants reasons are pretextual (just dreamed them up), or that material facts are disputed (precluding summary judgment)

4. Selecting the Tenanta. Neithamer v. Brenneman Property Services, Inc.

1. Gay, HIV positive plaintiff applied to lease a townhouse through defendant property managers. Plaintiff alleged he told defendants he had had credit problems due to financially supporting his lover, who had died of AIDS. Defendants informed plaintiff that the owner rejected his offer, and subsequently rejected several offers from plaintiff .

2. Under the McDonnell-Douglas Corp. framework, Plaintiff must establish a prima facie case of discrimination by showing: (1) that he is a member of a protected class and defendants knew or suspected that he was; (2) that he applied for and was qualified to rent the property in question; (3) that defendants rejected his application; and (4) that the property remained available thereafter.

3. Homosexuality=not protected; HIV is protectedB. Nonfreehold Estates

1. Selecting the Estatea. Term of Years Tenancy

1. Most leases are estates for years. An estate for years is any estate which is for a fixed period of time.

2. Certain Term: For a lease to be an estate for years, the beginning and ending dates must be fixed

3. Automatic Termination: Because the ending date is predetermined, no additional notice of termination is necessary on behalf of either party; the tenant just needs to leave the premises

b. Periodic Tenancy1. A Periodic tenancy is one which continues from one period

to the next automatically, unless either party terminates it at the end of a period by notice. Year-to-year or month-to-month tenancies are periodic.

2. Creation by Implication: Leases with no stated duration (when the tenant agrees to pay landlord a certain amount of money per month with no end period) creates a periodic tenancy.

3. Termination: A periodic tenancy will automatically be renewed for a further period unless one party gives a valid notice of termination

i. Most states today require only 30 days notice for any tenancy, even year-to-year. Notice must generally be effective as of the end of a period, but if the notice is not sufficiently in advance of one period, it is automatically applicable to the following period.

c. Tenancy at Will

1. A tenancy at will is a tenancy with no stated duration and which may be terminated at any time by either party

2. Implication: Usually a tenancy at will, like a periodic tenancy, is created by implication.

i. For instance, if the tenant takes possession with the landlord’s permission, with no term stated and no period for paying rent defined (so that the lease is not even a periodic one), it will probably be at will.

ii. Some courts hold that if one party has the option to terminate at will, the other party has a similar option so that the tenancy is at will.

d. Tenancy at Sufferance1. A tenancy at sufferance is created when a tenant holds over

at the end of a valid lease. The landlord may either (1) evict the tenant or (2) hold him to another term as tenant.

i. If the landlord elects to hold the tenant to another term, most courts hold that a periodic tenancy is then created, and the length of the period is determined by the way rent was computed under the previous agreement.

b. Kajo Church Square, Inc. v. Walker1. Lessees brought action for declaratory judgment after new

property owner notified them it was terminating their leases for property they had sold in part and gifted in part to church, which was new owner's predecessor in interest.

2. A lease which terminates upon the death of a lessee is a tenancy at will rather than a tenancy for life.

3. Give effect to the intention of the parties as expressed by the language of the instrument

4. There is no such thing as leasehold for lifei. Automatically becomes tenancy at will

2. Negotiating the Leasea. Statute of Frauds

1. If a lease is for more than one year, it must be in writingi. Mouth-to-mouth periodic tenancy is exempt

2. To comply with the statute of frauds, the lease musti. Contain the key terms

a. Parties, property, duration, rentii. Be signed by the party against whom enforcement is

sought3. Delivering Possession

a. The landlord is obligated to deliver the legal rights to possession when the lease term begins. Under the majority view, he is also required to deliver physical possession at the same time.

1. American Rule: the landlord has a duty to deliver only legal possession, not actual possession.

2. English Rule: Landlord does have a duty to deliver actual possession.

i. The tenant has the right to terminate the lease and recover damages for the breach if the prior tenant holds over and the landlord does not oust him. Alternatively, T may continue the lease and get damages for the period until the prior tenant is removed.

b. Keydata Corp. v. United States1. Defendant United States entered into a lease for

commercial space occupied by plaintiff, which provided that plaintiff would surrender the premises by a given date. Plaintiff failed to vacate, and defendant rescinded the lease. The landlord assigned its rights to plaintiff, and plaintiff sued defendant, alleging illegal rescission, waiver, and estoppel.

2. The United States District Court for the District of Massachusetts disregards the "Massachusetts rule," that a landlord it not obligated to secure his tenant in possession when the demised premises are occupied by a third party at the commencement of the lease term, in favor of the "English" rule, requiring that when the lease is silent on the point, the landlord deliver actual possession of the premises at the beginning of the term, as the appropriate standard for government leases.Condition of the Premises

2. Substandard Housing 3. Constructive Eviction

a. A tenant has the right to quiet enjoyment of the leased property and where this right is violated by the landlord, it constitutes constructive eviction and the lease is broken, meaning the tenant doesn’t have to pay the rest of the lease agreement.

b. Four elements:1. Substantial Interference with the tenant’s use and

enjoyment of the propertyi. Courts consider the intended purpose of the

property, foreseeability of interference, potential duration of interference, harm caused, and ways to avoid damage

2. Due to the landlord’s actions or failure to take action3. Landlord knew or should have known his conduct would

deprive the tenant of quiet enjoyment, and that he failed to correct the problem

i. The tenant should give notice to the landlord of interference, to show that the landlord knew of the problem

4. Tenant vacated the property within a reasonable time after giving constructive eviction notice to the landlord

i. What constitutes a reasonable time depends upon the circumstances of each case.

ii. A tenant’s right to claim constructive eviction will be lost if he does not vacate the premises within a reasonable time after the right comes into existence.

iii. T’s obligation to pay rent stops when he vacates the premises after constructive eviction

c. JMB Properties Urban Co v. Paolucci1. Defendant waived any claim of constructive eviction by

remaining on the premises for an unreasonable length of time after th rise of the untenantable condition.

2. Constructive eviction cannot exist where tenant doesn’t surrender the property

3. Tenant bears the burden of showing he abandoned the premises within a reasonable time after the untenantable condition occurred

B. Implied Warranty of Habitability1. Under the implied warranty of habitability, the landlord impliedly

warrants that the premises are in a habitable conditiona. Determining Habitability

1. Existence of a building code violation is evidence of uninhabitability

2. To prove inhabitability, a tenant must show:i. Conditions violate the building code

ii. Conditions are a substantial threat to his health and safety

b. Some courts hold that if the tenant knows of the defect before he moves in, he will be held to have waived the defect so the implied warranty of habitability does not apply.

2. Wade v. Jobea. Jobe rented a house, and after taking occupancy she discovered

numerous defects. She had no hot water, and there was accumulated sewage in the basement, which produced a foul odor in the house. She notified the landlord, and he came and would pump the sewage out of the basement. These problems persisted for several months. She withheld rent until the sewage problem was taken care of. The city inspector deemed the house unsafe for human occupancy and had the property condemned. The landlord brought suit to recover rent.

b. In residential leases an implied warranty of habitability exists, bare living requirements must be met, and the premises are fit for human occupation during the duration of the lease.

c. If a claimed defect has an impact on the health and safety of the tenant a code violation is not necessary to establish a breach.

d. Where the tenant provided notice of disrepair, as did the city, the tenant has at least 3 options.  Continue paying and file an action to recover; or withhold the rent; or terminate the agreement and move bringing damage claim for the costs expended.   If the tenant is awarded damages it is based on percentage diminution, or lost % of use and enjoyment.

3. Remedies for Breacha. Withold Rentb. Repair and Deductc. Sue for Damages

C. Assignment and Sublease: Basics1. Assignment

a. An assignment is the transfer by the lessee of his entire interest in the leased premises. He must transfer the entire remaining length of the term of his lease with the lessor. If he transfers something even one day less than the rest of the term, he will be held (in most courts) to have made a sublease.

2. Sublease a. A sublease creates a new landlord-tenant relationship between

lessee and sublessee. b. There is no privity of estate between lessor and sublessee, so the

lessor cannot ordinarily sue sublessee for rent, or for any other covenant running with the land.

c. The Lessee continues to be liable to the lessor following a sublease.

1. If the lessee does not pay rent or materially breaches some other covenant, the landlord may evict the sublessee by terminating the lease.

3. Transferring the Tenant’s Interesta. Ernst v. Conditt

1. The Complainants, Mr. and Mrs. Ernst (Complaintants), approved a modification to a lease that allowed the Defendant, Conditt (Defendant), to sublease the premises and left the lessee personally liable. Defendant ceased paying rent and Complainants sued to determine whether the instrument was a sublease or assignment.

2. A sublease grants the sublessee an interest in the lease premises with a reversionary interest remaining with the lessee. An assignment conveys the whole term, leaving no interest or reversionary interest in the lessee.

3. Because the sublease agreement left the lessee with no rights either express or implied, the intention of the parties was an assignment and not a sublease.

b. Kendall v. Ernest Pestana, Inc.1. The Plaintiffs, Kendall and others (Plaintiffs), wanted to

become the assignees of a current interest in land. The

Defendant, Ernest Pestana, Inc. (Defendant), withheld consent pursuant to a provision in the lease requiring the corporation’s approval. Plaintiff sued for declaratory relief.

2. Lessor must have a reasonable objection to the assignment, even with a provision in the lease stating consent can be withheld for any reason.

3. In a commercial lease, the court will imply a reasonableness term when the lease gives the landlord the right to consent to an assignment or sublet of the property. By doing so, they encourage the alienability of property.

B. Ending the Tenancy1. Abandonment

a. If the tenant abandons the premises by leaving and then not paying rent when due, the landlord has several available courses of action

1. Terminate the Lease (accept surrender)i. L may treat T’s abandonment as a surrender, and

accept it. This has the effect of terminating the lease, so that no further rent becomes due from T.

2. Re-Let the Property on the Tenant’s Behalfi. The landlord must notify the tenant that he is doing

so. ii. The tenant remains liable for all rents coming due,

if no new tenant is foundiii. If a new tenant is found who pays a lesser rent, the

tenant is still liable for the difference between this and the original rent due under the original lease.

3. Leave the Property Vacant and Hold Landlord to the Leasei. Traditional rule is that the landlord has no duty to

mitigate (make reasonable attempts to find a new tenant)

ii. An increasing number of courts have held that the landlord does have a duty to mitigate by attempting to find a suitable replacement tenant.

b. Sommer v. Kridel1. The Defendant, Kridel (Defendant) signed a two-year lease

for an apartment owned by the Plaintiff, Sommer (Plaintiff). The Defendant paid the security deposit and first month’s rent. Prior to even obtaining the keys to the apartment, the Defendant broke off his engagement, became a student and attempted to terminate the lease by letter to the Plaintiff. The Plaintiff did not attempt to re-let the apartment until months later.

2. To assess whether the landlord made reasonable efforts to mitigate, the court should consider whether the landlord offered/showed the vacant apartment, advertisements, among other factors.

3. The landlord need not accept less than fair market value rent or substantially alter his obligations as established by the pre-existing lease.

2. Security Depositsa. Landlords frequently require their tenants to deposit a sum of

money with them at the beginning of the term, to serve as security for the tenant’s paying rent and performing other lease duties

3. Evictiona. Hillview Associates v. Bloomquist

1. A mobile home park is owned by Hillview Associates (Plaintiffs). Tenants met to discuss the physical condition of the land and the increases in rent and then formed a tenant’s association. The association had several disagreements with management over the land. A tenant struck a manager during a meeting. Several members of the association were given notice of termination, but the notice did not provide specific grounds for termination. The tenants did not leave, and so Plaintiffs filed a forcible entry and detainer action.

2. Landlords may not engage in retaliatory conduct, including a retaliatory eviction, when tenants assert their rights to habitable conditions

3. When a tenant gives evidence of a retaliatory eviction, the landlord has to produce evidence of a legitimate non-retaliatory reason to overcome the presumption of retaliation.

4. In deciding whether a tenant has established a defense of retaliatory eviction, seven factors will be looked at to see if the landlord’s primary motivation was not retaliatory

i. Whetherthe landlord’s decision was a reasonable exercise of business judgment

ii. Whether the landlord in good faith desires to dispose of the entire leased property free of all tenants

iii. Whether the landlord in good faith desires to make a different use of the leased property

iv. Whether the landlord lacks the financial ability to repair the leased property, and therefore, in good faith, wishes to have it free of any tenant

v. Whether the landlord as unaware of the tenant’s activities which were protected by statute

vi. Whether the landlord did not act at the first opportunity after he learned of the tenant’s conduct

vii. Whether the landlord’s act was not discriminatory.b. Berg v. Wiley

1. Mr. Wiley, the Defendant (Defendant) and landlord leased land to Berg, the Plaintiff (Plaintiff), for use as a restaurant. The lease was for five years and required the tenant to bear all costs of repairs/remodeling and make no changes to the building structure without the Defendant’s approval. The relationship broke down when the Plaintiff allegedly remodeled the restaurant without the Defendant’s approval and allegedly operated the restaurant in violation of the state health code. Per the advice of his attorney, the Defendant changed the locks to the restaurant.

2. The only lawful means to dispossess a tenant who has neither abandoned nor voluntarily surrendered, but who claims possession of the property, is by resort to judicial process

3. Common law rule that a landlord may rightfully use self-help to retake leased premises from a tenant provided that the (1) landlord is legally entitled to possession and (2) landlord’s means of reentry are peaceable.

II. Selling Real Property A. Purchase Contract

1. Statute of Fraudsa. The Statute of Frauds is applicable in all states to any contract for

the sale of land, or for the sale of any interest in land.1. Must be in writing 2. Must contain the names of the parties 3. Must identify the land to be conveyed 4. Must contain the purchase price 5. Must be signed by the party against whom enforcement is

soughtb. Hickey v. Green

1. Gladys Green (Defendant) owned a parcel of property that she wanted to sell. She discussed with the Hickeys (Plaintiffs) their purchase of the lot, and orally agreed to a sale. Plaintiffs provided a deposit for the land. Plaintiffs told Defendant that they were selling their home and building on her lot. Plaintiffs then sold their home. Defendant told Plaintiffs that she would not sell her property to them because there was a better deal elsewhere.

2. A contract for the transfer of an interest in land may be specifically enforced notwithstanding failure to comply with the Statute of Frauds if it is established that the party seeking enforcement, in reasonable reliance on the contract and on the continuing assent of the party against whom enforcement is sought, has so changed his position that injustice can be avoided only by specific enforcement.”

c. Remedy, Reason, and the Statute of Frauds: A Critical Economic Analysis

2. Marketable Titlea. Title that is reasonably free from doubt as to its validity, so the

buyer can purchase property free from doubt as to its validity1. If a reasonable and prudent purchaser would pay fair

market value for the property, then it is typically considered to be marketable

2. Defects making title unmarketablei. The seller’s property interest is less than he purports

to sellii. The seller’s title is subject to an encumbrance

a. Outstanding mortgage or lienb. Easement (if it reduces full enjoyment)c. Use Restrictionsd. Land-use and Zoning Violations

1. Most courts do not include building code violations

iii. There is reasonable doubt as to either (i) or (ii)3. Most Jurisdictions do not require the seller to produce

marketable title until closing i. If it becomes clear that the seller won’t be able to

convey marketable title, the buyer may rescind before closing

ii. If a title problem is discovered shortly before closing, the seller has a reasonable time to cure it within, unless the contract stipulates that time is of the essence

b. Lohmeyer v. Bower1. The Plaintiff, Mr. Lohmeyer (Plaintiff), brought suit to

rescind contract to buy land after he discovered the structure on the land was in violation of a city ordinance.

2. A violation of a city ordinance as well as the other violations makes this title unmarketable and doubtful.

3. A marketable title to real estate is one, which is free from reasonable doubt and a title is doubtful and unmarketable if it exposes the party holding it to the hazard of litigation.

4. The defect which the purchaser complains must be of a substantial character and one from which he may suffer injury.

3. Equitable Conversiona. Concept that the buyer bears the risk if the property is damaged

during the executory period (time between signing the contract and closing)

1. Buyer is seen as the equitable owner after signing the contract and the seller is viewed as equitable owner of the purchase price

i. Buyer is still obligated to pay the purchase price even if the property is destroyed unless there is a provision in the contract reassigning the risk to the seller

2. Approachesi. Slim majority places risk on the vendee from the

moment the contract is signedii. Some courts use the MA rule, which places the risk

onto the seller until actual transfer of titleiii. Many jurisdictions base risk allocation on the right

of possession at the time the damage occursa. Buyer assumes risk where he is in

possession, and the destruction or loss is not proximately caused by the vendor

b. Brush Grocery Kart, Inc. v. Sure Fine Market, Inc.1. P was leasing property with option to purchase, but could

not agree on purchase price prior to lease expiring. P handed keys over to D and canceled insurance policy. During litigation of price terms, property substantially damaged by hail

4. Duty to Disclosea. Majority Rule

1. The seller is obliged to disclose defects he is aware of thati. Materially affect the value of the property and

ii. Are not known or readily discoverable by the buyer2. Many states place the same duty onto real estate brokers

b. Minority Rule1. Caveat Emtor: Buyer Beware2. The seller has no duty to disclose defects to the buyer

i. Buyer has the complete responsibility to assess condition of the premises

3. Seller is liable only when hei. Affirmatively misrepresents the condition of the

propertyii. Actively conceals defects, or

iii. Owed a fiduciary duty to the buyerc. Stambovsky v. Ackley

1. The Plaintiff, Stambovsky (Plaintiff), brought suit to rescind a contract to buy a house after he discovered the house was purported to be haunted, thus lowering its value.

2. A condition that impairs the value of property, known to the seller and left undisclosed to the buyer can constitute a basis for rescission of the contract.

d. Strawn v. Canuso1. A builder-developer of residential real estate and a broker

representing him were liable for non-disclosure of known, off-site physical conditions which were unknown to, and not readily observable by, the buyer, if the existence of the conditions was material to the habitablility, use, or enjoyment of the property

B. Recording Acts, MERS1. Privately held company that operates an electronic registry designed to

track servicing rights and ownership of mortgage loans in the United States.

2. See chart @ end of outlineC. The Closing

1. The Deed a. The deed is the basic document used to transfer an estate or other

interest in land during the owner’s lifetime. One who transfers title by deed is a grantor; one who receives title is a grantee.

1. In general, a deed must be in writing, be signed by the grantor, identify the grantor and grantee, contain words of conveyance, and adequately describe the land. In addition, the grantor must deliver the deed to the grantee, and the grantee must accept.

2. The central rule in deed interpretation is to follow the intent of the grantor and the grantee. If ambiguity remains, extrinsic evidence (e.g., statements and conduct of the parties) will be considered.

3. Virtually all deeds are recorded, meaning that the information contained in the deed is entered into the public land records maintained by the appropriate local government agency, usually a recorder’s office.

i. Recordation is not required in order for a deed to be valid. Yet the prudent grantee will immediately record in order to protect his title against later claimants.

b. Rosengrant v. Rosengrant1. The Defendant, Jay Rosengrant (Defendant), appeals from

a finding that he does not possess legal title to a farm allegedly given to him by his uncle for failure of his uncle to make proper legal delivery.

2. In cases involving attempted transfers, it is the grantor’s intent at the time the deed is delivered, which is of primary and controlling importance.

3. When a grantor delivers a deed under which he reserves a right of retrieval and attaches to that delivery the condition that the deed is operative only upon death and further

continues to use the property, these actions are grantor attempting to make the deed a will, which is unallowable.

c. Vasquez v. Vasquez2. Mortgage

a. A mortgage is the conveyance of an interest in real property as security for performance of an obligation. The obligation is almost always a loan of money evidenced by a promissory note.

1. Because the mortgage is viewed as the transfer of an interest in real property, the formalities required for an effective deed also apply to the mortgage: (1) the material terms of the mortgage (names of parties, description of property, words manifesting intent, etc.) must be set forth in a writing signed by the mortgagor and (2) the mortgage must be delivered to the mortgagee.

2. The mortgage is a nullity unless it secures an obligation. Typically, the mortgage secures repayment of a loan evidenced by a promissory note. The promissory note is simply a specialized form of contract between the lender and the borrower; it includes the loan amount, interest rate, term, and repayment schedule. Such notes often contain a prepayment clause (allowing the mortgagor to repay the loan in advance of the due date in return for payment of a monetary penalty) and a due-on-sale clause (allowing the mortgagee to demand repayment of the entire loan if the mortgaged property is sold or otherwise transferred).

b. Foreclosure1. If the borrower (the mortgagor) fails to make the payments

required by the note or otherwise defaults on the obligation, the lender (the mortgagee) may cause the secured property to be sold and apply the sales proceeds to satisfy the unpaid debt.

2. Judicial Foreclosurei. Specialized type of litigation.

ii. The successful mortgagee receives a judgment that states the amount due on the mortgage, directs the property to be sold at public auction, and specifies the terms of the sale. Once the sale occurs, it must be confirmed by the court; the court has the power to deny confirmation if needed to protect the mortgagor’s legitimate interests (e.g., if the sale was conducted in an illegal manner).

3. Power of Sale Foreclosurei. Purely private with no judicial involvement

ii. It is permitted only when authorized by the express terms of the mortgage. While most states allow this form of foreclosure, statutory safeguards are

generally provided for the mortgagor. For example, specified advance notice must be provided to the mortgagor and to the public, the auction must occur in a public location, and so forth. Most states allow the mortgagor to bring suit to cancel the sale only where the bid price is so grossly inadequate as to “shock the conscience” or if fraudulent or unconscionable conduct has occurred.

c. Anti-Deficiency Legislation: When a house is foreclosed on but the amount of money received does not fully pay the secured debt, the mortgagee might be able to sue the mortgagor to receive a “deficiency judgment,” requiring the mortgagor to pay the unpaid balance.

1. Many states limit the amount of any deficiency judgment to the difference between (1) the unpaid balance and (2) the fair market value of the property. Some states bar deficiency judgments altogether.

2. Wansley v. First Nat’l Bank of Vicksburgi. Mississippi Supreme Court held that every aspect of

the foreclosure sale must be “commercially reasonable.” This standard applies not only to the sufficiency of the bid amount, but also to the method of advertising and conducting the sale, as well as the time, place and terms of the sale.

d. Remedies for Breach1. Specific Performance2. Damages: The non-breaching party can obtain damages,

usually calculated as the difference between the contract price and the fair market value on the date of breach. In determining wither to award “benefit of the bargain” damages, some courts consider whether the seller acted in good faith.

3. Rescission: The innocent party may rescind the contract and receive restitution. Rescission restores the parties to their original positions.

4. Giannini v. First Nat’l Bank of Des Plainesi. P purchased a condominium unit from P, but

the building in which it was located was never declared a condominium and as a result the terms of the agreement were never fulfilled

ii. Where the parties have fairly and understandingly entered into a valid contract for the sale of property specific performance is a matter of right and equity will enforce it

D. Title Assurance1. Assures purchasers of land that they have good title

2. Title Covenantsa. The grantor expressly promises in the deed that he has good title to

convey. The buyer’s rights depend on The type of deed she received, and The scope of any promises the seller made within that deed

b. Types of Deeds1. General Warranty Deed: the grantor warrants title against

all defects, whether they arose before or after he obtained title

2. Special Warranty Deed; The grantor warrants title against all defects that arose after he obtained title

3. Quitclaim Deed: the grantor makes no warranties about title, so the grantee receives only what the grantor has, if anything

c. Types of covenants within general warranty deeds and special warranty deeds

1. Present Covenants: breached, if at all, at the moment the deed is delivered.

i. Covenant of seisin: a promise that the grantor owns the estate he purports to convey; this covenant is breached if the grantor purports to convey a fee simple but only owns a life estate

ii. Covenant of right to convey: a promise that the grantor has the right to covey title; ex. breached if grantor is a trustee who lacks the authority to transfer title to the trust property

iii. Covenant against encumbrances: a promise that there are no encumbrances on the title, other than those expressly listed in the deed

2. Future Covenants: breached, if at all, after the closing, typically when a third party establishes a right that is superior to the grantee’s title

i. Covenant of warranty: a promise that thte grantor will defend the grantee against any claim of superior title

ii. Covenant of quiet enjoyment: a promise that the grantee’s possession of the property will not be disturbed by anyone holding superior title, for example if the grantee is evicted because of a title defect

iii. Covenant of further assurances: a promise that the grantor will take all future steps reasonably necessary to cure title defects that existed at closing

d. Brown v. Lober1. P purchased from B, and sold subsurface coal rights to C. P

actually only owned ⅓ coal rights, and sued D, B’s

executor, for breach of covenant of seisin, then breach of quiet enjoyment

2. To have a breach of the covenant of quiet enjoyment, Plaintiffs would have to demonstrate that someone holding a paramount title interfered with Plaintiffs’ right to possession.

3. Possession of the surface area does not carry possession of mineral rights. To possess the mineral estate, one must undertake the actual removal thereof from the ground or do such other act that will apprise the community that such interest is in the exclusive use and enjoyment of the claiming party.

4. Until one holding a paramount title interferes with Plaintiffs’ right of possession, there can be no constructive eviction and no breach of the covenant of quiet enjoyment.

3. Title Opinion Based on Search of Public Recordsa. An attorney or other professional renders an opinion about the state

of title after searching the public land recordsb. The Recording System

1. Anyone holding an estate or interest in land may record a deed or other instrument to give notice of his rights to the world.

2. The recording system is in essence a “library” of documents that an attorney or buyer can inspect to determine whether anyone other than the seller claims an interest in the land

c. How to Search Title1. In order to determine the state of title, the searcher must (1)

locate the recorded documents that affect title to the parcel and then (2) evaluate their legal significance

2. Land records are typically filed at a county agency, often called the “recorder’s office.”

i. State law dictates the types of documents that can be recorded and how they are organized

3. Two systems for organizing documents that affect titlei. The Grantor-Grantee Index: most commonly used

system, which involves every recorded document being indexed in two places: the grantee index and the grantor index

a. Each entry is organized alphabetically by the grantee’s or grantor’s last name

b. Along with the parties’ names, an index entry will contain the type of instrument, the time of recordation, the location of the recorded document, and a brief description of the property involved

c. In searching this index, the first step is to establish a chain of title, or the history of ownership by first looking at the grantee index, and then cross-checking it with the grantor index to make sure no interest was ever conveyed to someone not in the known chain of title

ii. The Tact Indexa. Each parcel of land is assigned a unique

identifier, sometimes called a “parcel identification number”

b. Every document affecting that parcel is typically filed in a folder under its unique number.

c. A title searcher can simply examine the documents in the folder to assess the state of title

d. The Recording Acts 1. As a general rule, the person whose interest was created

first prevails. However, all states recognize a major exception: the bona fide purchaser doctrine, which creates special protection for the subsequent bona fide purchaser through the recording acts

i. Supersedes the first-in-time rule2. Three basic types of recording acts

i. Race: The purchaser who records first has prioritya. Under a race statute, a subsequent purchaser

has priority over a previously-created interest if she records first—even if she actually knows about that interest

b. Priority is given to the person who wins the “race” to the recorder’s office.

c. Only North Carolina and Louisia still have race statutes

ii. Notice: The subsequent bona fide purchaser has priority

a. Notice statutes provide that a subsequent purchaser for value prevails if he takes without notice of a prior interest

b. Purchaser does nto have to record to gain priority, but is motivated to record quickly because if he fails to do so, he could lose his interest to a subsequent bona fide purchaser

c. About half of the states use notice statutesiii. Race-Notice: The subsequent bona fide purchaser

who records first has priority

a. A race-notice statute protects the subsequent purchaser for value who both takes without notice and records first

I. Private Land Use PlanningA. Easements

1. An easement is the privilege to use the land of anothera. When the servient land is conveyed to a new owner, the easement

remains attached to the land like any other encumbrance unless the grantee is a bona fide purchaser

2. Terminologya. Affirmative easement: entitles its holder to do a physical act on

another’s land1. Example: A, who owns Blackacre, gives B a right of way over

Blackacre, so that B can pass from his own property to a street which adjoins Blackacre. B holds an affirmative easement.

a. Appurtent: easement which benefits its holder in the use of a certain piece of land. The land for whose benefit the appurtenant easement is created is called the "dominant tenement." The land that is burdened or used is called the "servient tenement."

1. Example: Blackacre, owned by S, stands between Whiteacre, owned by D, and the public road. S gives D the right to pass over a defined part of Blackacre to get from Whiteacre to the road. This right of way is an easement that is appurtenant to Whiteacre – Blackacre is the servient tenement, and Whiteacre is the dominant tenement

1. For an easement to be appurtenant, its benefit must be intimately tied to a particular piece of land (the dominant tenement)

b. Easement in Gross: Easement whose benefit is not tied to any particular parcel

1. Example: O, who owns Blackacre, gives E, who lives across town, the right to come onto Blackacre anything he wants and use O’s swimming pool. Since the grant is not given because of E’s ownership of nearby land, the easement is in gross

c. License: an informal permission that allows the holer to use the land of another for a particular purpose, but is not classified as an interest in land and can be revoked at any time

d. Profit: a right to enter the land of another to remove minerals, gravel, timber, game, or other natural resources

2. Creating Easements a. Express Easements

1. Express easements may be created only in writing that satisfies the statutes of frauds by (a) identifying the parties, (b) describes the servient land and the dominant land, (c) describes the exact location of the easement on the servient land, and (d) states the purpose for which the easement may be used

i. Most modern decisions allow this easement to be reserved in favor of a third party

2. Express Easement by Grant: arises when the servient owner grants an easement to the dominant owner

3. Express Easement by Reservation: arises when the dominant owner grants the servient land to the servient owner but retains or reserves an easement over the property

4. Millbrook Hunt, Inc. v. Smithi. MillBrook, a fox hunting organization dedicated

to the old ways, secured a 75 year lease and easement agreement to use ¼ acre of Smith’s land for hunting. Upon Smith’s death, his son, attempting to make a wildlife reserve and against hunting, ejected the hunters from the property while they were performing routine inspections.

ii. Labeling an easement such does not make it so. iii. An easement is an interest in land ordinarily

created by a grant and permanent in nature.iv. A license is a personal privilege which may be

revoked by the land owner at any time.v. This is an easement because it is for a specified

period of time; it specifically provides for a 75 year period. As well the parties sufficiently showed their intent to construct an easement to reserve a right to hunt the fox.

5. Van Sandt v. Roysteri. The Plaintiff, Van Sandt (Plaintiff), discovered that his

basement was flooded with sewage and brought an action to enjoin the Defendant, Royster (Defendant), from using and maintaining the underground sewer. The pipe crossed a single property encompassing both lots and the adjacent lot in 1904 that was owned by Bailey.

ii. If the land cannot be used without disproportionate effort and expense an easement may still be implied in favor of the grantor or grantee on the basis of necessity alone. The original purchaser was aware of the sewer and thus there were reasonable expectations concerning the prior existing use.

iii. An easement is implied to protect the probable expectations of the grantor and grantee that a prior existing use will continue after the transfer. Thus, where the grantee is aware of a reasonably necessary use of the grantee’s property for the comfortable

enjoyment of the grantor’s property an easement by implication is created.

b. Implied Easement by Prior Existing Use1. Elements for an easement by implication: (1) land must be

divided up (or "severed"), so that the owner of a parcel is either selling part and retaining part, or subdividing the property and selling pieces o different grantees; (2) the use for which the implied easement is claimed must have existed prior to the severance; and (3) the easement must be at least reasonably necessary to the enjoyment of the dominant tenement.

i. Severance: easement will only be implied where the owner of a parcer sells part and retains part, or sells pieces simultaneously to more than one grantee

ii. Prior use: the use for which the easement is claimed must have existed prior to the severance of ownership

iii. Necessity: most courts require the easement to be reasonably necessary to the enjoyment of what is claimed to be the common tenement; the easement must be beneficial or convenient for the use of the dominant tenement

iv. Easement of light and air: an easement of “light and air” (to not have one’s view obstructed) cannot be created by implication in most states

c. Easement by Necessity1. Two elements are generally required for an easement by

necessity: (1) severance of title to land held in common ownership; and (2) strict necessity at the time of severance.

i. Under the majority view, strict necessity exists when the parcel in question has no legal right of access to a public road. Some courts only require reasonable necessity.

2. Berge v. State of Vermonti. P subdivided land, and conveyed part of it to X. She

was then landlocked, and when the State placed a gate across the access road, she was unable to access her land. Trial court said she could use the water to travel.

ii. The water was not practical, and would deprive her of access during times of bad weather or seas.

a. Thus, P had no other reasonable consistent, practical means of reaching her property

d. Prescriptive Easement1. In order for a prescriptive easement to arise, the claimant’s use

must generally be (1) open and notorious, (2) adverse and under a claim of right, and (3) continuous and uninterrupted for the statutory period.

2. Adverse possession principles are frequently used in interpreting these elements.

e. Easement by Estoppel (or Irrevocable License) 1. Ordinarily, licenses are revocable. Three elements are

necessary to create an irrevocable license: (1) a license; (2) the licensee’s expenditure of substantial money or labor in good faith reliance; and (3) the licensor’s knowledge or reasonable expectation that reliance will occur.

2. MacDonald Properties, Inc. v. Bel-Air Country Club3. Kienzle v. Myers

3. Interpreting Easementsa. Scope of Easements

1. The scope of an easement may evolve over time as the manner, frequency, and intensity of use change.

i. The court will allow use that increases due to the normal, foreseeable development of the dominant estate so long as this does not impose an unreasonable burden on the servient estate

2. In general, the scope of an easement turns on the intent of the parties.

3. The law usually presumes that the parties to an express or implied easement intended that the easement holder would be entitled to do anything reasonably necessary for the full enjoyment of the easement, absent evidence to the contrary.

4. If a prescriptive easement is involved, the scope of the allowable use is determined by looking at the use that took place during the statutory period. Use that is substantially broader than existed during the time when the statue of limitations was running will not be allowed.

b. Marcus Cable Associates, L.P. v. Krohn1. Terminating Easements

a. Abandonment1. An easement is deemed abandoned where the holder both (1)

stops using it for a long period and (2) takes other actions that clearly manifest intent to relinquish the easement.

2. The easement holder’s words alone are not sufficient to constitute an abandonment

b. Condemnation: condemnation of the servient land also terminates the easement, and the easement holder is entitled to just compensation when this situation arises

c. Estoppel: an easement ends if the servient owner substantially changes his position in reasonable reliance on the holder’s statement that the easement will not be used in the future

d. Merger: if one person obtains title to both the easement and the servient land, then the easement terminates under the doctrine of merger

e. Misuse: in some jurisdictions, if the holder seriously misuses the easement, it may be ended through forfeiture

f. Release: the easement holder may release the easement to the servient owner by executing and delivering a writing that complies with the statute of frauds

g. Preseault v. United States1. Congress enacted a Rails-to-Trails Act to make public

recreational use out of discontinued railroad rights of way. The Plaintiffs, J. Paul Presault and Patricia Preseault (Plaintiffs), as fee simple owners of the land over which the tracks formerly ran, claimed that the conversion of the property was a taking by the Defendants, the United States (United States).

2. A public recreational trail was not within the scope of an existing easement for railroad purposes. Therefore, the conversion to public recreational trail was a taking of a new easement for a new purpose, for which the landowners are entitled compensation. In addition, since the easement was abandoned, the opening of the public recreational trails was also a physical taking of the Plaintiffs’ property rights.

2. Negative Easements a. Entitles the dominant owner to prevent the servient owner from

performing an act on the servient landb. English law recognized four negative easements

1. Those that prevented blocking windows2. Blocking air that flowed in a defined channel3. Blocking water that flowed in a defined channel4. Removing support from a building.

c. More recently, solar easements and conservation easements have been authorized by statute in many states.

d. Conservation Easement: restricts the development and use of servient land in order to preserve open space, farm land, historical sites, or wild and undeveloped land

1. Servient owner usually conveys the easement to a land trust or other conservation group, and may continue to use land as permitted by easement

i. Usually get some kind of tax or property benefitsB. Land Use Restrictions

1. Traditional Approacha. Real Covenants

1. A real covenant is a promise concerning the use of land that (1) benefits and burdens the original parties to the promise and also their successors and (2) is enforceable in an action for damages. A real covenant may be either affirmative (promise to perform an act) or negative (promise not to perform an act).

2. Burden: duty to perform the promise3. Benefit: right to enforce the promise

4. In order for the burden of the promise to bind the promisor’s successors, 6 elements must be proven, but there is neither horizontal privity nor notice are required for the benefit to run to successors

i. Compliance with the statute of fraudsii. Intent to bind successors: The original parties must

intend to bind their successors. The needed intent is usually found in the express language of the document

iii. Touch and Concern: the covenant must touch and concern land. In other words, it must relate to the enjoyment, occupation, or use of the property

iv. Notice: the successor must have notice of the covenant. This requirement is satisfied by actual notice, record notice, or inquiry notice

v. Horizontal Privity: concerns the relationship between the original parties to the promise.

a. Mutual interests: in some states, horizontal privity requires that the original parties have mutual interest in the affected land

b. Successive interests: in other states, there must be a grantor-grantee relationship between the original parties so that they have successive interests in the affected land

c. No Horizontal Privity Requirement: An increasing number of states have abandoned the requirement; this is the modern trend

vi. Vertical Privity: concerns the relationship between an original party to the promise and his successor. Vertical privity exists only if the successor receives the entire estate that the original party had

b. Equitable Servitudes1. An equitable servitude is a promise concerning the use of land

that (1) benefits and burdens the original parties to the promise and their successors and (2) is enforceable by injunction.

2. For the burden of an equitable servitude to bind the original promissor’s successors, four elements must be met:

i. Compliance with the Statute of Fraudsii. Original parties must intend to burden successors

iii. Promise must “touch and concern” landiv. The successor must have notice of the promise

3. For the benefit to run to successorsi. The promise must be in writing or implied from a

common planii. The original parties must intend to benefit successors

iii. The promise must “touch and concern” land4. Tulk v. Moxhay

i. The Plaintiff, Tulk (Plaintiff), had sold Leicester Square by deed containing. The Defendant, Moxhay (Defendant), a subsequent purchaser sought to build upon the land. Plaintiff brought a bill for injunction.

ii. An equitable servitude is enforceable by injunction with no regard to privity, so long as the promise is intended to run and the subsequent purchaser has actual or constructive knowledge of the covenant.

2. Restatement Approacha. The Covenant that Runs at Law: type of servitude that arises when

1. The owner of the property to be burdened intends to create a servitude

2. He enters into a contract or conveyance to this effect that satisfies the statute of frauds, and

3. The servitude is not arbitrary, unconstitutional, unconscionable, or violative of certain public policies

3. Common Interest Communitiesa. Planned residential development (a) where all properties are subject to

comprehensive private land use restrictions and (b) which is regulated by a homeowners association.

b. Typically created by a “declaration,” which has four basic parts1. Homeowners Association: it establishes the association that

will administer the CIC, specifies the association’s powers, and provides for an elected board of directors or similar group

2. CC&R’s: It imposes CC&R’s or similar restrictions on all land within the CIC. These restrictions may be enforced as real covenants or equitable servitudes

3. Assessments: It requires all unit owners to pay monetary assessments which finance the operation of the association

4. Ownership rights: it generally provides that each unit owner holds fee simple absolute in his particular unit, an undivided interest in common area of the CIC, and a membership interest in the association. Alternatively, common areas may be held by the association on behalf of the unit owners

c. Enforcing Restrictions1. Defenses

i. Unreasonablenessii. Abandonment

iii. Changed Conditions2. Two Types of Restrictions

i. Use Restrictions Set Forth in the Master Deeda. Presumed valid and should be upheld even if

unreasonable, but may be invalid the restriction is unconstitutional or violates public policy

1. Violates public policy if:i. Spiteful, arbitrary, capricious

ii. Unreasonably burdens a funduamental right

iii. Imposes an unreasonable restraint on alienation

iv. Imposes unreasonable restraint on trade

v. Unconscionableb. Restrictions can’t be arbitrary, bearing no

rational relation to the protection, preservation, operation or purpose of the affected land

ii. Rules Promulgated by the Associationa. Subject to reasonableness testb. Does not depend on the conduct of a particular

condominium owner, and must be uniformly enforced in the development

1. Unless the owner can show that the burdens imposed on the affected properties substantially outweigh the benefits of the restriction that it should not be enforced against the owner

3. Nahrstedt v. Lakeside Village Condominium Association, Inci. The Plaintiff, Natore Nahrstedt (Plaintiff), a

homeowner sued the Defendant, Lakeside Village Condominium Assoc., Inc. (Defendant) to prevent enforcement of a restriction against keeping cats, dogs or other animals in the development. Owner felt cat was noiseless and created no nuisance interfering with others’ enjoyment of property.

ii. Recorded use restrictions will be enforced so long as they are reasonable. Such restrictions are given deference and the law cannot question agreed-to restrictions.

iii. Reasonableness should be determined by reference to the common interest of the development as a whole and not the objecting owner.

d. Governing the Development1. Typically, CIC declarations set out duties of the association:

i. Maintaining common areasii. Enforce CC&R’s

iii. Adopt and enforce the rules to supplement the CC&R’siv. Collect Assessments from the unit ownersv. Take other actions necessary to administer the CCI

2. Determining the Board’s Poweri. First determine whether the board acted within its scope

of authority

a. Power Interpreted broadly because they provide municipal-like services

ii. Then determine whether the action reflects reasoned or arbitrary decision making

3. Schaefer v. Eastman Community Association4. Fountain Valley Chateau Blanc Homeowner’s Association v.

Department of Veterans AffairsII. Land Use Regulation

A. Basics of Zoning1. Zoning is the process of planning for land use by a locality to allocate certain

kinds of structures in certain areas. Zoning also includes restrictions in different zoning areas, such as height of buildings, use of green space, density (number of structures in a certain area), use of lots, and types of businesses.

B. Constitutionality of Zoning 1. Rational Basis Test: Zoning laws are unconstitional only if they are clearly

arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare

a. Used unless the law discriminates against suspect class or impairs a fundamental right

2. Village of Euclid v. Ambler Realty Co.a. Amber Realty Company (Appellee) challenged the enforcement of a

zoning ordinance on the ground that the enforcement would constitute an unconstitutional taking by devaluing his land.

b. The ordinance must find its justification in some aspect of the police power, which is asserted for the public welfare. The court used the doctrine of nuisance to determine whether the zoning exclusions were proper.

III. An Introduction to Environment LawA. Property and Ecology

1. Ecological View of Property: views land as consisting of systems defined by their functions, not by man-made boundaries.

2. Just v. Marinette CountyB. Water and Wetlands

1. Frequently, towns and regions try to limit or prohibit development on wetlands and coastland. By and large, such preservation schemes have been upheld, on the grounds that preservation of these areas is a goal of great social importance, outweighing the landowner’s interest in land development.

2. National Audubon Society v. Superior Courta. The litigation in this case stems from the diversion of streams

previously flowing into Mono Lake by the Department of Water and Power for the City of Los Angeles. Four of the five streams, which flow into Mono Lake were diverted and the lake is diminished in size and has been impacted ecologically.

b. The state has an affirmative duty to take into account the public trust in the planning and allocation of water resources, and to protect the public trust use whenever feasible

3. Borden Ranch Partnership v. U.S. Army Corps of EngineersC. Public Trust Doctrine

1. Under the traditional public trust doctrine, navigable waters and closely-related lands are held by the sovereign in trust for use by the public in such activities as commerce, fishing, and navigation. Most states have extended the doctrine to swimming, boating, and other recreational uses.

IV. Eminent DomainA. State and Federal governments have the power of eminent domain, which is the

power to take private property for public use. To exercise this power, the property in question must be put to “public use,” and just compensation must be paid

B. Defining Public Use1. As long as the state’s use of its eminent domain power is rationally related to

a conceivable public purpose, the public-use requirement is satisfied2. Property, Power, and American Democracy3. Hawaii Housing Authority v. Midkiff

a. Remnants of the feudal system in Hawaii left a great deal of land concentrated in the hands of a few landowners. The Hawaii legislature adopted a plan to condemn various residential lands to break up the large estates. Then, Hawaii Housing Authority (Petitioner) sold the land back to the tenants or lessees who requested the condemnation and wanted to buy the land.

b. Exercise of the eminent domain power for “public use” will be constitutional so long as it is rationally related to a conceivable public purpose. The Government itself does not have to use the property. Only the purpose, not the mechanics will be relevant to the takings’ constitutionality.

C. Scope of Public Use1. Kelo v. City of New London2. The Economics of Public Use

a. The supreme court has held that taking private property for the primary purpose of economic redevelopment pursuant to a comprehensive plan satisfies the public use requirement

V. TakingsA. Foundation Era

1. The Takings Clause was originally intended to apply only if government physically seized or occupied property.

2. During the foundation era (1776-1922) American courts followed a clear rule: regulation of land was not a taking. Rather, it was simply an exercise of the government’s police power to protect the public health, safety, welfare, and morals.

B. A New Doctrine1. Pennsylvania Coal Co. v. Mahon

a. PA instituted a statute that required that pillars of coal be left in place underground to support the land surface; prior Pennsylvania law had recognized that such pillars were an estate in land (a “support estate”) separate from the rights in removable coal.

b. The Court found that the statute took the coal company’s entire support estate—so the extent of the taking was “great”—and that this was not justified by the public interest.

c. Because the statute made it illegal to mine the pillars, this had “very nearly the same effect for constitutional purposes as appropriating” the coal.

d. The Court struck down the statute as an unconstitutional taking.2. The Original Understanding of the Takings Clause and the Political Process

C. The Penn Central Standard1. Balancing test to determine when a regulation constituted a taking. Factors:

a. The economic impact of the regulation on the claimant 1. The extent of economic loss suffered by the landowner as a

result of the regulationi. Usually diminution in value that is reasonably related to

the promotion of general welfareb. Particularly, the extent to which the regulation has interfered with

distinct, investment-back expectations, and 1. What the owners of the terminal thought they could do with the

building when they purchased iti. Reasonable expectations

c. The character of the governmental action.1. Reasonably related to the public interest2. More easily found where there is a physical invasion

2. Penn Central Transportation Co. v. City of New Yorka. Penn Central (Appellant) owned the Grand Central Terminal, which

was designated by application of New York’s Landmarks Preservation Law to be a landmark. Thereafter, the Appellant entered into a renewable 50-year lease with UGP Properties, Ltd., a United Kingdom company, under which the UGP agreed to construct a multistory office building on top of the terminal. The plans for the new office building were submitted to the Commission for approval, which was denied.

b. Several factors must be weighed to determine whether a taking occurred: (1) the economic impact of the regulation on the claimant and the extent to which the regulation has interfered with distinct investment backed expectations, and (2) the character of the government action, a taking is more readily found when the government has physically invaded the property than when interference arises from some public program adjusting the benefits and burdens of economic life to promote the common good.

c. In deciding whether a particular government action has effected a taking, this Court focuses both on the character of the action and the nature and extent of the interference with rights in the parcel as a whole- here, the city tax block designated as the “landmark site.”