Loyolastm.com
Property
Acquisition of Property rights
What rights are we talking about?
I. Property is a bundle of rights. Generally, we talk about the rights to:
A. use
B. exclude
C. dispose of (called alienate - to transfer property)
D. possess
II. But sometimes we can narrow it down to just one: exclude. If you can exclude everyone else, you can do whatever you want.
Acquisition by Capture
I. How does one obtain legally recognizable property rights over Natural Resources / Wild Animals?
A. RULE: Possession / Occupancy
1. (a) Mortally wounding the animal or otherwise depriving the animal of its natural liberty (b) while in the course of pursuit is enough to acquire rights to the animal. Both elements are necessary.
This is the lowest limit. Obviously, capturing or killing the animal is sufficient. A chase, no matter how likely or probable the animal will be caught, is not sufficient to acquire rights to the animal.
a. Policy:
(1) Simple litigation – It’s hard to determine facts that make something ‘reasonably likely’; also it’s easier to apply to future cases.
(2) Reduces disputes – it makes capture certain, less room for questions of ownership and litigation.
(3) Good for business/promotes transactions – if the acquisition of wild animals was less certain, it would decrease the value of these animals because the purchaser would be scared that he will lose his rights (i.e. he doesn’t have the true rights) in the animal.
(4) Protect ex-ante investments – if I know I will certainly be able to keep any animal I capture, I will invest more money into the business.
B. Constructive Possession - we consider it as if you have actual possession
1. A land owner has constructive possession of the animals on his land
a. Policy:
(1) We want people to be secure on their land. Lack of constructive possession breeds trespass
(2) Trespass breeds conflict. Constructive possession discourages trespass
(3) One is much more likely to invest in his land when the law gives redress to constructive possession, i.e. trespass.
C. Property is RELATIVE: we talk about Superior Rights
1. If an animal is naturally wild and it escapes ... you must again acquire rights to the animal by capture - you have lost whatever superior rights you once had.
2. T steals from O. T1 steal from T. T does have a legal claim against T1 because T has superior rights to T1. (O has superior rights to both T and T1
3. Animus Revretende (sp?) - owners of domesticated animals do not lose their superior rights when their animals wander off their property.
a. Policy:
(1) society places significant value on the domestication of animals. It's hard to have enough grazing land, so if the animals wander to graze we want to protect that right.
4. Why does the importer get the hide of the silver fox back?
5. Situation: Oil reservoir under both A and B's land.
a. Old common law rule: Each person can tap as much oil as they want.
(1) Outcome - it's a race. the oil will get drained extremely quickly.
b. New common law rule: A could limit how much B takes.
(1) Why? Society doesn't want to drain our natural resources. These resources will be more valuable in the future and we want them around.
c. Current Statutory laws limit our use of natural resources: hunting license, etc.
Theories of Property Law
I. Why do we recognize individual rights to property ?
A. Blackstone Occupancy - In the beginning everything was up for grabs. Based on the first in time principle (illustrated in Pierson v. Post) whoever gets it, got it. But it was transient. You put it down, you lost it. Once everything was grabbed up, society was forced to recognize more permanent rights. Once there were permanent rights, people were free to pursue other things instead of guarding all their stuff.
B. Locke's Labor Theory - In beginning, all a person owns is his own body; the work of his hands is his. Therefore when he invested his efforts in something, he has annexed something that is properly his to it. No other man can claim a right to the labor that he invested.
C. Demsetz Theory - Basically, Demsetz suggests that the cost of internalizing externalities is less with private ownership rights when compared to communal ownership. (economic terms why there is personal property rights.)
1. Externalities – an effect on another person that the first person is not forced to take into account. A harm or benefit that flows from someone’s use of property that the property owner doesn’t have to consider. (A benefit can be created by either building or removing something on/from your property)
2. Internalize – to take the effects on the other into account.
3. If community owns the land, and you want a specific action done to one part of the land for your benefit (say building a dam), you have to negotiate with every single other owner. The transaction costs involved can be prohibitively expensive, plus someone could always holdout. And some people will try to free-ride, let everyone else carry the burden and expense of enacting their ideas which will benefit the aggregate. In addition, since the costs of maintaining the land fall on everyone, if one person overworks the land, he gains unfair value because he reaps the profit without the burden of all the costs. BUT, with private ownership, negotiations for mutual benefits considerations are much more feasible and less costly because they would involve less people. Also, each person would be able to consider the economic cost-benefits of how they work or don’t work their land.
4. Transaction Costs:
a. Holdout - computer motherboard with 5,000 parts. The owner of the last part holds out to get much more money than his part is worth.
b. Freeride - everyone decides to pay the guy to get him to stop cutting down trees, but some people decide that everyone else wants it bad enough, they'll pay a little more so I don't have to pay anything.
5. Tragedy of the Commons – one view states that communal property will always be abused (without coercive intervention from the government) simply because they can. Litter and pollution, for instance, since it is everybody’s burden and not the burden of the factory producing the smoke, the factory is not forced to consider this effect on society. Another view feels owners of common property resources can cooperate to manage them efficiently.
a. i.e. too little property rights
b. The tragedy is overuse of public (common) property.
(1) Property rights alleviate the 'tragedy of the commons' by reducing transaction costs.
6. Tragedy of the Anticommons – just as commons include few rights to exclude others, anticommon entails multiple rights to exclude others. Usually, for example, no one person is given ownership of a storefront. Instead, the incidents of ownership are broken up and distributed among a number of competing owners: one person has the right to sign a lease, another to receive some o the lease revenue, another to sell the property altogether, another to occupy the premises, and so on. No one can set up shop without consent from all the owners.
a. i.e. too much property rights per each item.
D. Coase Theorem - In a world w/o transaction costs it won't matter to whom you assign property rights.
1. Without the transaction costs (Holdouts, Freerides), any sensible person will allow the proper allocation of assets
a. X gains $100 but causes $150 damages in pollution to city Y. Y offers to pay somewhere between $100 and $150 to stop. Problem solved.
b. Or city Y just never gives X the rights to run the kind of business it has. Either way, the pollution won't be a problem.
Acqusition by Creation / Intellectual Property
I. Intellectual property is a form of personal property (as opposed to land).
A. What’s a problem that flows from common property? Overconsumption – the tragedy of the commons.
B. Unlike physical property, which we both can’t use the pen at the same time, intellectual can be used, a story told, at the same time without causing any detriment to others simultaneous users. So, assigning property rights on intellectual property isn’t justified simply by claiming to solve the tragedy of the commons. That ‘tragedy’ doesn’t really occur with intellectual property. Your use doesn’t preclude my use of it like it would with tangible property.
C. Policy goal in INS v. AP: If court found for INS, AP would be much less interested in researching the news b/c it would be much less profitable. Court wanted to preserve news in this country. So they created quasi property rights for AP. This seemed like a very broad rule at the time, but future cases really narrowed it.
D. Try to compare Cheney to INS:
1. Making these designs is hard work and is expensive, and we don’t think we can get copyright protection and even if we could, it might not be worth it (it’s not practical to get property rights by any of these other mechanisms).
2. The actions of Cheney are also unfair. D is appropriating the value of the design.
3. If court doesn’t protect this under some sort of property rights, allowing my competitor to have an unfair advantage over me b/c he has so much less costs, then that will put me out of business. I will no longer be able to afford to provide this service to the public. Protection of this type of property is a social good.
E. So it’s a different justification for giving Intellectual Property rights than Real Property rights.
1. Real Property. – to prevent over-consumption;
2. Intellectual Property – to encourage and further the sciences and arts.
F. Judge Hand distinguishes INS from Cheney by saying that INS was the justification and the limit of that rule.
1. The default rule is that you can copy stuff, unless there is a statute or a special common law.
a. "In the absence of some recognized right at common law, or under the statutes...a man's property is limited to the chattels which embody his invention. Others may imitate these at their pleasure..."
2. Hand says competition makes things cheaper. Promotes efficiency, reforms, improvements, and the advancement of art and science.
a. "Since appellee’s perfume was unpatented, appellants has a right to copy it…There is strong public interest in doing so, ‘for imitation is the lifeblood of competition. It is the unimpeded availability of substantially equivalent units that permits the normal operation of supply and demand to yield the fair price society must pay for a given commodity."
Copyright
I. COPYRIGHT - protects original works of authorship (our focus) fixed in a tangible medium of expression (not our focus).
A. Subject matter of Copyright: In general
1. (a) Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. Works of authorship include the following categories:
a. (1) literary works;
b. (2) musical works, including any accompanying words;
c. (3) dramatic works, including any accompanying music;
d. (4) pantomimes and choreographic works;
e. (5) pictorial, graphic, and sculptural works;
f. (6) motion pictures and other audiovisual works;
g. (7) sound recordings; and
h. (8) architectural works.
2. (b) In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.
B. Copyright protects the expression of ideas (not the ideas themselves) in books and articles, artistic works, and so on. Lasts for a long time, typically 70 years after the death of the author or creator. Must be original (not novel) material.
C. To qualify for copyright protection, a work must be original to the author.
1. Original, as the term is used in copyright means only that the work was
a. (1) independently created by the author (as opposed to copied from other works), AND
b. (2) that it possesses at least some minimum degree of creativty.
2. Unlike a patent, if two people were to independently write the exact some story, they could both obtain copyrights for their work. (Even thought their work is identical.)
D. Facts are not copyrightable - they contain no originality.
1. As a statutory matter, U.S.C. does not afford protection from copying to a collection of facts that are selected, coordinated, and arranged in a way that utterly lacks originality.
2. A factual compilation may become copyrightable: (Fiest v. Rural)
a. The choices as to selection and arrangement, so long as they are made independently by the compiler and entail a minimal degree of creativity, are sufficiently original that Congress may protect such compilations through copyright laws.
b. BUT protection is only conferred on those elements of a work that are original to the author. The work as a whole, i.e. the facts contained therein, are not protected.
3. 'Sweat of the Brow' approach assumes that since you took the time, initiative, money, and time to collect those facts you should be afforded protection under the law. But this is incorrect. Facts themselves, no matter how much effort was involved in the collection of those facts, are not copyrightable b/c there is no originality in them.
E. Copyright protects the expressions of ideas, not the ideas themselves. Baker v. Seldon.
1. "(b) In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work."
F. Merger Doctrine - if an idea and expression merge unavoidably, then the expression is not copyrightable, just like the idea.
1. When the uncopyrightable subject matter is very narrow, so the ‘the topic necessarily requires,’ if not the only one form of expression, at best only a limited number, to permit copyrighting would mean that a party or parties, by copyrighting a mere handful of forms, could exhaust all possibilities of future use of the substance. We cannot recognize copyright as a game of chess in which the public can be checkmated. Morrissey v. P & G.
Patent
I. PATENT - protects new, useful, and non-obvious processes, etc. Our focus is patentable subject matter.
A. Subject matter of Patent:
1. 35 U.S.C. §100 - Definitions
a. When used in this title unless the context otherwise indicates:
(1) (a) The term "invention" means invention or discovery.
(2) (b) The term "process" means process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.
2. 35 U.S.C. §101 - Inventions Patentable
a. Whoever invents or discovers any new and useful process, machine, manufacture, or compostion of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.
(1) Laws of nature, physical phenomena, and abstract ideas are not patentable.
(a) If we gave a patent claim on a pure algorithm, what's the problem?
I. It's too broad, too big a scope. It would cover all uses of that equation, uses that are perhaps unforeseeable and very valuable. Funk Bros.
(2) Living things are patentable (if made through human intervention). Anything ‘under the sun’ that is made by man. Anything that falls into the 4 categories (process, machine, manufacture or composition of matter) that is made by man is patentable. Diamond v. Chakabarty
(3) Products themselves are patentable - as long as man's indelible imprint has been left on the product. Adrenaline was patentable because there was substantial human intervention in the refining of the final product. Parke v. Davis.
(4) The process of applying an abstract law of nature to a specific end, that process is patentable.
(a) While a scientific truth, or the mathematical expression of it, is not a patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be. Diamond v. Dier.
3. 35 U.S.C. §271 - Infringement of a Patent
a. (a) Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.
B. Patents grant a limited monopoly (20 years from the time of application) over protected material: novel, useful, or non-obvious processes. This promotes creative activity but is limited in order to advance competition.
C. Claims. On a Patent document one line reads, "What is claimed is." What follows--the claims--are the fence, the scope of the property rights which the law recognizes as exclusively yours with respect to everyone else.
D. Policy for patents:
1. I may not reveal my invention/discovery to the public if I wasn't protected. I would be afraid that someone would steal my idea. We recognize the public value in the furtherance of science/arts.
2. We want to offset the commercial risk of developing new technologies by allowing the developer the exclusive rights to profit off his invention.
E. Societal Costs for patents:
1. Permits premium pricing. New drugs, for example, would be a lot cheaper and much more of the world would benefit if generic drugs, which would lower the overall consumer cost of the drugs, were allowed.
2. Administrative costs - we need special courts, there's a huge patent office to examine all the applications, procedural costs of filing all those applications, etc.
3. People would always invent stuff anyway. It's argued that patents overprotect unnecessarily.
II. TRADEMARKS - words and symbols indicating the source of a product or service; owners of marks are protected against use of similar marks by others when such use would result in confusion.
Conversion in body parts
I. Conversion - wrongful exercise of ownership rights over the personal property of another. Conversion is similar to trespass. But trespass is for damages suffered because of interference with your property. Conversion is a situation where you can’t get your property back. The damage is for the current market value of the property.
II. Important argument for majority: Conversion should not lie because it would discourage medical research of cells and patients are adequately protected from abuse because of informed consent laws.
III. This stuff is from the Moore case. I don't know what we're supposed to learn from it exactly.
IV. In Moore the court held that a man did not have a property right in his spleen following its removal from his body by doctors who made it into a patented cell line of great commercial value. The doctors who created the cell line thus acquired original ownership. The court held that the patient had only the right to sue the doctors for failure to disclose their research and economic interest in the patient's cells. In ruling, the court was concerned about making body products property that could be sold. However, transferability in the market is not an essential characteristic of property. Although most property is freely transferable, some property is not alienable (e.g. Social Security) and some property can be given away but not sold. This latter type of property is sometimes called "market-inalienable." The hard question with body products or body parts is not whether they should be treated as property, but whether they should be saleable. Should the demand for body products be satisfied through the tradidtional market mechanism? This question is bound to arise in connection with the sale by a woman of an egg to an infertile couple for profit.
Subsequent Acquisition of Property Rights
Adverse Possession with land
I. Rationales:
A. Stability Theory - To protect title where it is difficult to prove, e.g. a gap in the records of transfer of ownership
B. Sleeping Theory - to bar stale claims. Adjudicating old claims are very difficult, memories fade, people die. To punish people for not asserting their rights. Use it or lose it.
C. Earning Theory - society values and wants to reward people to use land efficiently
D. Attachment/expectations - people feel attached and expect to own land that occupied for an extended period of time
II. Elements of Adverse Possession:
A. An actual entry giving exclusive possession that is
B. open and notorious,
C. adverse (hostile - does not mean animosity) and under a claim of right/title, and
D. Continuous for the relevant statutory period.
1. Actual and exclusive possession -
a. Actual - the possessor must actually and physically take possession of owner's land. This triggers the cause of action and the statute of limitations begins to run.
(1) The Statute requirements in the Lutz court defined actual possession when not accompanied by a written instrument as the premises (1)being protected by a substantial enclosure or are (2)usually cultivated or improved.
(2) The sort of entry and exclusive possession that will ripen into title by adverse possession is use of the property in the manner that an average true owner would use it under the circumstances, such that neighbors and other observers would regard the occupant as a person exercising exclusive dominion.
(3) Constructive Possession - Color of Title – refers to a claim founded on a written instrument (a deed, a will) or a judgment or decree that is for some reason defective and invalid (as when the grantor does not own the land conveyed by deed or is incompetent to convey, or the deed in improperly executed). Actual possession under color of title of only a part of the land covered by the defective writing is constructive possession of all that the writing describes.
(a) Many states have lower standards to establish adverse possession when the adverse possessor has color of title. Also, color of title generally gives constructive possession over the entire land written in the title even if not improved.
b. Exclusive - not sharing the possession with the owner or the public generally; the possessor is excluding the owner and the public. This does not mean that only one adverse possessor can occupy. A group of people adversely occupying may acquire a shared title - concurrent ownership.
2. Open and Notorious
a. The Possession must be readily visible. The idea being that the true owner would know of the occupation if he visited his property. This constitutes notice to the owner that his rights are being violated.
b. The sort of entry and exclusive possession that will ripen into title by adverse possession is use of the property in the manner that an average true owner would use it under the circumstances, such that neighbors and other observers would regard the occupant as a person exercising exclusive dominion.
c. May also be defined by Statutes.
d. Some jurisdictions hold that encroachments by neighbor onto the land of another are not open and notorious if the encroachment is of a small area and is not "clearly and self-evidently" an encroachment. In such situations the limitations statute does not begin to run until and unless the owner has actual knowledge of the encroachment.
(1) Mannillo v. Gorski - Open and notorious requirement is hard to meet in this kind of case. Why shouldn’t Gorski just be treated as a trespasser? In a case where it would be expensive to remove whatever improvements are built on the disputed land, it’s more equitable to force the land owner to sell the improved land – says the court.
3. Hostility/Adverse and under a claim of right
a. Majority opinion (our focus)
(1) In order to fulfill the hostility requirement, a person must (without the consent of the owner) intend to claim the lands as his own – he cannot disavow his rights and acknowledge that his claim is subordinate or with permission.
(2) Any entry and possession for the required time which is exclusive, continuous, uninterrupted, visible and notorious, even though under mistaken claim of title, is sufficient to support a claim of title by adverse possession.
(a) Connecticut Doctrine says that intent is largely irrelevant (as long as you (1) don’t acknowledge your claim as subordinate or (2) disavow your rights to the land). An honest mistake will gain you rights to the land.
b. Minority opinion
(1) Actions are considered for the hostile requirement; the fact that the adverse possessor disavowed his rights are only some other facts to consider in the case, it does not destroy the adveres possession claim.
(2) The Maine Doctrine says that a person must be an aggressive possessor and that an honest mistake will not qualify for a hostile claim.
(a) Criticism for Maine Doctrine: It rewards the wrong doer over the honest guy and encourages lying.
c. Problem 3 pg. 134
A and B own adjacent lots. A builds a fence three feet into B’s land and the fence is there for the statutory period. B has a survey that reveals the mistake. A, “to avoid a hassle,” tears down the fence and builds a new fence at the original boundary. Then A talks to a lawyer and wants to claim adverse possession, what result?
To apply Lutz, all you can say is that his moving the fence shows he never intended to acquire the land. That’s a good argument but:
Once you meet all the statutory requirements for adverse possession you are the owner as a matter of law. You go to court to get an official title – but you are already the owner. You can’t lose title unless you actively transfer the title or someone else claims adverse possession
4. Continuous Possession
a. The adverse possessor must occupy the land continuously, without interruption for the length of the limitations period. He must occupy the property as continually as would a reasonable and average true owner of the property.
(1) Seasonal Use - Use of a summer home only during the summer for the statutory period is continuous use. Similarly, seasonal use of a hunting cabin during the hunting seasons, or the grazing of cattle on range lands in summer, may be sufficiently continuous possession, if such lands are normally used this way. Howard v. Kunto
(2) Abandonment - is the intentional relinquishment of possession. If the possessor abandons the property for any period of time, without intent to return, continuity of adverse possession ends. If the adverse possessor later returns, the limitation period begins anew.
b. Tacking
(1) Tacking by successive adverse possessors - If privity of estate exists between the prior possessor and the present possessor tacking is permitted. Privity of estate means the voluntary transfer from the first possessor to the second possessor of either an estate in the land or actual possession of it.
(a) English courts don't require privity for tacking to occur. In the UK the sleeping theory alone is sufficient justification for this result. In the US courts prefer to penalize the slothful owner only when the victor is a deserving possessor.
(2) Ouster by third party - When an adverse possessor A is ousted (forcibly) by a third party X, X cannot tack on A's period of prior possession because of lack of privity. Privity of estate requires a voluntary transfer for tacking.
(a) Reentry by A - Suppose 6 months after A is ousted by X, A returns and reacquires possession. A can tack his prior possession onto his later possession, but the statute is tolled (suspended) during the period of X's possession.
(3) Tacking on the owner's side - Once adverse possession has begun to run against O, it runs against O and all of O's successors in interest. Hence, if A enters against O in 1990, and O conveys to C in 1995, the statute continues to run against C--from 1990. Thus successive ownerships are tacked on the owner's side as well as on the adverse possessor's side.
c. Interruption by the true owner - If O reenters the land openly and notoriously for the purpose of regaining possession, an interruption has occurred; this stops the statute of limitations from running.
d. Taxes - Some states (mostly in the West) require adverse possessors to prove that they have paid the property taxes on the occupied property for the duration of the limitations period. Tax collectors give notice to owners that someone else is attempting to tender taxes. In all states, payment of taxes is good evidence of a claim of right.
e. Problem 1 pg. 142
In 1996 A enters adversely upon Blackacre, owned by O. In 2003 B tells A, “Get out of here, I’m taking over.” A, feeling threatened, leaves, and B enters into possession. In 2006 who owns Blackacre?
O owns Blackacre. There was no privity between B and A and therefore no tacking. O can eject B. Also, A can eject B because A has more rights to Blackacre than B does.
Suppose that in 2003 A leaves under threat of force, but six months later A recovers possession from B. If O does nothing, will A own Blackacre 10 years from the date of entry in 1996, or 10 years and six months from the date of his entry, or in 2013?
In most American jurisdictions, the answer is 10 years and six months.
Why? We don’t want A to go get his gun to take B off the law. We rather protect A through the courts since B used force.
Suppose that in 2003 A abandons Blackacre, and B immediately goes into possession. If O does nothing, will B own Blackacre in 2006?
No privity. B does not own Blackacre in 2006.
f. Disabilities of Owners
(1) Most legislatures think it is unfair for a statute of limitations to run upon a person who is unable to bring a lawsuit due to a legal disability. Statutory disabilities vary but typically include (1) insanity or other unsound mind, (2) imprisonment, or (3) the condition of being a minor. Read your statute carefully! A typical statute provides that if the owner is disabled at the time the statute accrues the owner may bring suit for some specified period after the disability ceases, even though the normal limitations period has expired.
(a) Typical Statute - The owner has 21 years to eject the adverse possessor. If, at the time the adverse possessor entered the land, the owner had a disability (minority, unsound mind, or imprisoned) then the owner has 10 years to eject the adverse possessor from the time the owner’s disability is removed. (He has the longer of 21 years or 10 years from removal of the disability.)
I. Based on above statute, when in the following examples would the adverse possessor acquire title? In each case, O is the owner in 1980, and A enters adversely on May 1, 1980. The age of majority is 18.
A. O is insane in 1980. O dies insane and intestate in 2003
1. O's heir, H, is under no disability in 2003. 2013
2. O's heir, H, is 6 years old in 2003. 2013 Disabilities cannot be tacked.
B. O has no disability in 1980. O dies intestate in 1998. O's heir, H, is two years old in 1998. 2001. Adverse possessor is against O. The limitations period begins running (accrues) against O in 1980
C. O is five years old in 1980. In 1990 O becomes mentally ill, and O dies intestate in 2005. O's heir, H, is under no disability. Does the adverse possessor here acquire title in 2001, 2003, or at some later date? 2003. O has a disability - he is a minor. When he turns 18 in 1993, he gets ten more years.
D. O disappears in 1993 and is not heard from again. You represent B, who wishes to buy from A. What advice do you give B? Have A indemnify B, if O returns A will return the money. Or try to buy an insurance policy.
III. Extent of land acquired by adverse possession
A. Entry without color of title - only the land the adverse possessor actually physically occupied or controlled for the limitations period in a manner consistent with ownership of such premises.
B. Entry under color of title - deemed to possess all the land described in the defective deed, so long as it consists of a single parcel of land and the possessor has occupied a significant portion of the parcel. Remember: A possessor lacks color of title if he does not believe, in good faith, that his defective deed is valid. On the theory that he intends to control all of the land described in the instrument, the adverse possessor os in constructive adverse possession of the part of the tract he does not actually possess.
1. The 'single parcel' rule is designed to make sure that the owner of each parcel has a chance to protect his interest. If there has never been an actual entry against the owner, he has no way of knowing of any adverse claim.
2. Many states have lower standards to establish adverse possession when the adverse possessor has color of title
3. Problem 1 pg. 130
O owns 100-acre lot. A takes possession of the back 40 acres under color of title. That invalid deed is for the entire 100 acres. A brings suit to evict O after the statutory period has passed, what result?
Because O is still possessing and using the other 60 acres, A cannot eject O from those 60 but A does get the 40.
Even if O had title only under claim of title, the outcome would be the same.
4. Problem 2
Contiguous lots 1 and 2 owned by X and Y, A gets both lots on a bad deed from Z and A occupies lot 1, what result?
A has a claim vs. X but not against Y. The statute never began to run against Y because Y was never informed of A’s adverse possession because A was never on Y’s land. There was nothing open and notorious about it. (This is an exception to the color of title constructive possession rule. It’s because there are different owners to the land in the bad deed. If there was only one owner to both lots, A would have a valid claim for all of the land.)
What if X conveyed the title?
Same result.
What if X conveyed the title but A took possession of lot 2?
A would have a good claim for both lots.
C. Government Land - Under common law rules, adverse possession does not run against the government -- local, state, or federal.
1. A number of states, however, have changed the common law rules, whether by legislation or judge-made law. A few permit adverse possession against government land on the same terms as against private land. Others permit it only if possession continues for a period much longer. In some states land held by a county or city in its private capacity, and not for public use, is subject to adverse possession.
IV. Title Acquired by Adverse Possessor - a new title. The former owner hasn't transfered his interest; rather the law has stripped him of his title an a created a new one in the adverse possessor.
A. Same Scope - The adverse possessor can only acquire the title which the previous owner had.
1. If A adversely possesses B's life estate, A can quiet title for a life estate only. A will lose possession to the owner of the future interest. If no one claims the future interest immediately, the limitations period will begin anew for A.
a. Problem 2 pg. 142
In 1990 A enters adversely upon Blackacre, owned by O. In 1991 O dies, leaving a will that devises Blackacre to B for life, remainder to C. In 2006 B dies without ever having entered upon Blackacre. Who owns Blackacre?
A will prevail with his adverse possession because A is adversely possessing against O since A came in before the conveyance.
Problem 3
O, owner of Blackacre, dies in 1991 leaving a will that devises Blackacre to B for life, remainder to C. In 1992 A enters adversely upon the land. In 2006 B dies. Who owns Blackacre?
Here, C owns the land. Since A started adversely possessing after the conveyance, A’s claim is against B. A can’t claim more than B and all B has is a life estate. Therefore, once the life estate expires, all of A’s claims expire.
B. Once you meet all the statutory requirements for adverse possession you are the owner as a matter of law. You go to court to get an official title – but you are already the owner. You can’t lose title unless you actively transfer the title or someone else claims adverse possession. Until the adverse goes to court she has no record title, though. A purchaser may be nervous about who really has title in this situation. That is why a quiet title suit may be useful to settle the matter and provide record title.
1. Adverse Possession – acquires the title or ownership, and the exclusive possession, of land formerly belonging to someone else.
2. Prescription – gives rise to rights of use, such as right of way and other easements, but title to the land remains with the other person.
3. In some jurisdictions the elements of the two doctrines are essentially the identical, in others not.
Adverse Possession with chattels
I. A person can acquire title to chattels by adverse possession just as he can acquire title to land. Once the remedy is barred, the adverse possessor has title. Generally, the requirements for adverse possession of chattels are the same as land, except the period of limitations is shorter. There is, however, one great difference between land and chattels: Adverse possession of land is open and notorious, whereas adverse possession of chattels seldom is. How should this difference be handled? Basically, there are two approaches:
A. New York Rule - New York holds that the statute of limitations does not begin to run on the owner of stolen goods until the owner knows who has the goods and makes a demand for return of the goods that is rejected. If the person in possession refuses to return the goods, the three-year statute of limitations begins to run. By making it very difficult to obtain title to stolen goods by adverse possession, New York believes it will deter theft. The New York rule also puts the risk of buying stolen goods on purchasers, who can often protect themselves by making inquiries.
B. Discovery rule - A majority of courts (including California, by statute) appear to hold that the statute of limitations does not begin to run on the owner of stolen goods as long as the owner continues to use due diligence in looking for them. The conduct of the owner, not the possessor, is controlling. The cause of action thus accrues when the owner first knows, or reasonably should know through the exercise of due diligence, where the stolen goods are, or doesn't do her do diligence. (N.J. Supreme Court)
C. Replevin - An action for the return of stolen chattel to the rightful owner.
Possessory Estates & Future Interests - Dividing Up Property Rights Over Time
Introduction
I. Possessory Estate - a present right to possess the land now.
A. Fee Simple Absolute - will theoretically last forever
B. Fee Simple Defeasible - may theoretically last forever
1. Fee Simple Determinable
2. Fee Simple Subject to Condition Subsequent
3. Fee Simple Subject to Executory Limitation
C. Finite Estate - will end
1. Life Estate
2. Term of Years
II. Future Interest - a present right to possess the land in the future
A. To Grantor -
1. Reversion
2. Possibility of Reverter
3. Right of Reentry
B. To Third Party -
1. Remainder
a. vested
b. contingent
2. Executory Interest
a. shifting
b. springing
C. By estates:
1. Finite Estates:
a. Reversion (grantor)
b. Remainder (transferee)
(1) vested
(2) contingent
2. Fee Simple Defeasibles
a. FSD - Possibility of Reverter
b. FSSCS - Right of Reentry/power of termination
c. FSSEL - Executory interest
(1) shifting
(2) springing
III. "Conveying" a Property Interest - All possessory estates and future interests are transferable, devisable, and inheritable. One exception: The future interest 'right of reentry' is NOT transferable (it is devisable and inheritable).
A. Transferability - Capable of inter vivos transfer
B. Devisability - Capable of transfer by will
C. Inheritability - Capable of transfer by inheritance
1. Issue - Children and down
2. Ancestors - Parents and up
3. Collaterals - Other blood relatives (siblings, aunts, uncles, niece, nephew)
4. Prob 1, p. 185. O, owner of Blackacre has two children, A and B. B dies testate, devising all of his property to W (wife). B is survived by 3 children B1, B2, B3. A has one child, A1. O dies intestate. Who owns Blackacre (Am Law)?
A gets?
half of Blackacre
B1, B2, & B3 get?
half of Blackacre
A1 gets?
nothing, A survived O
W gets?
nothing, B is not O’s heir (a living person has no heirs)
IV. Analyzing Possessory Estates
A. Words of Purchase indicate to whom the property rights are being transferred.
1. Owner conveys "to Andrew for life, then to Bonnie and her heirs."
B. Words of Limitation indicate the duration of the rights transferred.
1. Owner conveys "to Andrew for life, then to Bonnie and her heirs."
V. Ambiguity
A. Where the words of limitation are ambiguous (it it unclear if a FSD or FSSCS was intended), the courts favor construing the estate as a FSSCS because of their dislike for forfeiture of property interests (which is inherent is FSD)
B. To create a FSSCS, must add a "right to reenter" clause. Without express language, the default is a FSA
C. Presumption today is to give as much as she possibly could have. We assume a fee simple if the language is ambiguous. White v. Brown
The Fee Simple Absolute
I. Theoretically lasts forever
II. Words of purchase that indicate FSA:
A. to A and his heirs
B. to A
C. to A in fee simple
D. to A forever
E. all to A
F. (to A and the heirs of her body)
III. Future Interest - NONE
Fee Simple Defeasibles
I. FEE SIMPLE DETERMINABLE
A. Automatically ends at the happening or non-happening of an event.
B. Created by:
1. language of a fee simple, and
2. Limited by "durational" language
a. "so long as"
b. "as long as"
c. "while"
d. "until"
e. "during"
f. "unless"
C. Future Interest:
1. Possibility of Reverter held by the grantor
a. note: If the estate looks like a fee simple determinable but the future interest is in anyone but the grantor, the estate is a fee simple subject to executory limitation.
b. note: there is no such thing as a possibility of reversion. It is either a reversion (for finite estates) or a possibility of reverter (for the FSD). Do not confuse them or mix them up.
II. FEE SIMPLE SUBJECT TO CONDITION SUBSEQUENT
A. May end at the grantor's election at the happening or non-happening of an event.
B. Created by:
1. language of a fee simple, and
2. limited by the following conditional language:
a. "but if"
b. "however if"
c. "provided that"
d. "provided however"
e. "on the condition that"
(1) note: "but if" is also used to created a contingent remainder. Be careful when reading the clauses, comma to comma. A remainder cannot be in FSSCS unless it is vested. If "but if" creates a contingent remainder, the future interest will be in FSA.
C. Future Interest
1. Right of Reentry or Power of Termination if held by the grantor.
a. note: If the estate looks like a fee simple subject to condition subsequent but the future interest is in anyone but the grantor, the estate is a fee simple subject to executory limitation.
III. FEE SIMPLE SUBJECT TO EXECUTORY LIMITATION
A. Automatically cuts off the prior interest.
B. Looks like either FSD or a FSSCS except that the future interest is NOT in the grantor.
C. Future Interest - Executory Interest
1. Shifting executory interest cuts off the interest of someone besides the grantor.
2. Springing executory interest cuts off the possession of the grantor (not as common). Scenarios that allow for springing interest:
a. Future interest only conveyance - O conveys "to A and his heirs if A is married."
(1) The express condition precedent is in the same clause as the clause which appears to be conveying a possessory interest to the grantee. It is not a possessory interest, however, due to the express condition precedent. The grantee is taking a future interest, not a possessory estate. A has a springing executory interest in fee simple.
b. "Gap" scenario - the express condition precedent cannot be satisfied before the end of the preceding estate.
(1) To A for life, then to B and his heirs if B attends A's funeral.
(a) In between A' s death and B attending A's funeral, the property reverts back to O. That is the "gap." B has a springing executory interest in fee simple.
IV. Problems/Examples
A. O conveys Yellowacre "to Francis and his heirs, but if Francis allows hunting on the property, then O has the right to reenter and retake the premises."
1. Francis has a fee simple subject to condition subsequent and O has a right of reentry or power of termination.
B. O conveys Yellowacre "to Francis and his heirs, unless Francis allows hunting on the property."
1. Francis has a fee simple determinable and O has a possibility of reverter.
C. O conveys Vineyardacre "to Alan and his heirs, so long as no alcohol is sold on the land." Alan then opens a restaurant that serves dishes cooked in wine and flamed with brandy. On Sundays the restaurant offers a brunch with complimentary champagne.
1. Alan has a fee simple determinable and O has a possibility of reverter.
2. Will this fee determine?
a. It depends if we stay strict with the words and try to determine O's intent.
D. Duane conveys Almanacre "to Greg for life, then to Cher and her heirs if Cher attends Greg's funeral.
1. Greg has a life estate, Cher has a springing executory interest and Duane has a reversion that is cut off if "Cher attends Greg's funeral"
a. Cher's interest is "springing" because there is a period in time where the property must revert back to duane -- After Greg's death. Greg's death and funeral cannot be simultaneous, therefore the property reverts back to Duane. If Cher gets the land, she gets it from the grantor, Duane, therefore it is springing.
E. Henry Paul conveys Henryacre "to Kenneth and his heirs, but if Kenneth fails within ten years to produce and name a son 'Henry Paul' then to Edward."
1. Kenneth has a fee simple subject to executory limitation and Edward has a shifting executory interest.
F. Jessie's will contains the following language: "I wish to Evelyn to have my home to live in and not to be sold." Jessie dies.
1. The possessory estate?
a. A FSA or a life estate
2. Future Interest?
a. None or a reversion in Jessie's heirs
G. Neil conveys "to David and his heirs, provided that David does not cut his hair."
1. David has a fee simple subject to condition subsequent and Neil (and his heirs) have a right of reentry.
The Finite Estates
I. Life Estate
A. Words of purchase that indicate life estate
1. "To Andrew for life"
2. "to Andrew for the life of Beta"
B. Conveyability:
1. Andrew can only transfer (because when he dies, he loses all interest in the land and therefore cannot devise it or have a heir inherit it.
2. If Andrew transfers to Carl - Carl has the ability to transfer, devise and be inherited as long as Andrew is still alive. The property rights are still measured by Andrew's life, even though Carl is in poession.
II. Term of Years
A. Words of purchase that indicate term of years
1. "to Andrew for 50 years"
2. "to Andrew from Sept. 1, 2007 to Sept. 1, 2057"
B. Conveyability - transferable, devisable, and inheritable
III. Future Interests of Finite Estates
A. Reversion - held by the grantor
B. Remainder - held by third party
1. Vested Remainder: a remainder is vested if the remainderman is:
a. Born
b. Ascertainable (can recognize by name) and
c. There is no express condition precedent in
(1) the clause creating the remainder or
(2) the preceding clause
(a) note: Born and Ascertainable do commonly overlap. The distinction would be something like "to A for 10 years, then to the next president of the united states." The next president is born, but not yet ascertainable.
(b) A vested remainder is one of the following:
I. Indefeasibly vested - will definitely become possessory at some point.
II. Vested subject to partial divestment (or subject to open) - a remainder held by a known or ascertainable person who has satisfied all conditions precedent to possession, but who is a member of a class of people who own the remainder, not all of whom are known or have yet satisfied the conditions precedent. A grant of a future interest following a life estate "to the children of A who reach age 21" creates a vested remainder subject to partial divestment in A1, the 22-year-old child of A.
A. Class gifts - Whenever a grant creates an interest in a group of people, it is a class gift. The group can be any ascertainable body of people, but is most often a family group; e.g., "to my children," or "to my surviving nieces and nephews," or "to my grandchildren who have reached age 21." A class is open if it is possible for new people to enter it, and closed if new entrants are not possible.
1. Class-closing rules - a class closes when it is no longer physiologically possible to have new entrants,
III. Vested subject to complete divestment - a remainder held by a known or ascertainable person who has satisfied all conditions precedent to possession, but whose remainder is subject to being taken away, or divested, if some subsequent event occurs. If O conveys Blackacre to "A for life, then to B, but if B should become a lawyer, to C." B has a vested remainder subject to complete divestment, and C has an executory interest.
2. Contingent Remainder - any other remainder that does not fit into the vested category is contingent.
(1) note: the difference between a contingent remainder and a vested remainder subject to divestment:
(a) Contingent Remainder - A remainder is contingent if there is some precedent event that must happen or not happen for the person to be able to possess the estate
(b) Vested Remainder Subject to Divestment - There is no precedent event. The estate can theoretically become possessory right now. But there is a possibility of a future event that will or will not happen before the estate actually becomes possessory, which will divest the person from being able to take possession.
IV. Problems/Examples
A. O conveys Whitacre "to Darlene for life, then to Elma and her heirs."
1. State the title: Darlene has a life estate and Elma has a remainder in fee simple absolute.
B. O conveys Redacre "to Ethan for life."
1. State the title: Ethan has a life estate and O has a reversion in fee simple absolute.
C. Phar-O conveys Egyptacre "to Caesar, then to Antony, then to Octavious and heirs."
1. Caesar has? A life estate (on our interpretation)
2. Antony has? If Caesar has a life estate, Antony most likely has a remainder in life estate.
3. Octavious has? Assuming the above, Octavious has a remaider in fee simple absolute.
D. Oliver conveys "to Dickens for 75 years."
1. Dickens has a term of years and O has a reversion in fee simple absolute.
E. O conveys Greenacre "to Ellen for life, then to Kim for life." O promptly dies leaving a will that gives all "my property real and personal, to Peabody."
1. Ellen has a life estate, Kim has a remainder in life estate.
2. Ellen and Kim die, Peabody has?
a. O has a reversion which is devisable. Thus, at this point Peabody has a possessory estate in Greenpeace in fee simple absolute.
F. O conveys "to Aurelia for life, then to Bertha and her heirs if Bertha attains the age of 21 before Aurelia dies." Bertha is 15. What if Bertha reaches 21?
1. Aurelia has a life estate and Bertha has a contingent remainder in FSA (condition "age of 21" is in the clause creating the remainder). O has a reversion.
2. If Bertha reaches 21 before A dies, Bertha has a vested remainder in FSA and O has no future interest.
G. O conveys "to A for life, and in the event of A's death to B and her heirs."
1. A has a life estate and B has a vested remainder in FSA.
a. If B conveyed his interest back to O, O would now have a vested remainder in FSA (not a reversion).
H. O conveys "to A for life, then to B for life, then to C and her heirs if C survives A and B.
1. A has a life estate, B has a vested remainder in life state, C has a contingent remainder in FSA (condition "if C survives" in clause creating the remainder), and O has a reversion.
I. O conveys "to A for life, then to A's children who shall reach 21." A's oldest child B is 17.
1. A has a life estate, B has a contingent remainder in FSA, and O has a reversion.
2. When B turns 21, he will have a vested remainder subject to partial divestment (or subject to open) -- A may have more children that reach 21.
J. O conveys "to A for life, then to A's children and their heirs, but if at A's death he is not survived by any children, then to B and her heirs."
1. A has a life estate, A's children (not ascertainable) have a contingent remainder in FSA; B has a contingent remainder in FSA ("if at A's death he is not survived by any children")
a. A's two children C&D are born?
(1) C&D have vested remainders subject to open in FSA; B has a shifting executory interest (which may fully divest C&D if no children survive)
b. C dies, then A dies?
(1) D and C's estate own equal shares of Blackacre, B gets nothing.
K. O conveys "to A for life, then to B and her heirs, but if A is survived at his death by any children, then to such surviving children." A is alive with two children C&D.
1. A has a life estate; B has a vested remainder in fee simple subject to divestment (subject to divestment) ; C&D have a shifting executory interest.
L. T devises $10,000 "to my cousin Don Little if and when he survives his wife."
1. DL has an springing executory interest in fee simple
Rule Against Perpetuities
I. "No interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest."
A. No interest is good - applies only to future interests:
1. Contingent Remainders
2. Vested Remainders Subject to Partial Divestment (or subject to open) -- class gifts
3. Executory Interests
B. Unless it must vest, if at all
1. To vest or not:
a. Contingent Remainders: must vest or fail or vest
b. Vested Remainders Subject to Partial Divestment (or subject to open) -- class gifts: Class must close or completely vest
c. Executory Interests: must become possessory
C. Not later than twenty-one years after some life in being at the creation of the interest
1. Must vest or fail to vest within a period calculated by adding 21 years to the end of the lives of the individuals who could affect the vesting of the interest:
a. If the interest does not vest or fail within this period it is VOID.
b. If an interest is VOID, the clause creating that interest it ELIMINATED from the conveyance.
II. Create, Kill, & Count
A. The essence of the Rule against Perpetuities is that the future inteerest in question must vest, if at all, within the lives in being at the creation of the interest plus 21 years, or the interest is void from the moment of its attempted creation.
1. If you can conceive of 1 possible scenario, no matter how implausible, where the interest could vest but only after the lives in being plus 21 years, the interest violates the Rule against Perpetuities. (proof by counterexample)
a. Create - someone in whom the interest could vest. His creation is after the conveyance (cannot be disqualified as a life in being).
b. Kill - everyone who was a live at the time of the conveyance. (this leaves only the person created to receive the future interest.)
c. Count - 21 years. If it is conceivable (no matter how absurd the scenario sounds) that one of the parties created can claim possession of the property after 21 years, then the interest violates the rule against perpetuities and the interest is void from the moment of its attempted creation.
(1) If such a scenario does not exist, then it does not violate the Rule and is valid.
III. Problems/Examples
A. Montcalm conveys Albanyacre "to Burgoyne for life, then to Washington and his heirs."
1. Burgoyne has a life estate; Washinton has a vested remainder if FSA.
a. RAP violation?
(1) No. RAP does not apply.ß
B. Consider:
1. O conveys "to Alice, but if beets are planted on the land then to Curtis."
a. Alice has a FFSEL; Curtis has a shifting executory interest in FSA.
b. RAP?
(1) Cannot prove that Curtis's interest is certain to vest or fail within 21 years. Interest in void. The limitation may be violated 500 years from now (by an after born person). [A and C may have after born children (create X and Y, respectively). O, A, and C may die immediately (kill). B/c X may plant beets later than 21 years after lives in being, Y's interest can vest too late.
(2) Remedy?
(a) O conveys "to Alice, but if beets are planted on the land then to Curtis."
2. O conveys "to Alice, but if Alice plants beets on the land then to Curtis."
a. Alice has a FFSEL; Curtis has a shifting executory interest in FSA.
b. RAP?
(1) Can prove that Curtis's interest is certain to vest or fail within 21 years of lives in being. The limitation is specifically linked to Alice's life. If she dies w/o planting beets, Curtis's interest will fail to vest (or terminate).
C. O conveys to "Katia for life, then to Marcus, if Marcus attains the age of 30."
1. K has a life estate; M has a contingent remainder in FSA (contingent on reaching the age of 30).
2. RAP?
a. RAP applies (contingent remainder). There is no violation of the rule. M is a life in being at the creation of the interest. M either will or will not reach the age of 30 before the end of life.
D. O conveys "to A for life, then to A's children who reach 25." A has a child living a the time of the conveyance, B, who is 26.
1. A has a life estate; A's "children who reach 25" have a class gift--a vested remainder subject to partial divestment.
2. RAP?
a. Applies. Cannot prove that the class must close within 21 years after the lives in being. Interest is void. A may have an after born child (create X). O,A, and B may die immediately (kill A and B). X may reach 25 later that 21 years after the deaths.
b. Remedy?
(1) O conveys "to A for life, then to A's children who reach 25."
E. T devises "to A for life, and on A's death to A's children for their lives, and upon the death of A and A's children, to_________. A and B survive T.
1. ...to B if A dies childless.
a. A has a life estate. A's children have a remainder in life estate; B has a contingent remainder in FSA.
b. RAP applies to contingent remainders. Remainder in B will vest or fail on A's death (at that point A will or will not have children).
2. ...to B if A has no grandchildren then living.
a. A & A's children (a same); B has a contingent remainder in FSA.
b. RAP applies. Cannot prove that it will vest or fail within 21 years -- thus void. A and B may have after born children (create X and Y (who could take B's interest by intestacy), X could live longer than 21 years, puting off the vesting vel non of the future interest in Y for too long.
3. ...B's children
a. valid
4. ...B's children then living
a. void
5. ...A' grandchildren
a. void
6. ...T's grandchildren
a. valid
F. During his life, Lucky makes the following conveyance: "to Shepard for life, then to my first grandchild and his or her heirs. Lucky has three children and no grandchildren
1. Shepard has a life estate. Lucky's first grandchild has a contingent remainder (contingent on being first).
2. RAP applies to contingent remainders. Remainder is void. Lucky can have an after born child (create X), who could parent the "first grandchild" (create Y) more than 21 years after the death (kill) of the lives in being at the time of the conveyance.
G. O conveys "to A for life, then to A's widow, if any, for life, then to A's issue then living."
1. A has a life estate; A's widow has a contingent remainder in life estate. A's issue then living has a a contingent remainder in FSA.
2. RAP - remainder in widow is valid. It will vest or fail at A's death.
a. Remainder in A's issue then living is void. A can marry (and widow) a person not yet alive. (Not a life in being at time of creation of interest.) In such a case we may not know which of A's issue will be "then living" until after 21 years from the lives in being at the creation of the interest.
IV. RAP Reform - people don’t like RAP because a lot of conveyances will likely vest and they still get voided. Our focus is on the common law rule. We don’t need to know these reforms.
A. Cy Pres – the court tries to rewrite the conveyance according to what the court believes was the intent of the grantor
B. USRAP – a type of wait-and-see. We actually just wait it out. Instead of validating the interest now, we wait to see if the interest will vest.
Concurrent Interests
Concurrent Ownership
I. Tenancy in the entirety - A form of marital ownership - not discussed in class.
II. Tenancy in common have separate but undivided interests in the whole property; the interest of each is descendible and may be conveyed by deed or will. There are no survivorship rights between tenants in common.
III. Joint Tenancy - Each co-tenant owns a separate undivided interest in the whole property. The outstanding characteristic of a joint tenancy is the right of survivorship. There is no limit on the number of persons who can hold together as joint tenants. On the death of each joint tenant, the property belongs to the surviving joint tenants, until only one is left. The tenant who lives longest takes the property by himself.
A. Common Law - Under the common law, four unities were essential to the creation and existence of an estate in joint tenancy: interest, time, title and possession. If one of the unities was destroyed, a tenancy in common remained.
1. Interest - All must have equal undivided shares and identical interests measured by duration. (fee simple, life estate, etc.)
2. Time - the interst of each joint tenant must be acquired or vest at the same time.
3. Title - All joint tenants must acquire title by the same instrument or by a joint adverse possession. A joint tenancy can never arise by intestate succession or other act of law.
4. Possession - Each must have a right to possession of the whole. After a joint tenancy is created, however, one joint tenant can voluntarily give exclusive possession to the other joint tenant. (The unity of possession is essential to a tenancy in common as well; none of the other three unities is.)
a. So, in order to create a valid joint tenancy where one of the proposed joint tenants already owned an interest in the property, it was first necessary to convey the property to a disinterested third person, a "strawman" (a disinterested third party), who then conveyed the title to the ultimate grantees as joint tenants. (this has to do with time interest)
B. Modern Trend (Our Rule) Unilateral Transfer and Severance allowed- California has disregarded this application of the unities requirement "as one of the obsolete 'subtle and arbitrary distinctions and niceties of the feudal common law,' and allow the creation of a valid joint tenancy without the use of a strawman.
1. Equal Shares Also Not Necessary - It used to be that the property had to be considered divided up equally among the owners – 2 owners each has half, 3 owners a third each, etc. Now, with 2 owners, the ownership can be divided however they want, 60/40, 85/15, etc. This is how we will approach it in class.
a. Objections to Unilateral Severance
(1) not fair to the other joint tenant. It’s possible for one owner to severe the joint tenancy without the other owner(s) knowing about it.
(2) one joint tenant (A) could draft a conveyance to himself and stick it in a drawer. He may tell one person (C). If the other owner (B) dies, A will simply destroy the conveyance to himself that he made and become complete owner of the land. On the other hand, If A dies first, C will make it know that the land was split into tenancy in common so C will not become the full owner of the land.
b. In a lot of jurisdictions, you could actually perform this conveyance in secret. (This is the rule from the Riddle case, and the rule we will use in class.) California has adopted some statutory requirements – you don’t have to tell the other owner(s), but you do have to file the conveyance with the public records.
C. Mortgages given by one joint tenant but not the other
1. Title theory - a mortgage effects a transfer of legal title to the mortgagee (lender), subject to an equitable right of the mortgagor (borrower) to reclaim title by paying off the loan secured by the mortgage (equity of redemption). This would separate the unities and the joint tenancy under common law.
2. Lien Theory (our rule) - mortgagee has only a lien against the co-tenants interest (mortgagor keeps title) and therefore does not severe the joint tenancy.
a. Does the surviving joint tenant take the one-half interest subject to the mortgage or encumbered by the mortgage?
(1) Courts are split. Our Rule is that he will gain the interest unencumbered by the mortgage.
D. Lease - one cotenant has the right to lease his interest in the property, even over the objection of the other joint tenant.
1. Common Law - a lease splits the unity of interest, and thus the joint tenancy leaving a tenancy in common
2. Modern Trend (Our Rule) - a lease does not severe a joint tenancy. The lease evaporates with the death of the lessor.
IV. Default Co-Tenants
A. The common law would assume that the cotenancy created was a joint tenacy
B. Modern Law assumes a tenancy in common
Rights and Duties of Co-Tenants
I. Partition - A joint tenant or a tenant in common may demand partition of the property at any time and for any reason, or for no reason at all.
A. Partition in Kind - physical division of the property (the default preferred partition)
B. Partition by sale - Sell the property and split the porceeds according to respective interests in the land.
1. "It has long been the policy of this court, as well as other courts, to favor a partition in kind over a partition by sale. Only when a sale of jointly owned property “will better promote the interests of the owners” because of an “emergency, when a division cannot be well made in any other way” may the court order such a sale. A partition by sale should be ordered only when two conditions are satisfied: (1) the physical attributes of the land are such that a partition in kind is impracticable or inequitable; and (2) the interests of the owners would better be promoted by a partition by sale. The burden is on the party requesting a partition by sale to demonstrate that such a sale would better promote the owners' interests."
a. Although it is usually said, as in this case, that partition-in-kind is preferred, the modern practice is to decree a sale in partition actions in a great majority of cases, either because the parties all wish it or because courts are convinced that sale is the fairest method of resolving the conflict.
II. Possession
A. Each cotenant has an equal right to occupy; and unless the one in actual possession denies to the other the right to enter, or agrees to pay rent, nothing can be claimed for such occupation.
B. Ouster – cotenant must pay rent if he gives an ouster, refusing to let the other co-owner onto the property
1. The normal fact situation which will render an occupying cotenant liable to out of possession cotenants is one in which the occupying cotenant refuses a demand of the other cotenants to be allowed into use and enjoyment of the land, regardless of a claim of absolute ownership.
2. Simply requesting the occupying cotenant to vacate is not sufficient because the occupying cotenant holds title to the whole and may rightfully occupy the whole unless the other cotenants assert their possessory rights.
a. A lock on the door is not an ouster unless it’s there to expressly keep out the co-owner or he denies giving a key to the co-owner. [minority view holds that letter demanding rent would be good enough to trigger a legal liability for possessing co-owner to pay rent to non-posessing co-owner]
III. Accounting
A. Rents and Profits - A cotenant who collects from third parties rents and other payments arising from the co-owned land must account to cotenants for the amounts received. Thus if one cotenant leases a farm to a third party, or executes a mineral lease, ,of cuts and sells timber, he must account for net rents, royalties, and other proceeds in excess of his share. Absent outster, the accounting is usually based only on actual receipts, not fair market value. However, a cotenant does not owe profits of foods grown and sold to other cotenants
B. Taxes, mortgage, payments, and other carrying charges - A cotenant paying more than his share of taxes, mortgage payments, and other necessary carrying charges generally has a right to contribution from the other cotenants, at least up to the amount of the value of their share in the property. (Similarly, the cotenant paying more than his share receives a credit for the excess payments in an accounting or partition action.) The principle behind this result "is that the protection of the interest of each cotenant from extinction by a tax or foreclosure sale imposes on each the duty to contribute to the extent of his proportionate share the money required to make such payments.
1. Now, "if the tenant who has paid taxes or interest has been in sole possession of the property, and the value of the use and enjoyment which he has had equals or exceeds such payments, no action in any form for contribution will lie against the others.
C. Repairs - As to necessary repairs, in most jurisdictions a cotenant making or paying for them has no affirmative right to contribution from other cotenants in the absence of an agreement. This is considered the rule by "weight of authority and of reason." The "reason" behind the rule is said to be that the questions "of how much should be expended on repairs, their character and extent, and whether as a matter of business judgment such expenditures are justified," are one too uncertain for the law to settle. (Credit for the cost of repairs is given in an accounting or partition action, though.)
D. Improvements - Generally, improvements are not recoverable from other cotenants, However, once the land is sold, the improver will get to keep the difference in the value of the property before the improvements and after.
Landlord & Tenant
Types of Tenancies
I. Intent - We look at intent to determine the type of leasehold. Most of the time it will be represented by the writing. But courts will consider parol evidence.
II. Term of Years - fixed period with beginning and ending dates; may be less than a year; ends automatically, notice of termination not required. A term must be for a fixed period, but it can be terminable earlier upon the happening of some event or condition.
III. Periodic Tenancy - period to period until notice of termination given. If notice is not given the period is automatically extended for another period.
A. Under common law rules:
1. 6-months notice was required to terminate a year-to-year tenancy.
2. For any tenancy of less than a year, notice of termination must be given equal to the length of the period, but not to exceed 6 months.
3. The notice must terminate the tenancy on the final day of the period, not in the middle of the tenancy
4. A holdover turns into a periodic tenancy.
B. Examples:
1. to A from month to month
2. to B from year to year
C. Problems:
1. On 10/1, L leases land "to T for one year, beginning 10/1." On the following 9/30, T moves out without giving L any notice. What are L's rights?
a. T didn't have to give him any notice b/c will automatically terminate 10/1.
b. L no rights, it terminates without notification.
2. What if the lease had been "to T from year to year, beginning 10/1"?
a. T must give L 6 months notice to terminate a year-to year lease; if not, new period of a year would begin.
3. What if the lease had been for no fixed term "at an annual rental of $24,000 payable $2,000 per month on the first of each month"?
a. A month-to-month periodic tenancy - need to give 30 day notice
b. Or a year-to-year periodic tenancy - must give 6 month notice(the phrasing is ambiguous annual rental…$ per month; so, how do we achieve clarity? It’s up to the judge. Obviously the judge will look for intent and the surrounding circumstances, the judge is the ultimate arbiter.)
4. Suppose on 9/3, tenant gives notice he's out on 1/3 of next year?
a. He'd be liable for Jan. rent. Termination must be at the end of the period - 1/31.
IV. Tenancy at will - no stated duration, continues until landlord or tenant desires an end. No notice under CL; modern trend 30 day notice.
A. (Our Rule:) Some courts hold that if the lease agreement does not create a term of years or periodic tenancy, but the tenancy is to continue so long as the tenant desires, the tenant has a life estate determinable.
1. Restatement: L leases a farm to T 'for as long as T desires to stay on the land'. The lease creates a determinable life estate in T, terminable at T's will or on his death.
V. Ambiguous Lease Agreements
A. Contract preferendum: take ambiguities and construe them against the person who wrote document - the drafter.
VI. Practice Problems:
A. L leases O "to T for as many years as L desires." What estate does T have?
1. T has a tenancy at will that will terminate by either party. It will be tenancy at will if tenant or landlord has ability to terminate at will.
If T alone had the power to terminate, it would be the Garnish case, and it would be a life estate with a reversion.
B. For rent payments of $500 a month L leases G "to T for the duration of the war."
1. What estate does T have?
Difficult because there are no fixed dates.
Could be 2 things, have to make arguments to support your deicision:
a. Gerrish case says it's a tenancy at will
b. Another would say it is a term of years….the war will end at some point
(1) The tenancy for years is the closest approximation of the parties' intention. Why? Because a tenancy for years cannot be terminated unilaterally by either party prior to the event fixing termination, it gives the parties the benefit of their bargain. (a periodic tenancy or a tenancy at will can be terminated prior to the event.) But there are some cases that hew strictly to the requirement that a term of years have a calendar date fixed for ending, and deem a lease terminable on some uncertain event to create a periodic tenancy or a tenancy at will or, if the event is in the control of the tenant, a life estate determinable (Gerrish Case).
Landlord's Duties
I. Delivery of Possession
A. English rule (Our Rule) - in the absence of stipulations to the contrary, there is in every lease an implied covenant on the part of the landlord that the premises shall be open to entry by the tenant at the time fixed by the lease for the beginning of his term.
1. the courts which hold that there is such an implied covenant do not extend the period beyond the day when the lessee's term begins. If after that day a stranger trespasses upon the property and wrongfully obtains or withholds possession of it from the lessee, his remedy is against the stranger and not against the lessor.
a. Rationale - The bargain was for use of the property, not a lawsuit against prior tenant; the landlord is more likely to know if the previous tenant will move out and is in a better position to pressure him to do so; the landlord is more familiar with the eviction process and it is presumably cheaper for him.
b. Tenant's remedies - terminate lease and recover damages sustained by having to obtain quarters elsewhere; affirm the lease, refuse to pay rent for the portion of the term during which he was kept out of possession, acquire part of the land and prorate the rent, and recover damages.
2. American Rule (minority) - the landlord is not bound to put the tenant into actual possession, but is bound only to put him in legal possession, so that no obstacle in the form of superior right of possession will be interposed to prevent the tenant from obtaining actual possession of the demised premises.
a. If the landlord gives the tenant a right of possession he has done all that he is required to do by the terms of an ordinary lease, and the tenant assumes the burden of enforcing such right of possession as against all persons wrongfully in possession, whether they be trespassers or former tenants wrongfully holding over.
(1) Rationale - The lease conveys a leasehold to the tenant, it is up to the tenant to take possession; the tenant has the right to evict the holdover by summary proceedings and needs no additional remedy against the landlord; the landlord should not be held liable for the tortious act of the holdover.
(2) Remedies against holdover tenant - sue to evict the holdover and recover damages; treat the holdover as a tenant and collect the rent from him.
II. Quiet Enjoyment - implied in law (if not express)
A. Common law - the implied quiet enjoyment was only that tenant had superior rights to the property than landlord for time of lease
1. Payment of rent was always dependent on the landlord's performance of the covenant of quiet enjoyment. If landlord breached, the tenant's obligation to pay rent ceased
2. A breach is by either actual or constructive eviction
B. Actual eviction - a tenant totally ousted either by landlord or by a third party with superior title no longer has to pay rent
C. Partial Eviction - ousted by landlord of superior title from some of the land permits a partial rent abatement under the restatement
D. Constructive Eviction - Where, through the fault of the landlord, there occurs a substantial interference with the tenant's use and enjoyment of the leased premises, so that the tenant can no longer enjoy the premises as the parties contemplated, the tenant may terminate the lease, vacate the premises, and be excused from further rent liability.
1. Substantial Interference - tenant is essentially deprived of the beneficial enjoyment of the leased premises that they are rendered unsuitable for occupancy for the purposes for which they are leased. Courts take into account the duration and severity of the interference, its foreseeability, and the ease or difficulty of abatement.
a. Failure to supply heat as covenanted in the lease so that the apartment was "unlivable" on cold days amounted to constructive eviction. So too, when the main waste pipe of an apartment building was permitted to become and remain clogged with sewage for a long period of time causing offensive odors and danger to health, the covenant of quiet enjoyment was breached and justified the tenant's abandonment of his premises. If a landlord lets an apartment in his building to a tenant as dwelling and knowingly permits another part to be used for lewd purposes which use renders the tenant's premises "unfit for occupancy by a respectable family," his failure to terminate the use when he has the legal power to do so constitutes a constructive eviction. The same rule was applied in White v. Hannon, where it appeared that the plumbing in the rooms to the rear of the demised premises became so old and worn out as to emit strong and unhealthy odors which came through into the tenant's quarters. The tenant's removal was held justified.
b. If the Tenant knows of the interference before taking possession, and then takes possession, the tenant has waived the interference.
c. The tenant must give notice to landlord of the interference and the landlord must fail to remedy the situation within a reasonable time before the tenant can claim constructive eviction.
2. Landlord must have Knowledge - actual or constructive
3. Landlord Must have Reasonable Chance to Fix, and Fail.
4. Fault of Landlord - the landlord must act wrongfully, not a third party. If the alleged wrongful act is a nonfeasance, the landlord must be under a duty to act.
5. Tenant must vacate premises - a tenant may not remain in possession and still press a constructive eviction claim. The tenant must vacate the premises within a reasonable time after the interference. A "reasonable time" depends on all the circumstances.
a. If the tenant stays on the property, his only option is to sue for damages.
b. If the tenant moves out under constructive eviction, but the court determines that he was no constructively evicted, he will be liable for rent.
III. Implied Warranty of Habitability
A. General - in the rental of any residential dwelling unit an implied warranty exists in the lease, whether oral or written, that the landlord will deliver over and maintain, throughout the period of the tenancy, premises that are safe, clean and fit for human habitation. This warranty of habitability is implied in tenancies for a specific period or at will. Additionally, the implied warranty of habitability covers all latent and patent defects in the essential facilities of the residential unit. Essential facilities are "facilities vital to the use of the premises for residential purposes . . . ." This means that a tenant who enters into a lease agreement with knowledge of any defect in the essential facilities cannot be said to have assumed the risk, thereby losing the protection of the warranty. Nor can this implied warranty of habitability be waived by any written provision in the lease or by oral agreement.
B. Scope -
1. Housing Code sets the standard - A substantial violation of an applicable housing code shall constitute prima facie evidence that there has been a breach of the warranty of habitability. This is the starting point, courts should inquire whether the claimed defect has an impact on the safety or health of the tenant.
a. Limit - "[One] or two minor violations standing alone which do not affect" the health or safety of the tenant, shall be considered de minimus and not a breach of the warranty. In addition, the landlord will not be liable for defects caused by the tenant.
C. Remedies -
1. Terminate and leave (rescission) - plus recover damages (usually relocation costs plus the excess of replacement rentals over the lease rentals for the balance of the term.
2. Stay and withhold rent - pending landlord correction of the defects. (The restatement provides that a tenant must notify the landlord of exercise of this remedy and deposit rent into an escrow account.)
a. In a suit of eviction for failure to pay rent, breach of warrant of habitability is a complete defense because after breach and notice to the landlord of the breach there is no further rent obligation. In court, the tenant must show:
(1) (1) the landlord had notice of the previously unknown defect and failed, within a reasonable time, to repair it; and
(2) (2) the defect, affecting habitability, existed during the time for which rent was withheld.
3. Stay with Rent Abatement
4. Stay and repair - and deduct that money spent on repairs from the rent
5. Stay and recover damages - the tenant may remain in possession and recover damages in the form of a rent abatement or deduction and for discomfort and annoyance.
a. The measure of damages shall be the difference between the value of the dwelling as warranted and the value of the dwelling as it exists in its defective condition.
6. Punitive Damages - If the breach is of such a willful and wanton or fraudulent nature, the award of exemplary damages is proper.
D. NOTE - The implied warranty of habitability does not render pointless the doctrines of quiet enjoyment, constructive eviction, and illegal leases considered earlier. First of all, a good handful of jurisdictions has yet to adopt the warranty. Second, the warranty, even where generally applicable, commonly does not apply across the board to all residential leases; single family residences might be excluded, for example, or agricultural leases, or long term leases. So too for casual leases by non-merchant landlords, as when a law professor goes off on sabbatical and rents her house to a visitor. Third, a majority of jurisdictions has declined to extend the idea to an implied warranty of fitness or suitability for purpose in commercial leases.
Assignment and Sublease
I. Assignment - If the tenant transfers the entire remaining term of his leasehold, he has made an assignment, and the assignee comes into privity of estate with the landlord. Also, the tenant does not retain a reversion in the property. Privity of estate makes the landlord and the assignee liable to each other on the covenants in the original lease that run with the land. Similarly, if the landlord assigns the reversion, the assignee and the tenant are in privity of estate.
A. Privity of Estate - an ancient concept developed to give the landlord the right to sue the assignee of the tenant on the covenants in the lease, and to give the assignee the right to sue the landlord on his covenants. Privity of estate was created to circumvent the lack of privity of contract between the landlord and assignee (or landlord's assignee and tenant).
1. Privity of Contract - If there is privity of contract (i.e., the plaintiff and defendant have agreed with each other to do or not do certain things), their obligations bind them regardless of whether they are in privity of estate. Thus, if tenant's assignee T2 defaults on rent, L can sue T b/c of privity of contract and T2 b/c of privity of estate.
II. Sublease - If a tenant transfers less than the entire remaining term of his leasehold, he has made a sublease, and he becomes the landlord of the sublessee. The sublessee is not in privity of estate with the landlord and cannot sue or be sued by the landlord. There also exists no privity of contract with the landlord (because they have not entered into a contract together) and cannot be sued on that ground either.
A. Reversion - a period of time within the term of the leasehold when the tenant will again be entitled to possession, i.e., the tenant has not transferred the entire remaining term of the leasehold. If the tenant retains a reversion in the property after the transfer, the transfer is a sublease (not an assignment).
B. No Privity of Estate nor Privity of Contract exist between the original landlord and a sublessee.
III. Modern view - we look at the intent of the parties to determine whether the transfer was an assignment or sublease not the words of the contract. I.e., it doesn't matter if the contracts contains the words sublease or assign, the essential fact is whether the entire interest of the leasehold for the remaining term was transfered (assignment) or less the entire interest or period was transfered (sublease).
IV. Problems:
A. L leases to T for a term of 3 years at a monthly rent of $1,000. 1 year later, T subleases, transfers, and assigns to T1 for a period of one year from date. Thereafter neither T nor T1 pays rent to L. What rights has L against T? T1?
1. Sublease: (even though it has language of both a sublease and an assignment, it specifically gives less than the whole interest in the property – only one year—so it must be a sublease.)
2. L can recover rent from T.
3. L has no legal ability to recover rent from T1, cannot sue directly because T is the lessor to T1.
B. If there is a coventant (promise) whereby T1 agreed to pay the rents reserved in the head lease, what effect might this have on L's rights?
1. T1 privity of contract with T, creates a liability to L therefore privity of contract exists
2. Contract that exists between T and T1 in this particular case has specific provisions that make L a beneficiary of the contract.
L has right to collect from T1.
a. 3rd party beneficiary theory - If an assignee or subleasee expressly assumes the covenants of the master lease, the assignee or sublessee is directly liable to the landlord, who is a third-party beneficiary of the contract between the tenant and his assignee or sublessee. The liability of the assignee or sublessee for performance of his promise continues, even though there is a further assignment of the leasehold (similar to privity of contract).
C. L leases to T for a term of 3 years, T covenants to pay the rent in advance on the first of each month. And also covenants to keep leased premises in good repair. 6 months later T assigns her entire interest to t1 who agrees in the instrument of assignment to assume all the covenants in the lease b/t L and T. 3 months later T1 assigns his entire interest to T2 and three months after that T2 assigns his entire interest to T3. T3 defaults on rent payments and fails to keep the premises in good repair. L sues T, T1, T2, T3. What are the liability of the 4 tenants to L and as among themselves?
1. • A series of assignments.
• Privity of K stays between original lessor and lessee (L & T)
• L and T -privity of contract/estate
• L and T1 - privity of contract/estate transfers from T b/c T1 assumed the covenants.
• T and T1 - privity of contract - T1 assume all covenants in the lease
• L and T2 - privity of estate transfers from T1 (if “entire interest” also includes all covenants, then a privity of contract would also exist, but we’re assuming that it doesn’t)
• L and T3 - privity of estate transfers from T2, no privity of contract
• L can sue T, T1 - b/c of privity of contract
• L can sue T3 - b/c of current privity of estate
• L cannot sue T2 b/c there is no longer privity of contract nor estate any longer b/c he has passed his interest along to T3
• If L sues T, then T can sue T1 and T3 (the same people L can sue)
V. Covenants Against Assignment of Sublease - unless there is a covenant to the contrary, a leasehold is freely transferable by the tenant. It may be assigned or sublet without the landlord's consent.
A. Express Covenants - a lease contract may expressly absolutely prohibit assignments and/or subleases.
B. Approval Clause - a clause that allows assignment/sublease only with landlord's express approval. (usually in commercial lease)
1. majority Common Law - Landlord may arbitrarily disapprove of any potential assignee/sublessee.
2. minority Modern view (our rule) - the landlord's denial of consent must be reasonable.
a. Reasonable - Some of the factors that the trier of fact may properly consider in applying the standards of good faith and commercial reasonableness are: financial responsibility of the proposed assignee; suitability of the use for the particular property; legality of the proposed use; need for alteration of the premises; and nature of the occupancy, i.e., office, factory, clinic, etc. Denying consent solely on the basis of personal taste, convenience or sensibility is not commercially reasonable.
Landlord's Remedies
I. Remedies typically derived from lease provisions:
A. Rent Acceleration - upon clause in the lease agreement, if the tenant defaults, the landlord can make the entire balance of the term payable immediately. (Cannot also terminate lease.)
1. Prepaid Rent - If the tenant prepaid (paid the last month's rent at the inception of the lease), the landlord is entitled to retain that money if the tenant terminates without justification before expiration of the lease term.
B. Security deposits - the landlord must return the deposit at the end of the term less any charges attributable to tenant. Some states require the deposit to be placed in interest bearing account.
C. Liquidated damages - clause for liquidated damages reasonably related to the probable amount of damages suffered by the landlord upon tenant default.
1. Criticism - Once the T is in breach, he might intentionally destroy things b/c the $ amount is already set.
II. Eviction through Judicial Process
A. Summary Proceedings - also called "forcible entry and detainer" or "unlawful detainer." the landlord can recover possession quickly and at low cost. The tenant is viewed as having tortiously, or wrongfully, acquired possession by holding over.
1. Notice to Quit - Before bringing a summary action, the landlord must give the tenant notice to quit, but the required notice may be very short (e.g., three days) because it is assumed that the tenant knows that he is holding over unlawfully.
2. Issues that can be raised - very limited. The landlord must prove that the lease has terminated, or that the she has exercised her right to forfeit for nonpayment of rent. It is sometimes said that the sole issue is whether the landlord or tenant has the right to possession.
III. Ejectment
A. Common law Self Help - a landlord may rightfully use self-help to retake leased premises from a tenant in possession without incurring liability for wrongful eviction provided two conditions are met:
1. (1) The landlord is legally entitled to possession, such as where a tenant holds over after the lease term or where a tenant breaches a lease containing a reentry clause; and
2. (2) the landlord's means of reentry are peaceable.
a. What's peaceable? Changing the locks has been held forcible, not peaceable.
b. Under the common-law rule, a tenant who is evicted by his landlord may recover damages for wrongful eviction where the landlord either had no right to possession or where the means used to remove the tenant were forcible, or both.
B. Modern Trend (Our Rule) - the only lawful means to dispossess a tenant who has not abandoned nor voluntarily surrendered but who claims possession adversely to a landlord's claim of breach of a written lease is by resort to judicial process.
IV. Tenant Abandonment
A. Terminate the Lease
1. Surrender - Surrender is a term of art, one that connotes quite neatly a tenant’s offer to end a tenancy – “here, I give up.” Surrender terminates a lease, provided, of course, that the landlord accepts the tenant’s offer. If he does – if the surrender is effected – this “extinguishes the lessee’s liability for future rent (there still may be liability for damages equal to the landlord’s loss of the value of the remaining portion of the original lease), but not for the accrued rent or for past breaches of other covenants.
B. Leave the premises untouched - traditionally, landlord may leave the premises vacant and sue the tenant for rent as it comes due under the lease. The recent trend (and our rule) is that the landlord has a duty to mitigate damages. Usually by:
C. Repossess and Relet - look for other renters
1. Today, the landlord is required to carry the burden of proving that he used reasonable diligence in attempting to re-let the premises.
D. Example:
1. L and T enter into 2 yr lease for $1000/mo. 6 mo into the lease T says, I got a new job in Omaha - see ya, I surrender the apartment. You’re the landlord, what do you do?
a. Try to mitigate damages by reletting the apartment
2. What if the market value increased to $1,500/mo by the time T left? Would L be happy T left?
a. Yes, L would accept the surrender and get more money for the apartment.'
3. Does L have to accept T's surrender? What if the market value fell to $500/mo?
a. No. L will not accept the surrender. T will be liable for future rent or the difference b/t new market value and the terms of the original lease (the other $500.)
4. What does L do if he’s not sure of the market value?
a. Don’t accept the surrender. But in some jurisdictions if L does end up getting $1500 the extra $500 goes to tenant!
b. In practice, L trys not to inform tenant about acceptance of surrender until after they re-let
c. What they do now is terminate the lease and sue for the present value of the apt.
The Land Transaction
The Contract of Sale
I. Statute of Frauds - adopted in some form by every state, it requires that, unless there is some exception available, a contract for the sale of land
A. (1) must be in writing and
B. (2) must be signed by the party against whom it is sought to be enforced.
1. Because both parties wish to enforce the agreement, if necessary, against the other, this means in practice that both parties must sign the contract for sale.
II. Exceptions to the Statute of Frauds
A. Part Performance – allows the specific enforcement of oral agreements when particular acts have been performed by one of the parties to the agreement. (Available to both buyer and seller.) Acts held to constitute part performance vary from jurisdiction to jurisdiction, depending primarily on how the court views the theoretical basis for the doctrine of part performance.
1. Some acts that are unequivocal evidence of contract:
a. Payment of all or a part of the purchase price
b. Taking possession
c. Making Improvements
2. Reasonable Reliance - The modern trend is to require proof of (1) an oral contract and (2) reasonable reliance on the contract -- enough reliance that it would be inequitable to deny specific performance.
a. O enters into agreement to sell his farm to A. They discuss preparing a written contract but decide not to. A gives O a $50 check deposit. A then sells his other farm in reliance on this deal although he didn’t inform O of his intention to sell his farm until after the other farm had been sold. O then backed out of the oral agreement.
(1) HELD: The court refused to grant specific performance. The delivery of the check was not sufficient part performance to remove the defense of the Statute of Frauds. The sale of the other farm did not constitute sufficient reliance on the oral contract b/c it was not within the contemplation and understanding of the parties and not foreseeable by O.
B. Estoppel – applies when unconscionable injury would result from denying enforcement of the oral contract after one party has been induced by the other seriously to change his position in reliance on the contract. Estoppel may also apply when unjust enrichment would result if a party who has received the benefits of the other’s performance were allowed to rely upon the Statute.
Marketable Title
I. Marketable Title - Implied in law condition of a contract of sale. Without marketable title, the buyer is entitled to rescind.
A. Defined - 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.
B. Substantial - To render the title to real estate unmarketable, the defect of which the purchaser complains must be of a substantial character and one from which he may suffer injury. Mere immaterial defects which do not diminish in quantity, quality or value the property contracted for, constitute no ground upon which the purchaser may reject the title. Facts must be known at the time which fairly raise a reasonable doubt as to the title; a mere possibility or conjecture that such a state of facts may be developed at some future time is not sufficient.
C. Proof of Marketable Title
1. Chain of title - a recorded chain of title showing an unbroken transfer of title from some original root of title in the past to the seller with no recorded encumbrances.
a. Defective Chain of Title - is not marketable.
(1) A faulty link - if the deed describes the wrong land
(2) A nonexistent link - Deed from A to B to C to D, but the title from B to C is not recorded.
(3) Encumbrances - a burden of the title such as mortgages, judgment liens, easements, or restrictive covenants
(a) Restrictive covenants -- in general the mere existence of restrictive covenants is an encumbrance. There are two exceptions:
I. Utility - An easement that benefits the property (e.g., a utility easement) is regarded by some courts as not an encumbrance if it is known to the buyer before entry into the contract.
II. Zoning - by law, zoning laws are not encumbrances. However, if the property is violating a zoning law, that is an encumbrance. Lohmeyer v. Bower.
A. Frimberger v. Anzellotti (exception?)- Latent violations of state or municipal land use regulations that do not appear on the land records, that are unknown to the seller of the property, as to which the agency charged with enforcement has taken no official action to compel compliance at the time the deed was executed, and that have not ripened into an interest that can be recorded on the land records do not constitute an encumbrance for the purpose of the deed warranty. (Lohmeyer was during executory period; that's the distinction between Frimberger which was after the executory period)
2. Adverse Possession - either through a successful quiet title action or ample evidence to prove that a rival claim of title would not succeed.
II. NOTE - Equitable Conversion
A. Equitable conversion (default rule) - If a contract for a sale of land is specifically enforceable, the buyer is viewed in equity as the owner of the land from the time of the contract (before title has actually passed) and the seller has a claim for money secured by a vendor's lien on the land.
1. Relevance - Under this doctrine, if damage happens to the property after the contract is signed but before title passes, it's the purchasers loss because he holds equitable title.
2. Massachusetts - holds that the risk of loss is on the seller if the loss is substantial and the terms of the contract show that the building constituted an important part of the subject matter of the contract; if the loss is not substantial, either party can enforce the contract, though an abatement in purchase price may be given.
3. Uniform Vendor and Purchaser Act - places the risk of loss on the party in possession.
4. Insurance - If the purchaser has the risk of loss, and the seller has insurance, in most states the seller holds the insursance proceeds as trustee for the buyer.
Default and Remedies
I. Default - one party has tendered performance in time, demanded timely performance from the other party, and reciprocal performance is not forthcoming.
II. Remedies:
A. Specific Performance - force the sale
1. Equitable conversion (default rule) - If a contract for a sale of land is specifically enforceable, the buyer is viewed in equity as the owner of the land from the time of the contract (before title has actually passed) and the seller had a claim for money secured by a vendor's lien on the land.
a. Relevance - Under this doctrine, if damage happens to the property after the contract is signed but before title passes, it's the purchasers loss because he holds equitable title.
b. Massachusetts - holds that the risk of loss is on the seller if the loss is substantial and the terms of the contract show that the building constituted an important part of the subject matter of the contract; if the loss is not substantial, either party can enforce the contract, though an abatement in purchase price may be given.
c. Uniform Vendor and Purchaser Act - places the risk of loss on the party in possession.
d. Insurance - If the purchaser has the risk of loss, and the seller has insurance, in most states the seller holds the insursance proceeds as trustee for the buyer.
B. Rescission - The polar opposite if specific performance. If the seller breaches, the buyer may elect to rescind, recover his partial payments already made, and "walk away" from the deal. If the buyer breaches, the seller may elect to rescind the contract and sell the property to another party. The rescission right does not ripen until the closing date, however, because either party has until then to tender performance. An attempted rescission prior to the closing date is not only ineffective but is a breach of the contract.
C. Damages - If the plaintiff does not want (or cannot obtain) specific performance he may obtain money damages.
Duty to Disclose Defects
I. Common Law
A. Caveat Emptor - (Buyer beware) Common law imposes no duty upon the vendor to disclose any information concerning the premises unless there is a confidential or fiduciary relationship between the parties or some conduct on the part of the seller which constitutes "active concealment." Normally, some affirmative misrepresentation or partial disclosure is required to impose upon the seller a duty to communicate undisclosed conditions affecting the premises.
1. Exceptions - the seller is obligated to disclose conditions that
a. are created by the seller,
b. materially impair property value, and
c. are not likely to be discovered by a reasonably prudent buyer using due care.
(1) Ex. the haunted house. Stambovsky
2. Nondisclosure of the exception constitute a basis for rescission as a matter of equity.
3. Fraud - the seller is not allowed to commit fraud:
a. Affirmative misrepresentation of material fact
b. With the intent to induce reasonable reliance on that misrepresentation, and
c. Based on the reliance, the buyer suffers harm.
II. Modern Trend
A. Disclosure of Latent Material Defects - The emerging majority rule today is that a seller must reveal all latent material defects. A latent material defect is a defect that Johnson
1. materially affects the value of desirability of the property,
2. is known to the seller (or only accessible to the seller), and
3. is neither known to or "within the reach of the diligent attention and observations of the buyer."
a. Objective test - whether a reasonable person would attach importance to the defect in deciding to buy
b. Subjective test - whether the “defect affects the value or desirability of the property to the buyer.”
III. California - (and some other jurisdictions) - have statutes that require sellers to disclose a number of specified conditions such as structural or soil defects, hazardous materials, underground tanks, alterations made without permits, encroachments, or neighborhood noise problems or other nuisances.
Warranties of Title
I. Three types of deeds:
A. General Warranty Deed – warrants title against all defects in title, whether they arose before or after the grantor took title. The general warranty deed contains 6 covenants:
1. 3 Present Covenants:
a. A present covenant is broken, if ever, at the time the deed is delivered. (during closing.) Either the grantor owns the property at that time, or he does not; either there are existing encumbrances at that time, or there are none. The statute of limitations begins to run on a breach of present covenant at the date of delivery of deed.
(1) Covenant of seisin – The grantor warrants that he owns the estate that he purports to convey.
(2) Covenant of right to convey – The grantor warrants that he has the right to convey the property. In most instances this covenant serves the same purpose as the covenant of seisin, but it is possible for a person who has seisin not to have the right to convey (e.g., a trustee may have legal title but be forbidden by the trust instrument to convey it).
(3) Covenant against encumbrances – The grantor warrants that there are no encumbrances on the property. Encumbrances include, among other items, mortgages, liens, easements, and covenants.
2. 3 Future Covenants:
a. A future covenant promises that the grantor will do some future act, (after closing) such as defending against claims of third parties or compensating the grantee for loss by virtue of failure of title. A fututre covenant is not breached until the grantee or his successor is actually evicted from the property, buys up the paramount claim, or is otherwise damaged. The statute of limitations begins to run on a breach of future covenant at the time of eviction or when the covenant is broken in the future. The future covenants run with the land to subsequent owners. If it is still with the limitations period, the subsequent owner still has a claim of action for breach of these future covenants. Brown v. Lober.
(1) Covenant of general warranty – The grantor warrants that he will defend against lawful claims and will compensate the grantee for any loss that the grantee may sustain by assertion of superior title.
(2) Covenant of quiet enjoyment – The grantor warrants that the grantee will not be disturbed in possession and enjoyment of the property by assertion of superior title. This covenant is, for all practical purposes, identical with the covenant of general warranty and is often omitted from general warranty deeds.
(3) Covenant of further assurances – The grantor promises that he will execute any other documents required to perfect the title conveyed.
B. Special Warranty Deed – contains warranties only against the grantor’s own acts but not the acts of others. Thus if the defect is a mortgage on the land executed by the grantor’s predecessors in ownership, the grantor is not liable.
C. Quitclaim Deed – contains no warranties of any kind. It merely conveys whatever title the grantor has, if any, and if the grantee of a quitclaim deed takes nothing by the deed, the grantee cannot sue the grantor.
II. Merger Doctrine - any promises in the contract of sale with respect to title are "merged" into the deed once the buyer accepts the deed.
A. Relevance: After closing - the only cause of action one could bring is for breach of the promises made IN THE DEED called warranties. He may no longer rely on the contract of sale's provisions with respect to title.
III. Problems/Examples
A. Suppose that the buyer has knowledge of an encumbrance of the property when he accepts a general warranty deed. Is the covenant against encumbrances breached?
1. With the possible exception of public easements that are apparent and in their nature permanent and irremediable, mere knowledge of the encumbrance is not sufficient to exclude it from the operation of the covenant against encumbrances. The intention to exclude an encumbrance should be manifested in the deed itself, for a resort to oral or other extraneous evidence would violate settled principles of law in regard to deeds.
B. O conveys to A a lot by general warranty deed. A does not go into possession. O continues to use the lot as a farm. 40 years later, A’s grandchildren convert the farm into a baseball field. O claims title by adverse possession. Judgment for whom?
1. The future interests contained in the general warranty deed preclude O from claiming adverse possession.
C. O builds septic system not in compliance with state building code and never obtained a certificate of lawful completion nor a certificate of occupancy from the city. O sells to A, who relies on O and does not know of O’s violations. A sells to B. Six months after the sale there are major septic problems costing $40,000. B sues A for breach of covenant against encumbrances.
1. HELD: Any substantial violation of municipal ordinances is an encumbrance in violation of the deed covenants if the seller – either the builder or a subsequent owner – can determine from municipal records that the property violates local zoning or building regulations at the time of the conveyance.
D. Damages for breach of warranty of seisin is return of some or all of purchase price (not market value). Damages for breach of warranty against encumbrance is the difference in the value of the property with and without the encumbrance or simply the cost of removal (if removable).
IV. Forgery – A forged deed is void. The grantor whose signature is forged to a deed prevails over all persons, including subsequent bona fide purchasers from the grantee who do not know the deed is forged.
V. Fraud – On the other hand, most courts hold that a deed procured by fraud is voidable by the grantor in an action against the grantee, but a subsequent bona fide purchaser from the grantee who is unaware of the fraud prevails over the grantor. The grantor, having introduced the deed into the stream of commerce, made it possible for a subsequent innocent purchaser to suffer loss. As between two innocent persons, one of whom must suffer the act of the fraudulent third party, the law generally places the loss on the person who could have prevented the loss to the other.
Determining the line between forgery and fraud is not always easy.
Delivery of Deed
I. Delivery - is necessary for an effective transfer of title.
A. Delivery means that the grantor has said or done things that demonstrate the grantor's intent to transfer immediately an interest in land to the grantee. (A physical deed, duly executed by the grantor, must exist before delivery is possible.)
1. Physical Act - Delivery does not necessarily require the physical act of handing over the paper deed to the grantee.
2. Intent - The Grantor's intent is the key that the courts look to/for.
B. Rebuttable presumption of delivery if:
1. Physical transfer of the deed to the grantee,
2. Notarial acknowledgment of the deed, or
3. Recording of the deed.
C. Rebuttable presumption of NON-delivery if:
1. Grantor retains physical custody of the deed.
D. Attempted Delivery at death - The most common case of delivery without manual tradition arises when the grantor executes a deed and places it in a safe deposit box, usually with the thought that the grantee will “take” the land at the grantor’s death. If the grantor intends to pass title or a future interest to the grantee now, there has been a delivery even though possession may be postponed until the grantor’s death. On the other hand, if the grantor intends that no interest should arise until death, no delivery during life has taken place; the deed cannot take legal effect at death because the grantor intended it to be a will, not a deed, and the instrument is not executed with two witnesses in accordance with the Statute of Wills. Laypersons often do not know of the sharp distinction the law draws between an inter vivos transfer of land, requiring the delivery of a signed instrument, and a transfer at death, requiring an instrument complying with the Statute of Wills. Sweeny v. Sweeny.
E. (Oral) Conditional Delivery -
1. Delivery Good, Condition Void (Majority view) - A conditional delivery is and can only be made by placing the deed in the hands of a third person to be kept by him until the happening of the event upon the happening of which the deed is to be delivered over by the third person to the grantee." Conditional delivery to a grantee vests absolute title in the latter; the condition is ignored. Sweeny v. Sweeny.
2. No Delivery - When the deed is handed over to the grantee but the extrinsic evidence shows that the deed is to "take effect" at the death of the grantor, a few courts have held that there is no delivery and that the transfer is testamentary and void. Rosengrant v. Rosengrant.
3. Delivery Good, Condition Enforced - a Maryland court, based on convincing facts, held the delivery was in fact conditional, and with the condition not fulfilled, the title became void.
F. Delivery by Estoppel - Suppose that a grantor conveys land to a grantee that the grantor does not own, and the grantor warrants the title to the land. If the grantor subsequently acquires title to the land, the grantor is estopped to deny that he had title at the time of the deed and that title passed to the grantee. Since the grantee could sue the grantor on the warranty, when the grantor later acquires title, and compel the delivery of a new conveyance, the law eliminates the necessity of a lawsuit and automatically passes the subsequently acquired title to the grantee.
Estoppel by deed originated in cases involving warranty deeds, but it has been extended by courts to quitclaim deeds if the deed represents that the grantor had title.
Title Assurance: The Recording System
Recording System
I. Purpose - Generally allows for the recording of all instruments which affect an interest in property, e.g., deed, mortgages, liens, easements, etc. -- not just deeds.
II. Indexes - two kinds: Grantor-Grantee indexes and Tract indexes
A. Grantor-Grantee - (most common) An alphabetical record of all grantors and grantees, by surname, is maintained in separate volumes. They generally contain:
1. Name of Grantor and Grantee
2. Document number
3. Recording date
4. Location in the public records (book and page number)
5. Type of document
6. Brief description of the property
a. How to use this index - Search backwards in the grantee index -- your client's grantor was once a grantee. Find the prior grantee (and his/her grantor), look for that grantor as a grantee ,repeat, etc.
Once you have gone far enough back, you start searching forward in the grantor index looking for all deeds (or other interests) "out" or (given) by the grantor until you get to deed to the next grantor in the chain. Then, using the new name, repeat.
(1) If a deed was given in 1915 but recorded in 1930, you must keep looking until 1930 to ensure the grantor did not give out his interest in the interim to a subsequent purchaser.
B. Tract - (a few jurisdictions) every transaction pertaining to a particular parcel is entered in one location, instead of chronologically by grantor and grantee. More common where property has been platted by map into various blocks and lots
Recording Statutes
I. Race Act - As between successive purchasers for value the purchaser who wins the race to the recording office wins.
A. Statute language - No conveyance or mortgage of an interest in land is valid against any subsequent purchaser whose conveyance is first recorded.
II. Notice Act - As between successive purchasers, a subsequent purchaser for value and without notice wins.
A. Statute language - No conveyance or mortgage of an interest in land is valid against any subsequent purchaser for value without notice thereof, unless the same be recorded.
B. Notice - to be protected under a notice or race-notice statute, a purchaser must be without actual and constructive notice of any prior unrecorded interests at the time the purchaser pays the consideration
1. Actual Notice - Real, actual knowledge of the prior unrecorded transaction. Evidence beyond the record is necessary to prove actual notice.
2. Constructive Notice - two forms: record notice and inquiry notice
a. Record Notice - If an instrument is validly recorded, every subsequent purchaser is considered to have constructive notice of it, and so cannot be a BFP.
(1) "Wild Deeds" -- Outside the chain of title - If a complete stranger to the record chain of title records a conveyance (a "wild deed"), the conveyance does not give constructive notice because it is not within the chain of title
(a) Example - When the Hughes deed was recorded, there was of record a deed to the lot from Duryea & Wilson to plaintiff, but no record showing that Duryea & Wilson had any title to convey. The deed to them from the common grantor had not been recorded. We hold that this record of a deed from an apparent stranger to the title was not notice to Hughes of the prior unrecorded conveyance by his grantor. He was a subsequent purchaser in good faith for a valuable consideration, whose conveyance was first duly recorded; that is, Hughes' conveyance dates from the time when he filled the blank space, which was after the deed from his grantor to Duryea & Wilson. He was, therefore, a "subsequent purchaser," and is protected by the recording of his deed before the prior deed was recorded.
(2) Expanded chain of title -- Deeds from common grantor - Is a purchaser for value bound by a restriction contained in deeds to its neighbors from a common grantor, when it took without knowledge of the restrictions and under a deed which did not mention them?
(a) Yes. Where the grantor binds his remaining land by writing, reciprocity of restriction between the grantor and grantee can be enforced. In such cases a subsequent purchaser from the common grantor acquires title subject to the restrictions in the deed to the earlier purchaser.
b. Inquiry Notice - a subsequent purchaser has an obligation to make reasonable inquires, and is charged with knowledge of what those reasonable inquiries would reveal. The inquiries could come up empty -- that's okay as long as they used proper diligence in their investigation.
(1) Record reference to an unrecorded instrument - If a recorded instrument refers expressly to an unrecorded instrument, a purchaser is under obligation to inquire about the substance of the unrecorded instrument to which the record refers.
III. Race-Notice Act - As between successive purchasers, a subsequent purchaser who is both a (1) BFP (for value and without notice) and (2) records first wins.
A. Statute language - No conveyance or mortgage of an interest in land is valid against any subsequent purchaser for value and without notice thereof whose conveyance is first recorded.
IV. Failure to record - As between successive purchasers, if nobody records the common law principle of "first-in-time" applies, except in a notice jurisdiction if the subsequent purchaser lacks notice.
V. Scope of protection afforded by recording acts
A. Invalid conveyance - Although recordation creates a presumption of validity, if in fact the instrument was invalid (e.g., it was forged or never delivered) recordation does not make it valid.
B. Interests in land created by operation of law - Recording acts only apply to conveyances (e.g., deed mortgages, grants, contracts) and liens created by operation of law (e.g., judgments). They do not apply to interests created by operation of law, such as adverse possession, prescriptive easements, or implied easements. Even though such interests are not of record, they are still valid and enforceable against subsequent purchasers
C. Bona Fide Purchasers (BFP) - Notice and race-notice acts are intended to protect the bona fide purchaser of property. A bona fide purchaser is one who gives valuable consideration to purchase the property and is without notice of a prior unrecorded conveyance. Race acts protect bona fide purchasers only to the extent they are the first to record. Obviously, a donee does not receive protection because a donee has not given value.
1. Shelter Rule - The protection given a BFP under a recorded act extends to all takers (donees, too) from the BFP, even if such a taker knows of a prior unrecorded conveyance. This "shelter rule" is necessary to give the BFP the full value of his purchase in reliance on the records. Part of that value is the ability to transfer full title to others.
Recording
I. Recording - To be recorded, an instrument must be eligible for recording and be entered in the records in a manner that complies with the jurisdiction's requirements. Virtually anything that affects title to an interest in real property may be recorded. Most states require that an instrument may not be recorded without a notarial acknowledgment. To obtain a notarial acknowledgment, the grantor must prove his identity to a notary and sign the document with the notary as witness.
A. Instrument Recorded but not indexed - in situations where an instrument of conveyance containing a sufficient description of the property conveyed is duly recorded but not properly indexed, the fact that it was not properly indexed by the register of deeds will not prevent constructive notice
B. Mother Hubbard Clauses - specific description of the property conveyed is required in order to impart constructive notice to a subsequent purchaser. If a deed describes a specific tract of property and includes "all other land owned by the grantor in the county" (a mother hubbard clause), the mother hubbard clause is void against later purchasers of the grantor's property (other than the tract specifically described) because a diligent searcher of the index will never locate any reference to the the properties contained in the clause.
1. We wish to emphasize that an instrument which contains a "Mother Hubbard" clause, describing the property conveyed in the general language involved here, is valid, enforceable, and effectively transfers the entire property interest as between the parties to the instrument. Such a transfer is not effective as to subsequent purchasers and mortgagees unless they have actual knowledge of the transfer
C. Defective Instrument - the recording of an instrument affecting the title to real estate which does not meet the statutory requirements of the recording laws affords no constructive notice.
Judicial Control of Control
The Law of Nuisance
I. Nuisance - non-trespassory substantial interference with use and enjoyment of land. Compare with trespass which is a physical interference with possession
A. Private - A private nuisance is one affecting a single individual or a definite small number of persons in the enjoyment of private rights not common to the public. Private nuisance exists in a legal sense when one makes an improper use of his own property and in that way injures the land or some incorporeal right of one's neighbor. Any substantial non-trespassory invasion of another's interest in the private use and enjoyment of land by any type of liability forming conduct is a private nuisance.
1. Intentional - Actor acts for the purpose of causing the result, or knows that it is resulting from his conduct, or knows that it is substantially certain to result from his conduct. Victim says that's unreasonable to my rights.
a. Unreasonable - A reasonably sensitive property owner would consider the conduct a substantial nuisance.
b. Unreasonable (Restatement) - Contrarily, the Restatement considers whether “the gravity of the harm outweighs the utility of the actor’s conduct…” Reasonableness = Utility - Harm
(1) Serious Harm. Even according to the restatement where the utility outweighs the harm, if the harm is serious, the actor causing the harm may be liable for nuisance, except instead of injunction, the conduct will continue if the actor compensates the victim. See Boomer.
2. Unintentional - A person is subject to liability for an unintentional invasion when his conduct is negligent, reckless or ultrahazardous.
B. Public - A public nuisance is one affecting the rights enjoyed by citizens as a part of the public. To constitute a public nuisance, the nuisance must affect a considerable number of people or an entire community or neighborhood.
II. Remedies
A. Balancing the equities explained. If the court finds that the injury to the complainant is slight in comparison to the injury caused the defendant and the public by enjoining the nuisance, relief will ordinarily be refused. It has been pointed out that the cases in which a nuisance is permitted to exist under this doctrine are based on the stern rule of necessity rather than on the right of the author of the nuisance to work a hurt, or injury to his neighbor. The necessity of others may compel the injured party to seek relief by way of an action at law for damages rather than by a suit in equity to abate the nuisance.' Get the factors to balance from book...
1. Ex. D built apartment building next to P's house. The air conditioning unit for the entire complex is situated very close to P's property and the noise interferes with even having a normal conversation in their house. HELD: The nuisance in this case will not be permitted to exist "'based on the stern rule of necessity rather than on the right of the author of the nuisance to work a hurt, or injury to his neighbor.'" There is not evidence before us to indicate the "'necessity of others . . . [compels] the injured party to seek relief by way of an action at law for damages rather than by a suit in equity to abate the nuisance.'" Injunction affirmed. Estancias Dallas Corp. v. Schultz.
B. No nuisance - If the court finds that the injury to the complainant is slight in comparison to the injury caused the defendant and the public by enjoining the nuisance, relief will ordinarily be refused. The cases in which a nuisance is permitted to exist under this doctrine are based on the stern rule of necessity rather than on the right of the author of the nuisance to work a hurt, or injury to his neighbor.
C. Injunction – (under common law, this was the only remedy) an injunction may issue where the injury to the opposing party and the public is slight or disproportionate to the injury suffered by the complainant.
1. Ex. P owned a restaurant situated on 9 acres also used as a trailer park. D owned a operated an oil refinery that would emit noxious gases for several hours a few days a week. P sought an injunction against D. HELD: When the evidence is taken in the light most favorable to the plaintiffs, it also suffices to warrant the additional inferences that the High Penn Oil Company intends to operate the oil refinery in the future in the same manner as in the past; that if it is permitted to carry this intent into effect, the High Penn Oil Company will hereafter cast noxious gases and odors onto the nine acres of the plaintiffs with such recurring frequency and in such annoying density as to inflict irreparable injury upon the plaintiffs in the use and enjoyment of their home and their other adjacent properties; and that the issuance of an appropriate injunction is necessary to protect the plaintiffs against the threatened irreparable injury. This being true, the evidence is ample to establish the existence of an abatable private nuisance, entitling the plaintiffs to such mandatory or prohibitory injunctive relief as may be required to prevent the High Penn Oil Company from continuing the nuisance. Morgan v. High Penn Oil Co..
D. Conditional injunction (Permanent Damages) – Give an injunction unless a court determined permanent damage is paid. "Where a nuisance is of such a permanent and unabatable character that a single recovery can be had, including the whole damage past and future resulting therefrom, there can be but one recovery.” It has been said that permanent damages are allowed where the loss recoverable would obviously be small as compared with the cost of removal of the nuisance.
1. Ex. (D) Atlantic Cement Co.’s plant (worth $45,000,000) emits dirt, smoke, and vibrations that interfere with (P) Boomer’s enjoyment of his property (worth $200,000). HELD: To grant the injunction unless defendant pays plaintiffs such permanent damages as may be fixed by the court seems to do justice between the contending parties. All of the attributions of economic loss to the properties on which plaintiffs' complaints are based will have been redressed. It seems reasonable to think that the risk of being required to pay permanent damages to injured property owners by cement plant owners would itself be a reasonable effective spur to research for improved techniques to minimize nuisance. Bommer v. Atlantic Cement Co..
E. Indemnified injunction - Having brought people to the nuisance to the foreseeable detriment of Spur, Webb must indemnify Spur for a reasonable amount of the cost of moving or shutting down. It should be noted that this relief to Spur is limited to a case wherein a developer has, with foreseeability, brought into a previously agricultural or industrial area the population which makes necessary the granting of an injunction against a lawful business and for which the business has no adequate relief. Spur Industries, Inc. v. Del E. Webb Development Co..
III. Incentives For Industry Nuisance Regulations
A. Carrot method - Capitalist pollution rights - cap the total amount of pollution allowed for the country and sell the rights amongst themselves. Incentive system, only allow a certain amount of, say, pollution per year total in the county. Divide up the amount and sell the rights to produce x amount of pollution.
B. Stick method - set cap and penalize or enjoin violations. There are absolute limits, and we will inspect, take you to court, sue, get injunctions, etc.
Private Control of Land Use
The Law of Servitudes
I. Servitudes – agreements creating interests in land - easements and other burdens and benefits. There are two major types, easements and covenants.
A. Easements - possessory interest to use or prevent use on someone else's land.
1. Affirmative – do something on another’s land
2. Negative – right of the dominant owner to stop the servient owner from doing something on the servient land.
a. Right to stop you neighbor from:
(1) Blocking your windows,
(2) Interfering with air flowing to your land in a defined channel,
(3) Removing the support of your building (usually by excavating or removing a supporting wall), and
(4) Interfering with the flow of water in an artificial stream.
3. Appurtenant – gives a right to whomever owns a parcel of land that the easement benefits
a. Dominant tenement (Benefited) – the parcel to which the easement is attached.
b. Servient tenement (Burdened) – the parcel burdened with the easement.
Transferable – transfers along with the dominant tenement to successive owners.
(1) Personal – can be made personal and not transferable
4. In Gross – gives the right to some person without regard to ownership of land
a. Servient Tenement only, because it does not benefit any land.
b. Alienable or Inalienable
(1) Assignment - Easements in gross may be assigned if it was intended to be allowed. Generally, commercial easements in gross are presumed to allow assignments (good for business) and noncommercial easements in gross are presumed to not allow assignments.
(a) Ex. See Miller v. Lutheran Conference & Camp Assn, Emanuel outline pg. 235-236.
(2) Divisibility:
(a) Nonexclusive Easements - (To B, the right to fish) The holder of a nonexclusive profits or easement in gross (one shared with the servient estate) may not divide it, because division would likely result in decreased utility of the use to the servient estate. Called a "surcharge of the easement," it exceeds the intent of the grantor.
(b) Exclusive Easements - (To B, the exclusive right to fish) If a profit or easement in gross is exclusive and vested in one person that person has the right to divide it, unless the easement or profit stipulates to the contrary. The rationale is that the risk of excessive use is borne by the easement or profit holder alone, and that person has it within their power to limit the risk by refraining entirely from division, so division ought not be objectionable.
I. Exclusive easements in multiple persons: The "One-Stock" Rule - If a profit or easement in gross is exclusive and vested in two or more persons division is permitted but the easement or profit must be used as a single unit (one-stock). This rule holds that joint users may divide their easement or profit but that the entire use must be conducted as a single unit. This rule prevents undue exploitation of resources by one user at the expense of his fellow users. A solo user of a right held by multiple people had the incentive to take as much fish or timber, or coal, as he can, because a disproportionate amount of the cost of exhaustion of the resource is borne by everyone else. By contrast, if the easement or profit must be worked together there is no incentive to overexploit, because the cost of exhaustion of the resource is borne entirely by the easement or profit holders. Any co-owner can block/void the use of the other co-owners.
A. Ex. Frank and Rufus jointly owned the right to fish, boat, and bathe in Lake Naomi. When Rufus's estate began to grant separate licenses to third parties for these purposes, Frank sought to enjoin the licensees from using Lake Naomi, partly on the ground that Rufus's estate lacked any legal authority to subdivide the rights by granting separate licenses. HELD: A boating, fishing, and bathing easement in gross held jointly could not be divided. Miller v. Lutheran Conference & Camp Assn..
5. Creation of Easements
Generally requires a written instrument signed by the party to be bound thereby (Statute of Frauds).
a. Exceptions:
(1) Fraud
(2) Part performance – allows the specific enforcement of oral agreements when particular acts have been performed by one of the parties to the agreement. Acts held to constitute part performance vary from jurisdiction to jurisdiction, depending primarily on how the court views the theoretical basis for the doctrine of part performance.
(3) Estoppel – see below, License. applies when injury would result from denying enforcement of the oral contract after one party has been induced by the other seriously to change his position in reliance on the contract. Estoppel may also apply when unjust enrichment would result if a party who has received the benefits of the other’s performance were allowed to rely upon the Statute. Holbrook v. Taylor.
(a) Elements: 1) license, or 2) course of conduct that leads to implication of license, 3) reliance on license with improvements or substantial expenditures, 4) licensor must realize that the licensee has relied on the license
(4) Implication
(a) Implied from prior use - if there was (1) common ownership that was severed creating a burdened parcel and a benefited parcel, (2) continuing necessity for the easement (reasonable necessity), and (3) regular and apparent use (constructive knowledge), which does not necessarily mean visible. (4) Quasi-easement (easement existed at time of severance).
I. Ex. X owned one lot subdivided into three lots. X built an underground sewer pipe across lots 1 and 2 for the house built on 3. X then sold all three lots. Houses were built on lots 1 and 2 and connected to this sewer pipe. Eventually A came to own lot 1 and B lot 2. From B's use, the sewer pipe would leak into A's house. A sought an injunction. HELD: At the time John J. Jones purchased lot 19 he was aware of the lateral sewer, and knew that it was installed for the benefit of the lots owned by Mrs. Bailey, the common owner. The easement was necessary to the comfortable enjoyment of the grantor's property. If land may be used without an easement, but cannot be used without disproportionate effort and expense, an easement may still be implied in favor of either the grantor or grantee on the basis of necessity alone. This is the situation as found by the trial court. Neither can it be claimed that plaintiff purchased without notice. At the time plaintiff purchased the property he and his wife made a careful and thorough inspection of the property. They knew the house was equipped with modern plumbing and that the plumbing had to drain into a sewer. Under the facts as found by the court, we think the purchaser was charged with notice of the lateral sewer. It was an apparent easement as that term is used in the books. Van Sandt v. Royster.
(b) Implied From Necessity - If a common owner subdivides a tract of land and by this subdivision deprives one lot of access to a public road or utility line. An easement of way over the lot with access to the public road or utility line is implied. Elements: (1) common ownership and severance, (2) Necessity present at time of severance (not prior use)
I. Ex. Hill owned a large parcel of land which he sold in bits and pieces over time in the 1890s. One of those parcels was landlocked and title to that parcel was eventually acquired by Othen, who habitually used a roadway crossing Rosier's land to reach a public road. To prevent erosion Rosier built a levee that impounded water, making the roadway impassable at times. Othen sued Rosier to enjoin further interference with his right of way, which Othen contended was implied by necessity. HELD: No easement by necessity had been proven across Rosier's land, because there was no proof that when Hill, the common owner, had conveyed the Rosier property to Rosier's predecessor in interest it was that conveyance that landlocked the Othen parcel. Rather, it appeared that at the time Hill conveyed the Roesier parcel Hill owned other land that was contiguous to both the Othen parcel and a public roadway. Othen had an easement implied by necessity across some property, but it wasn't Rosier's property. Othen v. Rosier.
(5) Prescription - easement equivalent of adverse possession.
b. Reservation - a provision in a deed creating some new servitude which did not exist before as an independent interest.
(1) An easement can be reserved in favor of a third party
(2) For example, O conveys Blackacre to A reserving a 20-foot-wide easement of way along the south boundary of Blackacre. The easement did not exist as an independent interest prior to the conveyance by O.
(3) Ex. X sells lot 19 to P. Later X sells lot 20 to P but reserves the right for D church to park in lot 20 on Sundays. P sues to quiet title citing the archaic rule that one cannot reserve an easement for a third party. HELD: We have no hesitancy in abandoning this archaic and technical rule. It is entirely inconsistent with the basic principle followed in the construction of deeds, which is to determine the intention of grantor as gathered from the four corners of the instrument. Willard v. First Church Scientist.
c. Exception - a provision in a deed that excludes from the grant some preexisting servitude on the land.
(1) An easement cannot be excepted in favor of a third party.
For example, after the above conveyance, A conveys Blackacre to B, except for the easement previously reserved by O.
6. Construction of Ambiguous Instrument - Generally, a grant of a limited use, or for a limited purpose, or of an identified space without clearly marked boundaries creates an easement. Similarly, a sale of an interest for less than the fair market value of a fee simple indicates an easement.
a. Ex. O grants A a 40-foot strip "for a road." The limited purpose indicates that an easement is created. Preseault v. United States
7. Duration – an easement can have a duration comparable to any of the possessory estates. An easement can be in fee simple (perpetual duration), or for life, or for a term of years.
8. Scope of Easements - misuse of an easement is trespass.
a. Grantor's Intent. The scope of the easement is determined the intent of the grantor. The easiest way to determine the grantor's intent is to look at express language in the four corners of the granting document.
(1) Limits. The easement is limited to the specific grantees and for the specific use granted.
b. Enlargement of the Dominant Estate - An easement, however created, cannot be used for the benefit of land that is not the dominant estate. However, that rule does not always mean that the appropriate remedy for such misuse is to enjoin the violation.
(1) Ex. X buys lot B and C. B has an easement over Y's land. B has a single family house on it. X plans on knocking down the house to build a house straddling the line between lots B and C. Y seeks an injunction b/c now X plans to use the easement to get to lot C which is not part of the easement. HELD: As a general rule, an easement appurtenant to one parcel of land may not be extended by the owner of the dominant estate to other parcels owned by him, whether adjoining or distinct tracts, to which the easement is not appurtenant. If an easement is appurtenant to a particular parcel of land, any extension thereof to other parcels is a misuse of the easement. However, it does not follow from this conclusion alone that defendants are entitled to injunctive relief. The trial court found as facts, upon substantial evidence, that plaintiffs have acted reasonably in the development of their property, that there is and was no damage to the defendants from plaintiffs' use of the easement, that there was no increase in the volume of travel on the easement, that there was no increase in the burden on the servient estate, that defendants sat by for more than a year while plaintiffs expended more than $11,000 on their project, and that defendants' counterclaim was an effort to gain "leverage" against plaintiffs' claim. In addition, the court found from the evidence that plaintiffs would suffer considerable hardship if the injunction were granted whereas no appreciable hardship or damages would flow to defendants from its denial. Finally, the court limited plaintiffs' use of the combined parcels solely to the same purpose for which the original parcel was used -- i.e., for a single-family residence. Based upon the equities of the case, as found by the trial court, we are persuaded that the trial court acted within its discretion by granted awards of $1 and denied injunctive relief. Brown v. Voss.
c. Adjusting the Scope - The scope of an easement may be adjusted in the face of changing times to serve the original purpose, so long as the change is consistent with the terms of the original grant.
(1) Ex. Railway was granted easement "right of way" for its tracks but goes out of business and ceases it use. US gov't adopts a "Rails to Trails" program for all abandoned railways. HELD: The right of way was an easement and not a fee simple. Nature trails are not consistent with the terms of the original grant, i.e. railways and cannot be presumed that the grantor contemplated such a scope/ use of the grant. Thus, the government has no right to this land as the contemplated use for this easement has ended. If the government uses this land for nature trails it is a taking and just compensation must be paid. Preseault v. United States.
9. Termination of Easement.
a. BFP without notice
b. Misuse - using an easement beyond its contemplated use is misuse and constitutes a trespass. The court will first issue an injunction and if the misuse can't be corrected, the D will lose the easement. Therefore, in Preseault v. United States, the gov't using the abandoned railway as a nature trail was a trespass and a taking.
c. Abandonment - An easement may terminate by abandonment if the easement holder manifests a clear and unequivocal intention to abandon the easement. Mere nonuse will not suffice to prove abandonment. Even if the easement is never used it is not extinguished by lack of use and nothing more. Abandonment is established by acts of the easement holder that clearly and unequivocally establish either a present intent to relinquish the easement or a purpose inconsistent with its future existence. Normally, mere non-use by the easement owner does not constitute abandonment, but in several states a prescriptive easement ends by abandonment upon non-use for the statutory period of time.
(1) Ex. The Vermont Railway owned a "right of way" easement for its rail line through Vermont. In 1970 it ceased operations over the portion of the line in dispute, using the tracks only to store railroad cars. In 1975 the Railway removed all of the tracks, switches, and other railroad equipment from the section is dispute. In the late 1980s a trial judge ruled that the Railway had abandoned its easement in 1975, and that ruling was affirmed in Preseault v. United States. The easement holder's conduct manifesting an intent to abandon can be affirmative or negative.
(2) Note: Don't assume it's easy to prove abandonment: "Far more decisions contain dictum about abandonment" than actually find abandonment; courts mostly "find that while the easement holder ceased to use the easement, he had no intention to abandon."
d. Condemnation - An easement may terminate by condemnation if the government exercises its eminent domain power to take title to a fee interest in the servient estate for a purpose that is inconsistent with continued existence of the easement.
e. Necessity ends - Easements by necessity end when the necessity that gave rise to it ends.
f. Merger – the dominant and servient tenements come under common ownership. An easement ends by merger if the easement owner later becomes the owner of the servient estate.
g. Release - The easement owner may agree to release the easement. Because easements are interests in property, subject to the Statute of Frauds, normally a release requires a writing.
h. Term expires - If the duration of an easement is limited in some way, it ends through expiration at the end of the stated period. Similarly, an easement created to end upon the occurrence of some event (sometimes called a defeasible easement) expires automatically if and when the stated event occurs.
i. Estoppel - An easement may end through estoppel if the servient owner reasonably relies upon a statement or representation by the easement owner.
j. Prescription – adversely (forcibly deny use of) possess the easement. If the servient owner wrongfully and physically prevents the easement from being used for the prescriptive period, the easement is terminated.
k. Defeasible Easement -
B. Covenants
1. Real covenants – a promise respecting the use of land that runs with the land at law. (usually negative restrictions)
a. Creation of real covenant – a written instrument signed by the covenantor (Statute of Frauds). If the deed creating the real covenant is signed by the grantor only, and it contains a promise by the grantee, the promise is enforceable against the grantee. The grantee is bound by the act of accepting such a deed.
(1) Cannot arise by estoppel, implication, or prescription.
b. Elements to Create a Real Covenant:
(1) Promise:
(a) Writing - see above
(b) Notice - The successor in land must have actual or constructive knowledge
(c) Intent - the original parties to the covenant must intend for its burdens or benefits, or both, to run to successors to their respective estates in land.
(2) Touch and Concern - focuses on the effects of the covenant. Can or can't use land in a certain way always qualifies as touch and concern. Positive acts that don't seem connected with the land itself are where the problems are. HOA fees are almost always enforced today.
(a) Ex. As part of a planned development, the developer sold lots subject to a covenant to pay money annually to a homeowners' association for the purpose of maintaining private roads and sidewalks owned in common by all lot owners. In holding that the covenant touch and concerned the burdened estate, the court concluded that the covenant "affects the legal relations -- the advantages and the burdens -- of the parties to the covenant, as owners of particular parcels of land and not merely as members of the community in general." Neponsit Property Owners' Assn. v. Emigrant Industrial Savings Bank. The money collected was for the maintenance of the common areas, so everyone benefits from the fee and this increases property values.
(3) Horizontal Privity - the relationship between the original parties to the covenant.
(a) Burden - a valid land conveyance of an interest in land is necessary, i.e., where one of the original parties to the promise succeeds to an estate previously owned by the other party.
(b) Benefit - no privity necessary
(4) Vertical Privity - a relationship between one of the original parties and his successor to the estate in land owned by the original party.
(a) Burden - must have the same estate (if B had fee simple, to enforce against C, C must have fee simple).
I. Note: For the burden to run there must be horizontal privity.
(b) Benefit - can be lesser estate.
I. Note: For the benefit to run, horizontal privity is not necessary.
II. Third Party Beneficiaries. Homeowners Associations. A homeowners association may sue to enforce the benefit of a covenant even though the association succeeds to no land owned by the original promisee. The homeowners association is regarded as the agent of the real parties in interest who own the land. Neponsit Property Owners Assoc. v. Emigrant Industrial Savings Bank.
c. Remedy: Damages.
2. Equitable Servitudes – a covenant respecting the use of land enforceable against successor owners or possessors in equity regardless of its enforceability at law.
a. Equity requires:
(1) That the parties intend the promise to run
(2) That a subsequent purchaser have actual or constructive notice of the covenant, and
(3) That the covenant touch and concern the land.
b. Creation – equitable servitude is an interest in land within the Statute of Frauds. It may be implied in equity under certain limited situations. It cannot be obtained by prescription.
(1) Ex. Tulk sold property in Leicester Square to Elms with a covenant in the deed that Elms would always maintain the garden on that property and would not build on that part of the property. Elms, by means of mesne conveyances, passed title to Moxhay, who knew of the covenant even though it was not written in his deed. Moxhay wanted to build where the garden was. HELD: Tulk sought and obtained an injunction. The Chancellor reasoned that it was highly unfair for Moxhay to purchase Leicester Square knowing of the covenant (and probably paying less because of its existence), only to ignore it with impunity. Because the covenant was intended to bind successors, its substance touched and concerned the land, and Moxhay had notice of it, it was enforceable in equity against Moxhay. Tulk v. Moxhay.
c. Elements of Creation of an Equitable Servitude:
(1) Promise:
(a) Writing
(b) Notice - take heed below in Sanborn, McLean was said to be on inquiry notice.
(c) Intent
(2) Touch and Concern
(3) NO requirement for horizontal privity
(4) Vertical Privity
(a) Burden - none
(b) Benefit - (some jurisdictions) some privity
d. Created by Implication From A Common Development Scheme. Many states will imply a negative equitable servitude where a real estate developer sells lots in a subdivision on the promise that all the lots will be burdened with the same use restriction (e.g. single-family residences only) and later fails to carry through on the promise to burden all the lots. In contrast, however, in California, an equitable servitude must be created by a written instrument identifying the burdened lot; it will not be implied from the existence of restrictions on other lots in a subdivision.
(1) Ex. O subdivided lots selling them under restricted use to single-family residences. Later O sold some lots with those restrictions. D acquired title to a lot without mention of a restriction. When D tried to build a gas station on his lot P sued for an injunction. HELD: Because the initial restrictions imposed by O were "for the benefit of the lands held by O to carry out the scheme of a residential district" an implied reciprocal servitude burdened O's retained property (including D's land) and that servitude was equitably enforceable against D, who was on inquiry notice from the "uniform residence character given the lots by the expensive dwellings thereon" that D's lot mist be burdened by a covenant restricting it to residential use. Sanborn v. McLean.
e. Remedy - Injunction.
3. Termination of Covenants
a. Merger
b. Eminent Domain
c. Release
d. Expiration
e. Abandonment
f. Zoning - Covenant –everyone must have a white picket fence, Zoning – no structures 10 ft to street. The zoning ordinance prevails and it terminates the covenant.
g. Change in the Surrounding Area - If the change outside the subdivision is so pervasive as to make all lots in the subdivision unsuitable for the permitted uses, or if substantial change has occurred within the subdivision itself, courts generally will not enforce the covenant. Change outside the subdivision that affects only the border lots in a subdivision is not sufficient to prevent enforcement of the covenant against the border lots. In other words, Restrictive Covenants will remain as long as the objects and purposes of the restrictions have not been thwarted, and that they remain of substantial value to the homeowners in the subdivision. (i.e. substantial benefit inures to the restrictive area by their enforceable)
(1) Ex. In 1941 the appellant developer, Western Land Co., subdivided this 40-acre development, and at that time it subjected the lots to certain restrictive covenants which specifically restricted the entire 40 acres of the subdivision to single family dwellings and further prohibited any stores, butcher shops, grocery or mercantile business of any kind. Now the appellant, Western Land, wishes to build a supermarket on a 3.5 acre strip of the subdivision. HELD: Even though nearby avenues may become heavily traveled thoroughfares, restrictive covenants are still enforceable if the single-family residential character of the neighborhood has not been adversely affected, and the purpose of the restrictions has not been thwarted. Although commercialization has increased in the vicinity of the subdivision, such activity has not rendered the restrictive covenants unenforceable because they are still of real and substantial value to those homeowners living within the subdivision. The record will not permit us to find as a matter of law that there has been such a change in the subdivision or for that matter in the area to relieve the appellant's property of the burden placed upon it by the covenants. There is sufficient evidence to sustain the findings of the trial court that the objects and purposes of the restrictions have not been thwarted, and that they remain of substantial value to the homeowners in the subdivision. Western Land Co. v. Truskolaski.
(2) Policy: Why allow covenant to end when the conditions significantly change? If not, there would be way too many transaction costs when condititon do change, and the land will be more beneficial w/ the other uses.
4. Common Interest Communities
a. Covenants Recorded in the Master Deed. A condominium development will have a recorded master deed in which the use restrictions that pertain to each unit are recited; thus, any purchaser of a condominium unit has constructive notice of such covenants. These covenants are "clothed with a very strong presumption of validity" and are invalidated only when unreasonable. The covenants are unreasonable if they are arbitrary, violate public policy, or interfere with the exercise of fundamental constitutional right. Reasonableness is measured against the whole, not against one person's individual use.
(1) Ex. A homeowner in a 530-unit condominium complex sued to prevent the homeowners association from enforcing a restriction, recorded in the master deed, against keeping cats, dogs, and other animals in the condominium development. The owner asserted that the restriction, which was contained in the project's declaration recorded by the condominium projects, was "unreasonable" as applied to her because she kept her three cats indoors and because her cats were "noiseless" and "created no nuisance." HELD: We conclude, as a matter of law, that the recorded pet restriction of the Lakeside Village condominium development prohibiting cats or dogs but allowing some other pets is not arbitrary, but is rationally related to health, sanitation and noise concerns legitimately held by residents of a high-density condominium project such as Lakeside Village, which includes 530 units in 12 separate 3-story buildings. Nahrstedt's complaint alleges no facts that could possibly support a finding that the burden of the restriction on the affected property is so disproportionate to its benefit that the restriction is unreasonable and should not be enforced. We discern no fundamental public policy that would favor the keeping of pets in a condominium project. There is no federal or state constitutional provision or any California statute that confers a general right to keep household pets in condominiums or other common interest developments. Nahrstedt v. Lakeside Village Condominium Assn..
II. And two minor types of easements:
A. Profit – the common land; today the right to remove timber, sand gravel, and minerals (coal, oil, gas). Mineral law has developed into a separate and complex doctrine.
B. License – oral or written permission given by the occupant of land allowing the licensee to do some act that otherwise would be trespass. This privilege to use the land resembles an easement, but a license is revocable whereas an easement is not.
1. Exceptions to rule that a license is revocable (treated as an easement):
a. License coupled with interest (cannot be revoked)– is one that is incidental to ownership of chattel to the licensor’s land.
(1) For example, O grants to A the right to take timber from Blackacre, owned by O. A has an interest (a profit) and an irrevocable license to enter the land and take the timber.
b. Estoppel - the right of revocation of the license is subject to the qualification that where the licensee has exercised the privilege given him and erected improvements or made substantial expenditures on the faith or strength of the license, it becomes irrevocable and continues for so long a time as the nature of the license calls for. In effect, under this condition the license becomes in reality a grant through estoppel. i.e., if someone, on reasonable reliance, makes improvements to the implied licensed land, the license becomes irrevocable, it becomes a grant through estoppel. Acts may imply a license.
(1) Ex. P used D's land with permission as a driveway when constructing his house on the lot adjacent to D's. During the course of construction, P spent money repairing the driveway. After construction was finished, D tried to make P purchase that land. Upon refusal, D put up a metal fence and no trespassing signs around his property including that strip of land. HELD: The law recognizes that one may acquire a license to use a passway or roadway where, with the knowledge of the licensor, he has in the exercise of the privilege spent money in improving the way or for other purposes connected with its use on the faith or strength of the license. Under such conditions the license becomes irrevocable and continues for so long a time as its nature calls for. This, in effect, becomes a grant through estoppel. Holbrook v. Taylor.
III. From a strictly functional perspective, all servitudes fall into five types:
1. A is given the right to enter upon B’s land
2. A is given the right to enter upon B’s land and remove something attached to the land
3. A is given the right to enforce a restriction on the use of B’s land
4. A is given the right to require B to perform some act on B’s land
5. A is given the right to require B to pay money for the up keep of specified facilities
Doctrinally, A’s interest in example
1. Is an easement
2. Is a Profit
3. May be treated as an easement (a negative easement, unlike the affirmative easement illustrated in ex. 1), a real covenant, or an equitable servitude, depending on several factors, including the remedy that A seeks in the event the restriction is breached
4. and 5. May be treated as a real covenant or an equitable servitude, depending again on the remedy sought.
Legislative Control of Land Use
The Law of Zoning
I. Theory of Zoning. By dividing up a city in to use zones from which harmful uses are excluded, zoning purports to prevent one landowner from harming his neighbor by bringing in an incompatible use. In a sense, zoning is nuisance law made predictable by declaring in advance what uses are harmful and prohibited in the various zones. Village of Euclid v. Ambler Realty Co.. But zoning has purposes beyond preventing harm. Modern zoning often regulates uses to achieve public benefits or to maximize property values (the tax base) in the city. Zoning also has a darker side. It has been used, e.g., to exclude low-income groups who cannot afford the housing permitted in the city.
A. Separation of Uses (Euclidean Zoning). The most fundamental means by which zoning accomplishes its purposes is the separation of conflicting uses, which are classified on a scale from "highest" to "lowest" use. The highest use is deemed the least harmful to others, the lowest the most harmful.
1. Highest Use - single family residences
2. Lowest Use – industry
3. Cumulative Uses - Higher but not lower uses are permitted in any district. Accordingly, in an apartment district, single-family and two-family house can be erected but no commercial or industrial uses are permitted. In certain situations, however, the ordinance may not be cumulative and may exclude higher uses. For example, it is rather common today for a zoning ordinance to forbid residential or commercial use in an industrial park district. Policy: To prevent discord between houses and industry and to keep land available for industry in the industrial park.
B. Density Controls. Density controls are rules that indirectly control the number of people using an area of land. They may include height limitations, setback requirements, and minimum lot and house sizes.
II. Source of Zoning Power.
A. Enabling Legislation. Zoning ordinances are usually enacted by a city or a country to apply to land within its local jurisdiction. But under our governmental scheme, the state legislature is the sovereign power, and a city or country has no power to zone unless given such power by the state legislature. The act giving power to zone is called the enabling act. All zoning ordinances must be authorized by and must conform to the state's enabling act. Any zoning ordinance that does not conform to the enabling act is ultra vires (i.e., beyond the authority of the local body) and is therefore void.
1. Defective Enabling Act. Every state has its own constitutional law concerning the proper scope of a legislature's delegation of legislative authority. While legislatures may not simply hand over to someone else (e.g., the state's governor, or a city, or a private entity) unbounded discretion to legislate, they are generally permitted to delegate to administrative agencies, cities, and other nonlegislative bodies the power to make rules that look exactly like laws, so long as that law-making power is exercised in conformity with clear standards in the authorizing legislation. Ex. The Standard State Zoning Enabling Act.
B. Comprehensive Plan. The Standard Act (the common enabling act) requires that zoning decisions be made "in accordance with" a comprehensive plan for land use in the locality, which is intended to be a general guide for overall development of a locality. Zoning laws are the specific means of implementing the vision of the comprehensive plan. The requirement of a comprehensive plan has received sporadic serious treatment. Unwritten plans have sufficed, or sometimes the zoning laws themselves were the plan. In some states the comprehensive plan is treated more seriously, hastened prerhaps by enabling acts that require zoning to be consistent with a written and adopted comprehensive plan, but a persistent practical problem to the utility of a comprehensive plan is that no planner can accurately predict the future, not control events that affect future land use.
III. General Constitutional Validity. In general, zoning laws are constitutionally valid, even though they restrict the uses to which a landowner may devote his property (possibly to his economic detriment). When a state enacts an enabling act, it does so under the authority of its police power, the legislative power a state has to regulate human affairs so as to promote health, safety, welfare, and morals. As long as the state has one decent reason that fits within the above categories, the zoning will be constitutional. To dispute the constitutional validity of a zoning ordinance, it must be shown that the law is arbitrary or unreasonable and has no rational relation to the police power.
A. Ex. Euclid, Ohio, adopted a comprehensive zoning ordinance that restricted the permissible uses of property, limited the height of structures, and imposes minimum lot size requirements for certain types of structures. HELD: The supreme court upheld the validity of the law against a due process and equal protection challenge. The law's objective--minimizing land use conflicts to prevent nuisances from ever occurring--was a legitimate exercise of the state's inherent police power because its content was neither unreasonable nor arbitrary. Village of Euclid v. Ambler Realty Co..
IV. The Nonconforming Use. When zoning is introduced some existing land uses will not be in conformity with the uses permitted under the new zoning law law. These nonconforming uses are permitted to continue to exist because their immediate abatement would amount to either a taking of property without just compensation or an unreasonable exercise of the zoning power.
A. Forced phase-out. One mechanism to abate the nonconforming use is the forced phase-out. The zoning law may specify a period after which the nonconforming use must cease. This is called the amortization period.
1. Our Rule - Forced phase-outs are invalid; they constitute an uncompensated taking of property, no matter what length of the amortization period may be.
a. Ex. (P) PA opened, after obtaining the necessary permits and certificates to conduct its business on leased premises, an adult bookstore. Shortly thereafter, the Moon Township Board of Supervisors adopting a new zoning ordinance for the regulation of locations of adult bookstores. PA’s store was in violation of this ordinance. The ordinance contained an amortization clause, allowing 90 days for any pre-existing use enterprises to relocate to the appropriate area of town. HELD: The amortization and discontinuance of a lawful pre-existing nonconforming use is per se confiscatory and violative of the Penn. Constitution. It is clear that if we were to permit the amortization of nonconforming uses in this Commonwealth, any use could be amortized out of existence without just compensation. Although such a zoning option seems reasonable when the use involves some activity that may be distasteful to some members of the public, no use would be exempt from the reach of amortization, and any property owner could lose the use of his or her property without compensation. Even a homeowner could find one day that his or her “castle” had become a nonconforming use and would be required to vacate the premises within some arbitrary period of time, without just compensation. Such a result is repugnant to a basic protection accorded in this Commonwealth to vested property interests. PA Northwestern Distributors, Inc. v. Zoning Hearing Board.
2. Minority View - Forced phase-outs are valid so long as the amortization period is reasonable as to the affected nonconforming user.
B. Destruction or Abandonment - Another common provision is to stipulate that if the nonconforming use is destroyed or abandoned, permission to continue the nonconforming use terminates. Any replacement structure or new use must conform to the current zoning law.
V. Limitations on The Zoning Power
A. Aesthetic Regulation. If by the term 'aesthetic considerations' is meant a regard merely for outward appearances, for good taste in the matter of the beauty of the neighborhood itself, we do not observe any substantial reason for saying that such a consideration is not a matter of general welfare. The beauty of a fashionable residence neighborhood in a city is for the comfort and happiness of the residents, and it sustains in a general way the value of property in the neighborhood.
1. Architectural Review - Typically, such a scheme conditions a land use permit of some kind (planning approval, building permit) on (1) the conformity of the proposed structure to the existing character of the neighborhood, and (2) the likelihood that the proposed structure will not cause substantial depreciation of neighboring property values.
a. Ex. P wanted to build an ultra modern style house in an affluent neighborhood, which, although it meet all building code requirements, was an eyesore. The D city denied the building permit based on the appearance of the house clashing with all other homes in the neighborhood claiming that it would lower the land values in that area. HELD: Property use which offends sensibilities and debases property values affects not only the adjoining property owners in that vicinity but the general public as well because when such property values are destroyed or seriously impaired, the tax base of the community is affected and the public suffers economically as a result. Ordinances 131 and 281 are sufficient in their general standards calling for a factual determination of the suitability of any proposed structure with reference to the character of the surrounding neighborhood and to the determination of any adverse effect on the general welfare and preservation of property values of the community. State ex rel. Stoyanoff v. Berkeley.
2. Aesthetic Regulation and Free Speech. In general, laws that regulate speech based on its content (e.g. "no political speech") are subject to strict scrutiny, which means that they are presumptively void and the government has the burden of proving that the speech restriction is necessary to accomplish a compelling government objective, and laws that regulate speech in a content-neutral fashion (e.g. "no amplified speech in the park between midnight and 6am) are subjected to more relaxed scrutiny.
a. Zoning based on the content of speech - presumptively invalid. Such a regulation may be challenged on the ground that it restricts too little speech. It is unconstitutional to target a specific speech or content.
b. Zoning neutral as to the content of speech - Zoning laws that regulate speech in a content-neutral fashion are invalid if they are either (1) broader than reasonably necessary to achieve a significant government purpose other than speech regulation, or (2) so restrictive that they fail to leave open ample alternative channels of communications, cannot limit a whole mode of expression.
(1) Ex. An ordinance of petitioner City of Ladue bans all residential signs but those falling within 1 of 10 exemptions, for the principal purpose of minimizing the visual clutter associated with such signs. Respondent Gilleo filed this action, alleging that the ordinance violated her right to free speech by prohibiting her from displaying a sign stating, "For Peace in the Gulf," from her home. HELD: The city has almost completely foreclosed an important and distinct medium of expression to political, religious, or personal messages. Prohibitions foreclosing entire media may be completely free of content or viewpoint discrimination, but such measures can suppress too much speech by eliminating a common means of speaking. Ladue's attempt to justify the ordinance as a "time, place, or manner" restriction fails because alternatives such as handbills and newspaper advertisements are inadequate substitutes for the important medium that Ladue has closed off. Displaying a sign from one's own residence carries a message quite distinct from placing the same sign someplace else, or conveying the same text or picture by other means, for it provides information about the speaker's identity, an important component of many attempts to persuade. Residential signs are also an unusually cheap and convenient form of communication. Furthermore, the audience intended to be reached by a residential sign -- neighbors -- could not be reached nearly as well by other means A special respect for individual liberty in the home has long been part of this Nation's culture and law and has a special resonance when the government seeks to constrain a person's ability to speak there. The decision reached here does not leave Ladue powerless to address the ills that may be associated with residential signs. In addition, residents' self-interest in maintaining their own property values and preventing "visual clutter" in their yards and neighborhoods diminishes the danger of an "unlimited" proliferation of signs. City of Ladue v. Gilleo.
(2) Ex. Los Angeles prohibited the posting of signs on public property. Vincent, a political candidate, attached signs advertising his candidacy to utility poles. The city removed them and Vincent's supporters attacked the validity of the ban. HELD: The supreme court upheld the law, reasoning that it was content neutral and that the ban left Vincent free to attach his signs to private property and to use other low-cost substitute means to reach voters.
3. Exclusionary Zoning - All zoning is exclusionary in that it seeks to exclude unwanted uses, but sometimes zoning is used to exclude unwanted people, though perhaps not for constitutionally or statutorily forbidden reasons. A typical example is a zoning law that, in the interest of preserving open space, aesthetics, and hish property values (with its corollary, a high tax base), requires a minimum lot size of 2 acres. The result is a landscape of expensive homes occupied almost entirely by affluent owners. The poor (often disproportionately composed of a racial minority) are excluded. However, excluding the poor, even if done intentionally, does not trigger any presumption of invalidity under the federal constitution. The exclusion is rationally related to the legitimate objectives of preserving open space, aesthetics, and high property values and is thus valid under the federal constitution. States, however, remain free to interpret their own constitutions and enabling acts to ban actions permitted under the federal constitution.
a. Ex. A zoning law in a township excluded all multi-family residential dwellings and mobile homes, and required minimum lot and dwelling sizes for single-family residences that were sufficiently large that low-income persons were effectively excluded. HELD: The N.J. supreme court ruled that the N.J. constitution and the state's zoning enabling act both required that local zoning further the "general welfare," and that the township's failure to accommodate the housing needs of poor people was contrary to the general welfare. A township could not adopt land use regulations that make it "physically and economically impossible to provide low and moderate income housing in the municipality," but must "make realistically possible the opportunity for an appropriate variety and choice of housing for all categories of people who may desire to live there." Southern Burlington County NAACP v. Township of Mount Laurel.
Takings
Intro
I. The Text. "nor shall private property be taken for public use without just compensation."
II. Purposes (Policy).
A. Prevent Forcible Redistribution of Property. - the government must pay the owner for taking his property.
B. Takings Permitted Only for Public Benefit. The takings clause was designed to prevent any taking, whether compensated or not compensated, that forces a transfer of property from one private person to another with no public benefit in the forced transfer. Governmental power to take property may only be exercised for public benefit.
The Public Use Requirement
I. The Text. "nor shall private property be taken for public use without just compensation."
A. Public Use Clause. No governmental seizure of private property may occur, even if just compensation is paid, unless it is for a public use.
II. The Meaning of "Public Use."A literal reading of the Constitution's text would limit governmental power to take private property to instances where the property will actually be used by the public (e.g. as s park, a school, road, or military base). However, today, the public use limitation has virtually been eliminated by the Supreme Court's extreme deference to legislative judgments about what constitutes public use. Public use is defined broadly as "public benefit" or "public welfare." So long as the taking is 1) rationally related to a 2) legitimate public purpose the public use requirement will be satisfied. As illustrated below, economic growth has been deem a legitimate public purpose. Now, the only seeming limitation to the public use clause is the stupid staffer, or if the legislature didn't put any research into their decision, or the justification for taking is so illegitimate.
A. Ex. New London, Connecticut decided to condemn a number of residences in order to assemble a 90-acre tract for an integrated redevelopment plan. The court had ruled in Berman that an "urban renewal" scheme in which blighted property was condemned and transferred to a private developer was a public use. In Midkiff, the Court had upheld as a public use the forced transfer of fee titles to long-term lessees of the ground on which their residences were located, given that only "22 landowners owned 72.5% of the fee simple titles" to land on Oahu. Hawaii's desire to eliminate "the perceived social and economic evils" of this "land oligarchy" was "rationally related to a conceivable public purpose." Despite these precedents, the landowners contended that condemnation of non-blighted property for purely economic development purposes was not for a public purpose. HELD: (Stevens) The Court rejects that argument, concluding that so long as the condemnation was part of a "comprehensive development plan" that had been subjected to "thorough deliberation," the Court would defer to the judgment of government officials. In short, the taking was rationally related to a legitimate public purpose. Kelo v. City of New London.
1. The Dissent. O'Conner and Thomas held that public use means that the public must actually use the land. Construing public use to mean public purpose, in their opinion, effectively eliminates the public use requirement from the Constitution. O'Conner explained that public use means direct public use like naval bases, common carrier like railroads, and where the taking directly fixes a public harm. This is how she explains the Berman and Midkiff cases, the seizure directly cured a public harm. By contrast, the taking in Kelo involved only incidental public benefits and raised the possibility that anyone's property could be taken so long as the government could offer some plausible possibility that the new private user would make it more economically productive.
Physical Occupations and Regulatory Takings
I. The Per Se Rules.
A. Physical Occupation. A taking has occurred if a regulation produces a permanent physical occupation of all or a part of the property. Temporary occupations are not a per se taking.
1. Permanent Defined. Defined very literally, almost nothing ca be said to be permanent. Permanent as regards taking can defined as "regular and continuous." Thus, where a field is flooded by a dam that must be in place and where airplanes fly low over a house near an airport, a taking has occurred. Converse, where an area is flooding by the dam, and it is known the the dam will be removed soon, it is not a taking.
2. Ex. New York required landlords to permit cable television operators to install cable facilities on their property. Loretto, a landlord, claimed that the forced cable installation was a taking of her property, even though the physical occupation consisted entirely of a 1/2 in. diameter coaxial cable along the roof and descending to the apartments within, together with associated small directional taps and junction boxes for the cable, most of which were on the roof of the building. HELD: The US Supreme Court agreed, ruling that a "permanent physical occupation authorized by government is a taking without regard to the public interests that is may serve." The Court reasoned that the permanent loss of the ability to exclude others was especially destructive of property expectations. "The character of the invasion is qualitatively more intrusive than perhaps any other category of property regulation." Loretto v. Teleprompter Manhattan CA TV Corp..
B. Nuisance Abatement. If a government regulates property to abate activities that are common law nuisances there is no taking, even though the regulations might bar all economically viable uses of the property. The theory is that ownership of property never included the right to inflict nuisances, so nothing has been taken by forbidding what was never lawful.
1. Ex. In the 1890s, Hadacheck acquired rural land outside of LA that was ideal for brick-making b/c of the extent and fine quality of the clay deposits. Hadacheck invested heavily in machinery and equipment and developed a thriving brick business. Eventually the city grew out to his brickyard and kiln and LA enacted an ordinance forbidding his continued operations, on the grounds that the continued activity was annoying and inconvenient to his newly arrived neighbors. HELD: Because the ordinance allowed Hadacheck to remove his clay (but not to make bricks on site) there was no taking. The Court never expressly declared that H's brickyard was a nuisance, but was persuaded that LA was seeking to regulare a "noxious" use, even if it might be lawful. Hadacheck v. Sebastian.
C. Loss of All Economically Viable Use. If a government regulation leaves the owner with no economically viable use of his property, and the regulation does not abate a common law nuisance, a taking has occurred. There are two rationales for this rule: (1) the severity of such regulations impeach the usual assumption that government regulation of property is for the advantage of everyone, including affected property owners, and (2) the effect of theses regulations is to achieve public benefits by imposing the costs of such benefits entirely upon affected property owners.
1. Ex. South Carolina's Beachfront Management Act was designed to protect the ecologically fragile coast on the Isle of Palms. As applied to Lucas' lots, the act forbade the construction of "any permanent habitable structures." The trial court concluded that the act ahd rendered Lucas' lots "valueless." HELD: A regulation that deprives a landowner of all economically viable uses is a per se taking, unless the loss of all economically viable use results entirely from abatement of a common law nuisance (which would make the regulation a per se nontaking). The Court justifried the rule partly because "total deprivation of beneficial use is , from the landowner's point of view, the equivilent of a physical appropriation," and partly because such regulations "carry with them a heightened risk that private property is being pressed into some form of public service under the guise of mitigating serious public harm."
2. Partial Destruction - see Emanuel pg. 294.
II. Balancing Public Benefits and Private Costs. If the per se rules do not resolve the issue of whether a regulation is a taking, courts weigh the public benefits achieved by the regulation against the private costs imposed. A regulation is not a taking if it substantially advances a legitimate state objective. To determine whether this test has been met following tests are employed: (1) character of government action; (2) economic impact; and (3) interference with reasonable investment-backed expectations.
................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related searches
- getroman com reviews
- acurafinancialservices.com account management
- acurafinancialservices.com account ma
- getroman.com tv
- http cashier.95516.com bing
- http cashier.95516.com bingprivacy notice.pdf
- connected mcgraw hill com lausd
- education.com games play
- rushmorelm.com one time payment
- autotrader.com used cars
- b com 2nd year syllabus
- gmail.com sign in