 INTRO.

TO PROPERTY

I. Introduction – Functions of Property, the Problem of Justification, and the Boundaries of

Property

A. The Functions of Property and Property in Everyday Life – 167-72

B. Justifying Property Rights – 87-88, 98-101, 104-24, 155-67

C. The Boundaries of Property – 268-84

II. Two Core Property Rights – Exclusion and Use

A. The Right to Exclude and its Limitations – Trespass and Access

1. The Right to Exclude versus Rights of Access

a. Trespass and Limits on the Right to Exclude – 34, 38-42, 3-4, 9-24

b. Public Accommodations and Discrimination – 25-33, 43-56

2. Adverse Possession

287-303, 333-35, 310-15 (for background)

B. Conflicts over the Right to Use Property and Arrangements for Coordination

1. Nuisance and Related Doctrines – 337-57

2. Land-use Regulation and the Problem of Parochialism – 423-46, 463-75, 484-

95, 1041-49, 1073-84
 3. Servitudes

a. Easements and Licenses – 513-528, 532-59

b. Prescriptive Easements – 315-33

c. Covenants – 559-79, 589-601, 638-57

III. Dividing and Sharing Property

A. Concurrent Interests and Family Property

1. Concurrent Tenancies – 665-697

2. Family Property – 697-717

3. Entity Property – 726-37

B. Dividing Property Rights Over Time

1. Present Estates and Future Interests – 739-69, 783-796

2. Chapter 11 Leaseholds – 813-91

IV. Constitutional Property – The Role and Limits of the State in our System of Property

A. Eminent Domain – Public Use and Just Compensation

1017-41
 B. Regulatory Takings

1149-75, 1183-1204

 INTRO. TO PROPERTY
 What is property?
 Property should be called “ownership” because it’s not about the stuff, it’s about
what we do with it. It involves the rights and obligations of people in relation to
objects, not the study of the objects themselves; exclusive rights to an owner that
they can exercise over others
 Scholars on “What is property?”
 William Blackstone- property is a god-given right
 Pierre Proudhon- Property is theft
 Categories of property-
 Real property- land and anything growing on, attached to, or erected on it
(excluding anything that may be severed w/o injury to the land)
 Chattels/Personal property- movable or tangible things (money, books, clothes)
 Intellectual Property- ownership of intangible things that may be imbedded in
tangible things; NOT the ownership of an idea, an idea cannot be owned—once
the idea is turned into a specific thing then it can become IP and can be protected
as such. (Music, thoughts in a book)
 Cultural property- (music, dance, film)- “owned” by a group of people with a
shared culture
 Unsure property? Person/Body- you buy and sell your labor, but are you property?
 Bundle of Rights
 Use
 Exclusion
 Control/Possess
 Transfer
 Superior Title- government has superior title; they yield ownership to private citizenships
in instances
 3 Rules for creating ownership
 Discovery
 Capture
 Creation
 Actions
Personal Property Real Property
 Damages Trover- common law action for Trespass
money damages resulting from
D’s conversion of P’s chattel. P
waives right to get the chattel
back/insists that D be forced to
purchase the chattel from him

Return of Property Replevin Ejectment- legal action fir

return of property [must prove
(1) P has title to the land, (2) P
has been wrongfully ousted,
and (3) P has suffered damages]

 CHAPTER 1: FIRST POSSESSION

 Possess- 2 meanings- Possession of an object implies its ownership- it can mean the
physical act of possession, and it can mean the legal conclusion that someone is in
possession of an object. Physical possession is 9/10 of the law, however physical
possession ≠ legal possession in all circumstances (title is superior to possession).
 A. Acquisition by Discovery- the sighting or finding of unknown/unchartered territory;
frequently accompanied by a landing/symbolic taking of possession
 Johnson v. M’Intosh (1823)- Supreme Court case a/b “Indian land”
 Action of Ejectment
 ROL- The first Christian person who discovers a piece of land is the one who
can validly transfer that title.
 Terms
 Res Nullius/Terra Nullius- thing or territory belonging to no one—only thing
that can be “discovered”
 Principle of first in time- doctrine of discovery’s foundation; notion that being
there first justifies ownership
 Labor Theory & John Locke-
 When you mix your own labor w/ something, you own the resulting mixture
 GENERAL ROL-
 B. Acquisition by Capture- ROL- Unowned property that is captured (wild animals,
fugitive minerals such as oil and gas) becomes the property of the person affecting the
capture. The unowned thing must be actually possessed for it to become property.
 Policy considerations- Will recognition of property rights under these circumstances
advice or retard desirable social objectives? Is there a custom embodying sound public
policy?
 Pierson v. Post (1805) FOX case
 Pursuit of a ferae naturae (wild animal) is insufficient to est. property
 Denys custom of “pursuit is enough”
 Ghen v. Rich- (1881)
 Whaling case- How do you reduce a whale ownership?
  ROL- local custom embraced by an entire business industry gives title to the
killer/mortal wounder of the whale
 Why custom? Preserves economic incentive to whale
 Keeble v. Hickeringill (England 1707)
 Duck pond case- ROL- A person cannot maliciously prevent another from
capturing wild animals in the pursuit of his trade. A person can lure the wild
animals away (competition) but cannot scare them away (interference).
 Constructive Possession
 Legal fiction to describe a situation where someone has actual possession w/o
physically possessing a piece of property
o Prevents trespassing hunter from gaining title
 Escape: CP ends when wild animal leaves ones land unless:
o Animal is domestic
o Animal is marked
o Animal is “Animus Rivertendi”- not a traditional domesticated animal,
but has some sort of trained relationship/propensity to return
 Ratione Soli- assigning property rights to landowner for resources found on land
 OIL & GAS
 Landowners have constructive possession of oil & gas on their property, but if
it “escapes” it’s no longer theirs
 First to extract gains possession, even if the point of extraction is taking
resources under someone else’s property
 WATER
 Eastern US- Riparian Rule
o Riparian Rights- the right of a landowner whose property borders on a
body of water or watercourse
o Riparian Rights Doctrine- rule that owners of land bordering on a
waterway have equal rights to reasonably use (not waste) the water
passing through or by their property
 Western US- First to Appropriate Rule
o The first to capture the water and put it to reasonable and beneficial use
has a right superior to later appropriators/capturers
 OLD EXAM QUESTION- You have a Midwestern state with two farmers groups (1
from the eastern side of the state, one from the west). There was a drought and more rain
fell on the eastern side of the state. Farmers from the Western side of the state decided to
attempt cloud seeding (capturing rain from the rain clouds as they passed over the western
part of the state towards the east). The farmers from the eastern side of the state brought
the case to court in an attempt to stop the farmers from the western side of the state from
diminishing the rain that reached the east, saying it interfered with their business as
farmers.
 C. Acquisition by Creation- if you create something, through labor and originality, then
that something is yours as the fruits of your labor. However, you don’t always have full
rights of property.
 1. Intellectual Property- Key issue w/ respect to IP is the degree of exclusivity the creator
ought to have
 IP & The Constitution
o Article 1, Section 8- “To promote the progress of science and useful
arts, by securing for limited times to authors and inventors the
exclusive right to their respective writings and discoveries
[inventions]”
 MINORITY VIEW- First in time: We must allow those who first come upon
an idea to have exclusive rights to it
o INS v. AP (Sup Crt 1918)
 News is quasi property in that after publication there is no
property interest between the news organization and the
public, but there is still a property interest between different
news organizations. The defendants behavior in distributing
for profit another organizations news at the point of profit
amounts to unfair competition in business.
 MAJORITY VIEW- its up to the legislature to extend copyright law, not the
courts
o Cheney Brothers v. Doris Silk Corp. (1930)
 Doris wanted short term protection of its silk designs (they
could not be © at the time)
 In the absence of some recognized right at CL or relevant
statute, one’s property interest is limited to the chattels that
embody the creation
o Smith v. Chanel (1969 note case)
 Perfume is not patentable
 Why? Perfume is sufficiently protects by name trademark
and packaging trade dress
 Nominative use of competitor’s trademark is OK
 Imitation is necessary for the market
 IP Categories
o Copyright- (Federal) Protects tangible physical expressions of literary
and artistic works (books, music, art, video games, DVDs, movies)
 Life of the author + 70 years
 120 years if “anonymous”
o Trademark- (federal) falls under the commerce clause of the
constitution; signs and symbols that call to mind the origin of goods
and services
 Lost when use is abandoned OR too generic (ex- Asprin)
 10 years & infinitely renewable
 ® = federally registered US trademark
 ™ = unregistered trademark
 Trade Dress- overall packaging is so distinctive that it calls
to mind the origin (ex- Loubs)
o Patent- (Federal) protects useful inventions
 20 years from date of application
 Standard- new/novel, useful, and non-obvious
o Trade Secrets- (state) unregistered secrets that give a company a
corporate advantage
  If they are discerned by illicit means, they can be protected
o Design Rights- (state) Big in Europe
o Geographical Indications- (state) Idaho Potatoes, Champagne
o Rights of Publicity- (state) falls between privacy and IP; the right to
control the use of our name/image/likeness
 ROP dies with you in NY, in many states it doesn’t
 2. Property in One’s Person
 Moore v. Regents of the University of California (1990)
o Conversion- civil action of theft
o When a doctor extracts cells from a person with consent and then uses
them as a basis for the development of a patentable and potentially
lucrative product without consent, there exists a valid legal claim by the
patient for breach of fiduciary duty or lack of informed consent, but not
for conversion
o Moore didn’t own it in the limited sense of having the right to profit
from it after he had discarded it. So long as the spleen was in him, it
was Moore’s exclusively to possess/use/exclude others from.
o Patent on cell line was an authoritative indication that cell line was a
product of invention
o Policy:
Progress/Innovation issues: don’t want to make socially useful
researchers liable for stolen cells
Disclosure obligations already protect patients
 Notes and Questions: Property in One’s Person
 The Right to Include/Exclude- rights to permit and deny use or possession of owned
property by others are the necessary and sufficient conditions of transferability
 Jacque v. Steenberg Homes, Inc. (Right to Exclude case)
o Steenberg moved a mobile home across Jacque’s property even thought
Jacque had forbidden it.
o ROL- when nominal damages are awarded for an intentional trespass to
land, the jury may award punitive damages
o Right to exclude is hollow if the legal system doesn’t protect it;
protection of rights avoids self-help
 Limits on the Right to Exclude
o State v. Shack (Right to Exclude case)
Migrant workers being blocked from meeting with government
officials since the land they were on belonged to their boss who
wanted to exclude the officials from entering
ROL- Under State law the ownership of real property does not
include the right to bar access to governmental services
available to migrant workers and hence there was no trespass
w/in the meaning of the penal statutes
o Civil rights legislation
o Rent controls & other landlord/tenant limitations
o Public rights to private beaches
 CHAPTER 2: SUBSEQUENT POSSESSION
 A. Acquisition by Find- when property is lost, mislaid or abandoned, and then is found
by another, a problem of relative title emerges. Finders law attempts to restore property to
the true owner, reward honest finders, deliver the reasonable expectations of landowners,
and discourage trespassers and other wrong doers.
 LOST property- found in a place where the true owner did not likely set it down and is
unlikely to find it
 General rule- finders title is good against all others except true owner and
prior finders
 Armory v. Delamirie
o Chimney sweep find gem and takes it to jeweler. Jeweler’s apprentice
removed the gem/refused to return it. The sweep was awarded damages
unless the maser produced the stone.
 Hannah v. Peel
o Soldier finds brooch on windowsill of house. Owner of house did not
live there or know the brooch was there.
o ROL- the finder of a lost article on the property of an absent owner, who
has the right to be on the property, is entitled to it against all persons
except the owner of the chattel.
 MISLAID property- property that the true owner placed somewhere with the intention of
returning for it.
 General Rule- Owner of property where object is found often gets mislaid
items because they are much more likely to get the property back to the
original owner should they remember where they misplaced it
 McAvoy v. Medina
o Purse was mislaid, so the owner of the shop was entitled to hold on to
the purse since he had a better chance of returning it to the true owner
o This was an involuntary bailment- the purse was involuntarily left there,
having accepted the purse the barber has the duty take reasonable care
of it and to return it to its owner if they arrive
 ABANDONED property- property to which the true owner has voluntarily given up
ownership.
 General Rule- finder of abandoned property acquires title.
 Treasure Trove- (Shipwrecks)- property deliberately hidden but done so long
ago that it is now considered abandoned.
 Exceptions
 Trespassers
 Owners of land where abandoned property is found may sometimes have
strong and reasonable expectations of ownership (embedded in the soil)
 Invitee finders don’t get what they find generally (workers on land etc)
 BAILMENT- it’s a temporary transfer of possession. (ex. Giving your keys to a parking
attendant, your keys to a house sitter, etc)
 3 Factors
o Transfer of possession & delivery
o Acceptance
 o Understanding that item will be returned
 Rights/Duties
o Duty of ordinary care
o Higher standard of care if bailment benefits the bailee
o Duty to deliver
 B. Acquisition by Adverse Possession
 1. Theory and Elements of Adverse Possession
 General Overview
o Def- A method of transferring property interests w/o the consent of the
owner by actually possessing/occupying the iten
o Theories/Reasons of/for AP
Things should be used
Punishing a negligent owner
Rewarding adverse possessor for using/improving
Quieting title- Action to Quiet Title
Psychological connections to the property
 Is it more painful to lose something you owned? Or to
lost something you’ve been using for a long period
of time?
o Burden- owners have the burden of making sure nobody is adversely
possessing their land
 Elements
o 1. Actual Entry giving exclusive possession
 creates COA; stakes out what is being claimed
 physical entry onto property
 acts as owner of property—bars trespassers
 improve and enclose land
o 2. Open & Notorious
 would put reasonably attentive property owners on notice
that someone is on their property
 objective test- Would an ordinary person notice?
 Mannillo v. Gorski
 15 inch protrusion of stairs into neighbor’s property
were not clearly visible with the naked eye, not open
& notorious
 Equitable Solution- when its not open and notorious,
but removal would be $$$, some courts will force
landowner to sell that part of the land
o 3. Hostile/Adverse under a claim of right
 “legal hostility and under a claim of right”
 claim of adverse possessor is not consistent with/cannot
coexist with the claim of the owner
 Van Valkenburgh v. Lutz
 By conceding in an action to acquire a prescription
over property in question that he does not own the
property, a potential adverse possessor shows that
 his possession is not under claim of right and title
will not be quieted in potential AP
 Various intents-
 Good faith- enter w/ belief that land is one’s own
 Maine Rule- intent to enter wrongfully (most
jurisdictions have abandoned)
 Connecticut Rule/Objective- Intent is irrelevant, look
at the objective evidence
o Majority
 Color of title satisfies adversity
o 4. Continuous
 not literally constant—use of the property in the manner that
an average true owner would under the circumstances
 Tacking- the joining of consecutive periods of possession by
different persons to treat the periods as one continuous
period—the adding of one’s own period of land possession
to that of a prior possessor to establish continuous adverse
possession for the statutory period (the two adverse
possessors must be in privity w/ each other)
 if an adverse possessor is ousted by a third party, the
third party may not tack the ousted possessors period
o 5? Color of Title (some jurisdictions)
 invalid document giving you title helps to bolster an adverse
possession claim & helps to define the scope of the property
 sometimes gives a shorter SOL
o 6? Payment of taxes (some jurisdictions—mostly in the West)
 some jurisdictions require adverse possessors to prove that
they have paid the property taxes for the duration of the
period.
 2. Adverse Possession against the Government
 Common law rule
o You cant adversely possess government land
o State owns land for all the people, and they shouldn’t suffer a loss
just b/c state officers were negligent in avoiding AP
 Today- you can’t adversely possess against the government unless the
government had created an exception (varies by jurisdiction)
o Some state permit AP against government lands held for non-
public/governmental use.
 3. Adverse Possession of Chattels
 Generally, all AP elements must be present
 Some courts held the you had to openly display the artwork (chattel) to fulfill
the open and notorious requirement.
 Majority Rule- Discovery Rule: Applied by modern courts to the open and
notorious requirement- The statute of limitations doesn’t start to run until the
owner of the chattel should have, through due diligence, discovered the facts
that form the basis for a cause of action (knows the item is gone & knows
 the identity of the person who has it)(actual or constructive notice)
o O’Keefe v. Snyder (New Jersey)
 In the context of a stolen painting, the SOL will not begin to
run begins to run when the original possessor first knew, or
reasonably should have known the identity of the possessor
 Policy
 Personal property is often readily moved and
concealed
 Favors innocent owner of property
 Demand & Refusal Rule (NY) (minority rule)
o SOL does not begin to run until the owner of a stolen work requests it
back and the possessor refuses
o Burden- burden on the buyer of a work to check its provenance (chain of
title)
o Art world prefers this rule
 Adverse Possession & Future interest holders- Adverse possession does not cut off their
future claim to possession. A future interest holder can bring action against a neglectful
present possessor who is allowing the property to be adversely possessed.
 Cultural Property
 The Native American Graves Protection and Repatriation Act of 1990
 Requires federally funded museums to inventory their Native American
sacred objects and return them upon request to, “direct lineal descendants
of an individual who owned that sacred object” or to Indian tribe that can
“show that the object was owned or controlled by the tribe.”
o Items only to be returned if they are going to be put into sacred use
(not if they are going to be put in a museum
 C. Acquisition by Gift
 To make a gift of personal property, the donor must transfer to the donee with the
manifested intent to make a gift, and the donee must accept
 Intent, Delivery, Acceptance
 Intent
 Donor must intent to pass title immediately
 Can sometimes be inferred from circumstance
 Delivery
 Manual
o Traditionally, if its possible to manually deliver than it must be done
(most concrete evidence of a gift)
 Constructive Delivery
o Handing over a key or some object that will open up acess to the subject
matter of the gift
 Symbolic Delivery- handing over something symbolic of the property given,
like a written statement
o Some states have statutes that say symbolic delivery by writing is
always permitted
 Why require delivery?
 o Prevent fraud
o Makes donor feel the wrench of delivery
o Transfer becomes vivid and concrete to both parties
 Newman v. Bost (1898)
 Gift causa mortis- a gift made in the contemplation of and in expectation of
immediate approaching death- substitute for a will.
 Man on his death bed handed servant set of keys and told her to take
everything in the house
 Because courts see upholding gifts causa mortis as undercutting the
safeguards of the Statute of Wills, traditional they have more strictly applied
the requirements for a valid gift causa mortis than for a gift inter vivos
 COURT SAYS- constructive delivery is only appropriate where the things
intended to be given are not present or are incapable of manual delivery.
 Gruen v. Gruen (NY 1986)
 Gift Inter Vivos- gift given when one does not anticipate their imminent death
 Father gives son a painting in a letter, but keeps the painting in his possession
 Symbolic delivery was valid b/c it would be unreasonable to force the father
to manually deliver the painting and then have the son hand it back to the
father to display until his death.
 Livery of Seisin is outdated

 CHAPTER 3: POSSESSORY ESTATES

 Estate- An interest in land that is or may become possessory
 Feudalism-
 Property Hierarachy- King  tenant in Chief  Mesne lord  tenant in
demesne (the demeaned individual)
 Bottom of the chain is the person actually in physically possession of the
property, using the property etc.
 2 types of estates
 leasehold (chapter 11)
 Freehold (Important chart)
 4 types of Freehold Estates
 (1) Fee Simple (absolute)- biggest possible estate
 O to A [and her heirs]
o Common law- if it didn’t say “and her heirs” than A got a life estate
only (today “and her heirs” isn’t required)
 Essentially the whole bundle of property sticks—if someone owns the fee
simple they own everything
 Present and future interests are unified
 Transferable by gift, sale, death
 If possessor dies intestate then it goes to their heirs via statute of intestate
accession
 (2) Fee Tail – obsolete in most states; way of creating an estate that stayed in the family
 O to A and the heirs of her body
 A would have a life estate, and all of A’s decedents would have
“remainders”—only if the chain of decedents ran out would the property
revert back to the original granter O
 TODAY
o If a lawyer drafts a fee tail will it will usually become a fee simple
 Policy problems
o Property may fall into disuse and repair
o Allows right to remain rich
 (3) Life Estate – transfer to owner to the recipient for as long as their life
 O to A for life
  Pur autre vie- life estate measured by 3rd party’s life- O to B for the life of A
 Future interest
o Reversion back to O
o Remainder to 3rd party
 Transfer- alienable during owners lifetime, but not descendible or devisable
 (4) Defeasible Fee interests- aka fee simple interests that can be terminated upon some
condition
 (1) Fee Simple Determinable
o temporal limitation- so long as, until, while
o Automatic possibility of Reverter
 (2) Fee Simple Subject to condition subsequent
o conditional limitation- provided that, upon condition that
o Right of (Re)entry that must be acted upon
 (3) Fee simple subject to executory limitation
o When a conditions is broken the property passes to 3rd party
o 3rd Party Executory interest
 Shifting
 O to A so long as she graduates by 2020. If she does
not, the property goes on to B.
 Springing
 O to A when she graduates law school. Until then,
property remains with O.
 Transfer ‘springs’ at a specific point in time when a
condition happens after a gap in time
 Requirement of Delivery-
 Livery of Seisin- ceremony of transfer, kind of like manual delivery of a gift
 Future interest problem
 How do you have livery of seisin for a gift of future interest?
 Courts of Equity- if there is livery of seisin for the present possessory transfer,
it counts for the gift of future interest
 Limitations of Freehold Estates
 Restraints against alienation- generally VOID
 Why?
o Make property unmarketable (land unavailable for best use)
o Restraints against alienation perpetuate concentrated wealth
o They discourage improvements to the land
o Creditors cannot reach property
 Types
o Disabling restraint- renders transfer null and void (void)
o Forfeiture interest- land is forfeited to another person upon an
attempted transfer (void)
o Promissory restraint- Grantee promises not to transfer interest
(acceptable)
 Restraint must still be reasonable
 Common w/ charitable giving
  Determining if a restriction on use = a restraint against alienation
o How severely does it restrict the number of potential buyers?
o What is the remedy if you try to transfer the property? (do you
automatically forfeit it—forfeiture interest)
o Would a bank lend money to improve the property?
o Are there social benefits? (gift to charity, public park)
 White v. Brown
o Gives house in handwritten will to Sister-In-Law White with the
limitation “To live in and not to be sold”
o Court crosses out “not to be sold” as void, result is Fee simple
 Mountain Brow Lodge No. 82, Independent Order of Odd Fellows v. Toscano
 Condition that the land can’t be sold is a restraint against alienation
and must be crossed out.
o Condition that the land must be used by the lodge is not an absolute
restriction against alienation and is valid because it could be sold to
another person as long as they still use the land for the lodge.
(majority in this case, dissent disagrees on this)
 Restraints against marriage- VOID
 If the deceased just wants to provide for his widow so long as is necessary—
possibly valid
 If its read as an attempt to prevent remarriage—invalid
 Restraints that are Spiteful & Illegal - VOID
 So long as Bob never comes on the property
 So long as the farm is always used to grow pot
 Restraints based on Race/Religion
 Law of Waste- When property is held consecutively (or concurrently), one party may not
unreasonably interfere with the expectations of the other
 Types
o Ameliorative waste- improvements to property
 Many courts will allow
o Affirmative/Voluntary Waste- Deliberate, negative change in
property
 Not permitted
o Permissive waste- allowing property to disintegrate
 Not permitted
o Economic waste- Baker v. Weedon
 JHW leaves all his property to his widow for life (life estate)
and to her children at her death if she has any (contingent
remainder). If she doesn’t have any kids, at the end of her
life estate it goes to his grandchildren (contingent
remainder)
 Old woman possessed life estate in property and wanted to
sell a portion of property (which would increase drastically
in value in the coming years) to support her in her last years
 ROL- While an equitable solution may be devised, a life
 tenant may not compel the sale of a whole property if doing
so would create a substantial economic loss to the
remainderman
 Woodrick v. Wood
o Mother receives a life estate, son and daughter share a remainder in
fee simple
o Daughter can not prevent mother from tearing down the barn, but if
the mother does tear down the barn she has to pay the daughter the
value of the barn.
o Non-traditional response to waste
 Doesn’t want to allow the present possessory holder to have
complete freedom to ameliorate the property, but also
doesn’t want to stick to a strictly traditional concept of
waste
 Note: Condemnation of Defeasible Fees
 If a parcel of land is taken by a city government through eminent domain the city has to
pay fair market value of the land. But if the land taken was owned in fee simple
defeasible, with future interes, how should that award be divided among the holders of the
present/future interests?
 MAJORITY VIEW- holder of the fee takes the entire award; the holder of
the future interest takes nothing
o Reversionary interest is considered too remote/contingent to be
capable of valuation
 RESTATEMENT VIEW- if the defeasible fee would probably not end w/in
a reasonably short period of time, the fee owner should have the entire
award.
 Ink v. City of Canton –
 Ink conveyed land to the city so long as it was used for a public part. The
state took most of the park by eminent domain to build a highway. Owners
of Ink’s possibility of reverter brought suit as to how the condemnation
proceeds should be divided.
 Court held that the Ink family, as owners of the possibility of reverter in the
condemned land, should receive that portion of the total proceeds that
exceeded the value of the land as a public park.
 Types of deeds
 Warranty Deed—deed guaranteeing the seller owns the land being sold and has the right
to sell it
 Quitclaim Deed (Disclaimer)—“I’m not sure what I own, but whatever it ends up being is
now yours.”

 CHAPTER 4: FUTURE INTERESTS IN FREEHOLD ESTATES

 Describing future interests
 RULE- EVERYTIME you have a future interest you need to (1) describe what that future
interest is, and (2) specify the type of freehold estate that will occur in the future
 Future Interests retained by transferor/Grantor
 Reversion
 Follows fee tail/life estate
 Automatic
 Alienable inter vivos, devisable, descendible
 Possibility of Reverter
 Follows Fee Simple Determinable
 Automatic
 Alienability- CL- not transferrable except when releasing it to the present
possessor (ie unifying all interests)
 Modern- alienable inter vivos and inheritable
 SOL for adverse possession begins to run if grantee retains possession
 Right of Re-Entry
 Follows fee simple subject to condition subsequent
 Alienability- In most states the future interest is devisable and inheritable, but
cannot be transferred inter vivos
 Future Interests created in a 3rd Party
 Remainders- future interest that will become possessor (if ever) upon the natural
expiration of the preceding possessory estate.
 Vested Remainder- Stable
o (1) Remainder is given to an ascertained person (2) There are no
conditions precedent other than termination of previous state
o Ex- O to A for life, then to B and her heirs
o Preferred when language is ambiguous
 Contingent Remainder- Unstable
o Either (1) subject to condition precedent, (2) owned by
unascertained people, or (3) both 1&2
o Ex- O to A for life, then to B’s children so long as B has children
 A has a life estate, C has a contingent remainder because
children are unascertained and there is a condition precedent
that B have children
 Vested Subject to Open Remainder- Unstable
o We have a group of remaindermen, at least one person from that
group is already ascertained (alive), and there is the possibility of
other unascertained people joining the group.
o Ex- O to A for life, then to B’s son C and any other after born
children of B
 A has a life estate, C has a vested remainder subject to open
 LIFE ESTATE RULE- “(1) If the first future interest created is a contingent
remainder in fee simple, the second future interest in a transferee will also
be a contingent remainder. (2) If the first future interest is a vested
remainder, the second future interest will be an executory interest.
o (1) O to A for life, then to B and her heirs if B survives A, and if B
does not survive A to C and his heirs.
o (2) O to A for life, then to B and heir heirs, but if B does not survive
A to C and his heirs
 Executory Interest- Unstable-
 Divests some part of the property to another by some means other than just a
natural end of the life
 2 types
o Shifting
 O to A so long as she graduates by 2020. If she does not, the
property goes on to B.
o Springing
 Transfer ‘springs’ at a specific point in time when a
condition happens after a gap in time
 O to A when she graduates law school. Until then, property
remains with O.
 O retains fee simple subject to executory limitation, A
executory interest
 RULE AGAINST PERPETUITIES
 Policy
 Prevent “dead-hand” control by the owner
 Trust grantor’s judgment of management capacity of living heirs, but cant
know whether unborn heirs will be competent
 Balance between desire to control use of property and interest in putting land
to its most productive use

 “No interest [in property] 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.” J. Gray

 Breakdown
 No interest is safe from being voided unless we can be certain that during
the perpetuities period it will vest or fail
 We have to be certain at the outset that all of the contingencies will have
been settled during the perpetuities period
o Looking for certainty
 Future Interests Attacked = unstable future interests
 Contingent remainders- which vest when they become possessory /
indefeasible/ subject to complete divestment
 Executory Interests- vest when possessory
 Vested subject to open remainders
o A gift to a class of people is not vested in any member of the class
until it is vested in every member of the class
o The class must be close
o Any conditions precedent must be satisfied by every member of the
closed class
o Rights of first refusal
 What can’t be attacked
 Property that goes back to the grantor—reversion, right of re-entry, possibility
of reverter
  Vested remainders
 Measuring or validating lives
 To prove validity you must ID some person alive on the effective date of the
grant whose life can serve to validate the interest. The validating life is
almost always someone who is germane to the interests created by the grant.
 Corporations aren’t considered a life in being, so a flat time period of 21 years
applies (unless the jurisdiction follows USRAP, which few do)
 Special Rules/Exemptions
 Charity-to-Charity exemption
o If you have a gift to a charity, with an executory interest in another
charity, the gift is allowed to survive even if it violates the rule
against perpetuities (doesn’t work if it goes Jack -> Jill -> charity

 The Fertile Octogenarian
o The rule presumes that a person of any age, whether male or
female, can produce a child
 The Unborn Widow
o W/o more, “A’s widow” refers to the unknown person who answers
that description on A’s death, not necessarily the person who is A’s
wife when the instrument is drafted. The rule presumes the
possibility that aged people might substitute fresh youngsters for
their elderly mates—so young they were not even born at the time
of the grant.
 Wait-and-see approach
o A lot of jurisdictions use
o Instead of invalidating an interest at the time of its creation on the
basis of a what-might-happen test, we wait and see whether a
contingent interest actually vests w/in the longest possible
perpetuities period (validating life + 21 years) or 90 years.
 Uniform Statutory Rule Against Perpetuities (USRAP)
o FEW JURISDICTIONS USE
o Abolishes RAP for commercial transactions
o Validates any interest that will vest w/in 90 years of its creation.
 Cy Pres
o Court can rewrite (to a degree) the conditions that violate RAP to
meet the intent of the grantor.
o Ex- acknowledge that an 80 yr old will not have children
 Salvage Statute
o If there are 2 ways of reading a contract, one of which is violating
the RAP and one which isn’t, the court will interpret the contract to
not violate RAP
 Rule of Convenience
o Closes a class where you have a vested subject to open remainder.
o When the conveyance vests in one person in the class allow them to
take the conveyance and destroy the interest of any future class
 members
 Ex- O to A’s children who reach 25. At the time of
conveyance A has 2 children (13 & 26) 26 yr old gets
everything.
 Partially Invalid Conveyance – delete language creating interest plus every
other interest that follows and depends on it. Apply what language is left
over, without regard for deleted language. This remaining language will
determine state of title. UNLESS it is clear that grantor would rather see
the whole conveyance fail.
 Example of above: J conveys Blueacre “to Jill for life, then to Jill’s first
child to reach 21 years old and 1 day old. (Jack has reversion, Jill has life
estate, Boris has nothing)

 Symphony Space V. Pergola Properties, Inc.

 Commercial transaction
 Corporations aren’t considered a life in being, so a flat time period of 21 years
applies
 A right to repurchase commercial property that must not vest/fail w/in 21
years is void.
 *Mutual ‘Mistakes of Law’ are no excuse for cancelling an agreement

 CHAPTER 5: CO-OWNERSHIP AND MARITAL INTERESTS

 Common Law Concurrent Interests
 Types, Characteristics, Creation – DEFINITIONS.
 (1) Tenancy in Common
o Characteristics- two or more tenants in common separate but
undivided interests in the whole of the property.
 The shares are allowed to be uneven and in different types of
estates.
 There is no right of survivorship
o Creation
 Modern Default Position- a conveyance to two or more
unmarried people is presumed to create a tenancy in
common
 A tenancy in common may also result from intestate
succession, or from a divorce that ends a tenancy by the
entirety.
o Transferability
 Tenants in common may devise, sell, lease, or mortgage
their share of the estate without the consent of a co-tenant.
 Interests my be alienated, devised, or inherited separately
from the other tenancy in common interests
 No matter how a tenant in common conveys the estate, it
still remains a tenancy in common.
o Rights & Duties co-tenants
 Possession
  Each co-tenant is entitle to possession and enjoyment
of the whole estate
 If one co-tenant has exclusive possession, the other co-
tenants are not entitled to rent.
 The ouster (wrongful exclusion) of a tenant does
entitle that tenant to rent.
 Profits
 Each co-tenant is entitles to his/her share of the profits
from the estate.
 Ex- D, E, and F are tenants in common in Blackacre. D
has a 45% share, E 30%, and F 25%. Each is
entitled to profits in proportion to his/her share.
 Costs and repairs
 Each co-tenant must pay a share of the taxes and
mortgage in proportion to his/her share.
 A co-tenant has a right of contribution for any repairs
made that are agreed upon
o Partition- Action for partition available- no need to show cause
 Partition-in-kind (preferred)
 Land divided up according to interests of parties
 Courts generally do not take into account where the
parties reside while splitting property
 Preference takes into account sentimental value of
home
 Policy: Home worth more to person who lives there
 Partition by sale (becoming increasingly popular)
 Sell property and split the proceeds accordingly
 Policy: Land may be worth more as whole than in
parts
 Heirs- when multiple heirs inherit property (creating
multiple tenancy in commons) partition by sale is
more practical.
 2-part test for choosing a method of partition
 1- Do the physical attributes of the land make a
partition in kind impractical?
 2- Which method of partition is in the best interest of
both parties?
 Delfino v. Vealencis
 P & D owned land as tenants in common (P owned a
larger percentage). D lived/operated a business on
part of the land. P proposed to develop the property
into residential building lots.
 P wanted partition by sale, D wanted partition in kind.
 TC- ordered partition by sale; AC reversed and ordered
partition in kind.
 (2) Joint Tenancy
o Characteristics- Two or more tenants own the estate with a right of
survivorship and are entitled to simultaneous possession and
enjoyment. Upon the death of one tenant, the share passes to the
surviving joint tenant(s).
 Per my et per tout- each tenant is seised by the whole
o Creation- Four unities essential to a joint tenancy:
 Time- the joint tenants must receive their interests at the
same time
 Title- All joint tenants must receive their interests under the
same instrument: a deed, a will, or a decree
 Interest- Each joint tenant must have identical interests in
the property. (1. Same share of the undivided whole, 2.
Same durational estate)
 Possession- At creation, each joint tenant must have the
right to possession of the whole property. After creation,
joint tenants may agree among themselves to divide
possession, or to deliver exclusive possession to one joint
tenant. So long as the arrangement is consensual, it
amounts to a voluntary waiver of a joint tenant’s legal right
to possess the whole.
o Transferability
 Not devisable or descendible
 Limited rights of alienability- during your life time you can
transfer a life interest in your tenancy to someone else, BUT
if you die before the other joint tenants that tenancy that you
transferred snaps back to the survivors
 An inter vivos transfer is invalid because it would breach the
four unities. The grantee would become a tenant in
common with the other joint tenants.
o Language
 “To A and B as joint tenants”
 Better= “To A and B as joint tenants with rights of
survivorship”
o Creditors- if a tenant dies in debt to a creditor, the surviving tenant
takes the property free and clear
o Severance of Joint Tenancies- JT may be destroyed at any time by
severing the JT, usually by conveyace. A tenancy in common
results.
 Actions for partition (See above description)
 Conveyance-
 if a JT conveys his interest to a third party or to
another JT, the joint tenancy is severed as to that
interes.
 Unilateral Severance/Conveyance to self-
 Can be done secretly
 Common Law- not allowed, had to use a strawman
(strawman- person to whom the severing
 conveyance would be mad and from whom a
reconveyance would be made)
 Riddle v. Harmon-
o Joint tenant allowed to convey to herself a
tenancy in common w/o a strawman.
o Policy- The idea that it takes two to transfer
is based on livery of seisin. LOS is outdated,
so rule should no longer apply. Intent should
apply.
 Divorce-
 if state classifys married couples as JTs, then divorce
severs and TIC results
 Mortgage- jurisdictions differ as to whether a JT is severed
when one JT mortgages his interest.
 Title theory- mortgage conveys legal title to the
mortgagee
o Destroys unity of title and time
 Lien theory (majority)- mortgager doesn’t convey
legal title. Only transfers a lien (aka security
interest)
o Policy- one JT shouldn’t be burdened by the
debt of another
 Harms v. Sprague
o Appellate court- mortgage did not sever JT,
JT has a right of survivorship and gets the
whole property.
 Formalistic approach- Harms
 Functional approach- considers the likely intent of the
party giving the mortgage
 Lease-
 Most jurisdictions today do not regard a JT as
severed by one JTs lease of his interest.
 Murder-
 If one JT kills another, the JT is severed
 Simultaneous death- Uniform Simultaneous Death Act
 Most states
 Simultaneous death results in a division of the JT into
separate shares unless there is clear evidence that
one person survived the other by 120 hrs.
 (3) Tenancy by the Entirety
o Characteristics-
 CL- husband & wife= one legal entity
 Today- recognized in approx. 20 states
 Civil states don’t use
 Rights of survivorship
o Creation-
  4 unities of JT + unity of marriage
 Any conveyance to a married couple (some states)
 When tenancy by the entirety is expressed clearly (other
states)
o Transfer
 Neither spouse can defeat the other’s right of survivorship
by conveyance to a third party
o Creditors
 Majority of states- creditor of one spouse cannot touch the
tenancy
 Minority- creditor may encumber one souse’s share but cant
touch the other spouse’s share or interfere w/ the right of
survivorship
o Severance-
 Cannot be unilaterally severed—neither spouse can alone
sever the TBE
 Divorce
 TBE  TIC
 Death of one spouse
 Relations Among Concurrent Owners
 Partition- (in kind or by sale – described above)
 A JT or TIC may demand partition at any time for any reason
 TBE not entitled to partition
 Rents, profits, and possession- absent agreement to the contrary, each co-owner has the
right to possess the property, and no co-owner may exclude the others.
 Exclusive possession by one co-owner- if exclusive possession is not by
agreement the owner in possession has the following obligations to owners
not in possession:
o Rental value of exclusive possession
 Most jurisdictions say no rent unless:
 (1) the other owners have been ousted
 (2) the owner in possession has a special duty to the
other owners
 (3) there is an agreement to pay rent
 ouster- term of art- occurs if the owner in possession
prevents the other owners from exercising their right to the
use and enjoyment of the land.
 Rents from third parties- a co-owner who receives rents from a 3rd party is
obligated to account to his cotenants for those rents and share them pro rata.
 Profits from the land- the normal rules regarding possession apply to
exlcusive possession for farming/etc. BUT if a cotenant permanently
removes an asset from the land, he must account to his cotenants for the
reduction in value.
 Action for Accounting- actions seeking reimbursement when (1) one cotenants actions
have reduced the value of the property or cut off a stream of income, (2) one content is
receiving rent/profit from the land, or (3) one cotenant is paying a disproportionately
 larger share of mortgage/taxes.
 Mortgage/Taxes- a cotenant paying more than his share of taxes/mortgage
payments has a right of contribution from the other cotenants
 Repairs-
o No right to recover from cotenants
o You can get credit in an accounting action for necessary repairs, or
you can get back expenses upon partition
 Improvements
o No right of contribution from cotenants
o General rule- the interests of the improver are to be protected if this
can be accomplished w/o detriment to the interests of the other
cotenants. (in a physical partition the improved property is given to
the improver; partition by sale improver gets added value.
 Adverse Possession (not easily achieved)
 In order for one co-owner to occupy adversely to his fellow owners, it is
essential that he give the other owners absolutely clear and unequivocal
notice that he claims exclusive and sole title. (Adverse possession begins at
ouster)
 Fiduciary Duties-
 General Rule- cotenants do not owe each other fiduciary duties
 2 Exceptions
o 1- when one cotenant saves a property from foreclosure by buying
it, the others have a right to reimburse the cotenant who bought it
and remain cotenants
o 2- A cotenant in exclusive possession cant adversely posses with
out above mentioned clear notice.
 Cases
 Spiller v. Mackereth
o D & P owned a building as tenants in common. When the tenant
that had been renting the building vacated, Spiller entered and
began using the building as a warehouse. Mackereth demanded that
Spiller either vacate half of the building or pay half of the rental
value. Spiller refused, Mackereth brought suit.
o Court- there must be evidence of an ouster before P can be required
to pay rent. Each cotenant has the right to occupy and use all of the
property, mere exclusive use can never be evidence of ouster.
 Swartzbaugh v. Samson
o Husband and wife are joint tenants with the right of survivorship
over 60 acres of walnut groves. The husband leases some of the
land to Sampson, with an option to renew, for the use of a boxing
pavilion. The wife objected to the lease, she did not approve of the
proposed usage of the land. The wife did not sign any of the two
leases, and all the money from the leases was going to her husband.
Later, she brought an action to cancel the two leases.
o Court- As concurrent owners, each cotenant has the right to transfer
their right to use the whole. Wife cannot cancel the leases.
 However, she can bring an action for accounting for a share of the
rents.
 Marital Interests
 1. Common Law Marital Property System
 Traditionally
o The pure common law system of marital property is extinct, but
aspects of it continue to exist. At marriage, a woman lost all legal
control over her property to her husband but acquired some
tentative property rights
o Rights
 Women
 Support Alimony- Right of lifetime support from her
husband
 Dower-
o Right given a widow
o Life estate in 1/3 of each and every freehold
estate the husband had owned at any point
during marriage
o 1/3 of personal property if there were surviving
issue, ½ if no surviving issue
 Men
 Curtesy-
o right given to widower
o a life estate in his wife’s real property if they had
a live-born child
o all of wife’s personal property
o Divorce
 Property remained in the spouse holding title to that property
 Payment of alimony to wife for life
 Modern “Common Law” system- (40 states, including NY)
o Rights-
 Women
 Dower has been abolished by most states and replaced
by spousal elective share which entitles a surviving
spouse to take a specified portion of the decedents
estate even if the deceased left a lesser share by will.
 Rehabilitative Alimony- alimony that supports for a
limited period of time until the spouse can enter the
job market and become self-sufficient
 Men
 Curtesy no longer exists
o Divorce
 Property subject to Equitable Distribution
 Division of marital property- Divided by the court, in
its discretion, on equitable principles. The concept
of fault is sometimes expressly included, ignored, or
 expressly excluded as a factor during equitable
division.
 Factors- income of each spouse, duration of the
marriage, occupational skills
 Rehabilitative Alimony (see above)
 What law controls?
o Real property- law of location
o Other property- law of home location
o Marital property-
 Property acquired during the marriage
 Exceptions
o Property acquired by gift, bequeath, devise, or
descent
o Property acquired in exchange for property
before marriage
o Property acquired after a legal decree of
separation
o Property excluded by a valid agreement amongst
the parties
 Professional Degrees & Celebrity Status
 In re Marriage of Graham- (Colorado)- Wife
supported husband while he was in school getting
his MBA. Divorce court holds that a professional
degree is not property
 Reimbursement theory- New Jersey & signif # other
states- professional degrees aren’t marital property,
but reimbursement alimony should be paid for all
financial contributions towards a spouse’s education
o Mahoney v. Mahoney
 NEW YORK EXCEPTION- rejects reimbursement
theory- professional degrees obtained during
marriage are marital property and subject to
equitable division
o Obrien v. Obrien
 Elkus v. Elkus- New York- Opera singer wife, voice
coach husband
o Enhanced professional skills are property subject
to equitable distribution
 2. Community Property System (Civil Law states- approx 10)
 Fundamental idea- marriage is a partnership of equals, and that the property
acquired during marriage by the efforts of either spouse belongs to the
marital community. Each spouse has an equal claim to the assets of the
marital community.
 Statutory Replica
o Uniform Martial Property Act- adopted by Wisconsin only
 3 Types of property
 o 1- Separate Property
 property acquired before marriage
 property acquired during marriage by gift/inheritance/devise
o 2- Mixed Property-
 ex- Wife’s separate money saved from before marriage is
used for a down payment on a house, and community
property money is used for mortgage payments.
 Ex- W has dog before marriage, husband pays for dog food
during marriage
o 3- Community Property
 earnings during marriage of either spouse and all property
acquired from such earnings
 Management
 Husband and wife have equal management powers.
Either can transfer community property, but neither
spouse acting alone can convey their interest in the
community to a 3rd party.
 Divorce
 Separate property stays with owner
 Each spouse is entitled to half the community property
 Mixed property- the portion of the mixed property
attributed to the community is divided in the way the
community property is
 Death
 Surviving spouse retails all of his separate property
 ½ of the community property is disposed of by
deceased’s will
 other ½ goes to surviving spouse
 No rights of survivorship
 3. Rights of Domestic Partners
 Common Law Marriage
o Common law conferred marital status on a man and woman who
openly lived together as husband and wife, even though they were
not ceremonially married.
o Allowed in 10 states (Ala., Colo., Iowa, Kan., Mont., Ok, RI, SC,
Tex., Utah)
o Why majority abandon? Policy reasons-
 Generated litigation
 Encouraged perjury about an agreement to marry
 Modern transportation makes it easier to get married
 Marriage makes proof easy for government benefits,
pensions, and property claims
 CL marriage dignified immorality
 Contracts
o Unmarried cohabitants may create express contracts to govern their
property upon death or termination of the cohabitation.
 o Same/Opposite sex couples can make contracts
o Contract cannot create the status benefits of marriage
 ALI Approach-
o Legal rights/obligations may be created by the conduct of the
parties w/ respect to one another, even w/o a formal document or
agreement.
o Requires that domestic partners of the same OR opposite sex share
for a significant period of time a primary residence and life together
as a couple.
 Same Sex Couples-
o Same-sex marriage is permitted only in 5 states and D.C., but some
states provide to same-sex couples the status benefits of marriage
under different names. Even then, federal law deprives same-sex
couples of the status benefits of marriage available under federal
law.
o Varnum v. Brien
 Iowa Sup. Crt. struck down Iowa’s limitation of marriage to
opposite-sex couples as violating Iowa Constitutions equal
protection clause.
 Applied intermediate scrutiny- challenges
classification is presumed void unless state can
prove that it is “substantially related to an important
state interest”
o Federal Defense of Marriage Act (DOMA)
 Marriage is limited to opposite sex partners, thus depriving
same-sex married partners of various federal tax and welfare
benefits.
 No state must recognize a same-sex marriage that is valid in
the state where it was contracted.
 4. Benefits of marriage—include…
 life & death decisions about a partner
o health care, burial arrangements, autopsies, remains disposal
 partner’s state-provided health insurance
 pension benefits
 state tax benefits
 federal tax benefits
 federal welfare benefits

 LEASEHOLDS: THE LAW OF LANDLORD AND TENANT

Chapter 11 Leaseholds – 813-91
 4 Types of Leasehold Estates
 Tenancy at Will (NO advance notice)
 Definition- is a tenancy of no fixed period that endures so long as both
landlord and tenant desire
 Creation- Agreement- uncommon b/c of the lack of security of the tenure
 o Ordered by the court- failure of some other leasehold
 Default category when devise is ambiguous
 Termination
o Bilateral- either party may terminate it at any time
 CL- If the lease provides that it can be terminated by one
party, it necessarily can be terminated at the will of the other
o Modern Statutes- usually require a period of notice in order for one
party or the other to terminate
 Death- If either party dies the tenancy at will ends

 Periodic Tenancy (Month to month or year to year etc)
 Definition- leasehold for a recurring period of time, such as month to month
or year to year, that continues for successive intervals until the landlord or
tenant give notice to terminate the tenancy
 Creation-
o Express terms OR
o Implication based on the parties’ conduct
 Termination
o Continues until either the landlord or tenant gives advance notice to
the other party of termination
o Common Law - notice needs to be equal to the period but not
longer than 6 months
o Notice supposed to happen at the end of a period
o Today- many state statutes have shortened the length of notice
required to a month
 Death- no effect
 Courts like this one.

 Term of Years (aka fixed term)

 Definition- an estate that lasts for some fixed period of time. MUST The term
must either be set out clearly in the lease (with an end date) or be formula
that will produce a fixed calendar date for the beginning and ending of the
leasehold. Preferred by commercial tenants.
 Duration- CL permitted a term of years of any length, but some states have
statutes restricting the length.
 Termination-
o A term must be for a fixed period, but it can be terminable earlier
upon the happening of some even or condition.
o No Notice is necessary to terminate this tenancy as the date of
termination is known when the lease begins and is fixed in the
lease.
 Death- death of a landlord or tenant has no effect on the duration of term of
years
 Tenancy at Sufferance (holdover tenant)
 Definition- tenancy that results when a tenant remains in possession after
 termination of his or her lease (first there had to be a lease)
 Landlord’s options
o Eviction + damages
o Consent (express or implied) to the creation of a new tenancy
 Consent Result
o In most cases holding over gives rise to a periodic tenancy
o Problem
 Is the new term month-to-month or year-to-year?
 Depends on jurisdiction
o Resulting tenancy is usually subject to the same terms/conditions as
those in the original lease
 Statutes- today many states have legislation to deal with holdovers, but it
varies widely across the map
 In order to be a trespasser – the landlord must ask her to leave- silence does
not equal trespasser.
 The Lease
 Is a lease a “lease”
 Just because it looks like a lease/calls itself a lease, a court may find it to not
be a lease
 Considerations to decide if it’s a lease or not
o Intent of the parties
o Number of restrictions on use
o Exclusivity of possession
o Degree of control retained by granting party
o Presence/absence of services
 Why it matters?
o Leases give rise to the landlord-tenant relationship
 Conveyance v. Contract- A lease is both
 Conveyance- a lease transfers a possessory interest in land (aka creates
property rights)
 Contract- a lease usually contains a number of promises (aka creates contract
rights)
 Historically it has been a conveyance, but today:
o Contractual nature emphasized
o Courts use contract principles to reshape the law of leases and
answer questions
 Statute of Frauds (leases)
 Rule- In all states the statue of frauds prohibits long term leases they must be
in writing.
 Exception
o Most jurisdictions permit oral lease for terms less than a year and
those that don’t usually hold entry under an oral lease + payment of
rent creates a periodic tenancy that is not subject to the statute
 Form leases
  Landlords typically use standardized documents on a take it or leave it basis
with no negotiation over terms
 Explanations
o Innocent- seller is just avoiding the costs of negotiating and drafting
separate leases with each lessee
o Sinister- seller uses a form lease so lessee has no choice but to
accept the seller’s terms
Possible Issues: No complete lease and its longer than a year – remedies: first look at what
the landlord and tenant intended and then most courts prefer the periodic tenancy (by
implication, especially if the bargained for amount was month to month instead of year to
year) if there is no enforceable agreement as to the term and the tenant has taken possession
and paid rent.
 Selection of Tenants/Unlawful Discrimination & The FHA
 Civil Rights Act of 1866
 Bars all racial discrimination, private and public, in the sale or rental of
property
 Covers commercial as well as private property
 Does not prohibit discriminatory advertising
 Federal Fair Housing Act (originally enacted in 1968, amended since)
 Prohibits private discrimination in the sale or rental of residential housing on
the basis of race, color, religion, national origin, handicaps, familial
status, and on the basis of sex.
o More on “Handicaps”
 Handicap = physical or mental impairment that substantially
limits at least one major life activity (excludes illegal drug
addiction)
 Handicap Discrimination includes
 Refusal to allow the handicap person to make
reasonable modifications on their own dime
 Refusal to make reasonable accommodations in rules
policies, practices, or services
 Failure to design and construct dwellings with
common areas that are readily handicapped
accessible. (post 1988)
 AIDS is a handicap
 Don’t need to rent to people whose handicap creates a direct
threat to the health/safety of others or results in property
damage
 No-pets policy only prevails against a aid-pet if there is no
reasonable way to accommodate the type of pet in question
or if the tenant does not in fact need the pet
 Exceptions
o A person who does not own more than 3 single-family dwellings
may discriminate on otherwise forbidden grounds in the sale or
lease so long as he neither uses a broker nor advertises in a
discriminatory way
 o A landlord can discriminate on otherwise forbidden grounds in the
rental of residential housing so long as the landlord is an owner and
occupant of the house or apartment building and it consists of four
units or less. However, they cant advertise discriminatorily
 Bringing an Action
o Actions Available
 Civil suit for injunctive relief/damages
 Conference & conciliation proceedings
 Suits by the U.S. Attorney General
 Criminal Penalties
o Proof needed
 No discriminatory motive necessary, proof of discriminatory
impact or disparate treatment is enough
 D must justify the action as being pursuit to a bona fide
compelling government purpose, w/ no less discriminatory
alternative available
o Who pays?
 P wins- D pays attorneys’ fees
 P brings a frivolous/bad faith complaint- P pays attorneys
fees
 Acceptable/Unacceptable Advertising Terms
o Unacceptable= able-bodied, bachelor, near churches, couples only,
empty nesters, exclusive, executive, responsible, no smokers
o Acceptable= near bus lines, credit check required, no drugs/no
drinking/no smoking (but not no alcoholics/smokers), near school,
senior discount, presence of nursery
o Caution= fisherman’s retreat, no gays, no lesbians, handyman’s
dream, prestigious, nanny’s room, quality neighborhood
 State/Local expansion of the FHA
 States/Cities cant narrow the act, but can broaden who it covers
 Age, sexual orientation, marital status, occupation
 Delivery of Possession
 Hannan v. Dusch (Virginia)
 D leased to P. When the date arrived the old tenant had not moved out, and P
was unable to take actual physical possession. The lease contained no
explicit term obligating D to deliver physical possession to P. P sought
damages attributable to D’s violation of an alleged implied-in-law
obligation to deliver physical possession
 Holding- Following the American Rule- The landlord is not bound to put the
tenant into actual possession, only in legal possession
 Area of disagreement*- a tenant does not expect to have to add a physical
delivery clause to a lease; a tenant reasonably expects a landlord to give
them a property that someone else isn’t living in
 Implied obligation to deliver LEGAL possession-
 Landlord must deliver to the tenant the legal right to possess the leased
premises. LL promises that the tenant will not be evicted by somebody with
 a better title to the premises than the LL.
 Obligation to deliver ACTUAL possession?
 2 opposing views
o English Rule- (majority in American States)- LL has an implied
obligation to deliver actual possession to the tenant on the first day
of the lease term
 Rationale
 Tenant signs a lease expecting property
 LL is better equip to oust a holdover
 LL is more likely to know when there is a holdover
problem
 Tenant Remedies
 Terminate the lease & recover damages
 Adhere to the lease and w/hold rent while out of
possession, and recover damages related to the lost
possession
 Disadvantage
 Disincentive to re-lease until former tenant has
vacated. Means the LL has to have the apartment
empty, not producing $, for some period of time
between tenants.
o American Rule- (Hannan v. Dusch)- no obligation to deliver actual
possession
 Rationale
 Tenant has sufficient legal/equitable remedies
available to protect himself against the 3rd party
wrongfully in possession and a greater incentive to
use them.
 Why blame the LL for a fault he didn’t do?
 At settlement America was a lot bigger than England
and LL’s weren’t close by, so the American rule was
better than the English rule
o Nowadays LL are close by and can travel
faster
 Remedies- Tenants remedies against the person wrongfully
in possession (not against the LL)
 Sue to recover possession
 Take possession of remainder
 Don’t pay for term kept out

 Subleases & Assignments

Consent Privity of Estate Privity of Contract Liability
Assignment by LL Consent by Tenant Assignee and tenant LL and tenant are in LL is liable for all
(to a new LL) not required are in privity of privity of contract covenants in the lease;
estate assignee is liable to
tenant for all covenants
that run with the land
Assignment by LL’s consent may Assignee and LL Tenant and LL are Tenant is liable for all
Tenant be required are in privity of in privity of covenants in the lease;
estate contract (unless the assignee is liable to LL
LL gives them a for all covenants that run
novation) with the land
Sublease by Tenant LL’s consent may LL and tenant are in LL and tenant are in Tenant is liable for all
be required privity of estate privity of contract; covenants in the lease,
Tenant and sublessee is not; Tenant
sublessee are in can enforce landlords
privity of contract covenants, but sublessee
cannot

 Essential Differences
 Assignment-
o An assignment places the assignee in privity of estate w/ the LL,
which means that the assignee is personally responsible for
performance of those obligations in the assigned lease that “run”
with the leasehold estate.
o An assignment occurs when the original tenant transfers his entire
remaining estate to the assignee.
 Sublease-
o A sublease does not create privity of estate between the LL and the
subtenant, so the subtenant is liable only to the sublessor for
performance of the sublease and has the right to possession only so
long as the sublessor is not in default under the master lease.
o Occurs when the original tenant transfers anything less than his
entire remaining interest in the leasehold estate
 Similarity
 In both cases the assignor or sublessor remains in privity of contract w/ the LL
and thus continues to be liable for performance of the original lease.
o Exception-
 Novation- the LL can release the original tenant from his
privity of contract obligations
 Neither sublessee or assignee is in privity of contract w/ the LL unless they
assume the obligations of the original lease.
 Distinguishing the two
 Ernst v. Condit-
o General Rule- assignment conveys the whole term, leaving no
interest nor reversionary interest in the grantor/assignor. Sublease
may be generally defined as a transaction whereby a tenant grants
interest in the leased premises less than his own, or reserves to
himself a reversionary interest in the term.
o Specific Rules
 Common Law/Formalist- form/intent of the doc do not
matter, what it does matters… “If the instrument purports to
transfer the lessee’s estate for the entire remainder of his
term it is an assignment, regardless of its form or the parties’
 intention.”
 Modern Rule/Rule of Intent- in construing a written
instrument, the court is to ascertain the intention of the
parties and use the intent of the instrument as its guide
 Running Covenants
 A lease covenant runs w/ the estate and binds the assignee if:
o the promise is intended to run,
o the assignee is in privity of estate or contract w/ the party seeking to
enforce the covenant,
o the substance of the covenant touches and concerns the use or
enjoyment of the estate,
o and the assignee has notice of the covenant.
 Covenant to pay rent = most signif running covenant
 Landlord Approval
 Tenant is free to transfer his leasehold unless the lease restricts that right.
LL’s commonly condition assignment or sublease on their consent to the
transfer, but LL’s may not deny consent for reasons that constitute unlawful
discrimination.
 Commercial LL’s
o Kendall v. Ernest Pestana, Inc. (Supreme Crt. of Cali)
 Issue- Whether in the absence of a provision that such
consent will not be unreasonably withheld, a lessor may
unreasonably and arbitrarily w/hold his or her consent to an
assignment?
 ROL- Lessor must have a reasonable objection to the
assignment.
o Traditional view
 Consent can be w/held for any reason
o Modern trend
 When a lease provides for assignment only w/ the prior
consent of the lessor, such consent may be w/held only
where the lessor has a commercially reasonable objection to
the assignment
 Tenant Who Defaults
 Tenant In Possession
 Berg v. Wiley
o Facts: Landlord locked premises when tenant was gone because
tenant had remodeled in breach of a lease term requiring approval
before changes to premises and health code violations (not lawful
and prudent use as required in lease)
o NEW ROL- the only lawful means to dispossess a tenant who has
not abandoned nor voluntarily surrendered but who claims
possession adversely to a landlords claim of breach of a written
lease is by resort to judicial process
 Right to Use Self-Help
o Common Law Rule
  Landlord may use self-help measures to retake leased
premises from a tenant in possession if these conditions are
met:
 LL legally entitled to possession
 LL means of reentry are peaceful
o Modern Trend
 Self-help is banned in the majority of states; LL’s must resort
to judicial means
 Policy
 Law does not favor self-help methods
 Reduces potential for violence
 Tenant does not have to be vigilant
 Landlord has remedy of damages already
 Summary Proceedings are available
 Summary Proceedings
o Every state has some form
o Purpose
 Quick & efficient means by which to recover possession
after a termination of a tenancy
 To promote quickness the typical statue requires only a few
days notice to the tenant
o Problems
 Not as quick/cheap as they say they are
 Tenant w/o lawyer fares significantly worse
 Tenant Who Has Abandoned Possession
 Sommer v. Kridel/Riverview Realty Co. v. Perosio (Joint Decision)
o Facts 1- D entered into a lease with LL P. D’s wedding got called
off and he could no longer take possession; he asked to be released
from the lease. P didn’t respond, and when a 3rd party inquired
about the apartment he told her it had already been rented. He
waited over a year to show the apartment.
o Facts 2- D entered into a lease w/ P for a 2-year term. D took
possession and vacated a year early, and stopped paying rent upon
vacating.
o Issue- Does a LL have a duty to mitigate damages?
o ROL- Yes
 Duty to Mitigate Damages (residential)
o CL- no duty to mitigate
 Policy-
 Tenant’s wrongdoing should not impose a duty on the
LL
 LL should not be forced to seek out new tenants
continually
 LL mitigating might constitute an unwilling
acceptance of surrender (tenants offer to end a
tenancy)
 o Modern Majority- When a LL seeks to recover rent from a
defaulting tenant, he has a duty to mitigate damages by making
reasonable efforts to re-let the vacant apartment.
 BOP- Majority say its up to tenant to prove LL didn’t make
reasonable efforts, Minority (sommer) say burden is on LL
 Policy-
 Prevents physical/economic waste
 Commercial Property?
o NY- clearly NO duty to mitigate in a commercial lease context;
believes that the parties engaged in commercial transactions must
be able to rely on the stability of the law
 Landlord’s Remedies and Security Devices
o Rent/Damages- LL has the right to sue for back rent and for
damages by breach of lease obligations. They also have the right to
terminate the lease and recover possession
o Doctrine of anticipatory breach- some states (via statute) allow LL
to recover amount of unpaid rent
o Security deposits
 LL is obligated to return upon lease termination, less any
amounts necessary to compensate for tenant defaults
 Abused often
 Protections for Tenant- amount limited, LL must pay
interest, tenants claim is made prior to other creditors,
itemized list of deductions required, double/treble penalties
for violation
o Other- LL’s avoid the legal strictures of security deposits by
renaming them
 Advanced rent
 Rent acceleration- provision that upon default, all rent for
the entire term is due and payable
 LANDLORD’S DUTIES, Tenants Rights, & Remedies (Esp. regarding condition)
 Quiet Enjoyment & Constructive Eviction
 Covenant of Quiet Enjoyment-
o Every tenant has the right to quiet enjoyment of the leased
premises. The obligation can be express, or implied in law. Under
this covenant, the landlord has a duty to refrain from interfering
with the beneficial enjoyment of the land, wrongful actual or
constructive eviction of the tenant.
o Examples of breach of quiet enjoyment
 Failure to make necessary repairs
 Failure to supply heat
 Offensive odors
 No hot water
 Lew property use
 Nuisance construction
o ** You can have a breach of quiet enjoyment severe enough to be
 actionable, BUT that are not severe enough to constitute
constructive eviction**
o HYPO-
 Part of the ceiling in your kitchen falls and isn’t repaired.
Constructive eviction?
 Yes. You need a kitchen to cook.
 Part of the ceiling in your 2nd bedroom falls. Constructive
eviction?
 No. Partial Eviction- ouster of the tenant from any
part of the premises. This allows the tenant partial
rent and gives them the further option of termination
or suit for damages.
 Constructive eviction
o Common law- landlord only required to put the tenant in
possession, there was no requirement about keeping things in good
repair etc.
o Today- acts or omissions of the landlord that so offend the tenants
use of the property that a tenant might as well have been evicted
o 3 elements
 1. Wrongful act or failure of the landlord
 2. Substantial and material deprivation of the tenant’s
beneficial use and enjoyment of the premises
 the tenant must be so essentially deprived of the
beneficial enjoyment of the premises that they are
rendered unsuitable for occupancy for the purposes
which the were leased.
 3. Complete vacation of the premises by the tenant within a
reasonable time.
 Reasonable time depends on circs
o Eviction is constructive, no actual, because the tenant has not been
physically ousted.
o Problem- if you leave too early the court may say “you didn’t give
the LL enough time to fix it.” If you leave too late the court may
say “you stuck around too long.”
 Tenants remedies after vacation
o Rent liability stops, lease is terminated, and tenant is entitled to
recover damages caused by the constructive eviction
 Reste Realty Corp. v. Cooper (NJ 1969)
o D leased office space in the basement of Ps building. After every
rainstorm water runoff from the driveway flooded the basement. D
renewed her lease only after being promised that the condition
would be fixed. Eventually it got so bad that she had to rent space
in a hotel for meetings.
 A single flooding would probably not have been enough for
constructive eviction
 D did not waive her claim of constructive eviction be
 remaining in possession as long as she did, because each
time she was promised the problem would be fixed.

 Doctrine of an Illegal Lease
 If there were substantial violations of housing code at the outset of the lease,
the lease would have been illegal.
 LL is not entitled to collect full rental value, only what is reasonable based on
the condition
 Tenant becomes a tenant at sufferance
 The Implied Warranty of Habitability
 In the rental of any residential dwelling unit, an implied warranty exists in the
lease, whether written oral or written, that the landlord will deliver and
maintain, throughout the period of the tenancy, premises that are safe, clean,
and fit for human habitation
 Hilder v. St. Peter (Vermont 1984)
o To determine breach:
 look at any relevant local housing code or minimums state
housing code standards
 inquire whether the defect has an impact on the safety or
health of tenant
o Tenant must..
 Show that they notified LL of the defect
 Allowed a reasonable time for its correction
 Rationale of IWH
o Implied warranties are common feature of contract law
o Tenants lack the skills to repair
o Necessary to redress unequal bargaining power btw rich LLs and
poor tenants
o Encourage compliance w/ codes
 Scope- doesn’t apply to all residential leases, majority of jurisdictions don’t
extend it to commercial leases
 Tenants remedies
o Contract remedies
 Rescission
 Reformation
 damages
o Terminate & leave- vacate & recover damages for relocation cost
o Stay & withhold rent until repairs are made
o Stay, repair, and get reimbursed
o Collect punitive damages for circumstances involving willful,
wanton, and fraudulent conduct on the part of the LL
 Retaliatory Eviction
 Most jurisdictions hold that a LL may not take retaliatory action against a
tenant after a good-faith complaint or other action by a tenant based on the
condition of the premises.
  Eviction, increase rent, decrease services
 NY HAS DIFF APPROACH
o once repairs are made a LL may evict the tenant w/o evidence of
intent as long has he shows that he has given the tenant a reasonable
opportunity to secure other housing

 Landlord’s Tort Liability

 Strict Liability- Majority of jurisdictions neither impose strict liability nor
recognize a general duty of care on the part of landlords; rather they follow
traditional common law belief that landlords are only liable fore tenant
injuries when they breach a handful of exceptions
 Latent defects- LL is liable for preexisting dangerous conditions known to him
that could not have reasonably been discovered by inspecting tenant
 Common Areas- LL are liable for injuries resulting from their negligence w/
respect to common areas under their control
 Statutory or Judicially created duty of landlord to repair- most jurisdictions
impose on the LL a duty to repair, especially in residential leases.
 Fraudulent misrepresentation- LL misrepresents some aspect of the property
in some material way and someone is injured as a result
 Public Use exception- When LL knows the customers of the tenant will be
coming onto the property he is liable for not warning them of the dangers of
the property and not fixing those dangers
 Third Party Acts- The landlord is not liable for the intentional acts of third
parties unless the LL failed to address a particular security issue, provide a
security specified in the lease, or those tortious acts by the third party were
foreseeable and ignored
 TENANT’S DUTIES; Landlord’s Rights and Remedies
 Tenants Obligations
 Pay the rent- dependant on LL’s performance of his obligations
 Waste avoidance- 2 components
o Duty to repair- common law, not modern
o Duty to avoid damage- voluntary acts of the tenant that
substantially damage the premises constitute waste/tenant is liable
 Affirmative Waste: Any structural change made to the estate
that intentionally or negligently causes harm to the estate or
depletes its resources, unless the depletion is a continuation
of a preexisting use
 Ameliorative Waste: An improvement to the estate that
changes its character, even if the change actually increases
its value
 Refrain from illegal uses
 Duty not to commit a nuisance
 Landlords Remedies
 Rent acceleration (described above)
 Security Deposits (described above)
 Eviction
  Problem of Affordable Housing
 Chicago Board of Realtors, Inc. v. City of Chicago –
 Chicago enacted an ordinance that codified the implied warranty of
habitability, required interest payments on tenant security deposits, and
permitted tenants to deduct the cost of minor repairs from rent and to
withhold rent in an amount equal to the damages inflicted by a LLs
violation of a lease term.
 Judges Posner and Easterbrook concurred separately expressing the policy
view that such requirements benefit in-place tenants at the expense of
would-be tenants, provide an incentive for LL’s to skimp on maintenance,
deter the construction of new rental housing, benefit LL’s in neighboring
jurisdictions that lack rent controls or similar regulations, and produce an
inefficient allocation of residential living space.
 Benefit the middle class by reducing the price of buying houses by increasing
its supply (simultaneously decreasing supply of rentals)
 If price is artificially depressed or the costs of LL’s artificially increased,
supply falls, and the poorer & newer tenants are hurt.

 CHAPTER 10: NONPOSSESSORY ESTATES: THE LAW OF SERVITUDES

 1. Introduction to Servitudes
 Definition- private arrangements concerning the use of land that endure as title and
possession of the burdened land passes from the initial contracting party to new owners or
possessors
 A property interest that you can own w/o actually possession
 About the right to use someone else’s property (to use a stick in their bundle)
 Also about the right to exclude someone from using their property in a certain
way
 More than a contract--- bind to the land, not to the other party
 Purpose- meant to bind successor titleholders of the land in question. The agreements
create interests in land, binding and benefiting not only the parties to the agreement but
also their successors.
 Two main categories
 Affirmative Servitudes
o Affirmative easements
o Profit
o License
 Negative Servitudes
o Negative Easements
o Real Covenants
o Equitable Servitudes
o *note* Some courts want to combine real covenants and equitable
servitudes into one category called “Covenants running with the
land”
EASEMENT LICENSE PROFIT REAL
(AKA PROFITS A COVENANT/EQUITABLE
PRENDRE) SERVITUDE
DEFINITION Affirmative- a grant of an
interest in land that allows
someone to use another’s
land
Negative- grant conferring
the right to prevent
specified uses of the
servient estate.
Permission given by The right to Promise to do or not to
the occupant of land enter someone’s do something on the land
allowing the licensee property and that binds original
to do some act that take resources. parties & their
otherwise would be a (Easement plus) successors. (Difference
trespass. (permission lies in relief sought-
to go onto another’s RC= damages,
land) ES=injunction)

EXAMPLE Owner of A grants to owner O allows the O allows A to O conveys an adjoining

of B the right to drive electrician to come come onto O’s parcel to A. A promises
across parcel A onto his land to fix an land to cut and not to build a swimming
outlet remove timber pool on the property.

WRITING Generally Required Not Required Required Required

Exceptions- (an invalid oral Exception- equitable
Less than 1 year; easement = a license) servitude may be
Implication/Necessity; implied from the
Prescription common scheme of
development of
residential subdivision
TERMINATION Stated Conditions Usually revocable at Same as Release
Release will. May be Easement Merger
Merger irrevocable if Condemnation
Abandonment coupled with an
Estoppel interest or if licensor Also, equitable defenses
Prescription estopped by may apply to
End of necessity licensee’s enforcement of servitude
expenditures.

 Easements
 Types- easements may be appurtenant or in gross and also may be affirmative or negative
 Appurtenant easements- an easement that benefits the owner of another parcel
of land, rather than conferring a personal benefit. The benefited parcel is
the dominant estate, and the burdened parcel is the servient estate. In
cases of ambiguity, courts prefer to find easements to be appurtenant.
 Easements in Gross- an easement in gross benefits its owner personally, and
not as an owner of land. That personal right may be transferred if the
parties so intended.
o Ex- easement allowing B to swim in A’s pool.
 Negative Easements- confers the right to prevent specified uses of the servient
estate.
o 4 recognized at common law
 for light, for air, for support, and for the continuing flow of
an artificial stream
o American Addition- Easement of an unobstructed view
o Conservation and other Novel Easements of the day-
  Conservation easement- easements that do not benefit any
dominant estate but are for the benefit of conservation
organizations.
 Façade preservation easement- preventing the façade of a
house registered as historic from being altered
 Primary Residence Easement- reaction to growing
popularity of vacation homes whose owners leave the
property vacant for most of the year; restricts the use of a
home as a vacant home
 Creation of Easements
 Express Easement-
o Requires a written instrument signed by the party to be bound
 Easement by Estoppel-
o If you allow someone to rely on your property for long enough and
allow them to make an investment in it than you are not allowed to
stop that use.
o Ex- Holbrook v. Taylor (Kentucky 1976)
 Holbrook allowed Taylor and his builders to use a road
across his property in order to construct Taylor house. Upon
completion of the house, use of the road continued.
Holbrook even allowed Taylor to widen and gravel part of
the road.
 Holding- While this started off as an oral license, it became a
easement by estoppel because it was continued past its
intent and allowed to be invested in.
 Easement by Implication
o Two circumstances give rise to easement by implication
 (1) Preexisting quasi-easement- a common owner of land
must use some part of it for the benefit of the remaining part
(quasi-easement), and then divide ownership of the lot,
intending for the use to continue. The prior use must be
reasonably necessary for the use and enjoyment of the new
dominant estate.
 Courts vary on whether easement must be visible or
just reasonably foreseeable
 Ex- Van Sandt v. Royster
 An implied easement to use of a sewer pipe passing
under the land of one holding a servient interest
when the purchaser is aware that his house has
modern plumbing and sewer access and could have
reasonably foreseen existence of easement, despite
the fact that no reservation was made in the deed.
 (2) Necessity- claimed easement is necessary for the
enjoyment of the claimant’s land and that the necessity arose
when the claimed dominant parcel was severed from the
claimed servient parcel
 Easement by Prescription
 o Analogous to adverse possession, except with use instead of
possession and no element of exclusivity.
o Elements- the use must be… for the prescriptive period
 Actual
 Open and notorious
 Continuous
 Hostile/under an adverse claim of right
o SOL starts running when permissive use ends and hostile/adverse
use begins
 Scope of Easements-
 The expectations that create the servitude will also define its scope and terms.
 If you start using the easement in a way beyond the scope than you may not
be able to rely on it
 2. Covenants Running with the Land
 Two Types
 (1) Real Covenants- Covenants enforceable @ Law
o Defined
 A contractual promise about land usage that runs with the
land so that it binds subsequent owners of that estate
 May be affirmative or negative promise
 The promise that forms the real covenant will benefit some
land and burden other land—either or both the benefit and
burden of the promise may run with the land
 Damages as remedy
o Creation
 A real covenant may only be created in writing and may not
be created by implication or prescription.
o Burden Running w/ the Land (burden= promise that must be
performed)- For the burden to run w/ the and to successors, the
following elements must be proven:
 Writing- covenant must be in writing
 Intent- the original parties must have intended the burden to
run
 Horizontal Privity- horizontal privity—privity of estate
between the original parties—is required for the burden to
run. Horizontal privity is satisfied whenever the two
original parties either (1) have a preexisting mutual
interest in each other’s estates, or (2) the real covenant is
created in the instrument by which one owner transfers
title to the other owner.
 Vertical Privity- privity of estate between the original
promisor and the successor to the burdened estate. Vertical
privity of estate is generally satisfied when the successor
acquires an estate of at least the same duration as the
original promisor.
 Touch and concern- the substance of the promise must
 touch and concern the burdened land and, in most cases, the
benefited land as well. This means that the promise must
affect the use and enjoyment of land, or must affect the
advantages and burdens of land ownership. The underlying
theory is to identify those promises that are so economically
beneficial to land ownership that successor owners might
well impose them voluntarily if given the chance to do so.
 Notice- the successor to the burdened estate must have
notice of the real covenant when she acquires the estate.
Notice may be actual or constructive. Notice is most often
constructive—the covenant is recorded in the chain of title
to the estate.
o Benefit running w/ the Land (benefit = the right to enforce the
promise)- For the benefit of a real covenant to run with the land, the
following elements must be proven”
 Writing- covenant must be in writing
 Intent- the original parties must have intended the benefit to
run
 Vertical Privity- privity of estate between the original
promisor and the successor to the benefited estate, but
privity is satisfied so long as the successor acquires some
interest in the originally benefited estate.
 Touch and Concern- the substance of the promise must
touch and concern the benefited land.
 The traditional/majority rule is that “if the benefit is in
gross, the burden will not run.”
 (2) Equitable Servitudes- Covenants enforceable in Equity
o Defined
 A promise about land use that will be enforced in equity (by
an injunction) against a successor to the burdened estate
who acquired it with notice of the promise. Equitable
servitudes are more common than real covenants, because
most people prefer to enjoin an offending use rather than
simply receive damages for its existence.
o Differences from Real Covenants
 The remedy for an ES is an injunction, not damages
 Neither vertical nor horizontal privity is needed for either the
burden or benefit of an equitable servitude to bind or benefit
successors
 And equitable servitude may be created by implication in
some states.
o Creation
 Generally
 Writing is generally required since it is an interest in
land, and the Statute of Frauds applies.
 Exception (in some states)
 Some states recognize an exception to this rule,
 permitting creation of negative equitable
servitudes by implication from a common
development scheme.
 Implication from a common development scheme- if a
single landowner develops property by selling off
lots subject to an identical servitude (ex residential
use only) and on the explicit or implicit promise that
all the lots in the development will be similarly
burdened, some states create an equitable servitude
by implication.
 The development must be of a common and uniform
character—an implied equitable servitude only
applies to lots conveyed after the beginning of the
common scheme
o Burden/benefit running w/ the Land
 In order for an equitable servitude to be enforceable by or
against successors the original covenant must have been
intended to run to successors, the successor must acquire
with notice of the servitude, and the substance of the
promise must touch and concern the affected property.
 Intent- This requirement is the same as for real
covenants; the parties must expressly or impliedly
intend for the covenant to run
 Privity NOT required- neither privity is required for
the burden or benefit to run
 Notice- actual, constructive, or inquiry
o Actual- actual knowledge of the servitude is
actual notice
o Record Notice- if the covenant is in the recorded
chain of title of the property, constructive
notice is satisfied.
o Inquiry Notice- a few courts have ruled that a
purchaser has an obligation to inquire about the
existence of servitudes, if the neighborhood
exhibits a common character and there is record
evidence of a possible common development
scheme.
 Touch & Concern- same as for real covenants-
 Cases
 Tulk v. Moxhay (case that created the equitable servitude)
o Facts- P sold piece of land with covenant requiring an area be kept
in good repair and be used as a “pleasure ground” for the
surrounding tenants. The land was conveyed through many people
to D. The servitude was not mentioned in his deed, but he was
aware that it existed.
o Holding- Since a covenant is a contract between the vendor and the
 vendee, it may be enforced against a subsequent purchaser who has
notice of the contractual obligation of his vendor, even though it
does not run with the land
 An equitable servitude is enforceable by injunction with no
regard to privity, so long as the promise is intended to run
and the subsequent purchaser has actual or constructive
knowledge of the covenant
 Sanborn v. McLean
o Facts- D owned a lot in a large subdivision – part of a common
plan. There was no restriction in his deed. All the surrounding
homes were residential. D tried to build a gas station on part of his
land
o Holding- If the owner of 2 or more lots, so situated as to bear
relation, sells one with restrictions of benefit to the land retained,
the servitude becomes mutual, and, during the period of restraint,
the owner of the lot or lots retained can do nothing forbidden to the
owner of the lot sold
 The court found a reciprocal negative easement (created this
new category)
 Because some of the lots were restricted, all the other
lots from the original subdivision are also restricted
 HUGE intent problem here
 The original owner knew how to create restrictions, he
did it in over half the plots. Why would he leave it
off the rest of the plots unless he intended to do so?
 Discriminatory Covenants
 Shelley v. Kraemer (Sup. Crt. 1948)
o Restrictive covenant banned use or occupancy by “Negroes or
Mongolians” for fifty years. Shelley’s, black petitioners, were
unaware of the restrictive covenant at the time of purchase. They
purchased and lived in the home for two months before the
neighbors brought suit.
o Trial Court- enforced the covenant and required Shelley’s to vacate
property within 90 days
o Supreme Court of Missouri affirmed
o Issue- Would enforcement of the restrictive covenant by a state
court deny the petitioners Equal Protection in violation of the
Constitution?
o Holding- Judicial enforcement of a restrictive covenant based on
race would deny the petitioners Equal Protection of the laws under
the 14th Amendment. The restrictive agreements standing alone
did not violate the 14th amendment and could be adhered to
voluntarily. It was the state action of enforcement that was
unconstitutional. Judicial action is state action.
 Although the court found the agreement could be adhered to
voluntarily at the time, today it would probably violate the
 Fair Housing Act
 Common Interest Communities
 “the distinctive feature of a common-interest community is the obligation that
binds the owners of individual lots or units to contribute to the support of
common property, or other facilities, or to support the activities of an
association, whether or not the owner uses the common property/facilities,
or agrees to join the association.”
 Condos-
o Each unit is owned separately in fee simple
 Since it is treated as fee ownership, the ordinary rules
against alienation apply
o Common areas are owned by the unit owners as tenants in common
 Each owner is responsible for a monthly charge to maintain
common facilities and insure against casualty and liability
o Each owner obtains mortgage financing by a separate mortgage on
the owner’s individual unit
 Real estate taxes are allocated to each unit separately
 Failure of one unit owner to pay mortgage does not effect
others
o Condo association
 Cooperatives
o Title to the land and building is held by a corporation
o The residents own all the shares of stock in the corporation and
control it through an elected board of directors
o Each resident has a long-term renewable lease
o Residents are both owners of the coop corporation and tenants of
the corporation
o One blanket mortgage—if one tenant fails to pay the rest have to
make up for it
 b/c of economic interdependence and b/c individual owners
are regarded as tenants a direct restraint on the alienation of
an interest is valid
o Tenant Selection
 courts are willing to defer to the “business judgment” of the
directors of the corporation and will permit the directors to
deny ownership to anyone for any reason except violation of
civil rights
 civil rights violation results in either admittance of the
applicant or pay damages
 Condo v. Coop (comparison)
o Condos are relatively more efficient and desirable
o Coops have greater exclusivity—screening procedures
o Hard to turn a coop into a condo- expensive and its hard to get
enough coop shareholders to agree to dissolve the corporation
 By what standards should the common interest communities’ rules and
regulations be judged?
 o THREE STANDARDS OF JUDICIAL REVIEW
 Most deferential
 Business Judgment Rule
 Middle Ground
 Nahrsteadlt Rule- a restriction to the original deed
should be presumed valid unless it is arbitrary,
violates public policy, or its burden outweighs its
benefit
 Least Deferential/MOST INTRUSIVE standard
 No strong presumption of validity; balancing utility or
restriction’s purpose versus harms resulting from its
enforcement
 Covenants recorded in the master deed:
o The recorded covenants in the development’s master deed, which
burden all the units in the development. When challenged, some
states hold that these restrictions are clothed with a strong
presumption of validity and only invalidated when they are
arbitrary, violate public policy, or interfere w/ the exercise of a
fundamental constitutional right.
 Other states think that such covenants should be generally
enforceable unless they are unreasonable.
o Nahrestedt v. Lakeside Village Condo
 Condo owner sues to prevent enforcement of the restriction
on her cats
 ROL- restrictions contained in the declaration or master
deed of the condo complex should be presumed valid unless
the restriction is arbitrary, imposes burdens on the use of
lands it affects that substantially outweigh the restriction’s
benefits to the development’s residents, or violates a
fundamental public policy
o MIDDLE GROUND
 Covenants imposed by homeowners’ associations
o Most states are less deferential to covenants imposed by
homeowners’ associations after the owners have acquired title.
Such covenants are valid if reasonable, a loose standard that is met
by rules that reasonable promote the health, happiness, and peach
of mind of the entire community.
 Least Deferential/MOST INTRUSIVE standard
 Cooperative apartments
o Because the shareholders and apartment lessees of a cooperative
apartment corporation are very financially interdependent, courts
are willing to defer to the “business” judgment of the directors of
the corporation.
 MOST deferential standard
 “Business judgment”- court should defer to a cooperative
board’s determination so long as the board acts for the
purposes of the cooperative, within the scope of its authority
 and good faith
 gives board HUGE deference
th
o 40 W 67 Street Corp. v. Pullman
 Coop tenant claims the old couple living above him was
noisy, ran an illegal book binding business, and stored toxic
chemicals. He even went so far as to post flyers all over the
building about the couple (calling them psychopath’s and
lesbians). The coop board hold a meeting, 75% of
shareholders show, and 100% of those who show vote to
evict the crazy tenant

 CHAPTER 11: LEGISLATIVE LAND USE CONTROLS: ZONING

 Zoning Basics
 Defined
 Zoning is the use of governmental power to regulate land use. Zoning laws
divide a political jurisdiction into specific separate geographic areas and
impose limits on the permissible uses of land w/in each are.
 The use of public power to impose uniform results that might otherwise be
accomplished in more piecemeal and selective fashion by private bargains
(servitudes) and nuisance law.
 Objectives
 Prevent incompatible uses of land
o Minimize nuisances—you don’t want a “pig in the parlor”
 Increase property values by minimizing use conflicts
 Channel development into patterns that may serve larger social goods
o Sic Utere tuo ut alienum no laedas- use your property so that you
do not injure another
 Validity
 Generally constitutionally value
o Village of Euclid v. Amber Realty Co.
 F- city adopted a comprehensive zoning ordinance that
restricted the permissible uses of property, limited height,
and imposed minimum lot-sizes. P’s land was split into
three sections and as a result its value decreased. P
challenged the ordinance on due process and equal
protection grounds.
 US Supreme Court- Upheld the ordinance- its objective
(minimizing land use conflicts/preventing nuisances) was a
legit exercise of the states police power. The scope of
zoning ordinances must expand/contract to meet changing
conditions; while the ordinance was not good for everyone,
it benefited the public at large.
 Encouraged fires safety, home safety, child safety
 What does it take for a zoning ordinance to be unconstitutional?
o Provisions must be arbitrary and unreasonable, having no
substantial relation to the public health, safety, morals, or general
 welfare.
 Types of Zoning
 Eclidean Zoning- cumulative zoning- Districts are graded from “high” (single
family homes) to “low” (industrial areas). The uses permitted in each
district are cumulative: higher uses are permitted in areas zoned for lower
uses, but not vice versa.
 Mutually Exclusive Zoning- zoning that permits some uses and excludes all
others w/in the zoned area. (most often used to keep residences out of heavy
industrial districts)
 Enabling legislation
 Police power- the power of government to protect health, safety, welfare, and
morals.
 Enabling acts- in most states, local government power to zone is derived
entirely from an enabling act and must be exercised in conformity w/ it
o Ex- Standard State Zoning Enabling Act- empowers cities to
regulate/restrict height, size, lot percentage, yard size, density,
location of types of buildings, zone, modify zones, give variances
 Most enabling acts require a comprehensive plan
o Comprehensive plan- a statement of the local governments
objectives and standards for development.
 The Nonconforming Use
 Defined- when zoning is introduces/modified, some existing land uses will not be in
conformity w/ the uses permitted under the new zoning laws.
 Invalid Per Se Rule
 PA Northwestern Distributors, Inc. v. Zoning Hearing Board
o F- P opened a porn bookstore legally. 19 days later the city
amended its zoning ordinance to regulate “adult commercial
enterprises” and P’s store was not in compliance with the new
regulations, and became a nonconforming land use. The ordinance
contained an amortization provision that would have required the
appellant to cease its business w/in 90 days.
o H- State Supreme Court said ANY amortization and discontinuance
of a lawful pre-existing use qualifies as a takin and violative of the
Penn. Const. (money has already been invested, the bookstore
didn’t violate obscenity laws, wasn’t a nuisance)
 NY’s Rule
 Amortization and discontinuance of a lawful pre-existing use is fine as long as
the owner is given a reasonable period of time and the need to change the
character of a neighborhood is wanted by the majority.
 “Reasonable period” factors
o nature of the use, amount invested, number of improvements,
public detriment caused by the use, character of neighborhood,
amount of time needed to amortize
 Termination of previously existing nonconforming use
 Ability to maintain a nonconforming use runs w/ the land
  Typically not allowed to expand
 If the nonconforming use is destroyed or abandoned, permission to continue is
terminated
 What do you do when you want to use your property for a nonconforming use?
 Variance- a license or official authorization to depart from a zoning law. Must
show some kind of undo hardship, usually that the land would be unusable
otherwise. (some zoning boards will also consider personal hardship
 ask for re-zoning
 Impermissible Spot Zoning-
 Zoning that on its face looks like a variance or zoning for nonconforming
use
 Occurs when the benefit of that particular spot zoning is for the benefit of
the particular property owner, not for the overall benefit of the community
 Def- zoning changes limited to a small plot of land, which establishes a use
classification inconsistent w/ surrounding uses and creates an island of
nonconforming use w/in a large zoned district, and which dramatically
reduces the value for uses specified in the zoning ordinance of either the
rezoned plot or abutting property.
 Aesthetic Regulation
 A majority of jurisdictions today accept aesthetics as a legitimate police power goal in
itself. A substantial number of courts have upheld aesthetic land use regulations banning
uses that result in lower property values.
 State ex re. Stoyanoff v. Berkeley (Sup. Crt. Missouri 1970)
 F- Applicants wanted to build a pyramid shaped house in a very wealthy
neighborhood. Their building permit was not approved by a city
architectural board which was set up to assure that plans for buildings
conformed to minimum standards of appearance.
 H- Zoning regulations that require a house to be aesthetically similar to
surrounding houses are enforceable.
o Denial of permit was not arbitrary and unreasonable when the basic
purpose to be served was that of the general welfare of person in the
entire community
o The weird house would lower neighboring property value and affect
the general public economically
 Vagueness Rule
 Aesthetic Regulation can not be too vague
 Anderson v. City of Issaquah (Wash. Crt. of Appeal 1993)
o F- Property owner applied to the city for a land use certification to
develop property. The property was zoned for general commercial
use. After obtaining the architectural plans, property owner
submitted the project to the various city departments for the
necessary approval. At the meeting, members told him that his
plans did not fit with the concept of the surrounding area. He
modified his plans multiple times, and still was not approved. When
the property owner asked for clarification of what they wanted, he
 was refused, and his application was denied.
o ROL- An aesthetic zoning statute that is so vague that men and
women of common intelligence would have to guess at tis meaning
violates due process of law.
 Aesthetic Regulation & Free Speech
 Content Based
o Regulating speech based on content is presumptively void
 Content-Neutral
o Laws that regulate speech in a content-neutral fashion are valid if
they reasonably serve important governmental interests and leave
open ample alternative channels of communication.
 City of Ladue v. Gilleo
o In order to minimize “visual clutter,” the affluent St. Louis suburb
of Ladue banned all signs except “for sale” signs, business or home
 PROPERTY 3 & 4
Professor Davidson – Fall 2018

Property law addresses how people interact through and around a v

including land (real property), individual possessions (personal property), and
property). This course explores fundamental questions about the boundaries of pr
rights and obligations come with interests in property; and the extent and limit of
set the terms and limitations of property. Throughout, we will consider justifi
rights as well as details of how law and other institutions resolve conflicts about p

LearningOutcomes

Through this course, students should be able to:

• Identify, analyze, and apply basic principles of property law, inclu

o The fundamentals of core property rights, with the exampl

use;

o The functional ways in which property law divides interest

concurrently and over time; and

o The constitutional limits of the state’s role in structuring pr

• Think critically about policy interests involved in our system of pr

including distributive fairness, economic efficiency, individual ide
community.

• Think strategically about lawyering choices involved in both trans

and litigation involving property.

• More nimbly read, analyze, and discern the import of cases, statute
in the context of the specific doctrinal realm of property law.

CourseInformation

Class Meetings. Class meets Mondays and Wednesdays from 9:00 a.m. to
Room 3-01 (please note the additional five minutes of class time).

Please note as well that we will not be having class on Monday, Septemb
Wednesday, October 3rd. Instead, we will be having make-up classes on Thur
27th and Tuesday, October 9th, from 12:30 to 1:50 p.m., in Room 3-01.

ID signs, and a few others, but certainly forbade Gilleo’s 8 ½ x 11

 window sign declaring, “For Peace in the Gulf.” Even though the
regulation was content-neutral (it was not attempting to regulate the
message on signs), the U.S. Supreme Court unanimously voided it
because its “near-total prohibition” on signs failed to leave open
enough alternative means of communication. Ladue’s law banned
an entire medium of communication. A narrower prohibition of
signs—one that left open ample alternative channels of
communication—would likely have been valid

 CHAPTER 12: EMINENT DOMAIN AND THE PROBLEM OF REGULATORY

TAKINGS
 Source
 Eminent Domain Power- All governments in the US have the power to take private
property to public purposes. The 5th Amendment provides “that private property shall not
be taken for public use without just compensation.
 Purposes of the Takings Clause
 Prevent forcible redistribution of property- through the just compensation requirement,
when governmental power is used to take private property the public pays the property
owner the value of the property taken
 Public Benefit- the public use requirement of the Takings Clause was designed to prevent
any taking (compensated or not) that forces a transfer of property from one private person
to another w/ no public benefit.
 THREE ELEMENTS to determine if an action is a taking
 1. Is this being done for public use?
 If yes, move on to the next element; if no then the government has no right to
take the land.
 2. Is the government action taking?
 If yes, move on to step 3
 If no, end of story
YES MAYBE? NO
*Permanent physical occupation *Physical Invasion- is there is *Temporary physical
an intent to remove in the invasion/occupation
*Transfer of title visible future?
*abatement of a nuisance-
*Regulation that “goes too far” *interference w/ Distinct (exercise of police power that is
w. respect to its burden on the Investment Backed specific to the health/safety of
value of the property Expectations- (if the regulation the public)
constitutes an interference w/
the profit-making capacity of *Average Reciprocity of
the owner, and the owner can Advantage- (benefit goes in
prove that when they acquired both directions, ex- landmarks
the property they had distinct law)
investment-backed expectations
of a specific plan that is now
banned, there may be a taking
 3. What is just compensation? (how much does the government owe you?)
 Why compensate?
o w/o compensation investors would be inhibited by the thought that
government could take or destroy the fruits of their venture
o fear will result in lack of investment
o w/o compensation the government could easily overreach and take
more than they should
 Fair Market Value
o Supreme court has held that just compensation requires payment
of the fair market value of the property prior to the taking.
Generally, this means the amount the property would likely sell
for on the open market.
o “Loss to the owner of nontransferable values deriving from his
unique need for property idiosyncratic attachment to it, like loss
due to an exercise of the police power, is properly treated as part
of the burden of common citizenship” Kimball Laundery Co. v.
US – I.e. it’s a cost of being a US citizen
o Some states mandate payment of 125 or 150% of fair market
value. – this may be overcompensating owners who would sell at
market price.
o Problem- b/c of relocation costs- (supreme court says the gov
doesn’t owe for this) but the federal government has passed
legislation requiring compensation for moving costs, personal
property lost during the move and actual reasonable expenses in
searching for a replacement business if the if property is taken by
the federal government or by state governments using federal
funding.
o Special suitability of the property for particular needs- some
states passed legislation providing compensation for goodwill
when a business is inextricably tied to a particular location and
the loss cannot be avoided by relocation of the business after the
land and structures are taken. Or if it isn’t easily movable
(narrow)
o Supreme court also says no compensation for either goodwill or
going-concern value on the ground that only the land and
buildings are taken, the business is free to relocate elsewhere,
where it may be as profitable if not more so. Any barrier to
relocation is merely an incidental result of the taking of the land
and is noncompensable. – EXCEPTION if the taking is not
permanent then the business owner may be entitled to
compensation for loss of goodwill because the owner is unable to
reestablish its business elsewhere during the takeover. 1171
o Problem – States tend to undercompensate lower-valued property
but overcompensate higher-value property. How might this shape
the choices that public officials make about which public projects
to pursue and where?
Just compensation and Leases
o Almota Farmers Elevator & Warehouse v. United States – US gov
 took property from a railroad company that had 7 years left on
the lease and was probably going to renew it again but the
supreme court held that just compensation should be measured
by the full market value of the lease and that it included “full
monetary equivalent of the property taken. The owner is to be put
in the same position monetarily as he would have occupied if his
property had not been taken.
 The Public-Use Puzzle
 Kelo v. City of New London (US Sup. Crt. 2005)
 F- City of New London approved a development plan that was projected to
create over 1,000 jobs, to increase tax and other revenues, and to revitalize
an economically distressed city, including its downtown and waterfront
areas
o hotel, restaurants, shopping, marinas for both recreational and
commercial uses, residences, state park, US Coast Guard Museum,
Pfizer pharmaceutical facility, office space, parking space, retail
space
o City’s private development agent wanted to use the power of
eminent domain to acquire the remainder of the property from
unwilling owners
 Issue- Does the proposal qualify as a “public use” under the taking clause?
 ROL- as long as the taking is rationally related to any conceivable public
purpose, the public use requirement is satisfied. Public use= whatever the
legislature rationally thinks is conducive to “the public welfare”= public
purpose
 KELOS AFTERMATH
 Under Kelo’s ruling, almost any taking by the government would now qualify
as a public use/purpose
 w/in a month of Kelo many state legislatures moved to protect homes and
businesses from the expanded reach of eminent domain. By mid-2009, 43
states had enacted post-Kelo restrictions and other measures, including
federal ones, have been put in place or are under consideration
 Physical Occupations & Regulatory Takings: How much regulation is too much?
 Intro: Supreme court broadly interprets police power to allow states to regulate property
for public health, welfare, and safety (Euclid v Ambler Realty Co.) and had long held that
they did not need to compensate for things like- (prohibition of sale of of alcoholic
beverages and how that affected a brewery, or specifically preventing an established
brickyard as a nuisance). Until Pennsylvania Co v. Mahon
 Nuisance Abatement
 If a government regulates property to abate activities that are common law
nuisances, there is no taking. The theory is that ownership of the property
never included the right to inflict nuisances, so nothing has been taken by
forbidding what was never lawful.
 Hadacheck v. Sebastian
o F: Owner was convicted of misdemeanor for running a brickyard
within LA city limits (newly passed law). City concerned about the
 effect of a brickyard on the neighbors. The soil in that particular
spot was ideal for brick-making. The soil made the land of high
value.
o H- City was using its police power when it passed the ordinance.
He can still use the clay from his land, he just cant make his bricks
there.
 Balancing Public Benefits and Private Costs
 A regulation is not a taking if it substantially advances a legitimate state
objective. To determine whether this test has been met, at least the
following conditions must exist: (1) public benefits from the regulation
must outweigh the private costs of the regulation, (2) the regulation must
not be arbitrary, and (3) the property owner must be permitted to earn a
reasonable return on the investment in the property.
 Penn Central Transportation Co. v. City of New York (US SC 1978)
o F- Grand central terminal was declared a landmark, and thus had to
have any building plans approved by the city. GC wanted to build a
skyscraper over the terminal, but they could not get their plans
approved.
o ISSUE- Does landmarks law amount to a taking or not?
o HOLDING- Supreme Court upheld NYC’s Landmarks Preservation
law. Here, the law prevented Penn Central from building an office
tower over Grand Central Station, but left Penn central with the
economic return from the terminal building and “transferable
development rights” (TDRs)
 Balancing test factors
 The nature of the regulation—the closer to a physical
invasion, the closer to a taking. However, if it
adjusts the benefits and burden to create an average
reciprocity of advantage the more likely its not a
taking.
 Reasonable expectations of the owner- Distinct
investment backed expectations- the stronger the
investment-backed expectations at the time the
owner acquired the property, the more likely there is
a taking when the expectations are frustrated
 The degree the regulation is designed to prevent harms
that aren’t necessarily nuisances
 The degree to which the regulation allows the
government to now use the property
 The landmarks law posed no threat of physical invasion, left
PC with the ability to earn a “reasonable return” on its
investment backed expectations,” and did not raise issues of
government use
o So what they lost their air rights-- We consider the value of your
property as a whole, we don’t engage in conceptual severance
(majority here adopts the dissent in Penn Coal)
  TDR’s- transferable development rights-
o Argument for
 We want to keep each part of town roughly at a certain
density, which translates to the number of people
working/living in those buildings, on the streets, how many
police/fire services we need for the area. B/c zoning (esp in
an urban context) is particularly concerned w/ density, they
can regulate building heights
 A 90 story building next to a 10 story building is the same
density as two 50 story buildings next to each other, SO
TDR’s can be sold to another building.
o Argument Against (Dissent in Penn Central by Rehnquist)
 TDRs are not just compensation

 Pennsylvania Coal v. Mahon (US SC 1922)

o F- Pennsylvania’s Kohler Act prohibited underground coal mining
that would cause surface subsidence, but only where the surface and
the underground coal were owned by two different people. Mahon,
owner of the surface, had expressly assumed the risk of subsidence
when he purchased his property, but he invoked the Kohler Act to
restrain the owner of the underground coal, Pennsylvania Coal
Company, from further underground mining.
o Holding- Court recognized that “property may be regulated to a
certain extent” but added that “if regulation goes too far it will be
recognized as a taking.”
 Diminution-In-Value Test- Whether a regulation goes too far
depends on the diminution of the value of the property.
Here, since the coal had to stay in the ground, its value in
effect went to $0
 Average Reciprocity of Advantage- when a regulation
benefits the community as a whole, concept that suggests
that a regulation must bestow some public benefits (and
perhaps that some of those benefits must be enjoyed by the
affected landowner.) If it doesn’t, then it’s a taking
o DISSENT- BRANDEIS
 The act was preventing a noxious use
 Diminution in value was not absolute—majority shouldn’t
look at loss of value of coal alone, but rather the value of the
whole property.
 Permanent physical invasion
 Loretto v. Teleprompter Manhattan CATV Corp. (US. SC. 1982)
o NY law required landlords to permit cable companies to install
cables on their buildings to deliver service to residents of a
building. There were plates, boxes, wires, bolts and screws
attached mostly to the roof of the owner’s building.
o ROL- A permanent physical occupation is always a taking that
requires just compensation.
 Zoning- generally not considered a taking

 Lucas v. South Carolina Coastal Council (US SC 1992)

o Bought 2 plots of land in SC intending to build single-family
houses on the lots. No parts of the parcels were critical areas under
legislation at the time (aka it was not restricted at the time). 2 years
later his lands are restricted by the Beachfront management Act
which banned the building of any permanent habitable structures on
his lot
o TRIAL COURT- it’s a taking because the land became valueless
o STATE Sup. Crt- Reversed, “when a land-use regulation is designed
to prevent serious public harm no compensation is due”
o US SUPREME COURT-
 A regulation that goes “too far” is a regulation that drops the
property value to $0
 RULE- TOTAL regulatory takings must be compensated
 EXCEPTION- No compensation when the use is noxious
and banned at common law
 ROL- Where the State seeks to sustain regulation that
deprives land of all economically beneficial use, we think it
may resist compensation only if the regulation is designed to
abate a nuisance of noxious-use that was not allowable at
common law