PROPERTY OUTLINE NGT SP02

IX.

1. 2. 3. 4. 5. 6.

WHAT IS PROPERTY
Property is a bundle of rights

right to use right to transfer right to exclude others from occupying or using the thing right to alter right to possess right to enjoy fruits Pro lems !ith undle of rights is that none of them are re"uired. #x$ o!ned !etland% can&t use or uild on it. 'istorical preser(ations can e o!ned% can&t e altered.

Barry Bonds: who owns the baseball? )ne idea$ *r. 'ayashi o!ns all + strong clear possession% not guilty of the assault on Popo( ,tandards$ ase all standard% hunting standard Pro lems !ith idea$ in(itation to a ra!l. Popo(&s counsel$ ase all is not life% rules shouldn&t apply to society -ots of extralegal !ays to deal !ith these issues !ithout ha(ing to go to court

1. 2. 3. 4.

!o"r types o# i$stit"tio$s t%at re&"'ate(&o)er$ property

ac.ground legal principles social norms / !ay that society organi0es itself pri(ate contractual relations political institutions Property rights / rules to allocate scarce resources 1focus on land

rights2 and things Property is rhetoric$ a language used to decide !hen and if people ha(e rights in relation to others in regards to things Property rights are rules that structure relationships o(er people

P%i'osop%i*a' Perspe*ti)es

3our competing justifications for pri(ate property$ i. John Locke Natural Rights Property in their o!n person / control o(er your ody Pro lems$ not complete control of your ody$ drug use% selling organs !asn&t an issue in 1645 Property y ac"uisition$ Property is that !hich a person remo(es out of the state of nature and mixes his la or !ith it / if you pic. up acorns on someone else&s property is it considered yours6 Property rights y ac"uisition / can pic. up only as much as you can consume. Pro lems !ith theory$ 7ot la! today% you can gather more than you need and store them. -ess common space no!adays. 8f t!o people !ant to use the property for different things% i.e. collecting feathers (s. collecting acorns% the first possessor gets the right to pic. acorns ut to not allo! the second to pic. the feathers may hurt society as a !hole. 9ole of go(ernment according to -oc.e$ to protect interests once they&(e een esta lished

ii. Professor Radin Property and Personhood :ased on 'egel&s theory of society$ people are created in their relation to others% creation y society. Property is essential% a person ecomes a real self only y engaging in a property relationship !ith something external. ;annot e a fully formed person !ithout property. 1155<s% industrial re(olution occurred% in(ol(es consumption2. ongoing relationships !ith property are essential for personhood + the !ill is em odied in things suggests that the entity !e .no! as a person cannot come to exist !ithout oth differentiating itself from the physical en(ironment and yet maintaining relationships !ith portions of that en(ironment. -a! should protect certain interests group property relationships are important / 9adin$ claims of property y group are important certain types of property are special to personhood% ex. Property in one&s ody% one&s home% !edding ring / property has different relationships to different people% i.e. !edding ring to spouse (s. !edding ring to dealer. =iscrete units are more important than total assets / losing property is more disconcerting than losing (alue of !ealth / certain property is fungi le% can e replaced y money..other property is personal% i.e. !edding ring% that !ould e disconcerting to losing it. >o(ernment should e a le to ta.e someone else&s property / things to consider / (alue to the person% interest of property to person things tied up in personhood s. fungible things ?hen should society e allo!ed to come in and ta.e people&s property6 'ouse should not e ta.en if it&s a home@ho!e(er ta.ing of an apartment uilding if it increases society&s !ealth in general then go(ernment shouldn&t e(en ha(e to pay compensation. Pro lems$ 8s certain property so ound up in personhood that it cannot e ought6 Pro a ly not. ;ould this actually e applied y courts6 Ar itrary to determine !hat is considered so important and personal to a person. ,tandards that can e set up to determine personhood o jecti(ely6 ) jecti(e list of personhood in property$ o Bype of d!elling% Cni"uenessD uilt on their o!n% 'o! long ha(e they een thereD een in the family% ,ignificant e(ents in house% -ocation% on a each% etc.% 9elationship !ith community% ,peciali0ed% e.g. gardens Personhood (s. economic efficient use of land #x. )ld lady o!ning a lucrati(e piece of land full of oil. )(erall social enefit (s. personhood. iii. Rawls !heory distributi e theory Bo determine the just allocation of enefits and urdens of social life% as. !hat distri uti(e principles !ould suita ly disinterested persons choose Eeil of ignorance / exclude from the minds of those choosing principles of justice all .no!ledge of their o!n a ilities% desires% parentage% and social stratum. =ifference principle + the fundamental institution of society should e arranged so that the distri ution of primary goods is to the maximal ad(antage of a representati(e mem er of the least ad(antaged social class. "deal contractarian state. 8f they !ere ignorant% they !ould choose !hat !as most necessary to them. #(eryone needs a little it% so !e shareDcontract so e(eryone has the asic necessities. ;annot e a person !ithout a minimal amount of property. Cnder a (eil of ignorance% people aren&t li.ely to ta.e ris.s ecause they are !illing to gi(e up a lot to at least ha(e something. People rather ha(e the guarantee of something rather than the opportunity to succeed or fail. ?ilson&s criti"ue of 9a!ls + :elie(es that not all people are risk a erse# they are risk takers . 9e!ards should e proportional to effort. ,ome people are more s.illed% smarter than others. 1Pritchett$ doesn&t ris. a(erseDris. ta.ers depend on !ho you are6 Bhose on ottom !ill uy 9a!ls theory those on top !ill not2 'o! to apply 9a!ls theory to the real !orld

o o

Bheories !e&d !ant to esta lish / 8dea is to protect the needy y allocating assets. #.g. =emocratic socialism% state capitalism% communism -a!s to include that support 9a!lsian state / special taxes% !elfare programs% rent control% su sidi0ed lo! income housing

9#;AP 'ypo1$ t!o people claim a piece of land% one has used it to uild a home and another has used it to hunt to feed his family. -oc.e$ !ho !as first on land6 9adin$ !ho has more personhood6 9a!ls$ minimal necessities% perhaps oth ha(e rights6 'ypo2$ second person !anted to culti(ate the land to sell food to feed the area people -oc.e$ !hoe(er !as first still !ins 9adin$ personhood of li(ing there is stronger than selling 9a!ls$ selling food is producing a pu lic good% increases the general !ealth of the pu lic 'ypo3$ homeo!ner has the rights% and the go(&t !ants to ta.e the land and condemn it to turn it into a recreation area -oc.e$ !hoe(er !as first still !ins 9adin$ personhood (s. greater societal !ealth% compensation for personhood6 9a!ls$ analy0e !hether recreational use is (ie!ed as necessary% and considered a spreading of !ealth 'ypo4$ homeo!ner has right% go(t !ants to condemn land and gi(e it to a pri(ate auto mfr. 9adin$ one pri(ate party (s. another pri(ate party / harder to determine 9a!ls$ depends on ho! much the transfer to the pri(ate auto mfr !ould increase the distri ution of !ealth 'ypo5$ homeo!ner has right and go(&t turns land o(er to a political group that !ould create an estate for themsel(es 9adin$ not allo!ed% personhood is more important 9a!ls$ not allo!ed% ta.ing from the poor and gi(ing to the rich

i . $tilitarianis% ?ant to maximi0e aggregate !ealth in society as a !hole. 7ot concerned !ith distri ution of assets. 3ree mar.et !ill ensure an efficient allocation of resources in the a sence of mar.et failure. -egal institutions are supposed to esta lish property rights% protect (oluntary exchanges through contract and create incenti(es to use resources efficiently. Property rights help us use the property rights efficiently. o #x. 8f you ha(e a piece of land that farmer (alues at F1<<< and some de(eloper (alues it at F15<<% the land should e sold to de(eloper some!here et!een F1<<<GxGF15<<. >o(ernment should protect their argaining and not inter(ene. Posner necessary elements to achie(e maximum !elfare o uni(ersality / e(erything should e o!ned y someone o exclusi(ity / can do !hate(er you !ant !ith !hat you o!n 1Property rights that you don&t ha(e exclusi(e rights to$ oceansD!ater fishing rights% air pollutants2 o transfera ility / allo!s the transfer of property to e used for its highest most producti(e use 'ardin + Tra&e+y o# t%e ,o--o$s o -imitations to the idea of utilitarianism. Bo pre(ent tragedy of commons re"uires limits or regulations on part of go(ernment. 8.e. fees% regulations 1no cars allo!ed% etc2% Pu lic space is o(erused and destroyed. 7o exclusi(ity% e(eryone uses it as much as they can ecause their o!n social enefit out!eighs the negati(e costs that are distri uted amongst

all. 8f it !as pri(ate space you ha(e more incenti(e to try to protect the land. Positi e utility & costs. o Ctilitarian argument$ Pri(ate property is good% pu lic space is not the est !ay to allocate resources. o ;ounterargument$ humans do not only focus on utility% sometimes pu lic o!nership is etter. 'oals of $tilitarianis% (ociety / maximi0e aggregate !elfare% free mar.et competition !ill maximi0e economic efficiency in the a sence of mar.et failure% legal institutions should enforce property rights and hold people to their contracts Pro lems !ith Ctilitarian ,ystem.
:as.et all example / pic.up as.et all game% first come first play. ?inner stays on court. 3irst come first ser(e rule is clear and fair. People set up o!n rules to efficiently allocate resources. 8.e. if lots of people play at court% they play to a lo!er point system. *ajority adjudication% !inning team has some ran. to adjudicate conflicts relating to court. 'as nothing to do !ith the legal system. >enerally there is no transfera ility of rights in line to play next. Bhere is some sense of exclusi(ity in courts ut in general there is an expectation that you can play% exclusi(ity doesn&t really apply. Bhere is no o!nership 1lac.s uni(ersality2 of the as.et all court. !he point: !here are social nor%s that allocate rights to use property without the need for the legal syste%. 8n(estment in the Cni(ersity of Pennsyl(ania / !ho o!ns CPenn6 #(eryone o!ns the school / in(estment in the ideas of the school and not the property 7on+profit corporation of CPenn o!ns Cpenn 1uni(ersality% no one o!ns Penn2. Penn is o!ned y a corporation ut it cannot exclude rights to the use of its facilities. Penn can&t just say pu lic can&t use this. ,ince Penn open its doors to a large group of people its hard for it to exclude and discriminate 1lac. of exclusi(ity2.

,o-pari$& Property Re&i-es i$ .i##ere$t Reso"r*es

)ysters o Bragedy of ;ommons. Pri(ate (s. Pu lic property. 8n pu lic / people ta.e oysters and lea(e% don&t consider replenishing the area. ,olution suggested / allocate certain rights to areas% leasing the property 1pri(ate o!nership or pu lic o!nership !ith licenses2% so it&s to their enefit to replenish the resources. Lobsters o 8ssue of maintaining the ecosystem isn&t as important in the lo ster domain. ;ommunal pu lic o!nership !or.s ecause social norms and assumed regulations are stringently in place. ;ohesi(e lo ster groups% close .nit. ,ocial norms police themsel(es% hierarchy of fishermen. Proble%s: ?ealth is aggregated in a selecti(e fe!% reduced distri ution of !ealth. Perhaps stalled progression resulting in less efficient use of resources% no incenti(e to impro(e% mitigates against inno(ation. #xcludes people that may e etter fishermen. Point: !ithout legal regulations% utilitarianism isn&t the only solution% a "uasi+ pri(ate property system may !or.. )rgan *onations / currently is a Rawlsian syste% o )ther (alues that our legalDsocial system care a out other than maximi0ing aggregate !elfare. o *oral issues exploitation / economicDsocial pro lems o Pro lems !ith the pre(ention of organ sales$ there are people !aiting for .idneys ecause of desperation% a lac. mar.et exists for .idneys unregulated industry% people are ta.ing a ris. that they may not ha(e to ta.e if la! changed. it !or.s !ell in 8ra" exploitation of the needy

X. PROPERTY
A. R"'es

A,/UISITION O!

a. 3irst+in+Bime 9ule 19ule of ;apture2$ i. 3irst person to ta.e possession of a thing o!ns it 1. re!ards la or 2. protects in(estment in resources ii. A prior possessor pre(ails o(er a su se"uent possessor

A*0"isitio$ o# La$+

a. =isco(ery of America i. Hustifications 1. =isco(ery ga(e title to #uropean nations !hich passed title to the states or to the C, + 7ati(e Americans !ere not in possession of America ecause they !ere hunters that did not settle into permanent setting 2. ;on"uest gi(es title / Hohnson (. *&8ntosh 1property confers and rests upon po!er2 ii. 7ati(e American 9ight of )ccupancy 1. 7o title% right of occupancy su ject to the control of% the so(ereign ;ongress
Hohnson and >raham&s -essee (. *&8ntosh 8,,C#$ ;an 7ati(e American 8ndians gi(e title to tri al land to pri(ate indi(iduals6 ?ho has title o(er land6 3A;B,$ P% Hohnson% granted land from 8llinois+Pian.esha! 8ndians in 1II3D1II5. =% *&8ntosh% granted land y C, in 1515. ?ho o!ns it6 1Cnder -oc.e&s theory / Hohnson should get it since he !as the first to o tain it.2 *A9,'A--&, '8,B)9J -#,,)7$ 8ndians ha(e the right to useDoccupyDpossess the land ut not the right to transfer the land. #uropeans disco(er land. #uropean go(ernments transferred some land to indi(iduals and once colonies set up% transferred to the state. After re(olution% you still held title to your land. After that the exclusi(e right to purchase land !as in states% and the states ceded some land to the C, go(ernments. Bhree le(els of o!nership$ 1.2 indi(idual% 2.2 state% 3.2 C, go(ernment. ;eded land to C, go(ernment to gi(e them a source of re(enue y allo!ing them to sell off land to settlers to fund go(ernment. 8f settlers and 8ndians had a dispute o(er land% the go(ernment !ould step in to ar itrate dispute. Breaties made et!een go(ernment and 8ndians / gi(ing up some land to get other land not a real contract ecause there !as no real consent. *A9,'A--&, P987;8P-#, A9>C*#7B$ Principles$ + exclusi(e right to purchase from the 8ndians resided in the go(ernment + disco(ery ga(e an exclusi(e right to extinguish the 8ndian title of occupancy% either y purchase or y con"uestK and ga(e also a right to such a degree of so(ereignty% as the circumstances of the people !ould allo! them to exercise + con"uering of land of ci(ili0ed people still elongs to the original ci(ili0ed people% exception here for the 8ndians ecause it is assumed that they are not ci(ili0ed / not a le to control their property properly$ no title system% used land less intensi(ely + ;on"uest ga(e the right to ta.e property y eminent domain / ha(e to pay compensation *A9,'A--&, :#-8#3,$ disagrees some !ith these principles$ 'o!e(er extra(agant the pretension of con(erting the disco(ery of an inha ited country into con"uest may appear@ :elie(es 8ndians !ere compensated y eing ci(ili0ed y the #uropeans and y payment y money or land.

')-=87>$ 8ndian inha itants are to e considered merely as occupants% to e protected% indeed% !hile in peace% in the possession of their lands% ut to e deemed incapa le of transferring the a solute title to others. *&8ntosh o!ns land ecause C, not 8ndians o!ned it efore. 8f it to e indispensa le to that system under !hich the country has een settled% and e adapted to the actual condition of the t!o people% it may% perhaps% e supported y reason% and certainly cannot e rejected y ;ourts of justice. P'ai$ti## +o $ot e1%i2it a tit'e 3%i*% *a$ 2e s"stai$e+ i$ t%e ,o"rts o# t%e US. ,B8;L, 87 B'# :C7=-#$ 8ndians had the right to use% the right to enjoy the fruits% and the right to possess. 7o right to transfer% alter or exclude. :)BB)* -87#$ Bhe ci(ili0ed people rule supreme a !ay to justify that the ends justify the means% a !ay for C, to gro!. At the time% the C, go(ernment !as mo(ing !est!ard% impinging on more 8ndian lands. *arshall is !orried that the judicial court !ill e irrele(ant if he rules the other !ay since the legislature and states !ould not listen to it. *arshall is trying to craft an opinion that protects some rights of the 8ndians.

. it isn&t. i.

=ispossession of ,outhern :lac. -ando!ners + ?hen is ac"uisition done fairly and !hen #xamples$ LLL attac.ed family% property folded into neigh ors ;ar dealer foreclosure ac"uisition ,tate foreclosed for ac. taxes >o(ernment foreclosed for go(ernment use ii. Arguments that can e made for P$ =uress. Bheft. A andonment y o!ners6 Cnconsciona ility% didn&t understand the terms of the agreement. #"uita le argument. 3raud% misrepresentation% other contractual arguments. #minent domain argument of necessary compensation. ?ould argue that they !eren&t treated e"ually in terms of compensation. =escendents ha(e a claim o(er ancestor&s land. iii. ;an you argue for the return of land as opposed to compensation6 ,pecific performance6 ,u stantial performance6 ;omplicated (s. ,imple transfers of land. 3ather to son6 ,old to another6 i(. Arguments against returning land and compensation$ utilitarian argument of the efficiency issue% greater distri ution of !ealth% dependa le and clear property rights. People that actually had land ta.en !ere dead% should heirs ha(e the right to compensation or to land6 #(en !hen ac"uisition seems to (iolate our sense of fairness in the (iolation of la!% courts often uphold property rights ecause they !ant to protect expectations that people ha(e for property rights. Pro(ides sta ility@if not protected it&s a slippery slope opening up to an a undance of litigation. 1. 2. 3. 4.

,apt"re o# Wi'+ A$i-a's 4Pierso$ ). Post5

1. 8f !ild animals are captured% they elong to the captor% must e captured 2. Hustifications a. ;ompetition / results in more capture of foxes . #ase of administration / promotes certainty and efficient administration c. ;reated !hen there !as a need to destroy !ild animals% no! the rule of capture% promoting pursuit and .illing% leads to o(er+capture of fish and o(er+in(estment in capture technology
Pierson (. Post 8,,C#$ ?hether Post% y the pursuit !ith his hounds in the manner alleged in his declaration% ac"uired such a right to% or property in% the fox% as !ill sustain an action against Pierson for .illing and ta.ing him a!ay6 ?hat acts amount to occupancy% applied to ac"uiring right to !ild animals6 Brespass on the case 1claim for damage y Post resulting from the conse"uence of unla!ful acts of Pierson2 -)?#9 ;)C9B$ at trial% judgment for Post% for appeal% judgment for Pierson. 3A;B$ Post% !ith his hounds% pursued a fox. Pierson sa! Post pursuing fox and .illed fox. 'unting on !asteland o!nership of land unclear.

P8#9,)7&, A9>$ Bo create a title to an animal ferae naturae% occupancy is indispensa le% e(en !ounding !ill not gi(e a right of property in an animal that is unreclaimed. 7o title in Post. P),B$ )ccupancy% manucaption% includes pursuit. B)*PL87,$ Pursuit is not enough. Muotes$ Puffendorf% :ar eyrac% >rotius 1legal commentators2 and Hustinian produced the la! of the roman empire. Hustinian says pursuit alone does not esta lish property rights. Puffendorf and :ar eyrac re"uire possession or mortal !ounding of !ild animal. >rotius re"uires control% e(en if only y trapping. :ased decision on these learned authors for the sake of certainty% and preser(ing peace and order in society. ')-=87>$ judgment for Pierson since his act !as producti(e of no injury or damage for !hich a legal remedy can e applied. 3act that Post !as chasing the fox !as not enough to esta lish property o(er the fox. B'#9# 8,7&B A 9C-# )3 -A? #,BA:-8,'#= 3)9 ;#9BA87BJ. =8,,#7B$ should ha(e su mitted to the ar itration of sportsmen. Pursuit should e enough. =ecision should ha(e in (ie! the greatest possi le encouragement to the destruction of an animal so cunning and ruthless in his career. >oal is to get rid of foxes instrumentalist approach% la! should help society. :elie(es :ar eyac is the most rational of authors% and should e follo!ed. =8,;C,,8)7Cnder -oc.e&s theory / Post has put the !or. into it first. Ctilitarian rule / -i(ingston !ins / gets rid of foxes !hich !ould impro(e society ?hich is the etter rule6 ?hy !ould !e !ant to use hunters as ar itrators6 Bhey&re more expert. 'o!e(er% you don&t !ant just anyone forming la!s@possi ility of ad systems.
?hale Pro lem / p. 54+6< >)A-,$ 7o / goes against >oal% Jes / support >oal 9ules allocating property rights +fficiently kill (afety of whalers ,hare the !ealth 7o JesD7o Reward useful labor 7o JesD7o Line holds the whale JesD7o JesD7o Possession of carcass Lowered boat holds whale Reasonable prospect -arpoon holds the whale 7o 7o Brand holds the whale .ortal wounding ,C**A9J$ rules are hard to assess and hard to delineate property rights along clear lines.

,larity Jes 7o Jes

7o

Water Ri&%ts Strea-s a$+ La6es

a. 9iparian rights include "uantity% "uality% and (elocity of !ater . 9iparian land / all land under a unit title adjacent to a ody of !ater + Cse on 7onriparian land / riparian right attached to the riparian land and can ne(er e transferred to a nonriparian o!ner / right runs !ith the land c. Nat"ra' #'o3 +o*tri$e / each riparian o!ner is entitled to the natural flo! of !ater% !ithout material diminution in "uantity and "uality 1domestic use2. 8n artificial% commercial use / o!ner can use !ater so long as it does not materially affect the "uantity or "uality of the !ater + 7ot allo!ed to use !ater on nonriparian land + ?ater storage is not permitted 7)B#$ limits commercial and irrigation uses% not efficient 1anti+utilitarianism2 d. Reaso$a2'e "se +o*tri$e / riparian o!ner is entitled to a reasona le use of the !ater% do!nstream o!ners cannot enjoin the o!ner or reco(er damages unless they are not recei(ing enough !ater for their needs or the upstream o!ner is su stantial interfering !ith their needs i. =omestic use$ #(ans (. *erri!eather + =omestic use preferred o(er others 1drin.ing% athing% for farm animals on a small farm% and for irrigation of a pri(ate garden2 / upstream o!ner

can ta.e !hate(er !ater is necessary for domestic purposes !ithout regard to its effect on the natural flo! of the !ater or the needs of lo!er riparians + =omestic uses are necessary to maintain life / can e esta lished at any time% e(en if it interferes !ith existing nondomestic uses
#(ans (. *erri!eather 8,,C#$ action o(er the destruction and di(ersion of a !ater course. Bo !hat extent riparian proprietors% upon a stream not na(iga le% can use the !ater of such stream6 'o! do you allocate rights et!een t!o people that ha(e riparian rights. 3A;B,$ #(ans is a o(e *erri!eather on stream. =am constructed on stream y #(ans& ser(ant to lead !ater into #(ans& mill and dries up stream for *erri!eather. 9iparian rights / rights of o!ners of land next to stream. P'$ *erri!eather !ins in lo!er court and judgment is affirmed here. '8,B)9J$ farming for o!n su sidence. Hudge !ants to protect the family farmers. -oo.s at #nglish Precedence / !ater flo!s in its natural course% and should e permitted thus to flo!% so that all through !hose land it naturally flo!s% may enjoy the pri(ilege of using it. A riparian proprietor% though he has an undou ted right to use the !ater for hydraulic or manufacturing purposes% must so use it as to do no injury to any other riparian proprietor. Muestion 1$ ?hat is a reasona le use6 9ule$ separation of the !ants of man in regards to !ater into t!o types$ 1.2 natural / necessary% 2.2 artificial / added comfort% not essential. Nat"ra' 3a$ts tr"-p arti#i*ia' $ee+s. Muestion 2$ ?hat is considered necessary and indispensa le6 8rrigation not considered necessary here ecause it&s not arid land. Muestion 3$ 'o! to delegate use for artificial needs6 Bhere is no lan.et rule applied to artificial use of !ater% up to jury to decide if just proportions used. ?ithout a contract or grant% neither has a right to use all the !ater% all ha(e a right to participate in its enefits. )ne cannot ta.e all the !ater% none can ha(e an exclusi(e enjoyment. >oal$ Bhis is to protect certain groups of people and not a utilitarian argument.
Rule and a (tandard ,tandard + reasona le use / alance the interest of one farmer to that of another% depends on the facts of the case 9ule$ a rule is clear and can e applied to e(ery case. ?ith a rule% e(eryone .no!s !here they stand. Pro lem !ith a standard is that you&re not as sure of !hat you&re doing is right or not. -itigation is more li.ely in terms of a standard. ?ho&s going to decide the standard6

;ommercial use$ Cpstream o!ner cannot ta.e !ater for commercial purposes unless there is enough !ater for the domestic use of all riparian o!ners 1irrigation of large farm is commercial% not domestic use2 iii. #conomic justification / courts should inter(ene to achie(e efficiency ecause of the high transaction costs that !ill pre(ent pri(ate parties from cutting a deal e. Prior appropriatio$ / pre(alent in arid states% doctrine of capture !here !ater rights are determined y priority of appropriation of the !ater i. can e used on land far a!ay from the !ater 1nonriparian use allo!ed2 ii. )nce a right in !ater is esta lished% it is an interest independent of the land and can e se(ered from the land and sold to another for use on other land 1;offin (. -eft 'and =itch ;o.2 iii. #conomic Hustification / permits the transfer of a prior appropriation right to a user !ho puts a higher (alue on it% and transaction costs are lo!
,offin . !he Left -and *itch ,o.# /001

ii.

3A;B,$ P%-eft 'and =itch% claimed to e the o!ner of certain !ater y (irtue of an appropriation from the south for. of the cree.. =% ;offin% o!ns land next to and elo! south for.. -'= used a dam and a ditch to carry land from the cree. to their land. ;offin% tore out part of dam so he could irrigate his land. -eft 'and =itch sued for damages and an injunction. Bhe -eft 'and =itch% appellee% !on in the lo!er court and ;offin% appellate% appealed. -'= !ins in appellate court. 8,,C#$ =id ;offin ha(e the right to the !ater ecause he !as adjacent to the stream% did the o!ner of riparian rights ha(e higher priority than one !ith appropriated rights. 9C-#$ 3irst appropriator using stream for eneficial purpose has a prior right to the stream. ;)C9B&, 9#A,)787>$ 8rrigation is a necessary need not an artificial one. A clear rule is necessary% they !ant people to irrigate the land% ut !ith limited !ater% and so a clear rule !ould encourage people to in(est their money !ithout fear of ha(ing their property rights ta.en a!ay. =octrine of riparian rights is inappropriate in ;olorado. -'= is a commercial farm. -oo.s at different past statutes to determine !hich one applies to case. 'a(e to figure out !hen the claim !as created and therefore% !hich statute applies. ,BABCB#,$ 15I6 / prior appropriations is the la!. )ther acts$ 1561% 1562 / o!ner of land should ha(e riparian rights and !ater should not e di(erted to the detriment of others. 'o!e(er% court reinterprets these la!s to fa(or -'= and riparian rights only exist only if ;offin had een using it in the first place. 'ence% reinterpreted doctrine of riparian rights to e the doctrine of prior appropriation. Also interpreted riparian rights to e applied to land in the (alley and not just next to the stream + =uty to guard against extra(agance and !aste% and to so di(ide and distri ute the !ater as most economically to supply all of the earlier appropriators thereof according to their respecti(e appropriations and necessities% to the extent of the amount remaining in the stream. ')-=87>$ for -'=% (ia a 9C-# of the doctrine of first appropriation.

i. ii. iii. i(.

A+)erse Possessio$
8f% !ithin the num er of years specified in the sate statute of limitations% the o!ner of land does not ta.e legal action to eject a possessor !ho claims ad(ersely to the o!ner% the o!ner is thereafter arred from ringing an action in ejectment. *eans of ac"uiring title to property y a long% uninterrupted possession Bitle y ad(erse possession cannot e recorded ecause it does not arise from a recorda le document ut from operation of la! / to record% must file a "uiet title action against former o!ner resol(es issues of mar.eta le title 9e"uirements$ possession has to ha(e een 1. a*t"al / must sho! that he actually possessed the land . constructi(e possession / exception to re"uirement of actual possession in !hich an ad(erse possessor holds color of title to all land in deed / claims ased on a document that turns out to e defecti(e 2. %osti'e7 a$+ 3it% a *'ai- o# ri&%t / possession is hostile if the occupier claims the land as his o!n% in derogation of the true o!ner&s claim / cannot ha(e expressed or implied permission of the true o!ner. *ust&(e acted in good faith 3. ope$ a$+ $otorio"s / acts must e such as !ill constitute reasona le notice / open use !ithout any attempt to hide or disguise his use 4. e1*'"si)e / must not e sharing possession !ith the o!ner nor the pu lic 5. *o$ti$"o"s #or t%e stat"tory perio+ / must e continuous for the statutory period% not constant. *ust decide !hether the use is consistent !ith the type of property in(ol(ed a. Bac.ing / successi(e occupiers may tac. their periods of possession together so long as there&s some pri(ity et!een them / i.e. one possessor (oluntarily transferred possession or an estate in land to a su se"uent possessor . Bolling / statute of limitations is tolled if the true o!ner is incapacitated !hen the claimant first ta.es possession Hustifications for ad(erse possession 1. protect title / protects those !hose land records are deficient

(.

2. ar stale claims / litigate earlyN 3. efficient use of land 4. honor expectations (i. :oundary disputes / one of the parties has een in open and notorious possession of a strip of land along his oundary% mista.enly elie(ing it to e his 1. ) jecti(e test / if A fences in the land% or other!ise indicates the oundaries and maintains the strip% A ac"uires title y ad(erse possession !hen the statutory period expires 2. *annillo (. >ors.i / !hen the encroachment of an adjoining o!ner is of a small area and the fact of an intrusion is not clearly and self+e(idently apparent to the na.ed eye ut re"uires an on+site sur(ey for certain disclosure the encroachment is not open and notorious. ,tatute of limitations runs only if o!ner has actual .no!ledge of the encroachment (ii. 7o ad(erse possession against go(ernment+o!ned lands
*annillo (. >ors.i 3A;B,$ >ors.i% the defendant% uilt stairs that !ent o(er into the property of *annillo. >ors.i too. possession in 1446. *annillo too. possession in 1453. Bitle doesn&t matter% only !hen possession !as ta.en. #ncroached on P&s land to the extent of 15 inches. *annillo complained and >ors.i claimed ad(erse possession. P'$ P% *annillo% !on in the trial court. Although = had clearly and con(incingly pro(ed that possession of the 15+inch encroachment had existed for more than 2< years ho!e(er% it !as not hostile it !as a %istake. >ors.i did not .no! he !as ta.ing someone elses property. >ors.i appeals. 8,,C#1$ ?hether an entry and continuance of possession under the mista.en elief that the possessor has title to the lands in(ol(ed% exhi its the re"uisite hostile possession to sustain the o taining of title y ad(erse possession6 8.e. =oes ta.ing y mista.en elief constitute hostile possession under the doctrine of ad(erse possession6 9C-#$ *aine doctrine$ a mista.en doesn&t count as hostility. rejected ecause it enefits an intentional !rongdoer and follo!ed ;onnecticut doctrine !hich says that mista.e can e hostile. =ecide to discard the re"uirement of intentional hostility and held that any entry and possession for the re"uired time !hich is exclusi(e% continuous% uninterrupted% (isi le and notorious% e(en though under mista.en claim of title is sufficient to support to claim of title y ad(erse possession. 8,,C#2$ ?hether defendant&s acts meet the necessary standard of open and notorious possession. purpose of open and notorious re"uirement is to ma.e sure that the true o!ner has the opportunity to defend themsel(es. 9C-#$ Bitle may ne(er e ac"uired y mere possession% ho!e(er long continued% !hich is surreptitious or secret or !hich is not such as !ill gi(e unmista.a le notice of the nature of the occupant&s claim. ?here possession of the land is clear and une"ui(ocal and to such an extent as to e immediately (isi le% the o!ner may e presumed to ha(e .no!ledge of the ad(erse occupancy. W%e$ t%e e$*roa*%-e$t o# a$ a+8oi$i$& o3$er is o# a s-a'' area a$+ t%e #a*t o# a$ i$tr"sio$ is $ot *'ear'y a$+ se'#9e)i+e$t'y appare$t to t%e $a6e+ eye 2"t re0"ires a$ o$9site s"r)ey #or *ertai$ +is*'os"re as i$ "r2a$ se*tio$s 3%ere t%e +i)isio$ 'i$e is o$'y i$#re0"e$t'y +e'i$eate+ 2y a$y -o$"-e$ts7 $at"ra' or arti#i*ia'7 s"*% a pres"-ptio$ is #a''a*io"s a$+ "$8"sti#ie+. 7o presumption of .no!ledge arises from a minor encroachment% only !here the true o!ner has actual knowledge can the possession e considered open and notorious. ')-=87>$ 8f *annillo didn&t actually .no!% then case is sent ac. to trial court to determine !hether *annillo actually had .no!ledge. 8nstead of tearing do!n stairs% may e compensation to *annillo6 >ors.i can argue e"uita le principles of added (alue% ut still needs to pay compensation to *annillo. P9):-#* / p.41 5# ,mith / deed in 14<1 ,mith 144< I? ,mith 5< 9ose 1425 9ose+Hones 144< I# 9oseDHones 1425

O324+325 apply ecause it&s not ased upon a !ritten instrument. 'ostile ecause he intended to ta.e title to this land. )pen and notorious. #xclusi(e. ;ontinuous for o(er 5 years% tac.ing. Hones should !in.

1<

8f Hones has paid all the taxes le(ied% if assessed on the property he is li(ing on then he !ins. 8f he has een paying taxes assessed on the property he really o!ns% then he may not !in.

XI.
A. Te$a$*y i$ ,o--o$ a$+ :oi$t Te$a$*y

,ON,URRENT INTERESTS

Joint ownership 1. 8oi$t te$a$ts / e"ual% undi(ided interest in the property !ith a right of sur(i(orship. Act as one person a. re"uires four unities$ i. unity of interest / to e identical ii. unity of title / interest created in same grant iii. unity of time / re"uired interest to (est at same moment i(. unity of possession / re"uired o!ners to ha(e e"ual rights of access . right of sur(i(orship / if a tenant dies% the rest a sor that interest% does 7)B go to heirs i. poor man&s !ill / accrual !ithout time and expense associated !ith pro ate 1i.e. no need to go to court% automatically goes to joint tenants2 ii. defeats the claims of unsecured and secured creditors of the deceased co+tenant c. purposes$ i. eliminate ris. of heirs of uncertain responsi ilities ii. a(oids shortcomings in the common la! system of estates iii. protects illegitimate children d. terminated y se(erance / act of one person can se(er a joint tenancy and ma.e the ne! party a tenant in common i. re"uiring recordation of the unilateral se(erance helps ensure that if the non+ se(ering co+tenant dies first% the se(ering tenant !ill not e a le to destroy e(idence of the se(erance and assert a right of sur(i(orship to the entire estate 2. te$a$ts i$ *o--o$ / form of joint o!nership% all ha(e a right to occupy% tenants can act on their o!n% default method a. !ithout right of sur(i(orship% undi(ided interest in land gi(es co+tenants the right to possess and use the entire property% su ject to the rights of other co+tenants . created y agreement% express grantD!ill or operation of la! c. decedent&s interest passes to his heirs d. terminate tenancy y$ i. transferring all of the interests to a single person ii. partitioning of property / one of the o!ners goes to court and as.s for partition 3. te$a$*y 2y e$tirety / joint tenancy unities plus marriage a. can only e terminated y joint agreement of oth parties . doesn&t exist anymore c. used to exist to try to protect spouses
People (. 7ogarr 3A;B,$ appellate / ex !ife% appellee / ex+hus and&s parents. ;ouple separated. #x+hus and mortgaged house to his parents and he died. ,tate !anted to condemn property% parents !anted satisfaction of the mortgage% i.e. !anted return. #x+hus and tried to gi(e parents right to the property. 8,,C#$ 8s a mortgage upon real property executed y one of t!o joint tenants enforcea le after the death of that joint tenant. ?ho gets returns !hen ,tate pays compensation% !ife or parents6 B98A- ;)C9B$ Parents should get money. Hoint tenancy se(ered and no! tenancy in common. ')-=87>$ *ortgage !as only a lien% lien is not a unilateral act to se(er joint tenancy% #laine is sole sur(i(or% all title goes to #laine. ;B&, 9#A,)787>$ 8n ;alifornia% the mortgage didn&t se(er the joint tenancy ecause title did not pass% just created a lien. ?ithout transferring title% there is no se(erance of joint tenancy. 8f the judgment de tor sur(i(es% the judgment lien immediately attached to the entire property. 8f the judgment de tor is the first to

11

die% the lien is lost. 8f the creditor sits ac. to a!ait this contingency% as respondent did in this case% he assumes the ris. of losing his lien. ;ourt is trying to protect the !ife&s interest% !ife should e gi(en notice and pro(e appro(al. ;ourt is trying to create a tenancy in entirety !hich isn&t ac.no!ledged in ;alifornia. :an. might e more reluctant to lend money to a joint tenant. Bhese days oth spouses need to sign the mortgage. 7ote$ ;ourts usually fa(or tenants in common to joint tenancy.

Tenants in Common, aka. Co-Tenants Ri&%ts a$+ O2'i&atio$s Partitio$ / judicial procedure used to end a tenancy in common or a joint tenancy !hen the co+ tenants no longer agree on the management or disposition of the property o in .ind / physical di(ide the property o y sale / property is sold and proceeds di(ided to the co+tenants proportionally o y appraisal / permits one co+tenant to uy out the others at the appraisal price o Purposes$
Ctilitarian$ helps maximi0e aggregate !ealth Aliena ility of land 8ncreased producti(ity of land

Possessio$ / each co+tenant has a right to possess and use the entire property. O"ster occurs !hen a co+tenant ars another co+tenant from using the property. )uster can turn into a claim for ad(erse possession. ,o$tri2"tio$ / co+tenant may demand contri ution from the other co+tenants for certain expenditures% i.e. taxes% mortgage% insurance% repairs. ;o+tenant may not demand compensation for managing the property. !i+"*iary O2'i&atio$s co+tenants recei(e their interests in the same !ill or grant% or at the same time y inheritance. 9estricts the freedom of co+tenants in ac"uiring co%%on property. ;o+ tenant ac"uiring superior title to the property must gi(e the other co+tenants a reasona le opportunity to ac"uire their proportional share. A**o"$ti$& / compensation for partition for co+tenant&s share of net rents collected from third parties !ho ha(e leased the property. 7on+leasing co+tenants may demand their share of the net rents recei(ed if the ease purports to ind all the co+tenants and if the non+leasing co+tenants ha(e ac"uiesced in the lease. "f the non2leasing co2tenants ac3uiesce in the lease# they can share in the rents recei ed. "f they refuse to ac3uiesce in the lease# they can e4ercise their present right of possession as a co2tenant.

Proble%# p.1/5
:ertha&s claims 1. profits from clay% trees% rent from ;orrine% (alue of ;orrine&s occupancy 2. ousted 3. insurance payment 4. increased profits 5. partition for sale 6. depletion of !ine Al ert&s 9esponse to :ertha&s claims 1. Brees is aftermath% contri ution% :ertha might get part of rent from ;orinne prior to Al ert&s relationship !ith her% ut after!ards% ;orinne is just li(ing !ith him. 2. 7ot ousted% she left (oluntarily 3. Al ert increased the (alue of (ineyard and therefore : should not get the enefits% also% Al ert paid the insurance% not :ertha. 4. :ertha didn&t help out% A and ; did all the !or.. 5. : a andoned property% or A claims ad(erse possession. A !ants partition y appraisal

=elfino (. Eealencis 3A;B,$ land o!ned y joint o!ners. =elfino !ants to turn it into a residential area. )ther o!ner operates a gar age disposal company. =elfino !ants partition for sale and or partition in .ind. =elfino doesn&t !ant

12

partition in .ind ecause they don&t !ant to uild a residential area next to a gar age disposal plant% it !ould de(alue the land. Brial court ruled for a partition in sale. P987;8P-#, )3 APP#--AB# ;)C9B$ Partition in .ind is default. Partition y sale only if$ 1. physical attri utes of land are such that partition in .ind are impractical A7= 2. interest of the parties !ould e etter ser(ed y partition y sale 8,,C#, B98A- ;)C9B ;)7,8=#9#=$ 1. partition is .ind !ouldn&t e feasi le 2. gar age usiness (iolated 0oning code 3. a !aste of land to uffer gar age usiness 4. extension of road re"uired% loss of land 5. de(aluation of de(elopment due to usiness seems li.e the trial court !as only !orried a out the =elfinos and doesn&t really loo. at the other party&s interests APP#--AB# ;)C9B + elie(ed trial court considered some improper factors. 7o proof that usiness (iolated 0oning code. *ust !eigh the interest of all the parties in suit. 8f you !ant a partition y sale% that party has to pro(e the necessity for that. ')-=87>$ guiding to consider the interests of oth parties and suggesting a partition in .ind HD)$ remanded for further consideration 7)B#$ if =elfino !ins% there&s greater enefit for more people including the ,tate. 8ncreases the (alue of land% and ma.es it more economically efficient. 8nterest represents 9adin&s theory of personhood and -oc.e&s theory ecause gar age o!ner !as there first. *e elopers and Lawyers $se a Legal .aneu er to (trip Black 6a%ilies of Land Pro lems !ith partitioning$
Pro lems !ith partitioning 1. lac. of representationDresources 2. extreme di(ersity of o!nership 3. lac. of education 4. (aluation / sale is easier 5. une"ual argaining po!er 6. unilateral act of one can affect others I. a use y la!yers Policy 8ssues% recommendations 1. ;hange in co+tenancy la!% higher re"uirements for partitioning% threshold 1pre(ent unilateral acts2 1ho!e(er% la! of co+ tenancy isn&t a federal la!% it&s a state la!2 2. 9ight of first refusal% offer land to co+tenants first 3. 9estraints on de(isa ility 4. Partition in .ind default 5. -egal ser(icesDHudicial sale 6. >o(ernment su sidi0ed appraisals I. 7ecessity of !ills 5. :ar o(ersight

;arita' Property

?ays to di(ide property in dissolution of marriage *octrine of e3uitable distribution / !hen marriage is dissol(ed% property is di(ided e"uita ly y court + ,o%%unity property / di(ided 5<D5<% must decide !hat is considered community property

8n re *arriage of >raham 1;olorado2 3A;B,$ ;ouple married% !ife contri uted I<P of financial support !hile hus and !as in school getting his *:A. 8,,C#$ !hether in a marriage dissolution proceeding a *:A constitutes marital property !hich is su ject to di(ision y the court B98A- ;)C9B$ Jes% it is jointly+o!ned property to !hich the other spouse has property right% ga(e !ife money ased on future earning of *:A APP ;)C9B$ ,ay that *:A is not marital property% education is not itself property su ject to di(ision under the Act% although it !as one factor to e considered in determining maintenance or in arri(ing at an e"uia le property di(ision 9C-#$ Property em races anything and e(erything !hich may elong to a man and in the o!nership of !hich he has a right to e protected y la!% anything that has an exchangea le (alue or !hich goes to ma.e up !ealth or estate

13

,CP9#*# ;)C9B A$ e+"*atio$a' +e&ree +oes $ot %a)e a$ e1*%a$&e )a'"e or a$y o28e*ti)e tra$s#era2'e )a'"e o$ a$ ope$ -ar6et. It is perso$a' to t%e o3$er. E+"*atio$ %as $o$e o# t%e attri2"tes o# property i$ t%e "s"a' se$se o# t%e ter-. ;ontri ution to education can e ta.en into consideration for maintenance claims. =8,,#7B$ future income earning potential may e considered in deciding property di(ision or alimony matters and the !ife&s a!ard may e increased on the ground that the hus and pro a ly !ill ha(e su stantial future earnings. 8t is not the degree itself !hich constitutes the asset in "uestion ut the increase in the hus and&s earning po!er concomitant to that degree !hich is the asset conferred on him y his !ife&s contri ution. )&:rien (. )&:rien 17J2 3A;B,$ ?ife supports hus and as he o tains his medical degree. )nce he recei(ed degree he commenced action to di(orce her. 8,,C#$ ?hether medical license ac"uired during marriage is marital property su ject to e"uita le distri ution6 B98A- ;)C9B$ found P&s medical degree and license are marital property% the court ordered a distri uti(e a!ard to = ased on (alue of degree 9C-#$ marital property is all property ac"uired y either or oth spouses during the marriage and efore the execution of a separation agreement or the commencement of a matrimonial action% regardless of the form in !hich title is held. APP ;)C9B$ since hus and hadn&t yet practiced medicine% it !asn&t considered marital property. ?ife doesn&t get anything. ,BABCB#$ recogni0es that spouses ha(e an e"uita le claim to things of (alue arising out of the marital relationship and classifies them as su ject to distri ution y focusing on the marital status of the parties at the time of ac"uisition. 9C-#$ !here e"uita le distri ution of marital property is appropriate ut the distri ution of an interest in a usiness% corporation or profession !ould e contrary to la! the court shall ma.e a distri uti(e a!ard in lieu of an actual distri ution of the property. A$ i$terest i$ a pro#essio$ or pro#essio$a' *areer pote$tia' is -arita' property 3%i*% -ay 2e represe$te+ 2y +ire*t or i$+ire*t *o$tri2"tio$s a$+ $o$9#i$a$*ia' *o$tri2"tio$s -a+e 2y *ari$& #or t%e %o-e a$+ #a-i'y. ')-=87>$ ased on statute% medical license is marital property% to the extent that license !as ac"uired during marriage. #"uita le distri ution !as ased on the premise that marriage is an economic partnership to !hich oth parties contri ute as spouse% parent% !age earner or homema.er. ?hether a professional license constitutes marital property is to e judged y the language of the statute !hich created this ne! species of property. partnership entity. =8,,#7B$ e"uita le distri ution !as not intended to permit a judge to ma.e a career decision for a licensed spouse still in training ,alifornia 6a%ily ,ode ;ommunity should e reim ursed for contri utions to education or training of a party and su stantially enhances the earning capacity of the party. ;ontri ution offset y enefits made to community. 3actors to consider to determine amount due for support. ;ares mostly a out money transfers. ?hich approach% 7J or ;A% is the etter approach6

XII.
A. T%eories

LI;ITATIONS ON USE
*odel of A solute 9ights i. <'a*6sto$es ,o--e$taries / Bhe third a solute right is that of property% !hich consists in the free use% enjoyment% and disposal of all ac"uisitions% !ithout any control or diminution% sa(e only y the la!s of the land. 9ight must e exclusi(e% o!ner retains the sole use and occupation% e(ery entry !ithout o!ner&s consent is trespass. ii. ;orris ,o%e$7 Property a$+ So)erei&$ty / essence of pri(ate property is al!ays the right to exclude others.

14

,oases T%eore- / all efficiency pro lems associated !ith externalities !ould sol(e themsel(es if people could argain costlessly i. Qero transaction cost model + an efficient allocation of resources !ill e o tained if the transaction costs are 0ero. Bhe allocation of rights affects only the final distri ution of resources% not the efficiency of resource allocation. "n the absence of transaction costs# an efficient allocation of resources will obtain regardless of how the legal entitle%ent is initially allotted.2 the %arket deter%ines whether the acti ity will continue# not the initial allocation of rights. ii. Positi(e transaction costs model types of transaction costs pro lems$ 1. 7egotiation and litigation / time and effort associated !ith hammering out an agreement and enforcing it. 2. 3ree+rider / most li.ely to occur !hen there are large num ers of parties !ho must get together to o tain the enefits of cooperation / transaction costs are too high 3. 'old out / can lead to an inefficient allocation of resources 19adin !ould say people (aluate resources differently2 a. ;an a(oid holdout if A does not ma.e a firm commitment to uy any rights until she is sure that all sellers !ill sell at the agreed price 1less than A&s cost2 time consuming in terms of information costs !hich may exceed the possi le gain from trade 4. )pportunism / !hen a party attempts to extract a higher price for her entitlement y threatening eha(ior that !ould reduce her argaining ad(ersary&s !ealth% thus raising the ad(ersary&s !illingness to uy the entitlement to a(oid such a threat ,oase T%eore- says t%at e$tit'e-e$t s%o"'+ 2e a''o*ate+ to t%e parties t%at 3o"'+ %a)e 2ar&ai$e+ #or t%e- i$ t%e a2se$*e o# tra$sa*tio$ *osts. #xternalities are reciprocal in nature. ?hen transactions are costly% an analysis of transaction costs !ill ena le social decision+ma.ers to determine ho! to allocate entitlements to a(oid the more serious harm. Pro lems$ rights% system fa(ors the highest use is the highest use al!ays the fa(orite use6 7o. -oc.e / !hoe(er !as there first% 9adin / personhood (aluation% 7n 7nalytic 6ra%ework for ,o%%on Law *octrines 2 ,a'a2resi a$+ ;e'a-e+ o Bhree types of entitlement$ 1. Bhose protected y property rules / someone !ho !ishes to remo(e the entitlement from its holder must uy it (ia a (oluntary transaction% (alue is agreed upon y the seller 2. Bhose protected y liability rules / !hen someone may destroy the initial entitlement if he is !illing to pay an o jecti(ely determined (alue for it% must pay damages% destruction of initial entitlement (ia a payment of an o jecti(ely determined (alue y some organ of the state 3. "nalienable entitle%ents / transfer is not permitted et!een a !illing uyer and a !illing sellerK protects% limits% and regulates the grant of the entitlement itself. o ,etting of #ntitlements / other !ays to allocate entitlements +cono%ic +fficiency ;hoice of set of entitlements !hich !ould lead to that allocation of resources !hich could not e impro(ed in the sense that a further change !ould not so impro(e the condition of those !ho gained y it

15

o rule

that they could compensate those !ho lost from it and still e etter off than efore. Goa' is t%e %i&%est pro+"*t #or t%e e##ort o# pro+"*i$&. ?hat is economically efficient (aries !ith the starting distri ution of !ealth. Presence of (arious types of transaction costs a society !ould go a out deciding on a set of entitlements in the field of accident la!$ 1. that economic efficiency standing alone !ould dictate that set of entitlements !hich fa(ors .no!ledgea le choices et!een social enefits and the social costs of o taining them% and et!een social costs and the social costs of a(oiding them 2. that this implies% in the a sence of certainty as to !hether a enefit is !orth its costs to society% that the cost should e put on the party or acti(ity est located to ma.e such a cost+ enefit analysisK 3. that in particular contexts li.e accidents or pollution this suggests putting costs on the party or acti(ity !hich can most cheaply a(oid themK 4. that in the a sence of certainty as to !ho that party or acti(ity is% the costs should e put on the party or acti(ity !hich can !ith the lo!est transaction costs act in the mar.et to correct an error in entitlements y inducing the party !ho can a(oid social costs more cheaply to do soK 5. that since !e are in an area !here y hypothesis mar.ets do not !or. perfectly / there are transaction costs / a decision !ill often ha(e to e made on !hether mar.et transactions or collecti(e fiat is most li.ely o ring us close to the economically efficient result the perfect mar.et !ould reach *istributional 'oals 1. distri ution of !ealth 2. distri ution of certain goods 1merit goods2 a. roadly accepted preferences . preferences lin.ed to dynamic efficiency concepts c. highly indi(iduali0ed preferences 9ules for Protecting and 9egulating #ntitlements Pri(ate property / an entitlement !hich is protected y a property Property and -ia ility 9ules 'ard to elie(e that a mar.et% a decentrali0ed system of (aluing% !ill cause people to express their true (aluations and yield results !hich all !ould in fact agree are desira le Pro lem is eliminated if society can remo(e from the mar.et the (aluation of each tract of land% decide the (alue collecti(ely% and impose it #minent domain compensation% although decided o jecti(ely% may result in under or o(er compensation #fficiency is not the sole ground for employing lia ility rules rather than property rules. ;hoice of lia ility rule made ecause it facilitates a com ination of efficiency and distri uti(e results !hich !ould e difficult to achie(e under property rule

16

Brief Reprie e for (o%e in Lead2!ainted !own ?ho has the entitlement6 =oe 9un% 9enco ,melter ;o. or to!nspeople6 7ot sure% ne(er een adjudicated. ?hich rules are eing applied6 -ia ility rules% company is paying damages to certain people% i.e. hotel stays% relocation% cleanup. Property rules% residents can e ought out. 7ssu%e residents ha e entitle%ent Cse of Property 9ule / injunctions may e unreasona le% affect other enefits such as taxes for schooling. Cse of -ia ility 9ule / en(ironmentally not the est solution% plant is still polluting. Are people that mo(e in after!ards% are they entitled to damages6 'o! do you determine !hat the effects of the damages are6 8naliena le 9ights / no right to negotiate% lose enefits of ha(ing the plant 7ssu%e s%elter has entitle%ent Cse of Property 9ule / litigation and negotiation costs are (ery high% not all residents agree and the li.elihood that they !ill all get together to negotiate !ith plant is minimal Cse of -ia ility 9ule / 8naliena le 9ights Policy issues: ?ho should ha(e entitlement and !hat should solution e6

Trespass La3

Brespassers are strictly lia le for intentional physical in(asions of another&s interest in the exclusi(e possession of land
Pile (. Pedric. 3A;B,$ factory !hich = uilt% the line protruded 1 3D5 inches onto =&s property underground. ;)C9B&, 9#A,)787>$ ;ourt said they could treat it as a permanent trespass 1compensation2 or remo(e it. ')-=87>$ ;ourt decided to order a remo(al of the protrusion. = had no right at la! or e"uity to occupy the land that does not elong to them. #ntitlement to the resident !ith a Property 9ule. -8A:8-8BJ 9C-#$ ;)A,#$ price for compensation as.ed for !ould e less than the cost of remo(ing protrusion. B9#,PA,,$ should there e damage for trespass6 7o% since it !as sur(eyor&s fault and intrusion made in good faith #ntitlement on o!ner #ntitlement on encroacher >eragosian (.Cnion 9ealty ;o. 3A;B,$ Bheater uilt y Eartigian% o(erhang and drainage pipe trespass onto neigh ors land. Eatigian&s land goes to Cnion 9ealty ;o. in foreclosure. Aaronian sells to Eartigian&s rother+in+ la!% >eragosian. Eartigian .ne! of the encroachment and his purpose in inducing P to uy the land !as to control it and ma.e trou le for Cnion 9ealty. #ncroachments !ere unintentional on the part of Eartigian !hen he uilt the theater. ;ost of a ne! drain !ould cost more than !orth of trespassed land. ;)C9B$ > !ins% trespass. C had to remo(e the fire escape and drain. ;)A,#$ not economically efficient% since cost of replacing drain !as more than cost of land. Perhaps a!ard damages% an easement% or a uyout instead. Property 9ule Pile (. Pedric. >eragosian (. Cnion 9ealty co. -ia ility 9ule 9aa (. ;asper 1district court2 8naliena le 9ight

1I

;ourt decisions state that you must ha(e permission efore you trespass and !ithout permission you can&t rely on the court to allo! the trespass and expect to just pay compensation for the land. Property o!ners ha(e the right to allo! or pre(ent trespass on their land and should not e depri(ed of their land. 9aa (. ;asper 3A;B,$ ;a in and home oth intruded on =&s land. =idn&t sur(ey land efore uilding. P !arned that he thought = !as trespassing on P&s land ut P continued uilding !ithout dou le+chec.ing. -)?#9 ;)C9B$ = !as acting in good faith and realigned property lines and compensated P. -ia ility 9ule. APP ;)C9B$ = stopped acting in good faith !hen he negligently continued to uild house after eing !arned of possi le trespass y P. ,hould ha(e sur(eyed or something to determine property lines more definitely !hen it comes into "uestion. = !as 7 and therefore remanded in "uestion of good faith impro(er.

So*ia' Nor-s as Property I$stit"tio$s

#llic.son / )rder !ithout la!$ ho! neigh ors settle dispute / trespass rules in a rural
(hasta ,ounty and "ts ,attle "ndustry )pen range / allo!ed to send cattle around% lia le for intentional trespass or if animal goes to someone else&s land that is enclosed y a fence. ;losed range / strict lia ility People in ,hasta ;ounty + .no! the la! e(en etter than the la!yers% they .no! the distinction et!een closed range and open range and .no! !hich areas are closed and !hich are open. Eie! la! as more lac. and !hite then it really is. :elie(e no lia ility at all in open areas% !hich is 7)B the la!. -a!yers + don&t .no! much a out la!% loo. at it in terms of negligence. 8nsurance adjusters / pay claims in(ol(ing trespass damage% ut don&t really .no! the la!% uinsufficient .no!ledge of la!. Bhey are paying claims !hen they don&t actually ha(e to. Bhought it that e(eryone has the same pro lems so it all e"uals and alances out. 8t&ll !or. out on its o!n and they don&t ha(e to depend on the legal system ?hen people don&t get along% disputes escalate to retaliatory actions after a fe! nice phone calls. Bhen% next step is to report to the authority. ,heriffs enforce society&s norms and not really the la!. ,child (. 9u in 3A;B,$ :as.et all feud% midday all interrupted neigh ors naps

setting

Li-itatio$s o# t%e Ri&%ts o# Property O3$ers

,tate (. ,hac. Cnder federal la!% !or.ers ha(e a right to organi0e a union and unions ha(e the right to communicate !ith !or.ers on the employer&s premises see.ing their (otes. Bo secure these rights% an employer housing migrant farm !or.ers cannot exclude union organi0ers from coming on the property PruneJard ,hopping ;enter (. 9o ins / 1. 8s it fair to ma.e a pri(ate o!ner ear urdens that the pu lic should ear6 2. =oes the regulation upset economic expectations6 B!o re"uirements are contradictory% don&t help in ma.ing decisions on these type of cases. 3irst amendment right does not re"uire mall o!ners to allo! access for purposes such as soliciting% protecting% etc.% ut a state court may read a state constitutional right to free speech to include exercising that speech !ithin a shopping mall

15

XIII. TRANSA,TIONS

REAL ESTATE

,tages in the transfer of interests in land$ 1. e4ecution 2 uyer and seller e4ecute a contract for the sale of property 2. escrow period / due diligence is done% uyer has the opportunity to use the recording acts and other means to in(estigate the (alidity of the seller&s title% inspect the property% and secure financing 3. closing 2 deli(ery of deed and F exchange% typically ta.es place a month or more after contract is signed 14.2 foreclosure + lender holding a security interest in the property forecloses on the property to satisfy a de t on !hich the lando!nerD orro!er has defaulted

A. ,o$tra*t #or Sa'e o# La$+

;a(eat #mptor / let the uyer e!are o Places urden on the uyer of finding physical defects o 7ot an a solute ar to reco(ery ;o(enants of title / normally deal !ith grantor&s lia ility from competing claims to title% not physical defects in the property 8mplied !arranty of fitness for ne! houses :uyers can sue under the tort of misrepresentation :uyer may claim fraud ased on failure to disclose material facts ,tatute of 3rauds re"uirements on real estate transactions has to e in !riting time period has to identify the parties has to descri e the land% price other essential terms or conditions contract should% ut not re"uired to% also specify other important rights and o ligations$ o parties& rights to the earnest money in the (ent of rescission o rights if property is damaged or destroyed o rights to personal property on the land o circumstances in !hich contract is automatically terminated or elected for termination o method of dispute resolution #xceptions to the ,tatute of 3rauds Part performance / typically !hen the uyer has ta.en possession of the property and either paid a su stantial portion of the purchase price or made su stantial impro(ements #"uita le estoppel / if one party to the agreement reasona ly and detrimentally relied on the oral contract
#state of Jounge (. 'uysmans 3A;B,$
1. 2. 3. 4. 5. 6. I. 5. 5D1<D51 + F16<%<<< + F1<%<<< deposit 5D22D51 / increased to F1I2%<<< an. confers / an. ta.es property off the mar.et 5D31D51 / an. letter to 'uysmans of acceptance D to dra! documents 4D5D51 / 'uysmans recorded the an.&s letter at the registry of deeds / .no!n to pu lic that they had an agreement to uy the property / to pro(ide notice% has no legal impact 4D5D51 / ' sells their o!n house 4D4D51 / ' met !ith an. re"uesting t!o separate deeds and the right to assignment 1<D51 / ' recei(ed a copy of the purchase and sale agreement% had issues !ith$ a. rights of ' could not e assigned to others

14

4. 1<. 11. 12. 13. 14. 15. 16.

no pro(ision !as made for transfer of property in t!o deeds agreement contained a fiduciary clause pro(iding that :an. !as not re"uired to sell to ' at the stated price if a higher offer !ere recei(ed 1is this really an agree%ent then6 ;onflict of the meeting of the minds62 11D51 / :an. disco(ered record of letter and ad(ised ' that they !ould not proceed !ith agreement unless letter released from recording at registry 11D15D51 / deal off return uncashed chec. 12D51 / property placed ac. on mar.et% an. as.ed ' for release 4D5D52 / un!itnessed release sent to an. 4D52 / :an. sold property to ;uccis !ho too. possession and made extensi(e and costly impro(ements 1<D52 / ;uccis file a petition to "uiet title as. judges to support ;ucci&s possession of property 5D31D52 / ' allege a inding contract% reach y an. and re"uest for damages 12D2ID1<53 / ' as.s for specific performance

. c.

8,,C#,$ ?ho has a inding contract6 ?hat !ill court do if it finds that ' had a inding contract% !as specific performance arred y the doctrine of laches6 APP#--AB# ;)C9B$ found that ' had a (alid contract ut denied specific performance% a!arded damages for reach of contract and aggra(ation and harassment damages in "uestioning the good faith of the an. 9C-#$ reasona le certainty that a meeting of the minds occurred is all that is necessary to e(idence a contract 9C-#$ !hether or not laches ars a particular claim is determined not only y the length of time in(ol(ed% ut also y the ine"uity of permitting a cause of action ecause of a change in the conditions of the property or the parties in(ol(ed ;)C9B&, 9#A,)787>$ acceptance of offer% acceptance of chec.% and ta.ing property off the mar.et constituted enough agreement to sho! a inding contract. '&s too. too long to ma.e the claim for ,P. ')-=87>$ yes there !as a reach of contract% damages a!arded% no specific performance

o o

Esta2'is%i$& Goo+ Tit'e

o o

;lear rules needed to resol(e conflicting claims to property and allo! prospecti(e purchasers ease in determining easily and accurately the existence and (alidity of preexisting claims to property and to protect purchasers from prior secret transactions 9ecording system o ?hen a deed to a prior claimant is properly recorded% a su se"uent purchaser is deemed to ha(e constructi(e notice of the prior claim to the property o 7otice is a critical factor to determine !hether the su se"uent purchaser or the prior claimant has superior title o Pro lems !ith system 1. competence and accuracy lac.ing in the recording office 2. hard to impro(e due to intricate nature of the (arious means y !hich and y !hom title to realty may e held 3. complicated procedures to identify and e(aluate property la! *echanics of *odern 9ecording ,ystem o ;hain of title / chronological series of con(eyances% from grantor to grantee% from sometime in the past until the present 9ecording Acts o 9ecording statutes protect only su se"uent purchasers% su se"uent donees% such as heirs and de(isees% are su ject to the first to ac"uire pre(ails rule. o Pro(ide protection only against recorda le documents / pro(ide no protection against prior interests held y ad(erse possession o =o not affect the grantor&s lia ility under tort la! or co(enants of title / recording acts offer a means to resol(e disputes et!een grantees !ho ha(e competing claims to the same property o Bypes$ Ra*e stat"tes / su se"uent purchaser pre(ails o(er a prior grantee if he is the first to record / irrele(ant !hich grantee ac"uired the land first or !hether either

2<

of them had notice that the grantor had con(eyed the property to more than one grantee Noti*e stat"tes / su se"uent grantee pre(ails o(er a prior grantee if and only if she is a onafide 1good faith2 purchaser for (alue 3- rule$ su se"uent grantee pre(ails if o At time of purchase% there !as no notice of prior claim and ga(e (alua le consideration for the interest Ra*e9$oti*e stat"tes / su se"uent purchaser has superior title only if she is oth a ona fide purchaser and she records her instrument efore the prior purchaser

.iller . 'reen 3A;B,$ *iller !as in possession of land 1 ought from >reen2 !hen 'ines paid >reen for land. *iller !as pre(iously >reen&s tenant. =efendant 'ines claim that their title under their deed is superior to the land+ contract interest of the Ps in as much as their deed !as recorded first. ,tatute !as a race+notice statute. *iller claims it !as e(ident that they occupied land% and 'ines should ha(e had notice. *iller had hauled manure and plo!ed the land after he ought the land. 9C-#,$ ;onstructi(e notice re"uired / open% (isi le% exclusi(e and unam iguous possession 1li.e ad(erse possession2 ;)C9B&, 9#A,)787>$ plo!ing of land and hauling of manure !as open and (isi le and exclusi(e and unam iguous ')-=87>$ !hat *iller did on property !as enough to gi(e 'ines notice of possession =8,,#7B$ *iller !as there prior to purchase% so plo!ing and manure hauling could ha(e een signs of *iller as a tenant. :urden on P to esta lish that 'ines !as not a ona fide purchaser.

Philadelphia deed office / !ay ac.ed up. Attempt to mo(e to a ne! computer system is slo!. =elay of a out 1< months. -egal pro lems pre(alent$ o A later purchaser could ha(e gotten their deed recorded first e(en tho they didn&t su mit it first o A su se"uent purchaser may not ha(e notice e(en !ith a title search at the time of their purchase due to the delay in the recording 'ousing scam / 9ic.ie ?illiams found run+do!n homes that loo. li.e they&re a andoned. ?ent to =epartment of =eeds and got copies of deeds and ?illiams created false transfer deeds from the original o!ner to him or to his confederates@!hich !ere forged and notari0ed. 3iled the ne! deed !ith the department of deeds. Bhen he&d sell the property to a purchaser. 3raudulently esta lished a chain of title. o Pro lems 8nefficiencies in deed office + any ody can ta.e a deed do!n to office% pay fee% and file it. 7otaries are indi(idual persons / easy re"uirements% no tests re"uired% no educational program re"uired / can administer oaths% attest to signatures on documents for filing !ith courts and other go(ernmental agencies o ,olutions *a.e notaries state officers or ma.e endorsement of forgery to e a serious offense Brac.ing a andoned property

,o)e$a$ts o# Tit'e

,o enants of !itle promises that the grantor gi(es to the grantee under ca(eat emptor% protects a grantee from title defects only original grantee% not his successors% can rely on the present co(enant Present co(enants / only original grantee can rely on theses 1. seisin / promise that grantor has title and possession of the land

21

2. 3.

right to con(ey / grantor promises she has right to transfer property freedom from encum rances / free from undisclosed encum rances 3uture co(enants 1. "uiet enjoyment / promise that no third party !ill assert la!ful title to the transferred property 2. !arranty / grantor promises to defend the grantee from any la!ful third party claims to the property% grantor co(enants to promise the grantee for losses sustained 3. further assurances / promise that the grantor !ill ta.e necessary steps to perfect title

!ypes of *eeds >eneral !arranty deed / includes many traditional co(enants of title / promise that grantor and his successors !ill defend against all la!ful claims to the property ,pecial !arranty deed / co(enants% usually specified y statute% that protect the grantee from certain acts of the grantor Muitclaim deed / contains no promises% grantee has no rights against the grantor for defects of title Breach and Re%edies for Breach Present co(enants reached only at moment of transfer 3uture co(enants are reached after con(eyance !hen 3 rd party has made a claim to the property :asic rule that let the uyer e!are has changed to implied !arranties of fitness for new properties *ore re"uirements for home sellers ?ho should are the urden6 ;a(eat emptor o ;ommon la!$ uyer ears the urden / let the uyer e!are o =isclosure is important / perhaps place the urden on the seller6 o 9each agreement for sale% uyer comes in !ith an inspector / if inspector finds a material defect% the uyer can (oid agreement o ,alabresi / !ho !ould e the more efficient earer of urden6 / seller ecause they .no! the pro lems and pro(ide a more efficient allocation of resources

!ore*'os"re o# Se*"rity I$terests

!ypes of (ecurity "nterests .ortgage lien on the property / default results in foreclosure / proceeds used to satisfy de t *eed of trust orro!er con(eys title to trustee / default results in sale 6oreclosure Property is sold at a pu lic auction% proceeds used to pay the costs of the sale% unpaid principal and interest accrued to date% and then junior liens B!o types$ 1. judicial foreclosure / lender goes to court and as.s to court to foreclose on property and either sell it% gi(e it to the lender% or force property o!ner to pay !ith other assets 2. po!er of sale foreclosure / lender can sell property !ithout ha(ing to go through court to adjudicate a dispute% lender may hold a pu lic sale of real property almost immediately after the orro!er default. 9ight of redemption / can get property ac. if you are !illing to pay !hat you o!es% some interests% and perhaps e(en damages. Bhis may increase cost of orro!ing and the lac. of su se"uent uyers !ho hesitate due to right of redemption% most of the time% the land lays (acant for a!hile. *eficiency Judg%ent

22

:orro!er may e re"uired to satisfy this judgment !ith personal assets other than the property on !hich the mortgage or deed of trust !as originally ta.en ,ome statutes for id deficiency judgments for foreclosures on purchase money mortgages or on deeds of trust used to secure the alance of the purchase price% particularly% if the real estate contains a residence )thers for id deficiency judgments !here the lender used a po!er of sale foreclosure% there y gi(ing the lender an incenti(e to maximi0e the sale pice at the non+judicial sale ,ome allo! deficiency judgment% ut permit mortgages to reco(er an amount e"ual to only the difference et!een the unpaid principal and the property&s fair mar.et (alue a the time of foreclosure *ortgagors cannot !ai(e these protections in the initial mortgage agreement (ales of Property (ub8ect to .ortgage A person !ho ac"uires secured property normally ta.es the property su ject to the security interest% unless the security interest has a due+on+sale clause >rantee is not personally lia le for the de t% unless he agreed to assume it% ut since he holds su ject to the security interest he !ill lose the property in foreclosure if he fails to ma.e the loan payments )riginal orro!er remains lia le on the promissory note unless the lender releases him (ub2pri%e lending9Predatory Lending >enerally pay a higher interest rate :enefits o 7e! lenders can enefit those !ith no credit !ho can no! orro! money o ;ertain neigh orhoods that don&t ha(e access to credit% discriminated y an.s% these lenders pro(ide access to credit that people didn&t ha(e efore Pro lems o a lot of people that ha(e access to these loans ha(e assets ut already ha(e lots of de t o Aspects of fraud in(ol(ed o Access to information% target group don&t usually understand the mar.et% don&t understand the terms and conditions o 9esulted in increase foreclosure rates 8ncreased regulations% decreased num er of su +prime lenders ?hat role should go(ernment play6

XI=.

LAN.LOR.9TENANT LAW

A. E)o'"tio$ o# t%e La$+'or+9Te$a$t Syste-(La$+'or+ Ri&%ts a$+ O2'i&atio$s

.arkets *ar.et esta lishing rights and consent et!een people la! allo!s people to ma.e their o!n agreements / operate on the asis of mutual consent through pri(ate% contractual agreements o allocate rights to material resources :ac.ground legal rules are most usefully seen as a set of default rules that contracting parties usually may (ary and o(erride to ser(e their mutual interest *ar.et system promotes producti(e uses of resources 3reedom of contract / the legal a ility of parties to ind themsel(es (oluntarily in exchange for commitments from the other contracting party or parties Property la! / limits the types of contractual arrangements that are enforcea le and the !ays in !hich such agreements may e enforced Pri(ate arrangements that allocate uses of land ?hen does society inter(ene in these pri(ate contractual interactions6 Leasehold "nterests

23

;ontract or property distinctions Bypes of leasehold interests 1. terms of years / tenancy for a definite period of time% neither party needs to gi(e notice of termination 2. periodic tenancy / automatically rene!s% ends !hen one party gi(es timely% !ritten notice of termination 3. tenancy at !ill / termina le y the landlord or the tenant at any time% the death of either party% the execution of a ne! lease to a third party% or the con(eyance of the fee 4. occupancy of sufferance / tenant% !ho !as once in rightful possession% remains in possession after his possessory rights ha(e ended% typically !hen the landlord la!fully terminated the tenancy / not a true trespasser since he didn&t not enter the property !rongfully !er%ination of Leases *utual Agreement / the parties may mutually consent to early termination of the lease =estruction of the Premises / at common la!% physically destruction of the premises did not terminate a lease. ,ome states modify common la! rule to pro(ide that a lease is terminated !hen the premises are destroyed% so long as the tenant is not responsi le for the destruction #minent =omain / if the go(ernment ta.es the entire parcel of leased land y eminent domain% the lease is terminated and the tenant&s o ligation to pay rent ceases% go(ernment must pay just compensation for the property ta.en. 8f the go(ernment does not ta.e all of the land% ut only part of it% the tenant&s o ligation to pay the full rent remains intact% e(en though the tenant can use only the remaining portion of the premises =eath / a party&s death terminates a tenancy at !ill ut not other types of leases ,u stantial :reach of a *aterial ;o(enant / tenant&s each of the co(enant to pay rent is a asis for the landlord to rescind@ Reality of Landlord2tenant relationships =o landlords ha(e an ad(antage of argaining po!er6 =epends on mar.et ?hen should go(ernments aid tenants ecause they lac. sufficient .no!ledge6 !enant:s duties 3ulfill express o ligations in lease ;an&t maintain a nuisance =uty to (acate at the expiration of the lease / if not% there&s a hold o(er tenant + court loo.s to actions% language% facts of case to guide their reasoning Landlord:s re%edies for !enant:s breach and for -olding o er 3orci le #ntry and 3orci le =etainer self help / change loc.s% cut off utilities% usually not allo!ed Cnla!ful detainer / summary proceeding for e(iction o ,ummary proceedings pro(ide shorter periods for gi(ing notice% filing pleadings% and setting a trial date% and limit the su stanti(e claims and defenses that can e raised o Process -andlord gi(es notice to the tenant Benant re"uired to perform an affirmati(e co(enant or "uit the premises -ease is considered terminated either !hen the tenant (acates the premises or !hen the landlord files an unla!ful detainer action see.ing possession ;ourt may order tenant to pay the rent into a court+managed escro! account pending trial Benant may raise affirmati(e defenses =id not reach lease #(iction notice !as defecti(e -andlord !ai(ed reach

24

 -andlord (iolated local rent control ordinance Benant o!ed no rent ecause of landlord&s reach Benant used rent to ma.e repairs -andlord&s termination !as retaliation o ?hat are the enefits of housing court6 *ore efficient process ,peciali0ations Bime efficiency o ?ho enefits from this system6 =epends on location$ Philadelphia housing court / usually fa(ors landlords o ,tudy sho!s that tenants hardly e(er !in o Benants gi(en minimal time to argue their side o 8n most e(iction disputes% tenants e(icted o -ot of cases% tenants e(idence not considered o 8gnored tenants& rights to li(e in ha ita le residences o Benants steered to!ards mediated agreements !ithout eing !arned that they are gi(ing up their right to appeal o Hudges are elected / need money to pay for campaigns / more landlords gi(e more money than tenants ias to!ards landlords 7e! Jor. housing court / usually fa(ors tenants 1changing2s o Csed to ta.e a little longer to adjudicate% tenant could stay longer o Benant used to e allo!ed to hold rent until adjudication / no! there&s a la! re"uiring to put rent in escro! o Hudges had pre(iously een pro+tenant o Hudges are generally appointed o Attempts to rectify situation Appointed more judges )(ersa! judicial selection process #nacted escro! period ?hich is etter6 Benant+fa(ored or landlord+fa(ored system6 Benant+fa(ored / o alance .no!ledge pro lem o tenants ha(e more to lose o depends on geography / housing shortage places should fa(or tenants -andlord+fa(ored / o depends on !hether landlord is a large landlord or small landlord o too much tenant+focus causes lots of pro lems o efficiency argument o housing surplus should fa(or landlords =amages 9ene! lease Landlord:s Re%edies for !enant:s 7bandon%ent Benant has a andoned premises !hen she has left the premises and has not paid the ren !hen due Bhree remedies a(aila le after a andonment o Berminate the lease y accepting surrender / court !ill find surrender !hen the landlord uses the property in a manner that is inconsistent !ith the tenant&s right to possession

25

o o

,ue the tenant for the rent as it ecomes due / courts treat the lease as a contract and re"uire the landlord to mitigate damages y ma.ing reasona le efforts to relet the premises 9eta.e possession to relet the premises on the tenant&s account

,ommer (. Lridel ,ommer (. Lridel + 3acts$ Lridel enters into lease !ith ,ommer to rent an apartment for t!o+years. Lridel paid ,ommer first month&s rent and security deposit. Lridel ne(er mo(ed in. Lridel !rites letter claiming that he can&t pay rent ecause he&s a student% supposed to get married% engagement called off% parents !ere supposed to pay rent% he got dumped and he has no money no!. Lridel as.ed ,ommer to ta.e the 2month rents deposit and as.ed to surrender all rights to property. ,ommer doesn&t reply to letter% someone else as.s to rent property% ,ommer refused% didn&t re+rent property until a year later. ,ommer ta.es Lridel to court for total amount due for the full t!o+year term of the lease. Brial court ruled for Lridel% claimed ,ommer didn&t fulfill his duties to mitigate. 9i(er(ie! 9ealty ;o. (. Perosio / Perosio had li(ed there for a!hile. ;ourt ruled for landlord tho they didn&t li.e the rule% ut felt inclined to apply it. ;ommon la! rule$ landlord has no duty to mitigate. 7e! 9ule$ A landlord has a duty to mitigate damages !here he see.s to reco(er rents due from a defaulting tenant / landlord&s duty to mitigate consists of ma.ing reasona le efforts to re+let the apartment. 'olding$ ruled that landlord didn&t meet urden in Lridel and should not get t!o+year lease% in 9i(er(ie! / remanded ac. to court to see if landlord made reasona le efforts to mitigate

*uty to %itigate Ctilitarian argument / using resources most efficiently re"uires one to mitigate :urden seems higher than typical contract la!. -andlord&s duty is pretty strong. 3actors to consider to determine !hether landlord carried urden to mitigate o -andlord offered or sho!ed the apartment to any prospecti(e tenants o -andlord ad(ertised in ne!spaper Benant&s a ility to re ut e(idence o Benant sho!s that he proffered suita le tenants !ho !ere rejected

Te$a$ts Ri&%ts a$+ O2'i&atio$s(,o)e$a$t o# Ha2ita2i'ity

,o enant to deli er possession / implied co(enant in lease that landlord !ill deli(er possession a the eginning of a lease term o American 9ule / landlord is only re"uired to put the tenant in legal possession% landlord right to gi(e possession to someone else% fulfilled o ligation if landlord has legal authority to lease the premises and has gi(en no one else permission to occupy the premises :reach occurs if -andlord or someone !ith paramount title or someone !ith the landlord&s consent is in possession !hen the tenant is first entitled to possession o #nglish 9ule / implies a co(enant to place the tenant in actual possession of the entire premises a the eginning of the lease :reach occurs if Anyone else is in possession% regardless of the circumstances% at the eginning of the teant&s lease o Arguments in fa(or of #nglish 9ule -andlord .no!s etter than tenant the status of possession of the premises efore the date the tenant is entitled to possession -andlord is the only one !ho can e(ict someone improperly in possession efore the tenant is entitled to possession

26

-andlord is the only one !ho can get some assurance that current tenant !ill not holdo(er -andlord has greater resources and experience to proceed "uic.ly !ith e(iction -andlord should ear the ris. ecause the landlord is in the est position to e(ict holdo(ers and trespassers and deli(er actual possession o Cnder either rule% if landlord does not deli(er possession !ithin a reasona le time% the tenant may terminate the lease and reco(er conse"uential damages "%plied co enant of 3uiet en8oy%ent / neither the landlord% someone !ith paramount title% nor someone acting !ith the landlord&s consent !ill disrupt the tenant&s possession of the premises. o *ost states do not recogni0e disrupti(e eha(ior of third parties in this implied co(enant o ,ome states ha(e modified and made landlord responsi le for the acti(ities of other tenants o ;ases focus less on !hether the landlord is responsi le for or appro(ed the disrupting tenant&s conduct than !hether the landlord is legally a le to remedy the pro lem o 7ctual e iction / !hen landlord physically ousts the tenants from the entire premists o Pro lems Policing y landlords Pri(acy issues ,houldn&t e landlord&s duty to act as ar itor Benant&s right to ha ita le premises / o )ld rule + ca eat e%ptor% lessee% ga(e the lessee the urden of inspecting the leasehold efore agreeing to lease o 'ousing codes today are (ery detailed and re"uire things such as plum ing% fire escape% etc. o Pro lems !ith housing codes reinforcement ;orrupt or inept inspectors Cnli.ely for prosecution for (iolations =ifficulty of super(ising repairs 9ecei(orship statutes unsuccessful ecause recei(or usually had insufficient capital to ma.e repairs until it had collected rent for a fe! years ;apture / inspectors mo(e from pu lic inspector positions to !or.ing pri(ately for landlords Cnderfunded o ;arranty of habitability / part of a roader political and legal mo(ement to address the pro lems of society at large
o Ha(ins (. 3irst 7ational ;orp. 3acts$ Ha(ins mo(ed into apartment% after mo(ing in% disco(ered all these pro lems !ith apartment% !ithheld rent. ;ommon la! at the time !as ased on property la!% that there !as no !arranty of ha ita ility. =istrict ;ourt found for landlord. ;ourt&s 9eason$ the continued (itality of the common la!@depends upon its a ility to reflect contemporary community (alues and ethics. ;ourt elie(es that the old rule ased on factual assumptions that are no applica le. Bhe (alue of the lease in the past !as on the land itself ut no! the (alue of the lease is to gi(e them a place to li(e. People these days don&t ha(e time to do their o!n maintenance% tenants no!adays don&t ha(e the s.ill to fix things themsel(es% much more mo ile population that !ill ha(e less incenti(e to repair the premises% and ine"uality in argaining po!er / that landlord .no!s more% tenants less le(erage. :uildings today are more technically ad(anced and tenants are not s.illed enough to repair. 3inancing / lo!+income tenants don&t ha(e money to in(est in repairs. 9ule$ under contract la!% there is not an implied !arranty for used goods -andlords ha(e incenti(e to impro(e uilding e(en !hen there is an ine"uality of argaining po!er

2I

*aintain incenti(e 8n(estment for o taining future tenants ;riticism / sometimes it&s less efficient to impro(e old uildings / should courts impose a urden on landlords to create an incenti(e to ma.e repairs6 'ousing codes / re"uire a !arranty of ha ita ility / must meet certain standards / court creates a pri(ate remedy of enforcement / tenants can enforce the codes through the la!. Benants no! ha(e a lia ility or a property right6 / property rule / ecause imposes that landlord must fix. 8s this right aliena le6 7o% cannot contract out of this% cannot agree to pay lo!er rent / not aliena le. -ia ility rule / tenant&s can reduce rent y some amount. 7o !ai(er of su stantial reaches permitted ?right applied !arranty of merchanta ility applied to apartments o 3la!s usually !arranty of merchanta ility is applied to ne! products and not used goods difference et!een uying and leasing goods seller sells goods% ma.es goods% should .no! their good% !hereas in landlord+tenant situation% landlord doesn&t necessarily .no! the state of the apartment many landlords not .no!ledgea le on ho! to maintain uildings Allo!s pri(ate right of action through housing code ?hat else could ?right ha(e done6 o *ore se(ere criminal sanctions for (iolations of housing codes / set y legislature o Benants should e mandated to go directly to the housing authority o ;ourt could ha(e forced housing oard to enforce code and forced legislature to increase funding to enforce housing codes Arg$ ;ourts shouldn&t e in(ol(ed in policy ma.ing Arg$ courts should ma.e policy in landlord+tenant issues ecause 6666 o o o

Warra$ty o# %a2ita2i'ity !enant2initiated re%edies to enforce habitability re3uire%ents Benants can use self+help to o tain its remedies !ithout facing e(iction for nonpayment 8mplied !arranty is reached only !hen the defect has a su stantial impact on health or safety and only after the landlord has had a reasona le opportunity to cure the defect !hree categories of re%edies: o Rent application tenant can use some of the rent money to ma.e repairs if the residence is su stantially untena le Pro lems under ;oase theorem / free rider pro lem o Rent2withholding / tenant !ithholds rent until the landlord corrects health+threatening defects or other!ise ma.es the premises ha ita le. *ay e held in escro! and once repairs are completed all the money in the account is turned o(er to the landlord. 1pay rentD ac. rent2 o Rent2abate%ent + tenant simply stops paying rent% if no reach found% landlord can get ac. rent and possession% good faith elief in inha ita le premises is not a defense ;ays to deter%ine a%ount of rent reduction o =ifference et!een the reser(ed rent and the actual rent (alue of the premises during the period of the reach o =ifference een the fair rental (alue of the premises as !arranted and the fair rental (alue of the premises in their present condition o 9eduction in rent y a percentage e"ual to the percentage reduction in (alue resulting from the reach +fficacy of the ;arranty of -abitability

25

;riti"ues elie(e that !arranty does not achie(e the goal of ensuring decent housing for poor tenants% and enforcement of !arranty might do+income tenants more harm than good o ,harles .eyers / !he ,o enant of -abitability and the 7%erican Law "nstitute three categories of housing !ill e affected y the co(enant$ 1. =!ellings that do not comply !ith the housing code and are considered unsuita le for residential use ut that can e ought up to code standards y additional in(estment that can e reco(ered through higher rents a. ?ill result in raised rent that some people cannot afford . ?ill result in raised rent that !ill result in decrease in disposa le income for other goods and ser(ices 2. =!ellings that do not comply !ith the housing code and are considered unsuita le for residential use ut that can e rought up to code standards y and expenditure that !ill reduce landlord&s rate of return a. ,hort run% enefits tenants ecause landlord eats costs . -ong run% "uantity of housing in the second category !ill decline unless rents fully reflect the costs of the additional repairs re"uired / ecause of lo! profit position% operating costs !ill e(entually exceed profita ility c. 7o ne! category 2 !ill e uilt / !hile present o!ners need only co(er their operating costs% potential o!ners must e a le to co(er their initial capital expenses fla!ed argument ecause ne! uildings ha(e to e up to code 3. =!ellings that do not comply !ith the housing code and are considered unsuita le for residential use% for !hich the costs of repair to meet code standards !ill result in a negati(e return on sun. capital a. ,ome portion of the housing stoc. in the third category !ill e !ithdra!n from the mar.et ecause of the duty of ha ita ility / less housing for lo!+income tenants . 8f not mortgaged / a andoned c. 8f mortgaged / the mortgager !ill try to maintain property for a!hile% after a!hile% the mortgager !ill default and the lending institution ta.es o(er. As long as rental income exceeds costs% lending institution controls. After it ecomes profitless% ,tate ta.es o(er property for taxes% remo(e it from tax rolls and pay for repairs out of rental income not reduced y taxes / results in a cycle / after city ac"uires property% city expenses rise% real estate taxes rise% and more structures are a andoned for city to ac"uire due to higher expenses resulting from higher taxes 'ousing is a asic human need% perhaps go(ernment should pro(ide more su sidies to allo! for minimum standards to e met ,hould protect children% and !arranty should pre(ent neigh orhood decline as long as housing agents can push landlords to .eep in(esting and repairing instead of a andoning / i.e. pro(ide incenti(es for landlord in(estment o

Te$a$ts Ri&%ts A&ai$st .is*ri-i$atio$

3air 'ousing Act / prohi its discrimination in the sale or leasing of housing on the asis of race% color% religion% sex% handicap% familial status% or national origin o ;ontains limited exemptions for single+family homes sold or rented y the o!ner !ithout the use of any sales or rental agent or ad(ertisement religious organi0ations

24

pri(ate clu s housing for the elderly

Cnited ,tates (. ,tarrett ;ity Associates 3A;B,$ ,tarrett uilt a large housing complex and sought to maintain a racial distri ution y apartment. 3ear of !hite flight. 7e! Jor. ,tate 'ousing Authority 17J,'A2 cared a out integration% racial alance 1I<P !hite and 3<P minority2. Bhe neigh orhood surrounding the project feared con(ersion to rental apartments !ould result in ,tarrett ;ity ecoming an o(er!helmingly minority de(elopment / racial tipping. Bo maintain a racial alance% ,tarrett ;ity maintained a residence of 64P !hite% 22P and 5P 'ispanic. 1!ho !ere the other 6P62. -a!suit y lac.s% resulted in an increase in percentage of apartments a(aila le to lac.s. After settling% 3ederal go(ernment rought suit% alleging "uota (iolating 3air 'ousing Act 8,,C#$ ?hether "uota system (iolated the 3air 'ousing Act6 Plaintiff&s Arg$ singled a(aila ility solely on the asis of race% !aiting list for lac.s longer than !hites 1preference to !hites2% fraud in telling minorities there !as no housing a(aila le !hen there !ere. =efendant&s Arg$ elie(ed procedure !as adopted at the ehest of the state solely to achie(e and maintain integration and not moti(ated y racial animus. Argued the point of !hite flight and tippng. Brying to pre(ent a con(ersion to a predominately minority community. ,trict ,crutiny / ,tate must ha(e a compelling interest to ha(e a policy ased on race. P'$ trial court found for the justice department% found that program (iolated 3'A / didn&t re"uire a specific program% just that you cannot discriminate. ;)C9B&, )P878)7$ o 3'A / !as enacted pursuant to ;ongress& 13th Amendment po!ers / to end discrimination and promote integration. #7= in discrimination !ould 9#,C-B in integration. o Muota promotes integration ut conflicts !ith anti+discrimination o ,upreme ;ourt&s analysis of !hat constitutes permissi le race+conscious affirmati(e action under pro(isions of federal la! !ith goals similar to those of Bitle E888 pro(ides a frame!or. for examining the affirmati(e use of racial "uotas under the 3air 'ousing Act ased on ;ourt opinions on 14th Amendment cases 'o!e(er% go(t specifically did not ring this case up under the 14th Amendment ecause they did not !ant to expand anti+discrimination la! in general under the 14th amendment. o -oo.ed at !hether the practice is temporary% !hether there is existence of prior racial discrimination or discriminatory im alance ad(ersely affecting !hites and "uote does not pro(ide minorities !ith access to ,tarrett ;ity ut rather acts as a ceiling to their access. o ;ourt agreed !ith the lo!er court and said there !as a (iolation. T%e i-pa*t o# Starrett ,itys pra*ti*es #a''s s0"are'y o$ -i$orities. =8,,#7B$ 7#?*A7 o =oes not elie(e that ;ongress intended the 3'A to prohi it the maintenance of racial integration in pri(ate housing 1de ates the statutory interpretation% *iner is loo. at a textual interpretation% 7e!man loo.ed more at intent2 o Bhe maintenance of racial integration !as !or.ing% met a compelling interest o ,tatute doesn&t prohi it integration ?ho is right6 o Preser(ing a alance o. y limiting the num er of minorities6 o ,hould racial tipping e permitted in analysis6 o 8ntegration helps eliminate prejudice in the future (ection 0 7rticles 9endell !anted 5<P of ,ection 5 certificates to e project ased stay at the project as opposed to tenant ased !hich allo!s tenants to li(e !here(er landlords allo! for ,ection 5 su sidies. 8n project ased plan% landlord has the certificates and chooses the tenants% instead of tenant trying to find landlords that !ill accept the certificates. 'istorically the go(ernment ha(e een responsi le for increasing segregation in the C, ecause of their programs. ,egregation inherent in the pu lic housing system in the eginning. Cr an rene!al programs also increased segregation. 3ederal housing administration in the 143<s fa(ored housing de(elopments in the su ur s and other o(er!helmingly !hite housing de(elopments. ,ection 5 created to pre(ent segregation and impro(e integration. ?anted to a(oid the concentration of minorities and !anted to increase interaction amongst different groups.

3<

-egal6 o 3acially neutral decision / ut has a disparate impact. o ?hat is the compelling interest6 o =issuade people from mo(ing out of city% .eep neigh orhoods intact% entice de(elopers to impro(e current housing o Program meant to gi(e poor families more options in finding a place to li(e / to help them escape isolated housing projects and mo(e into real neigh orhoods o 7ation!ide interest to .noc.do!n high rises and spra!ling housing projects and uild mixed+income to!nhouse+style neigh orhoods o Protect neigh orhood sta ility o Pre(enting !hite flight o Pre(enting (iolence o ,trict ,crutiny or mid+le(el scrutiny o 7ot facially discriminatory li.e ,tarrett ;ity ut did ha(e some racial impact Policy 8mplications o 9endell&s policy !ill restrict free choice / may increase concentration of minorities o Are the landlords accepting the certificates trust!orthy6 o ?hich policy is etter6 :oth ha(e enefits. 'C= didn&t accept 9endell&s proposal ut did increase the num er of certificates that city got.

X=. X=I. ,O=ENANTS

EASE;ENTS AN.

,er(itudes / arrangements et!een pri(ate parties that gi(e one party the right to use or to restrict the use of another&s land% property rights and o ligations created y ser(itudes pass to successi(e o!ners and occupiers !ithout the need expressly to assign these rights and o ligations or to renegotiate the arrangement. Bypes o #asement / right to use another&s land o Profits a prendre / right to remo(e natural resources from another&s land o 9eal ;o(enants / lease pro(isions that ind oth the lessor&s and lessee&s successors and that are enforced at la! o #"uita le ,er(itudes / promises et!een neigh oring lando!ners that ind their successors and that are enforced in e"uity Pros$ o Cseful in designing complex residential% commercial and industrial projects. o Bhey are more flexi le and dura le. o 9estrict the use of indi(idual parcels of land to o tain common enefits o Promote efficient land use ecause they allo! an in(estor to purchase only the degree of control needed to maximi0e the in(estment% rather than the entire fee ;ons$ o ;an free0e land uses and distort patterns of de(elopment o ;an impose urdens that ecome unreasona le and depress land (alues o Bransaction costs and free+rider and ilateral monopoly pro lems may pre(ent the most efficient use of land

A.
o o o o

Ease-e$ts
#asements gi(e the holder the right to use or restrict the use of another person&s land =oes not necessarily create an exclusi(e right =ominant tenement / enefits from easement ,er(ient tenement / urdened y easement

31

o o

#asement holder cannot normally pre(ent the ser(ient possessor from also using the land in(ol(ed in the easement or from granting another easement on the same piece of land% unless clearly esta lished as an exclusi(e easement Bypes o 7ffir%ati e9negati e ease%ents Affirmati(e easement / pri(ileges the holder of the easement to use of another&s land 7egati(e easement / has the right to pre(ent the ser(ient possessor from using the ser(ient tenement in an other!ise la!ful manner / air% light% flo! of an artificial stream% lateral support o 7ppurtenant9in gross ease%ents #asement appurtenant / incident of o!nership of the dominant tenement and is not personal to the original holder% passes !ith the possession of the dominant tenemant 1goes !ith the land2% successor to the ser(ient tenement ta.es possession of that interest su ject to the easement unless he is protected y the recording act o #asement in gross / personal to the holder% independent of his possession of any land 1 enefits certain people2% generally not transfera le ;reation of easements / must conform to the statute of frauds o +4pressed ease%ents / created y contract #asement y grant + created if A con(eyed a right+of+!ay across A&s land to : #asement y reser(ation / created if A con(eyed a fee simple to :% ut expressly reser(ed for herself a right+of+!ay across the land.
>reen (. -upo 3A;B,$ >% P% originally o!ned all land% sold northern part of it to -% =s. = uilt house on land. -upo&s ga(e > an easement% > uilt a mo ile home par. on their part of the land and people !ith motorcycles !ere using the easement access as a practice run!ay. - !ere paying off land contract in !hich > still held title until it !as still paid off. - re"uested a deed release% > agreed in return for the promise of an easement !hen -s e(entually o tained title y paying off land. - loc.ed off road% >s rought suit. 8,,C#$ 8s easement in appurtenant or in gross6 ;an parol e(idence e admissi le to pro(e it !as an easement appurtenant6 ;)C9B&, 9#A,)787>$ !ritten consent !as am iguous and parol e(idence is admissi le. ,trong presumption against personal easements in ?ashington% presumption for easement appurtenant unless specifically esta lished as in gross. 9C-#$ A ser(ient o!ner 1-2 is entitled to impose reasona le restraints on a right of !ay to a(oid a greater urden on the ser(ient o!ner&s estate than that originally contemplated in the easement grant% so long as such restraints do not unreasona ly interfere !ith the dominant o!ner&s use. =8,;C,,8)7$ easement appurtenant logical ecause often needed for ser(ices such as utilities% efficient% increases (alue of land to easement holder.

+ase%ents by operation of law #asement y implication / allo!ed if disputed parcels !ere under si$&'e o3$ers%ip7 there !as a per-a$e$t or *o$ti$"o"s pre9s"2+i)isio$ "se across the allegedly ser(ient tenement the use !as reaso$a2'y appare$t upon inspection easement is reaso$a2'y $e*essary easement y necessity / arises !hen land is su di(ided% and one of the parcels is landloc.ed from the pu lic road. 9e"uires$ that the purported ser(ient and dominant tenements !ere o!ned y a si$&'e o3$er at ti-e o# *o$)eya$*e

32

easement must e $e*essary scope easement y necessity + depends on a court&s assessment of !hat is necessary to permit the o!ner of the dominant tenement to use her land easement y implication / limited to the prior use of the "uasi+ easement and foreseea le changes in the use of the dominant tenement

9eese (. :orghi / Ps sold land to =% tried to uy another lot they sold earlier to a third party% ut = also ought that causing P to e landloc.ed. = then uilt their home in a !ay that loc.ed the former path!ay used y P to get access to reach ?itherly -ane. = had made some promise to P to allo! access to land% ut did not gi(e an express easement. B98A- ;)C9B$ said 9eese !as entitled to a right+of+!ay of necessity along the eastern oundary of =&s land. :elie(ed that since P formerly o!ned all the parcels% that they had an easement appurtenant thereto o(er ?itherly -ane. =&, A9>$ a!arding such a right+of+!ay constitutes ta.ing of property !ithout just compensation in (iolation of their constitutionally guaranteed rights% in light of e(idence% court did not ha(e po!er to create an easement y implication% and court erred. ;)C9B&, 9#A,)787>$ P&s common la! right to see. a right+of+!ay of necessity is 7)B affected y the fact that he could ha(e a right+of+!ay y condemnation. P&s rights rest on a claim to a right+of+!ay necessity not to an easement y implication ased on an o (ious% continuous% and pre+existing use. 9C-#$ ?hereas an easement may e generally ased on the implied intent of the parties and !hile necessity may e an operati(e factor in determining intent% a !ay of necessity rests on pu lic policy often th!arting the intent of the grantor or grantee. *e%ands of our society pre ent any %an2%ade efforts to hold land in perpetual idleness as would result if it were cut off fro% all access by being co%pletely surrounded by lands pri ately owned. doesn&t the single+o!nership re"uirement go counter to this pu lic policy elief6 ;A -A?$ 9ight+of+!ay of necessity arises y operation of la! !hen it is esta lished that 112 there is a strict necessity for the right of !ay 1ex. -andloc.ed parcel2 and 122 the dominant and ser(ient tenements !ere under the same o!nership at the time of the con(eyance gi(ing rise to the necessity. ')-=87>$ for P% re"uires an easement y necessity ,ome states pro(ide statutory procedures for pri(ate lando!ners to condemn a right+of+ !ay of necessity across adjoining properties% allo!ed !hen landloc.ed property o!ner does not satisfy the re"uirements to esta lish an easement y necessity under common la!

By prescription <si%ilar to ad erse possession= / justified on the ground of maximi0ing use of underutili0ed land. 9e"uirements$ Actual Ad(erse )pen and notorious ;ontinuous and uninterrupted for the prescripti(e period ;laimant&s good faith is irrele(ant Ad(erse use is presumed if the claimant has used another&s land
3inley (. :otto / t!o apartment uildings% Ps claim they o!ned an easement in a certain !al.!ay lying et!een t!o apartment houses o!ned y P and =. = put up a fence to loc. !al.!ay. Predecessor o!ners used to ha(e a ric. !all that had crum led and !as replaced y a !al.!ay. P&s tenants !ould use !al.!ay to access laundry room and !ith the fence in place% hindered access. Predecessor claims !al.!ay !as an act of eing neigh orly and did not consider anyone trying to ma.e a legal claim to it. P&s A9>$ !as actual% continuous and uninterrupted% and open@!as it notorious 1contrary to the interest of the o!ner2 or ad(erse6

33

;)C9B&, 9#A,)787> / !as not open and notorious% it !as a neigh orly accommodation ')-=87>$ use of the !al.!ay y appellants !as permissi(e and not under claim of right =8,;C,,8)7$ this !as an implied permission not an expressed permission% ased on history of fenceDpath!ay. Bo allo! people to do !hat the =s did in this case 1claiming they ga(e permission2% there is no o jecti(e criteria to determine if there&s an easement y prescription. Eague and su jecti(e. 7egati(e easements / cannot e o tained y prescription. ;onduct that !ould other!ise create a prescripti(e easement for light+ recei(ing light the flo!s across the lando!ner&s land for the prescripti(e period+does not create a cause of action. 7egati(e easements y prescription pose serious threats to de(elopmental (alues that underlie much of American land use la!s
Pro lem% p. I4I o PAB' : o #xpress easement / 7o% ne(er anything in !riting% nothing agreed upon o #asement y implication / 7o% not a single parcel of land that !as di(ided y *>#. o #asement y necessity / 7o% not a solutely necessary% not a single parcel of land that !as di(ided y *>#. o #asement y prescription / 7o% no .no!ledge that path !as e(er used% !as used y permission% house loc.ed it to pre(ent continuous and uninterrupted o PAB' A o #xpress easement% 1estoppel62 o #asement y implication / pro a ly% meets re"uirements 1single o!nership% use is permanent and continuous% apparent in use% reasona ly necessary2 / easement appurtenant or easement in gross6 ?as easement gi(en specific to .ids or to land6 *ust pro(e that permission !as gi(en in 14I2. o #asement y necessity / pro a ly / o!ned y same people% reasona ly necessary% landloc.ed

#asement y prescription + "uestion of !hether it&s continuous and uninterrupted since farm e"uipment loc.ed path sometime% !hether there !as permission gi(en y .ids% statute of limitations for easement y prescription has run out 1relationship deteriorated for more than I years2

<.
o o o o

,o)e$a$ts
;o(enant / a promise to do or refrain from doing something 9eal co(enant / connected to land in a legally significant !ay% enforcea le y damage :urdens and :enefits of real co(enants pass to successi(e o!ners of the underlying estate Affirmati(e real co(enant (s. affirmati(e easement o Affirmati(e real co(enant / promise to do an affirmati(e act o Affirmati(e easement / right to use another&s land% no promise to do anything 7egati(e real co(enants (s. negati(e easements o :oth lando!ners has agreed to refrain from some action on his land that he other!ise is legally allo!ed to do o 7egati(e easements / generally limited to easements for air% light% support% and flo! of an artificial stream )ther differences et!een easements and co(enants o #asement creates rights in rem% against the community or pu lic o 9eal co(enant creates rights in personam% solely against the co(enantor or her successors #lements of a 9eal ;o(enant / assumes that the co(enant is enforcea le et!een the original parties under he normal rules of contract% must satisfy the statute of frauds o :urden 8ntent / original parties must ha(e intended to ind the co(enantor&s successors / can e discerned from the circumstances surrounding the agreement% courts conclude that the parties intended a co(enant to run if it touches and concerns the land Eertical pri(ity / exists if the co(enantor&s successor has succeeded to the same estate that the co(enantor had% to succeed% one may ac"uire the land y de(ise% intestacy% grant% or judicial sale / any means e4cept ad(erse possession 1in easements% any possessor of the ser(ient tenement must honor the easementK in

34

ad(erse possession% title ta.en su ject to easements created prior to his ad(erse possession% ut ta.en free of predecessor&s real co(enants2% re"uires an identical relationship 1ex. A sold ?% leased to L% L not urdened since no identical relationship% L does not ha(e the identical interest that ? too.2. 'ori0ontal pri(ity / descri es the re"uired relationship et!een the original co(enantor and original co(enantee 9estricti(e approach / re"uires co(enantor and co(enantee to ha(e simultaneous interests in the land that is the su ject of the co(enant 1in hp if they are landlord and tenantDo!ners of ser(ient and dominant tenements respecting an easement2 -ess 9estricti(e approach / re"uires co(enant to e created simultaneously !ith a transfer of an interest in land 'P of little conse"uence in landlord+tenant relationships% limits real co(enants to those co(enants that !ere created !hen the lease !as executed% !hich usually co(ers all rele(ant co(enants 'P sharply restricts the a ility of fee o!ners to create real co(enants since fee o!ners often do not !ant to transfer an interest in land at the same time that they !ant to create a real co(enant Bouch and concern / re"uires that the real co(enant relate to the co(enantor&s use of his land 1ex. Benant&s co(enant to pay rent2% designed to identify those co(enants that a successor ought to e o ligated to fulfill simply ecause he !as succeeded to the co(enantor&s interest in the land

o o

:urden 8ntent Eertical pri(ity / exists !hen a successor has succeeded to the same interest as the original co(enantee% under the 9estatement% a su tenant could enforce the tenant&s co(enants !ith the landlord Bouch and concern 9emedy for :reach / real co(enants enforced y damages remedy only. ,ome states no! hold that the doctrine of changed conditions is a defense to a claim for damages and may e used to terminate a real co(enant Bermination of 9eal ;o(enants / 9eal co(enants may e expressly designed to terminate at some fixed point in time% or upon some condition o
#agle #nterprises% 8nc. (. >ross 3A;B,$ 1451 / B!o people 1) and :2 contracted in deed that ) !ill supply !ater and : !ill uy it. #xpressly pro(ided that the co(enant contained shall run !ith the land. #xpress co(enant. ,uccessor of :% >% uilt his o!n !ill and refused to purchase the !ater from successor of )% ##. 8,,C#$ ?hether the promise of the original grantees to accept and ma.e payment for a seasonal !ater supply from the !ell of their grantor is enforcea le against su se"uent grantees and may e said to run !ith the land. 8.e. =id the agreement touch and concern the land. ')-=87>$ Agreement does not seem to touch and concern the land% > !ins. ;)C9B&, 9#A,)787>$ agreement represents a contract% for it to touch and concern the land it must su stantially affect the o!nership interest of lando!ners in the su di(ision. 9C-#$ distinction et!een co(enants !hich run !ith land and co(enants !hich are personal% must depend upon the effect of the co(enant on the legal rights !hich other!ise !ould flo! from the o!nership of land and !hich are connected !ith the land. !he key 3uestion is whether >the co enant in purpose and effect substantially alters these rights.? 9C-# 2$re"uirements to sho! that a co(enant runs !ith the land$ i. original grantee and grantor must ha(e intended that the co(enant run !ith the land ii. pri(ity of estate must exist et!een the party claiming the enefit of the co(enant and the right to enforce it and the party upon !hom the urden of the co(enant is to e imposed iii. co(enant must e deemed to touch and concern the land !ith !hich it runs

35

;)C9B&, 9#A,)787>$ no e(idence that other property o!ners in the su di(ision !ould e depri(ed from !ater from ## or that the price of !ater !ould ecome prohi iti(e for other property o!ners if respondent terminated appellant&s ser(ice.

Rnot concerned really !ith hori0ontal and (ertical pri(ityR + !hen are co(enants appropriate and !hen aren&t they6 ?hen can agreements e enforced on su se"uent o!ners of land6 ?hen do co(enants pass !ith the land6 8f there&s no hori0ontal pri(ity% co(enant does not pass !ith land. 'ori0ontal pri(ity ;o(enantor and co(enantee 1original o!ners2 ha(e to ha(e o!nership interest in the land% third parties do not ha(e the right to impose restrictions on land use. *ost states re"uire that con(enantee pass the land to co(enantor !ith the co(enant. Eertical pri(ity su se"uent o!ner of land must ta.e the same interest as the prior o!ner% 1e.g. fee simple fee simple2% must ha(e an identical relationship.
,helley (. Lraemer 8,,C#$ Muestion relating to the (alidity of court enforcement of pri(ate agreements% generally descri ed as restricti(e co(enants% !hich ha(e as their purpose the exclusion of persons of designated race or color from the o!nership or occupancy of real property. =oes judicial enforcement of pri(ate co(enants amount to ,tate action of discrimination that (iolate the 14 th Amendment6 3A;B,$ there !ere 3< out of 34 o!ners !hich signed a co(enant pre(enting the sale of land to 7egroes and *ongolians. ,helley !anted to uy property from 3it0gerald. Bhe other lando!ners rought this la!suit as.ing for an injunction to pre(ent ,helley&s from ta.ing possession. ,helley&s had already ta.en the property. P'$ trial court found that not all the homeo!ners signed the agreement so it ne(er ecame final and complete% found for ,helley. ,upreme ;ourt of *issouri re(ersed% saying co(enant !as (alid and granted injunction. :elie(ed enforcement (iolated no rights guaranteed to the ,helley&s y the ;onstitution. ,CP9#*# ;)C9B )3 C,$ restricti(e co(enant in and of itself did not (iolate the 14th Amendment ecause it !as pri(ate not pu lic 1relied ;i(il 9ights cases of 15532. 14th Amendment only co(ered pu lic action. P9#;#=#7;#$ ,trauder (. ?est Eirginia$ racially restricted jury ser(ice% American 3ederation of -a or (. ,!ing$ enforcement of state courts of common+la! policy of state !as held to e state action. do they apply6 9C-#$ state action in (iolation of the Amendment&s pro(isions is e"ually repugnant to the constitutional commands !hether directed y state statute or ta.en y a judicial official in the a sence of statuteK ;onstitution confers upon no indi(idual the right to demand action y the ,tate !hich results in the denial of e"ual protection of the la!s to other indi(iduals ;)C9B&, 9#A,)787> / ut for the court% the transaction et!een uyer and seller !ould ha(e een complete. ?9)7>. ?ith an existing co(enant% there are other parties !ith rights in this case ')-=87>$ ;ourt&s enforcement of co(enant !ould e deemed ,tate action in the (iolation of e"ual protection of the la!s guaranteed y the 14th Amendment.

,.
o o o

E0"ita2'e Ser)it"+es
#"uita le ser(itude / creates an interest in property that passes to successi(e o!ners !ho ha(e .no!ledge of the restriction #"uita le doctrine to apply !hen co(enant la! !as too strict to apply / has fe!er re"uirements than co(enants #lements of ,er(itude o :urden To"*% a$+ *o$*er$ / re"uires that the real co(enant relate to the co(enantor&s use of his land Noti*e / urden of e"uita le ser(itudes do not run unless the party to e held lia le had notice of the e"uita le ser(itude !hen he ac"uired possessionK no

36

:enefit To"*% a$+ *o$*er$ I$te$t 9emedy o Csually injuncti(e relief o 8f the co(enant is one to pay money% courts usually !ill not order payment ut !ill impose a lien on the co(enantor&s property% limiting lia ility to the (alue of the property #"uita le defenses used to pre(ent enforcement of e"uita le ser(itudes o ?ai(er o -aches o Cnclean hands o #stoppel o =octrine of neigh orhood change / court !ill not enforce a co(enant in e"uity if% ecause of changed conditions% it is no longer possi le to fulfill the parties& original intent o ;ontrary to pu lic policy o
:olotin (. 9indge Muestion of e"uita le ser(itudes. ?hen they should e enforced and !hat standards to use to decide !hether they should e enforced. 3A;B,$ P o!ned an unde(eloped lot on ?ilshire :l(d. -ot had a restriction deed that only allo!ed a single+family home de(elopment. P !anted to uild a commercial uilding. 8s deed enforcea le6 B98A- ;)C9B$ rule for P% restriction not enforcea le due to changed circumstances. A court !ill declare deed restrictions to e unenforcea le !hen% y reason of changed conditions% enforcement of the restrictions !ould e ine"uita le and oppressi(e% and !ould harass P !ithout enefiting the adjoining o!ners APP#--AB# ;)C9B$ ;hanged circumstances e(idence not enough% economic (alue isn&t enough% 9e"uires a finding that the purposes of the restrictions ha(e ecome o solete 1P must sho! residential de(elopment !as impossi le2 or that the enforcement of the restrictions on P&s property !ill no longer enefit the other lando!ners. ;)C9B&, 9#A,)787> / purpose of restriction !as to preser(e tract as fine residential area y excluding acti(ities that might e offensi(e to residents or !hich !ould create noise% traffic% congestion% etc@de(eloping commercially may increase the (alue of the neigh oring lands% ut the purpose of the restriction !ill e (iolated. o ?ho should get to decide !hen the circumstances ha(e changed6 7eponsit Property )!ner&s Ass&n% 8nc. (. #migrant 8ndustrial ,a(ings :an. 3A;B,$ P% 7% rought action to foreclose a lien upon land !hich =% #% o!ns. P alleges that lien arose from a co(enant% condition or charge contained in a deed of con(eyance of the land from 7eponsit 9ealty ;ompany to a predecessor in title of =. = purchased land at a judicial sale. Bhe deed supposedly con(eys the property su ject to the co(enant% condition or charge contained in the original deed. ;o(enant charged a maintenance fee for pu lic area up.eep. 8,,C#$ does the co(enant run !ith the land6 =oes the co(enant touch or concern the land6 =oes the co(enant in purpose and effect su stantially alter the legal rights !hich !ould flo! from o!nership of land and !hich are connected !ith the land6 1:9)A= interpretation2 ;)C9B$ 9e"uirements$ 1. intent 2. touch and concern 3. pri(ity of the estate et!een the promisee or party claiming the enefit of the co(enant and the right to enforce it% and the promisor or party !ho rests under the urden of the co(enant

notice re"uired if the person against !hom enforcement is sought as a donee% heir% or de(isee. 4Pri)ity5 / none% anyone !ith a possessory interest in the land is ound

3I

9C-#$ ,u ject to fe! exceptions% there is no! in this state a settled rule of la! that a co(enant to do an affirmati(e act% as distinguished from a co(enant merely negati(e in effect% does not run !ith the land so as to charge the urden of performance on a su se"uent grantee. ;)C9B$ Association doesn&t o!n any land% didn&t transfer any land% doesn&t really ha(e hori0ontal pri(ity ut court too. a roader understanding% and claimed Association !as acting as an agent of the property o!ners and that !as enough to esta lish pri(ity. ;orporate P has een formed as a con(enient instrument y !hich the property o!ners may ad(ance their common interests. #"uita le relationship and rights transferred to 'ome )!ner&s Association. 1didn&t really meet re"uirements ut court decided to interpret co(enant as running !ith the land2. =8,;C,,8)7$ Pri(ity re"uirement lessens impact of co(enants on land use. >enerally should e a le to alienate land freely. Pri(ity doesn&t let co(enants al!ays urden the land% and it ma.es it easier to sell land in the future. 'o!e(er% this co(enant doesn&t restrict the a ility to sell land% therefore pri(ity is not re"uired. 7otice re"uired for enforcing co(enant. ?hy do you ha(e co(enants6 Csually increases the (alue of land.

X=II. ,O;;UNITIES
:enefits of 'omeo!ner&s Associations$
;ommon (alues >o(ernment has failed Property (alues AmenitiesD ,er(ices

,O;;ON INTEREST

A. ,reatio$ a$+ :"+i*ia' O)ersi&%t o# ,o--o$ I$terest ,o--"$ities

#nforcement of (aluesDrules ;heaper to uyD li(e in6 ProtectionD9egulation -ess researchD#xpressed #xpectationsD?arranty

,o--o$ I$terest ,o--"$ities o =e(elopers use co(enants% conditions and restrictions to tailor the li(ing en(ironment to a targeted audience. o ;reates a "uasi+democratic go(ernance structure to manage the community and pro(ide it flexi ility to e(ol(e o(er time o 3actors fueling the gro!th of ;8;&s$ -arge tax su sidies allo!s a roader segment of the population to o!n their o!n home )(ercomes pro lems !ith free riders and other pro lems pre(alent in co(enants% easements and e"uita le ser(itudes Pro(ides shared amenities !ith no indi(idual urdens =issatisfaction !ith pro(isions of ser(ices y local go(ernment are eliminated !hen ;8;&s supplement or ta.e o(er the asic ser(ices of road maintenance% utilities% etc. o :asic structure #xclusi(e occupancy rights to a d!elling unit ;o+o!nership of common areas =etailed co(enants% conditions and restrictions go(erning the use and sometimes transfer of units and the use of common areas Assessment of fees to operate the ;8; Participation y o!ners in the go(ernance of the ;8; o Predominant 3orms ;ooperati(es =e(ice to share o!nership among the residents of large% typically luxury% apartment uildings ;onstitute a out 1P of housing today ;oncentrated in large cities

35

)ften use a corporation or usiness trust model to structure o!nership interest in multi+unit uildings ;8; de(elopers form a corporation and con(ey land to the corporation !hich assigns stoc.holders proprietary leases to specific d!elling units 9esidents do not actually hold title to their apartment% they hold exclusi(e use and lease rene!al rights for as long as they retain their stoc. Bypically financed through lan.et mortgage )perates under charter and yla!s ,hareholders elect directors to o(ersee operation 8f uilding destroyed% corporate reco(ers the insurance proceeds and decides !hether to re uild. 9esidents influence decision y (ote. ;ondominiums 9ely on model of freehold interests to structure the rights and responsi ilities of residents *em ers typically o!n units in fee simple )!ners possess title to the interior spaces of their d!elling units extending to or e(en part !ay through exterior and common !alls. )!ners are also tenants in common !ith other unit o!ners in the underlying land and in the spaces and uilding parts used in common Bhree types of documents recorded y =e(eloper$ =eclaration or master deed / descri es land% d!elling units and common element of the uilding% incorporates applica le co(enants and other land use restrictions esta lishes a homeo!ner association and pro(ides for the amendment of the declaration and yla!s :yla!s / set forth the rules and procedures go(erning the homeo!ners association and the administration of the condo de(elopment. =eeds to indi(idual units / transfer title to the purchaser )!ners typically finance their o!nership interest indi(idually y pledging their fee interest as security 8f uilding destroyed% o!ners ha(e direct access to insurance proceeds and usually ha(e more control in deciding !hether a destroyed uilding !ill e re uilt% some states distri ute insurance proceeds pro rata. *ost common means to create o!nership interests in multi+unit residential uildings flexi le model adapted to a !ide range of uses. Planned Cnit =e(elopments and ,u di(isions !ith *andatory *em ership 'omeo!ner Associations 'omeo!ners o!n oth the d!elling unit and the land on !hich it is uilt =e(elopers typically esta lish a non+profit corporation that o!ns the common areas 'omeo!ners may o!n common areas as tenants in common Planned unit de(elopments 1PC=s2 ha(e a "uasi+democratic decision ma.ing structure / responsi ility to manage the common areas% po!er to assess homeo!ners for the costs of operating the association% and authority to enforce the co(enants% conditions% and restrictions go(erning the ;8;. *odel used to plan and mar.et PC=s Prior to sale% de(elopers record a declaration of co(enants% conditions% and restrictions !hich pro(ide for the esta lishment of a homeo!ner association and the rules go(erning its decision+ma.ing process% responsi ilities% and po!ers

34

=e(eloper incorporates the co(enants% conditions% and restrictions into the deeds of all properties sold in the de(elopment =e(elopers increasingly turn to homeo!ner associations to de(elop and mar.et homes :"+i*ia' Ro'e i$ O)erseei$& Ho-eo3$er Asso*iatio$s 5 *odels ;ontractD;onsent *odel / get the enefit of the argain !hate(er it !as agreed to% should e upheld -ocal go(ernment model / stricter% judiciary allo!ed to inter(ene and o(ersee Administrati(e model / (ie! 'A as an administrati(e authority / courts should respect agreements ut loo. at reasona leness and ho! its implemented ;orporate model / laxed standard / closely reflect the speciali0ed contractual nature among mem ers Brust model / run li.e a trust Restrictions in originating docu%ents ,trong presumption of (alidity / stri.e do!n only if ar itrary or (iolati(e of pu lic policy or a constitutional right :uyers (oluntarily agree to e go(erned y the terms !hen they uy in and are entitled to rely on the enforcea ility of restrictions in originating documents
'idding 'ar or (. :asso 3acts$ :asso !anted to dig a personal !ell% ;8; said no. :asso digs !ell any!ay% ;8; sues. ;ourt$ upheld prohi ition of any exterior alteration !ithout oard appro(al 9ationale$ :rea.s do!n t!o .inds of regulations$ 1. restrictions imposed y original declaration 1contract2 2. restrictions imposed y oard 1reasona leness standard2 Portola 'ills ;omm Assn (. Hames 3acts$ =% Hames% !anted to install a satellite dish. ;8; said no% in co(enant% ecause they didn&t !ant to hurt the aesthetics of the neigh orhood. ;ourt$ refused to uphold an ecause P&s dish not (isi le y neigh ors and there y did not impinge upon the goal of the statute

Restrictions subse3uently adopted 9e"uires reasona leness -ess deferential re(ie! to a su se"uent yla! change than to a co(enant in the originating document ;ourts may alance importance of the ne! rule&s o jecti(e !ith the importance of the indi(idual interest infringed upon
'idding 'ar or (. 7orman 3acts$ :d of director adopted rule prohi iting use of alcohol in certain areas of common use ;ourt$ upheld an 9ationale$ reliance interest of uyers is not so strong !ith respect to su se"uent changes ?inston Bo!ers (. ,a(erio

4<

3acts$ = had a dog% P had a policy that pets must e registered% dog !as registered. Amendment that all pets not registered !ere prohi ited% dog had puppies. = supposed to get rid of puppies. ;ourt$ regulation struc. do!n ecause it !as in effect% regulating retroacti(ely

:"+i*ia' Ro'e i$ O)erseei$& Ho-eo3$er Asso*iatio$s

o o o o o 5 *odels ;ontractD;onsent *odel / get the enefit of the argain !hate(er it !as agreed to% should e upheld -ocal go(ernment model / stricter% judiciary allo!ed to inter(ene and o(ersee Administrati(e model / (ie! 'A as an administrati(e authority / courts should respect agreements ut loo. at reasona leness and ho! its implemented ;orporate model / laxed standard / closely reflect the speciali0ed contractual nature among mem ers Brust model / run li.e a trust Restrictions in originating docu%ents ,trong presumption of (alidity / stri.e do!n only if ar itrary or (iolati(e of pu lic policy or a constitutional right :uyers (oluntarily agree to e go(erned y the terms !hen they uy in and are entitled to rely on the enforcea ility of restrictions in originating documents

o o o

'idding 'ar or (. :asso 3acts$ :asso !anted to dig a personal !ell% ;8; said no. :asso digs !ell any!ay% ;8; sues. ;ourt$ upheld prohi ition of any exterior alteration !ithout oard appro(al 9ationale$ :rea.s do!n t!o .inds of regulations$ 1. restrictions imposed y original declaration 1contract2 2. restrictions imposed y oard 1reasona leness standard2 Portola 'ills ;omm Assn (. Hames 3acts$ =% Hames% !anted to install a satellite dish. ;8; said no% in co(enant% ecause they didn&t !ant to hurt the aesthetics of the neigh orhood. ;ourt$ refused to uphold an ecause P&s dish not (isi le y neigh ors and there y did not impinge upon the goal of the statute

o o o o

Restrictions subse3uently adopted 9e"uires reasona leness -ess deferential re(ie! to a su se"uent yla! change than to a co(enant in the originating document ;ourts may alance importance of the ne! rule&s o jecti(e !ith the importance of the indi(idual interest infringed upon

'idding 'ar or (. 7orman 3acts$ :d of director adopted rule prohi iting use of alcohol in certain areas of common use ;ourt$ upheld an 9ationale$ reliance interest of uyers is not so strong !ith respect to su se"uent changes ?inston Bo!ers (. ,a(erio 3acts$ = had a dog% P had a policy that pets must e registered% dog !as registered. Amendment

that all pets not registered !ere prohi ited% dog had puppies. = supposed to get rid of puppies. ;ourt$ regulation struc. do!n ecause it !as in effect% regulating retroacti(ely 9estraints on Alienation
-aguna 9oyale )!ners Assn (. =arger

41

3acts$ Attempt to assign undi(ided interest in a property to others !hich (iolated a pro(ision of the deed y !hich = ac"uired property% prohi iting assignment or transfer of interest in the property !ithout the consent and appro(al of Association&s predecessor in interest. 9ule$ 8n appro(ing or disappro(ing transfers or assignments% Association must Act reasona ly #xercise its po!er in a fair and nondiscriminatory manner ?ithhold appro(al only for a reason or reasons rationally related to the protection% preser(ation and proper operation of the property and the purpose of Association as set forth in go(erning instruments 8n ;ondo setting / each unit o!ner must gi(e up a certain degree of freedom of choice !hich he might other!ise ha(e in separate% pri(ately o!ned property )!ners as a group should ha(e the authority to regulate reasona ly the use and alienation of the condos

!"t"re o# ,I, Go)er$a$*e

=uration o ?ino.ur / enforcement of all restrictions imposed y ser(itude regimes% limiting neither the duration nor the content of ser(itudes% can undermine the a(aila ility of neigh orhoods conduci(e to human flourishing% !here each indi(idual&s identity can e ased on personal control of a uni"ue place in the residential en(ironment o Lorngold / ser(itudes should e enforced li.e other contracts for efficiency% moral o ligation and freedom of choice 8ndi(idual 9ights o *ost constitutional restrictions don&t apply to 'as ,usan 3rench +

X=III.

>ONING

acceptance that pri(ate mar.ets don&t al!ays !or. and go(ernment must inter(ene to organi0e society and ta.e a!ay some property rights for the roader good. *echanism for -and Cse 9egulation o Qoning ordinances / to impose limits on the si0e and location of structures% the si0e and shape of lots% and the use of land and structures o >eneral Plans / specify the jurisdiction&s goals for future de(elopment% including distri ution of population density and infrastructure o ,u di(ision ;ontrols / esta lish specific criteria for the location and design of streets% major utility lines% and other pu lic infrastructure% and they fre"uently re"uire dedications of land or payments for off+site impro(ements o :uilding ;odes / dictate uilding methods% structural elements% minimum ha ita ility standards and aesthetic elements. *ay also restrict the o!ner&s right to change designated historic uildings

A. E"*'i+ea$ ?o$i$& systeo ,tandard ,tate Qoning #na ling Act / municipalities could regulate land use to promote health% safety% morals% or the general !elfare of the community. A== / p.4<<
Eillage of #uclid (. Am ler 9ealty ;o. 3A;B,$ #uclid set up six different 0oning districts !ith different le(els of restrictions on types of de(elopments allo!ed in each 0one. Attempt separate uses. P&s land is partly 0oned for residential use only and not industrial use and therefore limited their a ilities to de(elop the land profita ly industrially.

42

P-A87B833&, A9>$ claimed ordinance (iolated the 14th Amendment in depri(ing appellee li erty and property !ithout due process of la!% and denies it the e"ual protection of the la!. ,ought an injunction. =8,;C,,8)7$ ?ith the changes in society% go(ernment needs to change to reflect these changes. ?hile the meaning of constitutional guaranties ne(er (aries% the scope of their application must expand or contract to meet the ne! and different conditions !hich are constantly coming !ithin the field of their operation. 9C-#$ Although a degree of elasticity is thus imparted% not to the %eaning# ut to the application of the constitutional principles% statutes and ordinances% !hich% after gi(ing due !eight to the ne! conditions% are found clearly not to conform to the ;onstitution must fall. ;)C9B&, 9#A,)787>$ -a! ased on police po!ers / go(ernment has the o ligation to inter(ene to help protect pu lic !elfare. -a! of nuisances / allo!s regulation of property. must consider the specific circumstances surrounding the case% o(erly road. ,ome of things restricted under 0oning la!s may not e nuisances% 10oning ordinances are roader than nuisance la!s2 / 'o!e(er% the court !as not prepared to say that the end in (ie! !as not sufficient to justify the general rule of the ordinance% although some industries of an innocent character might fall !ithin the proscri ed class P9)&, )3 Q)787>$ segregation of residentialDindustrial uildings ma.es it easier to organi0e fire rescue operations% increase the safety and security of home life% tend to protect street accidents% reduce traffic noise% more fa(ora le en(ironment in !hich to rear children% etc. ;)C9B&, 9$ elie(es apartments come (ery near to eing nuisances% 0oning maintain the character of neigh orhoods% nand help maintain pu lic health% safety% morals% and general !elfare. ,BA7=A9= )3 9#E8#?$ 9ational asis ut lots of discretion to local go(ernments to ma.e ordinances / su stantial relation test / 0oning ordinance !ould e set aside of if it is clear that Sthe city council&sT action Uhas no foundation in reason and is a mere ar itrary or irrational exercise of po!er ha(ing no su stantial relation to the pu lic health% the pu lic morals% the pu lic safety or the pu lic !elfare in its proper sense. 9C-#$ !here e"uita le injunction is sough on the ground that the mere existence and threatened enforcement of the ordinance% y materially and ad(ersely affecting (alues and curtailing the opportunities of the mar.et% constitute a present and irrepara le injury% the court !ill not scrutini0e its pro(isions% sentence y sentence% to ascertain y a process of piecemeal dissection !hether there may e% here and there% pro(isions of a minor character% or relating to matters of administration% or not sho!n to contri ute to the injury complained of% !hich% if attac.ed separately% might not !ithstand the test of constitutionality. .a$ie' R. ;a$+e'6er7 T%e >o$i$& .i'e--a o =ilemma / gap et!een the adoption of the 0oning frame!or. and its execution in the mar.et place o ,hould !e percei(e the land mar.et as ma.ing perfect or imperfect allocations through the pricing system o #conomists say !e don&t need 0oning la!s ecause pri(ate o!ners !ill efficiently allocate land / mar.et !ill result in an organi0ed society similar to 0oning ordinances o 'o!e(er% indi(idual entrepreneur !ill only consider their o!n opportunity costs and gains% !ill not consider externalities that his de(elopments !ill affect on others o Qoning ordinance ased on the separation of land use incompati ilities must therefore inter(ene to pre(ent the (isitation of externalities !hich the pri(ate mar.et cannot pre(ent. Qoning ordinances correct for the externalities !hich the pri(ate mar.et need not consider. o Qoning in(ol(es matters of taste and preference rather than an o ser(a le physical effect. Qoning strategies ased on judgmental preference carry !ith them an implicit hierarchical model of residential de(elopment in !hich single family de(elopments is fa(ored / up!ard pressures on these more fa(ored uses are assumed to (isit harmful externalities !hich the legal system should control. o =8,;C,,8)7$ nuisance la! doesn&t sol(e all pro lems <ra+'ey @ar66ai$e$7 >o$i$& A Rep'y to t%e ,riti*s

43

Qoning protects a homeo!ner&s consumer surplus in a home and in the surrounding neigh orhood% that lies a o(e the mar.et (alue of that home o Bhere exists neigh orhood commons / collecti(e resources / rights of ur an d!eller to rights in indi(idual d!elling and inchoate rights in a neigh orhood commons o Purchaser of residential property in an ur an neigh orhood uys not only a particular parcel of real estate% ut also a share in the neigh orhood commons o 'igh le(el of consumer surplus may attach to features of a neigh orhood commons. 'ighly su jecti(e and may not !idely e shared y those !ho ha(e ne(er li(ed in the neigh orhood so they add little to mar.et (alue of property o 9esources are non+fungi le and irreplacea le o -i.e one&s home% one&s neigh orhood may e centrally ound up in one&s definition of self and sense of his or her place in the !orld. o =8,;C,,8)7$ doesn&t the mar.et (alue include these intangi les6 Assume that !hen you ought the house you assumed that the neigh orhood !ould remain the same..and 0oning la!s help assure this consistency. 8s 0oning more democratic6 Allo!ing constituents to (oice !hat they !ant6 'o!e(er% democratic process is limited to the current residents and not future residents 8f "uasi+commons is su jecti(e% and personal to indi(idual preferences Ri*%ar+ Epstei$7 A ,o$*ept"a' Approa*% to >o$i$& W%ats Wro$& Wit% Euclid o 7o clear demarcation separating nuisances% for !hich regulation is appropriate% from ordinary acti(ities% for !hich it is not. o Qoning process misunderstands the !ay in !hich indi(iduals !ish to integrate and coordinate their acti(ities o Although there is some local disad(antage to ha(ing just one de(iation from that particular patter of uses% there is a huge o(erall ad(antage o 'ard to coordinate 0oning o #ntitlement to ma.e land use decisions should rest !ith the indi(idual property o!ner o 7uisance la!% ser(itude la!% and ta.ings doctrine are ade"uate 7uisance ,er(itude / agreement through co(enants extremely difficult to enforce E''i*6so$ o ;o(enants not going to !or.% nuisance damages are the !ay to go o Qoning is an example of specific deterrence systems !hich impair the efficiency of resource allocation to the extent that they re"uire compliance !ith a standard e(en !hen the pre(ention costs in(ol(ed in compliance exceed the resulting reduction in nuisance costs. o =etailed mandatory 0oning standards ine(ita ly impair efficient ur an gro!th and discriminate others o ;onsensual systems of internali0ation are good mechanisms for handling external costs% particularly in area !here much of the land is still unde(eloped o Per(asi(e ut indi(idually tri(ial harms caused y noxious land uses cannot e efficiently internali0ed through nuisance suits !is*%e' E0"ity a$+ E##i*ie$*y Aspe*ts o# >o$i$& Re#oro Qoning is in response to mar.et failure / an attempt to redistri ute property rights or entitlements from those !ho o!n unde(eloped land to other community residents o Cnfair to hold 0oning to efficiency standards since it&s in response to areas that are inefficient o :enefits of 0oning$ limit on increased costs% lo!er tax rates% enjoyment of open land% preser(ation of (alues% and pre(ention of en(ironmental disamenities :enefits are those percei(ed y existing residents !ho comprise the community not potential occupants Bo the extent that any degree of restriction of de(elopment is enforcea le% the total enefits !ill e reflected in the (alue of existing housing o ;oase Bheorem 8nitial entitlement in restriction 10oning2 does not ha(e to e at the maximum enefit point o

44

Pro lem not one of laisse0 faire (s. planning ut in(ol(es t!o "uestions$ )f the (arious initial entitlements in land use restrictions ?hich is most e"uita le and ?hich is most li.ely to lead to the maximum enefit point6 o #fficiency 1Ctilitarian argument2 (s. #ntitlement 1-oc.e2 =8,;C,,8)7$ Are 0oning ordinances a good thing6 o Pro$ seem less judgmental and ar itrary than nuisance la! o ;on$

<. E1*'"sio$ary >o$i$&

#xclusionary Qoning / the deli erate exclusion of lo!+ and moderate+income families and indi(iduals% often has a disproportionate impact on racial minorities Bechni"ues of exclusionary 0oning$ o -arge+lot 0oning o -arge minimum s"uare footage re"uirements o Prohi itions on apartment uildings and mo ile homes o Prohi itions on multi+ edroom apartments o #xpensi(e architectural or uilding standards o )(er0oning for nonresidential uses Ley moti(ation for re"uirements is to .eep out residential de(elopments for lo!+income families that increase the demand for pu lic ser(ices ut that do not generate a corresponding increase in property tax re(enue Assumptions a out the moti(ation and conse"uences of strict 0oning practices o =esire for a lo! marginal tax rate and high ser(ice enefits per family relati(e to tax rates o 8ncrease in local housing prices !hich .eep the poor out o #nsure residential segregation y income and race o Aggra(ates pro lems characteristic of segregated metro areas 7o clear criteria to define exclusionary 0oning -ac. of remedial tools Pennsyla(ania o Qoning ordinance !hose primary purpose is to pre(ent the entrance of ne!comers in order to a(oid future urdens% economic and other!ise% upon the administration of pu lic ser(ices and facilities is in(alid
,urric. (. Qoning 'earing :oard / not a out race 3A;B,$ P !anted to uild multi+family d!ellings% tho 0oned for single+family d!ellings. =enied his petition for (ariance. Bhere are other 0ones that allo! for multi+family d!ellings% small 0one that allo!ed not just multi+family d!ellings ut also other industrial de(elopments. 7ot completely out0oned% ut definitely limited. ;)C9B&, 9#A,)787>$ Principles to consider standard of re(ie! / su stantial relationship to health and safety and general !elfare of community 1rational asis2 fair share principle / attempt to determine !hether ordinance is exclusionary 1. !hether the community in "uestion is a logical area for de(elopment and population gro!th 2. examine the present le(el of de(elopment !ithin the particular community 3. !hether the challenged 0oning scheme effected an exclusionary result or% alternati(ely% !hether there !as e(idence of a primary purpose or exclusionary intent to 0one out the natural gro!th of population 3ocus is not on the moti(esDintent underlying the 0oning ordinance ut on the ordinance&s exclusionary impact ;ourt says you can&t exclude certain groups of people

45

')-=87>$ 3or ,urric.% Bo!nship has not pro(ided its fair share of multi+family housing !hich it must do =8,;C,,8)7$ Bhis is a standard not a rule. 8t needs to e considered on a case+ y+case asis specific to the facts of the case. P9):-#* ?8B' A7A-J,8,$ fair share is a su jecti(e standard% hard to try a distincti(e line. Bhings to!nship needs to consider$ present population% future population% proportion in singleDmulti+family housing% loo. at de(elopment in similar communities P&s e(idence needed / flo! of multi+family d!ellings% if selling afforda le housing / is it !orth litigating6 3ernley (. :oard of ,uper(isors of ,chuyl.ill B!p. 3A;B,$ =e(eloper !anted (ariance for multi+family d!ellings in an area 0oned for single and t!o+family d!ellings only. Present case has a total an on multi+family d!ellings. P'$ 3or =% elie(ed to!nship is not a logical area for gro!th and de(elopment% noone is excluded 8,,C#$ ?hether a fair share analysis must e employed to assess the exclusionary impact of 0oning regulations !hich totally prohi it a asic type of housing ')-=87>$ Qoning ordinance is impermissi ly exclusionary ecause it totally prohi its the construction of multi+family d!ellings / fair share analysis is inapplica le since there&s a total an on multi+family housing. 3or P% granting (ariance ased on ;asey. Appro(al for the de(eloper&s plan is not automatic ut must e predicated on the suita ility of the proposed site and (arious health and safety considerations. ;)C9B&, 9#A,)787>$ Bhere is a presumption of ;onstitutionality in any 0oning ordinance. P has the urden of pro(ing in(alidity 1pro(es a total prohi ition of a legitimate use2% urden shifts to the to!nship to sho! that its ordinance is reasona le to promote pu lic health% safety% morals and general !elfare. 9C-#,$ + Bhe ;onstitutionality of a 0oning ordinance !hich totally excludes a legitimate use is regarded !ith circumspection and% therefore% such ordinance must ear a %ore substantial relationship to a stated pu lic purpose than a regulation !hich merely confines that use to a certain area !ithin the municipality. + 3air share test applies to cases !here 0oning ordinances effect a partial an that amounts to a de facto 1effectual2 exclusion of a particular use as opposed to those that pro(ide for a de jure 1intentional2 exclusion. / fair share does 7)B apply !hen the 0oning regulation totally excludes a asic form of housing. + ;ases in(ol(ing de facto or partially exclusionary 0oning turn on the "uestion of !hether the pro(ision for a particular use in the ordinance at issue reasona ly accommodates the immediate and projected demand for that use. =8,;C,,8)7$ =o you% as a pri(ate indi(idual% ha(e standing to contest this 0oning ordinance6 7o% unless you can ring a claim of racial discrimination. Argument for the right to tra(el is eing impinged6 )nly if et!een states / ut no one&s !on on this claim. ?ealth discrimination6 8n(idious intent6 People in these cases !ere de(elopers that actually o!ned property in the to!nship and !ere pre(ented from achie(ing highest potential in de(eloping land. Bo ha(e standing must sho! that you ha(e suffered some damages that can e compensated

7H$
*t. -aurel / 1.2 ;ourt ruled that each to!nship has to meet its responsi ilities and pro(ide its fair share@has not said that exclusionary 0oning in and of itself illustrates racial discrimination. 2.2 ;ourt declared that to!nship had to allo! afforda le housing% created a system of magistrates to o(ersee !hat the to!nships !ere doing. 3.2 ,tate adopted their interpretation of the fair housing act ut P&s not satisfied. ;ourt appro(ed the legislati(e act.

<. Gro3t% ,o$tro's

,ome communities !ant to restrict or stop all residential and commercial de(elopment 9easons$ o Preser(e certain resources

46

Pre(ent o(er+taxing infrastructure #xact from de(elopers enefits to !hich they are not entitled under the su di(ision la!s #xisting physical and financial resources of community are inade"uate to furnish the essential ser(ices and facilities !hich an increase in population re"uired / pu lic !elfare *ethods used$ o Pro(ided tax incenti(es to slo! the pace of de(elopment o 8ssued :onds o 8mposed *oratoria on or limited the num er or timing of uilding permits o #sta lished green elt 0ones in !hich no de(elopments is permitted Pro lems$ o Cnli.e 0oning% gro!th controls seem ad hoc% and don&t come as a democratic process o -egal issues$ are these fair6 Eiolation of e"ual protection clause. o ,hould different standards e applied to gro!th control% 0oning% and ta.ings6 Jes% !hy6 o o o
Associated 'ome :uilders of the >reater #ast ay% 8nc.% (. ;ity of -i(ermore

3A;B,$ )rdinance enacted that pre(ented the issuance of uilding permits until the o(ercro!ding in schools% se!age pollution% and !ater+rationing pro lems !ere sol(ed. P&, A9>$ ;laims the ordinance pre(ents nonresidents from migrating into the area and in doing so% exceeds the police po!er of the municipality. ;)C9B&, 9#A,)787>$ Applies a rational relation test finds that ordinance is reasona ly related to the o jecti(e of protecting the pu lic health and !elfare. no constitutional (iolation% "uestion is therefore@ ?') 'A, A ;-A8*$ ;ourt elie(es people outside municipality ha(e standing as !ell 8,,C#$ ?hether the ordinance is (alid in limiting uilding permits in accord !ith standards that reasona ly measure the ade"uacy of pu lic ser(ices 9C-#$ 8f a restriction significantly affects residents of surrounding communities% the constitutionality of the restriction must e measured y its impact not only upon the !elfare of the enacting community% ut upon the !elfare of the surrounding region. *ust consider the !elfare of those !hich the ordinance significantly affects. / )rdinance carries the presumption of ;onstitutionality P has to pro(e their case ;)C9B&, 9#A,)787>$ Cnder #uclid% states ha(e a lot of po!er% ho!e(er% current case&s ordinance significantly affects the interests of non+residents !ho are not represented in the city&s legislati(e ody. *ust decide !hether the ordinance is unreasona le. B#,B to determine !hether a challenged restriction reasona ly relates to the regional !elfare 3. forecast the pro a le effect and duration of the restriction 4. identify the competing interests affected y the restriction 5. determine !hether the ordinance% in light of its pro a le impact% represents a reasona le accommodation of the competing interests ')-=87>$ P has not met urden of proof in dispro(ing reasona le relation. 9emanded. =8,,#7B$ elitist concept designed to exclude future residents / no timeta le for ho! long moratorium !ill last and current residents ha(e no incenti(e to conser(e resources for future gro!th. =issent&s ,tandards Best$ 1. any a solute prohi ition on housing de(elopment is presumpti(ely in(alid 2. local regulations% ased on parochialism% that limit population densities in gro!ing su ur an areas may e found in(alid unless the community is a sor ing a reasona le share of the region&s population pressures 1fair share2 8f -i(ermore can do this% than other to!ns can do this / roader ramifications in the ay area. :elle Berre 1no houses that can house unrelated mem ers ;ourt said this !as o. to preser(e the character of the community2 not the same issue in this case. 9ight to housing is more than an esoteric principle% housing is special% pre(ention of mo(ement of people in li(ing area should e su ject to stricter scrutiny. 1housing ordinances are different results in the exclusion of people2 =8,;C,,8)7$ ?hat can P do to pro(e their case6 =efine standards see if it&s reasona le.

4I

,hould they do just enough for the people already li(ing there or should they do more to allo! ne! people to mo(e in6 Bo!nship is !orried a out slippery slope% fixing pro lem% people mo(e in% then ha(e to fix pro lem again@. =oes ordinance ma.e sense6 8s it fair in policy6 ,hould to!nships gi(e first priority to the needs of its residences6 8s it necessary6 ,houldn&t mar.et ta.e care of these issues any!ay% i.e. if se!age pro lems and education pro lems% de(elopers !ouldn&t !ant to li(e there6

#llic.son% ,u ur an >ro!th ;ontrols$ An #conomic and -egal Analysis o #ffects 1assuming non+elasticity2 )n present owners 2 :enefits those li(ing in the municipality already / .eeps their house prices constant or increases them% landlords pre(ent competition )n suppliers of new housing 2 ;osts largely felt y lando!ners !ho o!n tracts of unde(eloped land )n -ousing consu%ers 2 Prices raised on ne! and used housing. 9eduction in surplus to 12 current tenants% 22ne! households mo(ing in% 1people that !ant to uy2 32 tenants that can&t afford rent increases% and 42 potential immigrants !ho ha(e decided not to uy or rent there ecause of the price increase or antigro!th policies :elie(es 1%2 are hurt the most / current tenants ha(e higher property interest 3%4 not hurt as much +4traterritorial effects more attracti(e% demand for housing in surrounding areas is enhanced% prices for old and ne! housing is also increased o -egal Approach + Proposed 9ules ,u ur must e entitled to enforce restrictions on lando!ners or else it !ill not e a le to implement efficient antigro!th programs 1perhaps y compensation2 >o(ernment should e allo!ed to prohi it su normal acti(itiesK if prohi iting normal acti(ities% must pro(ide compensation. Bo!nship defines !hat normal is hierarchy / uses of land that are etter than others / single family considered the est considered normal o -a! of =e(elopment 9estrictions / Muotas% *oratoria% and 9eg. of Area% :ul. and Cse ,onstruction 3uotas .oratoria 2

XIX.
A. E1a*tio$s

TA@INGS

:een / #xit as a ;onstraint on -and Cse #xactions$ 9easons for imposing exactions upon de(elopment o ,hift to the de(eloper the costs of the pu lic infrastructure that the de(elopment re"uires o 8n sharing the costs of infrastructure et!een de(eloper and customer% exactions induce a more efficient use of the infrastructure o *itigate the negati(e effects a de(elopment may ha(e on a neigh orhood / encourage efficiency y forcing the de(eloper and its customers to internali0e the full costs of the harms that the de(elopment causes o #na le gro!th in areas that might other!ise e stalled y gro!th control o =iscourage gro!th or pre(ent certain .inds of de(elopment in order to preser(e the exclusi(eness of a community or to preser(e its fiscal position o 9edistri ute !ealth from the de(eloper or its customers to others or to pre(ent the de(eloper from appropriating !ealth created y the acti(ities of the local go(ernment

45

Bypes of #xactions o (ubdi ision +4actions su di(ision controls and conditional re0oning fre"uently re"uire dedications of pu lic infrastructure% such as streets% par.s% se!ers% etc. 9e"uire de(elopers to pro(ide on+site infrastructure in exchange for su di(ision appro(al Cpheld against ;onstitutional challenge on the grounds that de(elopment caused the need for the impro(ements and that the impro(ements !ould specially enefit the su di(ision o "%pact 6ees imposed on de(elopments to help finance a range of municipal facilities that may e re"uired as a result of de(elopment Cpheld usually as long as there is an ade"uate relation et!een the fee and the additional urden imposed on pu lic facilities o Linkage Progra%s / usually re"uire the de(eloper to pay fees reflecting the cost of housing construction% feeds deposited into a fund dedicated to the construction of lo!+ and moderate+income housing / afforda le housing presume that a ne! commercial de(elopment !ill either displace existing pri(ate land uses or create ne! demand for particular land uses that the mar.et !ill not supply some states re"uire express statutory authori0ation and others ha(e found implied authori0ation 3ederal ;onstitutional ;hallenges to #xactions
7ollan (. ;alifornia ;oastal ;omm&n$ 3A;B,$ ;oastal ;ommission re"uired the lando!ners to dedicate a pu lic easement across their property in exchange for a uilding permit. ;ommission !ished to pre(ent the loc.ing of the (ie! of the ocean that !ould e caused y the large house to e uilt on the eachfront property. ;)C9B&, 9#A,)787>$ 8f ;ommission had simply re"uired the lando!ners to dedicate an easement to increase pu lic access to the each% a ta.ing !ould ha(e occurred. :ut here% there !as an exchange for a uilding permit. 8f the ;ommission could deny permission to de(elop ecause of the negati(e impact of the de(elopment% it could impose appropriate conditions on its appro(al of the de(elopment. 'o!e(er% the condition su stituted for the prohi ition fails to further the end ad(anced as the justification for the prohi ition / lac. of nexus et!een the condition and the original purpose of the uilding restriction co(erts the purpose to something other than !hat it !as. #nhancing the pu lic&s a ility to tra(erse to and along the shorefront does not ser(e the go(ernmental purpose of (isual access to the ocean from the road!ay. 9C-#$ A permit condition that ser(es the same legitimate police+po!er purpose as a refusal to issue the permit should not e found to e a ta.ing if the refusal to issue the permit !ould not constitute a ta.ing ')?#E#9 / to sur(i(e a constitutional challenge% an exaction must mitigate the specific ad(erse impacts caused y the de(elopment. ;ondition re"uired must ha(e a nexus to the concerns of the commission ')-=87>$ 3or P% there !as not an essential nexus et!een the legitimate state interest and the permit condition exacted. =8,;C,,8)7$ ?as it fair to re"uire 7ollan to pro(ide access to the each ecause it !as 7ollan that !as pre(enting the access to the each6 Jes% alternati(e is not allo!ing 7ollan to not uild at all. Jes% nuisance la! application 7o% extortion / 7o% singling out of indi(iduals to ear the urden of the pu lic is !rong / do these constitute ta.ings6

Been +4it as a constraint on land use e4actions: rethinking the $nconstitutional ,onditions doctrine o ?hy are the courts so upset in 7ollan6 ;ourt doesn&t !ant go(ernment to as. for exactions for ad purposes / demanding inappropriate payments from people% imposing unfair urdens on people

44

Pros of exactions o ;reate incenti(es for de(elopers to ta.e the efficient le(el of precaution against harm and y forcing de(elopers to consider all costs in determining ho! much to de(elop o ;riticisms of 7ollan opinion$ costliness o 8t !ill pre(ent local go(ernments from spending exactions for something other than a remedy for the harm at issue% e(en !hen that course !ould e most efficient o 7exus test raises the possi ility that judges !ill su stitute their (alue judgments for the judgments of the legislature under the guise of assessing the closeness of the fit et!een an exaction and the purposes for !hich de(elopment might ha(e een denied o 7exus re"uirement has the cost of chilling local go(ernments& creati(e attempts to resol(e the pro lem of harmoni0ing demands for economic de(elopment !ith the goals of preser(ing the en(ironment and impro(ing the "uality of life !ithin the community o Possi le pro lems !ith exactions o ;ertain groups singled out ecause they don&t ha(e political po!er o Allo! municipalities to redistri ute !ealth y charging the de(eloper more than the costs of the harm that the de(elopment is causing and transferring that o(ercharge to others o #ncourage the go(ernment to o(er+regulate in order to gi(e itself a !ay of raising money or other enefits o )(er+regulation may pre(ent de(elopment that !ould ha(e een socially eneficial o )(er+regulation may e(entually lead to under+regulation / municipalities !ill ecome dependent upon exactions as a !ay to alance their udgets !ithout the political difficulties of tax increases that they !ill sell de(elopment too cheaply and pro(ide insufficient protection against harms that de(elopments may impose upon a community o ?hy exactions aren&t really a !orry / lots of competition to limit extent of exactions o ;ommunity don&t !ant to punish de(elopers% they !ant them to come in to de(elop the community o ;ommunity must compete !ith its o!n electorate o ;ommunity must compete !ith higher le(els of go(ernment + de(elopers can go to state to impose restrictions on exactions o ;ommunity must contend !ith competition from the pri(ate sector ecause a de(eloper can in(est the money it !ould spend on a de(elopment project in some other capital+see.ing enterprise o 3la!s in her argument o Perhaps de(elopers don&t ha(e a choice of !here they !ant to uild 1really !ant to uild in ,3% hot spots2 o 8n the short run% people may really not !ant de(elopers to come in 1-i(ermore2 ?endell&s personal elief / of the three type 10oning% gro!th controls% exactions2% exactions are the least pro lematic although courts ha(e struggled a lot less !ith 0oning. ;ourt&s intimately in(ol(ed in assessing exactions 17ollan% =olan2 o
=olan (. ;ity of Bigard 3A;B,$ ;ity of Bigard conditioned the appro(al of the P&s uilding permit on the dedication of a portion of her property for flood control and traffic impro(ements. ;ity adopted de(elopment plan / re"uired lando!ners to pro(ide 15P of land as green!ay% !orried a out flooding of a particular cree. as a result of increased de(elopment on the plain. P sought to expand her usiness and 0oning commission conditioned the permit on gi(ing green!ay land to the city and to pro(ide a i.e path!ay. ,he as.ed for (ariance% it !as denied.

5<

8,,C#$ ?hat is the re"uired degree of connection et!een the exactions imposed y the city and the projected impacts of the proposed de(elopments6 ?hen is go(ernment re"uired to pay compensation6 ')-=87>$ 3or =olan ;)C9B&, 9#A,)787>$ Qoning / different% ecause this !as an indi(idual property rather than classifying a regional area 1spot ta.ing2% and re"uired indi(idual to cede land to the go(ernment 1!ould ha(e constituted ta.ing if re"uired !ithout eing conditional of the permit2 8n 7ollan% there !as no nexus% so therefore didn&t ha(e to get to the proportionality argument. 'ere% there !as a nexus. Bigard loses ecause there&s no need for a pu lic green!ay rather than a pri(ate green!ay and no nexus et!een re"uiring a easement to recreational (isitors and city&s interest in reducing flooding pro lems. 9C-#$ Principles in determining unconstitutional conditions$ 1. has to e an essential nexus et!een legitimate state interest and permit conditions 2. has to e roughly proportional / city must ma.e some sort of indi(iduali0ed determination that the re"uired dedication is related oth in nature and extent to the impact of the proposed de(elopment =8,,#7B$ urden of proof no! on the go(ernment to pro(e that its actions are reasona le. ;oncern !ith judicial acti(ism / o(erreaching and micro managing state decisions / 0oning has to sho! an exact fit hea(y urden% A7= its hard to predict and e certain% since it&s ased on the !him of the courts 1second+guesses go(ernment officials2. ;ourts should let go(ernment regulate. su stanti(e due process argument / economic regulation (s. indi(idual rights =o Pro lems on p. 1<63% pro lems 2%3

,. Re&"'atio$s o# Use
Penn ;entral Bransportation ;o. (. ;ity of 7e! Jor. 7J had the first landmar. preser(ation act and this !as the first case in(ol(ing it. ;ity esta lishes act to foster ci(ic pride and eauty to protect and enhance city&s attraction to tourist% to support and stimulate usiness and industry% to promote the use of historic districts% landmar.s% interior landmar.s and scenic landmar.s for the education% pleasure and !elfare of the people of the city. ?anted to rip the top off and extend on the original design. 3iscal issues during the time% pu lic outcry o(er tearing do!n of penn station. Penn ;entral one of the last railroads in the country% the largest railroad and only rr that ser(ed passenger and freight ser(ice. ,ues to allo! 9C-#$ >eneral Principles of ta.ings la!$ :alancing test 6. economic impact I. character of the in(asion 5. reasona leness of the interest 4. general !elfare ;)C9B&, 9#A,)787>$ #uclid / go(ernment can inter(ene for general !elfare of the pu lic *iller (. ;heney / defer to legislature on certain issues P&, A9>$ this !as a ta.ing ecause the regulation denied them the use of the air space a o(e grand central / should e compensated ;)C9B&, 9#P-J$ ;an&t rea. up a piece of land% either all land is ta.en or none is ta.en P&, A9>$ this isn&t a 0oning ordinance ecause it only applies to 4<< properties 10oning re"uires application to e(eryone2% singles out a small num er of people ;)C9B&, 9#P-J$ 7ot that different% has a different impact on those in the future% landmar. designation may e(en increase the (alue of the property% e(ery uilding under 7J may fall under this ordinance in the future 1not discriminatory2 P&, A9>$ city has condemned air rights of Penn ;entral&s property / should e compensated ;)C9B&, 9#P-J$ 7ot a condemnation% condemnation has a higher standard / re"uires ta.ing of all of property% Penn can sell air rights to neigh oring uildings% landmar. commission hasn&t rejected e(ery possi le plan% just the ones su mitted so far

51

=8,,#7B$ o Qoning is different / decrease in (alue alanced y increase in neigh oring enefit 1 alance of interest2 this case% only imposed on indi(idual property o Muestion is$ does this act cause some people to ear the urden that should e orne y the pu lic6 o Bhin.s it does / property is a undle of rights and ta.ing a!ay one results in a depri(ation of property / right to de(elop !as ta.en a!ay =8,;C,,8)7 o ?as this a ta.ing of property6 o 7o + o Jes + o ?as this a ta.ing that needed to e compensated6 o Bransfera ility of the air rights o Bax enefits o 9ehn"uist / landmar. designation act re"uired Penn ;entral to ear the urden of many does this really single out a small amount of people unfairly6 o Arg1$ is a singling out ut not unfair o Arg2$ is singling out and unfair o =oes aesthetic preser(ation fall !ithin police po!ers of ,tate6 o Arg3$ is it more fact dependent6 =epends on !hen o!ner purchased the property% reasona le expectations of the o!ner o Arg4$ they are still ma.ing profit% e(en though not profiting to the maximum there are practical limitations placed y society o Arg5$ there&s a continuum of protection from no protection to full protection court alances many different factors to determine !hat .ind of protection to gi(e 1:rennan closer to no protection in property rights and 9ehn"uist closer to full protection of property2. ?hen does compensation .ic. in on continuum6 o Ba.ings la! is confused ecause the cases are so fact dependent and judges ha(e to alance the interests ased on the facts standard not a rule. Ad hoc approach. o ?hen should the fe! ear the urden of many6 ?hen compensation is re"uired that means the many ear the urden% !ithout compensation% the fe! ear the urden. 8s there any !ay to dra! this line6

SAX So-e T%o"&%ts o$ t%e .e*'i$e o# Pri)ate Property o Brend% people are more distrustful of de(elopment / results in a redefinition of property rights o >oing against :rennan that this !asn&t a ta.ing of property rights% decides to define property o Penn ;entral case is a perfect example / property rights are changing ecause the needs of society are changing o !e ha(e endo!ed indi(iduals and enterprises !ith property ecause !e assume that the pri(ate o!nership system !ill allocate and reallocate the property resource to socially desira le uses. Any such allocational system !ill% of course% fail from time to time. :ut !hen the system regularly fails to allocate property to correct uses% !e egin to lose faith in the system itself. )!n system is declining to the extent it is percei(ed as a functional failure / since such failures are increasingly common% the property rights that lead to such failures are increasingly ceasing to e recogni0ed. / 8nterest "uestion in Penn ;entral is not !hy the o!ner failed to recei(e compensation% ut !hy pri(ate o!nership of >rand ;entral ,tation did not lead to the correct allocation% that is% to maintaining the property as an uno structed% architecturally distincti(e railroad station. o Pri(ate negotiation process that forced people to go to political process o #xamples li.e landmar. preser(ations !here !e don&t let the pri(ate mar.et !or.6 o -o! income housing o ?ildlife preser(ation o ?etlands protection o *inimum ,tandards / ?arranties% etc.

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o o

o >ro!th controls o ?ater resources 7eeds of society change and therefore the !ay !e define property changes ?hat !ould ,ax say a out Penn ;entral ;ase6 o ,houldn&t feel sorry for the P% that&s the !ay the !orld !or.s
-ucas (. ,outh ;aroline ;oastal ;ouncil 3A;B,$ 1456% - purchased t!o eachfront lots intending to uild single+family homes on them li.e the neigh oring properties. 1455% :eachfront *gmt Act arred the de(elopment on ne! homes / protection of en(ironment 1and desire of neigh ors not to uild anymore homes2. -ucas !asn&t re"uired to get any permit !hen he rought the lots% ut !as re"uired to get the permits after Act !as passed. =enied (ariance !hich pre(ented him from uilding on the property. 9endered property useless. 8,,C#$ ?hether the Act&s dramatic effect on the economic (alue of -ucas&s lots accomplished a ta.ing of pri(ate property under the 5th and 14th Amendments re"uiring the payment of just compensation. ,;A-8A&, A9>$ ?hen does this result in ta.ing re"uiring compensation !ithout case+specific in"uiry into the pu lic interest ad(anced in support of the restraint6 o Physical in(asion of property no matter ho! minute and no matter ho! !eighty the pu lic purpose ehind in(asion o 9egulation denies all economically eneficial or producti(e use of land 5th Amendment is (iolated !hen land+use regulation does not su stantially ad(ance legitimate state interests or denies an owner econo%ically iable use of his land ?hen no producti(e or economically eneficial use of land is permitted% it&s not realistic to assume that the legislature is simply adjusting the enefits and urdens of economic life pri(ate property is eing presented into some form of pu lic ser(ice under the guise of mitigating serious pu lic harm 1constitutes a ta.ing2 8n some cases% >o(ernment does deny people the use of their land% i.e. nuisance la! here you can&t just ma.e up a harm or say there is a enefit. 9e"uires a clear standard$ o La$+9"se re&"'atio$ +oes $ot e##e*t a ta6i$& i# it substantially advances legitimate state interests o ?hen ,tate see.s to sustain regulation that depri(es land of all economically eneficial use% it may resist compensation only if the logically eneficial use7 State *a$ resist *o-pe$satio$ o$'y i# t%e 'o&i*a''y a$te*e+e$t i$0"iry i$to t%e $at"re o# t%e o3$ers estate s%o3s t%at t%e pros*ri2e+ "se i$terests 3ere $ot part o# %is tit'e to 2e&i$ 3it%. ,ome in"uiries to ma.e o =egree of harm to pu lic lands and resources% or adjacent pri(ate property posed y the claimant&s proposed acti(ities o ,ocial (alue of the claimant&s acti(ities and their suita ility to the locality in "uestion o 9elati(e ease !ith !hich the alleged harm can e a(oided through measures ta.en y the claimant and the go(ernment

No ,o-pe$satio$

,o-pe$satio$ any physical ta.ing

=enial of #conomic enefit

"f there is no background co%%on law principle# (tate can still allow the taking# but %ust pro ide co%pensation

"f there are background co%%on law principles# taking is allowed and does not re3uire co%pensation

nuisance la! common la!

no common la! principles

Protection in pri(ate property is special ecause it&s specifically mentioned in the ;onstitution / notion that title is someho! su ject to the implied limitation that the ,tate may su se"uently eliminate all

53

economically (alua le use is inconsistent !ith the historical compact recorded in the Ba.ings ;lause that has ecome part of our constitutional culture. ')-=87>$ = must identify ac.ground principles of nuisance and property la! that prohi it the uses he no! intends in the circumstances in !hich the property is presently found. )nly on this sho!ing can the ,tate fairly claim that% in proscri ing all such eneficial uses% the :eachfront *anagement Act is ta.ing nothing. =8,;C,,8)7$ ;ourt&s trying to set right+line rules instead of ar itrary standards su ject to the opinions of the ;ourt ho!e(er% still re"uires flexi ility Penn ;entral and -ucas tal. the same language ut come up !ith different approaches to go(ernment and interests of society ,ax gi(es a more nuance explanation of the Penn ;entral case B!o !ays to loo. at ta.ings and compensation / !ho determines !hat property is6 o ,axD:rennan (ie! ,ociety function / shapes property relations ?hen society changes% understanding of property rights changes o ,calia.D9ehn"uist (ie! Property is indi(iduali0ed ,tate has urden of pro(ing the interest in !anting to change property rights is justified

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55

RE=IEW @$+(!")N /: -oo.ing for critical legal s.ills / spotting issues / prioriti0e and order responses y strongest to !ea.est. 8nclude all% ut ac.no!ledge usefulness of arguments. / ;an assume some facts + Benancy+in+common -a! @i-s Pay off the loan ta.e interest gi(e loan to )rtega Petition in .ind =elfino case 9ight of first refusal 1tough arg2 3iduciary duty 1tough arg2 9ight of redemption right of refusal doc needs to expressly create o ligation right to appro(e fractionationD!aste 7) ,tructure of o!nership 1tenancy in common2 has no impact as to !hat you can use on property / can use all% not partitioned% can&t deny access to anyone else 9esults in ouster of other parties they can claim damages and injunction J#, contract 9ight of contri ution ;onsidered a loan 8ssue of necessity O<rie$s ,ame as Lim&s + + + + Orte&a ;laims in the pro lem + + + .oty A .ea$ ,ame as Lim&s + +

+ + 1 + + 2 +

+ + + + +

,ame as Lim&s

+ +

,ame as Lim&s

+ +

9ight to sell under ;-

)uster tenancy in common

+ + + +

,ame as )&:rien&s

+ + +

,ame as )&:rien&s

3 +

+ 4 + +

+ + +

9ight to ;ontri ution

+ + +

7ot 7ecessary

+ +

,ame as )rtega

1<.

agreement should re"uire each person in the couple to ha(e to uy out the interest of the others if they !ere to rea. up.

Policy 8ssues / Petition y sale% contract issues not crucial issues / )n 8ssue ,potting Muestion% 3);C, )7 8,,C#, 7)B P)-8;J

56

Hot do!n notes. Possi le !ays of ans!ering "uestion. Prioriti0e them. Muality of the ans!er / ho! !ell you analy0ed the usefulness of that approach

5I

@$+(!)N 1: Policy @uestion 1. a. -oc.e / first come first ser(e i. limitation on use 1use only ho! much you need2 ii. "uestion also limited to exactly !ho first ac"uired the property !hat is the property6 1. Bhe domain6 2. the name6 iii. -i.e real property% this !as a ne! territory / ne! form of property pulled out of state of nature i(. 8s there enough la or in it to consider it as ha(ing ta.en it out of the state of nature6 . 9adin+'egel / personhood i. ;ompany should get name and not s"uatters% ecause the name encompasses the (alue of the company not the s"uatter !ho just purchased it for money ii. 7ame used on !e site used in a different !ay conflicting personal interest 1indi(idual sites (s. commercial sites2 iii. ;orporations are or aren&t persons6 i(. #motional attachment6 (. 'o! much is your name your person6 c. 9a!ls / =istri uti(e Bheory i. -in.s to different companies from that original site ii. =epends on !ho is doing the most socially eneficial !or. !ith the !e site iii. ?hat is the enefit eing distri uted6 1. support inno(ation (s. protecting in(estments i(. allo!s ne! people into a ne! mar.et small fries ha(e opportunities too (. may stay out% say this isn&t focus of theory not a primary good6 d. Ctilitarianism / maximi0e aggregate !ealth i. Cse of !e site if act of eing creati(e% exploring a ne! !e site ii. Ealue of !e site depends on the mar.et iii. *aximi0e the opportunities i(. 7ot efficient use of allocations6 )(erpriced domains% pass costs on to customers6 (. ;y er s"uatter helped create interest in the internet% there !as no (alue efore they o tained the name e. Pierson (. Post / definition of property i. 9egistration% attainment of domain name V capture6 ii. #sta lishing name V chasing6 f. 9iparian rights i. 3irst use V person !ho gets name first has first use ii. 9easona le use V protect people ecause there are lots of different uses% allocation of uses V share use6 2. ;ostless transactions / !hich system of allocation of domain names !ould e preferred a. ;oasean system / argaining in pri(ate mar.et i. Bhere are transaction costs tho / negotiations cost money% free+rider pro lem% hold out pro lem . ,ince there are transaction costs% ho! do you allocate the rights6 i. Person !ho !ould ha(e ought it in the a sence of transaction costs ii. ?hy allocate right to the company if they don&t care to use it6 perhaps you don&t !ant the rand to deterioate c. ;ala resi and *elamed D Property 9ights of Brademar. -ia ility 9ights ;ompany W + ,"uatter !on&t !ant to uy it if comp W +6 gi(en property rights% doesn&t promote inno(ation ,"uattersD Person W + 8f s"uatter demands too much money% !ho registered the pre(ents inno(ation and utili0ation to W+6 name maximum enefit

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