Property Outline 2015

PART ONE: Recognition and Allocation of Property Rights

Recurring Questions in Property
1. Is there a property interest at issue?
2. If it is property, what type of property interest is it and how is that type of property interest
created or acquired?
3. Who owns the property interest? How are competing ownership claims decided?
4. What property rights does ownership in this property entail, and with what limits/scope and
duties?
5. What is required to make a valid transfer of this property interest?
6. How long does the property interest last? How can the property interest be terminated?
7. How are property rights in this kind of property enforced?
I. Theories of Morality/Theories of Efficient Allocation
a. Priority/First in Time Discovery
i. First person there is the owner.
1. Still issues here since some resources come out of nowhere (ex: natural resources,
intellectual property)
2. While it may explain how property rights evolved, it does not adequately justify
existence of property rights and private property.
3. MIntosh Rule: Discovery of land gives the exclusive right to settle, possess, and
govern the new land, and the absolute title to the soil, subject to certain rights of
occupancy only in the natives.
b. Lockean Labor Theory: You own yourself, your mix your labor with un-owned property, and you
leave as much and as good for everyone else. (Rose story)
i. Must be productive labor
ii. Problem is this is subjective (ex: Indians hunting and gathering viewed as unproductive and
illegitimate; in MIntosh, collecting food was not enough to establish mixing labor)
iii. Compare to Radin and fetishism
1. Critique: your fetish is my important way of life
2. Defense: utilitarianism: unhealthy relationship does not have the best effect for all.
c. Utilitarian Theory
i. Classic: property is a means to an end: private property exists in order to maximize the
overall happiness/utility of citizens. It is a convention that promotes social utility.
1. Critique: impossible to assess happiness.
ii. Law and Economics: Happiness stated above can be measured in dollars, and private
property exists in order to maximize the overall wealth of society. (Controversial)
d. Conquest Theory
i. MIntosh: after being conquered, Indians only have a right of occupancy, not ownership of
the land; conquest required deference to the conquerors system. Thus no right to own, only
to occupy after conquest.
e. Capture (wild animals, minerals, groundwater) Theory
i. Pierson v. Post: Killing nuisance versus hunt for sporttwo people hunt the fox, one is in
pursuit for hunting and the other happens to kill it. Who gets it?
1. MUST have:
Unequivocal intention to appropriate to own use
Deprivation of natural liberty
Certain control
2. Constructive possession dont need contact to have control of the property
3. Why not just order them to share? Issues in dividing property, plus high costs;
however, argument that it would give people incentive to swoop in doesnt really

hold water since they already have an incentive (they get to swoop in and maybe get
the whole thing)
ii. JUSTIFICATION FOR CAPTURE THEORY: encourage killing of animals for societal
benefit, create clear bright line standard for determining ownership.
iii. Ghen v. Reich (whale case; putting lance in whale signals ownership and right to claim the
whale once it is beached; finders fee to whoever finds it on the beach)industry custom
iv. Keeble (decoy pond with ducks) D was maliciously interfering with Ps lawful activity
(decoy pond); different from the competitive/productive interference in Pierson, this
interference is unproductive and interferes with Keebles right to exercise dominion.
v. Capture of OTHER resources
1. Fugitive resource doctrine: principles adduced from wild animal property law have
been applied to such fugitive resources as oil and gas.
2. NO ONE owns animals/oil/etc. in natural habitat; can only own through physical
possession.
vi. Possession in generalMust have:
1. Intent to possess
2. Actually controlling or holding the property
f. Demsetz
i. Changes in technology or opening of new markets create
1. Changes in economic values, which increase
2. Internalization AND lead to property rights.
ii. Changes may not be conscious but come about through social mores or common law
precedents. Property rights are an instrument that helps us form expectations about our
dealings with others. They are socially constructed, and the main allocative function of
property right is the internalization of beneficial and harmful effects (externalities).
iii. Thus, property rights emerge b/c of the emergence of new or different beneficial and
harmful effects. They emerge to internalize externalities when the gains of
internalization become larger than the cost of internalization.
iv. Externalities occur whenever some person makes a decision about how to use a resource.
II. Creating Property Formally and Informally
a. Custom (parking spot, lobster gangs, gold mining)
i. Often becomes law
ii. Custom broadly adopted when its easy to learn and infer
b. Lobster gangs of Maine
i. Customary rules to punish violators: cut lines, destroy traps, violence
ii. Norms enforceable because fisherman are repeat players see each other every day;
violence, social sanctions, reciprocal favors, overlapping social ties so easier to figure out
who commits wrongs, sense of cultural homogeneity
iii. Giving way to formal regulatory mechanisms by the state
c. California Gold Fields
i. No familial connections gave way to contracts system for monitoring
ii. Only English speaking whites included in the system
iii. First in time + labor theory: labor justified claims; lack of labor justified taking them away;
labor theory not sufficient explanation bc would have allowed person with 50 person crew to
show up and mine the land more efficiently; this did not happen
iv. Contracts allowed for efficient parcel size
v. Contracts made in 1849 were less effective by 1851 increased violence without formal
law backing them
d. Bundle of Rights: What Sticks Are Present in the Bundle?
i. Right to use
ii. Right to exclusive possession (right to exclude: see public policy and FHA for exceptions)
iii. Right to dispose or transfer (destroy)

iv. Right to exclude and destroy are not absolute.

III. Property in Persons
a. Radin: Property and Personhood
i. To be a person, individual needs some control over resources in the external environment
ii. Property v. liability rules: fungiblepersonal (entitlement)
iii. Fetishism: unhealthy relationship to property
iv. Hegel: person has no concrete existence until will acts on outside world
v. Which property is worthy of protection? **not all object-loss is equally important
vi. Welfare rights: redistribution? Takings implications? (hasnt developed this way)
b. White v. Samsung
i. SC holds that Vanna White has a case against Samsung for using her likeness in an
advertisement; protected not only her face and likeness, but things related to it (dress, letters,
wheel of fortune board, etc.)
1. Celebrities rely on ID to make money; therefore, court erred in dismissing right of
publicity claim.
ii. Why do we protect not only her likeness, but things related to it?
1. We are trying to avoid moral and economic harminterest in protecting not only her
name and likeness, but things related to it as well, because we define the boundaries
of protection by the THING we are interested in protecting. All related stuff is part of
the THING.
c. Moore v. Regents
i. Facts: Moores spleen cells enabled growth of valuable cell lines. Doctors didnt tell him
they patented a cell line based on his cells worth billions of dollars. Had spleen removed,
took his blood and his sperm. Fair amount of participation required. Undergoing treatment
for hairy cell leukemia. Treatment had ended but the research continued underwent tests
and procedures that he was led to believe were important to his treatment, although some
were done with research in mind. He had no idea which was which
ii. Court of Appeals: property as dominion; doctors had fiduciary duty to the patient, no
informed consent
iii. CA Supreme Court: reverses. No cause of action for conversion (wrongful exercise of
ownership rights or interference with right of possession of personal property of another
person) Moore had no right of possession in his cells because he did not intend to retain
them. Defines property as something you own or have a right of possession.
1. Would chill research, moral issues better left to the legislature, can still make claims
based on breach of fiduciary duty
2. Conflict between Moores right of possession of his body parts (like Lockes theory
that we own ourselves or at least our labor) and scientists right to own the unique
cells from Moores voluntarily discarded spleen
3. Principle: everyone owns his or her body until something is extracted
4. Everyone has cells, produce the same material; not unique
iv. Concurrence:
v. Dissent (Mosk): majority opinion gives patients only the right to refuse consent and the right
to prohibit the commercialization of this tissue. It does not give them the power to consent to
that commercialization on the condition that he shares in the proceeds.
d. Commoditization of Organ Sales
i. Labor theory of value: doing something with organs etc. in some cases contributes almost all
the value
1. BUT starting with the products of other peoples bodies indicates people may own
their own body parts
ii. Peggy Radin: property for personhood
1. If stuff is intertwined w/ personhood, claims to ownership should be recognized
2. If something is uncompensable, might suggest a moral wrong

IV. Adverse Possession

a. Adverse Possession Generally/Real Property
i. Argument for Adverse Possession
1. Social utility
2. Don't want to leave land fallowimplies concept of labor (not using it, losing it)
3. Personhood by working the land, indicating that land is somehow connected to
person
4. Respect for passage of timerelated to conquest; person acting like owner to be the
owner.
ii. Elements of Adverse Possession
1. Actual entry with exclusive possession (critical date) giving you exclusive
possession (exclusive in sense that dont share with the landowner can have visitors
and even rent it out)
a. Initiates SOL
b. True owner has right to exclude and include: can give permission to come into
house as a tenant or a visitor (exercising right to include)
c. Not required to pay taxes unless required by statute (IF REQUIRED BY
STATUTEmust talk about this)
2. Open and notorious
a. Goal to provide notice to landowner
b. Want to prevent people from sitting on their rights
c. Possessor must be visible to any inspector of property
d. Open and notorious if the type of occupation a true owner would make
i. Note: appropriate for the area means that if you are a cultural outlier,
behavior may not be recognized by other people as indicating
ownership
e. Mannillo v. Gorski: (minor encroachments)Court rejects Maine rule on
grounds that it rewards dishonest encroachers and disadvantages those who
make honest use of land.
3. Adverse and Under Claim of Right (Hostility Requirement)
a. Claim of Rightthe term often used to describe the element of
hostility/adversity
b. Must occupy the land without consent of the owner and with intention to remain
c. Adverse possessor does not have permission to be there, also claims right to
stay there
d. Maine Doctrine: Adverse possession requires an intentional tortious taking.
wouldve acted different had possessor known they werent the owner=no AP
e. Three Tests to Determine Owners Consent:
i. Good faith occupationadverse possessor must have genuine, good
faith belief that she owns the occupied property.
1. Negligence would get rid of this option
2. Could argue that its under-inclusive; could invite perjury; hard
to do state of mind inquiries
ii. Bad faith/aggressive trespassoccupier knows the property is not
her own but intends to claim in nonetheless
1. Also may be issues with figuring out state of mind
iii. Objective standard (majority view) 1. Lack of permission to enter;
2. Whether occupiers acts and statements objectively appear to be
claims of ownership
1. Act itself is hostility
2. Probably requires an intent to act as the owner
3. Consistency, easily administrable

4. Continuous
a. Must occupy continuously, without interruption, during limitations period
b. Must occupy property as continually as would a reasonable and true owner of
the property
c. When possessor gives up possession with no intent of returning, continuity
destroyed
d. Two LIMITS to Continuity:
i. Disability:
1. Tolling of SOL if the owner is disable from bringing an action
to recover possession at the time the cause of action accrues
2. Owner may bring suit for some specific period after the
disability ceases, even though normal SOL period expired
ii. No adverse possession allowed against GOVERNMENT:
1. Govt has monitoring problems that individuals do not have
2. Agency costs
3. Government lands generally benefit citizens
OWNERS INTENT = IMPORTANT!
iii. Maine Doctrine: occupier is not possessing adversely if she occupied under a good faith, but
mistaken, belief that the land is hers, but she would not have occupied if she had known the
true facts.
iv. Color of Title: even if you have a bad deed, can still give you the rights to the entire parcel
claimed in the deed
1. Defective deed or other writing that purports to deliver title to the possessor, but
which the possessor does not know to be invalid
2. Possessors who enter under color of title satisfy the adversity element
3. Adverse possessors who enter under color of title are deemed to possess all the land
described in the defective deed, so long as it consists of a single parcel, and the
possessor has occupied a significant portion of the parcel.
4. Possessor lacks color of title if he does not believe, in good faith, that his defective
deed is valid
v. Van Valkenburgh v. Lutz (122)
1. Facts: Around 1916, Lutz takes over adjoining land, builds a house, farms, uses it for
firewood. Also builds a garage that extends onto the property. Does this for longer
than the statute of limitations, was 15 years. Feud between them developed.
Valkenburghs bought the land at a tax sale and tried to kick them off. (tax sale should
have solved the problem because government would have solved the problem because
the government would have owned free and clear). Lutz agrees to clear the stuff off
the law, but claims easement on part of the property. Ruling here doesnt affect the
easement. No res judicata because elements of easement differ from adverse
possession.
2. Court of Appeals: reverse finding of adverse possession for Lutzs. Adverse under
claim of right not met because Lutzs lawyer said they knew someone else technically
owned the property.
3. No exclusive possession did not use it in manner that an owner would use land
because treated it like a junkyard
4. No mental state will suffice to be adverse under claim of right to majority
5. Dissent: argument for objective rule; only mental state we should require is an intent
to claim the property as his own
vi. Mannillo v. Gorski (136)

1. Facts: Gorskis make improvements to their house over the years, including stairs and
concrete walkway. Stairs encroach on the neighbors property by 15 inches. Mannillio
realizes the mistake several years later and sues.
2. Holding: Party may acquire land through adverse possession if that party had a
mistaken belief that she had title to the property. In order to constitute open and
notorious possession for minor encroachments, the true owner must have actual
knowledge of a minor encroachment along a common border.
3. Summary: The Gorskis renovations to their home included the accidental
encroachment of a stairstep on to 15 inches of their neighbors land. Although the 15inch encroachment had been right there, in plain sight for over 20 years, the court
found that it was so minor an encroachment that it could not be seen as an
encroachment with the naked eye, and that actual notice, not constructive notice, must
be demonstrated in order to prevail under the open and notorious element. To hold
otherwise would have amounted to requiring a survey of your property every time
your neighbor undertook a home improvement project.
vii. Tacking: when privity of estate (voluntary transfer from first possessor to second possessor
of either an estate in the land or actual possession of it) exists between prior possessor and
present possessory, tacking is permitted
1. Can tack time to satisfy the statutory period
2. Can also tack strips of land
b. Adverse Possession of Chattels
i. Thief cannot validly transfer a good title
ii. Bona Fide Purchaser Rule
1. OKeefe v. Snyder
a. Facts: OKeefe painting missing since 1946, but OKeefe does not report until
1972. Does discuss the theft with the art world. Painting in Franks possession
for years, then sold to Synder in a conventional trade. Snyder claims bona fide
purchaser for value.
b. NJ Supreme Court Holding: Limitations period for recovery of personal
property starts to run at the earlier of
i. (1) When the loss occurs (except where there is fraud or concealment,
or
ii. (2) Diligent Discovery Rule: when the owner first discovers, or
through reasonable effort should have discovered, the cause of action
(including the identify of the possessor)
iii. Focus on conduct of true owner encourages owners to report their
losses and undertake reasonable investigation
iv. Whether OKeefe satisfied the diligent discovery rule is a question for
the jury
c. Note: Void vs. voidable
i. Void: thief can never pass good title, so BFP cannot get good title. BFP
could get new title; still a limitations period
ii. Voidable: fraudster has the voidable title; if you catch the fraudster
before he sells the item, you get the item back + criminal/civil liability.
BFP can get good title if didnt know seller was a fraudster. Victim
only has remedy against the wrongdoer; cannot get the thing back
V. Gifts and Transfers
a. Gifts
i. Elements:
1. Donative Intent
a. Donor must intend to transfer title

b. No gift if just intending to transfer possession without title

2. Delivery (Manual, Constructive (e.g.: giving a key), or symbolic (written instrument)
a. Rule: anything that can be manually delivered has to be (preference for manual
deliver) (Bost)
b. Gruen: one does not have to redeliver once the requirements are met
3. Acceptance
ii. Gifts causa mortis
1. Revocable if donor recovers; highly scrutinized by the courts (potential interference
with probate lawswe want people to make wills; people on death beds more
susceptible to undue influence and fraud, wills are better indications of intent
2. Newman v. Bost: On his deathbed, Jack gives Julia all the keys to his household
furniture, saying he intends of her to have everything in the house. Delivery of the
keys constitute constructive delivery because it is impracticable to make physical
delivery under the circumstances.
a. Delivery of keys does not constitute constructive delivery of life insurance
policy locked in drawer because it was not impracticable to deliver the life
insurance policy itself
b. Issue: whether delivery is an independent element or a double check on
donative intent.
iii. Gifts Inter Vivos
1. Gruen v. Gruen: Father gives son letter saying wishes to give him a valuable painting
for his 21st birthday, but father wants to retain possession for the remainder of fathers
life.
a. Holding: a valid gift inter vivos was made of a remainder interest in the
painting, a property right that would automatically become possessory upon the
fathers death. Father manifested donative intent because it gave a presently
existing property right. Letter sufficient to constitute symbolic delivery. Son
manifested acceptance by telling his friends about the painting and keeping the
letter for 17 years.
b. An inter vivos gift is not valid if the donor manifests intention to transfer
ownership in the future.
b. Voluntary Transfers by Sale
i. Contracts to buy Land
1. Seller makes promises to convey the property and convey marketable title (title
that can be transferred to someone else)
ii. Duties of Seller
1. Common Law: Absent a fiduciary relationship, seller has no duty to disclose known
defects in the property but does have a duty to refrain from intentional
misrepresentations (outright lie about propertys condition)
2. Disclosure of Self-Related Conditions: Sellers are obligated to disclose conditions
that are
i. 1) Created by seller
ii. 2) Materially impair property value, AND
iii. 3) Are not likely to be discovered by a reasonably prudent buyer
using due care
3. Disclosure of Latent Material Defects:
a. Seller must reveal all latent material defects, which are defects that:
i. Materially affect the value/desirability of the property
ii. Known to the seller (or only accessible to the seller), and
iii. Not known to nor within reach of diligent attn./observations of
buyer

b. Note: There are some things that might decrease the value of property but
nonetheless we, as a society, are unwilling to call material (ex: some statutes
requiring disclosure of murder in the house, etc.)
4. Shield Laws/Stigma Statutes: several states have enacted statutes shielding sellers
from failure to disclose a psychological or prejudicial factors that might affect market
value (ex: murder, rape, AIDS, etc.)
5. Disclosure of Hazardous Waste Material:
a. Strawn v. Canuso: NJSC held that builder has duty to disclose suspected
presence of toxic waste in a landfill nearbythreat or risk has to be disclosed
because it is rooted in the land
6. Stambosky v. Ackley (ghost case): PURCHASE AGREEMENT = DUTY TO
DISCLOSE
a. Buyer from city puts in offer on house; wants to rescind offer because owner
had gone to great lengths (writing stories, etc.) to further the reputation that the
house was haunted
b. Duty to Disclose: In states that otherwise adhere to caveat emptor
i. When a condition:
1. Created by seller
2. Materially impairs the value of the contract and
3. Defects are not likely to be discovered by a prudent buyer
exercising due care
a. Is peculiarly w/in knowledge of seller OR
b. Is unlikely to be discovered by prudent purchaser
exercising due care
THEN NONDISCLOSURE IS A BASIS FOR RECISSION.
ii. INVOLVES PURCHASES, not leases.
7. Johnson v. Davis: SILENCE as misrepresentation: seller must reveal defects like:
a. Extremely leaky roof that poured water into the home; not disclosed
b. When the seller of a home
i. Knows facts that
ii. Materially affect the value of the home AND
iii. Are not readily observable AND
iv. Are not known by the buyer
SELLER HAS DUTY TO DISCLOSE THEM TO BUYER (no req that seller
created the problem)
v. Materially affected standard is pretty high. Must be real problem
1. Probably does not apply to landlord/tenant issues
8. Van Kamp v. Bradford: Seller/sellers agent failed to disclose fact that rape had
been committed against former lessees teenage daughter. Buyer was single mother
with teenage daughter; suffered from mental anguish when her house was
burglarized; she received threatening phone calls, and there were other rapes in the
neighborhood.
a. Issue: are seller/agent liable?
b. Holding/Reasoning:
i. When viewed in conjunction with a potential misrepresentation or
concealment on the part of defendant Bradford regarding the relative
safety of the home, the latent nature of the defect at issue here renders
the defense of caveat emptor inapplicable
ii. Fiduciary relationship between real estate agent and client = client
entitled to rely on representations of the realty agent.
iii. Duties of Buyer:

1. Caveat emptor: old common law rulebuyer beware; buyers ought to use diligence
and care to examine a property for themselves
a. LARGELY ABANDONED TODAY, because it is hard to distinguish
between intentional misrepresentation and nondisclosure
VI. Mortgages
a. Introduction
i. Terminology
1. Deed = document transferring an interest in land; document itself
2. Title = ownership interest in land, thus what is the state of the tile? means who
owns what interests in this land?
3. Mortgage = nonpossessory interest in land; mortgagee owns a legal interest in the
land, but it does not entitle the mortgagee to possession of the land; the land secures a
debt
4. Note = the debt. The note provides the terms of the debt; borrower is personally liable
for the amount in the note
5. In case of default: when the note is linked to the mortgage, the lender can go after
the land too
6. Interest = legal term used to say there is some legal right between you and the land
may not have a right to enter the land, but have a right to benefit from the land in
some way
7. Ownership = right to possessory interest; to go on the land, go in the house, live in
the house
8. Equity = net value of the house or the land, once you subtract the amount youve
borrowed tied to the land
9. Deficiency Judgment = lender goes after the borrower personally, not the property
10. Lien = a right to keep possession of property belonging to another person until a debt
owed by that person is discharged; mortgagor is entitled to possession until
foreclosure
ii. Old Mortgage Market
1. Could only secure loan for 80% of purchase price
2. Lenders were less likely to default because they would lose the 20% equity they
invested in the home
3. Leaves room for foreclosure costs and accounts for some fall in the housing market
iii. New Mortgage Market
1. Giant pool of money problem: lenders were chasing returns, so more willing to take
bigger risks by taking on the full value of the home
2. 80% minimizes some of your risk, if you are sure that property values will rise 10%
each year, a 100% loan is also less risky because if you need to foreclose 10 years
from now, there will still be extra value in the house
iv. Basic Examples
1. Example 1
a. Facts
i. $150,00 sales price
ii. $20,00 cash down payment
iii. $100,000 first mortgage from Bank 1
iv. $30,000 second mortgage from bank 2
b. In foreclosure, sold for $100,000
i. Bank 1 gets the $100,000
ii. Bank 2 and homeowner get nothing
c. Bank 1 is the senior mortgage holder, so their claim is satisfied in full first.
v. Inadequate Sale Price at Foreclosure

1. Must be commercially reasonable notice of sale

2. Will not be void just because less than fair market value
3. Rule: Sale price will stand unless it is so far below market value that it shocks the
conscience or fraud or overbearing unfairness is present
vi. Klem v. Washington Mutual Bank
1. Facts: trustee, acting on banks behalf, sells the foreclosed property for a dollar more
than the borrowers debt
2. Issues:
a. (1) Notice of sale was falsely dated
b. Permitted an earlier sale without valid reason
c. Court held that false notarization is a crime and undermines the integrity of
institutions upon which we must rely for the faithful fulfillment of the notarys
oath
i. General Standard of Notice: commercially reasonable
d. (2) Trustee failed to exercise its discretion to postpone the sale
i. Trustee has fiduciary duty to the lender
ii. Should have postponed the sale, but in reality is actually captured by
WaMu
e. (3) Reasonable offer on the table to buy the house. Bank still did not act to
postpone the sale
i. If bank is able to buy the house for $83,000 to themselves, they still
have the house, and are able to sell it to someone else for the actual
value
ii. Probably incompetence and WaMu being overwhelmed
f. (4) The Sale Price
i. According to the state, valued at at least $250,000, but sold for
$83,000
ii. This is really low, but probably does not shock the conscience
g. (5) The Numbers
i. Homeowner borrowed $75,000, but owes $83,000 bc of lots of fees
3. Holdings: Trustee is required to be a neutral third party and has an unwaivable duty
of good faith. It is an unfair or deceptive act or practice under the CPA for a trustee of
a nonjudicial foreclosure to fail to exercise its authority to decide whether to delay a
sale, as is the practice of falsely notarizing a notice of sale
b. Subprime Mortgages
i. Lots of terrible loans doomed to end in default
ii. Holder in Due Course Doctrine
1. A homeowner who believes that a lender deceived him about the terms of a loan can't
press such claims against the purchaser of a mortgage, such as a mortgage-backed
securities trust.
2. The holder-in-due-course doctrine protects pension funds and the like from having to
worry about any misbehavior by home lenders because one a secondary market for
the mortgage has developed, people believed they could be washed clean from fraud
etc. if theres a piece of paper formatted the right way
3. Holder in due course entitled to enforce bad loans even if they were fraudulently
obtained
4. BUT if trust waits to complete paperwork transferring a loan to a pension fund until
after the loan goes into default, the holder-in-due course protection evaporates, and
anyone who tries to foreclose could face defenses from the borrower that he or she
was lied to when seeking the loan
iii. McGlawn v. Pennsylvania Human Relations Commission

VII.

1. Facts: McGlawn arranged for loans to be made. Made his money from brokers fees.
The mortgages intentionally targeted people who were likely to default on their loans
as a function of what the loan terms were (reverse red lining). Without ability to pay,
lender is essentially looking forward to taking the asset and selling it bc only way to
get paid back.
2. Bad Features of the Loans:
a. Interest rate is adjustable instead of fixed, so may be artificially lowered early
on and produces payment shock when rate goes up
b. Requires no documentation and McGlawn encouraged people to lie about how
much they could afford/month
c. Prepayment penalties
d. Balloon payments at the end of a certain period, remainder of the payment
becomes due
3. Holdings: Ps had to show (1) engaged in predatory and unfair loan practices and (2)
showing D either intentionally targeted based on race or that there was a disparate
impact on the basis of race. Showed this McGlawn liable
c. NOTE ON BONA FIDE PURCHASERS:
i. Bona Fide Purchaser is a subsequent purchaser who pays valuable consideration for an
interest in real property, without any notice of an interest that 3rd party already holds in
land
1. SUBSEQUENT PURCHASER
2. FOR VALUE
3. WITHOUT NOTICE OF PRIOR INTEREST.
Recording
Cannot sell what you dont own
The Recording Act protects subsequent bona fide purchasers
Note: donees and devisees by gift or will are not protected against unrecorded interest, even if
they dont know about them
a. Owner vs. Record Owner
i. Unrecorded deed is valid, but vulnerable (depending on the recording statute) to subsequent
events
b. Types of Indexes
i. Grantor/Grantee Index alphabetical list by surname; includes dates, names, description,
citation to location in public record
ii. Tract Index: every transaction for one parcel in one location
c. Types of Recording Statutes( PROTECT BFPS!)
i. Race Acts (largely defunct)
1. Protects recorded interests over non-recorded interests
2. The earliest to record prevails (race to record first)
ii. Notice Acts
1. Subsequent bona fide purchaser without notice of a prior unrecorded transfer prevails
over the prior purchaser who has failed to record (AKA prior unrecorded interests are
not protected against subsequent bona fide purchasers for value as long as the latter
do not have notice of the previous purchase)
2. True even if the subsequent purchaser has not recorded
3. BFP MUST BE INNOCENT
4. Example: No conveyance is valid against a subsequent bona fide purchaser who has
no notice of the conveyance, unless the conveyance is recorded.
iii. Race Notice Acts
1. Only protects bona fide purchasers who record before the prior purchaser and has
actual notice

2. Encourage recording and eliminate disputes over which of two conveyances was first
delivered
3. Subsequent BFP for value, in order to be protected against prior unrecorded interests,
must both not have notice and record first.
4. Example: A conveyance of an interest in real estate shall not be valid as against any
person who first records his subsequent interest, pays substantial value and takes
without notice of the prior interest, unless the interest in real estate is recorded in the
registry of deeds for the county or district in which the land to which it relates lies.
iv. Shelter Rule: Protection given to BFP under recording act extends to all takers from the BFP,
even if the taker knows of prior unrecorded conveyances.
Note: when the recording statute does NOT apply, we use common law you can only give what
you have (EX: GIFT SITUATIONS)
SOMEONE WHO RECEIVES PROPERTY AS A GIFT IS NOT A BFP (non-BFP can only
get whatever the conveyer had to give)
A non BFP recording would still put another interested party on constructive notice (once on
inquiry notice, cannot be a BFP)
Donees are not only allowed but encouraged to record their interests they are just not
protected against prior unrecorded interests.
d. Types of Notice
i. Actual notice other person is aware, often because of possession of the property; can be
gained from document in deed record, or personal observation
1. You do have notice (in document, you heard about it, or you saw)
ii. Constructive Notice
1. (1) Record notice always on constructive notice of whats in the record; duty to
search the record
2. (2) Inquiry notice knowledge of the facts would cause a reasonable (ordinary
prudent person) person to inquire into a possible conflicting interest (ex: Roses
example of manure on the land; should have inquired)
a. Could have notice of it if you went and looked
b. Sanborn v. McLean (Ds tried to build gas station in residential area; court
implied a restrictive negative easement Ds has constructive notice of the
easement bc nature of the residential neighborhood should have put D on notice
that a reciprocal negative easement may have existed duty to inquire about
restrictions in the neighborhood)
e. Exam Tip: To Answer a Notice Statute Question:
i. Identify type of statute (race, notice, or race notice)
ii. Analyze each conveyance.
1. Is the new party a BFP or a donee?
a. If BFP apply the statute
i. Notice constructive, inquiry, actual
b. If donee apply the common law (can only give what you have)
f. Marketable Title Acts
i. Any claim inconsistent with the record title to land is extinguished after a certain period of
time (usually 40-60 years)
ii. Even a forged deed can be a good root of title after the statutory period
g. Problems that Arise in Title Searches
i. The Wild Deed: deed with a gap in the chain of title. Person with a wild deed has a duty to
record the transfers back to the last record holder or their recording doesnt count.
ii. The Naming Problem
1. Different names, misspellings, improper entry, etc.
iii. Interests that Dont Really Exist, but Are Recorded

VIII.

iv. Easements
h. Policy Issues
i. De Soto Article on Virtues of Title (Malawi)
1. Without formal title, people in developing countries cannot enter the formal economy
by using assets as collateral to raise cash
2. Argues should give squatters formal title so they can prove they own the land.
3. This makes assets fungible so they have collateral to raise loans, do business with
strangers, and meaningfully participate in the economy
4. Note: other problem with formal title = exploitation by the wealthy
ii. Greece: half of the buildings dont have title, and have been sold to people illegally.
iii. Point: what we need in our system, and any system were trying to change, is not perfect
certainty, but certainty sufficient to go forward. Concerned not with certain certainty, but
with fairness, predictability, whether satisfying the formal law is enough, or need to do other
things (bribing officials, making sure you have actual notice)
Mortgage Troubles and Recording
a. Perspectives on Homeownership
i. Homeownership as Personhood
1. Makes you a person, in particular a man
ii. Homeownership as Fundamentally Commercial
1. Toqueville: build and sell, build and sell
2. K. Jackson: stands for notion of ownership
iii. Homeownership as a Chain Around Your Neck
1. Have to make mortgage payments so things you cant do/risks you can take
2. Harder to switch jobs lower levels of labor mobility
b. US Bank v. Ibanez
i. Facts: Purported chain of title Rose Mortgage (originator) Option One Mortgage Corp
(record holder) Lehman Brothers Bank, FSB Lehman Brothers Holdings Inc. (seller)
Structure Asset Securities Corporation (depositor: creator of PSA) US Bank National
Association, as trustee for the Structure Asset Securities Corporation Mortgage Pass-Through
Certificates, Series 2006-Z. Problem: Mortgage (and note) is somewhere, services dont have
documents on hand to prove it, but theyre the ones responsible for initiating foreclosures if
theres a default
ii. Issue: whether the two securitization trusts could prove a chain of title for the mortgages they
were attempting to foreclose on?
1. No without clear chain of title, no standing to foreclose
iii. Reasoning:
1. (1) Holds that a PSA could suffice as a valid assignment of the mortgages if the PSA
(pooling and sale agreement) is executed and contains a schedule that sufficiently
identifies the mortgage in question must be a complete chain of title
2. (2) Assignments in blank are not allowed for land in MA
3. (3) Mortgage does not actually follow the note without further action to reunite them.
iv. Rule: to foreclose in Massachusetts, a securitization trust needs to prove a complete chain of
title, from origination to securitization, unambiguously associating the broken loan with the
trust through the PSA
c. A Mortgage has Two Parts
i. Note
1. A promise to repay debt: governed by contract/commercial law
2. Has the terms of the debt, including late fees and how interest is calculated
3. Can be replaced by a Lost Note Affidavit but thats supposed to be for special
circumstances

d.

e.

f.

g.

h.

i.

4. Not ideal because might say how do I know the terms in this loan are the same as the
one I actually signed
ii. Mortgage
1. Connection between the debt and the land, instead of just linking to the person who
borrowed
2. A lien, governed by real estate law
3. Should be filed and recorded
4. Gives the lender the right to take the collateral (the house) if the note isnt paid
iii. In theory, these should not get separated, but they do
iv. Problems Arising from Separation:
1. Security interests would be securing nothing (no debt behind it, nothing secured)
2. Mortgage with no associated debt
3. Many states have adopted strong rules that the mortgage follows the note
v. Restatement 3d. of Property: in general a mortgage is unenforceable if it is held by
someone who has no right to enforce the secured obligation (if the mortgagee transfers the
mortgage to A and the note to B, neither can foreclose unless A can foreclose on Bs behalf)
1. The [necessary[ trust or agency relationship may arise from the terms of the
assignment, from a separate agreement, or from other circumstances. Courts should
be vigorous in seeking to find such a relationship since the result is otherwise likely
to be a windfall for the mortgagor and frustration of Bs expectation of security.
Stewart
i. Wells Fargo charged $125for each broker price opinions to judge that value of the home. The
are was under exclusion at the time the alleged opinions occurred, so they could not have
done them.
Wells Fargo v. Ford
i. Original loan from Argent (predatory lender)
ii. Not endorsed to Argent
iii. Purported assignment of mortgage 5 days after execution (unrecorded)
iv. ButWells Fargos representative didnt indicate the source of the information that WF was
the owner and holder of the note and mortgage and the purported assignment of mortgage
v. If WF knew that the note was only actually transferred once Ford was in default not holder
in due course, so Ford gets all her defenses. Wells Fargo can still foreclose, but she can
now interpose her fraud defenses
HSBC v. Sene (Bad Faith)
i. Lots of documents that can contradict each other in chain of title two versions of notes, lots
of things saying that people foreclosing didnt have power to act?
ii. Original loan from ResMae to Marie Sene
iii. HSBC seeks to foreclose
iv. Evidence of illegal backdating
v. Courts have gone so far as to cancel the mortgages all together
MERS (Mortgage Electronic Registration System)
i. Outside recording system
ii. Seeks to solve Ibanez problem by recording mortgage in own name
iii. Banks purport to keep records with MERS about who really owns what
Culhane v. Aurora Loan Services of Nebraska (D. Mass)
i. MERS doesnt always report proper name of landowners if MERS says owner is Bank of
America, easy to loose track of whats actually in the trust
ii. Have stopped initiating foreclosures in MERS name now record transfer from MERS to
foreclosing entity, foreclosing entity goes into court itself
Landmark National Bank v. Kesler
i. First mortgage from Landmark, recorded
ii. Send from Millennia, MERS recorded as nominee

2nd transferred to Sovereign, assignment unrecorded

Default on 1st
Millennia is notified; no one notifies MERS and the property is sold at foreclosure
If they fail to notify a party who should have been notified, the sale should be set aside
should Sovereign be able to set the sale aside?
1. In cases like this - MERS says we have an interest in the property; in other cases
when someone wants to sue person with interest in property, MERS says no just
acting on behalf of someone else sue them
2. Until recently, courts have let MERS get away with having an interest when thats
help, and not having one when its not
vii. Kansas Supreme Court Held: because MERSs position was that it didnt have an interest of
its own, it was not entitled to be notified so Sovereign was out of luck
iii.
iv.
v.
vi.

PART TWO: Varieties of Permissible Interests

GENERALLY:
DIFFERENT TYPES:
(1) Freehold Estate
(2) Future Interests
(3) Coownership (joint tenancy, tenancy in common, tenancy by entirety)
(4) Leaseholds (term of years, periodic tenancy, tenancy at will)
a. Can live suggests landlord tenant relationship over freehold estate
Three Variables
Duration of Title
Timing of Possessory Interest (present interest or future interest)
Nature of the Interest (absolute or defeasible [might happen to end interest])
Determining the Type of Interest: Cannons of construction (White v. Brown)
1) You are presumed to convey your entire interest
2) Restraints on alienation are disfavored
3) Give meaning to all clauses
4) Construe ambiguity contra proferentem (construe against the interests of the party who
created the ambiguity)
5) Avoid forfeiture
Construe a conveyance according to its purpose
o That purpose is often in conflict with the laws preference for simple grants
I. Freehold Estates
a. Types of Freehold Estates
i. Fee Simple (O to A and her heirs)unlimited duration
1. Present possession, complete possessory interest
2. Duration is absolute
3. Fully alienable and descendible
a. Intestacy: surviving spouse entitled to some share; if no surviving spouse, goes to
issue; if child is dead, childs children take shares
b. Per stirpes: each branch of family is to receive equal share of estate
c. Rule: CANNOT create new variables on a freehold estate
ii. Fee Tail (O to A and the heirs of her body)until line runs out
1. Present possession; duration until A dies without issue
2. Inalienable
3. Descendible only to issue

iii. The Life Estate (O to A for life)until measuring life dies

1. Present possession
2. Followed by reversion or remainder; alienable BUT NOT descendible
3. Since all interests have to add up to a fee simple, something will always follow a life
estate
4. Limitations: cannot do affirmative waste; can do permissive waste like not pay taxes
iv. Defeasible Fee (O to A for 10 years)until the term expires
1. Present possession
2. Duration: determinable, uncertain
3. Ownership subject to termination
4. Fully alienable and descendible
a. Subject to uncertainty re: termination if triggering event is still possible.
b. Condition for termination may limit class of potential takers.
5. Can decrease value of land and interfere with alienability.
v. Alternative to Life Estate: The Trust
1. Beneficiary (or beneficial owner of trust)
2. Trustee (legal owner of trust)
a. Power of sale
b. Fiduciary duty to maximize the value of the estate (estate generally not home)
c. End run around the problem of spendthrift son/daughter: put all money in trust,
keep it out of their hands, trustee wil disperse amounts as needed
d. Trustee is usually a bank
e. Trust can be liquidated if no longer has enough assets to support itself
3. Dont want people to control property from the graveswitching to trust is a good
way to do this because it protects family wealth without locking up property and
preventing assets from moving freely.
b. White v. Brown: How to tell what type of interest an owner is granting
i. I wish Evelyn white to have my home to live in and not be sold. I also leave my personal
property to Sandra White Perry. My house is not to be sold.
1. Presume grantor intended to dispose of entire estatementioned property, presume
wanted to get rid of the entire interest they own (presumption against partial intestacy)
2. Restraints on alienation of a fee simple are disfavored; from majoritys perspective,
this means that many restraints on alienation of a fee simple are invalid so courts
wont enforce.
3. Try to give effect to every part of the documentall clauses of the grant
II. Future Interests
a. Rules For Analyzing Future Interests
i. Rule of construction: each clause in grant denotes a separate estate or interest
ii. Rules of logic
iii. All estates and interests must add up to a fee simple
iv. Estates and interests therefore generally come in matching pairs
1. Life estate reversion and/or remainder
2. FSD/FSCS/FSEL possibility of reverter/right of entry/executory interest
b. Kinds of Future Interests:
i. Interests Retained by Grantor
1. Reversion (waits patiently follows xxxx)
2. Possibility of Reverter (waits patiently follows determinable; divests fee simple
determinable automatically)
a. Contingent on condition precedent
b. Alienable and descendible in most states
3. Right of Entry (interrupts follows subject to a condition subsequent; capable of
divesting fee simple subject to condition subsequent if exercised)

a. Contingent on condition precedent

b. Alienable and descendible in most states
ii. Interests in the Grantee
1. Remainder
a. Vested (ascertained [born and identified] taker or condition precedent)
i. Vested subject to divestment (might be divested before becoming
possessory)
ii. Vested remainder subject to open (some people are ascertained, but
some still might be added to the class ex: usually some children are
alive, but more could still be born)
b. Contingent (unascertained taker or condition precedent [or both])
i. Alternate Contingent Remainder (follow the same estate and their
conditions precedent are the opposite of each other, so that the vesting of
one precludes the vesting of another)
2. Executory Interest (follows determinable or subject to an executory limitation)
a. Automatically divests preceding estate (fee simple subject to executory limitation)
b. Always contingent on condition precedent; fully alienable and descendible
iii. Rule Against Perpetuities
Rationale: Solution to issue of wanting to honor autonomy of property owners, but
also caring about people in the future who also have autonomy interests in using
property freely that may be restrained by very old grants
The Rule: No interest is good unless it must close and vest or fail not later than
twenty-one years of some life in being at the creation of the interest.
1. A future interest is void the moment its created if:
a. It is in a grantee (a remainder or an executory interest)
b. It is either contingent (given to an unascertained taker or subject to a condition
precedent or both) or subject to open; and
c. It might still exist and still be contingent or subject to open longer than 21 years
after the death of the last person alive at the time of the conveyance
d. Note: Must account for all contingencies no matter how improbable
2. Applying RAP
a. Step 1: Draw vertical lines to separate the different interests. Identify the state of
the title according to the conveyance
b. Step 2: Look for any future interests in a grantee
c. Step 3: If you find any future interests in a grantee, check each one to see if it is
contingent or open. If so, its vulnerable. Underline it.
d. Step 4: Identify the necessary factual developments for vesting and closing, and
write them beside the conveyance.
e. Step 5: Circle all of the lives in being.
f. Step 6: See if the interest might still be contingent or open longer than the
lifetimes of everyone you circled plus 21 years. Look for a validating life.
g. Step 7: If the contingent interest violates the Rule, strike the whole interests, and
revise your classification of the title.
h. If there is another contingent or open interest in a grantee, repeat this procedure.
3. RAP Danger Signs
a. The condition is not personal to someone
b. There is an identified age or time period of more than 21 years
c. An interest is given to a generation after the next generation (ex: grandchildren)
d. A conveyance requires that a holder survive someone who is merely described
rather than named
e. An identified event that would normally happen well within 21 years, but might
not

f. The holder wont be identified until the death of someone merely described rather
than named
g. Use restrictions
h. Commercial Transactions
III. Co-Ownership
Four Unities of Joint Tenancy Required for Creation
-Interest
-Time
-Title
-Possession
a. Three Types of Concurrent Interests
i. Tenancy in Common
1. Common ownership; each co-tenant has an equal share of the same piece of property
2. Default Rule: each co-tenant has an equal right to possess the whole property and to
share equally in rents and appreciation in value
3. Can sell, share, or devise without consent of the co-tenant
4. Descendible and may be conveyed by deed or will
5. No survivorship rights between tenants in common
6. Any net rents or proceeds from the rent are divided by share, but each co-tenant has the
right to possess the entire property (ex: A owns 50% interest and B and C each own
25% interest, A would receive 50% of any net rents, but all three would have equal
rights of possession)
7. Presumption in favor of tenancy in common
ii. Joint Tenancy
1. When a joint tenant dies, her interest ends
2. Last surviving tenant owns the property outright
3. When one joint tenant conveys or sells the land, severs the joint tenancy and converts it
into a tenancy in common
a. BUT if there are multiple joint tenants, it only coverts the conveying tenants
interest to a tenancy in common
4. Often used as a will substitute avoids slow and expensive probate process
5. A to B as joint tenants with right of survivorship and not as tenants in common would
be the preferred language
6. How to Sever:
a. Conveyance, even to yourself
b. Mortgage doesnt severe (Harms; majority rule) and doesnt survive the death of a
joint tenant (Harms; majority rule). A lender would be foolish to give a mortgage
to a joint tenant w/o the other joint tenant co-signing.
c. Adverse possession (if only against one, would make AP and non-APed tenant
tenants in common)
iii. Tenancy by Entirety
1. Form of joint tenancy available only to a husband and a wife (engaged does not count)
2. Each tenant has right of survivorship
3. CANNOT be severed by unilateral action of one spouse (so conveying ones interest
does not destroy tenancy by entirety or right of survivorship)
4. Recognized by about half the states; Hawaii and New Jersey permit creation of tenancy
by the entirety between same-sex partners who are not permitted to marry each other
5. If divorced: automatically covered into tenancy in common
b. Riddle v. Harmon (324)
i. Facts: Francis Riddle conveyed from herself as a joint tenant to herself as a tenant in common
bc she wanted to get the land away from her husband. Probably didnt just convey it to

c.

d.

e.

f.

someone else bc she wanted the benefits of ownership and, as long as it was in her name, her
husband probably wouldnt notice (possible DV)
ii. Rule (modern trend): Joint tenant can sever the joint tenancy and become a tenant in common
this way (dont need a straw buyer)
iii. Problems Here: no notice
1. (1) Jack probably didnt know joint tenancy as severed so his interest would pass at his
death through intestacy or the residual clause of his will
2. (2) Frances could sever the joint tenancy by executing a deed, not recording it, and
telling another unscrupulous friend about the deed. Then, wait to see if Jack dies first,
then secretly destroy the deed
iv. California Rule: deals with problem 2; if a joint tenancy is recorded, severance is only
effective against the non-severing tenant if the severance is recorded either before severing
tenants death or in some limited circumstances within 7 days of that death
Harmes v. Sprague (330)
i. What counts as severing a joint tenancy?
ii. Facts: William and John Harms owned property as joint tenants with right of survivorship.
John took out a mortgage on the property. John moved in with Charles Sprague, to whom he
devised all his property. John died.
iii. Issue: Did the mortgage sever the joint tenancy?
iv. Holding/Majority Rule: (1) there was no severance [majority view]; (2) William owned the
farm entirely free of the mortgage to Carl and Mary Simmons [more division here]
v. Reasoning: mortgage only burdened Johns interest. Because Johns interest died with him,
leaving only the previously unencumbered interest of William as the surviving title, the
mortgage had died with John
vi. Problems: penalizes the unsophisticated lender (savvy lender will never lend to sophisticated
joint tenant on joint tenant interest as a security interest) and delivers a windfall to the
surviving alternative
Rights and Duties of Concurrent Owners to Each Other
i. Partition
1. Unresolvable conflicts: partition
a. By sale: disfavored; should only be ordered if parties can prove (Delfino):
i. (1) Physical partition is impossible or extremely impractical, or
ii. (2) Physical partition is not in the best interests of all parties (economic
costs/gain involved, subjective costs imposed on a tenant in possession)
b. In Kind: physical division of the property; preferred method,
Delfino v. Vealencis
i. Facts: On one acre, Vealencis owns a house and operates garbage removal business has done
this since the 1920s. The rest of the lot is vacant, but Delfinos and Vealencis were tenants in
common. Delfinos wanted to develop the property into single family residences, so wanted
partition by sale even though the property was capable of partition in kind.
ii. Court Held: Even though total value of the property would be maximized by the sale, not in
the best interests of all parties (Vealencis) to sell the property. Value of continued possession to
Helen was sufficient for court to order partition in kind
1. Favored unless: (1) physically impracticable, or (2) against the co-owners interests
Rents, Profits, Possession
i. Does tenant in possession have to pay rent?
ii. Majority Rule: cotenant in exclusive possession has no liability for her share of the rental
value of possession unless:
1. Other cotenants have been ousted (tenant in possession prevents/bars physical entry by
a cotenant or denies cotenants claim to title)
2. Cotenant in possession owes a fiduciary duty to other tenants
3. Cotenant in possession has agreed to pay rent

g. Rent from Third Parties

i. Cotenant who receives rent from third parties is obligated to account to his cotenants for those
rents
ii. If there is a joint tenancy between two people, and through duty to mitigate one of the joint
tenants had to relet the premises, joint tenant would get:
iii. of the rent minus of the costs the joint tenant incurred in mitigating
iv. Profits from the Land
IV. Leaseholds
a. Four Categories of Leaseholds
i. Term of Years Tenancy
1. Exists for specific period of time and terminates as per the lease terms.
2. EX: O leases Blueacre from G from May 1, 2015 until June 1, 2015. (Exp 6/1/15)
ii. Periodic Tenancy
1. Lasts for initial fixed period and then automatically continues for additional equal
periods until either landlord or tenant terminates tenancy by giving advance notice.
2. Problems arise when parties fail to reach a complete agreement; may arise by
implication based on conduct of the parties, even in absence of express agreement.
3. Termination:
a. Common law: either landlord or tenant must give notice
b. Statutory: statutes now govern termination; most stick to standard 30 day notice
ending month to month tenancy
iii. Tenancy at Will
1. No fixed duration, endures only so long as both landlord and tenant desire.
2. Often emerges by implication
3. Complexities arise when only one party can terminate; may be TAW, may be
determinable life estate.
4. Termination:
a. Common law: ends whenever landlord/tenant chooses
b. Statute: regulates termination of TAW, many provide it can end by advance notice
after 30 daysstatutory form of periodic tenency now.
iv. Tenancy of Sufferance
1. Exists when a person in rightful possession of land (tenant) wrongfully continues in
possession after that right ends. (Holdover tenant)
2. Modern rule: usually courts make them pay for shorter term or other fixed amount.
b. Approaching a Tenancy Problem
i. What type of tenancy?
1. If term of years, is it determined already (e.g., ends May 1st) or determinable (e.g., ends
when it is no longer used as farm)?
2. If Periodic, what is the period? What notice is required?
a. Majority rule is to assume year to year; 2. Look at how rent is calculated in the
void lease; 3. Look at way rent is actually paid; 4. Notice clause in lease
b. Moving out enough to provide constructive notice; most statutes stick to 30 days,
if notice is too late, tenant only responsible for next period
3. If TAW, what notice is required?
a. Did lease stipulate only one party can terminate? (If so, more like LE)
b. Did one party abandon (tenant)? Did landlord give notice? Death? Modern rule:
notice required, usually 30 days.
4. If TAS, which rule do you use?
a. Minority rule: new tenancy is periodic (exmonth to month) (dont want to lock
tenant into paying for whole year b/c contrary to public policy)
b. Majority rule: term is created (term is either way that rent is computed in original
lease, or length of original term/period, but no more than 1 year)

i. Only lasts until landlord evicts/recovers damages or tenant bound to

new term
c. Hannan v. Dusch
i. Facts: Dusch leased property to Hannan for a 15-year term, beginning 1/1/28. When date
arrived, the old tenant never moved out and Hannan was unable to take actual physical
possession.
ii. Holding: Landlords legal obligation was to deliver the legal right to possession to the new
tenant, not the actual physical possession (American Rule)
1. English Rule: landlord has an implied-in-law obligation to deliver actual physical
possession (more dominant today)
d. Subleases and Assignments
i. Assignment makes the assignee and landlord liable to each other for performance of the
lease obligations that run with the leasehold estate
ii. Sublease subtenant is only liable to the tenant for the sublease obligations, and the subtenant
has no claim against the landlord for failure to perform his lease obligations; no privity of
estate or privity of contract
1. Conveys some of a tenants interest to a third party. A lessee reserves the right to reenter the premises after the sub-lessee has completed their term
2. If sublessee stops paying rent, landlord can evict but must sue original tenant for rent
3. If landlord terminates a tenants interest, they terminate the sublessees interest. But if
the tenant abandons their interest, the sublessee keeps their interest.
e. Ernst v. Conditt
i. Facts: Ernst leads land to Rogers for 53 weeks under a lease that required Ernsts consent to
any assignment or sublease. Rogers took possession, built a GoCart track on the premises,
then agreed to sell business to Conditt. Ernst and Rogers signed an agreement by which the
term of the lease was extended, and Ernst consented to subletting of premises to Conditt
upon express condition that Rogers would remain personally liable for performance of the
lease. Conditt stopped paying rent. Conditt claimed not liable for payments because assignment
was a sublease
ii. Holding: parties intentions should control this question; parties intended an assignment
1. Rogers parted with his entire interest in the lease
2. Conditt acquired every iota of Rogers interest and paid rent directly to Erns
f. Commercial Leases
i. Tenant cannot assign or sublet without landlords consent
ii. Kendall v. Ernest: Landlord cannot arbitrarily withhold consent discretionary power should
be exercised in accordance with commercially reasonable standards
1. RULE: where a commercial lease provides for assignment only with the prior consent
of the lessor, such consent may be withheld only where the lessor has a commercially
reasonable objection to the assignee or the proposed use
a. Necessity of permitting reasonable alienation of commercial space has become
paramount in increasingly urban society
b. Rest. 2nd adopts rule A restraint on alienation without the consent of the landlord
of a tenants interest in leased property is valid, but the landlords consent to an
alienation by the tenant cannot be withheld unreasonably, unless a freely
negotiated provision in the lease gives the landlord an absolute right to withhold
consent
c. Implied duty of good faith and fair dealing inherent in every contract neither
party shall do anything which will have the effect of destroying or injuring the
right of the other party to receive the fruits of the contract
V. Bad Tenants, Bad Landlords
a. Modern Moves in Landlord-Tenant Law

i. (1) General contract theory requires mitigation, and leases are enough like contracts that we
should apply the contract rule
ii. (2) Not general contract theory incompatible with idea of freedom of contractCourt has
begun to imply a lot of duties from a landlord to tenants. (old theory that estate is none of
landlords business less persuasive; already landlords business in a lot of places)
iii. (3) Procedural move in allocating burden of proof: ordinary contracts breaching party has
burden to show that damages could have been mitigated; here, landlord has burden to show
reasonable attempts to re-let
1. Landlord is in a better position to find someone to re-let
2. Hybrid of contract theory not pure contract theory
b. Landlord Self Help
Common law: landlord was entitled to use reasonable force to oust the tenant himself
Minority of states absolute forbid landlord self help
i. Berg v. Wiley
1. Facts: Wiley leased premises for Berg to use for a restaurant, under lease that required
Berg to obtain written permission from Wiley to alter the structure, obligated Berg to
operate her restaurant lawfully, and gave Wiley the right to retake possession upon
default. Bergs restaurant cited for health code violations. Wiley notified Berg that if
violations not corrected in two weeks, he would retake possession. Wiley entered the
restaurant and changed the locks.
2. Holding: Wileys self help repossession was wrongful as a matter of law
a. Self help always carries the risk of violence or other breach of peace
b. Common law response was that peaceful self-help was valid, but self-help that
involved breach of the peace was wrongful
ii. Is self-help a good idea?
1. (1) Landlords will pass on the cost of judicial repossession proceedings to tenants who
comply with the lease terms
2. (2) Self-help results in no reporting of the action to credit bureaus nor creation of public
records, the existence of which materially impede the defaulting tenant in a search for
replacement premises
iii. Landlords Options to Protect Himself
1. More specific provisions in the lease
2. Double the rent if holdover
3. Large security deposit
4. Credit checks
5. Co signors on rent
6. Arbitration agreement
c. Abandoned Property
i. Landlord assumes abandonment at his peril (actual notice saying Im leaving is best)
ii. If tenant abandons the leasehold premises in the midst of valid lease term, tenant is regarded as
having offered to surrender
iii. Landlord can:
1. (1) Accept the offered surrender and terminate the lease
2. (2) Reject the surrender by leaving the premises untouched, thus preserving the
landlord entitlement to rent as it comes due for the remainder of the term
3. (3) Retake possession and relet the premises for the benefit of the tenant
iv. Sommer v. Kridel
1. Facts: Kridel leased an apartment from Sommer for a two-year term. Kridel wrote
Sommer that his impending marriage would not occur and that as a result, he had
neither a need for the apartment nor the funds to pay the rent. Explicitly offered to

surrender the lease and agreed to forget it the 2 months rent he had prepaid. Sommer
did not reply and refused to show apartment to prospective tenants who were read,
willing, and able to rent it.
2. Holding: Landlord has duty to mitigate damages once a tenant has abandoned
a. Imposed burden of proof on landlord to show that he had exercised reasonable
diligence to re-let the apartment and that in doing so he had treated the abandoned
apartment as one of his vacant stock
b. Lost volume argument does not apply because generally people rent apartments
for particular reasons; each piece of property is unique
c. Dont have to accept less than FMV or substantially alter his obligations as
established by the pre-existing lease
v. NOTE: Restatement POLICY against mitigation abandonment of property is an invitation to
vandalism so the law shouldnt encourage abandonment
d. Mitigating Damages
i. Restatement:
1. Against mitigation
2. Abandonment of property encourages vandalism
3. If you believe no mitigation rules will deter renters from abandoning, then restatement
makes sense
ii. Lost Volume
1. Not renting one apartment doesnt necessarily mean that the person was going to buy a
different one lost volume seller argument doesnt necessarily apply
2. Goes back to idea that property is unique
3. Saving Grace for Landlord: just have to make reasonable efforts
iii. Reletting on Tenants Account
1. Agreed rent is $1000 a month
2. Fair market value is $800 a month
3. Landlord rents for $500 a month, and seeks remaining $500 a month in damages.
4. Assume that the landlord didnt incur any costs in procuring new tenant
5. Appropriate reward to the landlord for the defaulting tenant?
a. If landlord had mitigated correctly and received fair market value for the
apartment, would have been making $800/month. Landlords duty was to mitigate
to that amount.
b. Gap between $500 and $800 is the landlords fault
c. Proper gap is gap between $800 and $1000 because it is not the landlords fault
d. So he should get $200
iv. Landlord Remedies
--At common law, a landlord could use self-help (changing locks) to evict a tenant as
long as it wasnt violent. Now, a landlord can only use the judicial process to evict (in
most states). Landlord cant put right to self-help in lease.
--Restrictions on self-help developed parallel with increasingly efficient actions
for ejectment
If a tenant surrenders their interest, landlord has options:
1. Treat the lease as continuing and do nothing, and sue tenant on the covenant to pay rent
a. Tenant cannot unilaterally terminate the lease
b. When landlord sues, must show mitigation (majority rule).
i. Duty to mitigate is to make reasonable efforts to mitigate; depends on the
facts and circumstances of the situation
ii. Sommer - Duty to mitigate requires treating abandoned apartment as one
of your stock (take proper steps to advertise, dont refuse to sell). The cost
of seeking new tenants goes into damages

iii. Landlord need not attempt to relet using a lease fewer or more lenient
covenants or for a use substantially different from the abandoning tenants
use not need landlord relet at below market rent
2. Treat the lease as continuing and relet the premises for the tenants account, reserving
the right to sue the tenant for any unpaid balance of the rent.
a. If a landlord re-lets on tenants account (doesnt accept surrender) for more than
the old tenant paid, get nothing in suit. If they rent for less, damages are
difference between the fair market value and what new tenant pays
3. Landlord can accept the surrender of the lease, and relet on landlords account
a. Accept surrender and seek damages or reject it and seek rent
b. Determine acceptance or rejection from landlords intent in retaking possession
e. Covenant of Quiet Enjoyment:
[ANALYZE THROUGH CONSTRUCTIVE EVICTION OR IMPLIED WARRANTY OF
HABITABILITY as a unit, NOT SEPARATELY]
i. Implied Covenant of Quiet Enjoyment: landlord promises the tenant shall have quiet and
peaceful possession of premises for the term, as against the landlord, any person holding
through the landlord, or any person with a title superior or paramount to the landlord
1. Tenant may:
a. (1) Stay in the unit and sue for damages
i. Measure of Damages = difference between rent reserved in the lease and
fair rental value of use that was actually received
b. (2) Vacate and treat the situation as a constructive eviction
2. Includes things like: failure to supply hot water/heat when contracted to do so, failure to
make major repairs, to provide essential services/habitable premises, to properly
maintain heating/air condition facilities, obtain necessary permits, to control
vermin/insects/rodents, to police the activities in the hallways or in other apartments
ii. Elements: implied covenant of quiet enjoyment allows tenants to lawfully vacate the property
after giving the landlord notice of the disturbance and a reasonable opportunity to cure if
1. Landlord breached a duty owed to the tenant
2. That caused a substantial interference with the tenants enjoyment of the property or
rendered it unfit for the purpose for which it was leased and
3. Tenant vacates within reasonable period of time after the landlord fails to ameliorate
the problem
iii. OR tenant can sue for damages
1. Every tenant has the right to quiet enjoyment of the leased premises
2. Covenant only breached when landlords positive conduct destroyed tenant enjoyment
3. Tenants duty to pay rent conditioned upon landlords performance of obligation to
refrain from wrongful actual or constructive eviction
iv. Covenant of Quiet Enjoyment Breached By:
1. Actual eviction tenant who has been totally ousted from physical possession of the
leased premises either by the landlord or something with better title than the landlord,
so tenant is no longer to pay rent and may elect to terminate the lease
2. Actual partial eviction actual physical ouster of the tenant from any part of the
premises crucial to the use of the whole; relieves the tenant of the obligation to pay any
rent at all until and unless the tenant is restored to possession of the entire leasehold
property
3. Constructive eviction landlord substantially interferes with the tenants use and
enjoyment of the leased property, so much so that the intended purposes of the tenants
occupation is frustrated; tenant may terminate lease and move out
f. Constructive Eviction

i. Occurs When: Landlord so substantially interferes with the tenants use and enjoyment, or
causes or allows inhospitable conditions to persist that the tenant is justified in vacating the
premises, even though the landlords actions or inactions fall short of actual eviction
ii. Elements:
1. intentional (actual or inferred) acts or failures to act by the landlord that breach a duty
owed to the tenant and
a. Actual Intent to Force to Move: things like turning off heat, water, or electricity
allow tenant to show that landlord acting with intent to force the tenant to move
b. Failure to Act: landlord has duty to act or cure a problem and fails to do so within
a reasonable time after tenant notifies the landlord
2. that substantially interfere with the tenants enjoyment of the premises, or render the
premises unfit for the purpose for which it was leased; and
3. the tenant vacates the premises
4. within a reasonable time after the landlords actions (10 days was reasonable in Reste
Realty)
TENANT REQUIRED TO VACATE
a. Mere disagreement with landlord, inconvenience or dissatisfaction will not suffice
b. May have duty to act when third party creates uninhabitable condition (ex:
abortion clinic where police would not disperse crowd on property without
landlords signature)
g. Village Commons v. MCPO (Indiana state court case)
i. Landlord wouldnt fix leaky premises and tenant claimed constructive eviction. Landlord
defended on the grounds that there was a provision in lease agreement that prevented MCPO
from suing/claiming constructive eviction.
1. Holding: they were actually and constructively evicted, because the leaks were
continuous and the landlord warned the tenant not to keep files in certain areas to
protect from flooding.
h. Third Party Actions: Landlord Responsible?
i. Noisy neighbors: yes if noisy tenants are under the purview of the landlord; traditional rule was
that landlord not liable for other tenants behavior, but courts are increasingly holding landlords
responsible
ii. Burglaries and vandalism: if landlord puts in locks and security, probably not constructive
eviction bc did everything possibly could have
iii. Tenant as Abortion Doctor: Protestors in lobby and parking lot (property of the landlord).
Constructive eviction failure to act in response to request for a assistance can e enough when
landlord has ability to control the property
i. Implied Warranty of Habitability
i. Definition: requires that rental premises be offered and maintained in a physical condition that
provides safe, decent, and habitable housing for tenant; tenants obligation to pay conditioned
on this
1. Implied regardless of whether in the lease
a. Landlord must have notice of the defective condition
b. Defect must be substantial, considering its violation of the applicable housing
code, its effect on tenants health or safety, the length of time it has existed, and its
seriousness
c. Violations of housing code are usually prima facie proof of a violation of IWOH,
allowing for rescission/rent abatement equal to propertys value below what it was
warranted
d. Landlord must have been given reasonable time to repair the defect and have not
done so

ii. Traditional Rule: landlord has no implied obligation to warrant that property is suitable for
the intended purposes of the tenant, so long as the tenant has a reasonable opportunity of
examining the property and judging for himself as to its qualities
1. Somewhat broken down
2. Most jurisdictions dont extend this to commercial leases
iii. Modern Trend: imply warrant of habitability in residential leases; still minority trend
j. BUT: Common law rule that landlords had no particular duties to tenants
i. Exceptions to this:
1. Duty to disclose latent defects, which are defects that:
2. (1) the seller is aware of or ought to be aware of
3. (2) the purchaser is not likely to discover through reasonable inspection, and
4. (3) that materially alters the value
5. Short term leases of furnished dwellings duty to provided habitable premises
6. Duty to maintain common areas in a building when open property is open to all tenants
7. Some jurisdictions: duty on the landlord to abate immoral conduct
k. Hilder v. St. Peter (VT state case)
i. Facts: really bad landlord made lots of broken promises. (sewage leaks, clogged toilet, broken
lock, broken window, broken light)
ii. Court Holds: Caveat lessee put aside; conditions resulted in breach of implied warranty of
labiality.
1. Obligation to pay rent is dependent on the landlords obligation to provide and maintain
habitable premises.
2. If the premises arent habitable, tenant is relieved of duty to pay rent (at least in amount
necessary to compensate them for the violation.)
3. Cannot be waived
l. Remedies
i. Terminate and leave
ii. Stay and withhold rent until repairs are made
iii. Stay and repair then sue for the cost of repairs
iv. Stay and recover damages (rent abatement or deduction, sometimes damages for discomfort
and annoyance)
VI. Easements and Servitudes

SERVITUDES
Introduction
Terminology
Servitudes
o Current interests in land owned by someone else
o Never intended to become possessory
o Rights to make specific uses or to prohibit specific uses by the person who does own the
possessory interest
Easement: Right to enter anothers land
Profit: Right to enter anothers land and remove something
Real Covenant or Equitable Servitude:
o Restriction on use of anothers land (ex: for residential use only)
o Affirmative obligation on another landowner (ex: have to pay into homeowners association)
Servient Estate: land that is burdened
Dominate Estate: land that benefits
Appurtenant: attached to a dominant estate
In gross: personal to the owner

Two ways to own non-possessory interests (1.1 com. b)

o Appurtenant: attached to a dominant estate
Benefit/burden attaches to each parcel
Interest transfers with property
Runs with the land whoever moves in has the right to enforce
o In Gross: personal to the owner
Ex) even if the home owners association doesnt possess any parcels can still sue
parcel owners for paying fees
Homeowners association doesnt have to own any land to enforce
Creation of Servitudes
(1) Writing satisfying Statute of Frauds (main way) (required for neg easement) (2.7)
Estoppel (2.9we tried to make a servitudeand 2.10she said there was a servitude already)
Implication (2.11)
Implied from prior use (subset of servitudes created by implication) (2.12)
From necessity (rare) (2.15)
Prescription (similar to adverse possession) (2.16)
Distinguish: Licensees
Limited grant of permission
Written, oral, or implied from conduct
Permission by the owner to come on the property for a specific purpose
Not an interest in land
Revocable at will (might be damages for revoking, but can still be kicked off)
Inalienable unless contrary intent appears
Important factor in distinguishing: whether the agreement gets an exclusive right to use any definite
space
o If NO: probably a license
o If YES: maybe an easement
Example: movie ticket is a classic license can kick you out and movie theatre is a definite space
If intend to make a non-revocable transfer, probably intend a servitude
Distinguish: Possessory Estate
Example: to the railroad for use as a right of way
o Fee because the railroad is the OWNER, not an easement for the railroad to go across
o Retains no interest in the grantor
o VERSUS: To the railroad so long as it is used as a right of way (fee simple determinable, so
property will transfer back)
It is readily possible to abandon an easement, but difficult to abandon a fee
Factors to Determine Easement vs. Fee:
o Market Rates in the Area
o Public Policy Implications
Cut through lots of properties, restricting alienability?

If user abandons, can the property be easily reassembled/put back into use? (if yes, bias
in favor or easement)
Restraints on alienation
Allow many more restrictions when leasehold or easement vs. fee
More restrictions, probs more like an easement

Distinguish: Lease
Transferring possession is essential to a lease easement holder only has right to use
Considerations:
o Uses permitted: more limited to a specific use, more likely to be an easement
o Specificity of a location: more specific the location, more likely it is to be a lease because holder
of an easement wants to do something rather than possess a specific space
o Periodic Payments: if rent is reserved, periodic payments are likely to indicate a lease
o Duration: lease is usually limited in time in one way or another; easement is usually unlimited
Legal Consequences of Easement vs. Leasehold
o Statute of Frauds: servitude is an interest in land, so it is within SoF; lease can fall within short
term lease exception, so the writing requirement is different
o Possessory Actions: ONLY a tenant, not an easement holder, can bring possessory actions such a
trying to eject someone who is wrongly on the land, or suing for trespass/nuisance
Rest. 3d PROP-SERV 1.2
NOTE: if there is more than one regulation in a question about common interest communities/general plans
TALK ABOUT BOTH
1.1: Servitude Defined; Scope of Restatement
A legal device that creates a right (benefit) or obligation (burden) that runs with the land (appurtenant) or an
interest that does not run with the land (in gross). The estate that enjoys the benefit is the dominant estate; the
burdened land is the servient estate. (1.1)

Comment a: Servitudes Created Rights and Obligations that Run with the Land
Comment b: Interests that Run with the Land Pass Automatically to Successors
Comment c: Servitude Benefits and Burdens; Dominant and Servient Estates

1.2 Easement and Profit Defined

Comment a: Historical Note on Classification of Servitudes
Comment c: Easements and Profits May be Exclusive or Nonexclusive
Comment d: Easements and Profits are Not Possessory Interests in Land
Comment h: Negative Easements are Restrictive Covenants

Non-possessory interest that can allow the owner to enter the property or put something on the property
Profit right to enter anothers land and remove resources
Burden of an easement or profit is always appurtenant or in gross (spurious easement). Courts favor
appurtenant.
Most easements are affirmative. Negative easements are restrictive covenants (gives the holder the right
to prevent the possessor of a servient estate from doing some act on the servient estate)
Created by:

o Conveyance
o Acquiescence
o Prescription
1.3 Covenant Running with Land, Affirmative, Negative, and Restrictive Covenants Defined
Comment a: Covenants Running with the Land
Comment d: A Covenant is a Servitude if Either Side Runs with the Land
Comment e: Types of Covenants: Affirmative, Negative, Restrictive
2.1 Creation of a Servitude
2.9 Exception to the Statute of Frauds
Exception when one party changes its position in justifiable reliance on the existence of the servitudes
o The consequences of failure to comply with the Statute of Fraudsdo not apply if the
beneficiary of the servitude, in justifiable reliance on the existence of a servitude, has so
changed the position that injustice can be avoided only by giving effect too the parties intent to
create a servitude
How determine justifiable reliance?
o Probably have to say easement or servitude
Here: parties intend to create a servitude
2.10 Servitudes Created by Estoppel
Easement can be created by estoppel when substantial change of position that can be reasonably
foreseen and the change in position actually occurred
o Requires strong objective evidence of substantial change in position
Misrepresentation that a servitude already exists
(1) Permissive courts should be extremely careful before finding if this applies because want to
encourage neighborliness and make it hard for permission to become right
2.11 Servitudes Created by Implication
Comment a
Comment f
2.12 Servitudes Implied from Prior Use
Comment a: Rationale
Comment b: Servitude rights that can be implied from prior use
An easement from prior use can be implied when prior to a conveyance severing the ownership of land
into two or more parts, a use was made of one part for the benefit of another
Special Treatment for latent unknown easements in underground utilities servitude will continue
if its either:
o Apparent, or
o If its for underground utility
Example: something that is reasonably developed and apparent (path across a high way) may well be an
easement by implication

2.15 Servitudes Created by Necessity

Access easement by necessity will be implied if and only if a tract is divided to deprive a portion of it
from access to a public road. Easement is implied over the portion with public access
o (1) Unity of Ownership
o (2) Necessity [strict]
o (3) Necessity arises at time of severance
Key: access problem has to be created by the transfer that also allegedly creates the servitude. If it arises
for other reasons (ex: road that was operational closing down after the transfer), the owner is out of luck
End when the necessity ends
Comment c: Severance of rights arising out of common ownership is required
2.16 Servitudes Created by Prescription: Prescriptive Use
A prescriptive use of land that meets the requirements set forth in 2.17 creates a servitude. A prescriptive use is
either
(1) a use that is adverse to the owner of the land or the interest in the land against which the servitude is
claimed, or
o Not permissive
(2) a use that is made pursuant to the terms of an intended but imperfectly created servitude, or the
enjoyment of the benefit of an intended but imperfectly created servitude
o We made an agreement and screwed it up
Comment a: Rationale
Comment b: Definitions and Scope
Comment c: Relationship between uses described in (1) and (2)
o Exception to the statute of frauds requires change of position
o Prescription does not
o CANNOT acquire a prescriptive easement to have your neighbor refrain from some act under (1)
o If a burdened estate is transferred before the prescriptive period has arrived: CANNOT get
prescriptive rights unless a use is open and notorious as to the successor for the balance of the
prescriptive period
Comment e: Prescriptive Users
Comment f: Adverse Uses, Subsection (1)
Comment g: Presumptions as to Initial Character of Use
Note: in relations between neighbors, we presume a license unless estoppel kicks in (encourages
neighborliness)

Prescription
Actual and not dependent on a like right of
others
Open and notorious
Adverse and under claim of right: not
permissive (or: imperfectly created
servitude)
Continuous
For statutory period

Adverse Possession
Actual and exclusive

Open and notorious

Adverse and under claim of right
Continuous
For statutory period

2.17: Servitudes Created by Prescription: Requirements

Comment d: Servitude Benefits that can be Acquired by Prescription
Comment e: No Prescription Against the Government
3.1 Validity of Servitudes: General Rule
A servitude created as provided in Chapter 2 is valid unless it is illegal or unconstitutional or violates public
policy.
Servitudes that are invalid because they violate public policy include, but are not limited to:
(1) a servitude that is arbitrary, spiteful, or capricious;
(2) a servitude that unreasonably burdens a fundamental constitutional right;
(3) a servitude that imposes an unreasonable restraint on alienation under 3.4 or 3.5;
(4) a servitude that imposes an unreasonable restraint on trade or competition under 3.6; and
(5) a servitude that is unconscionable under 3.7.
Rule: any servitude that makes sense as a restriction on land can be valid; freedom of contract should
ordinarily control
Comment a: Historical Note and Rationale
Comment d: Unconstitutional Servitudes
Comment f: Sources of Public Policy
Comment g: Arbitrary, Spiteful, and Capricious Servitudes are Invalid
Comment h: servitudes that unreasonably burden fundamental constitutional rights are invalid
o To determine unreasonable burden:
The purpose of the servitude
Its importance to the beneficiaries
The strength of the challenger's consent to acquire the property despite the burden of the
servitude
The extent to which it interferes with the fundamental right are relevant considerations
3.4 Direct Restraints on Alienation (MUST BE REASONABLE)
- Transfers, rights of first refusal, options, etc.
- Example: The deed provides that A has no power to transfer or create any encumbrance on Blackacre prior to
Os death.
Comment b: Scope
o Direct restraints on alienation are valid unless unreasonable
o Includes: all types of transfers, including leases, prohibitions on transfer without the consent of
another, prohibitions on transfer to particular persons, requirements of transfer to particular
persons, options to purchase land, and rights of first refusal.
Comment c: Determining Reasonableness
o Determined by balancing the utility of the purpose served by the servitude against the harm that
is likely to flow from its enforcement
Comment d: Restrains on Transfer Without Consent
Comment f: Rights of First Refusal
Comment i: Nature of the Property: Conservation, Historic, and Charitable Properties
Rest. 3d PROP SERV 7.6

1.7 General Plan Development Defined

Comment a: General-plan developments and common interest communities
1.8 Common Interest Community Defined
2.14 Servitudes Implied from General Plan
(1) Implied Benefits: Each lot included within the general plan is the implied beneficiary of all express and
implied servitudes imposed to carry out the general plan.
(2) Implied Burdens:
(a) Language of condition that creates a restriction or other obligation, in order to implement the general
plan, creates an implied servitude imposing the same restriction or other obligation.
(b) A conveyance by a developer that imposes a servitude on the land conveyed to implement a general
plan creates an implied reciprocal servitude burdening all the developer's remaining land included in the
general plan, if injustice can be avoided only by implying the reciprocal servitude.

Comment a: Rationale
Comment b: Historical Note
Comment e: Effect of Servitude Implied Under Subsection (2)
Comment f: General Plan
Comment i: Subsection (2)(b): Implied Reciprocal Servitude Burdens

Sanborn v. Mclean: Ps buy land, look at their record title and dont find a servitude. Try to build a gas station.
Community claims there was an implied easement on their land.
(1) Court implies a reciprocal negative easement (servitude) will be implied on lot 86 and all the other
lots bc the common grantor (McLaughlins) had a general plan to develop a residential development. As
soon as first lots were conveyed with restrictions on, all the remaining ones had the restrictions
automatically.
(2) Evidence of General Plan from:
o Plan with restrictions
o Advertising brochures
o Oral representations
o OR restrictions in the deeds
o Doesnt matter if the restrictions are not identical; what matters most is that evidence has to show
the grantor is intending to benefit the other lot owners
3.5 Indirect Restraints on Alienation and Irrational Servitudes (MUST BE RATIONAL)
Example: The deed provides that in the event A transfers Blackacre to another, A will pay O $10,000. The side
payment = indirect restraitn
May decrease the number of people who want to buy the land; price restrictions and ban on
improvements indirectly restrain alienability
Comment a: Rationale
Comment b: Servitudes lacking rational justification
REPORTERS NOTE: why different than Nahrstedt
o Rules adopted my amendments/board of common interest communities are subject to higher
reasonability standard
3.7 Unconscionability
Comment c: unconscionability

7.1 Modification, Extinguishment, and Termination of Servitudes: General Rule

A servitude may be modified or terminated by agreement of the parties, pursuant to its terms, or under
the rules stated in this Chapter.
Care should be taken in describing various factual situations to indicate whether a servitude has actually
been terminated, or whether only some, but not all, of the beneficial interests have been extinguished.
Until all benefits have been extinguished, the servitude burden persists as modified

Comment b: Modification or Termination by Agreement

Comment c: Modification or Termination Pursuant to Terms of Servitude

7.4 Modification or Extinguishment by Abandonment

A servitude benefit is extinguished by abandonment when the beneficiary relinquishes the rights created by a
servitude.
Comment a: Rationale
Comment c: Evidence of Intentional Relinquishment of Rights is Required
7.5 Termination by Merger
A servitude is terminated when all the benefits and burdens come into a single ownership. Transfer of a
previously benefited or burdened parcel into separate ownership does not revive a servitude terminated under
the rule of this section. Revival requires re-creation under the rules stated in Ch. 2.
7.6 Modification or Extinguishment by Estoppel
7.7 Modification or Extinguishment by Prescription
Comment c: Adverse Possession of Dominant or Servient Estate
7.10 Modification and Termination of a Servitude Because of Changed Conditions
(1) When a change has taken place isnce the creation of a servitude that makes it impossible as a
practical matter to accomplish the purpose for which the servitude was created, a court may modify the
servitude to permit the purpose to be accomplished. If modification is not practicable, or would not be
effectice, a court may terminate the servitude. Compensation for resulting harm to the beneficiaries
may be awarded as a condition of modifying or terminating the servitude.
(2) if the purpose of a servitude can be accomplished, but because of changed conditions the servient
estate is no longer suitable for uses permitted by the servitude, a court may modify the servitude to
permit other uses under conditions designed to preserve the benefits of the original servitude.

Comment a: Rationale
Comment c: Test and Application
Comment d: Conservation Servitudes

Western Land v. Truskolaski: City wants to rezone subdivision with residential restrictions to build
shopping center; neighbors sue
o Could refuse an inunction and thus leave the servitude owners only with damages (which would
still be important) if the area surrounding the subdivision and changes in the subdivision itself
had changed so much that the values (low noise, low traffic, avoidance of crime, place for
children to claim) to be gained by the restrictive covenants could no longer be obtained by the
subdivision. Changed conditions are not enough here.

o RULE as long as the original purpose of the covenants can still be accomplished and
substantial benefit will inure to the restricted area by their enforcement, the covenants stand even
though the subject property has a greater value if used for other purposes

Rick v. West (project zoned for residences fails. Want to build a hospital, but West wont release the
covenant)
o Rule: West has the right to insist on enforcement, not merely the right to get damages, even
though that would increase social welfare overall, at least as long as the restriction is not
outmoded and it affords real benefits to the benefitted party.

7.12 Modification and Termination of Certain Affirmative Covenants

Comment a: Rationale

Pocono Springs: Court holds clear record title that is unchallenged by others cannot be abandoned.
Therefore, MacKenzies are permanently liable for the HOA dues.

7.14 Extinguishment of Servitude Benefits Under Recording Act

The benefit of an unrecorded servitude, including a servitude created by prescription, implication, estoppel, or
oral grant, is subject to extinguishment under an applicable recording act, except that, unless the statute requires
a different result, the following servitude benefits are not subject to extinguishment:
(1) an appurtenant benefit created by oral grant under 2.9, by estoppel under 2.10, by prescription under
2.16, or by necessity under 2.15, if extinguishment of the benefit would result in depriving the dominant estate
of rights of way for access or utilities necessary to reasonable enjoyment of the land within the meaning of
2.15;
(2) an appurtenant benefit for underground utilities implied on the basis of prior use under 2.12(4);
(3) a servitude that would be discovered by reasonable inspection or inquiry.

Servitudes created by estoppel or necessity cannot be extinguished by a recording act if they would
deprive the dominant estate of rights of way for access
Comment a: Rationale
Comment b: Scope

7.15 Application of Recording Act to Modification or Termination of a Servitude

Comment a: Rationale
7.16 Servitudes not Terminable Under Marketable Title Acts
Comment a: Scope and rationale

SERVITUDES AND PLANNED COMMUNITIES

Rest. 3d PROP SERV 8.5
3.1 Validity of Servitudes: General Rule
A servitude created as provided in Chapter 2 is valid unless it is illegal or unconstitutional or violates public
policy. [note: very hard to win claim that servitude violates the Constitution]

Comment d: Unconstitutional Servitudes

Comment h: Servitudes that Unreasonably Burden Fundamental Constitutional Rights are Invalid
Comment j: Unreasonable Servitudes, Narrowly Defined, Are Invalid
o Illustration 22 specifically references cats
Look at
Purpose of the servitude
Importance of the restriction
Importance to the beneficiaries
The level of consent to acquire despite the burden
The extent of the interference with the fundamental right
Probably the behavior should affect the value if the land if its going to be reasonable.
Prohibition on unmarried couples living together is invalid according to the restatement (3.1(d)
illustration 6)
Nahrstedt: cat case where P claimed the covenant was unreasonable as enforced against her.
Holding: the restriction was rational and she had notice of the restriction
o Reasonable (rst would say rational CA court just defines differently) bc people may have
chosen to live there bc lack of animals; other buyers entitled to rely on restrictions if found in
founding documents
o Rule: Restrictions can be valid if found in foundational declaration even if found invalid if later
adopted by rules; If there is a blanket rule, application will not be assessed on an individual
basis; whether its reasonable in its own terms is the inquiry
6.4 Powers of a Common Interest Community: In General
Comment
6.5: Power to Raise Funds: Assessment, Fees, and Borrowing
Comment c: Allocation of Assessments
Comment e: Assessment Obligation is Independent of Association Duties to Owners or Side Deals with
Developer
Comment f: User Fees and Service Charges
6.7 Power to Adopt Rules Governing Use of Property
Comment b: Rationale
Comment c: Rules Governing Use of Common Areas
Comment d: Implied Power to Regulate Use of Individually Owned Lots or Units When Necessary to
Protect Common Property
6.9 Design Control Powers
HOAs have power to regulate nuisances. If not a nuisance, statute or declaration must give HOA power to
regulate
Restrictions on design must be explicitly authorized by declaration or statute
Design control adoptions require supermajority consent
If new design control would affect specific owner, would need their explicit consent
Very difficult to add new things, except things like

Comment a: Rationale
Comment b: Scope and Relation to Other Sections

Comment c: Validity and Interpretation of Express Design Controls

Comment d: Discretionary Design Controls Must be Reasonably Exercised

6.10 Power to Amend the Declaration

(1) Except as expressly limited by statute or the declaration, the members of a common-interest community
have the power to amend the declaration subject to the following requirements:
(a) Unless the declaration specifies a different number, an amendment adopted by members
holding a majority of the voting power is effective
(i) to extend the term of the declaration,
(ii) to make administrative changes reasonably necessary for management of the common
property or administration of the servitude regime,
(iii) to prohibit or materially restrict uses of individually owned lots or units that threaten to
harm or unreasonably interfere with the reasonable use and enjoyment of other property
in the community.
(b) Unless the declaration specifies a different number, an amendment adopted by members
holding two-thirds of the voting power is effective for all purposes except as stated in subsections
(2) and (3).
(2) Amendments that do not apply uniformly to similar lots or units and amendments that would
otherwise violate the community's duties to its members under 6.13 are not effective without the
approval of members whose interests would be adversely affected unless the declaration fairly apprises
purchasers that such amendments may be made. This subsection does not apply to
nonuniform
modifications made under circumstances that would justify judicial modification under 7.10.
(3) Except as otherwise expressly authorized by the declaration, and except as provided in (1),
unanimous approval is required
(a) to prohibit or materially restrict the use or occupancy of, or behavior within, individually
lots or units, or

owned

(b) to change the basis for allocating voting rights or assessments among community members.

Comment a: Rationale
Comment c: Implied Amendment Powers: Minor Changes
Comment d: Implied Amendment Powers: Prohibition of Nuisance
Comment f: Non-uniform, Unfair, and Unreasonable Amendments Require Approval from those Whose
Interests are Adversely Affected, Subsection (2)
Comment g: Unanimous Consent Required for Amendments that Deprive Individual Owners of
Significant Property or Civil Rights
Appel v. Presley Cos. (New Mexico)
o Facts: lots are restricted to single-family homes. Covenants create an architectural control
committee with the power to make amendments and/or exceptions to the restrictions.

Committee voted to remove the restrictions from the last 9 lots and allow smaller
homes/townhouses. Owners of single-family homes sued the HOA saying you violated our duty
to us.
o Holding: court refused to read amendments and/or exceptions literally as the power to make
any possible amendment or exception; instead, looked at effects to determine whether reasonable
exercise of power to make decisions, or whether destroyed the benefit of the existing covenants
which were that they would be single family houses
6.12 Judicial Power to Excuse Compliance with the Governing Documents
Comment a: Rationale
Comment c: Excessive Quorum and Supermajority Requirements
PART THREE: The Nature and Extent of Ownership
I. Public Access, Public Trust
a. Bundle of Rights Revisited: RIGHT TO EXCLUDE
i. Some right to exclude is necessary for there to be transferability of property rights; need right
to include someone and right to exclude, otherwise you arent transferring anything of value
ii. Jacques v. Steenberg Home:
1. Court found trespass and upheld landowners right to bar an unwanted trespasser
from moving a mobile home across Jacques land, declaring that a person has the
right to exclusive enjoyment of his own land for any purpose that does not invade
rights of others
a. Court found willful disregard for right to exclude
b. Not for any good reason, other than Steenberg wanted to deliver home
iii. State v. Shack:
1. Court found no trespass, because of the statute giving workers living on farms rights
to see doctors and other officials
2. Migrant workers=community within but apart from local scene; mans right to real
property is not absolute.
a. Shack is different from Jacques because defendants in shack had right to see
the migrant workers. There was permissionlicense, at the very leastfor
these people to come onto the property to see the workers.
iv. Eyerman:
1. Lady wants home destroyed upon her death. Neighbors sought injunction and Ct of
Appeals grants it, saying that only capricious destructive condition of the will is not
going to be executed; the proceeds from selling house still go to estate as planned.
a. Policy and other Issues:
i. Dead hand
1. Does death matter? Would we not grant the injunction if she
was alive?
ii. Public has an interest in people having the power to destroy property if it
affects surrounding property
iii. Dissents point: public policy is just too vague. The testator and
relatives have agreed to the razing of the property, so why dont we want
to honor her wishes?
b. Larger Restrictions: Public Easement vs. Public Trust
i. Public Easement:
1. Rare because courts presume license instead of adversity
2. Could theoretically happen anywhere people walk; however, public prescriptive
easements are very uncommon because licenses defeat prescription, and courts are

very aggressive about presuming that public prescription is by license and not by
claim of right.
ii. Public Trust Doctrine:
1. USE FOR OPEN ACCESS RIGHTS
2. Government does not own it outright, but owns easement on land on behalf of public
in order to allow access to resources for common pursuits (swimming, etc.)
3. Private owners consent/adversity is irrelevant
4. Private owner ultimately traces title back to the state and state couldnt grant land not
subject to the public access; state does not own property outright, but subject to duties
as trustee to the public. Trustee has power to alienate property on behalf of
beneficiarygov should have power to alienate property on behalf of public,
iii. Carol Rose Article on Joseph Sax
1. Rose says: public trust is about preserving commerce (transportation, communication,
commerce, to some degree public speakingvoluntary exchangeconnection ability
is what the government is obligated to maintain) considers commerce anything
that brings people together
a. The existence of channels of communication and of commerce that are open
to everyone makes private property more valuable by providing you a way to
meet other people who are interest in it thats what public trust is about
2. Saxs Explanation for why government sometimes bad trustee: concentrated
interests capture the government, greater public interests are ignored because they are
more diffuse
a. Government, as a trustee of the public beach, must:
i. (1) Hold the property as available for use by the general public
ii. (2) Not sell the property
iii. (3) Maintain the property for particular types of use
b. Public can use the beach for: recreation, hiking, picnicking, fishing,
swimming, etc. (not exhaustive, but no inherent right to sleep on the beach)
iv. Raleigh Avenue Beach Assn v. Atlantis Beach Club: a private beach club must permit the
public to enter and use its private dry sand beach. Club barred from charging any fees to
transient users but was permitted to charge reasonable fees for its beach-maintenance
services to those who remain on the beach for extended periods of time
1. Considered the relation to dry sand beaches in the area, the nature and extent of the
public demand, the usage of the dry sand by the owner

c.
II. Unlawful Discrimination
a. Racially Restrictive Covenants:
i. Shelley v. Kraemer: racially restrictive covenant signed by 30 of 39 owners, covering 47 of
57 parcels; 5 of non signing owners were AA, and AAs had lived in the neighborhood.
1. Holding: Court cannot directly or indirectly give effect to private biases. Covenant
struck down.
2. Carol Rose Analysis: upholding racially rest. Covenants would have amounted to a
holding that people in general would agree that such covenants increased the value of
the land, thus making covenants rational. Courts couldnt endorse this without
becoming complicit in racial discrimination themselves. As a matter of law, race does
not affect the value of land.
b. Fair Housing Act
~Fair Housing Act of 1968: Discrimination in selling or renting housing is illegal.
FHA recognizes intent to discriminate and disparate impact
i. Covers
1. Race
2. Color
3. Religion
4. Sex
5. Familial Status (do you have kids or not)
6. National origin
a. Failing to advertise in the local language can constitute discrimination. Look
for intentional targeting, whether reasonable efforts were made.
7. Disability (1988 Amendment) - 3604(f)(3)

ii.

iii.

iv.

v.

a. Disability (defined by ADA): An impairment that substantially limits major

life activities, or one that is viewed as such.
b. FHA requires reasonable affirmative accommodation of handicap.
i. Cant refuse to permit reasonable modifications if the modifications are
necessary and the handicapped person will pay for them.
ii. Cant refuse to make a reasonable exception to rules or policies.
iii. Buildings built after 1988 must be handicap accessible.
iv. Note: waiver of a restrictive covenant is an appropriate remedy for
someone with a disability covenant remains in force for non-disabled
residents
c. Landlord can demand restoration of the premises to their pre-modification
state at the end of the lease as a condition of leasing.
Doesnt Cover
1. Marital status (although some states do to protect those who cohabitate)
2. Sexual Orientation (some states do)
3. Profession (except in NYC, some cities)
Cant Do
1. Refuse to sell or rent after a bona fide offer from a protected class
a. Prima facie case of discrimination:
i. Refusal to rent
ii. To a person who is a member of a protected class
iii. Who applied for the available property
iv. Was qualified (could pay the rent)
v. Was turned down while the property remained available
b. Disparate treatment is intentional discrimination; disparate impact is a neutral
practice that has a disparate effect on a minority group.
c. Refusal to renew a lease would also be illegal, but if you rented to them in the
first place there is probably a non-racist reason you arent renewing.
d. Organizations frequently send testers out to determine if a landlords stated
neutral justifications hold up (e.g. if landlord doesnt rent to Jews because
theyre lawyers, send a non-Jewish lawyer and a Jewish non-lawyer).
2. Refuse to negotiate (or otherwise make unavailable or deny)
3. Publish any ad that indicates any preference, limitation, or discrimination (3604(c))
a. An ad can violate the FHA even if the underlying restriction doesnt.
b. Describing yourself (e.g. I am white) is read as indicating a preference.
c. Phrasing something as an amenity (chapel attached) is OK; phrasing
something as preferential or exclusionary (chapel across the street) is not.
d. Publishers may rely on an advertisers representation that they are only
looking for a roommate to get to use the roommate exception (acc. HUD).
e. Publishers are ordinarily liable under the FHA.
i. The Communications Decency Act shields online publishers like
Craigslist from liability, although they must disclose their users
information when asked.
4. Steer prospective buyers (brokers).
What can you do
1. Set credit check, cosigner requirements that are reasonably tied to rent demands.
2. Set maximum occupancy limits (even through zoning). Must be plain and
unmistakable (Edmonds) or it will be treated as a land-use restriction (subject to
FHA).
3. Commit sex discrimination in college towns (HUD under enforces).
Once the plaintiff shows disparate treatment or disparate impact (dont need to show
subjective intent), defendant must show rational and necessary business purpose. If

defendant gives neutral justification, plaintiff must show that that is pretext (for disparate
treatment) or that the disparate impact outweighs the justification (for disparate impact).
1. Some courts say that a neutral justification automatically defeats a disparate impact
claim, but most weigh the justification against the degree of injury to the protected
class.
2. Govt must show bona fide compelling govt purpose with no less discriminatory
alternative if they are defendant.
vi. City of Edmonds v. Oxford House, Inc. opened group home for 10-12 adults recovering
from alcoholism and drug addiction; city issued citations violation of zoning rule that
defines who may live in a single-family swelling
1. Restriction on the number of unrelated adults who can live together
2. Issue: is it a density restriction or a familial status restriction?
3. Holding Citys family composition regulation was not exempt from FHA as a
maximum occupancy restriction;
4. RULE: if its not a density restriction it is not absolutely exempt from familial status
and disability parts of the FHA
a. If it can be overcome by showing occupants related by blood then its not a
density restriction its a restriction on who can live together as a family (and
triggers familial status and disability provisions)
b. Since an unlimited number of family members could live together it was not
enacted to set a maximum occupancy
c. Congress clearly wanted to allow density restrictions; has to be a density
restriction cannot be a restriction as to people who arent a family but allows
any number of people who are a family to live together
c. Exceptions to FHA
i. Mrs. Murphy Exception (3603(b)(1)
1. For sale by owner: any single-family home sold or rented by an owner if the owner
does not own >3 single-family houses at any one time
a. Cant be sold using a broker or discriminatory advertisement (can use
attorneys, title companies, etc.)
2. Your Dwelling: rooms or units in dwellings containing living quarters occupied or
intended to be occupied by no more than 4 families living independently of each
other, if the owner actually maintains and occupies one of the living quarters in his
residence
3. Roommate Exception (9th Circuit): FHA does not cover roommates because they
arent looking for a dwelling. Roommates.com can have discriminatory dropdown
menus
ii. Reasonable accommodation is one that does not impose undue burdens on neighborhood (ex:
traffic, noise, exterior appearance, effects to neighborhood)
d. Choosing Roommates
i. According to HUD: tenant seeking a roommate can discriminate on the grounds of sex, but
not race
ii. Communications Decency Act 230:
1. No provider or user of an interactive computer service shall be treated as the
publisher or speaker of any information provided by another information content
provider.
2. Saves Craigslist but not websites like ChristianRoommates.com
e. 1866 Civil Rights Act (1982)
i. All citizensshall have the same rightas is enjoyed by white citizensto inherit,
purchase, lease, sell, hold, and covey real and personal property)
ii. Dormant for years, revived in 1968 and still used today.
iii. Narrower than FHA because it requires showing intent to discriminate (disparate treatment).

iv. Broader than FHA because it does not have exceptions (not shot through with exemptions)
v. Race must be read as it was understood in 1866 (includes national origin, religion)
vi. Probably requires an intent to discriminate
III. Judicially Imposed Limits: Nuisance
a. What is Nuisance? Morgan v. High Penn Oil
i. Nuisance = Substantial, non-trespassory invasion of the use/enjoyment of land caused by:
1. Negligent, reckless, or ultrahazardous activities OR
2. Activities that are intentional and unreasonable
ii. Nuisance defined: An act or condition on Ds land that substantially or unreasonably
interferes with Ps use and enjoyment of Ps land (High Penn Oil: nauseating fumes from
refinery=nuisance; use is a nuisance when intentional and unreasonable)
1. Intentional: means acting to cause invasion knowing invasion is resulting, OR acting
with substantial certainty that invasion will occur (High Penn Oil)
2. Substantial interference: persons of normal sensitivities would consider interference
to be substantial (reasonable person)
3. Unreasonable: DEPENDS on who defines it.
a. High Penn Oil: threshold for unreasonableness is sufficient invasion of
anothers use and enjoyment of their land
b. Rst 2d. of Torts 826: finds unreasonableness when:
i. (a) The gravity of harm inflicted by the use outweighs its social
utility or
ii. (b) The intentional use causes serious harm and the actor could
compensate that harm without going out of business
iii. Other Factors Considered
1. Gravity of harm inflicted, weighed against social utility of Ds conduct (equities)
2. Gravity of harm sufficiently greater than P should have to bear w/o compensation?
3. Where there is serious harm, and financial burden of compensation for the harm
would still allow the conduct to continue (Boomer: cement company causes harm, but
still wants to operate; ordered company to pay damages b/c it can do so w/o going out
of business)
4. Harm to P is sufficiently grave and D could avoid interference in whole/part without
undue hardship
5. Ps use is well suited to character of the locality, but Ds is unsuited.
iv. REMEMBER: Use your own so as not to injure anothers property.
b. Types of Nuisance
i. Private Nuisance
1. Affects a single individual or definite small number of persons in the enjoyment of
private rights not common to the public
2. Only Private Owners can bring private nuisance suits.
ii. Public Nuisance
1. Unreasonable interference with a right common to the general public
a. Factors:
i. Does it interfere with public health, safety, peace, comfort or
convenience?
ii. Is the conduct proscribed by statute (ex: health and safety code)?
iii. Is the conduct continuing? Has it produced permanent/long-lasting
effects?
b. Only a member of the public who has suffered a special injury can bring
public nuisance suit (although courts have been flexible with this requirement)
iii. Nuisance vs. Trespass

c.

d.

e.

f.

1. Nuisance is not a physical invasion of land like trespass. Nuisance is gas or smelly
sriracha air; water or animals are trespass. This is because of its collective nature
water and animals will likely only pass onto one other lot, but gas/smelly air travels
2. Intension trespass is treated like battery (right to exclude); intentional nuisance
subject to balancing test (Penn Central!)
Remedies for Nuisance
i. Deny relief and let nuisance continue
ii. Give plaintiff injunctive relief (Estancias, High Penn Oil)
1. Estancias (noisy air conditioner units on apartment building case): default rule to stop
a nuisance under common law was injunctive relief
2. Giving an injunction lets parties calculate the damages at the bargaining table
(Estancias)
3. Rst 2d: restricts use of injunctions (promotes damages) out of concern that injunctions
give P too much control but damages give all of the difference between cost and
damages to D
4. Injunctions keep Ps from having to keep suing (Estancias), but courts can award an
injunction that can be vacated if damages are paid (Boomer)
iii. Let activity continue if D pays damages (Boomer)
1. Boomer damages rule is still competing with Estancias default injunction rule
2. If you dont trust a court to enjoin, why trust them to calculate damages?
3. Slight injury encourages damages; great injury encourages injunction
iv. Abate the nuisance if P pays damages (Del Webb)
1. Coming TO THE NUISANCE does not bar a nuisance suit (would unduly stunt
development), but it is a relevant factor in awarding relief. (Del Webb)
Estancias (TX case):
i. An apartment complexs industrial air conditioner located fifty-five feet from a residence was
a nuisance and enjoined operation of the air conditioner
ii. Court arrived at this decision even though the residence was valued at $25,000 and it would
cost over $150,000 to move the air conditioner
iii. Considered subjective value of quiet enjoyment of ones home as having more inherent value
than the operation of an apartment complex
iv. Note: ZONING AND NUISANCES
1. If the use Is permitted by zoning, it cannot be a per se nuisance
2. However, the method of operation may still be unreasonable and thus violative
Aside: Pierson v. Post: foxes found to be nuisances; probably extends to other overpopulated
creatures/game animals (like feral pigs) that cause harm to property/persons
Del Webb (AZ Supreme Court)
i. Enjoined the operation of a feed lot, but required a developer to pay a reasonable amount of
the cost of moving or shutting down the feed lot
ii. Reasoning: developer had come to the nuisance because the feed lot had been in operation
prior to the developments expansion that led to the nuisance complaint
Note: Right to Farm Statutes (Del Webb)
i. Use has to stay substantially the same cannot make significant changes then claim that
protected
ii. Just at the point that these are occurring, feed lots were changing into modern things we say
today intensity and volume going up
iii. Spur may have still been subject to this rule even with Right to Farm Statute

IV. Legislatively-Imposed Limits: Zoning

a. Zoning Generally: Euclid and Beyond
i. Euclid v. Ambler Realty
1. Village of Euclid enacted use districts, height districts, etc. and Plaintiff who
challenged them argued that zoning, in reducing what he could do with his land,
reduced the value of his landeffectively a nuisance.
a. Lower court upheld this, holding that if racial zoning is wrong, use zoning is
2. SC Reverses:
a. We must protect residential areas and residents
b. There are legitimate state interestspromotion of safety/security/reduce
accidents/decrease noise/preserve environment, etc. that justify zoning
3. Considerations:
a. Isnt this discrimination in disguiseeconomic discrimination? Doesnt it still
discriminate against minorities and poor people, just indirectly?
b. Euclid is used to justify a wide variety of restrictions, despite SC suggesting it
should be a narrow holding.
ii. Euclidean Zoning
1. Arose in 20th century as legislative alternative to nuisance and covenants
2. Four Principles:
a. 1. Different uses harm each other, so segregation of uses shoves undesirable
uses into undesirable areas (no pigs in the parlor)
b. 2. Protect the single family homecreates additional benefits (city expands)
c. 3. Low-rise development (houses w/ setbacks, lawns are good)
d. 4. Medium density population
iii. Justifications for Zoning
1. Originally based on nuisance control. Apartment buildings=nuisance because
overcrowding; large buildings diminish light and trees and green spaces, lead to
traffic, noise, and undesirable residents
a. Zoning=congestion on roads to get rid of congestion at home
b. Deferred to legislature because judges can only solve issues at tail end
(nuisance), and even so, many problems that people wanted gone were not
nuisances under law
2. Other justifications: solves externalities that bargaining (servitudes) and judges
(nuisance) cant; raises property values (but does it really?)
3. Social engineering, property values (Stoyanoff)
a. Property value justification assumes that ordinance has empirical effect. In
practice, the best evidence of empirical impact is neighbors complaining
b. Also reflects social constructs. Sex offenders can reduce property value even
though they are not a nuisance and dont run with the land.
iv. Validity under Euclid
1. Whether law advances health/safety/morals/general welfare (legitimate interest)?
a. In Euclid, legitimate state interests were furthered by zoning (see above)
2. If yes, are the means chosen to achieve the legitimate state interest rationally
related to the interest?
a. No if provision is arbitrary and capricious (has no relation to promotion of
the claimed legit state interest, has no basis)
3. If yes, person challenging ordinance given opportunity to prove that zoning ordinance
at issue is not sufficiently narrow in its reach
v. Standard Zoning Enabling Act:
1. Adopted at one time or another in all states; still in effect in some of them
2. Zoning=exercise of police power
vi. Houston as a Case Study

Houston is the only major city without zoning (but with many other restrictions like
minimum lot sizes, prevailing lot sizes, parking and set back requirements, wide
streets and large mileage)
1. (1) Allows zoning in accordance with comprehensive plan that enhances the police
power
a. Comprehensive plan can be a statement of objectives and development
standards with a zoning map
b. Some states accept the zoning ordinance itself (or its preamble)
2. (2) Requires creating a zoning board and appeals (adjustment) board
a. Board proposes comprehensive plan, the city council enacts
b. The Board can then pass amendments while the appeals board grants
variances
3. (3) FHA regulations for mortgage underwriting were incorporated into mortgages
vii. Discriminatory Issues with Zoning: Concepts Under Attack
1. Segregation of Uses is Desirable
a. Segregating favorable uses away from unfavorable ones (ghettos, etc.)
2. Wholesome housing is key aim of zoning, to which everything else is subsidiary
a. Considered single family home with yard; intended to preserve small town
social values. Good planning intended to preserve the status quo
viii. New Urbanism
1. Opposite of Euclidian Zoning
2. Automobile sprawl is harmful to health/env; reduces mobility; need public transit
3. Should instead configure spaces differently to get more utility and mobility overall
4. Mixed use buildings promote community interaction and end sprawl
5. Aims an addressing social harms of segregation, car pollution.
b. Exceptions to Zoning
i. Nonconforming uses
1. Destruction or intentional abandonment of non-conforming use terminates it
2. Substantially discontinuing terminates; cant try to keep it on a technicality
3. Right to maintain a non-conforming use runs with the land and can expand to meet
natural changes
4. Vested rights doctrine protects a proposed use from zoning change if sufficient
commitments have been made in reliance on the old zoning (you have plans but not
permits)
5. Estoppel can protect a non conforming use if the user reasonably and in good faith
relied on a defective permit, but its usually a losing case (ex: Parkview Associates:
case where court refused to apply estoppel and required apartment building had to
remove top 12 floors of building in area only zoned for 19 stories after mistake in
granting permit)
6. Amortization
a. PA Northwestern v. Zoning Hearing Board
i. Amortization of porn shop required within 90 days due to zoning
ordinance.
ii. Can use this to make argument against zoning: it allows taking without
compensation, puts all uses in jeopardy, extinguishes property
owners rights on timetable not of the owners choosing (can pass
law right after you open your porn shop)
b. Providing a reasonable period of time during which owners can maintain preexisting uses, and after which they have to terminate (retroactively extinguish
non-conforming uses within a specified time period)
c. Half of jurisdictions allow amortization, including CA
ii. Vested Rights: can grandfather in certain uses if sufficient commitments have been made.

1. You have a right to stay in non am-state, or you get to stay long enough to amortize.
Important to figure out WHEN you have vested rights (if no VR, gotta leave now)
2. But what is the limit? Construction? Permits obtained? Reliance?
c. Variances
i. Standard: Must Show
1. (1) Undue Hardship (without variance there is no effective use of the property)
a. Hardship cannot be created or peculiar to the owner
b. Knowingly buying the property subject to a use restriction is not self-inflicted
if the previous owner could have gotten a variance (dont blame successor-ininterest for previous owners failures)
c. Undue hardship needs to be related to the land (fact that individual cannot use
land for reasons specific to the individual is not going to count as undue
hardship)
d. Commons v. Westwood Zoning Board of Adjustment: NJ SC reversed denial
of a variance bc undue hardship means that, absent a variance, the property
may not effectively be used, a condition that Commons had established by his
efforts to either sell the land to his neighbors or acquire additional adjacent
land to conform to the ordinances area requirements
2. (2) Lack of Detriment (granting the variance wont imping on the public good or the
intent of the zoning plan)
ii. ADA and Variances: ADA should obviously trump zoning laws, but issue is whether
allowing variance is reasonable accommodation.
1. Self-inflicted hardships: should we give variance to building that violated ADA
ramp requirements, to let them expand to have ramp, or make builders tear down?
2. If it causes UNDUE BURDEN to the REGULATORY AUTHORITY, then
ACCOMODATION IS NOT NECESSARY (deemed unreasonable).
iii. Use Variances Analysis:
1. Substantially incompatible with the ordinance?
2. Affected in a unique way by the regulation?
3. Suffer unnecessary hardship if the variance is denied?
4. The grant will not be detrimental to the public welfare?
These are independent requirements
iv. Other Notes
1. Variance must run with the land (cant be based on hardship personal to owner)
2. Many boards require drawing up plans before applying for a variance boards can
condition variance on modifications to the plan
3. A current non-conformity is not grounds for an additional non conformity
4. The burden of proof is higher for use variance than area variances, but telling the
difference between the two is sometimes difficult (few variances are use variances)
a. Area Variances: purchase with knowledge is a factor but not dispositive in
whether there is undue hardship
b. Use Variances: if purchase with knowledge of use restrictions, usually courts
say buyer is out of luck
5. Boards grant many more variances than they deny (special interest politics or bribery)
6. Courts rarely overturn denials of variances (Commons is an exception)
7. Americans with Disabilities Act trumps zoning for buildings built after 1992
a. DOH requires variances for reasonable accommodations to be granted,
although lack of detriment helps show reasonableness
b. Your excuse for not giving variance better be good (aesthetic wont cut it,
traffic/safety maybe)
d. Variations of Zoning
i. Special Exceptions

1. Within the original zoning plan itself that promote the purpose of the zoning plan (ex:
residential areas with special exceptions for schools, churches, certain businesses,
etc.)
2. Legislature decides some uses are appropriate as long as specific standards are met
3. Rules for planned uses, standards for the variance
ii. Rezoning/Spot Zoning
1. Amendments to the original zoning plan
2. Presumptive Deference: traditional approach is to presume that the zoning
amendments are valid until the challenger has proven otherwise; many jurisdictions
dont scrutinize this more heavily bc if it is really zoning done by a body entrusted
with broad decisions, should be treated with initial Euclidean-like deference
iii. Contract Zoning
1. Developer gets rezoning to allow his proposed use in exchange for building a public
amenity like a school
2. Mostly used in developments
iv. Aesthetic Zoning
1. Only allowed by some states design standards must be part of the comprehensive
zoning plan
2. IF you give aesthetic controls Euclid deference, certain amount of arbitrariness is OK
if youre solving a problem constitutional limits though
a. Vagueness (Anderson v. City of Issaquah): a reasonable person must be able
to figure out the standard. Cannot just say drive around the block, especially
if ordinance requires diversity you should be able to do what your neighbors
did and be OK
i. NOT VAGUE: Stoyanoff: court upheld rejection of owners
monstrosity of grotesque design bc it was reasonably related to
preserving land use values and the prevailing aesthetic sense of the
community
b. Freedom of Speech (City of Ladue v. Gilleo): zoning laws that regulate free
speech in a content neutral fashion are invalid if they are either:
i. (1) Broader than reasonably necessary to achieve a significant
government purpose other than speech regulation, or
ii. (2) So restrictive that they fail to leave open ample alternative channels
of communication
1. Architectural design is not itself speech protected by the 1st
amendments
2. Noncommercial residential signs get the most protection
iii. City of Ladue v. Gilleo: even though Ladues regulation was content
neutral, unanimously voided bc it near total prohibition on signs failed
to leave open enough alterative means of communication banned
entire medium of communication
3. Nuisance abatement and police power do not justify aesthetic controls
a. Zoning upheld in Berman v. Parker bc ugliness (slums in that case) can be as
bad as actual nuisances
e. Exclusionary Zoning
i. Exclusionary Zoning: Seeks to exclude unwanted people, but sometimes not for
statutorily or constitutionally prohibited reasons (so its allowed).
ii. Freedom of Association and Family Occupancy
1. Cannot define which family members can live together (Moore v. East Cleveland)
2. However, CAN define other restrictions on who can live in a house (Belle Terre)

3. Related persons: Freedom of Association and Due Process protect freedom of choice
in matters of marriage and family choice (strict scrutiny therefore applies when
analysis ordinances that try to regulate this)
a. Moore: Court doesnt allow ordinance barring grandmother from living with
son and grandsons
4. Unrelated Persons: Zoning laws that prohibit/interfere w/ ability of unrelated persons
to live together are presumed valid and subject only to minimal scrutiny (Rational
Basis Review!)
a. Belle Terre: Court applies minimum scrutiny because the law did not
substantially burden deeply rooted liberty of family members to arrange
themselves in living situations.
i. Law was rationally related to legitimate government objectives of
residential tranquility and low residential density.
5. States can interpret ordinances to include the proposed use and avoid the
constitutional issue: McMinn; Baker: interpretations of family as functional rather
than biological unit; people can associate together if they exhibit characteristics of
permanence and intimacy that traditionally ID family units
f. Responses to Exclusionary Zoning
1. (1) Stay out entirely US Supreme Court
a. Zoning valid under Euclid
2. (2) Strong Involvement Mt Laurel
a. Principle: Anyone good enough to work in the city is good enough to live in
the city
b. Every developing community must presumptively make possible housing for
all incomes (fair share)
c. If city meets the heavy burden of showing the peculiar hardship of providing
this housing, they can be exempted
i. Local zoning cannot just service local welfare, has to serve all state
citizens because zoning power come from the state, not the municipality
d. The citys fair share decreases if there are fewer poor people in the region or if
city has already built a large chunk of low/moderate income housing
e. Challenger must show facial problem (housing not available disparate
impact). City must then meet heavy burden to show why housing is not
available
f. Fiscal and environmental reasons are not enough tax base defense can only
be relevant, not the sole justification for restrictive housing policies
ii. (3) Builders Remedy (Mt Laurel II)
1. Mt Laurel II extended duty to all communities, not just developing ones
2. Builders of low income housing may construct such housing despite local refusal to
permit construction
iii. (4) Regional Contribution Agreements
1. NJ legislative response: created administrative agency to enforce fair share
provision
2. Suburbs can, with council approval, compensate cities for agreeing to absorb portion
of suburbs fair share obligation
iv. (5) Inclusionary Zoning: encouraging poor people to live in the same neighborhood as rich
people by conditioning grants to developers on building some affordable housing
1. Usually only applies to residential developments with more than 5 units
2. Some cities allow developer to pay a fee instead of doing inclusionary zoning
v. Modern Trend is away from voluntary inclusionary zoning and towards mandatory
inclusionary zoning (although the city still gives developers benefits like quicker approval
and lower fees)

1. Affordable housing must look like market price housing (avoids stigma, keeps the
neighbors happy) increases maintenance costs
2. Developers use covenants to set sale price as a percentage of the market price, give
income controls, set occupancy requirements, create a sliding scale [you get a higher
percentage of the increased equity of you stay longer], forbid sublease/assignment
3. Tension between goals of giving people upward mobility and giving poor people
opportunity to live in decent neighborhoods giving too much of the equity will
reduce supply of affordable housing
V. Takings
a. Takings Generally
Fifth Amendment: Nor shall private property be taken for public use, without just
compensation
Rule: The government has the power to take private property for public use by eminent
domain. No governmental seizure of private property may occur, even if just compensation is
paid, unless it is for public use
-----SCOTUS give tons of deference to legislature public use basically means any
taking rationally related to any conceivable public purpose is permissible
i. Justifications for Takings
1. State owned property before you did, conveyed subject to takings (Hugo Grotius)
2. Takings are part of our feudal inheritance, like landowning itself
3. Taking is an inherent attribute of sovereignty (most common justification)
4. Taking is useful as an ant-monopoly device to prevent holdouts (Posner)
ii. Justifications for Compensation
1. Compensation is not a moral imperative
2. Compensation fully indemnifies landowner
3. Compensation protects private investment; dont need to take out insurance (Posner)
4. Some argue this view will lead to overinvestment in property, but query whether any
people actually behave this way (buying land recklessly without eminent domain in
mind)
5. Disincentivize state from taking (Madison protected wealthy landowners)
6. Forces the state to internalize costs of takings
iii. Theories of Takings
1. Joe Sax: Government should have to pay when it is enterprising (e.g. building road),
but not when it is arbitrating. Controlling spillover effects is a form of arbitration.
2. Michelman: 3 variables in takings calculations: efficiency gains of the taking (E),
demoralization costs of not compensating- both to landowner and other people who
worry about their land after seeing landowner taken (D), settlement costs of
compensating (S).
a. The government should not take if D>E and S>E.
b. If D>S, government must compensate for its taking.
c. If S>D, government need not compensate for its taking
d. This is well and good in theory (and explains why permanent physical
occupation is a taking), but difficult to calculate in practice.
3. Ackerman: The Ordinary Observer would not view reducing value as taking
something. He/she would view permanent physical occupation as taking something.
4. Richard Epstein: Any government modification of the right to possess, use, or
dispose of land is a taking. This is an extreme libertarian position.
5. Fischel: Trust larger governments regulations more than smaller governments
regulations because individual voices are greater in small governments.

6. Rubenfeld: A government action is only a taking if using the property would further
the governments interest more than it being destroyed would. Textualist reading of
public use.
a. The government didnt want the coal in Mahon to be destroyed, so it was a
taking.
b. The government would be perfectly happy to have the brickmaking business
in Hadacheck be destroyed, so it was not a taking.
c. Blowing up a bag at an airport is not a taking.
d. Any theory of taking that leads to taxes or blowing up a bag at an airport
being takings must be wrong. If taxes were a taking, there would have to be an
average reciprocity of advantage (you prefer a share of a battleship to your
money).
e. One way to do this is to claim that real property is special.
f. One way to differentiate taxes is to say that takings take that property, while
you can come up with the money for taxes however you like.
iv. (1) Public Use
1. Berman: urban renewal scheme in which blighted property was condemned and
transferred to a private developer was a public use
2. Kelo: as long as a condemnation was part of a comprehensive development plan
that had been subjected to thorough deliberation, the Court would defer to the
judgment of the government officials
3. 43 states reacted to Kelo by tightening eminent domain, but only some declared
taking for economic development completely off limits.
4. Ends Based Test: end is a public purpose; whether its for the public to actually
physically use (ex: road; transit hub)
5. Means Based Test: need to take property to accomplish governments aim (Note: if
ends are unacceptable, means should be as well)
a. Note: seizing drugs for use as evidence at trial is not a taking even when the
drugs expire, because prosecution is a public good (goes for all property
evidence)
v. (2) Just Compensation: fair market value + incidental moving costs
1. Inherently undercompensates for things like emotional attachment
2. Compensation will probably increase if politically powerful or threaten to sue
3. Rule: if only part of the land is taken, just compensation will include the fair market
value of the land taken and the fair market value of the damage to the remainder of
the land that foreseeably follows BUT if taking increases the value of remaining land,
the government does not get to offset that cost
a. Rationale: Offsetting cost would discriminate against the land owner whose
land is taken, even though the neighbor would get to benefit
b. NOT the uniform rule (ex: New Jersey)
4. Constitutional basis: outright appropriations in neither necessary nor sufficient for a
taking (some things that do not have to be compensated for)
a. A to B transfer off limits after Kelo
b. As house becomes public park can be done but must be compensated
c. Cops destroy As house not a taking; dont require compensation
i. Ex: firefighters set your house on fire as a fire break not a taking
ii. Ex: bust through the door to chase a criminal, not a taking
iii. Not really about taking the property, but its about achieving some other
objective that the property just happens to be in the way of
b. Regulatory Takings: How much regulation of property is too much?
i. Assuming public use/not otherwise unconstitutional, you would determine whether the
regulation falls within one of the categorical rules:

1. (1) permanent physical occupation;

2. (2) nuisance control [but see Lucas];
3. (3) total wipeout [if so check if Lucas exceptions apply].

ii.

iii.

iv.

v.

If none of the categorical rules apply, then apply Penn Coal/Penn Central
balancing.
Per Se Rules
1. (1) A permanent physical occupation is a taking
a. Even if damage is minimal (ex: $1 cable boxes on apartment building),
compensation is still required
2. (2) Stopping a nuisance never requires compensation (Hadacheck brickmaker
case)
a. If it is reasonable for the legislature to conclude that an activity is a nuisance,
you had no right to do it in the first place (not in your title)
b. Unless government caused a nuisance, does not matter how it came to be
c. Hadacheck: court never explicitly declared brickyard a nuisance, but rather
held that bc the ordinance allowed Hadacheck to remove his clay (but not
make bricks) there was no taking. City was seeking to regulate a noxious use,
even if it might be lawful
d. Wide latitude for the government to regulate activities as nuisances as long as
it has a reasonable belief that the activities will cause harm to nearby
properties
e. BUT SEE: Lucas: all affected properties been shown to be causing a nuisance
according to the common law of the 19th century?
3. (3) If government regulation leaves the owner with no economically viable use of
her property, and the regulation does not abate a common law nuisance, a taking has
occurred
a. Rationales: (a) severity of such regulations impeach the usual assumption that
govt regulation of property is for the advantage of everyone, including
affected property owners; (b) effect of these regulations is to achieve public
benefits by imposing costs of such benefits entirely upon affected property
owners
4. (4) Personal Property: seizing property as evidence of a crime is not a taking
(confiscatory nontaking)
a. Not compensable bc it is a state action to prevent public harm
b. Apparently subject to Penn Central analysis
Underlying Rules
1. (1) Must balance public benefits and private costs aka if a regulation goes too far,
it is a taking (Mahon)
2. A regulation is not a taking if it substantially advances a legitimate state objective
3. (1) Public benefits from the regulation must outweigh the private costs
4. (2) Regulation must not be arbitrary
5. (3) Property owner must be permitted to earn reasonable return on an investment
property
Test: Factors to consider in determining whether a regulation goes too far
1. Economic Impact
2. Extent of the interference with distinct investment backed expectations: taking exists
when a claimant is deprived of distinctly perceived, sharply crystallized, investmentbacked expectations
3. Character of the governmental action (physical invasion? Nuisance-like activity?
(2) Conceptual severance - when a regulation wipes out an entire property right that has
been recognized by the market)

1. Penn Coal v. Mahon: court held that Kohler Act, prohibited underground coal mining
that would cause surface subsidence, went too far so it was a taking. Law made it
commercial impracticable to mine coal, which had the same effect for constitutional
purposes as appropriate or destroying the right to mine coal
2. Destroyed a legal right, so it was a taking
3. Brandeis Dissent: Kohler Act prohibited a noxious use. Diminution in value was not
absolute the appropriate measure should not be the decline in value of the coal
alone, but the value of the whole property
vi. Penn Central Analysis: considers
1. The character of the government action
a. Physical invasions and occupations by the government
b. Misuse of regulatory authority of government
c. Uncertainty in application of regulations (hard to know how to comply/plan
for use/equal enforcement)
i. Average reciprocity of advantage: as long as some benefits s are accrued
to the regulated party, reciprocity demands are met
d. Importance of the governmental action
e. Likelihood that the regulation will work to abate the nuisance like condition
2. The economic loss suffered by the party regulated
a. Transferable development rights (TDRs) mitigate financial burden
3. The frustration of the distinct investment backed expectations (DIBEs)
4. Example: Grand Central primarily created as a method of profiting from railway
transportation, and ability to build offices above = added bonus
5. Less concern over ability to profit from additional aspects of an operation
6. If private covenants bar the activity, unlikely that DIBE exist
vii. Lucas v. South Carolina Coastal Council: total wipe out situations
1. Rule: If a regulation effects a total wipeout of a property interest, then it is a taking
unless the activity being banned was not part of the title in the first place based on
background common law principles of property law and nuisance law
2. Rejected the idea of conceptual severance and said that you have to consider the
impact of the regulation on the value of the ENTIRE parcel as opposed to on just the
regulated part
3. Note: explicitly limited to real property (NO PERSONAL PROPERTY) by Scalia
4. ABOUT NUISANCE: if land was only valuable for a use that was a nuisance, a total
wipeout was legitimate
5. Lucas: no theoretically productive use remained, regardless of the monetary
economic situation
a. As long as something productive could be done, whether or not it would be
profitable to do it at this point in time, no total wipeout has occurred
viii. Palazzo:
1. Timing of regulations matters because we make DIBE in reliance on new regulations
2. Background principle something that adheres in everyones title to land
a. Inherent thing that trumps right of possession
b. Laws that have always been around since there has been property law
c. Riparian Right: water rights, etc.
d. Adverse possession, prescription, implied easements = background principles
e. Palozzo: law does not become a principle for subsequent owners just by
enacting
i. 1870: would have allowed destruction of house to fight a fire, but would
not allow wetlands regulations because it was not something they knew
about, so not a background principle

ix. Note: forcing sex-offenders to leave their home is a regulatory taking; forcing them to leave
their business is not; living in your home is distinct investment-backed expectation; being at
your business isnt as long as you can hire someone else to run it

Regulation

Appropriation

No Go Zone
Violates some
other constitutional
rule (1st
amendment,
second
amendment, etc.)
Impermissible A-toB transfer (As
house to B)

Free Zone
Ordinary exercise
of police power
(Hadacheck, Penn
Central)

Pay Zone
Regulatory Taking
(Penn Coal, Lucas)

Confiscatory
nontaking
(evidence seized;
cops destroy As
house

Eminent domain
(Kelo; As house
becomes public
park)

c. Exactions (Nollan/Dolan)
i. Nollan v. California Coastal Commission
1. Rule:
2. (1) Nexus between government purpose and means used to achieve them (exaction
youre seeking has to be substantially related to the purpose youre seeking it for
cannot just equivocate meaning of access)

a. (Requiring a public easement over beach property to grant permit to build on

that property is not rationally connected to the development bans purpose of
protecting the publics view of the beach)
3. (2) Effectiveness: exaction must substantially advance that government purpose
ii. Dollan v. City of Tigard
1. In addition to the essential nexus between the condition and the governmental
purpose, there must be rough proportionality between the two
2. City must make some sort of individualized determination that the exaction is
related both in nature and extent to the impact of the proposed development
iii. Nollan/Dolan: applies to impact fees
iv. Bc the justification for Nollan/Dolan is not just that the owner is required to give up an
interest in land, court said justification is that they might be extracting something from the
owner that the owner is not required to give