Professional Documents
Culture Documents
Recording Acts
Incentivize A to record ownership (can lose your land otherwise)
Prevent B from being innocent (can check the record)
Create less of a sense of risk to the general public (provides land market stability)
Common law said first in time taker = O
Race Statute - bright line rule - first to record is the owner - the gov't administrator puts a time stamp
on it, so it is undisputed - very few jurisdictions follow this
Notice Statute - two requirements:
1) Paid valuable consideration (first in time will stand over someone who received Black acre as a
gift)
2) Must have been without notice of the previous transaction
***Note: there is no recording requirement in this jurisdiction***
Race Notice Statute - three requirements:
1) Must be a purchaser for value
2) Without notice of previous owners
3) Duly recorded
Ambiguous Terms:
Value - even black acre as collateral for a loan can be sufficient
Notice
Actual notice - B sees the previous deed or recordation or someone tells B about it
Constructive notice - A's deed was recorded - had B looked for it, B would have
seen it
Inquiry notice - sufficient evidence of someone else occupying black acre to make B
ask questions - ex - A is living there - who are you? I own this place, but A hasn't
yet recorded
Recordation
Can mean taxes paid, sealed, notarized, etc
If the notary's seal is expired and everything else is OK, A can still be seen as
nothing but a trespasser
Hypotheticals:
OA, no record
In a race
OX, has notice of OA
jurisdiction, as
X records
soon as X
A records
recorded, X won
XZ, Z has no notice (actual, inquiry or constructive) of OA
(Z checked after X recorded and before A recorded? Or only checked for X in grantee index - the
search is expensive and not necessarily always comprehensive - we are assuming that this jurisdiction
had a Morse search requirement)
Z records
Race jurisdiction: Z wins (Z took from X, who recorded first)
Race/Notice: Z wins - X recorded first, and Z had no notice (depends also on when Z records)
Notice:
OA, no record
OX, no notice
X records
A records
XC, C has actual notice of OA
C records
C gains protection based on X's innocence
C will still get it in a contest between A and C
This is the shelter rule - C is being sheltered by X's good
faith because we want to give X the benefit of the power of
transfer, b/c he satisfied all the requirements
This is an example of the relativity of innocence and the
concept of ownership
OL
LS
Who recorded first? Was recordation sufficient to find it?
Court decided that C was not charged with searching A as a grantor before A became a grantee
C would have had to have looked at A as a grantor before A got black acre, which is
outside the chain of title.
- At the time that Lowery was applying for the patent, a utility company was applying for easements to
hang wires across the property - they approached Lowery directly, and he said okay. Lowery then
conveys the underlying fee simple absolute to Sabo - does C have the encumbrance of the easement?
Did Sabo have notice? Sabo could not have known - the utility company may have to pay C and go
back to try to get its money back from A
- What can B do? RERECORD - the Horvaths should rerecord the LH record after OL promptly to
prevent the second in time scenario in both race and notice jurisdictions (B seems less innocent than
C, because B could have prevented this)
Copyright Law - protection for original works of authorship - published and unpublished - literary,
dramatic, artistic
- Cannot control derivative works
- Protects 70 years past the death of the author
Trademark Law - the longest protection - allows consumers to identify a product as from a specific
company (to avoid confusion)
- Can be limited (ex - can't trademark the color that is used to mark euthanasia for safety reasons)
- Must renew every 10 years to ensure that you are still using it, but you get perpetual protection
- Can prevent dilution of trademark by someone else (McDonald's was able to get McSleep hotels
to change their names, b/c could reflect poorly on McDonald's trademark)
- Can't trademark something that is functional - just an end run around patent law, and we want to
eventually allow for competition and innovation
Patent Law - the shortest - 20 years
- Rewards the creativity of the original innovator, but eventually allows for imitation and
competition
Damages can be measured in the value of the chattel at the time of conversion or the value of the
plaintiff's interest, taking into account the odds of the true owner coming back and trying to get the
possession back (this is a lower value usually).
Bailment - the rightful possession of goods by a person (the bailee) who is not the owner. (The owner of
the good is known as the bailor.) E.g. giving your car to the valet - you are the bailor and they are the
bailee. If someone steals the bailment from the bailee, and the bailee gets damages for it, the true
owner (bailor, you, in this case) cannot have an action against the present possessor (because they
already paid damages).
Replevin - a lawsuit to obtain the return of goods, not just damages for their value.
Right to Exclude
Lost, Mislaid and Abandoned Property
Abandoned - then, it's up for grabs (property), but it's hard to know when someone has abandoned a
legal right
Finders have a property right against everyone else except the original owner
Separate lost an mislaid as conscious v. unconscious act - probability of someone coming back for it is
greater in mislaid, b/c may remember where it was left
Adverse Possession
Thursday, December 17, 2009
3:06 PM
Adverse Posession
1) Actual entry
2) Exclusive i. AP says they have a right to exclude - putting up a fence, running after trespassers with a
pipe, etc
3) Open and notorious
i. Open - if the owner drove by, he would notice and come it to see who was occupying his
land
1) What the owner subjectively would think
ii. Notorious - the community at large is aware of the occupation by the AP - acting like an
owner (not just a visitor)
1) What the community objectively would think
This is all w/ reference to standard uses of the land in that area
But the AP might have to do more than a standard person in the community to show that
they are acting like an owner (most ppl might not develop/build more, but the AP has to do
something to show that he is an AP)
Some jurisdictions require the APer to pay taxes (this can get rid of mistakes on titles,
although some jurisdictions have clean up rules for that) - also, shows "sweat equity"
Some hold that if possession is unequivocal and visible, then there is a presumption of open
and notorious; others say if an encroachment is small (less than several feet), then there is
no presumption
4) Adverse and under a claim of right
i. Adverse
1) Does not have to mean hostility - just adverse to the owner's right
2) A tenant who pays rent is not adverse
3) A tenant who stops paying rent can be held to be adverse, but some jurisdictions hold
that if you entered under permission, then you can never be adverse
ii. Claim of right
1) Focused on the intention of the AP, not the owner
2) BUT, the AP's intention does not necessarily matter as much as the actions the AP
takes - depends on the jurisdiction whether mindset matters (see prescriptive
easement below)
3) Also, this depends on whether we care about the AP making improvements (and
taking the risk of being ejected) or if we care about owners sleeping on their rights
5) Continuous for the statutory period
i. Statute of limitations - begins at time of actual entry
ii. Also depends on the status of the owner
If the owner dies and passes the land on to a 2 yr old, the heir, the ownership will not
begin until the heir reaches the age of the majority. If the AP entered before the
original owner's death, then the SOL begins at entry, but if the AP enters after the
death and before the heir reaches majority, then the clock won't start running until
the heir reaches the age of majority
iii. Numbers 1-4 are all part and parcel to actual entry - you can't start the clock until you've
established all 4
iv. APs can tack their time together
1) Can record through a quitclaim deed (which does not say that the title is clear, but
shows the extension of the AP)
2) If another AP runs the first AP off the land, the time does not tack (unless you are in
England, who cares more about owners sleeping on their rights than about the APers)
a) In this case, both O and AP1 can sue AP2 - no privity b/w AP1 and AP2 and AP1
has a relativity of claim to possession over AP2 (and O is the owner)
v. Continuous - depends on what is normal for that area (if it's summer homes and AP lives
there only during the summers, that is sufficient - owner should be checking during normal
living times, even if they don't normally live there during those times - conversely, if AP lives
there during winters, the AP will not be able to claim continuous, b/c not the normal
occupancy period)
1) What if 50% are summer occupiers and the rest live there all year?
2) Must know the nature of the community - this is very fact specific
Color of title
This is a deed that shows that you have some right to be there (does not have to be
recorded - that is just to prevent confusion with future purchasers)
Different jurisdictions:
1) Color of title is required in order to be an APer
2) Color of title will shorten the SOL for APs if they have it
2) Color of title will shorten the SOL for APs if they have it
3) There will be less onerous requirements on the AP if they have it
Allows APer to show the exact extent of the claim (so will not have to occupy every square
inch that they claim to own, because they have the dimensions in writing)
If there is color of title to the land and the APer does not occupy all of it, then they can claim
the rest under constructive adverse possession
AP and Prescriptive easement
This is only a right of way (like in Manillo v. Gorsky and the stairs over the property line), not
an FSA
Do not have to exclude the owner, just everyone else (exclude owner to get ownership )
If just an easement and you rip up the steps, you can't put them back in, but if you get an
FSA, then you can reconfigure the steps
From the owners perspective, this can be just as damaging as an FSA, b/c now they will have
to try to sell the land with this encumbrance on it - lowers property value
Does knowledge of a small encroachment matter? Depends on the jurisdiction
Mistake does not create AP
Objective acts = claim of right as long as those acts reveal intent
Open and notorious? Depends
If possession is unequivocal and visible, then presumed O&N
If encroachment is less than several feet, no presumption of O&N
Then, the APer would have to prove actual knowledge
In a court of equity, if ripping out the steps is too high of a burden, they could convey and
prescriptive easement, but require the APer to pay for it
AP for Chattels
See O'Keefe Case
Discovery rule - SOL only begins when the lost chattel is found, as long as the original owner
is giving due diligence to finding it
Some jurisdictions hold that you must find it, request it and then be rebuffed before SOL
begins
Europe - if a painting is sold on the open market, where anyone can buy it, then the
subsequent purchaser (not the thief) can keep the painting, and the artist can sue for
damages
Gifts
Thursday, December 17, 2009
3:09 PM
Gifts
Require:
1) Intent
i. This is a matter of fact to be determined by a jury
ii. Things to look at:
1) Dominion and control over the gift
2) The relationship of the giver and receiver (legally special relationships might create a
greater presumption of intent)
2) Delivery
i. This is a matter of law
1) Actual - manual
2) Constructive
3) Symbolic
For a gift causa mortis, only actual delivery will be allowed, unless that is impractical, and
then constructive delivery must still be made (symbolic will not be sufficient)
Can delay delivery of entire inter vivos gift (can have a present title interest and a future
possessory interest)
3) Acceptance (which is generally assumed based upon the delivery)
Co-Ownership
Wednesday, December 16, 2009
11:40 AM
Co-Ownership
1) Tenancy in common - this is the modern presumption, unless stated to the contrary
i. Separate but undivided interests in property
ii. Interest is descendible and may be conveyed (separable) by deed (inter vivos), will or
intestacy - NO SURVIVORSHIP RIGHTS (when one dies, the other doesn't get the entire
property)
iii. Each has a right to divide the interests and have the property partitioned by the court
2) Joint tenancy
i. Each owns the undivided whole, so each has survivorship rights - if one dies, the other gets
it all
ii. 4 unities:
1) Time - must have acquired or vested the interest at the same time
2) Title - must have it under the same title or by the same AP
3) Interest - must have equal, undivided and identical interests, even if they contributed
unequal amounts to the purchase, maintenance, etc
4) Possession - must have a right to possession of the whole (although, one is allowed to
give exclusive possession to the other)
iii. Each has a right to divide the property if they choose by contract or court
1) Can make a request not to divide (against the other's wishes) if it is a reasonable
restraint on alienation - e.g. I want it to be held for 5 years until the market value goes
back up
iv. Can convey interest ONLY during life, and can be done w/o consent or even notice to the coowner (which will create a tenancy in common)
v. Creating a joint tenancy
i. Since there has to be unity in title, if one of the joint tenants owned first and then
wanted to share, it used to be that the original owner had to convey to a straw who
would then convey back to both, so there would be a unity in title, but that is
generally no longer required (you can just write a grant to yourself and your coowner)
ii. Joint tenancy can never arise by intestate succession - if someone gets property
through intestacy, it will be a tenancy in common unless specified otherwise in a will
vi. Severing a joint tenancy
i. By Unities
1) Used to be the same way with severing - if one wanted to sever (which you do
not have to give notice to your co-owner), then they had to convey to a straw
who would re-convey back - broke the unity of title, but now, some courts allow
you to convey to yourself directly
i) May still require conveyance to a straw
ii) Or conveyance in the form of a trust to someone who promises to convey
it back (or to whom you choose) upon your death
iii) Some require recordation (b/c otherwise, I could convey to myself to
break the tenancy, but destroy the conveyance if I hadn't recorded it if my
co-tenant dies first, so that I still get everything - these jurisdictions say
you can't have it both ways)
iv) If the jurisdiction does not allow these, and it's not discovered until your
death, then your co-owners will maintain their survivorship rights and get
everything if you die first
2) If there are three joint tenants, and A conveys his interest to another party, this
breaks the joint tenancy w/r/t A, but B and C according to common law still
have a joint tenancy w/ right of survivorship between them
i) A's grantee will have 1/3 interest and B and C will own 2/3 equally and
indivisibly - this is fine - tenancies in common do not have to have equal
shares
3) Does a mortgage break the unity of title?
i) Title theory - some jursidictions hold that a mortgage is like handing over
your title - in that case, the mortgage would break the unity - however,
some courts have still held that you still hold the title against everyone
else except the creditors, so it does not sever the joint tenancy
ii) Lien theory - the title remains in the owner's hands until the end of the
expiration period, so unless the expiration period ends and the debt is still
not paid, the joint tenancy has not been severed - this is what was held in
Harms v. Sprague
4) Does a lease break unity of title?
i) Generally, no - see Swartzbaugh v. Sampson
ii) Remember, during life the joint tenants have the same rights as a tenancy
in common - but renters from a joint tenant should be aware of the risk of
in common - but renters from a joint tenant should be aware of the risk of
partition or death, but the lessee during his term of years has the same
rights as the co-tenant, unless the contract limits them
iii) BUT, if a co-tenant leases the whole of the property and does not allow
the other co-tenant the right of enjoyment, that co-tenant can recover a
reasonable value for the loss
ii. By intent
1) The court can ignore all of the unities arguments above and look at whether the
co-tenant intended to sever joint tenancy
vii. Granting language
i. To A and B as joint tenants for their joint lives, remainder to the survivor.
1) This is a life estate with a contingent remainder in a FSA
2) They could release their future interests to the present possessory holder,
merging the interests and creating a FSA. This would destroy the grantor's
intent, but it would prevent one from taking unilaterally, which is more likely to
happen in the language below.
3) It is harder to destroy the right of survivorship here than below.
ii. To A and B as joint tenants, with a right of survivorship, and not as tenants in common
1) This is a FSA
2) Remember that courts err on the side of larger ownership
3) Tenancy by the entirety
i. Only between a husband and wife
ii. Cannot unilaterally pass the interest to anyone else - no right to divide (w/o divorce)
iii. Has all of the unities of joint tenancy PLUS the unity of marriage (if you divorce, then it
becomes a joint tenancy)
iv. If people buy before marriage w/ intention of tenancy by entirety and then get married soon
after, some courts have a clean-up rule to allow this, but strictly speaking it will not be more
than a joint tenancy
v. Hawaii extends this to parent/child holders
4) Creditor reach
i. If something can be conveyed during life, then creditors can reach it
ii. Tenancy by the entirety is out of the reach of creditors unless both tenants are held for
whatever loan/credit it is
iii. Joint tenancy
i. Common law rule - creditors can reach half (if one out of two tenants is in debt)
ii. Fractional rule - creditors can reach up to the fraction that the tenant in debt
contributed to the purchase
iii. Intent rule - creditors can reach only the amount that the joint tenant intended to
own (ex - mom and daughter - intended to give to daughter - mom's intent was 0), but
not so simple - must show intent
1) Objective intent? Contribution plus language of the conveyance
2) Some jurisdictions hold that there must be unequal contributions PLUS intent
iv. Carve out rules - some jurisdictions have held that debts will survive the death, so that
loaners get their money, even if there was a joint tenancy
v. See above re: mortgages - if it is held to sever the unity of title, then the creditors can
reach it upon debtor's death - if it did not, then the creditors are out of luck
1) Some courts hold judgment liens (imposed by the court, ex b/c of a tort) should
survive the joint tenant's death, but contract liens (like through a mortgage)
should not
5) Partitioning a joint tenancy
i. Joint tenants always have a right to partition - not allowing that right would be an
unreasonable restraint on alienation
i. There can be a reasonable restraint on alienation (ex. Waiting until they get rid of
certain clouds on the title, like an APer, etc)
ii. By sale
i. Only if physical attributes of the land make it impracticable or inequitable AND it will
better promote the interests of the owners
ii. Usually, this is done through an auction
1) If the court fears that the co-tenant will be the only bidder and this is cheaper
than buying the other co-tenant out, they can set a minimum bid
iii. In kind
i. If the partition in kind cannot be done evenly b/c of the nature of the land, it can still
be done in kind with the co-tenant receiving more being required to pay an owelty - a
one time cash-out for the difference
ii. An in-kind order can set out the bargaining chips for a settlement, but once a by sale
order is made, there is no turning back
iii. In equity, the court can divide as they see fit, while trying to incentivize the parties to
work it out between themselves.
iv. When deciding how to partition, courts consider
i. Who is occupying the land (if it is occupied at all)
ii. The sentimental value of the land
iii. If partition in kind will diminish the value of the land as a whole
iv. Some courts will make ppl draw lots (can't necessarily keep the land you are living on)
Property Outline Page 11
iv. Some courts will make ppl draw lots (can't necessarily keep the land you are living on)
v. Partitioning a lease that was created in a joint tenancy
i. In kind
1) Partition the land owned jointly over the period of time of the lease
ii. By sales
1) Sell the lease through an auction (which anyone, including the lessee, can bid
on)
i) THEN, the original lessee gets back all of the money spent on
improvements
ii) THEN, the remainder is split between the lessee and the unhappy cotenant
BUT, the lessee, must still pay out the remaining rent owed to the
lessor
6) Ouster
i. Through adverse possession
i. Must show that the co-tenant is preventing the other co-tenant from use/enjoyment
of land
ii. Through liability of occupying co-tenant for rent to other co-tenants
i. Only allowed if preventing entry and use
ii. Majority - absent an ouster, the co-tenant in possession does not owe rent to the cotenant out of possession - could say that this encourages occupation
iii. Minority - even without ouster, the co-tenant in possession owes rent to the cotenant out of possession - you owe for the part that reflects their possessory interest
(1/2, 2/3, etc)
1) So, when would it be fair? Courts look at
i) Intent of the parties
ii) Whether the space is commercial or residential - although rental
residential properties blend the two
iv. If rent is owed, ousted or non-occupying co-tenant should look at the amount of rent
being received - if it appears to be FMV, then they should demand rent from the cotenant, but if it appears to be half of that, then they should demand rent from the
person paying the rent in the first place
7) Improvements upon the land
i. Generally, the occupying co-tenant is required to do the repairs, but whoever puts them in
can get a cash-out during the partition
ii. If improved, there are two options:
1) Improving co-tenant gets the value added of the improvement, and then the original
value is split equally between the co-tenants
2) Improving co-tenant gets the cost expended of the improvement, and then the
remaining value is split between co-tenants
Jurisdictions who follow this generally don't like the risk of major changes
iii. If the "improvement" turns out to lower the value, generally, the only who made the change
will get half MINUS the value lost (so if it's worth $50,000 less, then they will get half minus
$50,000, which will then go to the co-tenant who did not make the change)
Easements
Wednesday, December 16, 2009
11:50 AM
Easements
Affirmative easements - the right to go onto someone else's land which cannot be revoked,
unless a time period expires
If you say that you can change your mind, then this is a license, and that is a contract
interest, not a property interest
Negative easements - a right to constrain another person's land
1) From blocking your windows
2) From interfering with air flowing to your land in a defined channel
3) From removing support for your building
4) From interfering with the flow of water in an artificial stream
Appurtenant easement attaches to the land (whoever is my neighbor can cross), while an
easement in gross goes to a specific person (the railroad company can cross) generally, courts don't like personal in gross easements (where it is burdened by a
bunch of ppl), b/c it is a restraint on marketability, and if it is hard to track down
everyone who has access to that easement, it will be hard to buy it out
But, in a commercial in gross easement, you know exactly who to go to to buy out the
easement
Easements should be granted expressly in writing to avoid the statute of frauds - all
easements shown below are exceptions, but not ideal.
Granting language: To A as owner of Purple Acre, a right to cross Black Acre to get to
highway one.
Should list:
Grantee
What the right is
Where it is located
How long it should last if not indefinite
Be sure to not make this look like a FSA!
Can clarify which you mean by a statement of intent
Some courts will consider intent, but it must be on BOTH the grantor AND
the grantee side
Others won't if the granting language is not ambiguous
It is okay to grant an easement in FSD - so long as A maintains the road used for
the easement
Quasi easement - you cannot have an easement across your own land for yourself, but when
you burden one part of your land (quasi servient tenement) for the benefit of another part
of your land (quasi dominant tenement), this is a quasi easement, which can turn into a real
easement if you subdivide the land
Generally, if the easement is being held by the grantor upon the subdivision, it has to
be expressly stated in the grant, b/c the grantor is aware of it
Granting language: To A and his heirs, subject to an easement of right of way
reserved for the grantor to cross Black Acre to get to highway one
If it is not there, it will go to equitable servitudes - implied reservation (which is
frowned upon), and they must show that it was so open and obvious, that they
assumed it would be continued and/or they just forgot to include it or it must be
held to be STRICTLY necessary
If the easement is being given to the grantee, the courts are less strict about it being
expressly written, since the grantor was aware of it when selling, and it can be
presumed that it was going to continue
There is an implied grant as long as it is apparent, continuous and necessary in
character
Granting an easement to a third party:
This is sticky - some courts do not allow it, b/c it breaks privity of contract - see
picture to the right
If O owns all of the land and sells Black Acre to A, and then wants to sell
Maple Acre to B with an easement across Black Acre to get to Highway
One, what can O do?
Some courts will allow a reservation to a third party if it is justifiable
Others require a two step process:
1) If O has not yet sold to A, O can sell Black Acre to B, who can then
re-sell to A with a reservation for the easement for B
2) OR, before O sells Black Acre to A, O can include a pre-existing
easement in the grant as an exception, making it an appurtenant
easement to the land (so it will go to whomever live on Maple Acre)
(or can then sell the easement to B)
Property Outline Page 13
Highway One
Black
(A)
Maple
(B)
Purple
(O)
Covenants that run with the land - a contracted promise that will continue to bind any future owners of
the same land
Granting Language: For the consideration of $x, Grantor A covenants to Grantee B, his heirs and
assigns, that A will keep the trees trimmed on Black Acre (A's property)
Heirs and assigns also implies and intent to run, but better to expressly say that
Sometimes, you can make a covenant that benefits a third party, but it depends upon the
jurisdiction
Remedies for a breach of a covenant that runs with the land:
1) Injunction
2) Specific performance
3) Monetary damages
1st Restatement
Benefit to run
1) Intent to run
2) Notice
3) Touch and Concern
a) Has to deal with something physically on the land
b) Only worthwhile if it creates more economic value than not burdening at all
c) Generally, obligations to pay money for maintenance are not direct enough to
T&C, but some jurisdictions hold that they are
d) Won't usually allow tying arrangement - homeowners assoc that require money
for gyms, golf course, etc that are in the communal area
4) Vertical Privity - relaxed (an AP only after quieting title)
Burden to run
1) Intent to run
2) Notice - much more important on the burden side
3) Touch and Concern (see above)
4) Horizontal Privity - strict
This is usually established by a developer creating the burden and then
conveying to neighboring plots or by a grantor selling part of his land and
putting the covenant in the grant to the grantee
If neighbors want to create a covenant, they must convey to a straw who will
convey back to them if they want it to run with the land
5) Vertical Privity - strict (whoever is being sued owns the exact estate that was
burdened)
An AP even after quieting title might not be held to have strict VP here, but you
don't want to go against the original intent, so it might be held that the AP is
responsible for the burden
Restatement 3rd
1) Intent to run - if you don't do convey to a straw, you should make intent explicit in the grant
2) Notice
3) Relaxed vertical privity (AP, tenant, etc could sue)
a) Divides Between:
1) Negative (restrictive) covenants - VP just has to be that you are connected to
the covenant in some way (not an arbitrary person suing)
Have to refrain from doing something
2) Affirmative covenants - must have VP (at least relaxed)
Have to actually do something - these are more onerous, but they can get
Property Outline Page 16
Have to actually do something - these are more onerous, but they can get
blurred
What about an AP before quieting title - can they sue? ONLY when
1) The covenant was to repair, maintain or render services to the
property OR
2) If the benefit could be enjoyed by the AP without diminishing the
value to the owner in title and without increasing the burden on the
burden side
b) As long as it is fair for the burden to run
1) Tenant from a lease - might make sense to have the burden run on things that
otherwise the landlord would have to invade the tenant's privacy to maintain,
but not for major, expensive maintenance
2) Life tenant - is liable for the burden but only up to the value of the life estate, so
O or the remainder may have to deal with super expensive changes
3) APer - if is in possession, will be liable for affirmative covenants
4) Can still run, even if the benefit is in gross, as long as it is fair
4) Valid
a) Can't be arbitrary, spiteful or capricious
b) Can't unreasonably burden a fundamental constitutional right
c) Can't be an unreasonable restraint on alienation
d) Can't be an unreasonable restraint on trade or competition (can be found sometimes
in no compete clauses)
e) Can't be against public policy
f) Generally, obligations to pay for maintenance and tying arrangements to homeowners
associations are OK b/c there is notice
g) Even if it puts a slight, but not complete restraint on alienation, this can be ok
Termination of covenants
1) By expiration (can expressly state in the grant that it is only good until a certain time or must
be renewed and re-recorded at that time)
2) Release - usually done for payment to the benefit side
3) Abandonment - where the benefit holder makes unequivocal acts w/intent to abandon
4) Merger - if the burdened side buys up the benefit side
5) Estoppel
6) By prescription (AP the burden and let SOL run, and you'll clear it out)
7) By abandonment/waiver of right to enforce - if a benefit holder does not enforce a
covenant, the burdened side can claim that they waived their right to enforce (this doesn't
have to be over SOL)
Ex - prop owner's assoc does not enforce against A - next week B can claim that they
waived/abandoned right to enforce it against entire tract
This tends to make these associations more assertive to enforce, so that there won't
be a claim of waiver/abandonment of a right to enforce
8) Condemnation - eminent domain
9) Through the consent of all interested parties
a) Sometimes does not even have to be unanimous - if a homeowners assoc says only a
certain percentage vote - can show the power of a holdout if it does have to be
unanimous
10) Changed circumstances - this is HIGHLY limited - must show that change has occurred w/in
the covenanted tract and that the benefit no longer remains at all
a) Restatement Third says:
1) If changes have made the intention of the servitude impossible, then the court
can change the servitude to re-assert the original intent (and if it can't be
modified, then the court can reward compensation to the beneficiaries who lost
out)
2) If changes can still maintain the benefits, but the location of the servitude is no
Property Outline Page 17
2) If changes can still maintain the benefits, but the location of the servitude is no
longer suitable, they can modify the servitude as long as they don't take away
the benefits
Federal Fair Housing Act
Only helps protected classes
Disability - something that prevents an individual from carrying out ADLs
Race
Class
Family status
NOT marriage status, viewpoints, sexual orientation
If you are protected, there is:
1) Discriminatory intent - nothing will be valid that was made with the intent to
discriminate against a protected class
2) Disparate impact - even if it was not the intent, but the outcome is discrimination, it
will not be allowed as long as there can be...
3) Reasonable accommodations - this is very fact sensitive, looking at the people and
places on a case-by-case basis
Remember, all of these requirements are only SUPER important if you want monetary damages otherwise, if you fall short, you can go to equitable servitudes and still get injunctive relief or specific
damages
In first restatement, if the benefit is in gross, the burden will not run
Covenants generally cannot create a property interest in a third party
When ambiguous, courts favor not burdening land
If you don't remember changed circumstances, see Western Land Co. v. Truskolaski
Landlord/tenant Covenants
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Equitable Servitudes
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6:47 PM
Equitable servitudes - a promise that does not meet all of the technical requirements of a covenant that
runs with the land
- Can be protected by injunction or specific performances, but NOT monetary damages
- Requirements:
1) Intent
2) Notice
3) Valid
Incompatible Uses
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Incompatible Uses
1) Nuisance
2) Trespass - only allowed for a physical invasion
Why choose trespass over nuisance?
Importance of the right to exclude
You will get damages if you can show the mere fact of an invasion, regardless of intent
Nuisance requires much more balancing and might end up not getting relief
3) Zoning - often can preemptively avoid incompatible uses
4) Environmental regulatory agency rules
5) Covenants - best only for small things between private parties
Nuisance
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Nuisance
Remedies:
Damages
Can require ongoing damages until harm stops - can induce nuisance to modify
their actions
Permanent damages may be like licensing a wrong and may not induce behavior
change, or it could be that the damage was done and the permanent pay -out
will suffice b/c no one will live there anymore
Injunction
If there is social utility, this might not be the best option, but it does create a
bright line rule, which may prevent future litigation, or you could just feel that
the harm is too great or the nuisance is too rich that monetary damages would
have no effect or this could just be the jurisdictional rule in certain situations
and this is the only option
Although it can be a start to bargaining if you allow
Nuisance to pay harmed party for the injunction
But, this is like licensing a wrong
Parties can also choose to do this privately, and that would not be
licensing the wrong w/o their consent, but their can be transaction
costs, holdouts that put the nuisance out of business, etc
Or say that the injunction is only until they can negotiate a tolerable level
b/w the parties
Or say injunction is only until they can come up with technological
advances that eliminate the problem
Also, could incentive ppl to complain to the legislature, which would get
regulatory agencies to take over, which is good
Combination
Complaining party must pay the nuisance to move
How to decide? Weigh
Social utility
Ability to prevent the harm and still operate
Who is a nuisance?
Social utility - balance to see which use has more social utility
Although this might not be the best starting point, b/c then it will be weighed
twice - here and in the remedies
Also, tends to favor big business and disfavor private landowners, etc.
Coming to the nuisance argument
Sometimes this is reflected in the property values at the time of moving towards
the nuisance
Substantial, intentional, unreasonable - this is usually the starting point - see decision
tree
Substantial - frequency of occurrence, degree of harm, some jurisdictions say
$100 worth of harm
Is this a highly sensitive complainant?
Intentional
Some jurisdictions say acting with the purpose of creating the harm
(narrow)
Others say acting knowingly, even if there was not harmful intent (broad)
Unreasonable - this is
1) only looking at the degree of harm to the plaintiff - no cost/benefit
analysis
So, the harm gets weighed doubly - here and in substantial
2) Balancing the degree of harm with
a) Benefits provided by the defendant
b) Cost to the defendant of preventing the harm
c) Plaintiff's role in reducing the harm
Remember, if there is a ramping up, then there is a new nuisance claim
1. Substantial ?
Yes
Unintentional
Intentional
Reckless or negligent?
(or ultrahazardous) could look at moving to
the nuisance or poor
site choice
No
Yes
Unreasonable?
No
Remedies
No liability, so
no remedies
No liability, so
no remedies
Remedies
Trespass
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Eminent Domain
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Eminent Domain
1) Public use/purpose
2) Was there a taking?
i. Categorical rule of characterization of the taking - if there is a permanent, physical
occupation by a third party, then it is a taking - hurts the right to exclude
1) BUT, permanent can be ambiguous
ii. Was the area already open to the public? If so, generally you can't exclude, but you can
regulate time, place and manner (Pruneyard, State v. Shack)
iii. Distinct investment backed expectations?
iv. Conceptual Severance v. property as a whole?
v. Extent of diminution?
vi. Is it land or coal/clay?
vii. Is there an unfair burden on a private party on behalf of the public?
viii. Is it 100%?
ix. Did the gov't go too far?
1) If the gov't had to pay for everything, we wouldn't be able to afford to provide
anything
x. Are there reciprocal benefits and burdens?
xi. Did the regulation take away 100% of its value, even if there is no actual taking? Consider:
1) Degree of harm to public land and resources or adjacent private property by
claimant's activities
2) Social value of these activities and their suitability to that location
3) The relative ease w/ which harm can be avoided by actions taken by claiment, gov't or
neighbors
4) THEN - if it is 100% - nuisance only = common-law nuisance
3) Just Compensation
i. Preventing a nuisance/w/in police powers? - no compensation required
ii. Providing a good? - then, must compensate
iii. Fair Market Value
1) AT THE TIME of the announcement of the taking (not after all the litigation, when the
market value will have already dropped) - although, even the announcement will drop
the value
iv. Replacement value - how much would it cost you to come back and buy the same square
footage? - no standard, b/c hard to take into account indiv. characteristics, sentimental
value, etc - ppl who willingly sell w/o litigation are likely to get more $
v. Transferrable Development Rights (TDRs)
4) Standard of review
i. Generally, it is a reasonable basis review/rational review (coupled with the deference to
lower courts provides a LOT of leeway to gov't)
ii. If it were higher, it could work back around and help gov't to hold promisors accountable
1) Although, corporations are liable to their shareholders - not reasonable to expect
them to stay at a loss to their shareholders
Cases
Kelo (Pfizer in New London)
Loretto (cable lines)
Causby (overflight)
Kaiser Aetna (dredged lagoon)
Pruneyard Shopping Center (annoying pamphleteers)
Yee v. City of Escondido (rent control - can't evict to raise the rent - no taking b/c not
permanent - you can stop renting or they can move out)
Andrus v. Allard (eagle feathers - right to sell was not so valuable a right that removing it
was considered a taking)
State v. Shack (migrant farmworkers)
City of Euclid v. Ambler Realty (75% loss to zoning - no taking)
Hadacheck (loss of brick making - no taking)
Pennsylvania Coal (conceptual severance - taking 100% of support estate)
Kestone Case (overrules PA Coal - says regulating a nuisance)
Penn Central (landmarks and TDRs)
Lucas (SC island restricted bldg)
Nuisance?
Yes
100% loss?
Yes
No - no taking no
compensation
What type of
nuisance is it?
(redefinition at
this point)
A nuisance that
does not violate
any prior
common law
nuisance
regulation compensation
A nuisance that
violates
common law
nuisance
regulation - no
compensation
Regulatory takings
Physical Invasion
Nuisance
(gov't will always claim they are
preventing a harm)
Is it less than 100% taking?
If it is less than 100%, and it truly is a
nuisance, then there is no taking
If it is 100%, then we look at
background law (common law rules),
and if it is a nuisance under the
common law rules, then there is no
taking
If it is 100% and it is not a common
law nuisance, then it goes back to the
Penn Central balancing test of nonnuisance regulation (Lucas)
There will also be pressure on the
definition of property (interests) in
determining %age of loss