Property

Question 1

A. Why Recognize property?

Answer 1

a. ANSWER: It’s a good idea because of the five theories of property.

Question 2

1. Five Theories of Property

Answer 2

a. Protect First Possession
* First come, first serve
* WHEN, WHY
* The first-in-time concept has less relevance today because almost every tangible thing is already owned by someone
b. Encourage labor
* each person was entitled to the property produced through his own labor
* Locke argued that when a person “mixed” his own labor (which he owned) with natural resources (which were unowned), he acquired property rights in the mixture
* EX: Farm = good; unfarmed = bad
c. Maximize societal happiness
* Under traditional utilitarian theory, as developed by Jeremy Bentham, we recognize property in order to maximize the overall happiness of society. Thus, it is a means toward an end
* The idea is that we all benefit from capitalism & increased production of goods
d. Ensure democracy
* property facilitates democracy
* If you have a stake in the laws passed you will participate in the political system
e. Facilitate personal development
* Hegel – personhood theory argues that property is necessary for an individual’s personal development
o Let’s recharacterize this list into three:
* Making life meaningful (individual view)
* Encouraging investment (community view)
 Giving incentives
* Prevent self-help (helps establish order) (society view)

Question 3

• Pierson v. Post (S. Ct. of NY, 1805)

Answer 3

o Facts
* Post (plaintiff) was hunting a fox and Pierson (defendant), seeing this, captured and killed the same fox.
* Post was hunting a wild animal in New York on unowned land
* Pierson took the fox to spite Post
* Post brought a trespass suit claiming that he had legal possession of the fox.
o Procedure
* The lower court found in favor of Post. Pierson appealed.
o Rule
* Property in wild animals is acquired by occupancy, meaning at least mortally wounding or capturing from a distance, and at most physical possession.
 The person that owns the fox is the person that OCCUPIES the fox.
 Pierson argues that occupancy = capture AKA actual possession
 Majority opinion’s rule has the virtue of certainty
o Application (majority)
* Formalist approach
 Formalist because it consults various philosophical authorities
* To have property rights, a person must establish occupancy, but the steps required to do so is a question of first impression for this court.
* In light of these principles, this court holds that mere pursuit of a wild animal, without mortally wounding or trapping the animal, is not enough to confer property rights.
* In this case, Post was merely pursuing the fox in question; there is no way he could guarantee that he was going to take possession of the fox.
* Once Pierson captured the fox and took possession, he became the rightful owner.
o Conclusion
* The decision of the lower court is reversed.
o Livingston dissent
* Instrumentalist approach
 Dissent is just asking, “what is a good rule?”
* Property in wild animals is acquired when the pursuer is within reach or has a reasonable prospect of taking physical possession.
 Post wants the court to adopt the standard of: hot pursuit + reasonable prospect of success
 The problem is this is very subjective and not certain at all
* The laws should change with the times.
 Foxes are nuisances, and killing them off serves the public good.
 Hunters will not invest the labor needed to hunt foxes if others can intercept them just before the kill.
* The ruling of the lower court should be affirmed.
o Notes
* Both sides agree that property rights in a wild animal are acquired by the first person to take possession of the animal, a principle called the rule of capture

Question 4

• White v. Samsung Electronics America, Inc. (9th Cir., 1992)

Answer 4

o Facts
* Samsung Electronics America, Inc. (defendant) ran an advertising campaign in which the company displayed its predictions of the future.
* One of the predictions included an image of a robot wearing a dress and pearls on a game show, turning tiles that displayed different letters of the alphabet.
* The image immediately called to mind Vanna White (plaintiff) on “Wheel of Fortune,” although White was never mentioned by name.
* Samsung did not obtain permission from White before airing this advertisement.
* White subsequently brought an action against Samsung for violation of the California common-law right of publicity.
o Rule
* The common-law right of publicity can protect a celebrity’s identity from unauthorized commercial exploitation.
o Application
* Although the defendants in these cases avoided the most obvious means of appropriating the plaintiffs’ identities, each of their actions directly implicated the commercial interests which the right of publicity is designed to protect
* A court may consider the surrounding circumstances in determining whether a celebrity’s identity has been used. In this case, it is true that White is neither pictured nor mentioned by name in Samsung’s advertisement. However, the robot with a dress and pearls, combined with the turning of the tiles on a game show, calls to mind White on “Wheel of Fortune.”
* Thus, enough evidence exists to reinstate White’s claim that Samsung’s unauthorized use of her identity violated her common-law right of publicity.
o Conclusion
* The judgment of the court below is reversed.
o Alarcon dissent
* The majority fails to distinguish between White and the role that she plays on television.
 Her role on television does not include any creativity on her part and could easily be completed by another person.
 The advertisement in question does not show White; it shows a robot wearing a dress and pearls on a game show.
 This robot is a generic depiction of a game show hostess and not necessarily a depiction of White. Thus, the judgment of the court below should be affirmed.
* White v. Samsung Electronics America, Inc. (9th Cir., 1993)
o Conclusion
* In this case, Samsung’s petition for rehearing is denied, and the suggestion for rehearing en banc is rejected.
o Kozinski dissent
* The majority has inappropriately broadened publicity rights in California, creating a prohibition on simply evoking the image of a celebrity in the public’s mind.
* Intellectual-property law must strike a proper balance between the intellectual property owner’s ownership rights and the public’s need to have a forum for creativity free from encumbrances.
* The majority’s decision inappropriately tips the right-of-publicity scale in favor of celebrities.

Question 5

• Six common narratives for when property rights are persuasive/compelling

Answer 5

1. First in time
   i. First come, first serve
   ii. EX: “I was using that.”
2. Possession
   i. EX: “I have it now.”
3. Labor
   i. You reap what you sew
4. Attachment
   i. “My home is my castle.”
5. Bodies/self
6. Family

Question 6

• What is Property?

Answer 6

• The right to transfer
• The right to exclude
• The right to use
• The right to destroy

Question 7

• Property rights …

Answer 7

• Property rights are defined by government
• Property rights are not absolute
• Property rights can be divided
• The actual property might not be able to be divided, but the rights can be
• Property rights evolve as law changes

Question 8

1. Elements of adverse possession

Answer 8

o A typical state requires:
* Actual possession
 Use the land in the same manner that a reasonable owner would given its character, location, and nature, or more intensively than a reasonable owner would
 EX: summer home?
* Exclusive possession
 Not shared with the owner or the public in general
 EX: trespassing signs? Preventing others from entering?
* Open and notorious possession
 Visible and obvious
 True owner would have discovered it if they made a reasonable inspection of the land
* Adverse and hostile possession (some states also require claim of right)
 Some states want the claimant to believe in good faith that he owns the land
 In most states, claimant’s state of mind is irrelevant
 Some states require bad faith– claimant must intend to take title from owner
* Continuous possession
 As continuous as a reasonable owner’s would be
* For the statutory period
 Ranges from 5-40 years

Question 9

• Gurwit v. Kannatzer (Court of Appeals of Missouri, 1990)

Answer 9

o Facts
* In 1963, the Gurwits (plaintiffs) purchased land in Missouri.
* The seller represented to the Gurwits that the purchased land included a certain 17-acre tract, and the Gurwits believed him.
* However, in 1983 the Gurwits learned their neighbors, the Gruenders (defendants), had record title to the tract and the tract had been included in the Gruenders’ tax bill.
* Between 1963 and 1983, the Gurwits had posted “no trespassing” and “no hunting” signs on the 17-acre tract, entered the tract to access the rest of the property, cleared away brush and downed trees by the tract, cut firewood and gave friends permission to cut firewood on the tract with the Gruenders’ apparent approval, and were notified by the Gruenders when people trespassed on the tract.
* Before 1983, both sides mistakenly believed that the Gurwits owned the disputed tract
* Additionally, after 1983, the Gurwits paid the taxes on the tract.
* The Gurwits instituted an action to have the title for the tract quieted in themselves, with the Gruenders as defendants.
 A quiet title action is a lawsuit brought to establish the plaintiff’s title to land
* The Gruenders filed a counterclaim seeking to have title quieted in themselves.
o Rule
* Under Missouri law, a person whose possession of a property is hostile, actual, open and notorious, exclusive, and continuous for the statutory period of 10 years may gain title to that property by adverse possession.

Question 10

• Van Valkenburgh v. Lutz (Court of Appeals of NY, 1952)

Answer 10

o Facts
* The Lutz family (defendant) bought Lots 14 and 15 in Yonkers in 1912.
 Between then and 1947, they accessed their property by cutting across Lots 19-22 (collectively, Lot 19).
* Over time, Lutz built a structure and started a gardening business on Lot 19, which he knew that he did not own.
* In 1947, the Van Valkenburgh family, with whom the Lutzes did not get along, purchased Lots 19-22 and demanded that Lutz remove his structures and garden from Lot 19.
 Lutz agreed to do so, but claimed that his family should be permitted continuing use of the path through Lot 19 to access his property. He then removed some of the structures from the land.
* Van Valkenburgh erected a fence blocking the path that Lutz had claimed a right to use.
* Lutz sued Van Valkenburgh, arguing that while Van Valkenburgh owned the land, he (Lutz) had established a right of way through it.
o Rule
* A party takes adverse possession of a property owned by another when he takes actual possession of it, encloses it and/or makes improvements to it, for statutory period of years.
o Conclusion
* The judgment of the trial court is reversed, and Lutz’s counterclaim is dismissed. The trial court must enter judgment in Van Valkenburgh’s favor subject to the previously established right of way.

Question 11

• Prescriptive easement

Answer 11

o Right to cross through the property, pass by, etc
o You don’t need exclusive use, but you need the other requirements of adverse possession: actual possession, open and notorious, adverse and hostile, continuous, for the statutory period

Question 12

• Tacking only works when

Answer 12

there is privity or a special relationship

Question 13

• When an item is separated from its owner:

Answer 13

o Lost items are awarded to the finder, assuming the owner is missing.
o Mislaid items are awarded to the locus in quo – whoever owns the land/is operating the business
* Locus in quo – the location where an event took place AKA the owner of the land
o Abandoned property is awarded to the finder

Question 14

• Elements of mislaid:

Answer 14

1. Voluntary placement of the object by the true owner
2. With an intent to return

Question 15

• Armory v. Delamirie (King’s Bench, 1722)

Answer 15

o Facts
* Armory (plaintiff), a chimney sweep, found a jewel in the course of his duties.
* He took the jewel to Delamirie (defendant), a goldsmith, for purposes of appraisal.
* Delamirie’s apprentice appropriated the jewel through deceit and refused to return it to Armory.
* Armory sued for the return of the jewel or for its value.
o Rule
* A person who finds a piece of chattel has a possessory property interest in the chattel, which may be enforced against anyone except the true owner of the chattel.
 Note: It’s not that the finder wins unless the true owner emerges. It’s that the finder has the superior claim unless there is some prior possessor, which might include the true owner.
o Application
* The finder’s possessory rights are superior to everyone else’s except for those of the true owner.
* Hence, Armory was entitled to return of the jewel from Delamirie.
* Here, Delamirie was liable to Armory for the acts of his apprentice.
* Also, because Delamirie had not returned the actual jewel and therefore could not prove that it was damaged or its value was otherwise impaired, the jury was entitled to presume that the jewel was of the highest quality and award damages accordingly.
o Conclusion
* Hence, Armory was entitled to return of the jewel from Delamirie.

Question 16

• Hannah v. Peel (King’s Bench, 1945)

Answer 16

o Facts
* In 1938, Major Hugh Peel (defendant) was granted ownership of a house.
 There is no indication that Peel ever lived in the house.
* In 1940, Lance-Corporal Hannah (plaintiff) lived in the house while it was requisitioned for the quartering of soldiers.
* While there, Hannah found a brooch embedded in a windowsill.
* Hannah reported his find to the police, who held the brooch for two years.
 When no owner was found, the police gave the brooch to Peel, who sold it for 66£ in 1942. (The brooch was subsequently resold by the jeweler for 88£).
* In 1943, Hannah sued for return of the brooch or for its value.
o Rule
* A finder of lost chattel on another’s property has rights to that chattel superior to the rights of the property owner.
* Here, Hannah found the brooch that had clearly been lost. The fact that it was found on Peel’s property did not grant Peel any ownership interest.
* Peel was never physically in possession of the house and had no knowledge or control over the brooch.
* The fact that the brooch was “lost” inside Peel’s house was happenstance and conferred no possessory interest on Peel.
o Conclusion
* Judgment for Hannah entered in the amount of 66£.

Question 17

Key Flash Card #2
* Bailee: someone who is in lawful possession of something owned by someone else (owner = bailor)

Answer 17

• Bailee: someone who is in lawful possession of something owned by someone else (owner = bailor)
  o EX: valet
• Duties of a bailee
• Nature of the bailment & duties of the bailee
  o (1) those for the primary benefit of the bailor
• Bailee is liable only if the property is damaged because of gross negligence or bad faith
• Duty: refrain from gross negligence
  o (2) those for the primary benefit of the bailee; and
• Extraordinary care is required
• Duty: Similar to strict liability
  o (3) those for the mutual benefit of both the bailor and the bailee;
• Duty: Bailee has the duty to take reasonable care of the property (negligence)

Question 18

Adverse possession of personal property

Answer 18

• Discourage theft v. function confidence
  o Discouraging theft
• You can’t get good title from a thief
   A thief destroys the chain of title
   The only way you can get good title from a thief is through adverse possession– if the thief has adverse possession ownership of the thing.
  o Markets functioning with confidence
• Entrusting
• Although you can’t get good title from a thief, you can get good title even if the item has other ills in it like fraud, duress, mistake, etc.
  o Conflict between innocent victim (had item stolen) and innocent purchaser (bought stolen item from thief)
• Btw: pets are property.

Question 19

Elements of a gift

Answer 19

1. Intent
   a. The owner’s intent to make immediate irrevocable transfer of title
2. Delivery
3. Acceptance
   a. Acceptance is presumed, so the element is really just “not rejection.”

Question 20

• Is there intent, delivery, and acceptance?

Answer 20

o Yes –> it is a gift
* Is it made in contemplation of death?
 Yes –> gift causa mortis
* Revocable if donor doesn’t die
 No –> inter vivos gift
* Irrevocable
o No –> it is not a gift
* It doesn’t matter whether it’s a gift causa mortis or an inter vivos gift unless the DONOR does not die.

Question 21

1. Inter vivos gift

Answer 21

o a gift is the immediate transfer of property rights from the donor (the person making the gift) to the donee (the person receiving the gift), without any payment or other consideration
o inter vivos gift—the ordinary gift of personal property that one living person makes to another, like the gift at a birthday party
o essential elements for a valid inter vivos gift are
* donative intent,
* delivery,
 The property must be delivered to the donee, so that the donor parts with dominion and control
* Acceptance
 The donee must accept the property—although acceptance of a valuable item is usually presumed

Question 22

• Gruen v. Gruen (C of A of NY, 1986)

Answer 22

o Facts
* Gruen’s (P) father wrote a letter to him giving him a painting for his birthday. However, the elder Gruen reserved a life estate for himself.
* The original letter was destroyed on the instructions of the elder Gruen. The elder Gruen felt this was necessary for tax reasons.
* However, he did send a second letter to his son Gruen (P) giving him the painting, though not mentioning that he reserved a life estate in himself.
* Seventeen years later, the elder Gruen died. Mrs. Gruen (D), the plaintiff’s stepmother, then had possession of the painting and refused to deliver it to Gruen (P).
* Mrs. Gruen (D) contended that the purported gift was invalid because title vested only after the death of her husband.
* That is, she contended that the gift was testamentary and did not satisfy the formalities of a will.
* Alternatively, Mrs. Gruen (D) argued that a donor may not make a valid gift of a chattel while reserving a life estate in himself because possession is not delivered.
 She contends that the purported gift was testamentary in nature and invalid insofar as the formalities of a will were not met or, alternatively, that a donor may not make a valid inter vivos gift of a chattel and retain a life estate with a complete right of possession
o Rule
* WHEN A GRANTOR MAKES A PRESENT TRANSFER OF A FUTURE INTEREST, TITLE TO THE FUTURE INTEREST VESTS AT THE TIME OF THE GIFT
* To make a valid inter vivos gift, the donor must intend to make a present transfer, either actual or constructive delivery of the gift must occur, and the donee must accept the gift.
o Application
* To make a valid inter vivos gift,
 (1) the donor must intend to make a present transfer,
* An inter vivos gift requires that the donor intend to make an irrevocable present transfer of ownership; if the intention is to make a testamentary disposition effective only after death, the gift is invalid unless made by will
 (2) either actual or constructive delivery of the gift must occur, and
* In order to have a valid inter vivos gift, there must be a delivery of the gift, either by a physical delivery of the subject of the gift or a constructive or symbolic delivery such as by an instrument of gift, sufficient to divest the donor of dominion and control over the property
 (3) the donee must accept the gift.
* Acceptance by the donee is essential to the validity of an inter vivos gift, but when a gift is of value to the donee, as it is here, the law will presume an acceptance on his part
* Mrs. Gruen (D) errs in maintaining that her husband intended to make a transfer of title only at his death. On the contrary, he intended to make a present transfer of a future interest.
* As to Mrs. Gruen’s (D) contention that the gift was invalid because possession was not delivered, we note that the rule that possession must be delivered to consummate a gift is flexible.
 The better statement of the rule provides that the delivery that is required is that delivery that is best under the circumstances.
* This wasn’t a gift of the painting– it was a gift of the future interest in the painting
* In this case, since Gruen (P) had only a remainder, it was impossible to deliver such an interest until his father had died.
* Moreover, it would be silly to have the elder Gruen deliver possession merely to take it back so that he could enjoy his life estate.
* Victor intended a present transfer of a future interest, rather than a future transfer of a present interest
 “I give you the painting but I want to keep it until I die”
* This was an immediate, irrevocable transfer, of a FUTURE INTEREST.
o Conclusion
* Judgment affirmed.

Question 23

2. Gift Causa Mortis

Answer 23

o A gift causa mortis is a gift of personal property made by a living person in contemplation of death
o four essential elements for a gift causa mortis:
* donative intent,
* delivery,
* acceptance,
* the donor’s anticipation of imminent death
o a valid gift causa mortis is immediately effective when it is made
o unlike its counterpart the inter vivos gift, the gift causa mortis is revocable. The donor may revoke it at any time before her death

Question 24

Life Estate

Answer 24

§ The duration of a life estate is measured by the lifetime of a particular person. When that person dies, the estate terminates
§ A life estate is created by language that clearly indicates this intention, such as “to B for life.” The words “for life” are the traditional words of limitation creating this estate
□ Grantor retains a future interest (a reversion) that becomes possessory upon the end of grantee’s life estate
EX: O grants to C for life, then to D. Here, D retains a remainder.

Question 25

Fee Simple Absolute

Answer 25

• absolute = no limitation)
  o the holder has all the rights in the metaphorical bundle of sticks
  o duration of a fee simple absolute is potentially infinite
  o The words “and his heirs” convey no interest to B’s heirs
  o Conveys = to give
  o Devise = this conveyance is happening because of a will. So the grantor has died.
  o states presume that the grantor intends to convey a fee simple unless he uses words of limitation that specifically convey a different estate
  o The fee simple is freely alienable (it can be sold or given away during the owner’s lifetime), devisable (it can be transferred by will at death), and descendible (it can pass by the laws of intestate succession if the owner dies without a will)
  o Grantor with a fee simple absolute that conveys/devises a life estate or term of years will get the property back upon the death of the grantee/expiration of the term of years

Question 26

Estates

Answer 26

• Fee simple
  o Text
• To Ann and her heirs
• To Ann in fee simple
• To Ann
  o Actions:
• Alienable
• Devisable
• Descendible
  o Ambiguity is resolved in favor of fee simple
• Fee simple determinable
  o Text
• Too Ann as long as
• To Ann while
• To Ann until
• To Ann during
  o Actions
• Alienable
• Devisable
• Descendible
  o Not subject to waste
• Fee simple subject to a condition subsequent
  o Text
• To Ann provided that
• To Ann but if
• To Ann on condition that
  o Actions
• Alienable
• Devisable
• Descendible
  o When ambiguity exists, preferred over a FSDet
  o Not subject to waste
• Fee simple subject to an executory limitation
  o Text
• To Ann as long as, while, until, during, provided that, but if, on condition that.. Then to Bob
  o Actions
• Alienable
• Devisable
• Descendible
  o Future interest in a third party follows the estate
  o Not subject to waste
• Fee tail
  o Text
• To Ann and the heirs of her body
  o Actions
• Alienable
• NOT Devisable
• Descendible
  o May only alienate right to possession until death
  o Descends only to lineal descendants
• Life estate
  o Text
• To Ann for life
• To Ann until she dies
  o Actions
• Alienable
• Not devisable
• Descendible
  o Subject to waste
  o When conveyed to another becomes LE pur autre vie
• Term of years
  o Text
• To Ann for 20 years
  o Actions
• Alienable
• Devisable
• Descendible
  o Subject to waste

Question 27

• Future interests retained by the transferor:

Answer 27

o Reversion
o possibility of reverter
o right of entry

Question 28

• Future interests created in a transferee:

Answer 28

o indefeasibly vested remainder
o vested remainder subject to divestment
o vested remainder subject to open
o contingent remainder
o executory interest

Question 29

• Future interests:

Answer 29

1. Transferor
   * Reversion
   * Possibility of reverter
   * Right of entry
2. Transferee
   * Remainder
    Vested
   * Indefeasibly
   * Subject to divestment
   * Subject to open
    Contingent
   * Executory interest
    Shifting
    Springing

Question 30

1. Future interests retained by the transferor

Answer 30

o Reversion: A transferor retains a reversion when she conveys a smaller vested estate than the one she has. Technically, a reversion is the future interest remaining in the transferor when she grants a vested estate of lesser quantum (that is, potential duration) than she began with
* Reversion follows a life estate or a term of years.
* Reversions ABSOLUTELY become possessory eventually. Unlike possibility of reverter or right of reentry, which might never become possessory.
o Possibility of reverter: The possibility of reverter is the future interest retained by the transferor who holds a fee simple absolute, but conveys a fee simple determinable. Since there is a possibility that the fee simple determinable might end, this future interest gives the transferor the right to possession if that estate terminates
o Right of entry: The right of entry is the future interest retained by the transferor who holds a fee simple absolute, but conveys a fee simple subject to a condition subsequent
o the right of entry does not become possessory until and unless the holder takes affirmative steps to regain possession

Question 31

2. Future interests created in a transferee

Answer 31

o A future interest created in a transferee can only be a remainder or an executory interest. So here’s a handy rule: if you encounter a future interest created in a transferee that is not a remainder, it must be an executory interest and vice versa.

Question 32

o Remainders

Answer 32

• A remainder is a future interest in a transferee that: (1) is capable of becoming possessory immediately upon the expiration of the prior estate; and (2) does not divest (or cut short) any interest in a prior transferee.
   The only way an interest is NOT capable of becoming possessory immediately upon the expiration of a prior interest is if the grant said something like “O to A, then, 6 months later, to B.” That would not be immediate.
• Does not divest: A remainder “waits patiently” for the preceding estate to expire before it becomes possessory

Question 33

• Indefeasibly vested remainder

Answer 33

• Indefeasibly vested remainder: A remainder is vested if
• (1) it is created in a readily ascertainable person and
• Created in an ascertainable person: Who is an “ascertainable person”? A person who is both alive and identifiable at the time of the transfer
• Needs to be a name. Not something like “my oldest living son at the time.”
• (2) it is not subject to a condition precedent other than the natural termination of the prior estate
• No condition precedent: A condition precedent is a condition that must be met before the remainder can become possessory, other than the natural termination of the prior estate

Question 34

• Vested remainder subject to divestment

Answer 34

• Vested remainder subject to divestment: This is a remainder that is vested, but is subject to a condition subsequent
• The interest may never actually become possessory

Question 35

• Vested remainder subject to open

Answer 35

• Vested remainder subject to open: This is a vested remainder held by one or more living members of a group or class that may be enlarged in the future

Question 36

• Contingent remainder

Answer 36

• Contingent remainder: If a remainder is not vested, it is contingent. Thus, a contingent remainder is a remainder that is either
• (1) given to an unascertainable person or
• (2) subject to a condition precedent

Question 37

o Executory interests

Answer 37

• An executory interest is a future interest in a transferee that must divest another estate or interest to become possessory. This is the exact opposite of the remainder. Thus, if a future interest in a transferee is not a remainder, it is an executory interest.
• If an executory interest follows an interest in the transferor, it is a springing executory interest; if it follows an interest in a transferee, it is a shifting executory interest. There is no substantive legal difference between springing and shifting executory interests. These are only convenient labels

Question 38

1. Rule in Shelley’s Case

Answer 38

• Before Shelley’s Rule, it would be hard for M to sell the land because the buyer can only have it until M dies.
• Rule in Shelley’s case says here (a sequence like this in a chain, even if they aren’t next to each other), if you see someone and then another transaction which is the someone’s heirs, the rule in shelley’s case says “let’s consolidate those” and convert it to a fee simple absolute to M.
• When you see two transactions: one to X and one to X’s heirs –> CONSOLIDATE THEM INTO FEE SIMPLE ABSOLUTE FOR X.
  o The Rule in Shelley’s Case addressed this problem by converting the contingent remainder in the heirs of the grantee into a vested remainder in that grantee
  o If a freehold estate is given to a person and, in the same instrument, a remainder is given to the heirs (or the heirs of the body) of that person, he takes both the freehold estate and the remainder.
  o In the United States, the rule has been abolished by statute in almost all jurisdictions

Question 39

2. Doctrine of Worthier Title

Answer 39

a. O conveys to D for life, then X so long as a school is on the property, then to O’s heirs.
1. D: Possessory estate in life estate (no limitation)
2. X: vested remainder in fee simple subject to an executory limitation
1. Remainder
a. Capable of becoming possessory upon expiration
b. Does divest prior interest, so it is an executory interest
2. Vested
a. Readily ascertainable person
b. No condition precedent
3. O’s heirs: shifting executory interest in fee simple absolute
1. Not a remainder because it divests prior interest, so it is an executory interest
a. Shifting because follows transferee
o a grantor could not create a remainder or executory interest in his heirs. If the grantor attempted to create such an interest, that interest was void and the grantor was deemed to retain a reversion
o If a grantor creates a remainder or an executory interest in his own heirs, the grantor retains a future interest in himself rather than creating a future interest in those heirs.
o Generally does not apply anymore

Question 40

3. Doctrine of Destructibility of Contingent Remainders

Answer 40

o rule that required all contingent remainders to vest by the end of the preceding estate.
* Notice that this rule is applied on a “wait-and-see” basis. A contingent remainder is valid when created. But if it has not vested by the time the prior estate ends, the contingent remainder is destroyed
o Any contingent remainder that has not vested at the termination of the preceding freehold estate is destroyed
o Today the doctrine has been abolished in almost every jurisdiction
* Under the modern approach, if a contingent remainder does not vest before the prior estate ends, it becomes an executory interest

Question 41

VIII. Rule Against Perpetuities

Four part test

Answer 41

1. When do we even need to worry about the rule of perpetuities
   a. Applies only to contingent remainders, executory interests, and vested remainders subject to open
2. State the contingency
   a. The “WILL…” question/the mystery
3. Identify the lives in being (circle them)
   a. Who of these people (the people in the chain) were alive at the time of the conveyance in question?
4. Will we know the answer to mystery (Q2) within 21 years after the deaths of the people who’s lives were circled
   a. Hint: It matters whether O is devising or conveying. Devise = O died already.
   b. The answer to the mystery does not need to be “yes.” We just need to know the answer to the mystery.

• No interest is good unless it must vest, if at all, no later than 21 years after some life in being at the creation of the interest

Question 42

o Three types of concurrent ownership:

Answer 42

• Tenancy in common
   “To A and B”
   Each has an undivided, fractional interest in the property
• Interests could be different from one tenant in common to the other, or they could be equal
   Freely alienable, devisable, and descendible
   Each has the right to use and possess the whole parcel, even if his fractional interest is smaller than others’ interests
   When property is sold, proceeds divided pro rata
• Joint tenancy (with rights of survivorship)
   “to A and B as joint tenants with right of survivorship”
   Clear statement rule: You don’t get a joint tenancy without using the magic words– the magic words are not “joint tenants,” they are “right of survivorship”
   Tenants must have equal shares
   Similar to tenancy in common: undivided right to use and possess the whole property
   Each joint tenant has a right of survivorship
• When one dies, the other automatically gets the sole interest
• When both die, interests are split among the heirs.
• EX: A and B are joint tenants. A and B die. A’s heirs and B’s heirs are now joint tenants.
   Neither devisable nor descendible
   At common law and in some jurisdictions today, a joint tenancy is created only when the four unities of time, title, interest, and possession are present:
• Time: all get interests at the same time
• Title: title by the same instrument (same deed)
• Interest: same shares in the estate, equal in size and duration
• Possession: equal right to possess, share, and enjoy the whole property
• Like with tenancy in common, all tenants have right to use the entire parcel
• If unity of time, title, or interest is missing, tenancy in common is created
   If one joint tenant transfers their interest, joint tenancy is severed
• Grantee becomes a tenant in common with the other concurrent owners
   If one joint tenant rents out the property to someone who leases it, the deceased’s interest still goes to the other joint tenant.
• Tenancy by the entirety
   Some states follow the traditional view that any conveyance or devise to a married couple creates a tenancy by the entirety
   Other states require language showing intent to create this estate
   “to A and B as tenants by the entirety”
   Requires presence of four unities of time, title, interest, and possession, plus the fifth unity of a valid marriage
   Like a joint tenant, they each have an undivided right to use and possess the whole property and a right of survivorship
   While a joint tenancy can be severed unilaterally by any joint tenant, a tenancy by the entirety can only be ended by death, divorce, or the agreement of both spouses
   Some states say that neither spouse can transfer or encumber their interest
   Many jurisdictions allow holders to partially shield their assets from creditors

Question 43

• Tenhet v. Boswell (SCT CA, 1976)

Answer 43

o Facts
* Johnson and Tenhet (plaintiff) owned a parcel of land as joint tenants.
* Johnson leased the land to Boswell (defendant), but died before the lease ended.
* Tenhet ordered Boswell to vacate the land, but he did not do so.
* Tenhet brought this suit for a declaratory judgment that the lease was invalidated by Johnson’s death.
o Rule
* A lease does not sever a joint tenancy, but expires upon the death of the lessor.

Question 44

• some states follow a title theory of mortgages while others use a lien theory.

Answer 44

o Under the title theory, the mortgage is seen as the conveyance of title to the mortgagee; this severs the joint tenancy because it destroys the unities of time and title.
o Under the lien theory, the mortgage is viewed merely as a lien to secure repayment of the debt; it does not end the joint tenancy because the unities are preserved.

Question 45

• Ark Land Co. v. Harper (SCT of A of WV, 2004)

Answer 45

o Facts
* In 2001, Ark Land Company (Ark Land) (defendant) purchased a portion of property belonging to several members of the Caudill family.
* The Caudill family had exclusively owned the land in West Virginia for nearly 100 years.
* Ark Land sought to purchase the remainder of their property from the other Caudill family members in order to extract coal from the entire property.
 The remaining members, however, refused to sell their land.
* Ark Land thereafter filed a suit to partition and sell the property.
* The Caudill family, in turn, sought partition in kind.
* During proceedings, the Caudill family presented expert testimony stating that the property could be partitioned in kind. But Ark Land presented expert testimony calculating that partition in kind would result in an increase of several million dollars in mining costs.
o Rule
* The economic value of property is not a decisive factor in determining whether to partition in kind or by sale.
o Application
* Partition in kind refers to the physical division of the property.
* A partition by sale is undesirable because, if one party opposes the sale, the receipt of cash proceeds is not always fair compensation for the loss of property.
 For this reason, the law of all jurisdictions reflects a presumption towards partition in kind, only resorting to partition by sale where partition in kind is inconvenient.

Question 46

landlord tenant: discrimination

Answer 46

o Right to exclude
* Carve out discrimination
 So you can exclude people for good faith reasons (or frivolous reasons, or for no reason at all), but not for discrimination
 Go look at the federal legislation (Civil Rights Act & Fair Housing Act), but also find the state law!
* Civil Rights Act – only about race
* Fair Housing Act – race, sex

Question 47

LL–tenant: estates

Answer 47

o Non-freehold estates
* Term of years
 Auto expiration (no notice or action required)
 End of term
* Periodic tenancy
 Automatic renewal (same #) absent action
 Could go on to infinity
* Tenancy at will
 Terminable any time by either party (or by death, sale, vacating)
 Infinite
* Tenancy at sufferance
 Landlord: evict or treat as renewed
 This is basically a trespasser– only difference is that their original possession was lawful
* EX: lease for “12K per year, payable 1K per month” = periodic tenancy

Question 48

LL-tenant: delivering premises

Answer 48

o American rule: It is the landlord’s obligation to deliver the RIGHT to occupy the premises– there is no obligation to deliver the actual premises

Question 49

• Neithamer v. Brenneman Property Services, Inc. (US DC, DC, 1999)

Answer 49

o Facts
* William Neithamer (plaintiff), who was gay and human immunodeficiency virus (HIV) positive, applied to rent a townhouse in September 1997.
* Neithamer provided Brenneman Property Services, Inc. (Brenneman) and its agents (defendants) with bank statements and credit reports.
* Neithamer explained to Brenneman’s agents that he had failed to make payments to creditors years before, because Neithamer had exhausted his financial resources paying the medical bills of his lover, who died of acquired immunodeficiency syndrome (AIDS) in 1994.
* Neithamer maintained good credit since 1994.
* Brenneman rejected Neithamer’s application despite Neithamer’s offers to pay a second month’s rent as security, obtain a co-signor, and pre-pay a year’s rent.
o Rule
* Once a plaintiff makes a prima facie showing of discrimination under the Fair Housing Act, 46 U.S.C. § 3601, et seq., the defendant may provide a non-discriminatory reason for rejecting the plaintiff’s housing application, but the plaintiff may rebut this by establishing the defendant’s nondiscriminatory reason is a pretext.
o Application
* A plaintiff’s claim of discrimination under the FHA is evaluated under the burden-shifting framework of McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973).
 First, the plaintiff must establish a prima facie case of discrimination.
* To establish a prima facie case, the plaintiff must show:
* (1) the plaintiff was a member of a protected class, and the defendant knew or suspected the plaintiff was a member of that class;
* Protected classes: Race, color, religion, sex, family status, or national origin
* (2) the plaintiff applied for and was qualified to rent the property;
* (3) the defendant rejected the plaintiff’s application; and
* (4) the property remained available after rejection.
* Also includes making, printing, or publishing an advertisement with discrimination based on race, color, sex, handicap, familial status, or national origin.
 Once the plaintiff makes the prima facie case, the burden shifts to the defendant to provide a non-discriminatory reason for rejecting the plaintiff.
* If the defendant provides such a reason, the plaintiff has the burden of showing the defendant’s non-discriminatory reason is a pretext for discrimination.
o Conclusion
* Under the burden-shifting framework of McDonnell Douglas, Neithamer established discrimination. Brenneman’s summary judgment motion is denied.

Question 50

• Neithamer illustrates the three-step approach that federal courts use to establish discriminatory intent under the Fair Housing Act:

Answer 50

o (1) the plaintiff establishes a prima facie case of discrimination;
o (2) the burden then shifts to the defendant to prove a legitimate, nondiscriminatory reason for his conduct; and
o (3) if the defendant meets that burden, then the plaintiff must show that the reason is a mere pretext.

Question 51

• The anti-discrimination provisions of the Fair Housing Act (42 U.S.C. § 3604(a), (b), (f)) do not apply to two types of property:

Answer 51

o (1) “rooms or units in dwellings containing living quarters occupied . . . by no more than four families living independently of each other, if the owner . . . occupies one of such living quarters as his residence”; and
o (2) any single-family house sold or rented by an owner if he does not own more than three houses and does not use a real estate broker or agent in the sale or rental.

Question 52

• The common law developed four nonfreehold estates:

Answer 52

o Term of years tenancy
o Periodic tenancy
o Tenancy at will
o Tenancy at sufferance

Question 53

• Term of years tenancy

Answer 53

o The term of years tenancy has a fixed duration that is agreed upon in advance (such as six months, two years, or 100 years).
* Once the term ends, the tenant’s possessory right automatically expires, and the landlord may retake possession of the premises.
o The term of years tenancy is commonly used in commercial leases and often seen in residential lease

Question 54

• Periodic tenancy

Answer 54

o The term of years tenancy is commonly used in commercial leases and often seen in residential lease
o Month-to-month periodic tenancies are frequently used in residential leases. Of course, the basic period could be longer than a month, which will increase the period for giving notice.

Question 55

• Tenancy at will

Answer 55

o The tenancy at will has no fixed ending point. Rather, it continues “only so long as both the landlord and the tenant desire.”
o But often the tenancy at will arises by implication, without an express agreement.
o At common law, either the landlord or the tenant could end the tenancy without any advance notice to the other.
* Today, most states require advance notice to end this tenancy, usually equal to the period of time between rent payments.
 The tenancy terminates automatically if either party dies, the tenant abandons possession, or the landlord sells the property.

Question 56

• Tenancy at sufferance

Answer 56

o The tenancy at sufferance is created when a person who rightfully took possession of land continues in possession after that right ends. It arises from the occupant’s improper conduct, not from an agreement. Accordingly, it is more a convenient label for a type of wrongful occupancy than a true estate.
o Today most states have abolished or limited the second option, in order to avoid unfairness to the tenant.

Question 57

• Effel v. Rosberg (C of A of TX, 2012)

Answer 57

o Facts
* Robert Rosberg (plaintiff) reached a settlement agreement with Henry and Jack Effel. As part of the agreement, Rosberg bought residential property from Henry and Jack.
* The agreement provided that the current resident of the property, Lena Effel (defendant), would continue to live on the property for the rest of her life, unless she voluntarily chose to vacate.
* Rosberg and Henry, with power of attorney for Lena, signed a lease incorporating these terms.
 The lease contained certain covenants governing Lena’s maintenance of the property.
 The lease did not reserve a life estate.
 Lena installed a wrought iron fence in violation of the covenants in the lease.
 Rosberg terminated the lease and ordered Lena to vacate the property.
 Lena did not vacate, and Rosberg filed a forcible detainer action.
o Procedure
* The trial court awarded possession of the property to Rosberg. Lena appealed.
o Rule
* A lease that is not for a certain period of time creates a tenancy at will.

Question 58

o Right to occupy premises (American rule) v. actual delivery (English rule)

Answer 58

• The problem we are worried about is when the prior tenant has a holdover
• Under right to occupy premises, client will sue the holdover tenant– not the landlord
   Will sue for trespass/eviction
• Under actual delivery, client will sue the landlord for breach of contract

Question 59

• Before the landlord-tenant revolution:

Answer 59

o The burden of maintenance/repair was on the tenant.
o If there is a breach of the lease, the obligation to pay rent is severable.
* The one exception to this, historically, is that if the landlord evicts the tenant, you don’t have to pay rent

Question 60

• Constructive eviction

Answer 60

o If you are a tenant’s lawyer, and you want to get out of the lease, look in the lease for any provision that is breached that significantly frustrates the purpose of the lease in the first place. You can argue that it is a constructive eviction (tantamount to evicting them), which severs the tenant’s obligation to pay rent.

Question 61

• Implied warranty of habitability

Answer 61

o Don’t need to negotiate it– it’s implied
o We generally don’t allow people to waive it

Question 62

• In re Clark (US Bankruptcy Court, PA, 1989)

Answer 62

o Facts
* Clark (defendant), a debtor in a bankruptcy proceeding, owned a 24-unit apartment building in Philadelphia, Pennsylvania.
* Five of Clark’s former tenants (plaintiffs) stated they experienced various problems with the building, including crumbling and hole-filled walls, infestations of mice, toilets that flooded and did not work, ceilings that fell in due to leaks, warped and sloping floors, broken sinks, unusable kitchens, lead paint, and no heat or hot water since 1987.
* These conditions forced the tenants to obtain heat from electronic and kerosene heaters and the warmth from the gas stoves.
* Use of these heat sources created fire and other hazards and required the tenants to place their minor children with relatives during winter.
* The tenants filed a complaint seeking damages due to the conditions of their premises.
o Rule
* Tenants can receive damages from landlords for egregious living conditions.
o Conclusion
* The tenants are awarded damages.

Question 63

• the doctrine of constructive eviction.

Answer 63

o Wrongful conduct by the landlord that substantially interfered with the tenant’s beneficial use and enjoyment of leased premises was deemed a constructive eviction.
* Under these circumstances, the tenant could vacate the premises and end the lease, thus avoiding liability for future rent
o The common law acknowledged that each lease included an implied covenant of quiet enjoyment—a promise by the landlord that he would not wrongfully interfere with the tenant’s possession

Question 64

• Fidelity Mutual Life Insurance Co v. Kaminsky (C of A of TX, 1989)

Answer 64

o Facts
* Dr. Robert Kaminsky (defendant), a gynecologist whose practice included performing abortions, leased office space from Fidelity Mutual Life Insurance Company (Fidelity) (plaintiff) for 2 years.
 The lease was executed in May 1983 and contained an express covenant of Dr. Kaminsky’s quiet enjoyment of the leased premises, conditioned on Dr. Kaminsky’s paying rent when due.
 The lease also required Fidelity to provide security service on Saturdays.
* In June 1984, anti-abortion protesters began picketing at the office building.
 Most of the protests were on Saturdays, when Dr. Kaminsky generally scheduled abortions.
 The protesters repeated and intensified their protests, often entering the building, occupying the stairs leading to Dr. Kaminsky’s office, and blocking patients from entering.
* Dr. Kaminsky complained to Fidelity through its managing agents.
 Fidelity and its agents provided no security.
 While Fidelity’s attorneys instructed its agents to distribute notices to the protesters, demanding that the protesters leave, its agents did not actually distribute those notices.
 Fidelity’s only response to the protesters was to state, through its agents, that it was aware of the issue.
* When Dr. Kaminsky sought help from the sheriff’s department, law enforcement officers refused to ask the protesters to leave, unless Fidelity or its agents gave directions to do so.
 Dr. Kaminsky abandoned the premises on or about December 3, 1984 and ceased to pay rent.
 Fidelity sued for the balance due under the lease.
o Rule
* A landlord’s failure to act in the face of repeated requests to protect a tenant’s quiet enjoyment of the premises can constitute a constructive eviction.
o Application
* In order to prevail on a claim of constructive eviction, a tenant must show:
 (1) the landlord intended that the tenant no longer enjoy the premises (which a trier of fact can infer from circumstances),
 (2) the landlord or its agents committed a material act or omission that substantially interfered with the use and enjoyment of the premises for its leased purpose,
 (3) the act or omission permanently deprived the tenant of the use and enjoyment of the premises, and
 (4) the tenant abandoned the premises within a reasonable period of time after the act or omission.
* An omission can include permitting third parties to interfere with the tenant’s quiet enjoyment.
* Here, while Fidelity did not encourage the protesters, it also allowed them to block patient access to Dr. Kaminsky’s office.
* Furthermore, a landlord’s omissions that result in blocking patient access to a practicing physician can constitute a permanent deprivation of the use and enjoyment of the leased premises for the purposes of constructive eviction.
o Conclusion
* Accordingly, the jury’s verdict is affirmed.

Question 65

• JMB Properties Urban Co. v. Paolucci (App. Ct. of IL, 1992)

Answer 65

o Facts
* Alfred Paolucci (defendant) opened a jewelry store in an Illinois mall in 1978.
* In November 1984, Barretts Audio and Video Store (Barretts) opened next door to Paolucci’s store.
 Barretts made considerable noise, making the jewelry store’s walls shake and its display cases vibrate and topple over.
* The jewelry store’s employees had to wear ear plugs, and its customers complained.
* In 1985, Carlyle Real Estate Limited Partnership XIV (Carlyle) (plaintiff) purchased the mall and hired JMB Properties Urban Company (JMB) (plaintiff) to manage it.
* Also in 1985, at Carlyle’s direction, Barretts insulated the common wall in an attempt to soundproof it, which did not help. The jewelry store lost profits.
* In August 1986, Paolucci entered into a new six-year lease with Carlyle, requiring Paolucci to operate the jewelry store for the entire term of the lease and refrain from operating any similar business within five miles of the mall.
* Barretts moved out of the mall in February 1990.
* However, Paolucci failed to pay rent for July 1990 and abandoned the premises in August 1990, two years before the end of the lease.
* Paolucci moved to a new business location within five miles of the mall.
o Procedure
* Carlyle and JMB sued Paolucci for unpaid rent and other damages resulting from Paolucci’s breach of lease.
 The trial court found Paolucci had been constructively evicted. Carlyle and JMB appealed.
o Rule
* If a tenant does not vacate the premises within a reasonable time after a constructive eviction, he waives his claim to constructive eviction.
* Constructive eviction – when the landlord’s failure to keep premises in tenantable condition– when interference with occupancy is of such a nature that property cannot be used for the purpose for which it was rented
o Application
o Conclusion
* The trial court’s judgment is reversed and remanded.

Question 66

• As a general rule, a tenant cannot assert constructive eviction due to the acts of third parties

Answer 66

o But, many courts recognize an exception to this principle if the landlord has a legal right to control the third party conduct

Question 67

• In general, a tenant seeking to rely on constructive eviction must notify the landlord about the problem, give the landlord a reasonable period to fix the problem, and then vacate the premises

Answer 67

o Some states allow the tenant to remain in possession and recover damages on a constructive eviction theory

Question 68

• If you don’t negotiate what else will be in the mall, then you probably won’t get the break for constructive eviction.

Answer 68

o If it’s something you could’ve anticipated and could’ve negotiated but you didn’t, you might not get bailed out through constructive eviction.

Question 69

3. Implied Warranty of Habitability

Answer 69

• A good starting point for the implied warranty of habitability is to look at the applicable housing code. However, merely satisfying the code doesn’t mean you haven’t breached the implied warranty of habitability. Also, if a landlord violates a housing code, it doesn’t guarantee that they’ve breached the implied warranty of habitability.

Question 70

• Wade v. Jobe (SCT of UT, 1991)

Answer 70

o Facts
* Lynda Jobe (defendant) rented a house from Clyde Wade (plaintiff).
* Soon after taking occupancy, Jobe discovered numerous defects in the house.
* After a few days, there was no hot water and a foul odor had developed throughout the house.
* The flame of the water heater had become extinguished by accumulated sewage and water in the basement.
* Jobe notified the landlord, who, on several occasions, came to pump water from the basement and relight the water heater.
* These and other problems persisted for several months until Jobe notified the landlord that she would withhold rent until the sewage problem was solved permanently.
* An inspection determined that the house was unsafe for human occupancy.
* A second inspection found numerous violations that were substantial health and safety hazards, and the house was to be condemned.
o Procedure
* Jobe vacated the premises, and Wade sued to recover unpaid rent.
* Jobe counterclaimed to offset the rent owed because of the uninhabitable condition.
 The trial court awarded Wade all the unpaid rent and dismissed Jobe’s counterclaim because Utah had not formally recognized an implied warranty of habitability. Jobe appealed.
o Rule
* If a landlord breaches the implied warranty of habitability, the tenant is entitled to a percentage reduction of the rent for the period of the breach.
* As a general rule, the warranty of habitability requires that the landlord maintain bare living requirements, and that the premises are fit for human occupation.
 Failure to supply heat or hot water, for example, breaches the warranty.
 A breach is not shown, however, by evidence of minor deficiencies such as the malfunction of venetian blinds, minor water leaks or wall cracks, or a need for paint.
o Application
* As a preliminary matter, Utah recognizes an implied warranty of habitability in residential leases.
 Under an implied warranty of habitability, a landlord represents that premises are habitable, i.e., fit for human occupation, when the lease begins and that the premises will remain habitable for the duration of the tenancy.
* Once the landlord has breached his duty to provide habitable conditions, there are at least two ways the tenant can treat the duty to pay rent.
 The tenant may continue to pay rent to the landlord or withhold the rent.
* If the tenant continues to pay full rent to the landlord during the period of uninhabitability, the tenant can bring an affirmative action to establish the breach and receive a reimbursement for excess rents paid.
* Rent withholding, on the other hand, deprives the landlord of the rent due during the default, thereby motivating the landlord to repair the premises
* The implied warranty of habitability is consistent with housing codes intended to ensure safe and decent housing.
 Whether a dwelling is habitable depends on the facts and must be determined on a case-by-case basis.
 The implied warranty of habitability may be breached by the landlord’s failure to supply basic utilities such as heat or hot water, or if the premises are hazardous or unsafe.
o Conclusion
* Now that this court has made clear that Utah recognizes the implied warranty of habitability, the matter is remanded for the trial court to consider whether Wade breached the warranty and, if so, to determine damages.

Question 71

• Sommer v. Kridel (SCT NJ, 1977)

Answer 71

o Facts
* Kridel (defendant) signed a two year lease with Sommer (plaintiff) and paid the first month’s rent and the security deposit.
* However, before Kridel was expected to move in, he wrote a letter to Sommer stating that his engagement had broken off and as a result he would no longer have the money to pay the rent.
* During the lease term a third party inquired about and was ready and willing to lease Kridel’s vacant unit, but Sommer told them that the unit was already rented to Kridel.
* Sommer did not show the apartment to anyone else until over a year after he received the letter from Kridel.
* Sommer brought suit against Kridel seeking rent for the entire two years of the lease.
o Rule
* A landlord has a duty to mitigate damages when he seeks to recover rents due from a defaulting tenant.
o Application
* If the landlord has other vacant apartments besides the one which the tenant has abandoned, the landlord’s duty to mitigate consists of making reasonable efforts to re-let the apartment. In such cases he must treat the apartment in question as if it was one of his vacant stock.
o Conclusion
* The court finds in favor of Kridel, and the decision of the New Jersey Superior Court, Appellate Division is reversed.

Question 72

Retaliatory Eviction Doctrine

Answer 72

• Landlord can’t not renew a lease because the tenant invoked some legal right, such as the implied warranty of habitability
  o If the landlord does evict the tenant for this reason, then the tenant has a cause of action for retaliatory eviction.
• Can be abused:
  o If a tenant has a feeling that landlord is going to evict them, they can then make a complaint about anything. Then if the landlord tries to evict them, they can claim that it’s a retaliatory eviction for their complaint.

Question 73

Two constraints on a landlord’s right to use/exclude their property:

Answer 73

1. Discrimination (cannot exclude for discriminatory reason)
2. Retaliatory eviction (cannot exclude in retaliation)
3. Statutory reform in jurisdictions that say when a LL rents space to someone, they’ve already committed to the person using that property. So when it comes time to renew, they shouldn’t be able to refuse renewal without a good faith reason not to. LL needs good faith in order to NOT renew a lease.

Question 74

Statute of Frauds Attack Sheet (If someone is trying to enforce a transfer of an interest in real property)

Answer 74

1. Essential Terms in Writing (E.g., Parties, Price, Property Descr.); AND
   a. The statute of frauds requires that the essential terms of the transfer be included in a writing. To be sure, [Facts)] invites [make counter-argument]. However, [Facts + argument that element is /isn’t satisfied].
2. Signed by the party to be bound
   a. The statute of frauds also requires that the writing be signed by the party to be bound. The party to be bound here is [x]. To be sure, [Facts] invites [make counter-argument]. However, [Facts + argument that element is /isn’t satisfied].
   * If elements not satisfied, look for exception to SOF:
3. Part Performance; OR
   a. Payment;
    A court may enforce the contract notwithstanding failure to comply with the statute of frauds where the buyer meets one or some combination of the following three actions. The first is where the buyer has paid at least part of the purchase price. To be sure, [Facts)] invites [make counter-argument]. However, [Facts + argument that condition is/isn’t satisfied].
   b. Possession; and/or
    An oral contract may be enforced where the buyer has taken possession. To be sure, [Facts)] invites [make counter-argument]. However, [Facts + argument that condition is /isn’t satisfied].
   c. Improvements
    An oral contract may be enforced where the buyer has made improvements. To be sure, [Facts)] invites [make counter-argument]. However, [Facts + argument that condition is/isn’t satisfied].
4. Estoppel
   a. Reasonable reliance;
    A court may enforce the contract notwithstanding failure to comply with the statute of frauds where the seller is estopped from denying the contract. Buyer must satisfy three elements to establish estoppel. The first is reasonable reliance on the seller’s oral promise. To be sure, [Facts)] invites [make counter-argument]. However, [Facts + argument that element is/isn’t satisfied].
   b. Change of position; and
    The second is the buyer’s injury/change of position. To be sure, [Facts)] invites [make counter-argument]. However, [Facts + argument that element is /isn’t satisfied].
   c. Equities justify specific enforcement
    The third is that the equities warrant the awesome power of equity. To be sure, [Facts)] invites [make counter-argument]. However, [Facts + argument that element is/isn’t satisfied].

Question 75

• three major steps in a typical real property sales transaction:

Answer 75

o Purchase contract: The parties negotiate and sign a written purchase contract, and prepare to consummate the transaction.
* Due diligence occurs between purchase contract and closing
o Closing: The contract is fully performed at the closing: the buyer pays the purchase price, the lender advances the loan funds, and the seller transfers title.
* Either party can walk away from the deal any time before closing
o Title protection: The buyer protects her title through title covenants, a title opinion based on a search of public land records, and/or a title insurance policy.

Question 76

• Hickey v. Green (App. Ct. of Mass. 1982)

Answer 76

o Facts
* Gladys Green (defendant) negotiated to sell a parcel of land to the Hickeys (plaintiffs). The parties came to an oral agreement, and the Hickeys gave Green a $500 deposit.
* The Hickeys told Green that they were going to sell their old house and build on Green’s lot.
* Less than ten days after making the deposit, the Hickeys sold their house.
* Subsequently, Green told the Hickeys that she no longer intended to sell the property to them and had found another buyer.
* The Hickeys offered to meet the other buyer’s price, but Green refused.
o Rule
* An oral land-transfer agreement may be specifically enforced, even though it violates the Statute of Frauds, if the party seeking enforcement detrimentally relied on the validity of the contract and injustice can be avoided only by specific performance.
o Application
* In this case, although the agreement between Green and the Hickeys was not in writing, the Hickeys relied on the agreement to their detriment.
 Green knew about the Hickeys’ reliance.
 Green does not deny that she entered into an oral agreement with the Hickeys.
 Further, there is no evidence that the parties planned to memorialize the agreement in writing later.
 Green knew that the Hickeys were going to sell their house in order to build on her lot, and the Hickeys entered into a binding agreement with a third party to do so.
 Once Green refused the sale, the Hickeys had no place to live, and repudiating the agreement for the sale of their own home would have exposed them to possible litigation.
* An equity court will not ignore such blatant injustice.
* If the Hickeys have sold their home or are still under an obligation to do so, specific performance may be ordered against Green upon the Hickeys’ full payment of the purchase price.
* If the contract to buy the Hickeys’ home has been rescinded, however, the trial court has discretion to order Green to pay the restitution of costs to the Hickeys instead.
o Conclusion
* This case must be remanded for further proceedings.

Question 77

• The Statute of Frauds also applies to an instrument used to transfer an interest in real property

Answer 77

o Statute of frauds applies to deeds – conveyances of land
o To cancel a deed, you cannot just tear it up because that is not a writing. So, to undo a deed, you need a new written deed that satisfies the statute of frauds.

Question 78

Marketable Title

Answer 78

• In every contract for the sale of real property, the seller expressly or impliedly promises that she will deliver marketable title (also known as merchantable title), unless the contract specifies otherwise. Generally, marketable title is defined as title reasonably free from doubt as to its validity
  o There doesn’t need to be perfect title, or as is title– it needs to be marketable title. If you want perfect title or as is title, you can negotiate that and put it into the agreement.
• If there is an encumbrance that isn’t likely to manifest or really affect the property, it might still be marketable title, although it is not perfect title.
• Marketable title is not about the value of the property– it is about the nature of ownership– the bundle of sticks.
  o An encumbrance interferes with marketable title
• An encumbrance is a lien, a mortgage, an easement, etc.
   Mortgage is an encumbrance because the bank can take possession of the property if the homeowner doesn’t make the payments.
• When there is an encumbrance, there may be a debate over whether it affects marketable title.
   Ask whether the encumbrance will affect the buyer’s bundle of sticks
• EX: After signing the K, B learns that property is worth less because it is in a flood zone.
   This does not interfere with marketable title because it has nothing to do with the bundle of sticks.
  o EX: If you find out the seller owns a fee simple subject to a condition subsequent (or other type of ownership that interferes with bundle of sticks), then that affects marketable title.
  o If the buyer knew about some encumbrance before entering into the K, some jurisdictions are doubtful about saying the encumbrance affects marketable title.
• The most common title defects are encumbrances. An encumbrance is a right or interest in land—other than a freehold estate—that reduces the value of that land. CC&Rs, easements, leases, liens, mortgages, options, and water rights are all examples of encumbrances

Question 79

• Generally, title is unmarketable if:

Answer 79

o (1) the seller’s property interest is less than the one she purports to sell;
o (2) the seller’s title is subject to an encumbrance; or
o (3) there is reasonable doubt about either (1) or (2).

Question 80

• Lohmeyer v. Bower (SCT Kansas, 1951)

Answer 80

o Facts
* Dr. Lohmeyer (plaintiff) contracted to purchase property from the Bowers (defendants).
* The deed that transferred with the sale warranted (among other things) that the property was transferred “free and clear of all encumbrances,” but “subject to all restrictions and easements of record applying to this property.”
* Lohmeyer had a lawyer examine the title, and determined that two zoning violations existed on the lot: the house situated on the lot was only one story high, whereas the regulations required that all houses be two stories in height; and it was situated too close to the border of a neighboring lot.
* After Lohmeyer informed Bowers of the violations, Bowers offered to purchase and convey additional land behind the house (correcting the second violation), but Lohmeyer refused.
o Rule
* The purchaser of real property may choose to cancel the sale if the title to the land is found to be unmarketable.
o Conclusion
* The judgment of the trial court is reversed, and the contract of sale should be cancelled.

Question 81

• Brush Grocery Kart, Inc. v. Sure Fine Market, Inc. (SCT CO, 2002)

Answer 81

o Facts
* Brush Grocery Kart, Inc. (plaintiff) entered into a five-year lease with Sure Fine Market, Inc. (defendant) for use of Sure Fine’s real property and operation of a grocery store located on the premises.
* The lease included a provision allowing Brush to purchase the real property at the end of the lease, with the price to be the average of the appraisals received by both parties.
* At the end of the lease, Brush attempted to purchase the property, but the parties could not agree on the price.
* As a result, Brush cancelled its insurance policy on the property and left the premises.
o Procedure
* Brush then brought suit against Sure Fine, alleging that Sure Fine’s offer was given in bad faith and was a breach of the leasing agreement.
 Sure Fine counterclaimed with the same argument.
 A special master was appointed to set the purchase price for the property.
 During the trial proceedings, a hailstorm caused $60,000 in damage to the property.
 Neither party was carrying insurance on the property, and both parties claimed the other was liable for the damage.
 The special master set a value for the property and concluded that Brush was responsible for the $60,000 loss.
 Brush appealed.
 The court of appeals affirmed the special master’s decision.
 Brush petitioned for certiorari to the Supreme Court of Colorado.
o Rule
* After executing a contract for the sale of real property, the vendee does not bear the risk of loss to the property prior to the transfer of title unless the vendee is in possession of the property.
o Application
* There are three approaches to determining which party bears the risk of loss during the executory period of a contract for the sale of real property.
 A majority of states put the risk of loss on the vendee from the time of contracting, relying on the theory of equitable conversion.
* Equitable conversion treats the vendee of real property as the equitable owner of the property and the vendor of the property as a secured creditor. Accordingly, once the equitable conversion occurs at the time of contracting, the vendee is the owner of the property and is responsible for its condition.
* Buyer bears the risk of loss during the executory period (between purchase K and closing)
 A minority of states keep the risk of loss on the vendor until the transfer of title is complete, unless the parties expressly agree otherwise.
 Several states apply a third approach, set forth in the Uniform Vendor and Purchaser Risk Act.
* Under this approach, the risk of a no-fault casualty loss is borne by the party in possession of the property at the time of the loss.
o Conclusion
* The case is reversed and remanded.

Question 82

4. Duty to Disclose
   * Majority rule:

Answer 82

In most jurisdictions, the seller of residential real property is obligated to disclose defects he knows about that
o (a) materially affect the value of the property and
o (b) are not known to or readily observable by a buyer
o Notice that actual knowledge of the defect is generally required; whether the seller or realtor should have known about it is inconsequential

Question 83

• Stambovsky v. Ackley (SCT NY, App., 1991)

Answer 83

o Facts
* Jeffrey Stambovsky (plaintiff) entered into a contract for the purchase of a home in Nyack, New York, with Helen Ackley (defendant).
* Prior to the purchase, Stambovsky conducted the required home inspection and searched the public records regarding title.
 However, unbeknownst to Stambovsky, Ackley had held the house out to the public as a haunted house.
* An article had been written about the home in Reader’s Digest, and the home was included on a haunted homes tour of Nyack.
* Ackley did not disclose these facts to Stambovsky during their negotiations.
o Rule
* Minority rule: If a seller creates a condition that materially impairs the value of a contract and is peculiarly within the knowledge of the seller and/or unlikely to be discovered by a prudent purchaser exercising due care, the seller must disclose it, or else the nondisclosure of the condition constitutes a basis for rescission of the contract.
o Conclusion
* Accordingly, rescission of the contract is an appropriate remedy. The lower court is ordered to reinstate Stambovsky’s action.

Question 84

• Rosengrant v. Rosengrant (C of A of OK, 1981)

Answer 84

o Facts
* Harold and Mildred Rosengrant were an older couple who owned a farm together. They had no children, but had several nieces and nephews.
* When Mildred became sick, their nephew Jay (defendant) came to take care of the farm.
* In appreciation for his help, Mildred and Harold sought to transfer their farm to him.
* They brought Jay to a bank where Harold handed the deed to him, which the banker said was necessary to make the transfer legal.
* Harold and Mildred instructed Jay to give the deed to the bank for safekeeping. They instructed Jay to record the deed upon their death.
* Harold and Mildred continued to live on the property. When they both died, Jay recorded the deed.
o Rule
* A deed is effective when it is executed with an intent to transfer and it is delivered
o Application
* In this case, Harold and Mildred did not properly deliver the deed to their farm to Jay because they did not intend to transfer the deed at the time the actual transfer took place. Instead, Harold and Mildred continued to live on the farm.
* Furthermore, the couple instructed Jay not to record the deed until they passed.
* These circumstances demonstrate an intent to deliver the deed to the farm after their death, not at the time actual delivery took place.
* Since Harold and Mildred did not transfer the deed by will, and because they intended to transfer the deed only after their deaths, not at the time they delivered the deed to Jay, delivery of the deed did not take place.
o Conclusion
* The judgment of the court below is affirmed.

Question 85

• Giannini v. First Nat’l Bank of Des Plaines (App Ct of IL, 1985)

Answer 85

o Facts
* Giannini (plaintiff) contracted to purchase a certain condominium unit in a newly constructed complex.
* The complex consisted of several buildings, some of which were declared as condominiums and others as rentals.
* The building in which Giannini’s unit was located was not declared a condominium, although it was originally supposed to be.
o Rule
* Absent oppression or fraud, a buyer of real property is entitled to a specific performance of a valid contract for the sale of real property as a matter of right.
o Conclusion
* As a result, the trial court is reversed, and the case is remanded for further proceedings consistent with this opinion.

Question 86

• Between purchase & sale agreement and the closing, if the buyer realizes that there is some encumbrance on the property right (EX: lack of marketable title),

Answer 86

they can walk away.
o Marketable title is before closing

Question 87

• Three ways to that buyers can pursue if they discover a problem with the property after the closing:

Answer 87

o Putting warranties into the deed
o Title search
o Insurance

Question 88

o Putting warranties into the deed

Answer 88

• This is the seller promising that they are giving something to the buyer, and if they breach the warranty, the buyer has a claim for breach of warranty
• Present warranties: warranties at the time that the property trades hands– not before and not after.
   The first three covenants (seisin, right to convey, and against encumbrances) are called present covenants. They are breached, if at all, at the moment the deed is delivered.
• Future warranties: Seller will reimburse buyer for any expense caused by an interference with buyer’s property rights (kind of like an indemnification).
   The last three covenants (warranty, quiet enjoyment, and further assurances) are known as future covenants. They are breached, if at all, after the closing—most commonly when the grantee is actually or constructively evicted by a third party holding superior title.
• General warranty deed
   EX: There aren’t any encumbrances; we are the owners; etc – broad assurances
• Special warranty deed
   A seller saying “I will warrant that during the time that I have owned the property that there hasn’t been any encumbrance/interference.”
• Quit claim deed – seller is making zero promises/warranties to seller. Kind of like “as is.”
• Examples of warranties that can be put into purchase contracts:
   Covenant of seisin: a promise that the grantor owns the estate he purports to convey; for example, this covenant is breached if the grantor purports to convey a fee simple but only owns a life estate. (Seisin is pronounced like “season.”)
   Covenant of right to convey: a promise that the grantor has the right to convey title; for example, this covenant is breached if the grantor is a trustee who lacks the authority to transfer title to the trust property.
   Covenant against encumbrances: a promise that there are no encumbrances on the title, other than those expressly listed in the deed; for example, this covenant is breached if there is a prior mortgage on the property.
   Covenant of warranty: a promise that the grantor will defend the grantee against any claim of superior title; for example, if a third party holds better title than the grantee does, the grantor must defend the grantee’s title.
   Covenant of quiet enjoyment: a promise that the grantee’s possession of the property will not be disturbed by anyone holding superior title; for example, this covenant is breached if the grantee is evicted because of a defect in her title.
   Covenant of further assurances: a promise that the grantor will take all future steps reasonably necessary to cure title defects that existed at closing.

Question 89

o Title search

Answer 89

• This is where the recording puzzles come in
   EX: First in time
• If someone conveys the same property to two people, the first to record the deed gets the property.
• First in time is the default. First in time will win, UNLESS there is a bona fide purchaser (BFP) involved
   If the party is not a BFP, then first in time (to be granted the property/to receive ownership– not the first to record the deed) wins.
• Bona fide purchaser (BFP) – a subsequent purchaser for value in good faith without notice of a competing claim.
   Can’t be a gift, has to be a purchaser
   For someone to prevail over whoever was first in time by being a BFP, they have to be subsequent to the person that was first in time.
   What does notice mean?
• Actual notice
• Actual knowledge (Knowtice)
• EX: somebody told them
• Constructive/record notice
• Notice of any prior interest that would be discovered by a standard search of the public land records.
• You have constructive notice of anything that is recorded in a land office
• Inquiry notice
• Notice of any prior interest that would have been obtained by investigating suspicious circumstances.
• There was reason for you to have suspicion about a competing claim and you didn’t investigate enough to discover it.
• EX: visiting the property
• Jurisdictions:
   Race jurisdictions: Whoever records first owns the property.
• This is rarely used anymore and it probably won’t be tested.
   Notice jurisdictions: you have to be a bona fide purchaser (a subsequent purchaser for value in good faith without notice of a competing claim)
• Look at the most subsequent BFP.
   Race notice jurisdictions: you have to be a bona fide purchaser (a subsequent purchaser for value in good faith without notice of a competing claim) that also records first.
• Note: recording protects a purchaser from future purchasers of the same land, not from the seller of the property. The seller immediately transfers property to the owner, regardless of whether/when it is recorded.

Question 90

o Insurance

Answer 90

• On an exam where the insurance company is refusing to pay, go through these:
   First, did the policyholder suffer the “loss” or “damage” that the policy requires?
   Second, the loss or damage needs to be something that is covered by the terms of the policy
   Exceptions in the policy
• Buyers are assured that if they don’t get the property that they think they are buying, then they file an insurance claim instead of filing any lawsuit.
   And, if it requires litigation, then the insurance company will fund the litigation

Question 91

• Shelter rule

Answer 91

somebody who has notice can use an exception to take advantage they would get without having notice.
o a grantee who has received an interest in property from a bona fide purchaser will also be protected as a bona fide purchaser, even if the grantee would not legally qualify for this status. The grantee is “sheltered” from other claims by the grantor’s status as an actual bona fide purchaser.

Question 92

• Late recorded deed problem

Answer 92

o Example of problem: If S conveys to B, and S later conveys to C, and then C records, and then B records, and then C conveys to D, then when D looks through the records, D will stop when they find S–> C without finding S–> B.
o Efficient search jurisdictions – more forgiving when a grantor conveys the same land to two grantees. Once a potential BFP finds one recorded deed, they don’t have to search anymore. No need to go through the entire record.
o Expanded search jurisdiction – less forgiving and require potential BFPs to do a search of the entire history of a property and see every single conveyance.

Question 93

d. Recording acts

Answer 93

• all states begin with the common law principle of first-in-time.
  o As a general rule, the person whose interest was created first prevails.
  o But virtually all states recognize a major exception to this principle: the bona fide purchaser doctrine.
• The recording acts create special protection for the subsequent bona fide purchaser, which supersedes the first-in-time rule
• In general, a deed or other document affecting title must be acknowledged in order to qualify for recordation.

Question 94

• Each state has a recording act which establishes the method for determining priority between adverse claimants. There are three basic types of acts:

Answer 94

o [NOT REALLY TESTED:] Race: the purchaser who records first has priority.
* Under a race statute, a subsequent purchaser has priority over a previously created interest if she records first—even if she actually knows about that interest
o Notice: the subsequent bona fide purchaser has priority.
* A notice statute provides that a subsequent purchaser for value prevails if he takes without notice of a prior interest. The purchaser does not have to record in order to gain priority
o Race-notice: the subsequent bona fide purchaser who records first has priority.

Question 95

• Messersmith v. Smith (SCT ND, 1953)

Answer 95

o Facts
* Caroline Messersmith and her nephew, Frederick Messersmith (plaintiff), each owned a one-half interest in land.
* On May 7, 1946, Caroline executed a quitclaim deed to Frederick, granting him her half-interest in the land. This deed was not recorded until July 9, 1951.
* On May 7, 1951, Caroline granted Herbert Smith, Jr. (defendant), a one-half interest in the oil and minerals located on the same land. The deed for this transaction was executed on the same date.
* However, when Smith noticed there was a minor error in the deed, Smith returned to Caroline’s home, tore up the deed, and prepared a second deed. The second deed was then brought to a notary public, who acknowledged Caroline’s signature by telephone.
* On May 9, 1951, Smith, in turn, conveyed the one-half interest in the mineral rights on the property to E.B. Seale (defendant). Both the second deed and the conveyance to Seale were recorded on May 26, 1951.
* Frederick sued to quiet title, claiming the deed to Smith was void. Smith defaulted.
* Seale argued that he was a good-faith purchaser without notice and therefore protected under the recording statute.
o Rule
* The recording of a title instrument that does not meet the recording act’s statutory requirements does not provide constructive notice of the transfer to subsequent buyers.
o Application
* Smith’s recordation of his deed did not provide constructive notice to Frederick, because Smith’s deed was not properly acknowledged. North Dakota is a race-notice jurisdiction.
 Thus, an unrecorded transfer of title to real property is void against a subsequent, good-faith purchaser.
* Proper recording serves as constructive notice of the transfer to all subsequent buyers. Further, a deed is not entitled to be recorded unless duly acknowledged.
 The recording of an instrument that does not meet all of the statutory requirements of recordation does not provide constructive notice.
* Here, the second deed granting Smith a one-half interest in the oil and minerals located on the land was not properly acknowledged by Caroline before a notary public. Due to this latent defect, the execution of the deed between Caroline and Smith was not sufficient for purposes of the recording statute.
o Conclusion
* The judgment of the trial court is reversed.

Question 96

o But when is a purchaser “without notice”? Three primary forms of notice exist:

Answer 96

• Actual notice: knowledge of a prior interest.
• Record notice: notice of any prior interest that would be discovered by a standard search of the public land records.
• Inquiry notice: notice of any prior interest that would have been obtained by investigating suspicious circumstances.

Question 97

• Riordian v. Lawyers Title Insurance Corp. (US DC, NM, 2005)

Answer 97

o Facts
* The Riordans (plaintiffs) purchased property in an “in-holding” (property surrounded by federal land) for $225,000 in 1995.
* The Riordans purchased title insurance from Lawyers Title Insurance Corp. (Lawyers Title Insurance) (defendant), including coverage for lack of a right of access to the property and unmarketability of title.
* The Riordans later brought suit against the United States, arguing the property was not accessible by automobile and seeking a declaration of a vehicular right of way to the property.
o Rule
* Title insurance for lack of a right of access to the property and unmarketability of title does not cover losses caused by lack of only practical access or physical defects.
o Application
* Here, the Riordans had pedestrian and horseback-riding access to the property. The policy explicitly covered a right of access and not vehicular access, practical access, or reasonable access.
o Conclusion
* Lawyers Title Insurance’s motion for summary judgment is granted.

Question 98

types of real estate finance

Answer 98

• Mortgage
  o Basically it is a promissory note
  o It gives the lender the right to foreclose on the property if the borrower does not pay.
  o Banks charge lower interest rates than they would for an unsecured loan
• Deed of trust
  o Courts treat deeds of trust the same as mortgages. A deed of trust is basically a mortgage.
• Alternative financing arrangement: installment land contract
  o What’s good for borrowers about installment land contracts:
• On the exam, we can assume that all of these (mortgage, deed of trust, installment land contract) will be treated the same way
  o We don’t have to distinguish between mortgages, deeds of trust, and installment land contracts.

Question 99

Foreclosures
* After there has been a foreclosure, who has title? How do we deal with the foreclosure, which involves a sale?

Answer 99

• Foreclosure eliminates or “wipes out” the mortgage being foreclosed and all junior interests, but does not affect senior interests.
  o Anything subordinate to the foreclosing party is distinguished.
• Junior interests that are mortgages are wiped out, but the promissory notes remain.
• Foreclosure sales proceeds are distributed first to the foreclosing lender, and then to junior interests in order of priority; any surplus proceeds go to the borrower.
  o We allocate the money going down, but we start with whichever lender is doing the foreclosure.

Question 100

• four methods to provide security for an obligation:

Answer 100

o Mortgage
o Deed of trust
o Installment land contract
o Equitable mortgage (or absolute deed as security)

Question 101

• Mortgage

Answer 101

o The borrower (the mortgagor) conveys an interest in real property to the lender (the mortgagee) as security for the performance of an obligation, usually payment of a promissory note.
o Once the borrower repays the loan in full, the mortgage is automatically extinguished.
o But if the borrower defaults, the property will be sold at foreclosure and the sales proceeds will be used to pay off the loan

Question 102

• Deed of Trust

Answer 102

o The most common mortgage substitute is the deed of trust

Question 103

a. set aside the sale

Answer 103

o Two different approaches for setting aside the sale depending on the jurisdiction
A. Compare sale price to fair market value
 Looks at procedural irregularity
B. Commercially reasonable efforts
 On an exam: what is the denominator for what is commercially reasonable? The county? This summer? This year?
 This is about the process

Question 104

b. Award C a deficiency judgment

Answer 104

o EX: When foreclosure sale generates money, we award it in order of priority beginning with institution that initiates foreclosure. But what if that institution is still not made whole and borrower still owes them money?
o A deficiency judgment lets the lender still go after the borrower for the remaining amount owed.
o Some jurisdictions simply prohibit deficiency judgments as a policy matter
o Some jurisdictions cap the amount of a deficiency judgment
* They cap it at the amount that the unpaid loan balance exceeds the fair market value.
o Commercially reasonable efforts
* If the foreclosure sale looks legit, we will allow a deficiency judgment.

Question 105

• Easement law terminology – o Property

Answer 105

Greenacre, the land benefited by the easement, is called the dominant tenement or dominant land. B’s land, which is burdened by the easement, is the servient tenement or servient land.

Question 106

• Easement law terminology –o Parties

Answer 106

A, the easement holder, is called the dominant owner. B, the owner of the servient tenement, is the servient owner.

Question 107

• Easement law terminology –o Appurtenant or in gross

Answer 107

An appurtenant easement benefits the holder in her use of a specific parcel of land, the dominant tenement. A’s easement is appurtenant because it benefits A in her use of Greenacre. An easement in gross is not connected to the holder’s use of any particular land; rather, it is personal to the holder. Most easements are appurtenant.

Question 108

easement law terminology – affirmative or negative

Answer 108

An affirmative easement allows the holder to perform an act on the servient land. A’s easement is affirmative because it allows her to cross B’s property. A negative easement allows the holder to prevent the servient owner from performing an act on the servient land. Most easements are affirmative.

Question 109

• Emanuel v. Hernandez (Illinois, 2000)

Answer 109

o Facts
* Wayne and Katherine Emanuel (plaintiffs) lived next to Jose and Lisa Hernandez (defendants).
* The property line bisected a driveway between the properties, but most of the driveway was on the Hernandezes’ property.
* The Hernandezes began building a fence on the property line, blocking the Emanuels’ continued use of the driveway. The Emanuels could not access their garage without use of the driveway.
* The properties originally composed one property but were severed in 1890.
o Rule
* If an easement implied by prior use did not arise at the moment the property was severed, a change in circumstances after the severance cannot create such an easement.
o Application
* Generally, a party can prove the existence of an easement implied by prior use by demonstrating that
 (1) the properties had been commonly owned at one point but were severed;
 (2) prior to the severance, the owner used part of the property for the benefit of another part of the property; and
 (3) the easement is necessary for the enjoyment of the severed property.
* The Emanuels did not present evidence that a garage or the driveway existed when the commonly owned property was severed in 1890.
 Accordingly, the Emanuels cannot demonstrate that prior to the severance, the original owner used part of the driveway for the benefit of the Emanuels’ portion of the original property.
 The Emanuels have not established an easement implied by prior use.
o Conclusion
* The judgment is reversed.

Question 110

express easement

Answer 110

• The easement is recorded to protects against people who, down the line, might say they weren’t aware of this encumbrance.
• This is simply an easement which is voluntarily created by the servient owner, usually in a deed
• Easements appurtenant
   Tied to the property
   Runs to the benefit of the transferees
   If the easement is appurtenant, it is to the landowner
• Easements in gross
   Tied to the person
   It’s not about the property– it runs to the owner individually
• On an exam, interpret an express easement by its terms

Question 111

easement by prior existing use

Answer 111

 Because of what has happened over time, the court will pretend there was an easement
 Elements:
1. Common ownership leading to severance
i. Some strict courts say there needs to be evidence of common ownership BEFORE the severance, no matter if the severance was in the year 1600. You could argue that the court should be more flexible when it is impractical to get evidence.
2. Prior to severance, common owner used one part of property for the benefit of another part of the property in a way that was apparent, obvious, continuous, and permanent at the time of the severance
3. Easement is necessary and beneficial for the enjoyment of the parcel

Question 112

• Easement by necessity

Answer 112

 Two elements:
1. Severance of title to land held in common ownership, and
2. Necessity for the easement at the time of severance
i. How do we define necessity? Completely landlocked? Extremely convenient?

Question 113

• Easement by prescription (similar to adverse possession)

Answer 113

 Elements:
1. Adverse use of another’s land
i. Use it in a way that easement holder (not owner) would use it
2. Adverse use was continuous and uninterrupted for at least 10 years
3. Adverse use was known to owner or so open, notorious, visible, & hostile that a reasonable owner would have noticed the use
i. Ask whether it’s within the consent of the owner. If there’s consent, then no easement by prescription.
4. Reasonably identified starting point, ending point, length, and width of land that was used (bounded)

Question 114

• Easement by estoppel

Answer 114

 When the servient owner encourages the development of a use that looks like an easement
 Elements:
1. Property owner grants another permission to use the property
2. Other party has reasonable grounds to believe permission will not be revoked, and
3. Other party, relying on this permission, incurs costs or otherwise substantially changes position by acting in a way that is not easily undone.
i. The change in position must be reasonably foreseeable to the property owner granting permission.
 There is no written agreement. If it were written, it would be an express easement.

Question 115

Interpreting Easements

Answer 115

• Conflict may arise between the easement holder and owner of the servient land about the manner, frequency, and intensity of use.
• There could be an express easement to establish what the client is using the property for. If it doesn’t work, we can try to establish it using an implied easement.
  o EX: Express easement is for wagons. Now, we drive cars. Express easement for wagons doesn’t work, but implied easements for cars might work.
• An express easement can be modified as long as its used for the same purpose. If you’re trying to use it for a different purpose, that cannot be done.
• Marcus Cable Associates, L.P. v. Krohn (TX, 2002)
  o Facts: Easement for electric transmission or distribution line. Dominant owner used it for cable line. Servient owner sued.
  o Rule
• An express easement may only be used for the purposes specified in the easement’s terms according to their common meaning.
  o Application: Original purpose was for electricity. Cable is not electricity. Sided with servient owner.

Question 116

Terminating Easements

Answer 116

• Easements are often terminated by abandonment– when a party quits using an easement.
• Easement can also be expressly terminated when parties agree to terminate it.

Question 117

• Johnson v. M’Intosh (SCOTUS, 1823)

Answer 117

o Facts
* Joshua Johnson’s (plaintiff) father was one of a group of men granted a tract of land by the Piankeshaw Indians, who were living on the land, prior to the American Revolution in exchange for a sum of money.
* After the Declaration of Independence, the county of Illinois, in which the land was located, was created by the State of Virginia.
* The Virginia delegates to Congress then conveyed the land to the United States government.
* About 35 years later, the United States government sold a portion of the land to William M’Intosh (defendant).
* Johnson brought this action to eject M’Intosh from the land.
o Rule
* Land title transfers are only valid when made under the rule of the currently prevailing government.
* You can’t transfer property that you don’t own!
* Tribes have a right of occupation, not a right of transfer.
o Application
* It has never been doubted, that either the United States, or the several States, had a clear title to all the lands within the boundary lines described in the treaty, subject only to the Indian right of occupancy, and that the exclusive power to extinguish that right, was vested in that government which might constitutionally exercise it
o Conclusion
* The court rules in favor of M’Intosh that the transfer from the Indians to Johnson is now invalid.

Question 118

• Moore v. Regents of the University of California (S. Ct. of CA, 1990)

Answer 118

o Facts
* John Moore (plaintiff) underwent treatment for leukemia at the University of California, Los Angeles (UCLA) Medical Center.
* There, Dr. David Golde (defendant) recommended removal of Moore’s spleen.
* Golde then used Moore’s cells for research without Moore’s permission.
* Golde established a patented cell line, which he licensed for commercial development.
* The patent was held by the Regents of the University of California (Regents) (defendant), and listed as inventors Golde and UCLA researcher Shirley Quan (defendant).
* The defendants made a significant amount of money from the cell line.
* Moore filed a thirteen-count lawsuit.
 Specifically, Moore sued for lack of informed consent and breach of fiduciary duty, due to the defendants’ omission of their financial interests in Moore’s cells.
 Moore also sued for conversion of his spleen.
o Rule
* Once cells leave a patient’s body, they are no longer that patient’s property.
o Application
* Moore had a property right in his spleen before it was removed.
* Conversion occurs when a party interferes with another’s property ownership or right to possession.
 Elements of conversion
* Property right
* Right to possession
* Interference
* There are three reasons why it is inappropriate to impose liability for conversion based upon the allegations of Moore’s complaint.
 First, a fair balancing of the relevant policy considerations counsels against extending the tort.
 Second, problems in this area are better suited to legislative resolution.
 Third, the tort of conversion is not necessary to protect patients’ rights
o Conclusion
* The California Court of Appeal is affirmed in part and reversed in part.

Question 119

• Jacque v. Steenberg Homes, Inc. (S. Ct. of WI, 1997)

Answer 119

o Facts
* Steenberg Homes (Steenberg) (defendant) sold a mobile home to a neighbor of the Jacques (plaintiffs).
* Because of snow on the nearest town road, the easiest way for Steenberg to deliver the mobile home was over the Jacques’ property. However, the Jacques refused to grant Steenberg permission to do so.
* Steenberg proceeded to deliver the mobile home across the Jacques’ property anyway. The Jacques notified the sheriff, and Steenberg was issued a $30 citation.
* The Jacques also sued Steenberg.
* Jacques wouldn’t let Steenberg cross because they’re afraid of adverse possession after 30 min on the property
* Steenberg also offered to compensate Jacques for passing through but Jacques denied
o Procedure
* At trial, the jury awarded the Jacques $1 in nominal damages and $100,000 in punitive damages.
 No compensatory damages
o Rule
* Punitive damages may be awarded for an intentional trespass, even in the absence of compensatory damages
o Application
* Punitive damages may, at the discretion of the jury, be awarded when there are only nominal and no compensatory damages. The general rule in Wisconsin is that punitive damages are unavailable if unsupported by compensatory damages. Barnard v. Cohen, 165 Wis. 417, 162 N.W.2d 480 (1917).
 The rationale for this is simply that society’s interest in deterring unlawful but unharmful conduct is not great enough to warrant punitive damages.
* The actual harm here is not in any physical damage to the land, but in the denial of the owner’s legal right to exclude all others.
 The right to exclude is “one of the most essential sticks in the bundle of rights that are commonly characterized as property.” Dolan v. City of Tigard, 512 U.S. 374 (1994).
* Therefore, as both a punishment and a deterrent, punitive damages in this case are warranted.
o Conclusion
* The decision is reversed and remanded for reinstatement of the punitive damages award.

Question 120

• State v. Shack (S. Ct. of NJ, 1971)

Answer 120

o Facts
* Tejeras and Shack (defendants) entered the private property of Tedesco (plaintiff) for the purpose of giving aid to migrant farm workers that were employed and housed by Tedesco on his property.
* Part of such aid was supposed to be giving legal advice to one of the migrant farm workers courtesy of a nonprofit corporation funded by the government pursuant to an act of Congress.
* Although offering to let Tejeras and Shack consult the migrant farm worker, Tedesco refused to allow a private legal consultation and when Tejeras and Shack insisted on privacy, Tedesco filed a written complaint with the police alleging a violation of a New Jersey trespassing statute.
* This case involves an unusual procedure, authorized under New Jersey law, by which a landowner may retain a private attorney to prosecute a criminal trespass action
o Rule
* Property rights serve human values
 We need a fair adjustment of the competing needs of the parties
* The ownership of real property does not include the right to refuse access to individuals providing government services to workers who are housed on the property.
o Application
* Rights in real property are not absolute and are limited by the maintenance of the well-being of those people that the owner permits on his land.
 Title to real property cannot include dominion over the destiny of persons the owner permits to come upon the premises. Their well-being must remain the paramount concern of a system of law
* Tedesco permitted the migrant farm workers to stay on his land, so despite his interests in his property, he is not entitled to refuse access to individuals seeking to aid those workers.
* The workers’ rights of privacy and the opportunity to receive such public assistance are too fundamental to be denied.
* Therefore, Tejeras and Shack did not invade any property rights of Tedesco and thus did not violate the trespass statute.
o Conclusion
* The convictions of Tejeras and Shack are accordingly reversed, and the case is remanded with directions to acquit.

Question 121

• Sundowner, Inc v. King (S. Ct. of ID, 1973)

Answer 121

o Facts
* In 1968, the Kings (defendant), owners of an Idaho motel, built a large fence between their motel property and that of the adjoining Desert Inn motel. The Desert Inn motel was owned by Sundowner, Inc. (Sundowner) (plaintiff).
 The fence was actually a giant sign with an advertisement
* The fence obscured approximately 80 percent of the Desert Inn motel and restricted air and light to its rooms.
* Sundowner brought suit seeking damages and the removal of the fence.
o Rule
* Under common law, no property owner has the right to erect and maintain a structure that:
 Has no productive use; AND
 Is for the sole intent of injuring others
 So, even if it only has either 1 or 2, it is still not a useless structure
o Application
* A property owner may be ordered to abate a structure built not for her own benefit, profit, or use, but purely for the purpose of diminishing the use or value of a neighbor’s property.
 no man has a legal right to make a malicious use of his property, not for any benefit or advantage to himself, but for the avowed purpose of damaging his neighbor
* Here, the trial court had substantial though conflicting evidence for its finding that, contrary to the Kings’ claims, the fence had no value as an advertising sign or to separate the two properties, but rather was built out of spite due to a grudge between the parties.
o Conclusion
* Accordingly, the trial court did not err in ordering the partial abatement of the fence, and the trial court’s judgment is affirmed.
o Notes
* one element of proving a spite fence case is to show that the defendant acted out of malice
* The plaintiffs’ expert said both that (1) the sign had “no value for advertising” and (2) its cost “would not be justified for advertising purposes
* A private nuisance is an (1) intentional, (2) non-trespassory, (3) unreasonable, and (4) substantial interference with (5) the use and enjoyment of the plaintiff’s land
 conduct is unreasonable if the “gravity of the harm outweighs the utility of the actor’s conduct

Question 122

• Prah v. Maretti (S. Ct. of WI, 1982)

Answer 122

o Facts
* Prah (plaintiff) owns a house that uses a solar energy system for heat and hot water.
 The system has solar panels on the roof to supply the necessary energy.
* Maretti (defendant) bought an adjacent lot and planned to build a house on his lot.
 When Prah found out the proposed location of the house, he told Maretti that at that particular location, the house would block sunlight from getting to the solar panels on Prah’s roof and in doing so reduce the efficiency of and cause other damage to the solar system.
 Maretti went ahead with construction anyway.
* Prah instituted this action seeking injunctive relief.
o Rule
* Private nuisance law is applicable in disputes over access to sunlight.
o Application
* 1905 case listed 3 reasons why landowners should not be liable for obstructing sunlight. Court invalidated the three reasons to overturn this case. About those three reasons, the court said:
 Old reason 1: right of landowners to use their property as they wished, as long as they did not cause physical damage to a neighbor, was jealously guarded.
a. Increased regulation: Society has increasingly regulated the use of land by the landowner for the general welfare.
i. the development of land is increasingly regulated for the benefit of society
 Old reason 2: sunlight was valued only for aesthetic enjoyment or as illumination
a. Access to sunlight has taken on a new significance in recent years
b. there is now an increased societal emphasis on the use of solar energy.
 Old reason 3: society had a significant interest in not restricting or impeding land development
a. The policy of favoring unhindered private development in an expanding economy is no longer in harmony with the realities of our society
o Conclusion
* The judgment of the Waukesha County Circuit Court is reversed and the case is remanded for a determination on the reasonableness of Prah’s nuisance claim.

Question 123

• Real covenants

Answer 123

o A real covenant is a promise concerning the use of land that benefits and burdens both the original parties to the promise and their successors
o traditional remedy for breach of a real covenant is money damages

Question 124

• Six elements for real covenants/equitable servitude/restatement

Answer 124

1. Compliance with Statute of Frauds
   i. Writing + signed by party to be bound + key terms
   ii. Exceptions to SOF
   iii. Alternative: common plan
2. Intent to bind successors
   i. needed intent is usually found in the express language of the document, but it may also be inferred from circumstances.
3. Touch and concern”: The covenant must “touch and concern” land. In other words, it must relate to the enjoyment, occupation, or use of the property
   i. Bullseye: directly relates to property + benefit x and burden y + permanent
   i. As a general rule, a covenant that restricts the use of land will satisfy the touch and concern requirement
   ii. monetary covenants which are closely tied to the occupancy of land, such as a tenant’s obligation to pay rent or an owner’s obligation to pay dues to a homeowners association, do touch and concern. But a purely monetary obligation does not touch and concern
4. Notice: The promisor’s successor (the burdened party that is challenging the agreement) must have notice of the covenant. This requirement is satisfied by actual notice, record notice, or inquiry notice
   i. Successor in interest (burdened party) must have actual, constructive, or inquiry notice
5. Horizontal privity: Horizonal privity concerns the relationship between the original parties to the promise. It requires the transfer of an interest in land other than the covenant itself
   i. Original agreement about more than the restriction
   ii. Bullseye: both parties have/had some property interest in the affected parcel
   i. Key: was there more going on in this deal between the original opposing parties to the agreement other than this one constraint?
   ii. Mutual interests: In most states, the horizontal privity requirement is met where the original parties have mutual simultaneous interests in the affected land (e.g., landlord and tenant; cotenants; or owners of the dominant and servient lands for an easement).
   iii. Successive interests: In almost all states that require horizontal privity, this element can also be satisfied by a grantor-grantee relationship between the original parties, so that they have successive interests in the affected land.
   iv. No requirement: An increasing number of states have abandoned the requirement; this is the modern trend
6. Vertical privity: Vertical privity concerns the relationship between an original party to the promise and his successor. Some states no longer require vertical privity. The states that retain this element usually distinguish between the burden and the benefit:
   i. Successor-in-interest (burdened party) must have received entirety of original estate
   i. Burden: Vertical privity exists only if the successor receives the entire estate that the original promisor held. If promisor A holds a fee simple absolute and conveys it to B, this requirement is met.
   ii. Benefit: On the benefit side, a less demanding test is used. Vertical privity is found if the successor receives either the original promisee’s entire estate or a smaller estate. If promisee C holds a fee simple absolute and transfers a term of years tenancy to D, vertical privity exists.

Question 125

• Equitable servitude:

Answer 125

o The traditional remedy for breach of an equitable servitude is an injunction.
o Common plan exception: Because the equitable servitude was recognized as a matter of equity, case law developed a special exception to the Statute of Frauds.
 Where a developer has manifested a common plan to impose uniform restrictions on a subdivision, all lots are burdened and benefited by the restrictions even if they do not appear in the chain of title to every lot.

Question 126

• Restatement approach

Answer 126

o Under the Restatement approach, a covenant that runs at law is a type of servitude. A servitude arises when:
 the owner of the property to be burdened intends to create a servitude;
 he enters into a contract or conveyance to this effect that satisfies the Statute of Frauds; and
 the servitude is not arbitrary, unconstitutional, unconscionable, or violative of certain public policies (e.g., it cannot unreasonably restrain alienation).
o this standard abandons the requirements of touch and concern and horizontal privity
o The Restatement provides that vertical privity is never required for a negative covenant and is required for an affirmative covenant only in certain situations
o Notice to successors is not required to create a valid servitude, but lack of notice is a defense to enforcement.
o it has not yet not been adopted by any court

Question 127

• Shelley v. Kraemer

Answer 127

State court enforcement of a racially restrictive covenant constitutes state action that violates the Equal Protection Clause of the Fourteenth Amendment.

Question 128

• Unit owner’s defenses to enforcements of CC&Rs (must assume all of the elements to establish validity were satisfied)
  o three defenses:

Answer 128

• (1) unreasonableness;
   Unconstitutional, arbitrary, against public policy/unconscionable, or burden outweighs benefit
• Arbitrary – it is arbitrary if it has nothing to do with what the community is trying to develop here. If the restriction doesn’t advance the purpose of having the community, then it’s arbitrary.
   Presumption of validity – things on the border line will be enforced
   Examples to argue unreasonable:
• Violating restriction doesn’t hurt anybody
• Violates privacy right
• Restriction was sneakily hidden, not super apparent to party burdened
   By reference to common interest development as a whole?
• Is this about the specific party only (retail)? Or is this about communities that have this exact restriction (wholesale)?
• Note different proof problems based on whether you pursue retail or wholesale
• Burden on this specific party only? Or specific burden on everyone who has to comply with this restriction?
• (2) abandonment; or
   Given number, nature, and severity of violations = reasonable to conclude abandoned
   Alternative: selective enforcement that undermines benefits sought by restriction
   EX: Others violated the restriction, benefited party didn’t fight this. So, benefited party abandoned the restriction.
• (3) changed conditions.
   Original purpose altered by changed conditions and no further substantial benefit
   Sometimes, restriction just doesn’t make sense anymore in light of changed conditions.
• But, court might enforce if someone still sued over it, so they still want it and care about it

Question 129

• Two ways to challenge HOA decisions:

Answer 129

o 1. Does HOA have authority to do this?
o 2. Is the decision reasonable?

Question 130

Does HOA have authority to do this?

Answer 130

Schaefer v. Eastman Community)
o Four principles:
* 1. Association’s constitution included a provision about being allowed to take the necessary steps to protect assets and in best interests of association
* 2. Decision was vested in proper authority, we should err on the HOA’s side because they are balancing the interests of everyone
* 3. If HOA board doesn’t act in a manner to the satisfaction of the residents, the residents would remove them. (accountability)
 On exam: Sentence will talk about HOA recall efforts. (EX: 10 year term, 80% of homeowners must sign petition, etc.)
* 4. No indication of suspicious circumstances (EX: If HOA owner’s brother bought the ski resort, that’s supicious)

Question 131

o Schaefer v. Eastman Community:

Answer 131

Ski resort case. An association governing a planned community may exercise all powers of the community except those the governing documents reserve to community members or expressly contravene.

Question 132

• Tort of nuisance

Answer 132

ability of one homeowner to say that another (usually, a neighbor) is doing something on their property that is interfering with owner1’s use of their own property.

Question 133

• Nuisance

Answer 133

The intentional and unreasonable, non-trespassory invasion of another’s use and enjoyment of their land
o Intention
* Doesn’t need to be the intention to invade the property. Rather, the underlying act itself is intentional. Engaging in the conduct must be intentional (think general intent)
o Reasonable – the gravity of the harm is unreasonable if the gravity of the harm exceeds the utility of the conduct
o Invasion = smells, sounds, etc
* Trespass = physical invasion of another’s property

Question 134

Zoning Hierarchy

Answer 134

• Single family homes have the most protections. If an area is zoned for single family homes, nothing else will be allowed other than single family homes.
  o Could be more or less specific. EX: single family homes of lots of 10 acres or bigger.
• Two-family homes (duplexes) = you can have single family homes OR duplexes
  o These categories are exclusive of what is above them
• Multi-family homes (EX: apartments) = you can have multifamily homes, duplexes, or single family homes
• Commercial uses is the highest tier. You can build anything all the way down a single family home. But the reverse is not true.

Question 135

what test does zoning use

Answer 135

• Zoning uses a rational basis test. Courts have a low bar for the constitutional validity of zoning bases.
  o The answer is almost always that the zoning is constitutional. The only way it would fail is if you can’t think of a single positive reason for the zoning.

Question 136

• What do we do with zoning laws that are inconsistent with current usage?

Answer 136

o We are going to grandfather those in. Non-conforming uses that pre-exist the zoning will be grandfathered in (tolerated).
* Why do we tolerate them? Because if we didn’t, it would be a taking.
o Routes to eliminate non-conforming uses:
* Eminent domain
* Amortization
 Giving a non-confirming business X number of years to get out of the business and conform.
* We fight about the number of years that the business has to get out of the business
* Squeeze by thinking creatively about the non-conforming use
 On an exam, consider the meaning of “use” in non-conforming use. Do we define the business by its food menu? Its hours? Number of employees? Etc.
 We can squeeze the use so that the business will make less profits and leave on their own.
 Intensification vs. expansion
* Non-conforming use can intensify, but it cannot expand. (Trip Associates case)
* Expansion: think of a pivot in the direction of the use.
* Destruction
 Covers things like fire, tornado, flood, etc.
 If the business burns to the ground, the non-conforming use disappears. Owner can still sell the property.
*** Nuisance (the non-conforming use is a nuisance)
 City cannot bring this claim unless it is a public property like a DMV for example. But usually the city will encourage a private individual to bring the nuisance claim (the city might fund it or something)
**

Question 137

• Village of Euclid v. Ambler Realty Co. (SCOTUS 1926)

Answer 137

o Facts
* Ambler Realty Co. (Ambler) (plaintiff) owned land in the Village of Euclid (Euclid) (defendant).
 Euclid is a largely residential suburb of Cleveland, Ohio.
* In 1922, Euclid enacted comprehensive zoning ordinances and created a board of zoning appeals charged with enforcement.
 The regulations created different districts based on the class of use, including purely residential, mixed use, commercial, and industrial.
 As a result of the ordinance, Ambler’s land was partitioned in terms of the types of uses that were permissible on it.
 Most notably, portions of Amber’s land were zoned in such a way as to prohibit the development of industry.
* Ambler brought suit against Euclid, alleging that the zoning ordinance violated the Fourteenth Amendment of the United States Constitution, as well as the Ohio Constitution, by depriving Ambler of liberty and property without due process.
 Specifically, Ambler argued that the ordinance significantly reduced the land’s value and deterred potential buyers.
o Rule
* Municipal zoning regulations are constitutional, unless they are clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare.
o Conclusion
* The judgment of the court below is reversed.

Question 138

• Trip Associates, Inc v. Mayor and City Council of Baltimore (MD 2006)

Answer 138

o Facts
* Anthony Triplin (plaintiff) owned Trip Associates, Inc. (plaintiff) and Club Choices, a nightclub sometimes featuring adult entertainment.
* In 1983, Triplin bought property that he used for the operation of Club Choices.
 At the time Triplin purchased the property, the applicable zoning ordinance did not prohibit the use of the property for adult entertainment.
 The prior owner of the property had also featured adult entertainment up to five nights a week.
 Triplin featured adult entertainment two nights per week and music and comedy on the other nights.
* In 1994, Baltimore passed a zoning ordinance declaring adult entertainment in the district containing Club Choices was a nonconforming use.
* Triplin continued to feature adult entertainment at Club Choices.
* In 2000, Baltimore issued a violation notice, directing Triplin to stop using the premises for adult entertainment.
o Rule
* Increasing the frequency of a valid, nonconforming use of property is a permissible intensification of the use rather than an unlawful expansion of the use.
o Conclusion
* The judgment of the court of special appeals is reversed.

Question 139

• Eminent domain vs. taking

Answer 139

o Eminent domain is when government intends to take property away
o Taking is when gov. does something (without intending to totally take property), and owner asserts that government has effectively taken the property away

Question 140

• Eminent domain doesn’t have to be

Answer 140

real property only. It can be intangible.

Question 141

• “[N]or shall private property be taken for public use, without just compensation.”

Answer 141

o Must take property for public use
 Low bar
 Similar to a rational basis test. If land is taken for some kind of public purpose, then it qualifies as public use.
 Public use is different from public purpose. Public use is something USED by the public. Not just advancing a public policy that has some broader implication.
 Trigger words: health, safety, welfare
 Potential argument: Giving something to a private individual is not public use. In Midkiff, it was allowed because it was different—it was about this larger social movement.
o Must pay just compensation
 Just compensation =/= fair market value
* The government probably offered the owner fair market value, but owner declined because property was worth more to them than just fair market value.

Question 142

• Hawaii Housing v. Midkiff

Answer 142

o Facts: 47% of Hawaii owned by 72 private landowners. Oligopoly harmed general public. Hawaii tried to use eminent domain to take land and redistribute among general population.
o Rule: A state may use the eminent domain process to take property that is heavily concentrated in the hands of a few private landowners and redistribute it among the general population of private individuals.
o Application: Virtually any use within state’s police power is a “public use.” Requirement is satisfied if state rationally believed that taking property would promote its objective.

Question 143

• Kelo v. New London

Answer 143

o Facts: CT wanted to redevelop part of city to have shops, luxury condos, etc., with Pfizer as corporate anchor for the development. Needed to condemn nearby homes.
o Rule: A state’s use of eminent domain to condemn private property from private individuals and redistribute it to other private individuals is a “public use” if it is rationally related to a conceivable public purpose.
o Application: An economic benefit coferred on the general public can still constitute a viable public use.
o Program is constitutional.
o Kennedy concurrence: Doesn’t want a BS “public use” argument
 Test for public use:
* 1. Subjective intent
o We need to look at government’s subjective intent. What is their real goal? We want to see a pure intent to benefit the public.
* 2. Objective benefit
o We need a true objective benefit. Not just mouthing the magic words. Something that would objectively benefit the public.
 We don’t want to let the government unfairly advantage one private group over another.

Question 144

Midkiff/Kelo

Answer 144

• Midkiff
  o Public use: Contextualize it with the social problems that the condemnation was trying to fix.
• Kelo
  o Public use: rational basis.
  o Kennedy on public use:
• Make sure that you ask, did government have to use eminent domain? Or was there another way for the government to fulfill its overall objective without taking this land?

Question 145

TAKINGS
* Elements:

Answer 145

o Private property
 Used to be an element, now it’s too broad because everything counts so it doesn’t matter.
o Taking
 The key about takings, unlike eminent domain, is that the government was not trying to take the property.
o Public Use
o Just Compensation

Question 146

• Pennsylvania Coal v. Mahon

Answer 146

o Facts: PAC gave surface of land to Mahon, but retained right to mine underneath. PA law prevented coal mining that could harm land. PAC sued.
o Rule: A regulation that “goes too far” is a taking.
 Three factors for taking. None are dispositive:
* 1. Diminution in value
o Consider the DENOMINATOR. Owner wants to say 100% was taken. Gov wants to say land is the same as it was before.
 EX for owner: Bought this land to use it for X. Law bans X, so land was worth something and is now worth $0.
* 2. Public interest
o Nuisance v. benefit
 Law to stop nuisance = less likely to be taking
* Protecting people from something?
 Broader benefit = more likely to be taking. Everybody should pay fair share.
* 3. Reciprocity of advantage
o If you benefit from burden on others, you can’t complain.
o Reasoning: Here, law does not correct public nuisance because one home is involved. Law is a taking.

Question 147

• Penn Central v. New York

Answer 147

o Facts: Penn owned Grand Central Terminal—historic landmark. Leased airspace to UGP, who wanted to build on top of it.
o Rule:
 Factors for a taking (not dispositive/indispensable):
* 1. Economic impact of regulation on owner
o May be broader than diminution in value from PAC.
o DENOMINATOR PROBLEM.
* 2. Extent to which regulation interfered with owner’s reasonable investment-backed expectations
o Diminution in value can play a role here.
o Owner: I bought land entirely for this purpose.
* 3. Character of government action involved in regulation.
o Public interest from PAC creeps in here. START with nuisance v. benefit
 Nuisance = less inclined to be a taking
* Protecting people from something?
 Benefit = more inclined to be a taking
* Trying to address a social problem? Safety, health, welfare
o Physicality and duration of invasion
 More physical = taking
 Less physical = not taking
 Here, economic impact was not total diminution in value. Merely prohibited additional revenue from lease. Investment-backed expectations not impaired because air building was not an option when first invested. Character/nature is about benefit. Not physical invasion. This was not a taking.

Question 148

three per se rules RE takings

Answer 148

o 1. Permanent physical occupation of land = taking
 Loretto v. Teleprompter: Permanent physical occupation is a taking. Law let cable TV providers to install permanent cables on private property. This was a taking.
 Even temporary physical occupations of land get the attention of the court, although not as per se as permanent. Might be a taking.
* Cedar Point Nursery v. Hassid: CA rule let labor groups go on farms to talk to workers 4x a year with notice. This was a taking.
 This is element three of the Penn Central factors (character of government action) dialed up.
o 2. Regulation that causes loss of ALL economically beneficial/productive use of land is taking UNLESS justified by background principles of property/nuisance law (owner could not do it either way)
 Lucas v. South Carolina Coastal Council: Lucas bought lots on the beach. SC law banned homes being built on the lots. This was a taking. It totally deprived him of beneficial use of the property.
 This is element one of the Penn Central factors (economic impact) dialed up.
o 3. Demands exaction that has no essential nexus to legitimate state interest or lacks rough proportionality to impacts of particular project.
 EX of an exaction: You can build 100 homes in City, but you also need to build a fire-station with it.
* You can’t put a condition that is wholly unrelated to the land they are trying to use.