PROPERTY SECOND SEMESTER OUTLINE

PART III: Leaseholds

A.The Law of Landlord and Tenant

i. The Leasehold Estates (Nonfreeholds/Tenancies)

Freehold is the ownership of real property (land and all immovable structures attached on it). Ex: Fee simple, etc.

Leasehold is an ownership of temporary rights of real property by some form of title from a lessor or landlord.—think of it as right to exclusive possession—you“own” possession but not title

3 Principal Leaseholds: Term of Years/Periodic Tenancy/Tenancy at Will

a. TERM OF YEARS- Estate that lasts for some fixed period of time or for a period computable

by a formula that results in fixing calendar dates for beginning and ending,once the term is created or becomes possessory.

- Term must be for a fixed period- Can be terminable earlier upon the happening of some event or condition- No notice of termination is necessary to bring the estate to an end- Critical them is beginning and ending date

b. Periodic Tenancy- A lease for a period of some fixed duration that continues for succeeding

periods until either the landlord or tenant gives notice of termination.- If notice is not given the period is automatically extended for another

period- Under common law, half a year’s notice is required to terminate a year-to-

year tenancy- For any periodic tenancy of less than a year, notice of termination must be

given equal to the length of the period.- The notice must terminate the tenancy on the final day of the period, not in

the middle of the tenancy.- Death of the landlord or tenant has no effect on the duration of a term of

years or periodic tenancy.- EX: to A from month to month, to B from year to year.

c. Tenancy at Will- A tenancy of no fixed period that endures so long as both landlord and

tenant desire.- Terminates if either the landlord or tenant dies or if one party chooses to

end it.

d. Tenancy at Sufferance: Holdovers- Arises when a tenant remains in possession (holds over) after termination of

the tenancy- Gives landlords two options: 1) Eviction (plus damages) or 2) Consent

(Express or implied) to the creation of a new tenancy.

1. The Lease

- Leases transfers a possessory interest in land, which creates property rights. (Conveyance)

- Contains a number of promises (ex: promise to pay rent, promise to provide utilities) thus creating contractual rights.

- Leases for more than one year must be in writing (Statute of Frauds).- Typically, landlords use form leases. (Questions about bargaining power)- Leases usually contain covenants that run with the leasehold estate, e.g.,

covenant of quiet enjoyment, covenant to pay rent.

NOTE: Fair Housing Act (42 U.S.C.A. §§3601-3619, 3631)- Enacted to protect from discrimination in selecting tenants on ground of

race, gender, national origin, handicap, or family status.

ii. Subleases and Assignments

- Sublease : Lessee transfers anything less than his entire interest. EX: Twoyears remain on the lease and the lessee transfers for a term of one year.

- Assignment : Arises when the lessee transfers his entire interest under thelease, transferring the right of possession for the duration of the term.

- A sublease grants the sublessee an interest in the lease premises with areversionary interest remaining with the lessee. An assignment conveys thewhole term, leaving no interest or reversionary interest in the lessee.

- Note the result. In assignment there is privity between landlord andassignee; with sublease only privity is between teanant and sublessee.

- In sublease, sublessee is liable to tenant and tenant is liable to landlordto perform covenants and contractual oblitations.

- In assignemnet, tenant is liable to landlord under contract and assignee isliable under leasehold covenants

CASE: ERNST v. CONDITT - (The common law rule is if the instrument purports totransfer the lessee’s estate for the entire remainder of his term, it is anassignment, regardless of its form or the parties’ intentions. Because thesublease agreement left the lessee with no rights either express or implied,the intention of the parties was an assignment and not a sublease).

Privity of estate: Conveyance of a right of possession from the landlord tooriginal tenant. Privity of estate arises when there is conveyance of any

interest in an estate from one person to another, e.g., landlord to tenant,grantor to granteev.Privity of contract: Promises by one party to the other in a privity of estate.Privity of contract exists whenever two persons enter into an agreement

B.Landlord’s Duties; Tenant’s Rights and Remedies

CASE: SOMMER v. KRIDEL - Landlord has an obligation to make a reasonable effort tomitigate damages in this situation. Leases are not distinguished from ordinarycontracts.- To assess whether the landlord made reasonable efforts to mitigate, the

court should consider whether the landlord offered/showed the vacantapartment, advertisements, among other factors.

- The landlord need not accept less than fair market value rent orsubstantially alter his obligations as established by the pre-existinglease.

- Abandonment of property is an invitation to vandalism, and the law shouldnot encourage such conduct by putting a duty of mitigation of damages on thelandlord.

- Surrender: Tenant’s offer to end a tenancy- Security Devices for Landlord : Advance Rent/Rent Acceleration- Intent Test : One considers whether the landlord’s actions are inconsistent

with or repugnant to continuation of the original lease.Landlord may or may not have duty to mitigate, depending on jurisdiction. Notedistinction between commercial and residential leases

i. Quiet Enjoyment and Constructive Eviction

CASE: RESTE REALTY CORP. v. COOPER - Periodic flooding of tenant’s office space afterlandlord promised to fix the problem and tenants repeated requests for relief,constituted a constructive eviction.- Ordinarily a covenant of quiet enjoyment is implied in a lease and when it

is breached substantially by the landlord, courts have applied the doctrineof constructive eviction as a remedy to the tenant.

- Tenants right to claim constructive eviction will be lost if he does notvacate the premises within a reasonable time after the right comes intoexistence.

Actual v. Constructive Eviction: If there is an actual eviction even thoughwith only part of the premises the tenant is relieved of all liability for rentnotwithstanding continued occupation of the balance. Constructive partialeviction is when some breach by the landlord makes a part but not all of thepremises uninhabitable.

CASE: BARASH v. PENN. TERMINAL RESAL ESTATE CORP. - Landlord’s failure to provide acontinuous flow of fresh air after hours and on weekends constituted an actualpartial eviction.Covenant of quiet enjoyment runs from landlord to tenant. If it is breached,tenant has right to terminate lease and leave the premises. Actual evictionoccurs when landlord causes the eviction or someone with superior rights, e.g.,mortgagee, causes eviction.

Constructive eviction occurs when premises are made so intolerable noreasonable person would stay, when landlord breaches a duty to tenant which hevoluntarily acceptecd or which is imposed by law. Landlord has duty tomaintain common areas but no duty to maintain individual dwelling places,unless agreed to . Tenant is responsible for his own maintenance and repairotherwise. Applies to residential and commercial

ii. Implied Warranty of Habitability

CASE: HILDER v. ST. PETER - An implied warranty of habitability exists, requiring thelandlord to deliver and maintain through the lease, premises that are safe,clean and fit for human habitation.- To bring this claim, the tenant must show that he first notified the

landlord and gave the landlord a reasonable time to correct the defect.- The warranty of habitability covers all latent and patent defects in the

essential facilities of the residential unit. Essential facilities arefacilities vital to the use of the premises for residential purposes.

- A tenant cannot assume the risk by acknowledging a defect, nor can theimplied warranty of habitability be waived by a covenant in the lease.

- May be statutory now- If not statutory, implied in the lease. Governed by either housing code or

general principles of health and safety- Does not apply to commercial leases

iii. Affordable Housing

- Mixed Accounts- Rent Controls (Gentrifying markets)- Government housing program

Part IV. Transfers of Land

Alienability: The easy transfer and exchange of property rights. Any transfer ofproperty rights, easy or not

A. The Land Transaction

i. Introduction to Buying and Selling Real Estate

- Real estate contracts are almost always executor. Title is not transferredimmediately upon signing the agreement, because both buyers and seller mustdo certain things during the time between the contract and closing.

- Buyer needs to obtain a title search to satisfy themselves and their lenderthat the seller can convey good title to the property.

- Most contracts of sale also contain a mortgage contingency: if the purchasercannot obtain a mortgage loan within a given time, they can rescind thecontract and get back their deposit.

- Inspection contingency : if the cost of remedying the problem exceeds somethreshold.

- Lender provides the proceeds of the loan to the seller who uses the moneyand additional funds paid by the buyer to 1) pay off any existing loans onthe property; 2) pay the real estate brokers their commission; 3) pay thelegal fees and other fees (such as title insurance) they have agreed to takecare of and 4) pockets the remaining proceeds.

ii. The Contract of Sale: Statute of Frauds - Enacted in 1677 to make people more secure in their property and their

contracts by making deceitful claims unenforceable.- Except for leases for less than 3 years, no interest in land can be created

or transferred unless there is an instrument with writing signed by theparty bound to it.

- Action can only be brought to written instruments.- Electronic signatures can constitute writing- Length of time varies from state to state.

Exceptions:1. Part performance : Allows the specific enforcement of oral agreements when

particular acts have been performed by one of the parties to the agreement2. Estoppel : Applies when unconscionable injury would result from denying

enforcement of the oral contract after one party has been induced by theother seriously to change his position.

3. Understand these are similar—in both cases other party is de facto estopped from raising statute of frauds

CASE: HICKEY v. GREEN - The reliance of the Plaintiffs on their oral contract withthe Defendant created an enforceable contract for the sale of real propertyeven though only $500 out of the $15,000 was given.

Principle is reliance, buyer relied on promises of seller to his detriment

iii. Marketable Title; Equitable Conversion

Marketable Title: A title not subject to such reasonable doubt as would createa just apprehension of its validity in the mind of a reasonable, prudent, andintelligent person, one which such persons, guided by competent legal advice,would be willing to take and for which they would be willing to pay fair value.

- Seller must convey to the buyer a “marketable title”. If they do not, buyeris entitled to rescind a contract.

- Marketable title is free of encumbrances, though agreement usually exceptsencumbrances of record.

- Absent marketable title, buyer will have trouble selling when he or shewishes to do so

Title: Bundle of rights in a piece of property in which a party may own eithera legal interest or an equitable interest.

Encumbrance: A right to, interest in, or legal liability on real property thatdoes not prohibit passing title to the property but that diminishes its value.

CASE: LOHMEYER v. BOWER - A violation of a city ordinance as well as otherviolations can make title unmarketable and doubtful.- Hazardous materials does not render title unmarketable/unmerchantable.

Rule is that (1) existence of covenant or other encumbrance makes titleunmarketable (though contract may explicitly accept such encumbrances); (2)existence of zoning or land use ordinance does not make title unmarketable; (3)violation of zoning or land use ordinance or violation of covenant does maketitle unmarketable

iv. Duty to Disclose Defects; Merger; Implied Warranty of Quality

CASE: JOHNSON v. DAVIS – Defendants’ fraudulent concealment of a material factentitled the Plaintiffs to a return of their deposit.- In determining whether a seller of a home has a duty to disclose latent

material defects to the buyer, the law distinguishes between inaction andaction

- Doctrine of caveat emptor : Buyer cannot recover from seller for defects inproperty. (Archaic)

- Full disclosure of all material facts must be made whenever elementary fairconduct demands it.

- If the seller is aware of a material defect, he has a duty to disclose this to the buyer.

- Generally an “as is” clause in a sales contract will be upheld if thedefects are reasonably discoverable and there is no fraud

Nonfeasance: To ignore and take no indicated action (neglect)Misfeasance: To take inappropriate action or give intentionally incorrectadviceMalfeasance: To take hostile, aggressive action to injure the client’sinterests

Materiality Tests:

1. Objective test of whether a reasonable person would attachimportance to it in deciding to buy

2. Subjective test of whether the defect “affects the value ordesirability of the property to the buyer.”

3. So rule is that seller has duty to disclose material defects tobuyer, at least to the extent that buyer could not reasonablyidentify those himself. Many states now require extensivedisclosure

Uniform Land Transactions Act provides for two implied warranties againstpersons who are in “the business of selling” real estate:1. Warranty of suitability: Applies to used and new buildings2. Warranty of quality: Applies only to new construction. Broader and more

general.

B. The Deed

Deed: Any legal instrument in writing which passes or affirms or confirmssomething which passes an interest, right, or property and that is signed,attested, delivered, and sometimes sealed.

i. Warranties of Title

Short form deed:- Grantor- Grantee- Words of Grant- Description of the land involved- Signature of the grantor- SOMETIMES attestation or acknowledgement—usually required to record

3 Types of Deeds- General warranty deed – Warrants title against all defects in title, whether

they arose before or after the grantor took title.- Special warranty deed – Contains warranties only against the grantor’s own

acts but not the act of others.—warrants title from date grantor acceptedtitle forward

- Quitclaim deed – Contains no warranties of any kind. Conveys whatever titlethe grantor has, if any, and if the grantee of a quitclaim deed takesnothing by the deed, the grantee cannot sue the grantor.

Description of tract usually includes:1. Reference to natural or artificial monuments and, from the starting point,

reference to directions and distances2. Reference to a government survey, recorded plat, or some other record.3. Reference to the street and number or the name of the property.

- It is not customary nor necessary to state the exact consideration given- Forged deed is void. Look at distinction between void and voidable title.If there is fraud in factum, deed is void. If there is fraud in theinducement, deed is voidable. BFP may prevail if grantee of voidable deedconveys to BFP (subsequent purchaser/pay value/no notice)- Locus sigilli: Place of the seal- Indenture: Copies for the grantor and grantee- Deed poll: Signed only by the grantor.

Express Warranties (6) – Page 590

Present Covenants (3): Broken at the time the deed is delivered

Covenant of seisin – Grantor warrants that he owns the estate that he purports toconvey

Covenant of right to convey – Grantor warrants that he has the right to conveythe property.

Covenant against encumbrances – Grantor warrants that there are no encumbranceson the property.

Future Covenants (3): Promises that the grantor will do some future act, such asdefending against claims of third parties or compensating the grantee for loss byvirtue of failure of title.

- Not breached until the grantee or his successor is evicted from theproperty, buys up the paramount claim, or is otherwise changed.

Covenant of general warranty – Grantor warrants that he will defend againstlawful claims and will compensate the grantee for any loss that the grantee maysustain by assertion of superior title.

Covenant of quiet enjoyment – Grantor warrants that the grantee will not bedisturbed in possession and enjoyment of the property by assertion of superiortitle.

Covenant of further assurances – Grantor promises that he will execute any otherdocuments required to perfect the title conveyed.

Present covenant breached at time of conveyance if at all. Future covenantbreached by eviction. Eviction can be actual or could involve paying money toeliminate the claim of the one with superior title. Seller must indemnify anddefend only if someone with truly superior title evicts the grnatee

CASE: BROWN v. LOBER - Possession of the surface area does not carry possession ofmineral rights. To possess the mineral estate, one must undertake the actualremoval thereof from the ground or do such other act that will apprise thecommunity that such interest is in the exclusive use and enjoyment of theclaiming party. (2/3 v. 1/3)

- Until one holding a paramount title interferes with Plaintiffs’ right ofpossession, there can be no constructive eviction and no breach of thecovenant of quiet enjoyment.

- This is an issue of breaching the deed covenants. Present covenants werebreached, but staute of limitaitons had run. Future covenants no breachedas there was no eviction. Underscores the necessity of eviction toestablish breach of future covenatns

CASE: FRIMBERGER v. ANZELLOTTI - An encumbrance is defined as every right to orinterest in the land, which may subsist in third persons, to the diminution ofthe value of the land, but consistent with the passing of the fee for conveyance.

- Latent violations of land use regulations not on land records, are unknownto the seller and to which the state enforcement agency has taken no actionto compel compliance at the time the deed was executed, do not constitute anencumbrance for the purpose of this warranty.

- Plaintiff failed to meet the burden of proving innocent misrepresentationsince the Defendant had made no representation to the Plaintiff regardingthe tidal wetlands.

Rule here is that breach of zoning or land use violation at time of conveuyancedoes not breach deed covenant against encumbrances, even though same conditionprior to conveyance may have made title unmarketable

ii. The Deed: Delivery; Estoppel by Deed - If the grantor subsequently acquires title to the land, the grantor is

estopped to deny that he had title at the time of the deed and that titlepassed to the grantee. Law automatically passes the subsequently acquiredtitle to the grantee.

- To be effective, a deed must be delivered with the intent that it bepresently operative

CASE: SWEENEY, ADMINISTRATRIX v. SWEENEY - There was no intent on behalf of the grantor(decedent) to pass title to the Defendant.

- Physical possession of a duly executed deed is not conclusive proof that itwas legally delivered. Delivery must be made with the intent to pass titleif it is to be effective.

- A conditional delivery is and can only be made by placing the deed in thehands of a third person to be kept by him until the happening of the eventupon which the deed is to be delivered by the third person to the grantee.

Revocable Trusts functions very much like a will, but avoids probate.

iii. Financing Real Estate Transactions

Federal National Mortgage Association (Fannie Mae)/ Federal Home Loan MortgageCorporation (Freddie Mac): Government-sponsored enterprises were created toestablish a secondary market in which mortgages could be bought and sold muchlike stocks, there by evening out credit flows across the nation.

Mortgage-backed securities (MBS): Mortgage loans were purchased and pooledtogether, securities representing these pool were issued to investors.

Amortizing loan: A loan where the principal of the loan is paid down over thelife of the loan.

- Borrowers make a payment each month: 1 for the interest component and 1 forthe principal.

- Amount stays the same for the life of the loan, typically 15 to 30 years butas the principal is paid off the part of each payment attributable tointerest declines and the part attributable to principal increases.

Adjustable rate loans: Loan (Debt instrument) that does not have a fixed rate ofinterest over the life of the loan.

Subprime (Alt-A) Market: Risky segment of the mortgage market (Risk-basedlending: No matter how bad your profile might be many people qualified for loansduring the 1990s).

Negative amortization: A decline of the mortgage principal would happen if peoplepaid less than the accrued interest on the debt.

In order to borrow money from a lender the borrower must give the lender a noteand mortgage.

Promissory note: Creates a personal liability for the buyers.Mortgagors (buyers) v. Mortgagees (lenders)

If buyers fail to pay their note or do not otherwise perform their obligations,the lender, either at private sale or under judicial supervision, can have theproperty sold (foreclose the mortgage) and apply the proceeds of sale to theamount due on the note.

Equity (or “Equity of redemption”): Mortgagor’s interest in the property.

MORTGAGE (COMMON LAW): Deed in fee simple given to the moneylender by theborrower, with a condition subsequent clause providing that if the borrower paidback the sum owed on the day due, the deed would become void.

- If the borrower did not pay the sum the moneylender owned the land in feesimple absolute; the defeasance clause (mortgage provision indicating that

the borrower will be given the title to the property once all mortgage termsare met) could no longer become operative.

The mortgagor has an inherent right of redemption. Even if the lender has titleto the land, the mortgagor could redeem it at any time. This was not in thefavor of the lendor so English law permitted the mortgagor’s right of redemptionto be foreclosed.

Strict foreclosure: Proceeding in which the mortgagor is ordered to pay within agiven period or be forever barred (from title).

Foreclosure sale: A public sale conveying the title to the property to thepurchaser and, from the proceeds of sale, paying the debt to the lender andpaying any amount exceeding the debt to the borrower.

- If the land did not bring enough to satisfy the debt, the mortgagee couldrecover a judgment for the deficiency against the mortgagor.

- Foreclosures though judicial proceedings have unchallengeable sale prices- Foreclosure by a private sale may be scrutinized by courts to assure that

the mortgagee is acting fairly and may be denied a deficiency judgment.

Right to redeem from the mortgage (equity of redemption – judicial)v.Right to redeem from the purchaser at a foreclosure sale (statutory)

Deed of trust: Borrower conveys title to the land to a person (who is usually athird person but may be the lender) to hold in trust to secure payment of thedebt the lender.

- Trustee is given the power to sell the land without going to court if theborrower defaults.

- Rather than a deed of trust, a power of sale may be incorporated into amortgage.

NOTE: Article 9 of the UCC governs the financing of personal property BUT doesnot apply to real property. (aside from fixtures)

A second mortgage usually carries a higher interest rate than the first mortgagesince the sum of a foreclosure sale must first pay off the first mortgage.

CASE: MURPHY v. FIN. DEV. CORP. – A mortgagee has two fiduciary duties: good faith anddue diligence.

- A mortgagee is acting as a fiduciary of the mortgagor and must exert everyreasonable effort to obtain a fair and reasonable price for the house underthe circumstances.

- The requirement that the sale be conducted in a reasonable manner requiresthat the person conducting the sale use the ordinary methods of makingbuyers aware that are used when an owner is voluntarily selling his land.

- When a mortgagee fails to exercise due diligence, the proper assessment ofdamages is the difference between a fair price for the property and theprice obtained at the foreclosure sale.

- Courts generally articulate two main standards for invalidating aforeclosure sale:1. The price is so gross as to “shock the conscience” of the court.2. The price must be “grossly inadequate” to invalidate the sale.

If a borrower wants to avoid foreclosure they can tender the deed to the lenderin lieu of foreclosure to avoid extra fees.

Mortgagor can transfer his interest in the land by sale, mortgage, or otherwise.The land will remain subject to the mortgage in the hands of the transferee.

Purchaser of the equity may buy the mortgagor’s equity either “subject to themortgage” or “assuming the mortgage”

- Subject to the mortgage : No personal liability for the mortgage, mortgagoris still liable. But the purchaser agrees that the debt is to be satisfiedout of the land if not paid for.

- Assumes the mortgage : Purchaser promises to pay off the mortgage debt. Doesnot automatically relieve the mortgagor of the duty to pay the mortgagee butdoes give them the right to pay the debt and then sue the assuming purchaserfor reimbursement. Mortgagee can also enforce the promise made by thepurchaser of the equity in assuming the mortgage.

Acceleration clause: In the mortgage contract that enables the mortgage, upontransfer of the mortgagor’s equity, to declare the whole amount of the mortgagedebt due and upon failure to pay, to foreclose.

- Enforcement of the acceleration clause requires the new purchaser of theequity to refinance. The lender may use a due-on-sale clause to increasethe loan interest rate to current rates upon transfer of the property.

Teaser rates: A low readjustable introductory interest rate advertised for a loanin order to attract potential customers. They usually reset to abnormally higherrates after two or three years.

- 1/3 of subprime loans and 2/3 of Alt-A loans did not require the borrowersdocument their income (TERRIBLE IDEA! – CREDIT SCORES? = ABILITY TO PAY??)

CASE: COMMONWEALTH v. FREMONT INVESTMENT & LOAN – Court found that the marketing ofadjustable-rate mortgage (ARM) loans (loan-to-value ratio aka LTV of almost 100%when readjusted) constituted unsafe and unsound banking practice with clearlyharmful consequences for borrowers.  Such unsafe and unsound conduct by thelender leads directly to injury for consumers, qualifying as “unfair” breachingtheir fiduciary duty.

- Defendant ultimately made no effort to determine whether borrowers could“make the scheduled payments under the terms of the loan.”

Be certain you understand the concept of a mortgage and the rights that areretained by the mortgagor and granted to the mortgagee

C. Title Assurance

i. The Recording System

Public Records Office: To search to see if you have good title to the land youpurchased/purchasing.

- Private insurance companies sell title insurance to purchasers for a premiumserving as a backup to the recording system.

Land title records are maintained by the county recorder (or equivalent publicofficial).

- They include copies of documents filed with the recorder and indexes tothese copied documents.

- The original document presented for recordation is copied by the recorderand returned to the grantee

- Recording acts generally do not affect the validity of a deed or other instrument. A deed is valid and good against the grantor upon deliverywithout recordation.

Functions of the Recording System1. Establishes a system of public recordation of land titles. Anyone can

ascertain who owns land in the county by searching the records.2. Preserves in a secure place important documents that, in private hands, may

be easily lost or misplaced. Can be admitted directly into evidence injudicial proceedings, without production or accounting of the original.

3. Protecting purchasers for value and lien creditors against prior unrecordedinterests.

Generally any instrument creating or affecting an interest in land can berecorded, even a judgment or decree affecting title to land can be recorded.

- Wills and affidavits of heirship of an intestate are entitled to berecorded.

Lis pendens (notice of pending action): Puts subsequent claimants on notice ofthe claims being litigated.

Under the recording acts, a subsequent bona fide purchaser is protected against prior unrecordedinterests.

2 Types of Indexes:1. (Public) Tract Index : Not popular. Indexes documents by a parcel

identification number assigned to the particular tract.2. Grantor-Grantee Index : Grantor Index - All instruments are indexed

alphabetically and chronologically under the grantor’s surname. GranteeIndex – Same but grantee’s surname.

Index Reference includes:1. Grantor2. Grantee3. Description of the land4. Kind of instrument5. Date of recording6. Volume and page numbers where the instrument can be found set forth in full.

NOTE: Government Survey Description (Page 659)- Filed in the General Land Office- Range lines running north and south (Range = 6 miles)- Township always located west of the Principal Meridians- Each township was surveyed into 36 tracts called sections (1-mile squares) –

Page 660

CASE: ORR v. BYERS - Absolute accuracy in spelling names is not required in legalproceedings and if the pronunciations are practically alike, the rule of idemsonans (when a person’s name has been inaccurately written, the identity of suchperson will be presumed from the similarity of sounds between the correctpronunciation and pronunciation as written) is applicable. But, the rule will notbe applied where the written name is material.

- The doctrine of idem sonans cannot be applied to give constructive notice togood faith purchasers for value of real property

- The court ruled that to allow the judgment lien holder to prevail wouldplace an undue burden on good faith purchasers for value of real property.These individuals would in reality never be sure if the property they intendto purchase was free of liens.

- Lien : A form of security interest granted over an item of property to securethe payment of a debt or performance of some other obligation.

Be aware that title searcher may have some duty to look beyond the name in handif there might be a mmisspelling beginning with the same letter and soundingsimilar, eg., Seinfield and Seinfeld

ii. Chain of Title Problems

Chain of title: Refers to the recorded sequence of transaction by which title haspassed from a sovereign to the present claimant.

- Also the period of time for which records must be searched and the documentsthat must be examined within that time period.

- From the date of execution of the deed granting title to the owner to thedate of recordation of the first deed by such owner conveying title tosomeone one requires a standard (caveat) and sometimes extended titlesearch.

CASE: GUILLETTE v. DALY DRY WALL, INC. - Defendant is bound by the restrictions imposed bythe common grantor to the subdivision. When a grantor binds his land by writing,reciprocity of restriction between grantor and the grantee can be enforced. A

subsequent purchaser from the common grantor, acquires title subject to therestrictions in the deed to the earlier purchaser.

- Each of the several grantees if within the scope of the common scheme, is anintended beneficiary of the restrictions and may enforce them against theothers.

- Court states that the title examiner could have easily seen this through anindex search of the grantor. (Neighbors plan within the chain of title) Notethe principle involved here. If owner of tract conveys deed, O to A, whichbinds A’s land and O’s land with covenant, then O conveys a parcel to Xwhich does not expressly mention the covenant, is future purchaser from O,B, bound? Does he have notice. Guillette says yes. States split about 50-50 I believe.

CASE: LEWIS v. SUPERIOR COURT - The lis pendens was not properly recorded untilindexed, which occurred the day after the title passed to the Plaintiffs.

- Any purchaser without notice who makes a down payment and obligates himselfto pay the balance, has every reason to believe that his rights are securein the property.

- Plaintiff had already received title by the time the lis pendens wasrecorded and was not on constructive notice at the time he received title,thus was a subsequent bona fide purchaser for value.

There is an issue of timing of the filing and also an issue of timing of payment.iii. Inquiry Notice

Types of Notices:1. Actual – Where one is personally aware of a conflicting interest in real

property, often due to another’s possession of the property.Next two are constructive notices: Notices that the law deems you to haveregardless of your actual knowledge.

2. Record – A notice one has based on properly recorded instruments.3. Inquiry – Based on facts that would cause a reasonable person to make

inquiry into the possible existence of an interest in real property.

CASE: HARPER v. PARADISE - Since the deed from which the Defendant’s interestoriginated mentioned there had been a lost deed, they were now under a duty toinquire as to the interests in the lost deed. Because they did not, the courtfound for the Plaintiffs.

- Defendants were on constructive notice that another missing deed existed andhad a duty to inquire of the interests in the missing deed. It wasincumbent upon the Defendants to ascertain through diligent inquiry thecontents of the earlier misplaced deed and the interests conveyed therein.

- A deed in the chain of title discovered by the investigator, is constructivenotice of all other deeds which were referred to in the deed discovered.

One is on notice of any instrument referenced in a deediv. Marketable Title Acts; Torrens Acts; Marketability of Title

Marketable Title Acts: Acts to limit title searches to a reasonable period (60years)

- Basic idea is that when one person has a record title to land for adesignated period of time, inconsistent claims or interests areextinguished.

- Sometimes take the form of a statute of limitations barring a claim notrecorded within the designated period of time.

- Others declare that the record owner with a clear title going back for adesignated period of time has marketable record title that is free and clearof adverse claims.

- Intended to work in conjunction with recording acts.- “Root of title”: Beginning of the chain of title.

Title Insurance: Guarantees that the insurance company has searched the publicrecords and insures against any defects in the public records, unless suchdefects are specifically excepted from coverage in the policy (such as lossesarising from government regulations affecting the use, occupancy, or enjoyment ofland) Other exceptions from the standard policy on Page 714

- Developed because of the inadequacies and inefficiencies of the publicrecords in protecting private titles.

- Bought by one premium paid at the time the policy is issued.- Premium is based on the amount of insurance purchased (For homeowners the

purchase price of the property, for lenders the amount of the loan)- No fixed term and continues for as long as the insured maintains an interest

in the property- Creates liability to the insured only, does not run with the land to

subsequent purchasers (subsequent purchasers must take out a new policy).Forms:

- Most title insurance companies use uniform policy forms based upon formsdeveloped by the American Land Title Association (ALTA).

- 2 basic forms (one for the mortgagee’s policy and one for the owner’spolicy)

Marketability of Title- Marketability of title and the market value of a land itself are separate

and distinct. Title insurance policies would not cover physical conditionof property.

Encumbrance on Title- Must look at specific statutes to see what is defined as an encumbrance.

Part V. Judicial Land-Use Controls

A. Judicial Land-Use Controls and the Law of Nuisance- Law of Nuisance : Interference with the use and enjoyment of land.- One should use one’s own property in such a way as not to injure the

property of another.

i. Introduction to the Substantive Law

CASE: MORGAN v. HIGH PENN OIL CO. – A person who intentionally creates or maintains a private nuisance is liable for the resulting injury to others regardless of the degree of care or skill exercised by him to avoid such injury.

- Plantiff need not prove negligence, only that the activity was intentional.- Court considers whether the “gravity of the harm outweighs the utility of

the actor’s conduct”.- Abnormally sensitive nature of the plaintiff’s use can hurt plaintiff’s

argument of nuisance.- Unsightliness alone does not constitute nuisance (but spite can)

Private nuisances are classified as (i) per se or at law and (ii) (ii) nuisances per accidens or in fact.

A nuisance per se or at law is an act, occupation or structure, which is a nuisance at all times, under any circumstances. Nuisances per accidens or in factare those, which become nuisances by reason of their location or manner in which they are constructed, maintained or operated.

NOTE: Lateral and Subjacent Support- Lateral Support : Imposes a duty on neighboring land to provide the support

that the subject parcel would need and receive under natural conditions- Subjacent Support : Support from underneath as opposed to the sides.

ii. Remedies (and More on the Substantive Law)

CASE: ESTANCIAS DALLAS CORP. v. SCHULTZ - Even when there is a jury finding of a nuisance, there should be a balancing of the equities in order to determine if aninjunction should be granted.

- Balancing of Equities – Comparative/Equitable Hardship : Harms need to weigh more in the favor of the enjoining party for the injunction to be granted.

CASE: BOOMER v. ATLANTIC CEMENT CO. - Where a nuisance is of such a permanent and unabatable character that a single recovery can be had, including the past and future damages resulting there from, there can be but one recovery.

- Avoided pollution abatement (environmental policy)

Public Nuisance: An unreasonable interference with a right common to the general public.

- Person must show “special injury” different from other members of the public.

Private Nuisance: Protects rights in the use and enjoyment of land.- Only owners of interests in land can bring suit.

“Coming to the Nuisance” – Defense but not a bar to recovery (relevant factor)

Nuisance Claim Resolutions:1. Abate the activity in question by granting the plaintiff injunctive relief2. Let the activity continue if the defendant pays damages3. Let the activity continue by denying all relief4. Abate the activity if the plaintiff pays damages

NOTE: Nuisance Law and Environmental Controls- Pollution: Public Nuisance- Virtually all legislative-administrative efforts to control environmental

problem have taken the form of regulation.- Marketable rights have also made inroads

B. Private Land Use Controls: The Law of Servitude- Burdening one parcel of land for the benefit of another parcel.- These agreements creates interests (Servitudes) in land, binding and

benefiting not only the parties to the agreement in question but also their successors.

- Easements and Covenants (2) 1. Covenants enforceable at law (real covenants) 2. Covenants enforceable in equity (equitable servitudes)

Five Types of Servitudes:1. A is given the right to enter upon B’s land (Easement)2. A is given the right to enter upon B’s land and remove something attached to

the land (Profit)3. A is given the right to enforce a restriction on the use of B’s land

(Negative Easement)4. A is given the right to require B to perform some act on B’s land (Real

Covenant/Equitable Servitude depending on remedy)5. A is given the right to require B to pay money for the upkeep of specified

facilities. (Real Covenant/Equitable Servitude depends on remedy)

i. Easements

Easement Apputenant: Gives the right to whomever owns a parcel of land that the easement benefits.

o Requires a dominant tenement (the one who benefits from the easement) and a servient tenement.

o Transferable (Dominant Tenement to successive owners)o However can be made personal to the easement owner only and not

transferable to others.

Easement in Gross: Gives the right to some person without regard to ownership of land.

Reservation: A provision in a deed creating some new servitude which did notexist before as a independent interest.

Exception: Provision in a deed that excludes from the grant some preexistingservitude on the land.

Regrant Theory: Holds that an easement “reserved” by the grantor was not a reservation but a regrant of an easement by the grantee to the grantor.

NOTE: Licenses- Oral or written permission given by the occupant of land allowing the

licensee to do some act that otherwise would be a trespass.- Unlike easements, it is revocable- A license coupled with an interest cannot be revoked.- A license can become irrevocable under the rules of estoppel.- An irrevocable license is treated like any other easement, unless the

parties intended or reasonably expected that it would remain irrevocable it stays as long as reasonably necessary to recover expenditures.

CASE: HOLBROOK v. TAYLOR - Where a license is not a bare right of entry, but includesthe right to erect structures and acquire an interest in the land in the nature of an easement by the construction of improvements, the licensor may not revoke the license after the licensee has erected improvements at considerable expense.

- A license by estoppel can be created by licensor’s consent, along with the licensee’s construction of various structures and repair to the land in question.

NOTE: Implied Easements (2 Situations)- Easement implied from a prior existing use : On the basis of an apparent and

continuous (or permanent) use of a portion of the tract existing when the tract is divided (quasi-easement) – Same person must have owned both parcels.

- Easement by necessity : When the court finds the claimed easement is necessary to the enjoyment of the claimant’s land and that the necessity arose when the claimed dominant parcel was severed from the claimed servientparcel. (reasonable necessity)

o Only endures as long as its necessary- Easement by prescription : Granted after the dominant estate has used the

property in a hostile, continuous and open manner for a statutorily prescribed number of years. Prescriptive easements differ from adverse possession by not requiring exclusivity.

o Once binding same legal weight

CASE: OTHEN v. ROSIER - An implied easement may be shown if (1) originally there existed common ownership of the dominant and servient estate; (2) the easement is

a necessity not a mere convenience and (3) the necessity existed at the time of the severance of the two estates.

- An easement by prescription must be hostile or adverse in character.

CASE: RALEIGH AVENUE BEACH ASSN. v. ATLANTIS BEACH CLUB - The public trust doctrine requires the Atlantis property be open to the general public at a reasonable fee (including incurred expenses for management services) for services provided by the owner and approved by the Department of Environmental Protection.

- The public trust doctrine extends to all land covered by the ebb and flow ofthe tide and, in addition, all inland lakes and rivers that are navigable.

CASE: BROWN v. VOSS - Nondominant property may also enjoy use of an easement, although technically improper, if it is found to be the more equitable solution in a proceeding for an injunction, which is based on the discretion of the trial court.

Ways to Terminate Easements (Does not recognized changed conditions doctrine):1. Easement owner may agree to release the easement (requires writing SoF)2. Can expire if limited in some way3. Expires automatically if a defeasible easement (created to end upon the

occurrence of some event).4. Easements by necessity ends when the necessity ends.5. Ends by merger if the easement owner later becomes the owner of the servient

estate.6. May end through estoppel if the servient owner reasonable relies upon a

statement or representation by the easement owner.7. May terminate by abandonment. Mere non-use does not constitute abandonment

(maybe statutory limitation)8. May terminate by condemnation if the government exercises its eminent domain

power to take title to a fee interest in the servient estate for a purpose that is inconsistent with continued existence of the easement.

9. May be terminated by prescription, if the servient owner wrongfully and physically prevent the easement from being used for the prescriptive period.

Negative Easement: The right of the dominant owner to stop the servient owner from doing something on the servient land.

1. Blocking your windows2. Interfering with air flowing to your land in a defined channel3. Removing the support of your building (usually by excavating or removing a

supporting wall)4. Interfering with the flow of water in an artificial stream.5. Conservation Easement : To preserve scenic and historic areas and open space.

ii. Covenants Running With the Land

a. Covenants Enforceable at Law (Real Covenants) Horizontal Privity: Privity of estate between the original

covenanting parties. Vertical Privity : Privity of estate between one of the

covenanting parties and a successor in interest CHART – PAGE 850 A real covenant can be a negative promise (promise not to do

an act) or an affirmative promise (promise to do an act) Covenant is not enforceable against an assignee who has no

notice of it. Burden v. Benefit

b. Covenants Enforceable in Equity: Equitable Servitudes

CASE: TULK v. MOXHAY - An equitable servitude is enforceable by injunction with no regard to privity, so long as the promise is intended to run and the subsequent purchaser has actual or constructive knowledge of the covenant.

- Equitable servitude is a covenant respecting the use of land enforceable against successor owners or possessors in equity regardless of its enforceability at law.

Equity requires:1. Parties intend the promise to run2. A subsequent purchaser have actual or constructive notice of the covenant3. The covenant touch and concern the land.- No privity of estate is required.- Benefits runs to all assignees and may run to adverse possessors.- Burdens the land not the estate (similar to easements)

Remedy for a breach of covenant is damages in a suit of law while for an equitable servitudes is an injunction or enforcement of a lien in a suit of equity.

iii. Creation of Covenants - Assessment Covenants : For common interest communities.- Homeowner Associations – “Touch and concern” debates

iv. Discriminatory Covenants - Racially restrictive covenants historically perpetuated residential racial

segregation.- Violates the Fair Housing Act

v. Termination of Covenants - Merger : On the basis of unity of ownership of the benefit and burden by the

same person.- Formal Release: Normally written and recorded

- Acquiescence : Arises when the plaintiff has failed to enforce the servitude against other breaches and then seeks to enforce the servitude against the defendant.

- Abandonment : Resembles acquiescence except that it makes the servitude unenforceable as to the entire parcel rather than only as to the plaintiff immediately involved.

- Equitable doctrine of unclean hands : According to which the court will refuse to enjoin a violation of a servitude that the plaintiff previously violated

- Equitable doctrine of laches : Involves an unreasonable delay by the plaintiff to enforce a servitude against the defendant causing prejudice to the defendant (laches does not extinguish the servitude but only bars enforcement)

- Estoppel : If the defendant has relied upon the plaintiff’s conduct making itinequitable to allow the plaintiff to enforce the servitude.

- Exercise of the government’s eminent domainpower - Basis of prescription

CASE: WESTERN LAND CO. v. TRUSKOLASKI - Even though nearby roadways become heavily traveled, restrictive covenants are still enforceable unless the objects and purposes of the restrictions have been “thwarted.

- Substantial evidence indicated the covenants continued to have real and substantial value to the residents of the subdivision and that there was notsufficient evidence that the object and purpose of the restrictions was thwarted.

- Even if the property is more valuable for commercial purposes, substantial benefits still go to the restricted area by enforcing the restriction.

- An ordinance could not override the privately-placed restrictions and a zoning change would not invalidate these restrictions.

- Any other sporadic violations of the restrictions were distant and did not show a general consensus of the property owners to abandon or waive the restrictions.

CASE: RICK v. WEST - Only upon evidence of a substantial change in the neighborhood that would render the defendant’s enforcement of the covenant unconscionable or oppressive. The restriction is not outmoded by a change in the character of the neighborhood and continues to provide a real benefit to the defendant. 

- Enforcement of a covenant will be allowed unless the owner’s action would beunconscionable or oppressive.

vi. Common Interest Communities - Condominium : Each unit is owned separately in fee simple by an individual

owner.- Exterior walls, the land beneath, the hallways, and other common areas are

owned by the unit owners as tenants in common- Association dues/covenants

- Housing Cooperative : Title to the land and building is held by a corporation; residents own all the shares of stock in the corporation and control it through an elected board of directors.

- Original purchasers are all in privity with the developer and subsequent purchasers are in privity with the original purchasers.

- Negative covenants restricting use/ Affirmative to pay dues to a homeowner association.

C. Legislative Land Use Controls: The Law of Zoning

i. Historical Background

Foundation for Modern City Planning:1. Separation of uses2. Protection of the single-family home3. Low-rise development4. Medium-density population

CASE: VILLAGE OF EUCLID v. AMBLER REALTY CO. - As long as the zones of exclusion excludeda nuisance from the other zones, the ordinance was proper.

- In order for the zoning ordinance to be valid, the apartment house must be anuisance, which the Appellant is attempting to exclude from zone one. This court found that apartment houses were a nuisance to single-family houses, and thus, the zoning ordinance was proper.

Euclidean Zoning: “Highest” (Single-Family Residences)/ “Lowest” (Worst Kind of Industry)

ii. Structure of Authority Underlying Zoning

Zoning: Power of government to protect health, safety, welfare, and morals.

A comprehensive plan is a statement of the

iii. The Nonconforming Use

CASE: PA NORTHWESTERN DISTRIBUTORS, INC. v. ZONING HEARING BOARD - An ordinance requiring termination of lawful pre-existing uses was confiscatory per se and unconstitutional as the loss of use of property without just compensation.

- A lawful nonconforming use establishes in the property owner a vested property right.

- Destruction of a nonconforming use usually terminates it and so does abandonment.

Factors Relevant to an Assessment of the Reasonable of a Particular Amortization Period:

1. Nature of the use in question2. Amount invested in it3. Number of improvements4. Public detriment caused by the use5. Character of the surrounding neighborhood6. Amount of time needed to “amortize” the investment.

iv. Flexibility in Zoning

Variance:1. Must be necessary to avoid imposing undue hardship on the owner of the land

in question.2. Must not substantially impinge upon the public good and the intent and

purpose of the zoning plan and ordinance.- Personal hardship is usually irrelevant

Area Variance: Setback requirements

Use Variance: Relaxing restrictions on permissible uses in a particular area

Special Exception: Conditional use under a zoning variance which results from a legislative determination that such use will not ordinarily be detrimental or injurious to the neighborhood within the zone.

v. Zoning Amendments and the Spot Zoning Problem

Spot Zoning: Zoning changes typically limited to small plots of land which establish a use classification inconsistent with surrounding uses and creates an island of nonconforming use within a larger zoned district, and which dramatically reduce the value for uses specified in the zoning ordinance of either the rezoned plot or abutting property.

- Usually arising from legislative zoning amendments

Contract Zoning: Bilateral agreement between the owner and the zoning authority.

Floating Zone: Defining a zone but reserving the decision about its location for the future.

1. The local government creates (but does not pin down) a use district by an ordinance that specifies standards and criteria to govern the uses permittedin the zone.

2. Later in time, the zone is brought to earth, attached to a particular area through a zoning amendment.

Cluster Zoning: Flexibility device whereby a developer is permitted to construct dwellings in a pattern not in literal compliance with the area restrictions of a zoning ordinance.

- Involve area variations

Planned Unit Developments (PUDs): A mix of residential, commercials, and sometimes even industrial uses.

- Involves area and use variation.

vi. Aesthetic Regulation

CASE: STATE EX REL. STOYANOFF v. BERKELEY - The Supreme Court held that the ordinances didin fact provide for clear rules based upon maintaining property values, finding that there was due process.

- Police Power = Nuisance Control

CASE: ANDERSON v. CITY OF ISSAQUAH - The Supreme Court felt aesthetic considerations were not impossible to define, but that these were vague and the procedural safeguards contained were not enough to remedy the constitutional problem of vagueness.

vii. Controls on Household Composition - Would the denial of a conditional use permit to allow the use of church land

for a homeless shelter or affordable housing constitute an element of religious exercise?

CASE: VILLAGE OF BELLE TERRE v. BORAAS - It is permissible for the legislature to draw lines, which limit the number of unmarried people who can constitute a family.

- The ordinance does not ban association because a family within its guidelines may entertain whomever it likes.

- A quiet neighborhood is a permissible goal of a legislature. The police power includes zoning an area to promote family values, youth values, and quiet seclusion.

- How to define a family is not a constitutional right, so as long as a zoningordinance restricting types of households is rationally related to a permissible state objective, the ordinance will be constitutional.

- The freedom of association is often entwined with the right to privacy. The right to establish a home is an essential part of the Fourteenth Amendment. The choice of household companions involves deeply personal considerations as to the relationships within the home. That decision falls within the protection of the right to privacy. The zoning ordinance creates a classification, which impinges upon fundamental personal rights, so it can only withstand constitutional scrutiny only upon a clear showing that the burden imposed is necessary to protect a compelling and substantial

governmental interest. The means chosen to accomplish the purpose of a quietneighborhood are both over inclusive and under inclusive.

CASE: CITY OF EDMONDS v. OXFORD HOUSE, INC. - The Edmonds Community Development Code’s definition of family was not a maximum occupant restriction and thus was not exempt under the FHA. Justice Ruth Bader Ginsburg (J. Ginsburg) explained that the code provision governed family living and had been enacted to foster the family character of a neighborhood rather than the living space per occupant. Particularly, since an unlimited number of related persons could live together under the Code, it was not enacted to set a maximum occupancy.

- The Code governed family living and not living space per occupant as the exemption under the FHA. The purpose of a maximum occupancy is to protect health and safety by preventing overcrowding. To achieve such a purpose, it would need to apply uniformly. The provision here places absolutely no cap on the number of related persons who could cohabitate.

- “Group Homes”- “Locally Undesirable Land Uses” (LULUs)

viii. Exclusionary Zoning- Minimum housing cost requirements- Minimum floor area requirements- Minimum lot-size requirements- Minimum setback requirements- Barring mobile or manufactured homes- At worst zoning was a means to achieve segregation by class, income, and

race. Short of that it was an effective way to protect the property values of homeowners.

Inclusionary Zoning:1. Requirement: Conditioning a building permit on the builder’s agreement to

provide a certain number of units for lease at below-market rents.2. Incentive – Lifting density limits in exchange for the builder’s agreement

to build more low-income units.

D. Eminent Domain and Problem of Regulatory Takings- Fifth Amendment: “nor shall private property be taken for public use,

without just compensation.

i. Power of Eminent Domain - Eminent Domain : Power of government to force transfers of property from

owners to itselv.

ii. Public-Use Puzzle - Government may only take for public uses. May not condemn for “private”

purposes.

CASE: KELO v. CITY OF NEW LONDON - Public needs used to be according to rigid formulasand intrusive scrutiny in favor of affording legislatures broad latitude in determining what public needs justified the use of the takings power.  The court must look to the entire Plan’s importance and the City’s overall interest in the economic benefits derived from the development.

Broad View: Advantage or benefit to the public

Narrow View: Actual use or right to use of the condemned property by the public.

- If ends are sufficiently “public” in one sense or another, the test is passed.

- Should be permitted only for pressing needs the attainment of which would beunduly difficult without the means of eminent domain.

- Just Compensation : Value that the marginal owner attaches to his property.- Public-Use Test or Voluntary Transactions with owner who set the price

themselves.iii. Physical Occupations and Regulatory Takings

CASE: LORETTO v. TELEPROMPTER MANHATTAN CATV CORP. - A permanent physical occupation authorized by government is a taking without regard to the public interests it may serve.

- The historical rule that a permanent physical occupation of another’s property is a taking has more than tradition to commend it. Such an appropriation is a serious invasion of a property owner’s interest. The size of the area occupied under the taking is not important in this context.

- If the government action in question is depicted as a nuisance-control measure, then there is no taking notwithstanding the loss worked by the regulation.

Categorical Tests1. Permanent physical occupations are always takings2. Nuisance-Control Measure are never takings3. Land Use Regulations that prohibit all economic uses of property are takings

UNLESS the prohibited uses are common law nuisances

CASE: PENNSYLVANIA COAL CO. v. MAHON - A taking can result from regulation of propertythat seriously interferes with the use or enjoyment of the property by the owner.

- Surface v. Subsurface Rights- Diminution-in-value Test

- When governmental regulation of a use that is not a nuisance works too greata burden on property owners, it cannot go forth without compensation.

Conceptual Severance: Reasoning the rights of an owner as against the public are not increased by dividing the interests in his property.

CASE: PENN CENTRAL TRANSAPORTATION COMPANY v. CITY OF NEW YORK - Several factors must be weighed to determine whether a taking occurred:

(1) the economic impact of the regulation on the claimant and the extent to whichthe regulation has interfered with distinct investment backed expectations, and

(2) the character of the government action, a taking is more readily found when the government has physically invaded the property than when interference arises from some public program adjusting the benefits and burdens of economic life to promote the common good.

- “Landmark Site”- Distinct Investment-Backed Expectations (DIBE)- Transferable Development Rights (TDRs): Severs development rights from other

rights in land and treats them as a separate item.

CASE: LUCAS v. SOUTH CAROLINA COASTAL COUNCIL - It is unreasonable for a state to prohibit the owner from using the land as he originally intended, unless it can be shown that this use results in a nuisance or that general property law prohibits such a use.

- If a regulation prohibits all economically beneficial use of land and the proscribed use could not have been prohibited under a given state’s nuisancelaw, the regulation is a “taking” which requires “just compensation” to be paid to the landowner.

- The majority describes two types of regulation that are considered takings: (1) where the property owner suffers a physical invasion of his property and(2) where the regulation denies all economically beneficial or productive use of the property. The majority also focuses on the original intent and plans of the property owner to preserve the common law property rights as a means of determining whether a taking exists.

CASE: PALAZZOLO v. RHODE ISLAND - Assuming a taking is otherwise established, a State may not evade the duty to compensate on the premise that the landowner is left with a token interest. Here, however, the evidence showed that Petitioner was left with more than a token interest.

- Should be aware of the investment-backed expectations consideration for a claim analyzed under Penn Central v. New York, especially the reasonablenessof the expectations. Although prior enactment of the wetlands act is not a bar to a claim, one must question how much the Petitioner could have reasonably expected to gain from the property, which he succeeded to, in light of the regulation.

CASE: TAHOE-SIERRA PRESERVATION COUNCIL, INC. – TAHOE REGIONAL PLANNING AGENCY - In order todetermine if a temporary taking has occurred “requires careful examination and weighing of all the relevant circumstances.” 

- The moratorium (delay or suspension of an activity or a law) at issue is classified as a regulation of property from private use which does not require compensation.

- The court does not hold that the temporary nature of a land-use restriction precludes finding that it effects a taking; simply recognizes that it shouldnot be given exclusive significance one way or the other. The extreme categorical rule that any deprivation of all economic use, no matter how brief, constitutes a compensable taking cannot be sustained (i.e. normal delays in obtaining building permits, changes in zoning ordinances etc.).

iv. Exactions

CASE: DOLAN v. CITY OF TIGARD - One purpose of the takings clause is to bar the government from forcing some people to bear public burdens, which should be borneby the public as a whole. Such public access would deprive Petitioner the right to exclude others.

- However, a land use regulation does not constitute a taking if it substantially advances legitimate state interests and does not economically viable use of his land.

- A determination must be made as to whether the essential nexus exists between the legitimate state interest and the permit condition exacted by the city. If the nexus exists, then a determination must be made as to the required degree of connection between the exactions and the projected impactof the proposed development. There must be a rough proportionality between the demands of the city and the impact of the proposed development.

- When a city requires a landowner to convey some property to the city as a condition to obtaining a permit, there must be a rough proportionality between the burdens on the public that would result from granting the permitand the benefit to the public from the conveyance of land.

- When the government enacts land regulations, there must be a close fit between the land use regulation and the objective sought to be fulfilled by the government.