Property
with Professor Vicki Been
outlined by Lane McFadden

Spring 2000

I.	abFirst Possession - establishing incentives in the law
A.	abPierson v. Post (NY 1805) - P(Pierson) found and chased a fox as part of a hunt; D(Post) then stepped in, killed the fox, and carried it away.  The court held that “mere pursuit” gave P no legal right to the fox, and D had a legal right to intervene.
1.	abAlways read property holdings narrowly.  So here, the holding only applies to foxes on unclaimed land, and rights v. an interloper.  It would be different if Pierson owned the land or if it was a beaver.
2.	abImagine a continuum along which we reward effort and labor:
   
  Pursuit      Amount of time in pursuit    Reas. prospect    Certain prospect   Mortal wounding   Capture Intent to use?

3.	abDissent in Pierson would allow less labor than the majority because the policy goal is eliminating pest.  Point?  Consider the incentives when making policy.  Here, greater certainty provides greater incentives.
4.	abDoes Pierson provide certainty?  Arguing “mere pursuit is not enough” decreases the risk of ambiguity.  Best ways to do this are:
a.	abEstablish a brightline
b.	abDecrease the number of subjective criteria used
c.	abDecrease the number of issues.  (Dissent would increase - “reasonable prospect”)
B.	abWild animals are unowned until they are captured, at common law.

C.	abWhy first possession?  common law approach – clear-act + reward-to-labor = useful labor will be the clear communication of notice (the act).  Provides certainty in the law (by providing objective evidence of a claim of entitlement).

II.	abDo we want certainty in the law?
A.	abNO
1.	abUnjust in certain situations
a.	abNot adaptable to circumstances
b.	abStrictness of the rule might favor one group
2.	abInflexible when dealing with changes in circumstances or mores
3.	abMay not deter overinvestment
4.	abMay deter technological innovation.
B.	abYES
1.	abMore likely to lead to equal treatment of people under the law
2.	abLess likely to cause mistakes
3.	abAllows for more predictability
4.	abProtects your investments (the SQ is more stable)
a.	abThis ºmore productivity
5.	abúTransaction costs (no need for prior agreements or for ex post litigation
6.	abA more certain rule is more likely to trigger consent notions

III.	abFirst Possession II - using custom to create the law
A.	abGhen v. Rich (Mass 1881) p. 26 - Judge legalizes the custom used by whalers of marking their finds so that when they wash up, others can’t take them.
B.	abThings considered by Ghen v. Rich judge when codifying custom:
1.	abThe number of people affected
a.	abA smaller number means there’s more likelihood that people have consented to the custom.
2.	abLaw should follow people’s expectations
a.	abOr else it might just get disregarded
3.	abIt’s worked up until now (because there’s never been a legal challenge)
C.	abProblems with codifying custom
1.	abWhen custom is established by a small group but the actions affect an outside group who has little or no say.
2.	abWhich interests do the custom-makers represent?
3.	abCustom might not be as recognizable or easily followed as a law.

IV.	abThe Rule of Capture
A.	abThings to capture:
1.	abBefore domain name statutes were passed, this was a great example of unrestricted capture.  This demonstrates the worth of “initial recognition of value” on the continuum of effort above.
2.	abGeothermal nodes on the ocean floor.
B.	abA rule of unrestrained capture poses several risks:
1.	abOverinvestment in the search (and related search technologies)
2.	abOverconsumption
3.	abMonopolistic control of resources by the person who gets there first.
4.	abTends to reward size and might
5.	abTends to destroy natural storage value (oil, gas, or water)
6.	abResults in less efficient consumption (no consideration for what the cheapest methods of acquisition or extraction would be overall)
C.	abWhere the fugitive resource is captured, then re-released, the capturer has not been held responsible for damage done through the rerelease. Hammonds, the slant-drilling oil case.
1.	abHad court addressed policy concerns, it might have wanted to separate the question of original ownership from the question of liability for reintroduction.

V.	abMore capture and first possession
A.	abKeeble v. Hickeringill (Eng. 1707) p. 30 - P claimed that he had set some decoys on his own pond to lure ducks for hunting, and that D fired guns nearby to drive the ducks away.  Court found D liable because he acted out of spite and malice, but said that if he had done it for purposes of business competition, that would be okay.
1.	abIdentical to Pierson - Another “savvy interloper”, question is whether the pursuer had a right to stop interference by others; same underlying policy arguments.
2.	abBut Mr. Keeble doesn’t get any socially acceptable benefits.

VI.	abTheories of the origins of property
A.	abPreserving order
1.	abJustified by the peacekeeping aspects of property law; but doesn’t really explain why this is the chosen method.
B.	abProductivity
1.	abAlso doesn’t explain why this is the chosen method, rather than “might makes right,” e.g.
C.	abTerritoriality
1.	abProperty as personhood 
a.	abWhat property represents personhood? Money?
2.	abNature vs. nurture; this notion of property is culturally determined
D.	abPolitical
1.	abA way to give people the ability to overthrow their government
E.	abUtility
1.	abA way to internalize costs as new technology develops (Demsetz)
F.	abLabor
1.	abLocke.
a.	abLocke clearly limits his treatise to situations where his conditions are met, which includes leaving enough for others.  I.e., not a market with scarce resources.
2.	abCopying (as in AP) - labor theory would say this is stealing.  But:
3.	abProblem: What has one person’s labor contributed to a product/piece of property?  How do we separate the value of the good inherently (e.g., news) and of the labor?  How much did Moore contribute to the advent of a new cure v. all the other donors?
a.	abDo you value your labor speculatively or retroactively?  What is the cell worth?
G.	abReliance
1.	abOf people; they can’t enjoy land (and won’t invest in it) if it could be taken away from them.
2.	abThird parties rely on people being able to continue to use their land the way they have been.
3.	abExamples: AP, marital property, first in time rules such as Pierson v. Post.
4.	abReliance should be reasonable.
a.	abYou shouldn’t rely on something if you’re told not to (you’re on notice).
H.	ab

VII.	abGuido Calabresi
A.	abProperty rule - the owner has exclusive rights, including exclusion
1.	abProtected by an injunction
B.	abLiability rule - society can intervene, and pay the owner compensation
1.	abProtected by damages
C.	abInalienability rule - the owner retains control at all costs

Public Choice Theory

VIII.	abThe communal property problem
A.	abSay a village of 100 people owns 1000 trees - each person has a 1/100 undivided interest in maintaining those trees.  Now say Larry chops down a tree.
1.	abHe bears 1/100 of the cost, and society bears 99/100 - this is the externality.
2.	abWhen the rule of capture is at play Larry has externalized the cost of cutting down the tree, so this will lead to overconsumption by the first possessor.
3.	abWhen benefits are externalized (Larry only gets 1/100 of the profit), this öunderinvestment.
B.	abMore problems:
1.	abSay the trees are v=$20, but future value (present value discounted) is v=$30.  Demsetz claims communities can’t take this into account, but individuals can.
a.	abWhy?  Transaction costs are too high
2.	abTransaction costs in general for communal decisions are too high:
a.	abIdentifying owners
b.	abMeeting costs
c.	abLegal/administrative costs
d.	abEnforcement of agreement
e.	ab“Hold Outs”
f.	ab“Free Riders”

IX.	abDemsetz is a jive-talking bastard
A.	abAmbiguity of terms
1.	abDoes “communal property” mean sharing or with capture?
B.	abAmbiguity in scope of argument
1.	abAll communal regimes or just some?
C.	abIdentification of key assumptions
1.	abThe rule of capture governs
D.	abInternal consistency of the arguments
1.	abPosner and Rose point out that people can’t agree to have private property if they can’t even agree on the sharing rules
E.	abInconsistent application of standards
1.	abHe’s not as strict on costs of a private property system
F.	abFailure to account for other interests
1.	abWhat if a communal system increases quality of life by providing a psychological benefit?
G.	abFactual errors
1.	abIs it historically and anthropologically correct?

X.	abConquest - Acquisition by Discovery
A.	abJohnson v. M’Intosh - discovery overruled by conquest
1.	abM’Intosh got a land grant from the US, Johnson’s predecessor in interest bought it directly from the Indians.  Marshall frames the question: “Can the courts recognize the title of the Indians?”  A question of institutional competence.
a.	abNo.  The court can’t recognize title granted by the Indians.
b.	abThe Indians maintain a right of occupancy, to continue their use.
2.	abThe new rule is necessary because of the savage, warlike character of the Indians.  If they would cooperate, then some negotiations might be had.
3.	abSettled expectations; Marshall is unwilling to toss out every title in the country.
B.	abMabo v. Queensland
1.	abTurned out in favor of the native people, but mostly to prevent racial discrimination.  The question is framed as, “Can the government annex previously held land?”
2.	abAny questions raised by the court (compare to Johnson v. M’intosh) were quickly solved through legislation.

XI.	ab“Finders, Keepers”
A.	abFinders aren’t really keepers.  They only hold the property in trust for the true owner.  But, finders have rights superior to those of everyone except the true owner.
B.	abArmory v. Delamirie (Eng. 1722) p. 99
1.	abA chimney sweep’s boy found a jewel - he took it to a goldsmith, whose apprentice stole it.  Ruled that the chimney sweep’s boy had a right to keep it as against the goldsmith.  Also, you presume the value of the stolen good was as high as possible.
2.	abThieves are protected against subsequent thieves - a finder has a right to possession as against everyone except the original owner.
a.	abMay as well protect thieves b/c we can’t distinguish b/t thieves and finders, and we want to stop the “chain of thievery.” 
3.	abConsider property rights in terms of “X has rights with respect to...”
C.	abHannah v. Peel (Eng. 1945)p. 103
1.	abSoldier quartered in a house in which the owner never lived found a brooch, and the homeowner claimed possession of the brooch.
2.	abExpectations of whether a homeowner owns what’s on his or her property differ.  Here, the court held that while the soldier had no rights against the original owner, and the homeowner normally owned everything on her land, here the homeowner hadn’t really established possession of the land and so the brooch should remain with the soldier.  
D.	abMcAvoy v. Medina (Mass. 1866) p. 110
1.	abA woman leaves a pocketbook, and P (a customer) picked it up and turned it in to D (shopowner).  P came and asked for the money three times, but D refused.  Court ruled that the property was not lost, but “mislaid,” and the D had a duty to hold it in trust.
2.	abPolicy: let’s increase the chance that the true owner will get their property back.

E.	abInternational News Service v. AP (USSC 1918) 
1.	abINS takes AP bulletins and publishes them as their own news, selling it to their clients.  Majority argues that true news is common property, but that these bulletins are the product of labor, and this is about unfair competition.  The news is not abandoned, and AP’s actions intervene at the precise moment the AP becomes profitable.    Publication is for limited purposes (profitability).  Ruled: INS can’t use it for several hours.
a.	abBrandeis’ dissent: The news is not property b/c it’s ideas.  INS isn’t trying to profit from AP’s reputation, just from something they found.  They weren’t trying to hurt AP either.  Creating new property rights out of a common good has serious consequences; let’s not go there.  Brandeis doesn’t want to infringe on “the free use of knowledge and ideas.”
2.	abNeither can have a property right in the news as against the public; only against each other.  “Is there property in the news?” is a meaningless question.
3.	abAP does get an exclusive right to first publication as against INS.
a.	abSee discussion of copying above under the labor theory.
F.	abCheney Bros. v. Doris Silk Corp. (USSC 1930) p. 60-61
1.	abSame situation as AP, but court sees it differently; silk isn’t important to society, and mimicking technological innovations isn’t bad.  So people should be able to copycat designs.  Court says AP is distinguished because it was a very narrow holding.  Protecting a design from copy would be an incredible slippery slope problem.  (But of course there are patents!)
2.	abIn Smith v. Chanel (9th Cir. 1968) p. 63 the court held that a copyist actually served a beneficial public interest by “offering comparable goods at lower prices.”
G.	abMoore v. Regents of UC (Cal. 1990) p. 66
1.	abPeople can’t sell their organs; a statutory requirement.  You don’t continue to own your cells once they are extracted as a medical procedure, even if they’re used for things.
a.	abWe don’t want scary, evil organ markets.  Fucking conservative idiots.
b.	abWe do want to limit liability on good faith users who unknowingly benefit from a drug based on cells whose property was not properly acquired through purchase by the original researchers/doctors.
c.	abThe court did hold that Moore could sue the extracting physician for breaching fiduciary duty if he intended to sell them w/o telling Moore.
2.	abBundle of rights: Moore could have been given the right by the court to exclude the Ds from commercially exploiting his cells at the time of extraction, but not the right of transfer!
3.	abThis conception prevents the slippery slope.  Calling it “property” doesn’t ± infinite rights.

H.	abInstitutional Competence: both the dissent in AP and the majority in Moore pass the buck to the legislature.  Do we want to make these decision more democratically?
1.	abWhat about regulatory capture?
2.	abLegislative approach; an individual focus.  Judicial decisions are broad.
3.	abThings we want our decision-makers to have
a.	abAccountability
b.	abAdministrative/enforcement powers
c.	abPromptness/responsiveness
(1)	abThe court can act now, and the legislature can undo it later.
d.	abWhat about SOP?  Should the court make law?
e.	abInnovation
(1)	abDoes the common law system constrain innovation in new paradigms for the court (like Moore)?

XII.	abAdverse Possession
A.	abHypo: NY has a 15-year SOL.  O buys property in 1968, T(respasser) moves onto it in 1975.
1.	ab1968: O’s rights protected by a property rule - she owns the land in fee simple absolute.
2.	ab1975: Same rights apply, plus she has a cause of action against T.  T now has rights to the land as against anyone except O.
3.	ab1990: SOL is tolled.  T now has rights against everyone.  AP actually clears the title.
B.	abWhy allow adverse possession?
1.	abReward labor and productivity
2.	abComply with people’s expectations
3.	abTo punish a sleeping owner; we want to encourage policing by owners, not by the State.
4.	abRedistribution; possibly, the wealthy lose land to the poor.

C.	abVan Valkenburgh v. Lutz (NY 1952) p. 120
1.	abConflict over the lot behind the Lutz house; the lot they had built a shack and garden on was bought by the Van Valkenburghs after Lutz chased their children with an iron pipe.  A series of lawsuits went on, but in the first one Lutz claimed only a right to use the causeway, and that Van Valkenburgh owned it.  Eventually the court gave Lutz an easement to access the road, but ruled that Van Valkenburgh owned it because of the prior admission.

2.	abWhy not some other solution: neighborly disputes are irrational, and dividing up the lot doesn’t work.  You want to avoid this situation: 

3.	abA big question was whether the cultivation was large enough to count as AP.  This is a question of subjectivity which hearkens back to Johnson v. M’Intosh.

D.	abClaim of right (hostility)
1.	abEngland doesn’t look at state of mind at all; SOL begins running immediately.
2.	abMajority rule: “claim of right” = “hostile.”  T need only not have O’s permission.
3.	abMinority rule: requires a “good faith” T.  T cannot know that s/he is trespassing, and must have a bona fide belief that she has title to the property. 
a.	abThis happens even in majority courts; unwilling to give land to a knowing T.
b.	abWhy not require “bad-faith” possessors to pay fair market value to O, and then give them the title?  This would prevent wrongful activity w/o compensation but still maintain AP for the reasons we listed above.
4.	abAggressive trespasser: Courts always presume that you intend to take the property, even if you intended to give it back when O showed up.   

E.	abManillo v. Gorski (NJSC 1969) p. 138
1.	abD built steps behind her house to the side door which encroached 15 in. onto P’s property.  She had this piece of the land for twenty years, and mistakenly thought it was hers by deed.  Court holds that mistake can qualify and they overturn requirements of “open hostility.”  Manillo is now the majority rule.
a.	abThey also hold that tiny encroachments are not “open and notorious,” and that requiring surveys would be an undue hardship.
b.	abProperty only protected by a liability rule if there is actual notice (by notoriety)
2.	abHostility still important: consider leasing or if someone said “Can I use your land for a bit?”

F.	abColor of title: where the deed is mistaken.  This can grant you adverse possession taken under color of title, called “constructive adverse possession” by Emmanuel’s.

G.	abAdverse possession requirements:
1.	abActual - often conflated with “open and notorious.”  Used to determine when the SOL starts.  You have to use a reasonable percentage of the land.
2.	abOpen and notorious - usually just requires using the property as a true owner would.  Sometimes difficult to determine.  Also means, O must be reasonably expected to know that another person has entered the property.
3.	abHostile / Adverse - lack of O’s permission is required.
4.	abContinuous - interrupted by ouster (by anyone) or re-entry by O.
5.	abExclusivity - 
a.	abdefeated if:
(1)	abYou’re sharing with O
(2)	abYou’re sharing with other members of the public (like if you have an easement)
b.	abTwo people can only jointly and become joint owners under AP

H.	abAP of chattel
1.	abGeorgia O’Keeffe v. Snyder (NJSC 1980) p. 153
a.	abThe SOL is held not to start running until the true owner knows or should have known of the theft and the identity of the theft (what was stolen).
(1)	abThis is really hard; maybe AP should only be for land.
(2)	abHere it means the SOL never runs, and the paintings can never be sold.

XIII.	abMarital and Intellectual Property
A.	abIn re marriage of Graham (ColoradoSC 1978) p. 379
1.	abWoman wants rights to her husband’s masters degree after divorce.  
2.	abCourt uses the “looks like, smells like” property test- The degree isn’t saleable/transferable.
B.	abCourts aren’t treating intellectual property the same way they do land.
C.	abDifferent theoretical approaches
1.	abLabor theory - paying for it ÷ a right to share in it
a.	abRewarding her gives him less incentive to work for the degree.
b.	abThe value of his degree is so speculative (like a cell for research!)
2.	abReliance theory - wife forwent opportunities for herself to invest in his degree
3.	abExpectations - she expected to be married to an MBA.  Not a popular notion, this one.

XIV.	abEstates
A.	abCharacteristics
1.	abEstates are or may become possessory
a.	abSo easements and restrictive covenants can’t be estates
2.	abEstates are measured in terms of duration

B.	abRemainders
1.	abVested
a.	abIf there’s no condition precedent (except the expiration of the prior estate)
b.	abMust be possible to identify who will take the remainder when possessor expires
c.	abVested remainder “subject to open” means O÷A for life, then to B’s children.
2.	abContingent
a.	abIf its subject to a condition precedent (other than expiration)
b.	abOr it it’s Created in favor or an unborn beneficiary
c.	abOr if it’s Created in favor of a living but unidentifiable beneficiary
d.	abAny time the last interest is a contingent remainder, there’s a reversion interest in O.
e.	abAt CL, vested remainders were transferable but contingent ones weren’t.

C.	abExecutory Interest
1.	abAny interest for a TPB that’s not a remainder.
2.	abAn executory interest can divest (cut short) the primary estate.
3.	abExamples:
a.	abO÷A for life, but if B should marry then to B and B’s heirs.  So even if A were still alive, B could take the estate by marrying.
b.	abO÷A for life, then 1 year later to B.  This is a “springing” executory interest, b/c it reverts back to O when A dies, then springs back from O to B.

XV.	abThe Free Market is a Communist Plot
A.	abDemand side problems
1.	abUnjust initial distribution - let’s just intervene a little, no big deal.
2.	abPreferences aren’t “internal” - shaped by culture and advertising.  This is just nature vs. nurture.
3.	abImperfect information - 
a.	abE.g., people underestimate voluntarily assumed risks, and overestimate risks that are imposed on them (remember Risk Comm.?)
4.	abThere may not be a viable market mechanism for public goods
a.	abZoning restrictions - the example Been gives
5.	abPeople are irrational cretins
a.	abTransitivity might not work; a bipolar choice may force comparison of different factors of the same good than does a choice over the three.  So maybe rationality doesn’t require this.
6.	abThere’s no “social welfare” outside the aggregate of individual welfare.  But maybe people do act differently in their roles as citizens than as consumers
7.	abUtility is incommensurable - “happiness units” can’t be compared across people.
B.	abSupply side problems
1.	abHigh costs of entry and exit
2.	abNatural monopolies
3.	abInformation withheld by collusion and high entry barriers
4.	abSellers don’t act to maximize profits (racist landlords, Ben and Jerry) - they value informal norms and cultural affirmation as well as money.
5.	abDe minimis number of sellers for competitiveness

XVI.	abCoase
A.	abMistaken assumptions of Coase
1.	abHe thinks there’s equal distribution of wealth.
2.	abHe thinks parties have equal bargaining power.
3.	abWe assign fault for all sorts of normative reasons to make parties liable for bad behavior.
4.	abThe “offer-ask” disparity.  People will ask for a lot more to surrender a right than they would have paid for it initially.
B.	abWhen government steps into the shoes of the neighbors, it has a different set of interests than they do when they act as citizens or neighbors compared to when they act as consumers.
C.	abCoase’s theorem always cautions against inalienability.
D.	abCoase theorem suggests that regulating market transactions skews other markets in unforeseen ways.  Also, all government actions have opportunity costs that must be considered.

XVII.	abDead Hand Control and the Fee Tail
A.	abDead hand control is an effort to shape the nature of an estate so that by definition, it can’t be transferred or changed in certain ways.
B.	abIt’s also an effort to influence behavior of the future owner by making future ownership conditional.  E.g., the fee simple determinable, fee simple subject to a condition subsequent
C.	abAnd an effort to influence behavior of future interest holders - e.g., remaindermen, executory interest
D.	abAnd of course, restrictive covenants - limitations that run with the land.
E.	abThe Fee Tail - From O÷A and A’s heirs, meant that A’s (collateral or lineal) heirs also had an interest and they would keep the land forever until the family’s line was totally dead.  This prevented A from dissipating the wealth by breaking up the estate.

F.	abMahrenholz v. County Board of School Trustees (Ill. 1981) p. 231
1.	abIn 1941, the Huttons gave 1 ½ of their 40 acres to the School, providing “this land to be used for school purpose only; otherwise to revert to Grantors herein.”  Harry was left as their legal heir.  Classes were held until 1973, when the building was used for school storage.  Harry conveys all his interest to the Ps in Sept. 1977, without re-entering.  But the day before, he disclaimed all interest in the land to the School.
2.	abHeld: for the Ps.  The original deed from O÷D created a fee simple determinable; the deed gives it “only” for school purposes, and thus is a limited grant, rather than a full grant subject to a condition.  Revert language sounded mandatory too.  Thus, land had reverted back to Harry in 1973 automatically, and he had a fee simple absolute.
a.	abThus, his attempt to transfer to the Ps intra vivos is invalid, but his releasing of his rights to the school land is ok? [from notes]
b.	abCourts interpret language w/hostility towards FSDs.
3.	abHad this been a fee simple subject to a condition subsequent, Harry would have had to reenter when the condition was broken (1973) in order to cause the right to revert to him.
a.	abHe would have up until the SOL for AP in order to retake the land.  

G.	abMountain Brow Lodge No. 82 v. Toscano (CA 1968) p. 240
1.	abToscanos conveyed their land during life, with a “habendum clause” that restricted use and granted a right of reverter to O and O’s heirs.  The Lodge had no use for it after a while but couldn’t sell it or use it for anything else (as a parking lot).
2.	abDoesn’t the restraint on use ÷ a restraint on sale?  Can you restrain alienation in a fee simple estate?

H.	abWhat’s wrong with the Dead Hand?
1.	abYou can’t negotiate with the dead.  Circumstances change but clauses won’t.
a.	abBut, do inheritors really know best?
2.	abWe don’t want to keep people from donating to charitable interests.
3.	abWe want to encourage productivity - the Lodge won’t invest in this land if they don’t need it.
4.	abú mortgageability of the land.
5.	abBut we still have life estates!  Don’t these have the same problem?
a.	abWe want to respect peoples “natural” altruism and closeness towards their heirs.
6.	abWhy aren’t societal limits on my dead hand control a takings?

I.	abLegislative responses:
1.	abMarketable Title Acts - requiring holders of future interests (reverter, re-entry) to periodically re-record their interests to maintain them.  A lot of people default (don’t know or don’t care?)
2.	abStatutory limitations on future interests (c. 30 years)
3.	abRefusal to enforce conditions of “nominal value”
4.	abRestraints:
a.	abDisabling Restraint: “to A for life, but A may transfer” - if A transfers, transfer is void
b.	abForfeiture Restraint - “but if A transfers, then to B” - reverts to O or goes to B
c.	abPromissory Restraint - “to A for life, but A promises never to transfer the estate.”  If A transfers, s/he’s liable in money damages.

XVIII.	abThe Rule Against Perpetuities
A.	abAn interest must vest, if at all, not later than 21 years after some life in being at the creation of the estate.
1.	abThis rule applies to interests not vested at creation - e.g., contingent remainders and executory interests
2.	abHypo: O ºA for life, then to the first child of A to graduate from law school.
a.	abThis violates the Rule, because we can imagine a situation where it vests in someone who wasn’t a life in being at the time the estate was created and who graduates from law school 21 years after its creation.
b.	abIt doesn’t matter if this is what happens, only that Rule can be violated.

XIX.	abThe state of Life Tenancy
A.	abBaker v. Weedon (Miss. SC 1972) p. 219
1.	abTo A for life, then to A’s children.  If no children, then to O’s grandchildren (O skips his own evil daughters in favor of his wife).  
a.	abSo A’s children have a contingent remainder (b/c they’re unborn), and O’s grandkids do to because A would have to have no children for them to inherit.
2.	abO’s grandchildren oppose the sale of the land by A because it’s value is increasing.
a.	abCurrent market values include an estimate of its future profitability.  So if it’s worth $165,000, that’s all the market thinks it will be worth later.  The court ignores this and follows the grandchildren.  The court also doesn’t discount for time preference.
3.	abShouldn’t the court have cared about John’s intent?  A’s personality interest?
4.	abMaybe a life estate only means you have the right to the income from the property for your life, but not necessarily a right to sell the land.  

B.	abThe rights of a Life Tenant
1.	abUndisturbed possession of the land - the right to stop trespass or adverse possession.
a.	abRemaindermen have no right to occupy the land, except to inspect the property.
2.	abOrdinary and recurring income (like rents)
a.	abThe open mines doctrine - Land can be used however it was being used when you take possession, but not necessarily for a new discovery.  Remaindermen must generally agree on any drastic changes.  

XX.	abThe problem of waste
A.	abWaste is the “unreasonable” use of property by the present interest holder
1.	abPermissive waste - failure to keep the property in a reasonable state of repair
a.	abLife tenant pays taxes, interest on the mortgages, and normal maintenance.
b.	abLife tenant not responsible for extraordinary repairs or keeping insurance.
2.	abAffirmative waste - selling off all the natural resources of the land, e.g.
3.	abAmeliorative waste - altering the land and increasing its value
a.	abAssume the grantor left the land in the state he wanted it to be in.  “One man’s improvement is another man’s horror.”

XXI.	abConcurrent Ownership
A.	abJoint tenants - 
1.	abUnity of time - interests must be acquired simultaneously
2.	abUnity of title - acquisition by same conveyance or by joint adverse possession (not by intestate possession)
3.	abUnity of interest - A & B can’t be given unequal shares- this is usually ignored by courts.
4.	abUnity of possession - anything either one does to their title (while alive) will sever the joint tenancy and destroy it.
5.	abTerm required to create: “Joint tenancy with right of survivorship”
6.	abJoint tenants hold a ½ share, but also the whole share b/c of ROS.
B.	abTenancy by the entirety -
1.	abRequires the above four unities, plus it requires marriage.  (Not in HI - but in VT?)
2.	abTenants in the entirety hold a whole share, not halves.  They’re a fictional single entity.
3.	abTenancy in the entirety can’t be unilaterally destroyed.
C.	abTenancy in common-
1.	abSame as joint tenancy but without the right of survivorship.
2.	abCan be passed by intestate succession - it’s descendible.
D.	abIn both  a tenancy in common and a joint tenancy, you have the right to occupy the entire premises.
E.	abHypo:

1.	abIf A and B hold as joint tenants with right of survivorship (JTROS); A dies and leaves property to C - no good!  B automatically takes it.  Wills can’t break up JTROS.
2.	abBut if A and B were tenants in common, then B and C would become tenants in common; A only has half of the property. 
3.	abIf A and B were tenants in the entirety, then when A dies B gets everything.
4.	abNew one: if A,B, and C are JTROS, and A deeds her interest to D, it becomes a tenancy in common between D and the “single unit” of B and C, who between each other are still JTROS.  So if A and B die, then C gets 2/3 and D holds 1/3.

F.	abRiddle v. Harmon (CA 1980) p. 326
1.	abThe Riddles own in joint tenancy; she deeds ½ the property interest to herself, destroying the JTROS and creating a tenancy in common.  She doesn’t use a strawperson, but she could have.  She wanted to be able to dispose of her interest by will instead of giving it to her husband.
a.	abThis lets Mrs. Riddle wipe out his interest w/o telling him or allowing him to defend.  This can be solved by requiring transfers to be recorded (which CA does now).
G.	abHarms v. Sprague (Ill. 1984) p. 332
1.	abP and his brother John took title to real estate in ‘73 as JTROS.  John gave a mortgage on his interest in the property to a friend so his friend (D) could buy land.  P had no idea.  John moved to this property D now owned, and then he died, leaving D his devisee.  
2.	abLien theory of mortgages- mortgages don’t pass title, and therefore don’t sever JTROS.
3.	abCourt holds that a mortgage can’t survive John’s death and the creditors lose their $.
H.	abDelfino v. Vealencis (Conn. 1980) p. 341
1.	abP owns 11/16 and D owns 5/16, as tenants in common.  D lived on it and ran a garbage service; no one uses the rest of the property, but P is a developer and wants to put up 45 residential lots.  P asked for partition of the property by sale w/proportional splitting of the proceeds.  D asked for a partition in kind.
a.	abTrial court thought overall wealth would be üif the property was sold.
b.	abKaldor-Hicks efficiency - if A can be made so much more better off that they can make B whole, we should allow the move.  This is compensated Pareto optimality.
c.	abCourts always prefer a partition in kind, except when impracticable.
2.	abSince this was a nonconforming use, the neighbors had no right against it, even if they were unhappy because it’s legal under zoning.  By giving the developers the power to force a sale, they get more rights than the neighbors have.

I.	abSwartzbaugh v. Sampson (CA 1936) p. 352
1.	abSwartzbaughs owned 60 acres in JTROS; husband leased a strip to D for a boxing pavilion (built on top of her treasured old walnut trees).  Can one joint tenant who has not joined in the leases executed by her cotenant and another maintain an action to cancel the leases where the lessee is in exclusive possession of the leased property?
a.	abA cotenant has no veto rights, but a cotenant can only lease that portion of the property that is theirs.  Both the Swartzbaughs own ½ of the boxing pavilion each.
2.	abWhat else could she do?  Partition off the one acre.  She could partition over time (selling them only a ten-year lease, e.g.).  And so on.  All her options screw her.  She sues for rent.
3.	abImprovements: A cotenant can never sue for cost of improvements.  Once the cotenancy is severed, s/he gets the value added from the cost of improvements.
4.	abContribution: A cotenant can ask a tenant out of possession for “contribution” towards taxes and mortgages, because the land is forfeited without them.
a.	abBut normal maintenance can only be requested at the time of accounting.
5.	abWaste: One cotenant cannot generally sue another for waste.  

J.	abOuster
1.	abMajority rule: the cotenant has no right to recover rent from the tenant in occupancy unless the tenant in possession has ousted the tenant out of possession.
a.	abThe tenant in possession must make a very clear statement.
b.	abRefusal to vacate alone is not an ouster.  Refusal to pay rent is not an ouster.
2.	abMinority rule: tenant out of possession is owed fair market value.
3.	abSwartzbaugh: if the D had responded “Get out of here” to her protests, that’d be an ouster.
4.	abAn ouster triggers adverse possession.

K.	abOwnership situations
1.	abCoop - you own the unit by owning a piece of the corporation, and if you default the whole corporation is at risk.  Coops allow for discrimination.
2.	abCondo - you own the bricks and mortar (in part).  Association owns the common areas.  Your default doesn’t affect the other owners.
3.	abRCA - Residential Community Association.  Like the coop boards, but for condos.

XXII.	abServitudes
A.	abSome protection was granted to homeowner’s interests through defeasible fees (OÿA for residential use only, e.g.)  But
1.	abO can’t be trusted to enforce, or to not change their mind when the land reverts.  Often, O (a developer) will market an upscale subdivision, and then change plans when the economy ú.
2.	abCts. are reluctant to enforce fee simple determinables.  So the restriction may disappear.
3.	abA had no way of enforcing this restriction against his neighbors
B.	abThe law of servitudes: a device that creates an interest that runs with the possession of the land or ownership of an estate in land such that it burdens or benefits not only the original parties but their successors in interest.  3 main types (collapsed under Rest. of Servitudes 3d.):
1.	abEasements- an interest in land in the possession of another, granting the holder of the easement the right to use that land in some way.  Can be affirmative or negative.
2.	abReal Covenants - agreement between two parties that imposes obligations on the owner or possessor to do something or not to do something on the land.
a.	abEnforceable by damages only.
3.	abEquitable servitudes - Basically a real covenant that a lawyer screwed up.  A covenant that can’t be enforced by law but a court of equity would enforce it anyway under a diff. theory.
a.	abEnforceable by an injunction.

C.	abCovenants- the good stuff
1.	abFor the burden to run with the land:
a.	abThe promise must be enforceable between the original parties
b.	abThe original parties must intend that the burden will run
c.	abThe burden must touch and concern the promisor’s land
d.	abThere must be privity of estate, usu. meaning a land transfer between promisor and promisee, plus a succession of estate from promisor to her assignee.
2.	abFor the benefit to run with the land:
a.	abThe promise must be enforceable between the original parties
b.	abThe original parties must intend that it be enforceable by an assignee
c.	abThe benefit must touch and concern the promise’s land
d.	abPrivity of estate is sometimes required.
3.	abWhat is... “horizontal privity?”
a.	abAnytime land is transferred, this satisfies the horizontal privity requirement (in most states).  This requirement is being increasingly abandoned, and Rest. 3d abolishes it altogether.
(1)	abIf the promise is made after the conveyance, there’s no horizontal privity.
b.	abOne of the main reasons for covenants is to allow neighbors to mutually agree how to use their land.  So since they’re not grantor/grantees (usually), they have to use a straw to have a covenant.
4.	abVas is das... “vertical privity?”
a.	abBurden side: At CL, the party against whom the covenant is sought to be enforced must be a successor in interest in the estate or an estate of equal duration (but not necessarily of the same geographical size).
(1)	abSay B receives interest from the covenantor, and A receives interest from the covenantee.  If the covenantor had a FSA and B got a life estate, there’s no vertical privity (not of same duration).
(2)	abBut if Cor has an FSA and B gets a FSD, this counts.
b.	abAn adverse possessor is not a successor, so there’s no vertical privity there.
c.	abBenefit side: If A has the same estate or a lesser estate, then the covenant is enforceable.  We want people to benefit but we are wary of burdening them.
d.	abThe trend is towards abolishing vertical privity for negative covenants.  
e.	abAn equitable servitude does not require vertical privity.  

D.	abTulk v. Moxhay (Engl. 1848) p. 863
1.	abP sold to Elms, who promised to maintain (aff.), not to build a garden (neg.), and to allow admission of O (both).  Moxhay comes to own the land; the deed doesn’t mention the covenant but he has notice of it.  This case has no horizontal privity in England (only horiz. privity is in landlord/tenant relationships).  So ct. invents an equitable servitude.
a.	abTulk was paid less by Elms because of the covenant.
2.	abTulk is important because it softens the rules and creates a new rule in equity that allows an injunction w/o a strict requirement of horizontal privity.
3.	abHypo: Say we have Tulk v. Elms in the US.  There’s no horizontal privity problem.  But say Moxhay is a life tenant instead of FSA.  Moxhay has no vertical privity on the burden side, so it’s not enforceable against him.
a.	abEquitable servitudes don’t require vertical privity for the burden to run.  As long as Moxhay owns an estate or possesses the land, it’s enforceable.
b.	abTouch and concern and intent are still required.

E.	abSanborn v. Maclean (Mich. 1925) p. 868 - the “implied reciprocal negative easement”
1.	abMcLeans wanted to build a gas station behind their house, despite the reciprocal negative easement that P claims exists.  Ds deny they knew anything about that when they bought the land.  Suing neighbors (Ps) are successors in interest to the original deeds, bound by all residential-use restrictions.  But there’s no evidence that the developer made any explicit promises to the buyers of the restricted lots that he would bind future purchasers (incl. Ds).
a.	abCourt finds that there’s a common scheme of development, as evidenced by restrictions on all the other lots.  So when he sold the early lots, his remaining land became subject to a reciprocal negative easement.  D had constructive notice of the restriction (b/c all the other lots around were restricted).
b.	abBeen: “Sanborn is way out there.”
F.	abNeponsit Property Owner’s Assoc. v. Emigrant Bank (NY 1938) p. 873
1.	abDoes a requirement to pay homeowner’s association dues “touch and concern” the land?  This was a covenant created by the original homeowners.
a.	abThe aff. covenant to pay dues does touch and concern the land - benefits are bestowed on the land.
b.	abNo vertical privity; the assoc. didn’t succeed to the land- how can it enforce?
c.	abThe court “pierces the corporate veil” by viewing the assoc. as a representative of the landowners.  But it developed after the original grant; so purchasers of the land didn’t really bargain for it.
(1)	abThird-party enforcement of covenants is a big problem.  If A gave his land to the Nature Conservancy, the court wouldn’t say they were acting as an agent of the homeowners.  
2.	abThe Bigelow test: If the promise makes the covenantor’s land less valuable, and if the promise makes the covenantee’s land more valuable, then it “touches and concerns.”  Been claims this is circular.
G.	abThe Rest. 3d. of Property eliminates “touch and concern”
1.	abEstablishes separate grounds for refusing to enforce a servitude at its inception and for refusing to enforce servitudes on account of subsequent events.
a.	abRejecting agreements at their inception now based on public policy: unreasonable restrictions on alienation, racism, etc.
b.	abRejecting agreements afterwards based on whether circumstances changed.
2.	abDecisions based on form lead to imprecise and inefficient decisions.

H.	abRestrictive Covenants
1.	abHill v. Community of Damien of Molokai (NMSC 1996) p. 891
a.	abPeople fear increased traffic and AIDS in their neighborhood from the group home.  Restrictive covenant prevents use for anything except single-family homes.  Court finds that this is close enough; they’re like a family.  
(1)	abcourts will resolve ambiguous language in favor of free enjoyment of property and against restrictions.  Nor will they imply restrictions.
b.	abPs also claim the Fair Housing Act applies.  3 causes of action:
(1)	abDiscriminatory intent: USSC’s intent requirement in Washington v. Davis read the 14th Amendment as applying only to intentional discrimination.  This makes discrimination claims in land use suits very difficult under the 14th, so Constitutional attacks fail, and people must turn to statutory suits.
(a)	abAlso, 14th Am. only applies to gub’mint actors; FHA is for everyone.
(2)	abDisparate impact: does not require intent.
(3)	abReasonable accommodations are required.
2.	abShelley v. Kraemer (USSC 1948) p. 902
a.	abThe government used to require racially restrictive covenants to enforce mortgages!  So Shelley is the aftermath of that. ??? in notes- but is this true?
b.	ab“A right is only as good as its enforcement,” which the State refuses to provide here.
c.	abDoes this preserve any public/private distinction?  Is it a takings?
(1)	abThe FHA would make this covenant illegal at the outset now anyway.

3.	abHow can covenants be ended?
a.	abBy its own term of expiration.
b.	abBy release - the holder of the promise can release the covenantor from the agreement, or the homeowners association can quit enforcing.
c.	abBy abandonment or waiver- if neighbors are openly flaunting it and you don’t enforce, you give up the covenant.  Even for the whole subdivision.
d.	abBy judicial policy - e.g., Shelley
e.	abRecordation laws - must be rewritten often.  Some states have SOLs.
f.	abDoctrine of changed circumstances - see Western Land
4.	abWestern Land Co. v. Truskolaski
a.	abTruskolaskis want to stop a developer from building a shopping mall on a lot next to their home, despite a restrictive covenant.  Developer argues the covenants are void b/c times have changed, and the street is really busy.  Court disagrees; the covenants are still of substantial value to the homeowners, and it’s not oppressive to keep enforcing them.
(1)	abZoning cannot override privately-placed restrictions, nor will they convince a court to overturn a restrictive covenant just because.
b.	abThe proponent of termination has the burden of proof to show the restriction should be overturned.
c.	ab“In order for community violations to constitute an abandonment, they must be so general as to frustrate the original purpose of the agreement.”

5.	abRick v. West (NYSC 1962) p. 912
a.	abAn old woman holds out when developers want her land rezoned, and the city can’t get the land sold to build a hospital.  Court says, “tough, she relied on the covenant when she bought it and it’s still of value to her.”
(1)	abThe court enforces with an injunction.  What about with damages?  This would allow the hospital to be built, but wouldn’t reward her personality interest.  Typical eminent domain problem.
(2)	abShe has a bilateral monopoly, so she can argue for an irrational amount of $

6.	abPocono Springs Civic Association v. Mackenzie (PA 1995) p. 916
a.	abMackenzies tried to abandon their plot, unsuccessfully, and eventually had to pay the association dues.  They hadn’t visited or used the land for five years.  Court held that they remained owners in fee simple, with a deed and title
(1)	abPossession always presumed to be in the party who has record title.
b.	abWhat could they do with it?  
(1)	abTransferring to a life estate would destroy vertical privity, and the owners wouldn’t be bound by the covenant not to build anything.  
(a)	abNonetheless, the new life tenant would have an equitable servitude against them. 
(2)	abIncorporating and then going bankrupt would just leave the property in the hands of a defunct corporation
(3)	abGiving it to a neighbor who could claim that they don’t owe any more association dues because their RCA expands would be the best solution.

XXIII.	abNuisance
A.	abAn interference in the functioning of the market place- courts decide the value of the land.  The free market is better because
1.	abIt avoids collective valuation and judgment
2.	abLower costs of enforcement (nuisance law is costly)
3.	abContinuing flux in the use of the land, allowing quick adaptation to changes in economy, etc.
4.	abAvoids (in theory) rent-seeking
B.	abEven though nuisance isn’t about fault (it’s about incompatible land uses), we have a fault-based system.
C.	abMorgan v. High Penn Oil (NC 1953) p. 741
1.	abAn oil refinery abuts a trailer park and restaurants, etc.  Its fumes made people sick and it smelled bad.  This is the result of “cumulative zoning,” where areas that are residential are exclusively residential, but areas that are industrial can be both.
a.	abBut the Morgans knew that, they probably paid less for their house b/c of it.  So in a way, they’ve already been granted damages.
2.	abNuisance per se- an illegal activity that’s been zoned out; a rare category.  Some ultrahazardous activities or negligent activities are nuisance per se, but some aren’t.
3.	abNuisance in fact- contextual.  Here, D claims that it’s not negligent, so it’s not a nuisance.
a.	abIntentional- Standard is whether it interferes substantially with the enjoyment and use fo the land.  Not just about negligence- sort of like strict liability.
b.	abUnintentional- like negligence (my employee fell asleep, etc.)
4.	abAll of this should be handled in tort.  Period.  Used to be that nuisance was handled w/injunctions, but not so much any more.  
D.	abReasonableness - p. 748
E.	abTest 1: Restatement 2d. of Torts test part one- Balancing of the utilities : consider whether “the gravity of the harm outweighs the utility of the actor’s conduct.”  Relevant factors include
1.	abExtent of harm to P
2.	abSocial value of each of the competing uses
3.	abWhether a finding of nuisance and liability would make it impossible for D to operate
4.	abWhether D can take steps to eliminate problem that wouldn’t require injunction
5.	abWhether P can take steps to eliminate the problem
6.	abSuitability of this particular use for this location.
F.	abBalancing test asks which use maximizes social welfare, but is this an appropriate criteria for wealth allocation?  Even if the oil refinery is more useful, should the local families have to bear that cost?
1.	abLetting P enjoin the oil refinery allows P to externalize the cost of P’s use of the land (residential) onto the refinery.  This is an inevitable type of result.
G.	abTest 2: Threshold test- used by many courts instead, doesn’t really balance anything.  It assumes that the entitlement lies with P, and puts the D in check if he gets out of control.
1.	abBeen thinks this is gay, and that this is all a tort.  
H.	abTest 3: Restatement 2d. of Torts test part two: Use when P is seeking damages.  If you can pay damages to this victim and all other victims and still profit, then you should pay the damages.  Strict liability w/a bankruptcy cap.
1.	abThis is dumb; if D’s product wouldn’t be profitable enough socially if costs were internalized, why should we protect it?
I.	abCoase would say: who’s the cheapest cost avoider?  Rest. 1st prong seems to deal with this.

J.	abPeople as nuisances
1.	abPeople have tried to use nuisance law to enjoin certain uses such as group homes, etc.  It was used to try to enforce racial segregation by suing those who rented to blacks.  Courts held firm that people can’t be considered nuisances based on race/religion.  But:
2.	abResidents of halfway houses are more likely to commit crimes, etc.  You can’t think of people as nuisances in the abstract, but you can only sue on actual crimes they commit.
a.	abCourts use Anticipatory nuisance- courts refuse to enjoin on the basis of likelihood, but wait to see if use in fact turns out to be a real nuisance.  Avoid the mini-max fallacy, but do consider the degree of harm if in fact the unlikely event does occur.
b.	abCourts don’t use the Precautionary principle (Wildavsky)- In nuisance law, in the face of uncertainty, you do go ahead.

XXIV.	abRemedies for Nuisance and other stupid crap

Entitlement:	Property Rule:	Liability Rule:	
Plaintiff	(Rule 1) injunction against D’s use	(Rule 2) Damages for D’s use	
Defendant	(Rule 3) no liability	(Rule 4) damages to D for stopping use (e.g., Spur)	

A.	abEstancias Dallas Corp. v. Schultz (TX 1973) p. 753
1.	abThe air conditioner behind the apartment building is too loud.  The total claim (for úproperty value and QOL) is $25K.  The harm to D is much more: $150K to fix it now, $40K to fix it prospectively.  
a.	abRecall Rest. 2d. Torts S826(b) - if the D can stop the use without going out of business, then a threshold test can be used.  But this is in applicable here because it applies to suits for damages, not injunctions.
b.	abCourt presumes that injunction is the default (and grants one), unless there’s major public interest concerns.
2.	abWhy grant injunctions?
a.	abIf conduct is reprehensible, and we need to send a strong message
b.	abCreate an incentive for parties to bargain around the decree
(1)	abBilateral monopoly problems - P can hold out for extra damages
3.	abProperty rule better (when perfect information): On remand, the jury found the damages were $700K instead of $185K!  This shows why we need a market to allow for things to be valued.  A property rule protection would allow for efficient bargaining, but a liability rule protection won’t allow them to bargain around an inefficient results.
a.	abLiability rule doesn’t account for P being the cheapest cost avoider (buying $10K worth of soundproof windows, e.g.) - inefficient in this way too.

B.	abBoomer v. Atlantic Cement Co. (NY 1970) p. 758
1.	abDamages are about $185K, while cost to cement plant of closing is about $1 million.  Rest. 826(a) says, there’s no nuisance.  Essentially, this case is Rule 2.
a.	abCourt prefers damages to an injunction b/c the disparity is “unreasonable.”
b.	abBut the court grants “continuing damages” which obviates the need for them to return to court.
c.	abThis type of balancing approach is highly P-skewed; not all possible Ps were represented, so only the ones who came to court get helped.

[Harm to D (from injunction) + Harm to public (from injunction)] balanced against [harm to P from continued nuisance]

C.	abHow to analyze a nuisance case:
1.	abLow transaction costs:
a.	abUse Rule 1 or Rule 3, and get an injunction.
2.	abHigh transaction costs:
a.	abCan the court accurately value both the harm and the preventive costs?  If so, choose damages since the parties empirically don’t bargain anyway.  Many courts now use liability and property protection:  If the court values all correctly, then the court will assign the entitlement to the victim if [harm > preventive costs], or the D if [preventive costs > harm].
b.	abIf the court can’t accurately value both the harm and preventive costs, then use Rule 2 or Rule 4 again.  Under a property rule, the court won’t know where to assign entitlement.  Also the parties have perfect information about their costs.  
(1)	abAccurate value of the harm: Assign entitlement to the P, forcing the D to come forward with info on its preventive costs.
(2)	abAccurate value of the benefit: assign to D

XXV.	abRegulatory Costs (insert Been’s notes here)

XXVI.	abHousing Discrimination
A.	abWhat provides laws against housing discrimination?
1.	abThe 14th Amendment
2.	ab§1982, the Civil Rights Act of 1866 - prohibits race discrimination by giving everyone the rights of whites in selling, holding , buying or conveying.
a.	abOriginally interpreted only to apply to state action, until Jones v. Mayer held it applied to private action as well.
3.	abThe Fair Housing Act - found in detail on p. 435 of casebook

B.	abUnited States v. Starrett City Assoc. (2d Cir. 1988) p. 439
1.	abLimiting the number of black families in a complex to just below the “tipping point.”  Court held the quotas violated the FHA, so the quotas were overturned and people lived where they wanted to - i.e., it’s all black.
a.	abActually “integrated” now because they marketed to Russian immigrants.

C.	abSoules v. US HUD (2d Cir. 1992) p. 439
1.	abRealtor discriminated because the renting applicant had a small child.  But there’s a law requiring separate bedrooms for children of opposite gender.  Also, the old woman in the share didn’t want a lot of noise.
2.	abSoules’ prima facie case must include:
a.	abMembership in a protected class
b.	abApplied for and qualified to rent or purchase housing
c.	abRejected although the apt. remained available.
3.	abD has burden of production to show a legitimate nondiscriminatory reason.  If she does, the burden shifts back to the P to show pretext.
D.	abBronk v. Ineichen (7th Cir. 1995) p. 448
1.	abTwo women wanted a hearing dog.  Swiss Ds won’t let them have one.  This wasn’t necessarily reasonable accommodation.  Did D have a duty to make a reas. accom.?
a.	ab2 values to consider
(1)	abCBA
(2)	abnecessity

XXVII.	abLetting and Subletting
A.	abErnst v. Conditt (TN 1964) p. 465
1.	abPs lease a tract of land to Rogers, who’s forbidden from assigning or subletting the lease without permission, and who even then will remain personally liable.  Conditt and Rogers meet with the landlord, who consents to a “sublet.”  Landlord amends the lease agreement but it still holds Rogers liable for the lease.  There’s a “subletting” agreement b/t Rogers and Conditt, who runs the track but stops paying rent.  Ernst sues, but C says it was a sublease, so he must sue Rogers.
2.	abFormalism: Under common law, if the tenant retained any reversionary interest, then it’s a sublease, and if not, then it’s an assignment.
3.	abIntent: the modern rule is to investigate intent.
a.	abThis is silly; it’s a form lease signed by non-lawyers.  What indicates intent?
4.	abIf lease works like this : L (lease) ÿ T(sublease) ÿ T2 
a.	abL can sue T even though T is no longer in possession- privity of contract
b.	abL can sue T also under privity of estate - sublet doesn’t pass on the whole estate
c.	abL can’t sue T2 because there’s no privity (T2 got a lesser estate)
5.	abIf lease works like this : L (lease) ÿ T(assignment) ÿ T2 
a.	abL can sue T by privity of contract
b.	abT can be released from the obligations of the lease by a novation
c.	abL can sue T2 because T2  and L have privity of estate (same estate)
B.	abRestrictions on your right to sublet or assign
1.	abKendall v. Ernest Pestana (Cal. 1985) p. 473
a.	abDifferent rules for commercial and residential leases.  Can a lessor arbitrarily withhold permission from subletting?  Complicated lease of an airport hangar.
b.	abCourt rejects the old majority rule that arbitrary rejection is allowable.  They pursue the minority rule because they want property to be freely alienable, which is adopted by the Rest. 2d.
c.	abStill an exception for commercially reasonable reasons for rejection.

XXVIII.	abExclusionary Zoning
A.	abSouthern Burlington County NAACP v. Mount Laurel (NJSC 1975) p. 1061
1.	abThe city must provide adequate housing for the good of the general public.  All the homes (b/c of zoning restrictions) are really expensive.  Why?
2.	abExactions: if the development places demands on public services, then the $ is legitimately extracted, but if it’s not then it’s just a way to raise costs.  Also true of housing/building codes that require really expensive features.  E.g., banning mobile/manufactured homes.
3.	abDensity limits: houses required to have an acre or more - most frequently used
4.	abGrowth controls - keep out everyone, but increase the value of already existing housing
5.	abWhen this case is approached as a class issue, it’s interesting
a.	abThe court thinks that what drives exclusionary zoning is reliance on local property taxes to fund municipal governments.
b.	ab10,000 municipal governments will find a way to externalize onto each other by not building high-income housing themselves.
B.	abDemocracy can’t solve it.  Arrow’s paradox: because of agenda control, the decisions will cycle endlessly.
C.	abTiebout hypothesis- local governments and jurisdictions are acting like a market, providing diverse services for which people can vote with their feet.  This allows an efficient allocation of community features. 
1.	abBut the poor are always chasing after the rich.  Remember how that works?

D.	abRemedies to exclusionary zoning-
1.	abMt. Laurel common law approach
a.	abAnd so wetlands get zoned for low-income housing
2.	abA quota of tradeable required housing units
a.	abTends to be whites from the same area that move into these houses- becomes housing for the children and parents fo middle-class families in the suburbs.
3.	abBreak link between zoning and municipal $ allocation by “head taxes.”  Or by property taxes which are sent to and redistributed by the state.

XXIX.	abLandlord/Tenant Rights
A.	abLeases create a moral hazard; the short-lived tenant has little incentive to invest in repairs, and the landlord neglects everyday repairs because the cost is borne by the tenants.  Another problem is that covenants in leases are considered to be wholly independent by the courts, ofttimes.  This is different from contract law, where you only make promises in exchange for other promises.
B.	abOnce conveyance took place, the law began to imply a warranty of quiet enjoyment.  Originally, this was only broken through physical dispossession (actual eviction), and was a defense against rent.
C.	abDoctrine of constructive eviction - affirmative actions that deprived T of full use and enjoyment of the property; broader than physical dispossession.
1.	abWhere the failure to act breaches some independent duty, some courts will now hold that breach constitutes a breach of the covenant of quiet enjoyment.  We consider this a dependent covenant even if others in the lease aren’t really dependant.
D.	abIf landlords breach an independent covenant, all you can do is sue for damages.  Exceptions:
1.	abShort-term leases - failure to repair is a breach, b/c tenants have no incentive to repair.
2.	abL has a duty not to misrepresent the condition of the premises
3.	abDuty to disclose latent defects that T couldn’t be expected to uncover.
4.	abDuty to maintain common areas -
5.	abL has a duty to prepare carefully any repairs he undertakes
6.	abLs had an obligation to abate immoral conduct

E.	abNahrstedt
1.	abYou have to abide by your lease.
2.	abA lease’s restriction is presumed reasonable if it’s written into the deed.  Reasonableness isn’t about the particular case, but about the bulk of similar cases (it was unreasonable to take her cats, but it was reasonable to have a rule about cats in the building).  

F.	abReste Realty Corp. v. Cooper (NJSC 1969) p. 508
1.	abWater floods a woman’s business office whenever it rains, ruins her business.  Court does not use the above exceptions.
2.	abNew rule of constructive eviction: “any act or omission of the landlord...which renders the premises substantially unsuitable for the purpose for which they are leased, or which seriously interferes with the beneficial enjoyment of the premises, is a breach of the covenant fo quiet enjoyment and constitutes a constructive eviction of the tenant.”
a.	abThis is the broadest conception around.  Based on implied warranties in K law.
3.	abReste does say that constructive eviction requires actual, physical abandonment within a reasonable time.  And then, your remedies are:
a.	abAffirm the lease but suspend payment of rent
b.	abBreak the lease and don’t pay future rent, plus sue for damages.
4.	abThis doctrine doesn’t actually force the L to make repairs.
5.	abThis may not extend to where T knows of the defect.
6.	abIf the T abandoned within a reasonable time, L could be liable for the costs of moving, (as well as the damages above, losing premium value of lease and the rent).

G.	abBrown v. Southall Realty (DC 1968) p. 518
1.	abD claimed that no rent was due b/c the premises violated the housing code.  Court agreed, holding that the lease was an illegal K and therefore unenforceable.
2.	abTo what extent does a housing code grant a private right of action?  Why should courts get to circumvent their administrative discretion?
3.	abQuantum meruit theory- a T who gets some value out of living in the apartment ought to pay some rent
4.	abIllegal lease: 
a.	abDoesn’t require abandonment
b.	abPuts the T at less risk
c.	abNot applicable to commercial leases because it’s based on housing codes - which often don’t apply to single-family individual houses either
d.	abUnder constructive eviction, you can abandon for defects that develop later - but under illegal lease, violations must have existed at the start of the lease.

H.	abHilder v. St. Peter (VT SC 1984) p. 519 - Implied Warranty of Habitability
1.	abThe Apartment from Hell.  D paid all her rent.
a.	abThe notion of L making a “conveyance” is archaic.  This is really a contract.
b.	abRules so favorable to Ls assume an equal bargaining power between landlords and tenants; this is no longer true.
2.	abCourt establishes the Implied Warranty of Habitability.  “Safe, clean, and fit for human habitation, implied in tenancies for a specific period or at will; covers all latent and patent defects in the essential facilities of the residential unit.”

I.	abRemedies for the implied warranty
1.	abA T can seek specific performance, but the courts don’t like monitoring stuff like that
2.	abIt does put the P at less risk b/c it doesn’t require vacating.
3.	abAn illegal lease means T loses the court’s protection, and they may be liable for rent under quantum meruit - not so under the implied warranty of habitability.
4.	abImplied warranty may not apply to commercial Ts, who will probably be limited to constructive eviction theory.
5.	abSome Js limit this theory only to apartment buildings.

XXX.	abLandlord’s rights
A.	abBerg v. Wylie (Minn. SC 1978) p. 484
1.	abWoman defaulted after several failed restaurants, but wouldn’t let the L take back the property.  L gets a little testy.
2.	abSelf help: at common law, the landlord can retake possession if
a.	abHe’s legally entitled to it and
b.	abHis means of reentry are peaceable.
3.	abThe court now requires notice, though, which ülikelihood of an altercation, so the only scenario is where L says “I’m changing the locks,” and T says “Oh, OK.”  
B.	abBy effectually prohibiting self-help (p. 490 “the only lawful means to dispossess a tenant who has not abandoned nor voluntarily surrendered but who claims possession adversely to a landlord’s claim of breach of a written lease is by resort to judicial process”), the court eliminates a bargaining chip between Ls and Ts.  This provides a disincentive to build housing (ú L’s rights).

XXXI.	abTakings
A.	abAllowing government to take our property without bearing the cost will lead to overconsumption.  Consider the draft, which created a people-intensive style of warfare.
B.	abPublic Choice says: private interests coop the government’s ability to take land for free or úcosts instead of doing it themselves.  Cost is not assessed against those who benefit but rather the taxpayers or some smaller group of victims (individual landowners)
1.	abEven with compensation, this happens through cutting other programs (less food stamps means more parks!)
2.	ab“Avg. reciprocity” doesn’t justify placing cost of public good on shoulders of a private citizen.
C.	abMoral hazard: there may be overinvestment, but if takings run rampant there will be no investment.
1.	abLet’s solve it with private insurance!
D.	abAll land comes from the government in Fee Simple Determinable (no Fee Simple Absolute).

E.	abLoretto v. Teleprompter CATV (USSC 1982) p. 1124 - The Case of Vicki Been’s House
1.	abCourt finds that this is a taking per se because of the physical nature of the invasion.
2.	abThis distinction is rather silly, when you think about it; little connection to actual value.  It only lasted 4 years, yet was considered “permanent.”
3.	abThis is an historical distinction.  The first 5th Amendment cases were about confiscating title.
F.	abPolicy arguments for a per se takings rule:
1.	abArbitrary and discriminatory governmental conduct
2.	abInability of property owner to band with others to protect self in political process

G.	ab3 “rules” of takings:
1.	abPermanent, physical invasions are a takings per se regardless of amount.
2.	abWhere 100% of the value of property is taken, it’s a takings per se (Lucas)
3.	abMost regs fall under a Penn Central ad hoc analysis- judge each on their own facts.

H.	abDifferences between Penn Coal and Hadacheck:
1.	abThe extent to which the government can regulate nuisance-like activities.
2.	abThe extent to which the courts must defer to the legislature
a.	abHolmes does just this, by saying “You could have done it by notice.”
3.	abThe extent of the harm to the property owners
4.	abThe court’s consideration of redistribution effect.
5.	abBut: the effect of the regs in these 2 cases is the same!  Essentially, Holmes takes an extremely narrow view of the property; there was no separate estate in the clay so you have to look at the property as a whole.

I.	abThe Penn Central Test
1.	abThree factors:
a.	abEconomic harm of the regulation on the claimant
(1)	abThey look for inherent compensation (“average reciprocity of advantage”)  (through TDRs, e.g.)  Brennan seems to be saying at the end of Penn Central that existing compensation schemes offset the likelihood of finding a takings, but the court recently announced they would overturn this idea first chance they got.
(2)	abIs the government forcing some people alone to bear public burdens which in all fairness and justice, should be borne by the public as a whole?
b.	abWhether it’s physical or not
(1)	abPost-Loretto, this is relatively unimportant to the courts
c.	abExtent of interference with investment-backed expectations.
(1)	abWhat is an investment?  Do you need to start building?  It means more than thinking you might do something.  Maybe it must be “reasonable.” 
(2)	abWhat about initial expectations?  Here, the court thinks it very important that they can maintain their present use- their “primary expectation.”
(3)	abDoes it allow for a reasonable rate of return?  Very vague as to what counts.
2.	abSo, if you have some sticks left in your bundle, Brennan says there’s no taking.  The property owner rarely wins under this test.
3.	abRehnquist’s dissent: He argues that a regulation that causes economic harm is invalid:
a.	abUnless it regulates a nuisance
b.	abUnless there is clear average reciprocity of advantage.
(1)	abHere there wasn’t; a few property owners were singled out.

J.	abDoctrine of Vested Rights: courts are more reluctant to let government take property that’s being used.  Property law has a very strong presumption that you ought to be able to continue to use your land for whatever it has been used for.

K.	abApproaches to Economic Regulation as Takings
1.	abMere rational scrutiny (can the court say this isn’t a taking with a straight face?)
a.	abGovernment must have a legitimate state interest
b.	abThere must be a rationally related fit between the means and the purpose
c.	abOnly then do we reach the takings question
2.	abStrict scrutiny (used for exactions cases, maybe for others down the road?)
a.	abGovernment must have a compelling interest
b.	abMeans must be necessary; you can’t do more than what is required.  

L.	abDefining Property: It can be 
1.	abThe physical thing (land)
a.	abIf we divide land and define property narrowly (each parcel on a 50-acre plot), then there’s always a takings.  If we define it all, then there’s almost never a takings.
b.	abWas it treated as one piece by the owner?  Was it acquired simultaneously?
2.	abEstates (air rights v. mineral rights)
a.	abCreates an inefficient division, requires markets in air rights and other hard-to-separate-out things.
b.	abShould we recognize made-up estates?
3.	abSticks in the Bundle (exclusion, the right to build a 50-story building)
a.	abCourts suck when determining what’s important:
(1)	abAndrus v. Allard - challenged the ESA’s Bald Eagle law that banned sale of any products; harmed purveyors of ancient Native American art.  Court said, this wasn’t a takings, because he could still exhibit them and charge admission.
(2)	abBut, in Hodell v. Irving, the right to inherit small shares of Native American lands was contested and the court thought that the lack of ability to pass your land intestate was a takings.
4.	abDivide land four ways:
a.	abHorizontal, like a map
b.	abVertical- sub, surface, and air
c.	abFunctional - easements, servitudes
d.	abTemporal- present and future interests.

M.	abNollan v. California Coastal Commission (USSC 1987) p. 1181
1.	abNollans have the option to buy beachfront property, contingent on demolishing the bungalow and building something great.  So they apply for a permit to build a house, and it is denied because it would impede public access to the beach.
2.	abNollan was the first permit exaction case before the USSC.
3.	abThe “Greater/Lesser” argument; the government has the greater power to deny use of property  - i.e., the police power says they can stop altogether the building of the house.  And if it can do this, it can take the lesser act of making the permit’s grant conditional.
4.	abPermits: must be a fit between the condition you impose and the reason you impose it.  (You can require a viewing-hole, but not a beach-side easement).
a.	abThis is the same as Scalia’s essential nexus test in Dolan.  It doesn’t allow tradeoffs - you can’t force people to give other concessions (like a building which casts a shadow on a park building a playround).

N.	abDolan v. City of tigard (USSC 1994) p. 1186
1.	abA woman wants to expand her business w/o building the greenway and bike path the town requires.
a.	abThe court reinforces the essential nexus test- a bike path is not sufficiently related to the problems that would require a denial of permit.
b.	abCourt adds a proportionality requirement.  The exaction must be proportional to the harm that the expansion creates.
2.	abDolan puts the burden of proof for proportionality on the government, which is totally contrary to the normal allocation of the BOP.

O.	abLucas v. South Carolina Coastal Council (USSC 1992) p. 1199
1.	abThe Beachfront Management Act is enacted by SC to prevent hurricane problems.
2.	abScalia expands the per se exception to 100% diminution in value.  But what do we do to define “property?”
3.	abException: it’s not a takings if the regulation merely codifies existing restrictions on property such as state nuisance law.
4.	abLucas  allows a judge to make a nuisance determination and there’s no takings; but if the legislature does it, it becomes a takings.
5.	abBut notice; Lucas still had some rights (think about Hadacheck).  As Eric says, he could still throw parties on the land if he wanted to.

XXXII.	abHow to answer a takings question posed by Been
A.	abIs there property that’s protected?
B.	abIs the regulation valid?
1.	abRational Scrutiny
2.	abStricter scrutiny
C.	abIs this a per se taking?
1.	abPermanent physical invasion
2.	ab100% diminution.
D.	abIf not, do some ad hoc balancing.
1.	abExtent of the diminution in value
2.	abInterference with reasonable investment-based expectations
3.	abCharacter of the government action
a.	abAre they regulating a nuisance?  Does this matter any more under Lucas?
E.	abAnalogize to cases!  Cite them!