Property Test Notes
Professor Fried – Spring 1999

Defn of property; Justifications

Blackstone’s traditional view of property – dominion over things
Modern view – realist view; interests can be divided
	Basic ownership rights
1.	to possess
2.	to use
3.	to transfer
4.	to exclude
Never absolute
Conflicting interests among owners

Autonomy/personality theory – property ownership is linked to one’s sense of self
Utilitarian – property ownership maximizes social welfare; gives people incentive; 
people will negotiate with each other to produce the best outcome for 
everyone
	Problem – transactions costs prevent this; utility value of $ - people value $ 
differently depending on how much they have – makes bargaining hard 
for poorer people
Labor – you put labor into it, it becomes yours; whoever gave the thing value has a 
right to it. (Locke)
	Law of accession – you take something and contribute a lot to it, you 
 probably get it – then you’d just have to give the owner the value of the original thing
	Locke – sacrifice theory – I worked hard to get it so I deserve it)
	Essentialist view – what you put your labor into becomes part of you
	Problem – if resources are scarce, Locke’s idea that private property doesn’t 
infringe on the rights of others doesn’t hold when resources are scarce 
(always); If the ownership right didn’t infringe on anyone else’s rights, 
the stuff would be so abundant, no one would care about owning it.
		Nozick’s response – If future generations aren’t left worse off – no 
conflicting interests because private ownership increases the 
value for future generations
Will – Who wants it the most gets it (I took it because I wanted it)
Efficiency – private owners use property most efficiently
Certainty – absolute, recognized rules reduce conflict (like in 1st possession rule)
Eccentricity – Reich – private property allows/protects individuality
Hardin - Tragedy of the commons – common land gets overused because each person 
has an incentive to use it more to benefit themselves and externalizes 
the cost to others
Demsetz – Private property creates 
1.	optimal use of property in owner’s generation (has to bear the costs of overuse)
2.	owner has incentive to use land in a sustainable way (to sell it later or pass it on)
3.	optimal use of property generally (b/c of transactions costs of negotiating with a group of communal owners to do anything)

Unowned Land

1st Discovery Rule – you discover, you get sole right to take it, build on it (possession 
perfects title – if not, adverse possession possible) 
			(Johnson v. M’Intosh)
Conquest – might makes right; you assimilate what you conquer, taking past owner’s 
rights to transfer; They stay by privilege

Wild Animals

Rule of Capture – have to capture (includes mortally wound or trapped) to own (1st 
possession not 1st discovery)(Pierson v. Post)
		Response – utilitarian theory – disincentive to hunters b/c they could 
lose the thing after chasing
Customary Rules – Whale case; Custom produces a rule that promotes certainty – so 
follow when one exists (Ghent v. Rich)

Intellectual Property

Use not necessarily exclusive
PRO – Utilitarian – protection of IP gives incentive for invention/innovation
ANTI – Utilitarian – restricts dissemination so prevents optimal use of info
-	monopolist info holder – preventing dissemination through $
-	or for other reasons – artistic integrity
-  High cost of enforcement
Ideal – protect author/inventor for a while then allowing free dissemination of info 
They do this with copyright and patent law
Copyright:
1.	subject matter covered by statute
2.	not new facts
3.	not voices
4.	celebrity “right to publicity”
5.	“hot news” can be copyrighted ‘til it’s no longer hot (INS v. AP)
a.	shouldn’t profit from another’s gathering of info (info costs)
6.	Not scores from live broadcast sports (NBA v. Motorola)
a.	info is publicly available
b.	not profiting from someone else’s info gathering (and avoiding those costs)

Acquisition by Find

Rule – 1st finder beats everyone but true owner (Armory v. Delamirie)
	Protects true owners – they possess the thing and don’t have to prove that it’s 
theirs
-	If it’s on someone’s property and they don’t know it’s there – 1st finder still gets it (Hannah v. Peel)
-	Owner of property – has right to stuff under or attached to land
-	If owner knows it’s there but doesn’t know where – they have superior claim to finder
Misplaced vs lost – If purposely put there but not meant to be left – misplaced; 
Property owner becomes a bailee (McAvoy v. Medina)
Property owner has the best chance of getting it back to the true owner

Adverse Possession
Doesn’t fit into property or liability rules (where you can only get property through 
voluntary transfer; or you can take it but you have to pay for it)
Justifications:	Utilitarian – possessor is using the land the best
		Identity – they’ve been there so the land is now impt to them
		Protect innocent possessor – mistakes or defective titles
		Reestablish true ownership defeated by a technicality
		Labor – user worked the land & it became part of them
1.	actual entry
2.	exclusive and continuous possession
3.	for req’d time period
4.	open and notorious
5.	hostile (inconsistent with not being the owner) (without consent) not equal to state of mind despite Van Valkenburgh v. Lutz
6.	under claim of right (state of mind)
-	3 possible meanings (doesn’t matter, think they own it or know they don’t)
7.	some places require – under color of title
You get  	-	only up to the estate that the rightful possessor at the time has
-	under color of title – the whole thing
-	not under color of title – part you enclose and use
-	or just the part you use (if you don’t enclose)
^ (Van Valkenburgh v. Lutz)
Tacking rule – have to have privity; applies to owners too – if they transfer the 
property and AP conditions continue (Howard v. Kunto)
If you build on wrong lot – in good faith – usually get the land through AP or can 
stay but have to pay for the land(Howard v. Kunto)

About stuff
S.ofL. doesn’t start running til the owner knows or should know through due 
diligence that a COA exists (who the current possessor is) (O’Keefe v. Snyder)
NY Rule – no due diligence requirement; S.of.L. doesn’t start until the owner 
demands return and the possessor refuses (so only AP if the owner then 
drops it); Trying to discourage trafficking in stolen art by making the 
buyer check the title

Gratuitous Transfers

Inter vivos – promised and delivered during life; irrevocable
Causa mortis – revoked if donor recovers; has to be delivered before death; cts tough 
on these b/c of fraud potential
(if not promised or not delivered – revocable)
at death –will or intestacy
	divise = the gift
	testator = dead person
	legatee = recipient
	Intestacy Statutes (heirs)
				1st – 1/3 to spouse, 2/3 to kids
				2nd – no spouse, all to kids (and vice-versa)
				3rd – no living kids – descendants of kids
				4th – no descendants – to parents
				5th – no living parents – siblings
				6th – no living siblings – statutes vary – maybe to 
descendants
				No heirs at all – stuff escheats to the state
				Per stirpes rule – if the person who is supposed to take is 
dead, stuff goes to lineal descendants (not to their estate that’s already been distributed)
Delivery
-	easy to deliver – you have to (Newman v. Bost)
-	constructive – giving means to get the thing – key (Newman v. Bost)
-	symbolic – giving something meant to represent thing – deed
¤  acceptance also req’d (implied if delivery occurs; or if the thing is valuable (Gruen 
v. Gruen))
Not delivered – gift isn’t good (Newman v. Bost)
When the donor reserves a life estate – don’t have to deliver and then get the thing 
back (especially if valuable) (Gruen v. Gruen) but have to show intent
Checks – not good til cashed
	Should it be until it clears? (b/c until then the money hasn’t been taken from 
the donor)
Estate Taxes justified
-	Lockean argument – person who labors for it has more right to it that successors Don’t they also have a right to say what will happen to it b/c they worked for it?
-	Transfer of wealth – level the playing field
-	BUT Parents should be able to provide for their children however they want

Possessory Estates

Freehold – owner ship interest
Non-freehold – other interests (tenancies, licenses)

FSA
-	Common law – had to use words of limitation or it didn’t create FSA (to A and her heirs)
-	Modern – FSA assumed unless it is specifically limited (even “I wish her to have my home to live in”)
Reversionary Interests
-	grantor retains future interests
-	If grantor is dead – goes to whoever got her other stuff
-	Grantor could will her interest to someone else
-	If the grant is silent a reversion is implied
Remainder Interests (3rd parties!)
-	future interest is retained by someone other than the grantor
-	Common law – “To A for life, remainder to B” would give a life estate to B and a reversion to O
-	Contingent remainder – 
-	given to an unknown person or group with no members
-	AND/OR with a condition precedent
-	Followed by a contingent remainder
-	Vested remainder – 
-	given to a known person or group with at least 1 member
-	not subject to a condition precedent
-	Indefeasible, subject to divestment, subject to open
-	Indefeasible when:
-	Certain person
-	No condition precedent
-	No condition subsequent
-	Not divisible
-	To A for life, then to B
-	Subject to divestment when
-	Certain person or group with at least 1
-	Condition subsequent
-	Just like contingent except for punctuation (here, condition in a separate clause)
-	Sounds like you get it – but it could be taken away
-	Followed by an executory interest
-	Subject to open when:
-	At least one known person
-	Others may appear/be born
-	When remainder vests – group is closed
¤ can be subject to divestment and open
Executory Interests (3rd parties who take when conditions fail)
-	cuts short the preceding estate before its terms end (unlike a remainder) (can follow a fee simple or a remainder)
-	can be a fee simple or a life estate
-	follows an FS subject to an EL when the condition is violated 
-	follows a vested remainder subject to divestment 
-	Springing – divests the grantor
-	Shifting – divests someone else
-	When a contingent remainder fails – it’s followed by another 
remainder
Fee Tail
-	“To A and the heirs of her body”
-	Common law – goes to lineal descendants and then reverts to the grantor if it dies out
-	Modern fee tail – where it exists – can break easily by converting it to someone else (but can’t break by will or intestacy)
-	Modern use of fee tail language:
1.	FSA for A but if no descendants, goes to whoever has the 
remainder in the fee tail (or if not, to the grantor ); If A 
has descendants, it becomes a FSA for A and A can give 
it to whoever (or goes by intestacy)
2.	FSA for A
3.	Life estate to A and FSA to lineal descendant (so entaild for one generation)
Life Estate
-	Equitable title – where the estate is set up in trust; holders have a regular life estate (get profits from land etc.) but can’t transfer it
-	Legal life estate – transferable unless says otherwise; if they transfer – measured by their life
Interpretation of ambiguity (White v. Brown)
-	when language is ambiguous – construe a FSA
-	Interpret in light of circumstances/language
-	Unless it’s clearly intended – interpret to avoid partial intestacy
-	What about the person’s real, obvious intention to create less than a FSA?
Restraints on alienation
-	FSA – 
Can’t have complete restraints – strike offending 
language (Mountain Brow Lodge) and leave the 
rest as a FSD or whatever (some places just get rid of all conditions)
-	exception – for charitable groups
Partial restraints – allowed if
-	reasonable
-	serve a socially useful purpose
-	don’t affect property value
-	With a life estate – 
Disabling restraint – not allowed in most places; prohibits 
sale of the life estate w/o saying what will happen 
Forfeiture restraint – says who gets the property if the 
restraint is violated; usually allowed 
Stupid to have the distinction b/c you know what’s going to happen with a disabling restraint, too - reversion
Rights of future interest holders
-	remainder holders have a say about what happens during a life estate
-	Legal waste – property holder acts in a way that unfairly affects 
the value of the remainder (economic or character)
-	affirmative – life tenant takes actions that decrease the 
value
-	ameliorative – increases the economic value but 
changes the character
	(probably have to show that grantor intended the 
land to pass unchanged to the remainder person and that the property can be reasonable used in the unchanged condition; Also affected by how much the difference in economic value is)
-	Permissive – letting the property fall into ruin
-	Economic waste – party under-utilizes the property compared 
to the maximal use
(Waste claims work against each other – Someone says ameliorative waste – the other person says it would be economic waste not to do it)
Defeasible Estates
FSD – automatically ends
-	some places don’t recognize it – only FS on CS (so 
there’s only right of entry)
-	Ambiguous grants – often construed as FS on a CS so 
that the land will not change hands unless the 
grantor wants it back
-	possibility of reverter for grantor:
-	can pass by intestacy or will
-	Modern rule – can transfer inter vivos
-	Can give it to the person who holds the other rights (the FSD) (Mahrenholtz)
-	If you don’t take possession, you lose your FSA by adverse possession
-	so long as A uses
-	while used
-	until it is no longer used
FS on a CS – have to assert rights (right of entry)
-	sounds like a FSA – then adds the condition
-	Right of entry for grantor
-	transferable by will or intestacy
-	modern law – transferable inter vivos
-	can give it to the person who holds the other rights (Mahrenholtz)
-	Adverse possession – some states S of L start wen the condition is violated; some say you can’t adversely possess against a right of entry (b/c the holder doesn’t own the land yet)
-	Tacking of violations allowed when there’s a time limit on right of entry
-	To A but if A stops..
-	To A provided however that…

Note – restraint on marriage – only valid if it seems intended to provide for the person til marriage, not to prevent their marriage p.20

FS with a covenant
-	can get damages for breach of the covenant
-	language sounds like there’s a promise between the grantor and holder
-	To A. A promises that…
-	To A. It is OUR understanding that…
-	Not hopeful language – that’s just a FSA
-	I leave B.. to A with the understanding that…
-	I leave B.. to A with the intention that…
FS with an executory limitation
-	A FS that may be cut short if a condition occurs – and the estate will go to a 3rd party
RAP
		Only applies to:  	vested r’s subject to open, contingent remainders 
and executory interests
		
		Who are the measuring lives (mentioned and parents of mentioned)?
		See whether anyone could be born after the grant and break the rule
		p.24
		Strike offending language until there’s a valid grant left
		
		Modern – 	1) wait and see (for 21 yrs after measuring lives are dead)
				2) Uniform statutory – common law, then look to see if 
it vests or fails within 90 yrs, then wait and see for 90 yrs after measuring lives are dead
Concurrent Interests

Joint Tenancy
-	Unity of time – interest of both tenants has to be acquired at the same time
-	avoided using strawperson (see unity of title)
-	Unity of title – both have to acquire title by the same will or deed; (can’t arise by intestacy)
-	gone or qualified in some places
-	But if not, if you want to create one from your land – have to transfer it to strawperson who transfers it back to you and the other person
-	Unity of interest – all must have equal, undivided shares
-	Modern law – interest can be in unequal fractional shares (that’s how govt takes JT’s too)
-	Unity of possession – each has an undivided interest in the property and can use all of it
BS that both parties can do whatever they want – pretends interests will never conflict
-	Right of survivorship (so you can’t will your interest to someone else)
-	Easy to sever but good for people who don’t want to spend the $ or time to make  a will
-	Transferable – inter vivos without consent or knowledge of the other (creates a tenancy in common)
-	How to Sever:
-	convey the interest to another person (see transfer  above)
-	when you sever, you don’t change the relationship of the remaining original tenants
-	Some places – you can break it by conveying your interest to yourself Potential for fraud (Riddle v. Harman) (others – you need a strawman)
-	A mortgage – doesn’t sever a JT (so if it’s just in one name and that person dies, the mortgage is gone)(Harms v. Sprague)
Tenancy in Common
-	Unity of possession
-	No right of survivorship (so you can will your rights to someone else)
-	If a cotenancy is created and fails the test for JT – it’s a tenancy in common
-	Ambiguous language – construed as T in C
-	Transferable inter vivos w/o other person’s consent or knowledge

When cotenants can’t agree:
-	partition – physical division (preferred over partition by sale)
-	partition by sale – only done when 1. Partition is impracticable b/c of land’s features or 2. Interests of the owners would be better served by this (Delfino v. Vealencis) (some say do it when it’s the most economically favorable choice)
Who says what the best uses are? The tenant should be able to do whatever they want with the land.
-	When parties want damages:
-	each cotenant has the right to possess the whole
-	So have to show OUSTER - that the other tenant is adversely possessing (openly and notoriously behaving in a way inconsistent with being a cotenant rather than sole owner) – very difficult (ex’s clear-cutting, renting all of it and not sharing rent, changing locks and refusing to give the keys) (Spiller v. Macareth)
-	OR physically barring the other tenants 
-	Seems like other possessor has to deny that the other tenant has ANY right at all (Spiller v. Macareth)
-	Constructive ouster – copossession is impracticable
•	tenant in possession has to pay ½ the rental value (or partition – extreme remedy)
When land is rented to a 3rd party:
-	accounting – cotenants split renting according to their % share (and deal with expenses separately)
-	OR just split the profits
-	(amount split = how much is actually collected)
-	If 1 cotenant rents their ½ - as long as other tenant can coexist with the renter – renting tenant can keep all the rent
-	Cotenant can seek partition if really unhappy with the arrangement
Maintenance Expenses:
-	all occupying tenants have to pay their share
-	can use non-occupiers for contribution (see below)
-	not occupying:
•	if rental value > expenses – occupiers have to pay
•	if expenses> rental value – all have to pay
Improvements:
-	cotenant makes improvements w/o consent of the others  has to pay for them
-	IF rental value increases, improver can take all of the increase
-	Improver can demand a greater % of partition by sale $ (b/c of increased value by improvements) (not the cost of making the improvements)
Tenancy by the entirety
-	only married couples
-	(some states- if it’s ambiguous – assume it between married couples)
-	Interest can’t be divided w/o consent of both
-	Only ends if done together – divorce, death, transfer
-	neither can destroy the other’s right of survivorship
-	Can only sell – their right of survivorship – under common law
Creditor’s rights
1.	Common Law 
a.	husband can convey the whole property
b.	BUT if husband died 1st – it still went to the wife (right of survivorship)
c.	In Mass. -= creditors can attach the property to cover his debts (but if he dies 1st – 100% still goes to her)
2.	Bank can attach the property of the debtor spouse and ½ the 
right of survivorship (so if debtor live, they take 100%, if they die – bank takes 50%)
3.	Property can’t be attached unless it’s for the debt of both and neither spouse can alienate anything by themselves
(after it’s severed by death/divorce etc – then the remaining interest can be attached)
4.	The property can’t be touched by creditors during life – but one’s right of survivorship can be attached
Community property
-	9 states
-	stuff during marriage, earnings, stuff from earnings, earnings on earnings or things bought
-	Not – one spouse’s cotenancy with another (with spouse’s consent)
-	Not stuff from before and not transmuted to comm.prop. by actions showing intent
-	Not earnings on separate property
-	Not assets from gift or inheritance
-	No tenancy by the entireties allowed
-	T in C or JT – either spouse can sever/transfer w/o consent
-	Divorce
-	comm.prop. – split 50-50, separate – kept
-	Creditors
-	Dift rules (about the community property)
1.	Can take it if it’s both spouse’  debt - always
2.	can take 100%
3.	can take 0%
4.	can take debtor’s ½ and ½ the other spouse’s (75%)
Non-community property
-	stuff bought by 1 is theirs unless comingled
-	general obligation of support
-	Divorce
1.	Equitable distribution states
a.	Majority rule - All property held by either divided equitably (need, length of marr., economic contribution, alimony, child support)(some look at fault)
2.	Uniform dissolution of marriage act
a.	like comm.prop. – community property and assets by gift or will – split
b.	education is not like $ - no exchange value, not transferable – so not divided (In re marriage of Graham)
What about future earning potential?That looks like property
3.	When 1 spouse has supported the other – options
a.	50/50 split of future earning potential
b.	make spouse make a similar contribution (education etc.)
4.	Increased earning potential:
a.	majority – isn’t marital property (In re marriage of Graham)
b.	minority – is marital property and can be divided (Elkus v. Elkus) b/c one party contributed to the marriage and deserves to be compensated; Hard to value; how do you figure out how much it’s worth? What if you decide to do something that doesn’t maximize it?
Domestic relationships (same sex)
-	Hawaii  - they have rights of marriage; equitable dist. upon split
Unmarried
-	Can make a K
-	If not:
-	Contractual remedy – patterned behavior created a K
-	Restitution (in some places) – do equitable distribution
Death
	Community property states
-	survivor gets her ½ - deceased can leave other ½ to whoever
-	can be changed by K
Non-community
-	forced share statute (have to give certain amt regardless of what kind of property)
-	can’t cut spouse out
-	A lot of places – if no will, spouse gets 100%
Unmarried – regular intestacy or will

Non-possessory Interests

Easements
	Affirmative – can enter upon someone’s (burdened) land
	Negative – like covenants – promise not to do something on the burdened 
estate
	When grant is ambiguous  - cts favor appurtenant easements
	Determinable easement – subject to a condition for keeping it; don’t have to 
use it all the time to keep it – just don’t violate the cond.
	Creation
explicit – needs to be in writing (SofF)/ implied 
1.	by estoppel 
– 	temporary or permanent
-	when access is necessary to exercise another interest (like a profit)
-	AND/OR when a party has been using it and invests in owner-inducedreliance of being able to continue (then it’s irrevokable) (owner can’t change her mind later – Holebrook v. Taylor)
-	OR grantor didn’t complete all the formalities but intended the easement
2.	by implication - seems like grantor intended to allow it
1.	by prior use:
a.	estates were together
b.	owner used one estate to benefit the other
c.	apparent and continuous prior use
- when necessary uses that can be found by reasonable investigation = apparent (Van Sandt v. Royster)
d.	easement implied later for the same use
2.by necessity:
a.	necessity arose when 2 parcels were divided
b.	easement is necessary for use of dominant estate
c.	If it creates land-lock – the easement is across the formerly-joined parcel
d.	Stricter when grantor wants it – b/c they could have reserved it
e.	mostly don’t have to pay for it
seller is taking easement into account in the sale price
f.	sometimes you do
3.	by grant – owner keeps all rights but grants easement
4.	by reservation – grants all but the easement and keeps it
-	common law – can’t reserve an easement for a 3rd party but could grant top whoever
-	Now you can reserve an easement for a 3rd party (Willard v. Church of Christ Scientist)
5.	Prescriptive – AP of an easement
-	owner can defeat by interrupting use (have to physically, successfully bar people)
-	or giving permission (maybe implied permission – where the owner saw the person and waived to them all the time)
-	Requires:
1.	open and notorious use
2.	exclusive use (by 1 person or the public as a whole)
3.	without permission (adverse) and under claim of right
4.	continuous, uninterrupted
-	Sometimes when req’ments not met – ct will enforce it anyway – easement to access pubic beaches (Matthews v. Bayhead Improvement)
Passing to successors:
	Burdens running with the servient parcel: (so that all successors have it)
1.	parties intended it to run (look at language)
2.	successors have notice (actual, constructive – deed, inquiry)
(if doesn’t run – servient returned to FSA for the next owner)
		Benefits running:
1.	in gross – if stated and intended – can run (and is assignable and transferable in most places)
2.	appurtenant – benefit always runs with the dominant parcel
Scope
	You can do whatever you want but can’t overburden the easement 
(Brown v. Voss)
	Increase from development – has to be reasonable and gradual (“)
	You can’t widen b/c of need due to development (“)
1.	Did the original parties contemplate the proposed use?
2.	If not, is it equitable for the ct. to expand the purpose? (burden to owner vs. justification for allowing it)
(1&2 Preseault v. US)
In Gross:
-	many places – division in limited not fair to dilute grantor’s rights w/o compensating them
-	mentioned in the grant – you can divide
-	Not mentioned:
1.	 exclusive – (owner doesn’t use) – divisible
2.	non-exclusive – no can’t dilute owner’s rights
Terminating easements:
1.	abandonment
a.	mere disuse or oral release – not enough
b.	disuse + actions showing intent to abandon (Preseault v. US)
c.	have to show unequivocal intent to abandon
2.	consent
a.	in writing (unless parties waive)
b.	agreement of all parties
3.	by estoppel
a.	servient-estate holder relies on person saying they’re giving it up
4.	by merger – servient and dominant join (not automatically renewed if split)
5.	by adverse possession/prescription
a.	taken by someone else AP=grantor; “prescription” = someone else
6.	by statute – if statute makes you renew now and then
7.	by misuse
a.	uses outside the scope
b.	usually – ct just enjoins – but severe – may extinguish
8.	when it’s useless
a.	debatable (ex. dried lake)
Negative easements:
1.	traditionally 
a.	interfering with support (shared walls etc)
b.	blocking access to light
c.	air
d.	an artificial stream
2.	If it’s not these – usually called a negative covenant or ES
Profit
	Right to take stuff off someone’s land (usually with an easement)
Real Covenant
	Other promises about land; enforced by damages – gives holder the benefit of 
the other person’s obligation to do something
	Has to be in writing – except when it burdens the grantee, grantor signs and 
grantee accepts – also except for common plans – see below
	Negative – just like a negative easement – person promises not to do X
	Passing to successors:		
Burdens:
1.	in writing (See Sanborn exception for common plans)

2.	intent to have it run (see p. 41 about circumstances)
3.	notice to successors (actual, con.,inquiry)
4.	privity
a.	horizontal between original parties
(1)	tenurial (landlord-tenant)
(2)	substituted/mutual – easement granted with a related covenant both burdening the same and benefiting the same parcels
(3)	instantaneous – parties transfer land and agree to it (grantor-grantee) (can be reciprocal)
b.	vertical
(1)	successors have same estate as original
(some will allow a lesser estate but the burden may be pro-rated)
(2)	in a voluntary transfer
5.	covenant must T&C burdened and benefited parcels
(shouldn’t burden people unless they have an interest)
(1)	burdened p. – agreement changes the physical use of the parcel (modern – allows economic affect too)
(2)	benefited parcel – covenant must be physically enjoyed by the parcel (modern – allows economic benefit to count)
Benefits:
1.	writing
2.	intent (look at wording of the deed)
3.	no notice – doesn’t burden them not to know
4.	most places don’t require privity (but see Neponsit)
5.	covenant must T&C the benefited parcel 
(1)	benefited parcel – covenant must be physically 
enjoyed by the parcel (modern – allows economic benefit to count)
(2)	Problem – when the benefit is held in gross and is impt – it gets thrown out b/c the covenant doesn’t T&C any benefited parcel
Enforcing Covenants – Ct. won’t enforce covenants that violate the 
Constitution (Shelley v. Kramer)
Common plan exception for reciprocal covenants (Sanborn v. McLean)
1.	Starting from common owner
2.	Common plan from the start
3.	That’s known (plat, plans filed with city)(or in neighbor’s deeds)
4.	That’s in place before the plot in Q is sold
5.	Burdened parcel in Q must benefit
6.	Don’t all have to be burdened in same way – follow plan
7.	Many places – developer can change the plan later reasonably
- Inquiry notice of buyer required – has to look at deeds and ask
Ending ES’s and Covenants
1.	written release by all
2.	if it’s time limited
3.	by merger
4.	aquiescence – P violated it herself in the past OR tolerated infringement long enough, it shows she agreed to violation
5.	abandonment – P tolerated violations all around then tries to enforce against one (non-uniform enforcement = abandonment) b/c then the thing has no value left
6.	by statute – if you have to reassert periodically
7.	sale of servient estate w/ no notice to buyer
	      8.	private release (usually not b/c of transaction costs)
9.	changed conditions (debatable)
a.	original purpose is not longer possible
b.	and covenant is no longer of value to benefited parcels (hard to judge)
(a&b – Western Land Co.)
-	may take into account the actual market value
-	but maybe just the subjective value – even to an eccentric (Rick v. West)
Damages for dissolving:
a.	Mass – release but award damages (uses subjective measure – objective would be nothing when the value w/o the C. is more)
b.	Cts don’t like to – if they think your reason is change in economic value only
c.	If ct. does dissolve – will give market value + subjective damages
Equitable Servitude 
	Just like a covenant but enforced by injunction
	Ending ES’s – see above
	For burden to run:
1.	has to be in writing (exception Sanborn)
2.	intent
3.	notice
4.	no horizontal privity needed
5.	no vertical privity needed
6.	must T&C the benefited and burdened parcels
(1)	burdened p. – agreement changes the physical use of the parcel (modern – allows economic affect too)
(2)	benefited parcel – covenant must be physically enjoyed by the parcel (modern – allows economic benefit to count)
7.	Minority rule – only has to T&C the burdened parcel
For benefit to run:
1.	in writing
2.	intent
3.	no notice needed
4.	no privity needed
5.	no T&C needed

Right to Exclude

Not absolute – b/c property is the relationship of people in relation to things; So interests conflict – can’t exclude to the point that it infringes on basic rights of others

-	Property rights don’t include the right to harm others through exclusion
Logan Valley – when privately owned business district is the functional equivalent of a public meeting place – it’s treated like it’s publicly owned (owner can regulate speech but not bar it)

Lloyd – Free speech definitely protected federally if site-specific No other effective place to go
-	Speech rights of a publicly owned place if the place functions like the state (seems to mean monopolistic control – like in Logan Valley)
-	BUT – shopping mall is not the functional equivalent of a public meeting place

Pruneyard – when the state has a more permissive free speech law – follow that law
-	State has the right to define property rights any way they want up to the point of regulatory taking
-	(can define property rights to exclude the right to exclude the right to prevent speech on publicly accessible private property)

State v. Shack – 	1st A rights don’t trump the right to exclude speech 
-	BUT property rights don’t include the right to harm others
-	Here, b/c of materiality and the isolation of the workers, (even though the land doesn’t fit into the Logan Valley idea b/c it’s not open to the public) exclusion of the speech would cause harm (and the owner wouldn’t be hurt – could regulate the speech)
Speech cases 		1.	state law? Does it go too far (regulatory taking?)?
2.	site-specific? 
3.	Is it a shopping mall?
4.	Is it the functional equivalent of a public meeting place – (b/c the private owner has monopolistic control of all the places people could speak effectively)?
5.	Is there a reason why preventing the speech would harm people? If so, will the property owner be harmed? (balance)(isolation, materiality, availability of other forums, ability of people to get the info another way)
If these tests say – no right to speak on this property – then a taking if someone is forced to allow it? b/c rights given by title are violated? COME BACK TO THIS!!!

Discriminatory exclusion p.48

Civil rights act of 1964 – outlaws discrim. In public facilities and some private places

Fair Housing Act – exception – single-family, owner-occupied houses AND an 
owner-occupied multiple unit with 4 units or less
-	advertising can be considered discriminatory here (but discrimination is ok)
-	Prove violations using patterns of behavior
-	National origin? Questionable

ADA – affirmative duties and non-discrimination provisions

ADA vs. FHA – both try to prevent discrimination; FHA wants to level the playing field; ADA wants affirmative obligations

Nuisance

Nuisance vs. trespass – trespass easier to prove; sometimes they overlap (some places think noise and air pollution are physical trespass)

Per se – unreasonable if anyone is harmed
-	ultrahazardous
-	or deeply offensive
OR active conduct that seems physically intrusive

Coase: Say how parties are injuring each other
1.	Joint cost theory
a.	eliminates idea of fault
b.	all uses conflict with others & imposes costs on them
2.	Entitlement given by the ct. doesn’t matter
a.	WHEN there are no transaction costs
b.	Parties will bargain so that the outcome is the one with the greatest social utility (based on who was willing to pay what)
3.	Good to give an injunction not damages – so the parties can bargain it out
Problems:
1.	bargaining won’t happen b/c of transaction costs
2.	So – should put duty on the person best able to avoid the injury (technologically or wealth) – efficiency argument
3.	Coase acts like social utility is maximized b/c people pay as much as it’s worth to them to eliminate/continue the activity – but people don’t have enough $ to get what they want (or have so much, no one can pay them enough) Wealth effect
4.	Endowment effect affects bargaining (if you have something, you want more $ to give it up that someone would pay to stop it) – so the entitlement matters
5.	Ignores outside parties –who aren’t a part of the bargaining
Threshold test – 
1.	if P has been harmed over a certain amount – D is liable for 
nuisance (then damages are decided)
-	Includes a normative decision as to what constitutes an injury
-	Ex. Morgan v. High Penn Oil – Ct. looks at injury to P; finds it’s over a certain amt; finds for P Normative right = to be free of smelly gases
-	Ex. Estancias Dallas Corp. v. Schultz – Ct says – injury to P so D is liable Normative right = right to be free of loud AC noise
Modern tendency – balancing test – 
1.	uses comparative test to decide nuisance liability
2.	P’s costs from keeping (and benefits from finding nuisance) vs. D’s costs of eliminating (and benefits from staying)
3.	OR Restatement test harm vs. utility of D’s conduct
4.	D’s costs – should be measured in a way that will cause better behavior (cost of not having created the problem to start with)
Damages:
a.	injunction v. damages – use balancing test (Boomer) costs of injunction v. costs of just granting damages
(1)	includes – does the “nuisance” have some social value?
(2)	Is the harm very great?
(3)	Maybe even so great that ct. should not let the parties bargain out of it
Maybe paternalistic – but overcomes wealth effect (where P would sell out for much less than it’s worth); and there’s more social value in actually stopping the activity
b.	Liability (damages) – D pays for cost to P of the nuisance but doesn’t have to stop; OR D doesn’t have to pay to eliminate the nuisance (if they’re not liable)
c.	rare remedy – to find no liability for D but make P pay them to move

HOME-OWNER’S ASSOC’S

Restriction was there when person moved in? (Nahrstedt)
Is it reasonable (looser standard b/c the person knew about it and taken into account 
in the purchase price)? 
Consider: Did they have little choice? – (the restriction is everywhere)

Restriction made since they got there?
Higher standard of reasonableness when challenged (Nahrstedt)

Think – reasonableness of restriction in this situation vs. consistency and certainty in rules

EMINENT DOMAIN

LANDLORD-TENANT
Did landlord use self help?
•	Was it peaceable/non-confrontational?  Has to be - (Berg v. Wiley)
•	Is there a fair, quick forum? If so, no self help (summary proceeding in 7-10 days (Berg v. Wiley)
					 Were these terms avoided by K? (so that LL 
can use self help)Is that valid?
1.	Is “no self help” a mandatory term?
Yes – K provision invalid
No (default term) – valid

Did the LL default somehow?
	 Tenant can:  	1.	Stay and not pay
2.         leave early and not pay
3.	not leave at the end
	
	 Was there a wrongful eviction?
		Then tenant can leave and not pay any more

	 Was there a constructive eviction? (Reste Realty v. Cooper)
		Was there substantial interference with the tenant’s rights?
		like a wrongful eviction – can repudiate and not pay
	INCLUDING
	 Was there a breach of Implied W. of Habitability? (Hilder)
		Commercial property – generally no implied warranty
		Owner-occupied single family – sometimes not
		(traditionally LL had no duty)
		Remedies:
1.	uncontroversial – tenant claims damages (way it should be – way it is)
2.	controversial – tenant can stay and set-off the rent by value of the breach
OR stay, make repairs and deduct the cost
Sometimes – have to put the withheld rent in escrow Then how can you make the repairs?
THEN – burden is on LL to sue for back rent

	 In a summary proceeding for back rent:
-	some places, tenant couldn’t use LL misconduct as a defense
-	constructive eviction can be used as a defense
-	Breach of implied WofH – most places can be used

Effects of mandatory terms (rent control and WofH) (policy)

1.	(-)
a.	Costs will be passed on to tenants – White
b.	with a Wof H - supply goes down b/c LL’s fold; cost of remaining stuff goes up – White
c.	WofH AND rent control – even more LL’s will fold – White
d.	Only rent control – quality will go down
e.	Some will benefit, some will be driven out
f.	People take risks to invest  - if you cap their profits – disincentive
g.	If LL doesn’t have a lot of $ invested – likely to leave
h.	Some who benefit don’t need the help
i.	No proof it’s working

2.	(+)
a. Empirical evidence is unclear   
b.Even if rent did go up b/c of WofH – it could be compensating for an          ineffective market – where people would be willing to pay more - Posner
c.If consumers can’t/won’t pay any more – LL’s will have to absorb the cost
	d.  LL has invested a lot in the building – sale price will reflect the laws
	e.  LL’s have imposed monopoly rents – so they can afford to absorb
	f.  So unless the LL is losing $, they’ll stay