Property Outline Haynes 2020: Chapter 1

What is property:
Property = legal relationship among people in respect to things. Prop serves human rights but is also limited by them.
Ownership = Bundle of Sticks

Externalities: Can be positive or negative. Cost or benefit that one does not have to consider. Privatizing property is
conserved a way that you can internalize externalities.
 Overgrazing is a negative externality. Effects everyone
 Using fertilizer on field is positive. Still effects everyone

Right to possess:

Right to Use or Exploit:

Nuisance: legal mechanism to balance conflicting rights to use prop. (Spite Fence Case)
 Latin principal: sic utere tuo
 One may not use property in a manner that causes unreasonable harm to the use and enjoyment of another’s land

Right to Exclude (R2E):

Most essential stick. Fundamental Element.

Think Jacque v Steenberg. Denial of the right to exclude is important, even if limited harm.
 Confidence to landowners
 Society has interest in punishing and deterring intentional trespassers

Must yield to public policy. (State v. Shack: Migrant Worker Case)

Interests of Privacy and right to exclude not as important in public places (Mall Protest case)

Privileged: Allowed to enter if in order to protect life or property.

Unprivileged: if…
 Without owner’s consent
 Lacks necessary justification (ex: firefighters have justification)
 Not otherwise justified by public policy

Criminal Trespass: someone told you to leave and you didn’t

Civil Trespass: an unprivileged intentional encroachment upon property owned by another
Intentionally engaged in a voluntary act (does not have to be knowingly)

R2E: Personal Property:

Adcoelum Doctrine: heaven 2 hell. Courts say does not belong in modern world.
When someone takes control of resources by capturing then he takes title absolutely (oil case)
Common law = ad coelum Civil Law = everyone can enjoy (Surface of lake case)
People allowed control over the immediate reaches of enveloping atmosphere. Owns at least as much space as can be
occupied.

Right to Transfer

Right to modify or destroy:

This right can’t interfere with public policy
  Eyerman example: Woman wanted house destroyed in will. Estate and neighborhood against. Court deemed void. Waste to
destroy. Court can step in when clauses are against public policy. Principal of E.E.

One person can have one stick but not other sticks.
Sticks may very depending on who is on other side.
Example: You can keep out a sales man but not a migrant farm social worker.

Principles:

Fairness: Labor in creating = fair to give ownership. Moral dimension. Natural Law theory. Mix labor with materials and
value goes up. Makes it your own.
 Haslem V Lockwood: Manure case. People who create value deserve to have rights to the creation.

Economic Efficiency: Protection of Property gives incentive to produce =wealth maximization. Alienability
IMPORTANT. Makes sure that lands in hands of person who finds most valuable (aka highest and best use).

Certainty: We should incentivize certainty it makes it easier to find out who owns property. Less transaction costs. Promote
peace and order. Uncertainty = lower investment and promotes high transaction costs which is against E.E. principal.

Democracy: Promotes stability, what do you have if you don’t have secure property?

Personhood: we cherish out land. Homestead laws acknowledge this. Privacy and security.
 Property Outline Haynes 2020: Chapter 2
A. Rule of Capture: First possessor wins!
In terms of unowned property. Basis of rights in terms of water, oil and gas, fishing, domain names.

Pierson V. Post: Does pursuit of animal vest property rights?

Mere pursuit not enough.
No. a person must establish occupancy. Constructive possession not enough.
Must mortally wound, dominate, trap. Must deprive them of natural liberty subject them to control.

Role of Custom:
Fishing whales case: For E.E. rule of capture can be abrogated.

Pre-possessory Interest: Exception: When attempting to lawfully obtain proprety but you were thwarted by unlawful acts of others. See:
Popov v. hayashi, genuine rule of capture not applied due to principal of fairness, popov was given a PP right because he would have
captured it. POLICY: We don’t want to incentivize violence.

1. Surface Water

Prior Appropriation: West.

 West
 Rights acquired by diverting water and putting it to beneficial use.
 Based off rule of capture
 Water rights are transferable, and comes at a first come first serve basis

Riparian Rights:
 Reasonable use
 Test is balancing the benefits of the use against the rights and uses of other riparians.

2. Ground Water
Depends on state: Texas has absolute ownership.

3. Oil and Gas

Treated like ferae naturae
 Fugitive and wandering existance
 Physical poession is paramount
4. The Internet
Domain names work with the rule of capture.
Trademark can protect, if infringed a P must show that something “dilutes” the quality of the mark. This Virtual Works
 That I posses a mark
 That the d used the mark
 That the d use of the mark occurred in commerce
 That the d used the mark in connection with sale or ads
 Confuse customers

B. Law of Finders
A finders rights are superior to everyone’s but the true owner.

Principles of fairness: finder labored to discover

Efficiency: allows property to be used where it wasn’t before. Gives incentive to retrieve lost items.
Certainty: Protecting possession is just better. (willcox v stroup) person in possession is presumed to be
the owner. Avoids confusion, maintains status quo, incentive to improve your items.
 - Policies behind acquisition by finding:
o We want to encourage property to get back to rightful owner
o We want property to be found
o We want the possession to be used
o We want to reward the finder & encourage honesty
▪ EX: Hannah v. Peel: solider was able to keep broach he found in house; Hannah’s actions were
commendable
- If public property:
o Generally, you don’t get ownership of things found if it’s a public place (and you are the owner)
o Bridges v Hawkworth: Bag of notes found in shop, found for the finder.
- If private property:
o Owner has more interest in the property
o Depends on the situation (think Hannah v. Peele)

- Mislaid Property: if the owner intentionally placed it in some location and then forgot to retrieve it. Oftentimes states will
make sure it is left with the owner of the property.
- Lost Property: when an owner accidentally/inadvertently loses possession
- Abandoned Property: owner intentionally ditches all legal rights to property and has no intention of reclaiming or giving
those rights to another person

C. Gifts
-Three elements:
 Donative intent
o To make a PRESENT transfer of an EXISTING interest in property (only give what you have)

 Delivery of the gift

o Manual
 Physical transfer (generally required)
o Constructive
 Giving control over property, ok if impossible or impractical (keys)
o Symbolic
 Giving something that just represents the gift

 Acceptance of the gift by the done

o Acceptance generally presumed

Causa mortis: In anticipation of death

If gifting causa mortis the standard is VERY HIGH: Think Newman v Bost (housekeeper/lover) if you can hand it over
physically you should. Constructive delivery of keys did not give her insurance policy inside the box.

Inter vivos: while living/between the living

Michael I will give you the painting when I die: NOT OK
Michael, I give you the painting now but you can’t have it till I die: OK
A transfer inter vivos requires that the donor intend to make a n irrevocable present transfer of ownership, thus a transfer
effective only at death requires a will.
- Present and future interests areimportant in giving gifts!

Adverse Possession:
- Adverse Possession: legal principle which a person who does not have legal title to a piece of property, usually land,
acquires legal ownership based on continuous possession or occupation of the land (w/o permission from true legal owner)

- Policies behind adverse possession:

o 1. Avoiding Stale Claims
▪ Done w/ Statute of Limitations: must being claim w/in certain time frame (often 7 yrs)
● Meeting the Statute of Limitation is not an easy thing to do, shows real neglect
 ▪ Why? – memories get faulty, evidence gets old, sleeping on rights, we want property to be used
o 2. Protecting Personal Attachment
▪ Honors psychological aspect of attachment
o 3. Quit Title / Correct Defects
▪ Color of Title: (false doc) there is some kind of deed or title document, but the description is not correct, or
document is not valid; false claim
● You take possession under basis of title you had (invalid)
● Most common – title describes more land than actual
● States will open up ability to take Constructive Adverse Possession: Entering/occupying any part
of property covered by false title is constructive possession of all land (with limitations)
o With limitations, ex. matters what actual property is
● Is False; but must be reasonably able to believe it was true.
▪ Getting rid of any cloud on the title (there can be mistakes in mapping out prop)
▪ Claim of Right: (false belief) you think the property is yours and treat it as such
● Improvements to property help establish Adverse Possession
- Adverse possession often happens when owner decides to sell the property
- Elements of Adverse Possession:
o 1. Trespass: the act of trespass, actual entry (typically starts the clock)
o 2. Exclusive Possession: can’t share possession with true owner
▪ Owner’s use can be broad, including “do not trespass” signs, mowing grass, etc.
o 3. Use must be open & notorious: can’t be done in secret, a reasonable person must be able to know
o 4. Continuous/Uninterrupted: determined from ordinary course of how the property would be used, can’t be
interrupted by true owner (resets clock)
▪ Interruption must be open & notorious
o 5. Hostile & Adverse: not hostile if you had permission to be there
▪ Adverse to the ownership rights of true owner
▪ May be a way to favor or disfavor the adverse possessor
▪ Use, remodeling, changes, care, can all help establish this
▪ Public land does not have adverse possession, because you’re allowed to be there
- 3 Views of Adverse Possessors’ State of Mind:
o 1. Objective Standard: (MOST common view) intention/state of mind doesn’t matter
▪ Just looks at the adverse possessor’s actions
● → Whether the actions are adverse despite state of mind (doesn’t matter if Kevin thought book
was his or if he knew it was someone else’s)
o 2. Good-Faith Requirement: the adverse possessor in good-faith believed the property was theirs
▪ In color of title & claim of right
▪ Ex: Hollander v. World Mission Church: thought land went to 50 acres, deed said it did, deed was wrong,
cared for prop, was allowed to keep when church tried to recover
o 3. Bad-Faith Standard: “I thought I didn’t own it, but I intended to make it mine” bad faith view, most hostile
▪ Could indicate someone was making good use of the property
▪ The owner not realizing possession shows negligence on owner’s end
▪ Ex: Court used in Fulkerson v. Van Buren (Church) church tried to get deed therefor did not meet hostile
requirement
- Squatter can’t establish adverse possession because not hostile, not looking to take possession of the home, not improving,
etc.
- Successive Adverse Possession: possession of title can be tacked on to previous owner’s possession (for clock purposes)
o Can be used if privity of estate- based on relationship between successive possessors
o Has to be a legitimate transfer, even if transfer is incorrect
▪ Must be relationship/transfer/sale with regard to the property
● Either a contract, color of right transfer
 Property Outline Haynes 2020: Chapter 4
- Types of Co-ownership:

 Tenancy in Common
o Default Form
o Each person has the right to sell or lease without permission
o Upon death interest goes to the estate
o Presumptions of equal shares
o NO right of survivorship

 Joint Tenancy
o YES to right of survivorship
 The interest is automatically absorbed by the survivors. This will not pass through will or estate.
 Must be created clearly
 To A and B as JT with the right of survivorship.

 Tenancy in Entirety
o Between married people
 Only half of states recognize this, and some only in terms of real property.
o Creation: To H and W a married couple as tenants by entirety. Usually assumed unless otherwise stated.
 Must be married at the time of conveyance or devision.
o No possibility of unilateral severance
 One spouse cannot act alone and effect the others right of survivorship
 Needs spousal permission
o Problem for Creditors
 Allows owners by TBE to protect assets from creditors
 This can be circumvented by required signatures of both spouses.
 Some states even say that you can take only the interest of the party in debt

- The four unities

 Time: Must be acquired at the same time. For example if half of the interested is deeded in 2012 and the other half in
2014 then there would be no JT.
 Title: The same instrument/deed/title has to give the interests. The example above would be also wrong for the same
reasons because it was on two
separate occasions.
 Interest: For most state it can’t be unequal shares and the interest must be the same for all the parties. So a Life estate to
A and a remainder to B would not work.
o The unity of interest requirement applies only to joint tenants as between themselves, however; a share of an
entire property can constitute an entire joint tenancy.
Example:
 Ben’s mother owns Babbling Brook Acres. In her will, she devises the property this way: “A two-thirds interest to
Ben and his heirs, and a one-third undivided interest to Thomas and Florence as joint tenants with the right of
survivorship and not as tenants in common.” What are the interests of Ben, Thomas, and Florence?

 Thomas and Florence are joint tenants as to each other in a one-third undivided interest in the property,
and the two of them as a unit are tenants in common with Ben, who has an undivided two-thirds interest
in the property.

 Possession: Possession is as a whole as opposed to percentages and such.

- Severance
o Anything that destroys the four unities will enact a severance
o This commonly occurs when one person transfers her interest to someone else.
▪ JT can do this at any time, without permission from others

o Mortgages: Some states see it as a lien, some states see it as a severance.

o Leases: Most jurisdictions don’t see it as a severance

- Partition
o Partition in Kind
▪ Actual or physical partition. Property is physically divided into pieces and given to cotenants as separate
proprety.
▪ Favored by the courts
● They don’t want to force sales of land
o Partition by Sale
▪ The proprety is sold by the court and the proceeds are divided according to ownership shares.
▪ Not favored but will be done if splitting up is impracticable or if it will significantly reduce the value of the
property

- Rights and Relations between Co-Tenants

o Ouster
▪ Constructive Ousters
● Can happen in divorces
● Spouse will leave through mutual agreement; remaining spouse should have to pay rent.
● Ouster per se can happen if it’s a single family home and theres really nowhere else to live. Even
if they do say, hey you can live here with us.
o Adverse Possession
▪ Only occurs if there is an ouster.

o Duty to Pay Rent

▪ If a CoT leases out the premises to a third party then she may have to pay the other cotenants for the rents
that she received
● Why? When you lease out a property you are giving exclusive rights to others which in a way acts
as an ouster on the property.

o General Rules
▪ Each Co-T has an equal right to possess the whole property.
● Sole possession by one tenant is OK
● No obligation to compensate other co-t absent OUSTER
● Absent statute there is no duty for a person taking sole possession of a property to pay (unless
ouster)
▪ Accounting: every action for partition there will be a final accounting to see how stull will be divided
● There may also be a separate action for accounting if cotenant is receiving rent for more than their
interest in the proprety.
▪ Contribution: A Co-t can seek contribution from others for expenses like taxes, mortgages, or repairs.
● May be subject to cirucumstances such as if one of the CoT has sole possession.
● Improvements:
o Improvements are not subject to contribution.
o Could get credit when the house is sold or partitioned for the increase in market value
● Repairs:
o Credit upon rent
▪ Waste: Co-T can seek injunction or damages against another cotentant for harming the property.

- Helpful Examples:

o Christina, Barbara, and Matthew own Blackacre as joint tenants. Matthew conveys his interest in Blackacre to Rick.
What is the state of the title?
 ▪ The new tenant, Rick, is a tenant in common and has no right of survivorship with Christina and Barbara’s
interests; he has an undivided interest in one-third of Blackacre. Christina and Barbara still hold an
undivided interest in the other two-thirds of Blackacre as joint tenants, however. Thus, if Christina dies,
Barbara takes her interest, and vice versa. In other words, the joint tenancy was severed by Matthew’s
conveyance, but only to the extent of the one-third interest conveyed away.
o Evan owns a farm. He validly conveys it to Sam and Benjamin as joint tenants with right of survivorship, and not as
tenants in common. After the conveyance, Sam moves onto the farm exclusively, tells Benjamin he has no right to
possession, and ensures that by installing an electrified fence. What can Benjamin do about this assertion by Sam?

▪ In this scenario, Benjamin didn’t agree to Sam’s exclusive possession, and Sam forcibly kept Benjamin off
the property with an electrified fence. In other words, Benjamin was “ousted.” Benjamin can either (1)
regain his own possession (which would co-exist with Sam’s possession), or (2) demand his share of the
fair rental value of the property, or (3) have the property partitioned. But if Sam’s adverse possession
continued for the statutory period, he’d gain title to the whole thing through adverse possession.

o Martin, Nick, and Fred are joint tenants in Blackacre. Nick transfers to Donna a life estate in Blackacre, remainder
to himself. Is the joint tenancy destroyed?

▪ Yes. A conveyance will destroy a joint tenancy, even though it was not a conveyance of the conveyor’s
entire fee interest. Thus the transfer of a lesser interest, like a life estate, will sever the tenancy, leaving the
“default” tenancy—a tenancy in common. So after the transfer, Martin and Fred are joint tenants as to two-
thirds of Blackacre, and together as one unit are tenants in common with Donna in Blackacre. Donna has a
life estate in one-third of Blackacre. (Nick isn’t a tenant at all; he has a reversion interest in Donna’s one-
third, and he’ll become a tenant in common with Martin and Fred [who are joint tenants as between
themselves] when Donna dies.)

● NOTE: Nick’s conveyance doesn’t destroy the joint tenancy as to the two remaining joint tenants,
Martin and Fred, but only between Donna and the two of them, as to the one-third interest Nick
conveyed to Donna.

o John owns an estate, Whiteacre. He conveys it to himself and his wife, Yolanda, in joint tenancy with the right of
survivorship, and not as tenants in common or tenants by the entirety. Does this leave John and Yolanda as joint
tenants in Whiteacre?

▪ Courts are split, but according to the better, modern view—yes. At common law, a conveyance like this
wasn’t possible, because a person was deemed to be unable to make a conveyance to himself. What John is
actually doing, however, is conveying the property from him personally to him and Yolanda as a unit.
Under the modern majority view, the conveyance to him and Yolanda as a unit satisfies the four unities,
and because the conveyance is unambiguous, it’ll create a joint tenancy.

● RELATED ISSUE: John could avoid any ambiguity or split of authority by conveying the
property to a third person, known as a strawperson. The strawperson would then convey
Whiteacre to John and Yolanda as joint tenants with right of survivorship and not as tenants in
common. No matter which view a jurisdiction follows, this would create a valid joint tenancy.

o Dr. and Mrs. Jasper are tenants by the entirety in Pansy Place. Dr. Jasper gets a little too wrapped up in his lab work,
falls into debt, and his creditors attempt to levy upon Pansy Place to satisfy their claims. Can they do so?

▪ In most states that recognize a tenancy by the entirety, no—creditors of one spouse cannot levy upon
property owned jointly “by the entirety” (although they could do so if it were a debt of both spouses,
instead of just one). Note that this protection from creditors is a very attractive feature of a tenancy by the
entirety.

● RELATED ISSUE: Say instead that the Jaspers were joint tenants instead of tenants by the
entirety. Then Dr. Jasper’s creditors could levy upon his interest in Pansy Place to satisfy his debts
(during his lifetime only; if they attempt to levy on his interest after he dies, Mrs. Jasper will
already have his interest and the creditors won’t be able to get to it).
o Henry and Wanda were husband and wife. Using funds supplied entirely by Henry, the two purchased Blackacre
from Oscar. (The deed from Oscar to Henry and Wanda read, “To Henry and Wanda in fee simple,” without further
elaboration.) Shortly thereafter, Henry became infatuated with a younger woman, Georgia. To celebrate the six-
month anniversary of their affair, Henry conveyed to Georgia his interest in Blackacre. (Assume that the land is
located in a state that permits such a conveyance.) For the next five years, Henry continued to be married to Wanda,
but carried on his affair with Georgia. Then, Wanda died, leaving all of her real and personal property to her and
Henry's daughter, Denise. Shortly thereafter, Henry died. What is the state of title? (Assume that the common-law
approach to all relevant matters is in force, unmodified by statute or case law.)

▪ Fee simple absolute in Georgia. Oscar's original conveyance to Henry and Wanda created a tenancy by the
entirety in them, since at common law any conveyance to two persons who are in fact husband and wife
necessarily results in such a tenancy. (In fact, in the 22 states that retain tenancy by the entirety, there
remains a presumption that a husband and wife who take property take it by the entirety.) When Henry
conveyed his interest to Georgia, this did not have the effect of destroying the tenancy by the entirety,
since such a tenancy is indestructible while both parties are alive and remain husband and wife. But
the conveyance did have the effect of passing to Georgia whatever Henry's rights were. When Wanda died
before Henry, her interest was extinguished, and there was nothing for her to pass to Denise. Since Henry
would have taken the entire property had he kept his interest, Georgia steps into his shoes, and takes the
entire property.

o Omar, the owner of Whiteacre, left the property to his daughter Carol and his son Dan, in equal parts. The will said
nothing about who should occupy the property. The property was a single-family home. Dan already had a home of
his own, suitable for his family. Carol did not. Therefore, Carol moved into the house, and has since occupied it. The
estimated fair market rental value of the house is $18,000 per year. Dan has demanded that Carol pay him one-half
of this amount, to compensate for her use of the premises. Carol has responded, “You are free to live here with me,
but I'm not paying you any money for my use of the premises.” If Dan sues for one-half of the fair market rent
represented by Carol's occupancy of the premises, will Dan prevail?

▪ No. Each co-tenant is entitled to occupy the entire premises, subject only to the same right on the part of
the other tenant. But the occupying tenant has, in general, no duty to account for the value of his exclusive
possession. If Carol refused to let Dan live in the property, then Carol would be liable to pay Dan
one-half of the rental value of the premises. But as long as Carol holds the premises open to Dan, she
does not have to pay Dan any part of the imputed value of her own occupancy.

o Edward and Felicia, brother and sister, received Whiteacre as a bequest in their mother's will. Edward, who had been
living on the property while his mother was still alive, continued to do so after her death. Felicia has never had any
interest in living on the property. The property is presently worth approximately $800,000, and has a rental value of
$50,000 per year. However, Edward has rejected all suggestions by Felicia that the property be sold or rented out to
third parties (though Edward has always indicated that Felicia is welcome to live on the property with him). What
sort of action, if any, may Felicia bring to accomplish her goals?

▪ She should bring an action for partition. Any tenant in common or joint tenant (but not a tenant by the
entirety) may bring an equitable action for partition. By this means, the court will either divide the
property, or order it sold and the proceeds distributed. Normally, each tenant has an absolute right to
partition, even over the objection of the other. Here, since the property probably cannot be readily
divided, the court will order it sold. Felicia will get half of the sale proceeds.
 Property Outline Haynes 2020: Chapter 5
Future Interest Retained by Future Interest in Third
Estate Grantor/Testator Party

Fee simple absolute None None

Fee simple determinable Possibility of reverter Executory interest

Fee simple subject to Right of entry or power of termination Executory interest

condition subsequent

Life estate Reversion Remainder

Term of years Reversion Remainder

- Fee Simple Abosulute (Fee Simple)

o Has the entire timeline
o No Future Interests
o Uses terminology: to heirs and assigns

- Life Estate
o present possessory interest
o remainders always follow a life estate
o Creation:
▪ “to B for life”
▪ “to B in life estate”
▪ “to B during the term of his life”
▪ “the full use and possession of the described property to B for and during the term of her natural life.”
o Is alienable

- Restraints on Alienation:
o Will not be enforceable
o Policy decision: we want to promote the free transfer of property among people

- Future and Present Interest Notes:

o There cannot be a partition between future and present interests (At least in most states)
o Valuation can be tricky
o Future interest holders can have some protection with the a waste case
▪ A plaintiff must show that the actions by the current possessor diminish the value of her interest
▪ Remedy can be an injunction damages or even termination of a life estate.
- Reversions
o Happens when the something “Reverts” back to the grantor
o Can also be created by failing to provide for a remainder interest after a life estate

- Contingent and Vest Remainders

 o Contingent Remainder
▪ Subject or condition precedent that is NOT certain to happen OR
▪ Granted to a person that is NOT in existence or ascertained
▪ Do not accelerate into possession upon the termination of a preceding estate
● O conveys “to A for life, then to B if she reaches the age of 21.” Until B reaches the age of 21, B
has a contingent remainder and O has a reversion. Assume A dies when B is 17. The estate returns
to O until B reaches 21. If B does not reach 21, her interest is extinguished and O has a fee simple
absolute.
▪ Less rights.
● Ex: In a cause of action for waste they can get an injunction but not damages or forfeiture.

o Vested Remainder
▪ Given to an ascertained person in existence AND
▪ Not subject to any condition’s precedent (other than one that WILL happen)

▪ Vested remainder subject to open

● Given to a class.
▪ Are devisable

▪ Vested subject to divestment

● If the condition is subsequent rather than precedent
● He doesn’t have to meet any conditions to take but the interest could be taken away

- Defeasible Fees

o Fee Simple Determinable (FSD)

▪ Durational language
● SO LONG AS
● UNTIL
▪ A grants Blackacre to the Rock Railroad so long as it is used to railroad purposes
▪ AUTOMATICALLY reverts to the grantor
▪ Future interest retained by grantor is called possibility of reverter
▪ FSD is a limited grant, she is not giving away the entire timeline
▪ Adverse possession begins at the time of the improper use

o Fee Simple Subject to Condition Subsequent (FSS)

▪ Conditional language
● ON THE CONDTION THAT
● PROVIDED, HOWEVER

o Alice grants Blackacre “to the Rock Island Railroad, its successors and assigns forever.”
In another clause of the deed, she attaches this condition: “Provided, however, that the
grantee must use the property only for railroad purposes.

▪ Option to retake the property, but not automatic

▪ Future interest is called a right of entry or power of termination
▪ Here she is giving away the entire timeline, but she holds the power to take it back.
▪ COURTS FAVOR FSS BECAUSE THEY DON’T WANT THE AUTOMATIC FORFETIURE

o Fee Simple Subject to an Executory Interest (FSE)

▪ When a fee simple is followed by an executory interest
▪ Automatic transfer to the transferee (not a right of entry)
▪ Two types
● Shifting
o The possessory interest shifts from one transferee to another
● Springing
o When the grantor has the interest until a certain event
 ▪ O places $100,000 in trust, to be distributed “to my son Sam, if he graduates
from college.” The grantor retains the present interest in the trust and Sam will
take only upon the occurrence of the stated condition (graduating from college).
▪ O has a FSS (or FSE); Sam has an executory interest.

o Estate for Years

▪ Had a fixed duration
● O conveys to A for 99 Years. A has an estate for years and O has a reversion
- Dead Hand Control
o Land is for the living

o Fee tail:
▪ Created by “to my son A and the heirs of his body”
▪ Indicated that when A dies that it would pass to his issue then their issue and so on…
▪ Until the line died out, then it revert back to the grantor
▪ Creates endless series of life interests
▪ Impossible to hold in Fee simple because of the future interests of the unborn
o Rule Against Perpetuities
▪ Used to prevent the remote vesting of interests

NO INTEREST IS GOOD UNLESS IT MUST BEST OR FAIL WITHIN

THE LIVES IN BEING AT THE CREATION OF THE INTERST PLUS
21 YEARS

o Wills take effect at death

o When interest violates a rule it is simply struck out

EXCEPTION: THE RULE DOES NOT APPLY WHERE BOTH PRESENT AND FUTURE INTERSTS ARE TO
CHARITIES.

- Steps to Rules against Perpetuities

1. Identify the future interests

a. Do not get tripped up by present interests (aka an estate for years is a present interest)
2. Look for contingent remainders and executory interests
a. Does not apply to interests retained by the grantor (reversion possibility of reverter, or right of entry)
b. Does NOT apply to vested remainders
c. Remember that unascertained people or classes= contingent
3. Determine the latest point at which the future interest may vest or fail
a. If contingent: what makes it contingent, what needs to happen for the
contingency to clear up?
b. If it is an executory interest what event will cause it to come into
possession?
4. See whether the contingency will be resolved within the lifetime of a person alive at
the creation of the interest plus 21 years
a. Creation of the interest= at the time of the conveyance or at the death of the
testator
b. Forget 21 years unless there is year limiting language
c. Look at lives that effect vesting, everything else is irrelevant
 Property Outline Haynes 2020: Chapter 6
INTRODUCTION
- The leasehold is a relationship.
o The tenant goes into possession of the landlord’s real property has obligations regarding the use of the property
and the payment of rent.

o The landlord has obligations to the tenant reg the condition of the premises.

B. WHAT IS A LEASE: THE BASICS

 The essence of a lease:
o the landlord grants a right of exclusive possession of specific real property to the tenant
o for a term (period of time),
o with a reversion in the landlord at the end of the term.

o In other words, the lease creates a present possessory estate in the tenant, and a future interest in the landlord.

2. Categories of Leases

- There are three “true” leasehold relationships

o tenancy for a term of years
▪ The phrase “term of years” does not require the actual term to last years.
▪ Means FIXED duration
▪ Some states limit the maximum duration of leases by statute.
▪
o periodic tenancy
▪ The lease continues from period to period
▪ only terminates if either the landlord or the tenant notifies the other of an intention to terminate
▪ The lease does not end in the middle of a period.
● The period may be one week, one month, a half-year, or a year.
● There are two key questions when encountering a periodic tenancy:
o How is the tenancy created?
o How is it terminated?
▪ If a landlord leases premises to the tenant “from year to year,” then the landlord has expressed his intent to
create a periodic tenancy with a year as the period.
▪ The landlord or tenant terminates the periodic tenancy by giving notice.
● A written lease agreement usually spells out how and to whom notice should be given—by mail,
by hand delivery electronically.
▪ Under the basic common law rule, the amount of notice equals the period of the periodic tenancy.
● If more than one year, usually just 6 months.
▪
o tenancy at will

- These three relationships are “true” because

o landlord and tenant voluntarily and mutually agree to the arrangement.

- If a tenant decides not to leave at the end of his term then a tenancy at sufferance is created.
o the law will grant the landlord an election to treat the tenant as:
▪ a trespasser
 ● Can recover actual damages from the tenant which may include loss of new tenant due to delay
▪ or a tenant under a new lease.
o The tenant’s period for adverse possession begins when the tenant is informed that tenant is trespassing.
o Provisions of old lease will govern new.
▪ Will usually change into periodic lease, no longer than a year.

C. MANAGING THE RELATIONSHIP: RIGHTS AND OBLIGATIONS OF LANDLORD AND TENANT

1. Landlord’s Duties and the Consequences of Failure

- Different from License:
o Does not have exclusive possession
o Can be revoked

- Primary Obligations of the Landlord

o landlord may be required to place the tenant into physical possession on the first day of the lease;
▪ English Rule: place tenant in actual physical possession
● reasoning behind this is that the landlord is in a better position to know whether a previous tenant
is likely to holdover and protect against it, and because of this, the landlord is the one who would
be required to testify on such matters in legal proceedings.

▪ American Rule: give tenant right to physical possession

● American rule suggest the English rule is unduly burdensome on landlords and requires that they
either refrain from leasing occupied premises until the tenant has vacated or be subject to legal
action for the wrongdoing of another.

o tenant’s right of “quiet enjoyment”;in the residential context,

o provide property meeting a minimal level of “habitability.”

a. The Right to Possession

Hannan V Dusch
Rule of Law
An implied covenant to deliver actual possession of a premises does not exist in real estate leases. The default rule is the American
rule unless there is an express covenant to deliver actual possession.

Key Data v US
Rule of Law
A lessor is obligated to provide the lessee with actual possession of the leased premises at the beginning of the term. The risk ought
to be upon the owner, unless the prospective tenant expressly agrees to shoulder it.

b. The right of quiet enjoyment

- The tenant’s right to exclude means that even the landlord does not have the right to enter into the tenant’s property
o default rule;
o the tenant may always grant the landlord a right in the lease to enter the premises for particular reasons.
o At common law, the landlord did not have the right to enter even to prevent waste.
▪ The landlord could bring an action for damages as a result of waste, or for an injunction to prevent the
tenant from wasting the property. landlord could not simply unlock the door and stop the wasteful activity.
▪ Similarly, the landlord could not generally enter property if the tenant was engaging in illegal activity.
o Some courts moving away from this, and letting landlords in even if not in lease

- Lease = promise to pay rent, and you can live in my space

o They are independent promises
▪ Breach of one does not relieve the other
● If the landlord breaches the right to quiet enjoyment then tenant still has to pay rent.
● Can sue for damages out of breach of promise though
- Eviction
o Can get out of rule if physically evicted
 ▪ Then you would not have to pay rent
o Can get out of rule if you there is constructive eviction
▪ Elements of Constructive Eviction
● the interference must be substantial and of a kind that would cause a reasonable person in
tenant’s position to be forced to leave the premises right away, or as soon as possible
● the tenant must notify the landlord, and give the landlord an opportunity to fix if possible within
reasonable time
● the tenant must vacate; and
● the interference must result from breach of express or implied promise made by landlord to the
tenant
o Please note that a landlord cannot be in breach of promise NEVER made
o
▪ If interfere with quite enjoyment of leased premise to such an extend that the tenant is basically forced out
of there
● Then no duty to pay rent
● Example: if the landlord cut off water to an office building, then fairly soon the tenant would be
forced to leave, terminating the tenant’s obligation to pay rent. If the landlord interfered with the
tenant’s quiet enjoyment, but not to a degree that forced the tenant to leave, the tenant could still
sue landlord for damages based on a breach of the implied covenant of quiet enjoyment.
o You must make the premises untenantable
▪ Basically they might as well have forced you out…. Aka constructively evicted.

Reeste Realty Corp. V. Cooper

Rule of Law
If a landlord, by act or omission, makes a leased space substantially unsuitable for the purpose for which it is leased, or which
seriously interferes with the beneficial enjoyment of the premises, this results in a breach of the covenant of quiet enjoyment and may
constitute a constructive eviction.

Holding and Reasoning (Francis, J.)

Yes. Where the lease contains a covenant of quiet enjoyment, breach of this covenant may lead to a claim of constructive eviction,
relieving the tenant in possession from rent obligations. Examples of breaches of quiet enjoyment include failure to heat so as to
render the space uninhabitable during cold days, or failing to clear a clogged waste pipe for so long that it presents odors and health
dangers. Reste’s argument that the interference was not “permanent” (in that it only occurred when it rained) is rejected
because the problem nonetheless amounted to a serious interference with the use of the premises. Reste’s alternative
argument, that Cooper failed to vacate in a reasonable time is also rejected. Cooper was put in a precarious position after
Donigian died: if she had vacated prematurely, she may have been found liable for rent, so she had to be cautious about when
she finally decided to leave. She hoped for a time that the landlord would fix the problem. Given the choices (vacate too early or
hope that the situation would be addressed), Cooper acted reasonably in vacating when she did. The findings of the trial court were
supported by the record, and the Appellate Division erred in reversing it. The Appellate Division judgment is reversed, and the trial
court’s judgment is reinstated.

c. Minimum Levels of Habitability

- Commercial leases
o subject to significant negotiation
o commercial tenants are often (but not always) represented by counsel.
o There is typically more money “on the table” than in a residential lease.
- Residential Leases
o the tenant is usually presented with a form document that he cannot negotiate:
▪ if he does not like it, he is free to find another apartment complex.
o residential tenant has less ability to fully examine the leased space in advance that would reveal problems.
o Common law rule of caveat lessee is under fire recently.
o We value homes as much more personal than any other kind of prop
o Problems can occur for tenants:
▪ Tenant must move out and then discover after being sued for rent whether court thinks their departure was
justified
▪ If she loses she can owe rent to both old and new landlord.
Hilder v. St. Peter (REALLY SHITTY LANDLORD CASe)
Rule of Law
All residential rentals include an implied warranty of habitability, which cannot be waived or disclaimed.

2. Tenant’s Duties and the Consequences of Failure

- The lease may expressly place other duties on the tenant,

o but the duty to pay rent and the duty to avoid waste arise almost always

“I Surrender”; Giving Back the Keys and Walking Away

- Abandonment means that a tenant walks away from the premises and relinquishes any intention to return.
o A tenant who abandons leased premises typically stops paying rent.
o The landlord granted exclusive right to possession; this fact does not change because the tenant chooses
temporarily to vacate the property.
o The landlord may treat the lease as continuing and in full force and effect.
▪ If the landlord chooses to do so, rent continues to accrue and the landlord may sue tenant for rent until the
end of the term.
▪ On the other hand, the landlord may choose to “accept surrender” of the premises.
● This means that the landlord treats the lease as terminated from the moment of acceptance.
● This usually plays out as follows:
o tenant sends landlord a letter informing landlord that tenant is leaving the space and
enclosing the keys. The tenant will then ask the landlord to treat the lease as terminated.
If the landlord accepts surrender, the landlord can sue the tenant for any damage to the
premises and unpaid back rent, but landlord cannot sue for future rents because the lease
no longer exists.
● Taking the keys is akin to accepting a check; a landlord that accepts keys appears to have
accepted termination of the leasehold.

- Landlord’s Response to the Tenant’s Abandonment of the Premises

o The landlord may “accept surrender” and terminate the lease;
o the landlord will not be entitled to future rents, but can recover past due rents.
o The landlord may reject surrender. The jurisdictions are split:
▪ modern contract law approach, the landlord would be required to use reasonable efforts to find a
replacement tenant in order to mitigate damages from the breach of the lease
▪ common law jurisdictions: the landlord may choose to leave the premises vacant and continue to hold the
tenant liable for rent for the remainder of the term.
SOMMER v. KRIDEL
SOMMER v. KRIDEL
Rule of Law A landlord has a duty to mitigate damages when he seeks to recover rents due from a defaulting tenant.
A tenant can do a lot of damage to the premises, if he wants to. Moreover, if a tenant remains in his space when he has lost his legal
right to possession, the landlord cannot lease the space to a new, paying tenant. This is the cruelest cut for a landlord. And if the
space is occupied, the landlord may have to continue to maintain it at a certain level and pay increased insurance and utilities. The
landlord would like to bring this sad state of affairs to a quick end. See 2 Andrew R. Berman, Friedman on Leases §18:6 (6th ed.
2017). As we will see, the landlord has the option of resorting to a specialized judicial remedy known as summary proceedings (often
called “unlawful detainer actions”). The end result is that a sheriff removes the tenant under the auspices of the court. In a few
jurisdictions, the landlord may exercise a remedy known as self-help and personally remove the tenant.
The landlord does not want to sit on his hands when the tenant fails to pay rent. State statutes provide that the landlord does not have
to do so. The landlord is permitted to (relatively) quickly evict a tenant and take possession if the tenant fails to pay rent. Statutes
permit the landlord to retake possession after giving tenant a statutorily prescribed notice period and opportunity to cure. The notice
periods are short (typically about ten days). These statutes apply to both residential and commercial leases. If the tenant does not pay
within the time period but remains in the premises, the tenant is subject to a “summary” judicial proceeding.
BENDER v. NORTH MERIDIAN MOBILE HOME PARK
c. The Duty to Not Commit Waste
In the case of landlord-tenant law, the tenant is in possession, and the landlord has a reversion giving the landlord the right to
possession in the future. A tenant who deliberately changes the property in a way that diminishes its value is engaging in affirmative
(or voluntary or commissive) waste. A tenant who simply allows the property to deteriorate by failing to take appropriate steps to
protect or repair is engaging in permissive waste. The tenant is not allowed to waste the property that he leases. In the case of
permissive waste, this really means that the tenant must make reasonable repairs or notify the landlord of a problem if the repair
obligation falls to landlord under the lease.
Waste: Three CategoriesAffirmative. Tenant acts deliberately to alter the premises and lower its value.Permissive. Tenant fails to
take reasonable steps to repair or protect the premises.Ameliorative. Tenant alters premises but increases its value.
On some occasions, a tenant might actually alter the premises in such a way as to increase its value. This is still a form of waste, but
the landlord has less reason to be upset about it. This is called ameliorative waste, and in some limited instances, the tenant will not
be liable in damages to the landlord for such ameliorative waste.
We want the tenant to treat the property as if it were his own. This is precisely what waste doctrine tries to accomplish. Tenant will
be liable for any damage he causes or allows, and perhaps punitive damages, if the tenant intentionally acts to damage the property.
Ben and Jerry are law students. They are also co-tenants and have signed a lease with their landlord for a two-bedroom apartment in
the Piedmont Park apartments. Ben occupies one bedroom and Jerry the other. Ben graduates a semester early and moves out of the
apartment. Ben shuts the door to his room and never returns.Ben continues to pay his share of the rent. Jerry similarly continues to
pay his share of the rent and all payments to the landlord are made on time.The day after Ben leaves, a heavy thunderstorm moves
through the area; a single thunderclap breaks the bedroom window in Ben’s room. In the following months, a number of animals,
including a family of gophers, move into Ben’s bedroom. Jerry hears the animal noises but assumes that the noises come from
outside the apartment; he does not enter Ben’s room.The lease term ends and Jerry moves out. The landlord enters the apartment unit
after expiration of the term and discovers a veritable wild animal park in Ben’s room. The room is considerably damaged.The
landlord asks for your advice. What are Ben’s liability and Jerry’s liability for the damage, if any? What steps would have protected
Ben and Jerry from liability?
This is permissive waste. They are tenants in common so jerry is liable too.
D. TRANSFER OF THE PREMISES
you may locate someone to take your place in the office and to start paying rent to the landlord. If this happens, you will have either
“assigned” your interest in the lease or “subleased” the premises. In both situations, you will have granted your exclusive right to
possession to a third party, who for the moment we will simply call the “transferee.”
1. Distinguishing an Assignment from a Sublease

ERNST v. CONDITT
ERNST v. CONDITT390 S.W.2d 703 (1965)Tennessee Court of Appeals
Rule of Law One who takes an assignment of a leasehold interest is responsible to the lessor under the terms of the lease.
Complainants, B. Walter Ernst and wife, Emily Ernst, leased a certain tract of land in Davidson County, Tennessee, to Frank D.
Rogers on June 18, 1960, for a term of one year and seven days, commencing on June 23, 1960.
The Ernsts (plaintiffs) owned a tract of land which they leased to Rogers in 1960. Rogers built up a Go-Cart business on the land and
operated it for a year under the terms of the lease. Conditt (defendant) bought the Go-Cart business from Rogers.
Rogers went into possession of the property and constructed an asphalt race track and enclosed the premises with a fence. He also
constructed other improvements thereon such as floodlights for use in the operation of a Go-Cart track.
With respect to the land, the Ernsts and Rogers executed a second document which extended the lease term through July 1962 and
granted permission to Rogers to “sublet” the land to Conditt, on the condition that Rogers remain liable under the lease. Conditt and
Rogers then executed a document under which Rogers “sublet” the premises to Conditt.
On July 10, 1962, complainants, through their Attorneys, notified Conditt by letter the lease would expire as of midnight July 31,
1962; and they were demanding a settlement of the past due rent and unless the improvements on the property were removed by him
as provided in paragraph 9 of the original lease;
Conditt operated the business on the land from August through November 1960. He failed to pay rent for most of that time, claiming
that he was not liable to the Ernsts for rent. In July 1962, near the expiration of the lease, the Ernsts demanded from Conditt full
payment of the back rent and for removal of the improvements to the land. Conditt did not respond, and the Ernsts sued him.
On August 1, 1962, complainants filed their bill in this cause seeking a recovery of $2,404.58 which they alleged was the balance due
on the basic rent of $350.00 per month for the first year of the lease and the sum of $4,200.00, the basic rent for the second year, and
the further sum necessary for the removal of the improvements constructed on the property.
The trial court found that the conveyance from Rogers to Conditt was in fact an assignment, and that Conditt was liable to the Ernsts
for the relief requested. Conditt appealed.
The defendant by his answer insists the agreement between Rogers and himself is a sublease and therefore Rogers is directly and
primarily liable to complainants.
Issue Is a third party directly responsible to a lessor for the obligations under the lease when the lessee conveys to the third party all
of his interest under the lease?
Defendant has appealed to this Court and has assigned errors insisting the Chancellor erred in failing to hold the instrument to be a
sublease rather than an assignment.
Yes. A sublease is created when a lessee conveys less than his full interest in the property to another, either by term of years or by
retaining a right to re-enter or right of reversion. In that situation, the lessee remains in privity of contract and privity of estate with
the lessor, and is responsible for performance under the lease.
As stated in complainants’ brief, the liability of defendant to complainants depends upon whether the transfer of the leasehold interest
in the premises from Rogers is an assignment of the lease or a sublease.
In contrast, a lessee who conveys all of his interest to another creates an assignment, and the lessee is no longer in privity of estate
with the lessor. Therefore, the lessor may hold the assignee directly responsible for the terms of the lease. Here, Rogers relinquished
all his rights to the property when he passed the land to Conditt.
The general rule as to the distinction between an assignment of a lease and a sublease is an assignment conveys the whole term,
leaving no interest nor reversionary interest in the grantor or assignor.
The fact that the lease included a clause that Rogers remained liable under the terms of the lease did not create any right of re-entry
or reverter, although it did mean that Rogers remained liable in the event that Conditt defaulted on his obligations. Because Rogers
retained no interest in the land other than the obligation to cure the default of Conditt upon demand, the conveyance was an
assignment, and Conditt was directly liable to the Ernsts for rent and for removing the improvements to the property upon demand.
The trial court is affirmed.
It results the assignments are overruled and the decree of the Chancellor is affirmed with costs.
Courts ask: did the tenant transfer his right to exclusive possession for the entire remainder of the term? If the tenant retained the
right to return into exclusive possession, for even an hour, the transfer would not be considered an assignment.
If there is no continuing role except for the contract duty. The only way that you as a tenant can get out of the privity of contract
(assignment takes you out of privity of estate) you need to get a release from your landlord.
The Ernst court spends considerable effort describing the meaning and effect of the terms privity of estate and privity of contract.
Privity of estate can only be with one person.
“Privity” has different meanings in different contexts. Broadly, though, one party needs to be in privity with another to hold that
other person liable for an action. To put it another way, you cannot sue someone unless you can show that you have an adequate,
legally recognized connection with the person you are suing.
Contract law creates privity. If you contract to provide a service to a company and then fail to do so, the company can sue you for
breach of contract because you are in privity of contract.
Any party “stepping into the shoes of the tenant” via an assignment is in privity of estate with the landlord.
2. May Tenant Transfer His Lease Rights (Either by Assignment or Sublease)?
May Tenant Transfer His Lease Rights (Either by Assignment or Sublease)?
“Lessee shall have no right to assign or sublet the leased premises without prior written approval of Lessors.” This is typical of lease
agreements, both in the residential and the commercial contexts. The restrictions on transfer in a commercial lease may be more
involved; we will discuss that briefly below. But in both instances, the landlord tries to exert control over who has the right to
exclusive possession. Interestingly, the reason that the landlord finds it necessary to insert this sort of language is that, at common
law, the tenant had an absolute right to assign his lease or sublease the premises.
The Default Rule: The tenant has a right to transfer.
Historically, leases were treated more as conveyances than contracts. As we have seen though, this basic approach to the nature of the
lease has been changing and, generally speaking, the lease is increasingly seen as a contract. Yet, there is a striking area of agreement
between property law and contract law. Under both approaches, a tenant has the right to transfer his rights under the lease (whether
by sublease or assignment), if the lease does not otherwise preclude the transfer. To put it another way, if the lease is silent on the
subject, the tenant can transfer.
The property law rationale is this: property law “abhors” a restraint on alienation.
If the landlord wishes to restrict the tenant’s ability to transfer, he must expressly limit the tenant in the lease. This rule applies to
both residential and commercial leases.
In some leases (both residential and commercial), the landlord will include an express limitation on the tenant’s ability to transfer the
lease or the premises to a third party. Typically, the lease will state that “tenant may not transfer, assign or sublease without the prior
written consent of the landlord.” This is sometimes called a “silent consent clause,” because it says nothing about the permissible
reasons for refusing consent; in fact, the language seems to allow landlord to refuse for any reason. Tenants may negotiate, especially
in the commercial sphere, for language that requires the landlord to act reasonably. Even in the absence of that limiting language,
however, some courts imply a reasonableness requirement into the consent provision. In those states, some leases therefore include
explicit language negating the implied duty to act reasonably (“consent may be withheld for any reason”).
Query: What happens if a lease states: “Tenant may not assign his interest in the lease without the prior written consent of landlord.”
The tenant then enters into a sublease with a third party. Has the tenant violated the lease?
Sublease is still allowed, it is different than an assigment
PROBLEM: “BLOOD MONEY”Clarke owns Rama Travels, a travel agency, and leases space in an office center owned by
Smith.Clarke is nearing retirement age. Clarke therefore locates Ursula, who agrees to buy his business.The lease between Rama
Travels and Smith includes Provision 5, which reads as follows: “Tenant may not transfer, assign or sublease the lease or premises
without the prior written consent of Landlord.”Clarke requests that Smith consent to an assignment of the lease to Ursula. Without
the assignment, Ursula will not purchase the business.Smith refuses, stating: “Provision 5 is my license to steal. If you want my
consent, Clarke, you must give me 10 percent of the purchase price. Consider the 10 percent fee my blood money. I have the right to
say no just because I feel like it. If you want to retire, pay up.”Clarke visits you and asks for advice. Is Smith entitled to demand the
money?
This is extortion
The older common law rule allowed a landlord to deny consent for any reason if the lease required consent. This remains the
majority rule, but the law is in transition. “[A] substantial number of courts have concluded that the landlord has an implied duty to
be reasonable whenever the parties provide that the landlord has the right to consent prior to any assignment or sublet.”
Assume that University asks for your advice. The President and Board of Trustees would like to deny consent. Is University
permitted to deny the tenant’s request for consent to an assignment to Planned Parenthood? What is reasonable under the
circumstances?
The Restatement provides generally, as to both residential and commercial leases, that the landlord cannot withhold consent
“unreasonably” to tenant’s request to transfer, unless the lease includes “a freely negotiated provision [that] gives the landlord an
absolute right to withhold consent.”
Basically, when approached by the tenant for consent to an assignment or sublease, the landlord wants the ability to discriminate—to
select among tenants. This is entirely allowed, so long as the landlord is not doing so for illegal reasons.
What happens to the subtenant if the lease between the landlord and tenant terminates? Does the sublease also fail? After all, the
general rule is that you can sell only what you own. You would think that a tenant could grant only as much right in a leased
premises as the tenant was given by landlord and no more. Imagine that Jerry leases a building to Daniel to be used as a hotel. Jerry
includes a provision in the lease that gives Jerry the right to cancel the lease if Daniel becomes insolvent (a very sensible provision).
Daniel then subleases to Bill. Daniel promptly goes insolvent and Jerry cancels the lease. What happens to Bill?In short, Bill is out of
luck; the sublease comes to an end. The lease between Jerry and Daniel is often called the “prime lease.” The lease is “prime” in the
sense that it is the first or senior lease. The lease between Daniel and Bill is the sublease. If the prime lease fails because of Daniel’s
default or because some right in the prime lease gives the landlord the right to terminate the lease, then Bill’s sublease also dies. This
is a risk of being a subtenant, and you probably already knew this. If you sublease a friend’s apartment, you must have suspected that
the end of your friend’s lease would terminate your sublease as well.
E. DISCRIMINATION IN LEASING OF REAL PROPERTY (AND MORE GENERALLY, HOUSING)

1. Reconstruction and Afterward

Section 1 of the Fourteenth Amendment states:
All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the
State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the
United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person
within its jurisdiction the equal protection of the laws.
In Shelley v. Kraemer, 334 U.S. 1 (1948), the Supreme Court held that, although the Fourteenth Amendment did not prohibit private
persons from entering into and voluntarily complying with racially restrictive covenants, enforcement of such covenants by a court
would constitute state action and therefore violate the Equal Protection Clause. Thus, the Fourteenth Amendment indirectly reaches
private restrictions as well.
In addition to the Fourteenth Amendment, Congress passed the Civil Rights Act of 1866, 42 U.S.C. §1982, which was directed
squarely at the right of freed slaves to use and own property. The Civil Rights Act of 1866 provides:All citizens of the United States
shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold,
and convey real and personal property.
2. The Fair Housing Act
In 1968, Congress supplemented the Civil Rights Act of 1866 by enacting a legislative regime aimed at eliminating a broad range of
discrimination in housing. The Fair Housing Act, 42 U.S.C. §§3601-3631 (2013), is one of the most important pieces of legislation of
the twentieth century and has had wide application. As we look at the Fair Housing Act, keep two things in mind:First, as a statutory
construct, the Fair Housing Act is limited to the forms of discrimination designated in the language of the statute. A court may not
add to the list of prohibited behaviors as it might do when interpreting a more general law or a constitutional amendment.Second, and
unlike the Fourteenth Amendment or the Civil Rights Act of 1866, the Fair Housing Act provides a specific set of remedies,
including damages. This particular feature adds real and intimidating teeth, as well as an incentive for individuals who are subjected
to illegal discrimination to sue.
Arnold is the owner and landlord of a 20-unit apartment building. Pedro was born in the same town as Arnold, but Pedro’s parents
were immigrants from Colombia.
Civil Rights Act of 1866
only reaches racial discrimination
Pedro works with a leasing broker and the broker shows Apartment 5 to Pedro. Pedro likes the apartment and offers to lease the unit.
As a standard practice, the broker provides Arnold with a copy of Pedro’s most recent pay stub, demonstrating Pedro’s ability to pay
the rent. Arnold sees Pedro’s name on the proposed lease and inquires about Pedro’s background. Arnold then tells his office
assistant: “I just do not like renting to folks who come from south of the border,” and rejects Pedro as a tenant.
Civil Rights act: Prohibits discrimination based on race. He could argue this is national origin discrimination. Fair Housing act does
include national origin.
A tenant (or any other Fair Housing Act plaintiff) may choose one of two approaches to prove a claim. Under the first, the tenant
must show that the landlord intended to discriminate against a person protected by the statute. This type of claim is termed disparate
treatment. “To make out a prima facie case of disparate treatment under § 3604(a), plaintiffs must show that (1) they are members of
a class protected by the FHA; (2) they sought, and were qualified, to rent (or continue renting) the dwellings in question; (3)
defendants refused to rent to plaintiffs; and (4) the housing was put on the market or was rented to other tenants.
To succeed based on disparate impact, the plaintiff must demonstrate that the practice or rule in question was outwardly neutral—in
other words, that on its face, the practice or rule does not appear to discriminate against a protected class of individuals.
SUMMARY

Notes

Property Outline Haynes 2020: Land Use Control

Now beings the discussion on ways to restrict an owner use of the land.
- Civilized society needs limits on use of land that cause undue harm so that we can live harmoniously and productively

- Example: Alice lives on property and doesn’t want Bart from adjacent property to build a feed lot because they smell.

- Private: Restrictive covenants or other servitudes, in which parties agree to limit use.
o She can: use servitudes
▪ They are the most common and useful tools to limit land use.
▪ They are private land use controls in the form of covenants or easements
▪ Preferred because they’re voluntary and can be very narrowly tailored to particular circumstances

- Judicial: Common law, primarily through nuisance doctrine, controls unreasonable uses.
o She can: sue Bart for nuisance
▪ Court called upon to decide whether there is substantial and unreasonable interference on Alice’s use and
enjoyment of her land.
▪ We call this judicial land use control because its in the common law
▪ Significant drawbacks is that it is adhoc (after the fact) rather than ex ante (before the fact)

- Governmental: Federal, state, or local laws, such as zoning, that limit land use.
o She can: use governmental land use control
▪ More comprehensive and ex ante
▪ Lets owners know ahead of time what uses are permissible.
▪ Nuisance law has diminished with governmental land use control increase.
 Property Outline Haynes 2020: Nuisance (Chp 12)
- Nuisance: common law method of invoking judicial power to stop injurious uses of land
o Intersection of property and tort law

- Private Nuisance:
o when a landowner substantially and unreasonably interferes with the use and enjoyment of the land of another
o Sic utere tuo ut alienum non laedas [often shortened to sic utero tuo]- that every person should so use his own
property as not to injure that of another.
o Nontrespassory
▪ To make is separate from an action of trespass
▪ Hard to draw this line- laws often include claims on both these theories
o There is an exception for wild animals, if you don’t bring the animals you don’t have a duty w/ nuisance law save
if there are any regulations or HOA rules.

- Public Nuisance
o More widespread impact
o Traditionally can only be brought by a public prosecutor or person specially affected by the harm

- Courts approach:
o Early approach is the substantial harm approach
▪ If A’s use of her land substantially interfered with B’s use and enjoyment, then A was a nuisance and must
be enjoined.
▪ Courts used the unreasonable interfence mostly to refer to degree
o Modern Approach: More nuanced
▪ More focus on the unreasonable interference
▪ Looks at defendant AND plaintiffs behavior (two to tango)
▪ Can be described as a balancing of utilities
● Balancing whether the gravity of the harm to the plaintiff outweighs the utility of the defendants
conduct

Restatement (Second) of Torts §827 (1979)

In determining the gravity of the harm from an intentional invasion of another’s interest in the use and
enjoyment of land, the following factors are important:
1. the extent of the harm involved;
2. the character of the harm involved;
3. the social value that the law attaches to the type of use or enjoyment invaded;
4. the suitability of the particular use or enjoyment invaded to the character of the locality; and
5. the burden on the person harmed of avoiding the harm.

Restatement (Second) of Torts §828 (1979)

In determining the utility of conduct that causes an intentional invasion of another’s interest in the use and
enjoyment of land, the following factors are important:
1. the social value that the law attaches to the primary purpose of the conduct;
2. the suitability of the conduct to the character of the locality; and
 3. the impracticability of preventing or avoiding the invasion.

- Note: Restatement test only applied to intentional interference

o BUT intentional doesn’t mean they acted to cause nuisance rather that their conduct was purposeful
o Unintentional activity can also be a nuisance, but it has to be shown to be negligent or reckless or being abnormally
dangerous.

An invasion of another’s interest in the use and enjoyment of land is intentional when the actor:
a) acts for the purpose of causing it, or
b) knows that it is resulting or is substantially certain to result from his conduct.

- Recently courts have been moving away from the property rule and implementing the liability rule
o Done when defendants activity causing the harm might be valuable to society
o We look at harm to P if injunction is denied vs hardship to F is injunction is granted

Prah v. Maretti
Rule of Law
Private nuisance law is applicable in disputes over access to sunlight. Development of land is increasingly regulated for the benefit of
society and also because there is now an increased societal emphasis on the use of solar energy.

Substantial Harm Test Compared:

- Many Jx use substantial harm rather than restatement

- Substantial is hard to define
- “discomfort and annoyance must be significant and of a kind that would be suffered by a normal person”

- Negligence Per Se
o Nuisance regardless of the circumstances
▪ Use that violates zoning or other law is per se
▪ There is nothing that P really needs to show other than the law is being broken
o IMPORTANT NOTE: COMPLIANCE WITH ZONING DOES NOT PRECLUDE A NUISANCE CLAIM

- Negligence Per Accidens

o Look at the circumstances

Remedies
- Historically, enjoining was the way to go. Restatement has changed that

Boomer v Atlantic Cement Co. (Cement Company is a nuisance but there would be economic damages to closing plant)
Rule of Law
Permanent damages, rather than an injunction, are appropriate when the damages resulting from a nuisance are significantly
less than the economic benefit derived from the party causing the harm. Generally, an injunction is appropriate in cases
where a nuisance would otherwise persist after a trial. Since the economic benefit of keeping the factory open is greater than
the harm suffered by Boomer, the most equitable solution is to award an injunction that will be lifted once Atlantic pays
permanent damages to Boomer.

Public Nuisance

- Example:
o Cassie is kayaker. Hates that bart is polluting river. It is not effecting her land so she can’t maintain a private action
of nuisance against him, event though his actions are significantly affecting her use and enjoyment of the river.
▪ She can maintain a public nuisance action or convince local authorities to do so

-  The Restatement defines a public nuisance as follows:

o A public nuisance is an unreasonable interference with a right common to the general public.
o Circumstances that may sustain a holding that an interference with a public right is unreasonable include
the following:
 ▪ Whether the conduct involves a significant interference with the public health, the public safety,
the public peace, the public comfort or the public convenience, or
▪ whether the conduct is proscribed by a statute, ordinance or administrative regulation, or
▪ whether the conduct is of a continuing nature or has produced a permanent or long-lasting effect,
and, as the actor knows or has reason to know, has a significant effect upon the public right.

- Often brought by government authorities

o Many courts hold that pn actions can ONLY be brought by gov
o UNLESS an individual can prove special harm
▪ This is a harm different that that of a member of the general public
o Recently, plaintiffs have brought public nuisance actions to achieve social reform goals in the areas of climate
change, firearms, and lead paint, albeit with limited success.

SUMMARY

A private nuisance exists when a landowner creates a substantial, unreasonable, nontrespassory interference with the use and
enjoyment of another’s land.

The Restatement of Torts defines an unreasonable interference as one in which the gravity of the harm to the plaintiff outweighs the
utility of the defendant’s conduct. This balance of utilities analysis requires a court to weigh the suitability and social value of each
party’s land use.

In contrast, many courts use the more traditional substantial harm approach, which focuses more on the degree of interference caused
by the defendant, although social utility may be considered as a factor by some courts.

The fact that a particular use is allowed by zoning or restrictive covenants does not automatically preclude a court from declaring the
use a nuisance, although it may be good evidence of reasonableness. If a homeowners association has specifically dealt with a
particular conflict, however, courts are reluctant to intervene.

In deciding the remedy for a nuisance, courts have moved away from automatically granting an injunction. The Restatement suggests
a balancing of equities, weighing the harm caused to the plaintiff if no injunction were granted against the harm to the defendant and
the public if the use were to be enjoined.

A public nuisance is an unreasonable interference with a right common to the general public. Such actions are often based on
violations of statutes or local ordinances and are brought by public officials.

Many courts do not allow private plaintiffs to bring public nuisance actions unless they can show special harm, different from that
suffered by the general public.

Recently, plaintiffs have brought public nuisance actions to achieve social reform goals in the areas of climate change, firearms, and
lead paint, albeit with limited success.
 Property Outline Haynes 2020: Zoning (Chp 13)
History

- Widespread adoption is a recent phenomenon

- Started off as enjoinment of specific problems as they arose
- Urban planning soon became needed, following events/movements helped bring this to fruition
o Skyscrapers which allowed a great concentration of people to be in one area
o Population explosions
o Progressive era
o Belief that a city could be beautiful and pleasant

Constitutional Issues

Village of Euclid v Ambler Realty Co. (Most Famous Zoning Case!)

Rule of Law
Municipal zoning regulations are constitutional, unless they are clearly arbitrary and unreasonable, having no substantial relation to
the public health, safety, morals, or general welfare. The power to pass zoning regulations derives from states’ police powers. Zoning
ordinances are a relatively recent development, created to deal with the difficulties created by increasing urban populations. Further,
experts generally agree that such zoning laws make fire and accident prevention easier, reduce noise, and preserve residential areas.

Downsides of Zoning
 Interference with market. Our system uses the free market to allocate resources such as land, to ensure
they get to the “highest and best use.”
 Environmental impacts. 
 Barriers to entry for small business. Think about Goldman, the tailor. Now that he can’t use his house for
his business, what increased costs does he face?
 Discrimination. Giving local boards power to decide how property can be used opens up the potential for
unequal treatment and favoritism. A local developer might get a variance while one from out of town may
not. In addition, zoning may allow economic segregation (minimum lot-size restrictions, for example, may
keep out lower-income buyers).
 Spillover effects. The Court in Euclid was sympathetic to the Village’s effort to protect itself from the
“natural flow” of industrial activity coming from Cleveland.

- Constitutional Questions:
o What if church wants to build but its against zoning… is this a burden to the exercise of religion
o Can a city stop the display of political signs for aesthetic purposes
o Just compensation is required if you stop someone from using their land

Zoning Process
 - Begins with a comprehensive plan for the area
o Lengthy process
o Requires input from citizens and experts
o Not law but a policy document

- Jx have separate requirements when it comes to planning

o No separate plan required
▪ Satisfied if the municipality acts with intention of promoting best interests of community
o Separate plan required
▪ Once a place is adopted it has to eb followed… some deviation is ok thought
- Regulations apply to many different things
o Height of building and size
o Percentage to be occupied
o Density of the population
o Use of the structures and land

- There must be flexibility as cities grow

o Can be done with amendments to zoning laws
-
o Variance is an option
▪ Variance differ from zoning amendments because the area retains the original
classification
● Ex: Permit for child day care does not make the whole zone a commercial area
▪ Variances are not favored because they are Ad hoc exceptions to general law
● Only granted when unnecessary hardship is shown
o This term caries by Jx
o Test between burden on the landowner if the V is not granted and the
impact on the neighborhood if it is
o One test is to prove that no economic use of the prop can be made
without variance.
o Even if there is hardship must show that it is unnecessary
▪ Which means that the purpose of the ordinance can be met
even with the variance
▪ So if impact to neighbors too great then no variance should be
granted no matter the degree of hardship

o Special Permits
▪ Singling our of a particular use to be conditionally allowed
● Ex: Bed and Breakfast in an agricultural zone

Non-Conforming Uses

- Happens when:
o when the city or county adopts a zoning ordinance for the first time, many uses are already in place and
may not fit neatly into the desired pattern;
o when a city annexes additional land into the city limits and thus zones it for the first time;
o when the city rezones a particular area—uses previously allowed in an agricultural zone on the edge of
town, for example, no longer conform when urban growth results in a zoning change to commercial or
residential;
o when the city decides to target particular uses, such as mobile homes, junkyards, or adult businesses, in
areas where they were previously allowed.

- Goal is to get rid of it eventually

o If abandoned or destroyed, then the right is lost
o No right to change or expand the store
▪ If there was a repair shop when the nonconforming use happened, he cant change it to a gas station