FONT face="Times New Roman" size=3>1. Certain term: For a lease to be an estate for years, the beginning date and end date must be fixed.

2. Automatic termination: Because an estate for years contains its own termination date, no additional notice of termination need be given by either party - on the last day, the tenancy simply ends, and the tenant must leave the premises.

D. Periodic tenancy: The periodic tenancy is one which continues from one period to the next automatically, unless either party terminates it at the end of a period by notice. Thus a year-to-year tenancy, or a month-to-month one, would be periodic. [195 - 196]

1. Creation by implication: Normally a periodic tenancy is created by implication. Thus a lease with no stated duration (e.g., T agrees to pay L "$200 per month," but with no end period) creates a periodic tenancy. Also, if a tenant holds over, and the landlord accepts rent, probably a periodic tenancy is created. [195]

2. Termination: A periodic tenancy will automatically be renewed for a further period unless one party gives a valid notice of termination. [195 - 196]

a. Common law: At common law, six months' notice was needed to terminate a year-to-year tenancy, and a full period's notice was necessary when the period was less than a year (e.g., 30 days notice for a month-to-month tenancy). Also, at common law, the notice had to set the end of a period as the termination date.

b. Modern: Most states today require only 30 days notice for any tenancy, even year-to-year. Notice today must still generally be effective as of the end of a period, but if the notice is not sufficiently in advance of one period, it is automatically applicable to the following period. (Example: L and T have a month-to-tenancy; if one gives the other notice of termination on January 4, this will be effective as of February 28.)

E. At-will tenancy: A tenancy at will is a tenancy which has no stated duration and which may be terminated at any time by either party. [196 - 197]

1. Implication: Usually a tenancy at will, like a periodic tenancy, is created by implication. For instance, if T takes possession with L's permission, with no term stated and no period for paying rent defined (so that the lease is not even a periodic one), it will probably be at will. Also, a few courts hold that if one party has the option to terminate at will, the other party has a similar option so that the tenancy is at will.

F. Tenancy at sufferance: There is only one situation in which the "tenancy at sufferance" exists: where a tenant holds over at the end of a valid lease. Here, the landlord has a right of election, between: (1) evicting the tenant; and (2) holding him to another term as tenant. (If L elects to hold T to another term, most courts hold that a periodic tenancy is then created, and the length of the period is determined by the way rent was computed under the lease which terminated.) [198 - 200]

II. TENANT'S RIGHT OF POSSESSION AND ENJOYMENT

A. Tenant's right of possession: Courts ar split about whether L impliedly warrants to T that he will deliver actual possession at the start of the lease term. The question usually arises when a prior tenant holds over.

1. "American" view: The so-called "American" view is that the landlord has a duty to deliver only legal possession, not actual possession. Despite the name, at most a slight majority of American courts follow this rule. [200]

2. "English" rule: Other courts follow the so-called "English" rule, by which L does have a duty to deliver actual possession. In courts following this rule, T has the right to terminate the lease and recover damages for the breach if the prior tenant holds over and L does not oust him. Alternatively, T may continue the lease and get damages for the period until the prior tenant is removed. [200 - 201]

B. Quiet enjoyment: T has the right of "quiet enjoyment" of the leased premises. This right can be violated in two main ways: (1) by claims of "paramount title"; and (2) by acts of L, or persons claiming under him, which interfere with T's possession or use of the premises. [201]

1. Claims of paramount title: L, by making the lease, impliedly warrants that he has legal power to give possession to T for the term of the lease. If someone else successfully asserts a claim to the property which is superior to T's claim under the lease (a claim of "paramount title"'), L has breached this warranty. Thus suppose that X shows that L does not have title to the premises at all (because X has title), or that X shows that L has previously leased the premises to X, or that X shows that X holds a mortgage on the premises, and is entitled to foreclose because L has not made mortgage payments - in all of these instances, X's claim of paramount title constitutes a breach by L of his implied warranty. [201]

a. Before T takes possession: If T discovers the paramount title before he takes possession, he may terminate the lease.

b. After T takes possession: Once T takes possession, he may not terminate the lease (or refuse to pay rent) merely on the grounds that a third person holds a paramount title. (It is sometimes said that T is "estopped to deny L's title" to the leased property.) On the other hand, if the third person then asserts his paramount title in such a way that T is evicted, T may terminate the lease and recover damages.

2. Interference by landlord or third person: If L himself, or someone claiming under L, interferes with T's use of the premises, this will be a breach of the covenant of quiet enjoyment. [202]

a. Conduct by other tenants: If the conduct of other tenants makes the premises uninhabitable for T, the traditional view is that L is not responsible (unless the other tenants use their portion for immoral or lewd purposes, or conduct their acts in the common areas). But the modern trend is to impute the acts of other tenants to L where these acts are in violation of the other leases, and L could have prevented the conduct by eviction or otherwise. (Example: Suppose that other tenants make a great deal of noise in violation of their leases, so that L could evict them, but does not. The modern trend, but not the traditional rule, is that T may terminate the lease.)

b. Constructive eviction: If T's claim is merely that his use or enjoyment of the property has been substantially impaired (e.g., excessive noise, terrible odors) the eviction is "constructive". When T is constructively evicted, even if this is L's fault, T is not entitled to terminate or stop paying rent unless he abandons the premises. (Example: Other tenants make so much noise that T's use is severely impaired. If T remains in the premises, he may not reduce the rent payments to L; he must leave and terminate the lease, or else pay the full lease amount.) [203]

C. Condemnation: If the government uses its right of eminent domain to condemn all or part of the leased premises, T may have a remedy. [204]

1. Total taking: If the entire premises are taken, the lease terminates, and T does not have to pay the rent.

2. Partial: But if only a portion of the premises is taken (even a major part), at common law the lease is not terminated. Also, T must continue paying the full rent (though he gets an appropriate portion of any condemnation award which L collects from the government). However, the modern trend is to let T terminate if the condemnation "significantly interferes" with his use, and to give him a reduction in rent even for a small interference.

D. Illegality: If T intends to use the property for illegal purposes, and L knows this fact, the court will probably treat the lease as unenforceable, especially if the illegality would be a serious one (e.g., crack distribution). [205 - 206]

1. Variance or permit: If the use intended by T requires a variance or permit, and T is unable to get the variance or permit after the lease is signed, most courts hold that the lease remains valid.

III. CONDITION OF THE PREMISES

A. Common-law view: At common law, T takes the premises as is. L is not deemed to have made any implied warranty that the premises are fit or habitable. Nor does L have any duty to repair defects arising during the course of the lease (unless the parties explicitly provide that he does). [208]

1. Independence of covenants: Also, the common law applies the doctrine of "independence of covenants" in leases. Thus even if L does expressly promise to repair (or warrants that the premises are habitable), if he breaches this promise T must still pay rent. T may sue for damages, but he is stuck in the uninhabitable living conditions. [209]

2. Constructive eviction: However, even at common law, T can raise the defense of "constructive eviction" - he can terminate the lease if he can show that the premises are virtually uninhabitable. But he can only assert constructive eviction if he first leaves the premises, something which a poor tenant in uninhabitable residential space can rarely afford to do. [209]

B. Modern implied warranty of habitability: But today, the vast majority of states (either by statute or case law) impose some kind of implied warranty of habitability. That is, if L leases residential premises toT, he impliedly warrants that the premises are in at least good enough condition to be lived in. If L breaches this warranty, T may (among other remedies) withhold rent, and use the withheld rent to make the repairs himself. [210]

1. Waiver of known pre-existing defects: Some (but by no means all) courts hold that if T knows of the defect before he moves in, he will be held to have waived the defect, so that the implied warranty of habitability does not apply to that defect. (If the defect is one which T neither discovered nor reasonably could have discovered before moving in, then all courts agree that an otherwise-applicable implied warranty of habitability protects T against the defect.) [211 - 212]

2. Standards for determining "habitability": All courts agree that the existence of a building code violation is at least evidence of uninhabitability. However, most courts require that to prove uninhabitability, T must show that the conditions not only violate the building code, but are also a substantial threat to T's health or safety. (Conversely, most courts hold that if conditions are a substantial threat to T's health or safety, the warranty is breached even if there is no building code violation.) [213]

a. Relevance of nature of building: Some (but not all) courts hold that the age of the building and the amount of rent charged may be considered in determining whether there has been a breach. Thus a given condition might be a breach of the warranty as to a new luxury high-rise, but not as to an old low-rent structure.

3. Kinds of leases:

a. Residential: Most statutes imposing an implied warranty of habitability apply to all residential leases (though some apply merely to units in multiple dwellings, so that a single-family house would not be covered). [213]

b. Commercial leases: Most statutes and cases do not impose an implied warranty of habitability as to commercial leases. [214]

4. Waiver in lease: Generally, a clause in the lease expressly stating that there is no implied warranty is usually not effective. (But some statutes, such as the URLTA, will enforce a deal in which T promises, in a separate writing, and for adequate consideration such as a lower rent, to make repairs himself.) [215]

5. Remedies: If T shows a breach of the implied warranty of habitability, he may have a number of remedies:

a. Terminate lease: T may usually vacate the premises and terminate the lease (after he puts L on notice and L still refuses to make the repairs). [216]

b. Withhold rent: T may also withhold rent until the defects have been cured. (But most statutes, and some cases, require T to deposit the rent in some sort of escrow account.) [216]

c. Use rent for repairs: Many cases and statutes allow T to make the repairs and then to deduct the reasonable costs of those repairs from the rent. T must usually give L advanc notice of his intent to make the repairs and to deduct (so that L can make the repairs himself to avoid the loss of rent). [217]

6. Retaliatory eviction barred: By the doctrine of "retaliatory eviction," L usually may not terminate a periodic lease, or deny T's request for a new lease at the conclusion of a tenancy for years, on account of T's assertion of the right to habitable premises. The doctrine is most likely to be applied where L tries to terminate the tenancy in retaliation for T's complaints made to a housing authority about code violations. Also, some courts apply the doctrine where the non-renewal or termination is in retaliation for T's withholding of rent or his joining in a tenants' organization. [219 - 221]

C. Destruction of premises: If the premises are suddenly destroyed or damaged (by fire, flood, lightning or other natural elements), at common law T must keep paying rent, and may not terminate the lease. [221]

1. Modern view: But most states have now passed statutes changing this common-law rule - if the premises are destroyed or damaged so that they are no longer habitable, T may now usually terminate the lease and stop paying rent. Also, some courts have reached this result by case law. (But T usually cannot recover damages, so termination of the lease is his only remedy.)

IV. TORT LIABILITY OF LANDLORD AND TENANT

A. Tenant's tort liability: T, during the time he is in possession of the premises, is treated like an owner, for purposes of his tort liability to others who come onto the property. (Example: Since L would have a duty to warn a social guest, or licensee, of known dangers, T has a similar duty to warn of dangers that he is aware of.) [223]

B. Landlord's liability:

1. Common law: At common law, L is generally not liable for physical injury to T, or to persons who are on the leased property with T's consent. That is, L has no general duty to use reasonable care to make or keep the premises safe. [223] However, there are a number of exceptions (including some developed by courts recently), including the following:

a. Concealment: L is liable if he conceals, or fails to disclose, a dangerous defect existing at the start of the lease of which he is aware. [224]

i. L should know but does not: Most courts also hold that if L does not have actual knowledge but should know about the danger, based on facts that he does know, he will be liable for failing to warn.

ii. No duty of inspection: But L has no duty of inspection, i.e., no obligation to inspect the property to find out whether there are hidden defects.

b. Liability to persons other than T: Nearly all courts hold that if L would be liable to T, he is also liable to persons on the premises with T's consent. (But if L has told T about the defect, L will not be liable to T's guests even if T did not pass on the warning.) [224]

c. Areas under L's control: L has a duty to use reasonable care to keep the common areas safe (e.g., lobbies, elevator, corridor, etc.). [224]

i. Security against criminals: Most courts now require L to use reasonable care to prevent unauthorized access to the building. (Example: L, the owner of an apartment building, fails to repair the building's outer lock after being told that it is broken. X enters, and mugs T. Most courts would hold L liable for not using reasonable care to secure the building.)

d. Repairs negligently performed: If L attempts to make a repair, he will be liable if the repair is done negligently, and L has made the condition more dangerous or lulled T into a false feeling of security. (But if L's negligent repair does not make the condition worse or lull T, the courts are split as to whether L is liable if T is injured.) [225]

e. L contracts to repair: If a clause in the lease requires L to make repairs or otherwise keep the premises safe, L will be liable in tort if he fails to use reasonable care and T is injured. Also, L is probably liable to third persons on the premises with T's consent in this situation. [226]

f. L's legal duties: If building codes or other laws impose a duty on L to keep the premises safe, L will generally be liable in tort if he fails in this duty. Probably L will also be liable if he breaches an implied warranty of habitability, and the uninhabitable condition causes injury to T or T's guest. [226 - 228]

g. Admission of public: If L has reason to believe that T will hold the premises open to the public, and L has reason to know that a dangerous condition exists, L will be liable for resulting physical harm to the public. (L usually has an affirmative duty to inspect in this situation.) [228 - 229]

2. General "reasonable care" theory: Some recent cases have simply rejected the common law view that L has no general duty to use reasonable care. Under these cases, P does not have to fit within one of the above exceptions, and merely has to show that: (1) L failed to use reasonable care and (2) the lack of reasonable care proximately caused P's injury. [228 - 229]

3. Exculpatory clauses: At least in the case of a residential lease, most courts today refuse to enforce an "exculpatory clause" in a lease, that is, a clause purporting to relieve L of tort liability for his negligence. About half the states accomplish this by statute, and some others by case law. [229]

V. TENANT'S DUTIES

A. Duty to pay rent: T of course has a duty to pay rent.

1. Breach of L's duties: Most courts today hold that if L materially breaches his implied or express obligations (e.g., the implied warranty of habitability), T is temporarily relieved from continuing to pay rent. [230 - 231]

B. Duty to repair: At common law, T had an implied duty to make minor repairs. [230]

1. Modern rule: However, most courts today do not impose this duty on T (and indeed, most impose it on L under the doctrine of implied warranty of habitability, at least for residential leases).

C. Fixtures: A fixture is an item of personal property which is attached to the land (e.g., lighting, built-in bookcases, etc.). [231]

1. Right to affix: T is usually allowed to attach fixtures if this would not unfairly damage the value of L's reversion.

2. Right to remove: Similarly, most courts today say that T may remove a fixture installed by him if this removal will not damage L's interests (so that T must normally restore the premises to the way they were before the fixture was attached).

D. Duty to behave reasonably: T has the implied duty to behave reasonably in his use of the premises. (Examples: T must not unreasonably disturb other tenants, and must obey reasonable regulations posted by the landlord.) [233]

VI. LANDLORD'S REMEDIES

A. Security deposits:

1. Interest: In many states, L is required by statute to pay interest on the security deposit. [233]

2. Right to keep: Once the lease terminates, L must return the deposit to T, after subtracting any damages. If T abandons the lease before the end of the lease term and L re-lets, L must immediately return the deposit (after subtracting damages).

3. Commingle: L may normally commingle the security deposit with his own funds.

4. Purchaser's obligation: Courts are split as to whether one who purchases L's interest in the property must account to T for the end of the deposit at the end of the lease term. [234]

B. Acceleration clause: Most leases contain an acceleration of rent clause, by which if T fails to pay rent promptly or otherwise breaches the lease, L may require that all of the rent for the rest of the lease term is payable at once. [234]

1. Generally valid: Most courts enforce such acceleration clauses. (But if L decides to sue for enforcement of the acceleration clause, he may not also demand possession of the premises.)

C. Eviction:

1. Express forfeiture clause: Most leases explicitly give L the right to terminate the lease if T fails to pay rent or violates any other lease provision. Such clauses will be enforced, but only if T's breach is material. (Example: If T is merely a couple days late with the rent on one or two occasions, the court will probably not allow L to terminate the lease.) [235]

2. Summary proceedings: In most states, if L is entitled to terminate the lease and regain possession (or if T holds over at the end of the lease term and L wants to get him out), L may do so by "summary proceedings," which provide for a speedy trial of L's right to immediate possession. Summary proceedings usually work by limiting the defenses whch T may assert. (Example: Some summary proceeding statutes prevent T from asserting the breach of the implied warranty of habitability as a defense in L's action to regain possession for non-payment of rent.) [236 - 237]

D. Damages for holdover: If T holds over after the lease terminates, L is entitled to damages as well as eviction. [237]

E. Abandonment: If T abandons the premises (and defaults on the rent) before the scheduled end of the lease term, L has three basic choices: (1) to accept a surrender of the premises, thus terminating the lease; (2) to re-let on T's behalf; and (3) to leave the premises vacant and sue for rent as it comes due. [238 - 241]

1. Accept surrender: L may treat T's abandonment as a surrender, and accept it. This has the effect of terminating the lease, so that no further rent becomes due from T. (If T takes possession and/or leases to someone else, and does not notify T that he is acting on T's behalf, then this will probably be held to be an acceptance of surrender, causing T's rent obligation to end.) [238]

2. Re-letting on T's account: L may re-let on T's behalf, if he notifies T that he is doing so. This has two advantages to L: (1) T remains liable for all rents coming due, if no new tenant is found; and (2) if a new tenant is found who pays a lesser rent, T is still liable for the difference between this and the original rent due under the L-T lease. (Courts are split on whether L must give the surplus to T if L re-lets for a higher amount.) [239 - 241]

3. Leave vacant: Courts are split on whether L has the right to leave the premises vacant, and hold L to the lease. Usually, the question is phrased, "Does L have the duty to mitigate?"

a. Traditional view: The traditional view is that L has no duty to mitigate, i.e., no duty to try to find a new tenant. [240]

b. Duty to mitigate: But an increasing minority of courts now hold that L does have a duty to mitigate, by attempting to find a suitable replacement tenant. In these courts, if L does not make such an effort, T is off the hook. [240]

VII. TRANSFER AND SALE BY LESSOR; ASSIGNMENT AND SUBLETTING BY LESSEE

A. Generally allowed: Unless the parties to a lease agree otherwise, either may transfer his interest. Thus L may sell his reversion in the property, and T may either assign or sublease his right to occupy. [241]

1. Distinguish assignment from sublease: Be sure to distinguish sublease from assignment. An assignment is the transfer by T of his entire interest in the leased premises. Thus he must transfer the entire remaining length of the term of his lease. A sublease is the transfer by T of less than his entire interest. (Example: T's lease has one year to go. T transfers the first 11.5 months of this interest to T1. In most states, this is a sublease, not an assignment.) [242]

a. Significance: The main significance of this distinction is that if T assigns to T1, T1 is personally liable to pay rent to L, even if he makes no express promise to L or Tthat he will do so. If T merely subleases to T1, T1 is not personally liable to L for the rent (absent an explicit promise). [243]

B. Running of benefit and burden: Determine whether a particular promise runs with the land, either as to benefit or burden. If the benefit runs, then an assignee of the promisee can sue to enforce; if the burden runs, an assignee of the promisor will be liable. If neither the burden nor benefit runs, then the promisor's assignee is not liable, and promisee's assignee cannot sue. [244]

Example 1 (benefit runs): In the L-T lease, T promises to make repairs. This promise "touches and concerns the land" both as to benefit and burden, so benefit and burden run. Thus if T assigns to T1, T1 is personally liable for making the repairs. Conversely, if L assigns to L1, L1 can sue T (and T1 if T has assigned to T1) to enforce this promise.

Example 2 (burdens runs, but benefit does not): In the L-T lease, T promises not to compete with L's use of certain other property. If T assigns to T1, T1 is liable not to compete. But if L assigns to L1, in most states L1 cannot enforce the promise against either T or T1.

1. "Touch and concern" test: The burden runs if the promise "touches and concerns" the promisor's assignee's interest in the land. Similarly, the benefit runs if the promise "touches and concerns" the promisee's assignee's interest in the property. [244]

2. Normally both or neither: Normally, either the benefit and burden will both run, or neither will run. (The non-competition situation described in Example 2 above is one of the few examples where this is not true.) [244 - 245]

C. Rights after T assigns: Here are the rights of the parties after T assigns to T1 his rights under the L-T lease:

1. T's liability to L: After the assignment, T remains liable to L (whether T's promise to L does or does not "touch and concern" the land). (Example: T remains liable for the rent after assignment to T1. This is true even if L consents to the assignment, and even if L accepts some rent payments from T1.) [246]

2. T's rights against T1: After the assignment, T1 becomes primarily liable, and T is only secondarily liable. Therefore, if L sues T when T1 does not make the rent payments, T can then sue T1 for the amount that T has had to pay (even if T1 never expressly assumed the lease duties at the time of the assignment). [246]

3. L's rights against T1: Assuming that T1 does not make any specific promises of performance when he takes the assignment, T1 is liable only for those promises made by T whose burden runs with the land. [247]

Example 1: T1 is liable to L for rent, since the burden of T's original rent promise ran with the land. Thus T1 must make the rent payments even if he did not expressly promise either T or L that he would make these payments.

Example 2: In the original L-T lease, T promises to keep the premises insured. Assume that the burden of this promise does not run with the land (the majority rule). If T assigns to T1 and T1 does not make any promise of insurance, T1 is ot liable for failing to insure the property (though L can terminate the lease for breach if T1 does not do so).

a. Assignment by assignee: But T1 remains liable (even on promises whose burdens run with the land) only for the period when he is in actual possession. If he re-assigns, he is not liable for breaches by the subsequent assignee. [248] (Example: T assigns to T1. T1 remains in possession for six months, then assigns to T2. T1 is liable for the rent that accrued during the six months he was in possession, but not for any rents accruing after he left possession and T2 took possession.)

b. Assumption: However, if T1 assumes the lease (i.e., expressly promises T that T1 will obey all terms of the L-T lease), then T1 is liable both to T and L for all T's obligations, including those accruing after T1 re-assigns to T2. [248]

D. Assignment by L: Now, assume that L assigns his rights to L1. Here, the same rule applies: L1 has the burden of covenants whose burden runs with the land, and has the benefit of covenants whose benefit runs with the land. [249 - 251]

1. Repair obligation: Thus if L promised T that he would keep the premises in repair, L1 is liable for making the repairs after the sale. (Also, the implied warranty of habitability, if it applies at all, probably binds L1 just as it bound L.)

E. Agreement by the parties about transfer: All of the above assumes that the lease itself contains no provisions restricting transfer. Most leases, however, contain a promise by T that he will not assign or sublease his interest without L's consent. [251 - 252]

1. Generally enforced: Most states enforce such a clause, even if L is completely unreasonable in refusing to consent to the transfer.

a. Strict construction and waiver: However, courts construe such anti-transfer clauses strictly, and are quick to hold that L waived the benefit of the clause. (Example: If L knowingly accepts rents from T1 he will probably be held to have waived his right to refuse to consent to the transfer.)

b. Consent to second transfer: Also, if L consents (or waives his objection to) a particular transfer, he is usually held to have also waived his right to a subsequent transfer, under the rule of Dumpor's Case. (Example: L consents to T's assignment to T1. In most states, L is also held to consent to T1's further assignment to T2.) [251]

2. Modern trend: An increasing minority of states hold (often by statute) that even if the lease says that L has an unconditional right to refuse to consent to a transfer by T, the consent may not be unreasonably withheld. (In such a state, L should get a lease provision giving him the right to make his own deal directly with T1 - this way, if T1 is willing to pay more than the original lease amount, L, not T, gets the benefit.) [252]

Chapter 9 
EASEMENTS AND PROMISES CONCERNING LAND

I. EASEMENTS GENERALLY

A. Definition: An easement is a privilege to use the land of another. [261]

1. Affirmative easement: An affirmative easement is one entitling its holder to do a physical act on another's land. (Example: A, who owns Blackacre, gives B a right of way over Blackacre, so that B can pass from his own property to a street which adjoins Blackacre. B holds an affirmative easement.)

2. Negative easement: A negative easement is one which enables its holder to prevent the owner of land from making certain uses of that land. These are rare. (Example: A owns Whiteacre, which is next to the ocean; B owns Blackacre, which is separated from the ocean by Whiteacre. A gives B an easement of "light and air," which assures B that A will not build anything on Whiteacre which would block B's view of the ocean. B holds a negative easement.)

B. Appurtenant vs. in gross: Distinguish between easements that are appurtenant to a particular piece of land, and those that are "in gross." [261]

1. Appurtenant: An easement appurtenant is one which benefits its holder in the use of a certain piece of land. The land for whose benefit the appurtenant easement is created is called the "dominant tenement." The land that is burdened or used is called the "servient tenement." (Example: Blackacre, owned by S, stands between Whiteacre, owned by D, and the public road. S gives D the right to pass over a defined part of Blackacre to get from Whiteacre to the road. This right of way is an easement that is appurtenant to Whiteacre - Blackacre is the servient tenement, and Whiteacre is the dominant tenement.)

a. Test for: For an easement to be appurtenant, its benefit must be intimately tied to a particular piece of land (the dominant tenement).

2. Easement in gross: An easement in gross is one whose benefit is not tied to any particular parcel. (Example: O, who owns Blackacre, gives E, who lives across town, the right to come onto Blackacre anytime he wants, and use O's swimming pool. Since the grant is not given because of E's ownership of nearby land, the easement is in gross.) [262]

3. Profit: Related to easements is something called the "profit a prendre." A profit is the right to go onto the land of another and remove the soil or a product of it. Thus the right to mine minerals, drill oil, or capture wild game or fish, are all profits. (In the U.S., profits are functionally identical to easements.)

II. CREATION OF EASEMENTS

A. Four ways to create: There are four ways to create an easement: (1) by an express grant; (2) by implication; (3) by strict necessity; and (4) by prescription.

B. Express creation: If a easement is created by a deed or a will, it is "express." [263]

1. Statute of Frauds: An express easement must be in writing. This is required by the Statute of Frauds.

2. Reservation in grantor: Often, an express easement is created when the owner of land conveys the land to someone else, and reserves for himself an easement in it. This is called an "easement by reservation." (Example: A deeds Blackacre to B, with a statement in the deed that "A hereby retains a right of way over the eastern eight feet of the property.") [263 - 264]

3. Creation in stranger to deed: At common law, it was not possible for an owner to convey land to one person, and to establish by the same deed an easement in a third person. (Thus an easement could not be created in a "stranger to the deed.") But most modern courts have abandoned this rule. (Example: O owns two parcels, 1 and 2. O sells parcel 1 to P, without recording any easement over parcel 2 in favor of parcel 1. O then deeds parcel 2 to D, with a statement in the deed, "Easement reserved in favor of P or his successors to parcel 1." Today, this easement will be enforced even though P was not a party to the O-D deed.) [264]

C. Creation by implication: An easement by implication may sometimes be created. If so, it does not have to satisfy the statute of frauds. [264 - 265]

1. Requirements: There are three requirements for an easement by implication: (1) land must be divided up (or "severed"), so that the owner of a parcel is either selling part and retaining part, or subdividing the property and selling pieces to different grantees; (2) the use for which the implied easement is claimed must have existed prior to the severance; and (3) the easement must be at least reasonably necessary to the enjoyment of the dominant tenement.

2. Severance: An easement will only be implied where the owner of a parcel sells part and retains part, or sells pieces simultaneously to more than one grantee. This is the requirement of "severance." (Example: A and B are neighboring landowners. A new street is built adjoining B's property, and A can only get to this street by crossing B's property. A crosses B's property at a particular spot for several years, then sells to C. C has no easement by implication across B's property, because there was never any conveyance between A and B, required for the creation of an easement by implication.) [265]

3. Prior use: The use for which the easement is claimed must have existed prior to the severance of ownership. [266]

4. Necessity: According to most courts, the easement must be reasonably necessary to the enjoyment of what is claimed to be the dominant tenement. Courts are stricter in imposing this requirement where the easement is created by grant (i.e., in favor of the grantee), than where the easement is reserved (i.e., in favor of the grantor). [267 - 268]

Example of easement by implication: O owns two houses side by side on one parcel. To give the garage behind house no. 1 access to the street, he builds a driveway which runs between the two houses. O then conveys house no. 2, including part of the land and the driveway, to A. An implied easement in favor of house no. 1, and against the land on which house no. 2 is located, will be reserved with respect to the driveway. Also, if O conveys house no. 1, an implied easement in favor of that house will be created against the land of house no. 2. This is because: (1) O was the owner of both tenements just before the easement came into being; (2) the use existed prior to the severance of the two tenements; and (3) the easement is reasonably necessary to the enjoyment of houseno. 1's garage.

5. Easement of light and air: An easement of "light and air" (the right to have one's view remain unobstructed) cannot be created by implication, in most states. [268]

D. Easement by necessity: The courts will find an "easement by necessity" if two parcels are so situated that an easement over one is "strictly necessary" to the enjoyment of the other. [269]

1. Common grantor: The courts require that at one time, both the alleged dominant tenement and the alleged servient tenement were owned by the same person. [269]

2. No prior use: But unlike the easement by implication, there does not have to have been a "prior use," that is, the easement does not have to have been used prior to the time the two parcels were split up. (Example: O owns parcel 1 and parcel 2, which adjoin each other. In 1950, he sells parcel 1 to P and parcel 2 to D. In 1960, an old road serving parcel 1 is closed, and a new one is built so that the only way to get from parcel 1 to the road is by crossing parcel 2. Because both parcels were owned originally by the same owner, O, the courts will grant parcel 1 an easement over parcel 2 to get to the road, even though no such easement was in use at the time O split up the ownership of the parcels.)

3. Landlocked parcels: The most common example of an easement by necessity is where a parcel is landlocked, so that access to a public road can only be gained via a right of way over adjoining property (as in the above example). [269]

E. Easement by prescription: An easement by "prescription" is one that is gained under principles of adverse possession. If a person uses another's land for more than the statute of limitations period governing ejectment actions, he gains an easement by prescription. [269]

Example: In state X, the statute of limitations on actions to recover possession of real estate (ejectment actions) is 21 years. A, the owner of lot 1, uses a path over lot 2, owned by B, for 21 years. Assuming that the use meets the requirements discussed below (e.g., use must be "adverse," not "permissive"), after the 21 years A gains an easement by prescription, and may use the path as a right of way forever afterwards.

1. When statute starts to run: The statutory period does not begin to run until the owner of the servient tenement gains a cause of action against the owner of the dominant tenement. Therefore, an easement of "light and air" cannot be acquired by prescription (since the owner of the servient tenement never can sue the owner of the dominant tenement, because the latter merely looks out over the former's property, rather than trespassing upon it). [270]

2. Adverse use: The use must be adverse to the rights of the holder of the servient tenement, and without the latter's permission. (Example: P and D are next-door neighbors. Solely out of friendship, D agrees that P may use D's driveway to get to P's garage. P thanks D for this, and does not say that he is asserting an actual legal right to use the driveway. P's use is therefore not adverse, so even if the usage continues longer than the statute of limitations, no easement by prescription will be gained. Instead, the use is merely a licnse, which is revocable at will by D.) [270 - 271]

3. Continuous and uninterrupted: The use must be continuous and uninterrupted throughout the statutory period. Thus if the use is so infrequent that a reasonable landowner would not be likely to protest, the continuity requirement is not satisfied. [272]

4. Tacking: There can be tacking on the dominant side of the prescriptive easement. (Example: In a state with a 21-year statute of limitations on ejectment actions, A, the owner of Blackacre, uses a path across Whiteacre for 12 years. He then sells Blackacre to B, who uses the same path for an additional 9 years. At the end of this 9 years, B will have an easement by prescription, because he is in privity of estate with A and therefore can tack his use onto A's use.) [273]

III. SCOPE OF EASEMENTS

A. Prescriptive easement: If the easement is created by prescription, the scope of the allowable use is determined by looking at the use that took place during the statutory period. Therefore, a use that is substantially broader (or more burdensome to the servient tenement) than existed during the time when the statute of limitations was running, will not be allowed. [275]

B. Development of dominant estate: Regardless of how the easement was created (e.g., whether by implication, prescription, etc.), the court will allow a use that increases dues to the normal, foreseeable development of the dominant estate, so long as this does not impose an unreasonable burden on the servient estate. (Example: A right-of-way easement is created by prescription in favor of the sole house then located on a dominant tenement. After the easement is created, two more houses are built on the dominant property. The residents of all three houses may use the right of way, since the basic use - as a pedestrian right of way - remains unchanged, the increased use is a function of normal development, and the increase in the burden is slight.) [276]

C. Use for benefit of additional property: The holder of the dominant estate is normally not allowed to extend his use of the easement so that additional property owned by him (or by others) is benefited. (Example: W, the owner of Whiteacre, gives B, the owner of Blackacre, an express easement by which B may cross W's property to get from the road to a house on Blackacre. B then buys an adjoining parcel, Greenacre, tears down the house on Whiteacre, builds a new house on Greenacre, and extends the path represented by the easement through Blackacre (which he still owns) to get to the new house on Greenacre. W will be able to enjoin this extended use, since the easement is now being used to benefit additional property beyond Blackacre, the originally-contemplated dominant estate.) [276]

IV. TRANSFER AND SUBDIVISION OF EASEMENTS

A. Transfer of burden: When the title to the servient estate is transferred, the burden of the easement remains with the property. (Example: O, the owner of Blackacre, gives A, a neighboring landowner, an express right of way over Blackacre. O then sells Blackacre to B. After the sale, A's easement remains valid against Blackacre.) [278]

B. Transfer of benefit: Whether the benefit of an easement "runs with the land" (i.e., is enforceable by an assignee) depends on whether the easement is appurtenant or in grss.

1. Transfer of easements appurtenant: An easement appurtenant (one where the benefit applies to particular land only) normally passes with the transfer of the dominant estate. (Thus in the above example, if A sells his land to X, X may enforce the easement against either O or one who bought from O.) [278]

a. Subdivision: Also, if the dominant estate is sub-divided into smaller lots sold to different people, and the geography is such that each of the smaller lots can benefit from the easement, then each will generally be permitted to do so. (But this will not happen if this would result in an extreme increase in the burden to the servient estate.)

2. Easements in gross: But easements in gross are different. [280]

a. Common law: At common law, easements in gross are not transferable. (Example: O owns Blackacre, which adjoins a public beach. O gives A, a friend of his who lives in a different city, the right to park in O's driveway and walk across A's land to the beach. Since this easement is "in gross" - it is not intimately tied to particular land held by A - at common law it is not transferable by A to anyone else.)

b. Modern view: Today, courts continue to apply this rule of non-transferability to easements that are "personal" (as in the above example). But courts will often find that a commercial easement was intended to be transferable and will therefore hold it to be so. (Example: O gives the telephone company the right to string wires over his land. Today, because of the commercial nature of this easement in gross, most courts would hold that the phone company can assign this right to some other outfit that takes over the phone operations.)

V. TERMINATION OF EASEMENTS

A. Abandonment: Unlike estates in land, an easement may be terminated by abandonment in some circumstances. [283]

1. Words alone insufficient: The easement holder's words alone will never be sufficient to constitute an abandonment. [283]

2. Intent plus conduct: But if the easement holder intends to abandon an easement, and takes actions manifesting that intent, he will be held to have abandoned the easement, and it will be extinguished. [284]

a. Non-use: For instance, non-use may on particular facts be action which manifests the easement holder's intent to abandon, in which case the abandonment will be effective. (Example: A owns a summer cottage, which holds an appurtenant easement to use a driveway on B's next-door property. If A uses the cottage each year for three years, and fails to ever use the driveway, he may be held to have intended to abandon the easement. But if A's non-use for three years is because he doesn't even use the cottage, then no intent to abandon will be found, and therefore there will be no abandonment.)

VI. LICENSES

A. Definition: A license is a right to use the licensor's land that is revocable at the will of the licensor. Ths revocability is the main thing that distinguishes licenses from easements. (But there are a couple of exceptions to the revocability of licenses, described below.) [285 - 287]

1. No Statute of Frauds: A license is not required to satisfy the Statute of Frauds, so it may be created orally.

2. Illustrations: Some licenses are much like easements, except for revocability (e.g., O orally gives A the right to use O's driveway to get from A's land to the public highway; this would be an easement if it were in writing, but is a license because it is oral). Other licenses are much more transitory. For instance, a ticket to a sports event or concert is a license; similarly, the right to use a parking lot is generally only a license.

B. Exceptions to revocability: There are a couple of exceptions to the general rule that licenses are revocable at the grantor's will.

1. Oral license acted upon: Most important, a license is irrevocable if its use would have been an easement except for failure to meet the Statute of Frauds, and the licensee makes substantial expenditures on the land in reliance on the licensor's promise that the license will be permanent or of long duration. (Example: P orally gives D permission to build a roadway across P's land so that D can get from his land to the public highway. D expends substantial money digging and paving the road. P attempts to revoke, and sues D for trespass. A court would probably hold that the license, though oral, was irrevocable because of D's substantial reliance expenditures.) [287 - 288]

VII. COVENANTS RUNNING WITH THE LAND

A. Definition: Like easements, "covenants" may under some circumstances run with the land. A covenant running with the land is simply a contract between two parties which, because it meets certain technical requirements, has the additional quality that it is binding against one who later buys the promisor's land, and/or enforceable by one who later buys the promisee's land. [288]

1. Legal relief: When we use the term "covenant," we are talking about a promise that is subject to legal rather than equitable relief. That is, when a covenant is breached the relief granted is money damages, not an injunction or decree of specific performance. (An injunction or specific performance may be granted for breach of what is called an "equitable servitude," discussed below.) [288]

B. Statute of Frauds: For a covenant to run with the land, it must be in writing. [289]

C. Running with the land: The only interesting question about covenants is, When do they run with the land?

1. Running of burden and benefit: More specifically, we want to know: (1) When does the burden run (so that the promisor's assignee is bound)? and (2) When does the benefit run (so that the promisee's assignee can sue for damages if the covenant is breached)? We have to worry about: (1) the "touch and concern" requirement; and (2) the privity requirements.

a. "Touch and concern": For the burden to run, the burden must "touch and concern" the promisor's land. Similarly, for the benefit to run, the enefit must "touch and concern" the promisee's land.

b. Privity: Also, for the burden to run, there must be "privity of estate," which usually means both a land transfer between the promisor and promisee ("horizontal" privity) plus a succession of estate from promisor to promisor's assignee ("vertical" privity). For the benefit to run, horizontal privity is sometimes required, but vertical privity is generally not. (See further discussion immediately below).

2. Privity between promisor and promisee ("horizontal" privity): Where a court requires "horizontal" privity, it means that there must be some land transfer between the original promisor and the original promisee. [291]

a. Running of burden: In America, horizontal privity is required in order for the burden to run. This mainly means that if the original parties are "strangers to title," the burden will not run. Thus two neighboring landowners cannot get together and agree that neither will use his property for a certain purpose, and have this restriction be binding on a subsequent purchaser from either of them. (Example: A and B, neighboring landowners, agree in writing that neither will tear down his house to erect a new structure. B sells his property to X, who tears down that house. A cannot sue X for damages, because the burden of the covenant does not run with the land. This is so because there was never any land transfer between A and B, and thus no horizontal privity between them.)

i. Requirement satisfied: But the horizontal requirement is satisfied if the original promisor and promisee have some land-transfer relationship. (Example: A owns two parcels, each with a house on it. He sells one of the parcels to B. In the transfer agreement, A and B each promises the other that he will not tear down the house to build a new structure. B then re-conveys his parcel to X, who tears down the house. Now, A can sue X for damages, because there was horizontal privity between A and B, in the sense of a land transfer between them.)

b. Running of benefit: Most courts hold that there must also be horizontal privity for the benefit to run. (Nearly all courts hold that the same privity rule that applies to running of burden applies to running of benefit; since most courts require horizontal privity for running of burden, they also require it for running of benefit.) (Example: A and B own adjacent parcels. They each agree not to tear down their house and rebuild. A conveys to X; B tears down and rebuilds. Assuming that the state, like most, requires horizontal privity for the burden to run, it will apply the same rule for running of benefit. In that case, X will not be able to sue B for damages, because the benefit does not run due to lack of horizontal privity between A and B.)

3. Privity between litigants ("vertical" privity): When a court requires "vertical" privity, this refers to the relationship between the promisor and his successor in interest, or the relation between the promisee and his successor. [293]

a. Running of burden: For the burden to run, the party against whom itis to be enforced must succeed to the entire estate of the original promisor, in the durational sense. (Example: A and B, owners in fee simple of neighboring parcels, each agree to maintain half of a hedge between the properties. B gives a long term lease to X. X fails to maintain his part of the hedge. A cannot sue X for damages, because there is no vertical privity between B and X - when X took a long term lease, he took only part, not all, of B's fee simple.)

b. Running of burden: But the vertical privity requirement has much less bite on the benefit side. The benefit may be enforced by anyone who has taken possession of the promisee's property with the promisee's permission. (Example: On the facts of the above example, if A gave a long-term lease to Y, Y could sue B if B failed to maintain his part of the hedge.)

i. Homeowners association: If P is a homeowners' association set up by a developer to collect annual fees from homeowners in a subdivision (used to maintain any common areas), the association may sue non-payers even though the association owns no property in the development. Thus the requirement of vertical privity is almost completely relieved in this instance.

4. "Touch and concern" requirement: [294 - 298]

a. Running of benefit: For the benefit to run, that benefit must touch and concern the promisee's land. But this requirement does not have too much practical bite - most kinds of covenants that have anything to do with real estate (e.g., promises to make repairs, promises not to demolish, promises to pay money to a homeowners association, etc.) are found to "touch and concern" the promisee's land (as well as the promisor's land).

i. Burden in gross: If the benefit touches and concerns the promisee's land, the benefit will run even though the burden does not. That is, the benefit can run even if the burden is "in gross," i.e., personal to the promisor. [294]

Example: D sells land containing a restaurant to P; as part of the transaction, D promises not to operate a competing restaurant within a two mile radius. (Assume that the state holds that a non-compete promise "touches and concerns" the promisee's land.) P then conveys the property to X. X can sue D for breach of the promise - since the benefit touches and concerns the P/X land, the benefit can run even though the burden is "in gross," i.e., personal to D.)

b. Running of burden: For the burden to run, that burden must "touch and concern" the promisor's land. But about half of the courts impose an additional significant requirement: these courts hold that the burden will not run if the benefit does not touch and concern the promisee's land. (That is, half the courts say that the burden may not run when the benefit is in gross.) [295]

Example: A, the owner of Blackacre, sells it to B. B promises not to operate a liquor store on the property so as not to compete with a similar store owned b A on different property. Assume that the state is one which holds that a non-compete promise does not touch and concern the promisee's land. B then sells Blackacre to C. About half of the courts would hold that A cannot sue C for breach, because the burden will not run where the benefit is in gross, i.e., personal to A.

VIII. EQUITABLE SERVITUDES

A. Generally: The above rules apply where a promise concerning land is sought to be enforced at law, i.e., by the award of damages. But a promise may also be enforced at equity, by the award of an injunction (ordering the defendant not to do something) or a decree of specific performance (ordering the defendant to do something). When a court not only gives equitable relief, but applies it against an assignee of the original promisor, the promise is referred to as an "equitable servitude" against the burdened land. [298 - 299]

1. Less rigid requirements: In general, the technical requirements for establishing an equitable servitude that burdens the land are less difficult to meet than the requirements for covenants at law. Therefore, the law of equitable servitudes is generally more important today than the law of covenants at law.

2. Affirmative vs. negative: Most agreements for which equitable enforcement is sought are negative in nature - they are usually agreements not to violate certain building restrictions. But occasionally, an equitable servitude may involve an affirmative promise (e.g., the promise to pay dues to a homeowners' association, or the promise to make certain repairs), at least in American courts. [300 - 301]

B. Privity not required: The requirements of privity are virtually non-existent in connection with equitable servitudes. For instance, two neighboring landowners that never had any land-transfer relationship between them can, by agreement, impose land-use restrictions that will be binding on assignees. (Example: A and B, who own adjacent parcels, agree that neither will tear down his house without the other's consent. A and B sell their properties to X and Y, respectively. Assuming requirements of notice are met, X can get an injunction against Y to stop a threatened demolition in violation of the restriction, even though Y may not have expressly agreed to honor the restrictions. By contrast, X could not sue Y for damages under a covenant-at-law theory, because of the lack of horizontal privity between A and B.) [301 - 302]

C. "Touch and concern" still required: Neither the benefit nor the burden of a restrictive covenant will run unless it can be said to "touch and concern" the promisor's land (in the case of a running burden) or the promisee's land (in the case of a running benefit). But this requirement has little bite - courts are extremely loose in determining what kind of benefit or burden "touches and concerns" land. [302]

1. Running of burden or benefit is in gross: Courts are in dispute about whether equity will enforce a burden where the benefit is in gross, just as they are in dispute about whether a suit at law for money damages may be awarded in this situation. [302]

D. Notice to subsequent purchaser: The most important thing to remember about equitable servitudes is that equity will not enforce an agreement against a subsequent purchaser unless he had notice of the restrction. Notice may be either "actual" or "constructive." [304 - 305]

1. Actual notice: Thus if the subsequent purchaser of the burdened land happens to know about the restriction, it is irrelevant that the restriction is not recorded anywhere. (Example: A and B each agree in writing not to use their properties for anything but residential premises. Neither records this promise in the land records. B assigns to X, and orally tells X, "You should know that I have promised A that I'll never use the property for non-residential purposes." A will be able to enjoin X from making non-residential use of the property, because X was on actual notice of the restriction at the time he bought.)

2. Recording: Also, the subsequent purchaser will be deemed to be on notice if he has "constructive" knowledge of the restriction. Most importantly, if the restriction is properly recorded in the land records, the purchaser is bound even if he does not discover the restriction by the time he buys.

E. Developer's building plan: A general building plan formulated by a developer will often bind all parcels in the development. The developer records the plan in the form of a subdivision "plat" or map. To see how the burden and benefit can run to all parcels, assume that Developer (who has recorded a subdivision plat) conveys one parcel to B1 and, subsequently, another parcel to B2. Assume that the deed from Developer to each imposes the requirement that the buyer use the property in accordance with the recorded building plan (e.g., that he not use the property for non-residential uses if the building plan prohibits this). [305 - 311]

1. Enforcement by subsequent purchaser: First, consider a suit by B2 against B1. Here, B2 can enjoin B1 against violating the use restrictions. This would probably be true even if the deed from Developer to B1 did not expressly mention the plan or the restrictions - the fact that the plan had been publicly filed would probably be enough to put B1 on notice.

2. Enforcement by prior purchaser against subsequent one: Now consider a suit by B1 against B2. This is trickier, because by hypothesis B1 received his property before the restriction against B2 even existed. Nonetheless, B1 can probably get an injunction against any violation by B2. Courts often do this by the doctrine of "implied reciprocal servitude" - when B1 acquired his land in expectation that he would get the benefit of subsequently-created servitudes, there was immediately created in him an implied reciprocal servitude against Developer's remaining land (even if Developer did not put the restriction in later deeds, including the deed to B2!)

F. Selection of neighbors: Equitable restrictions (as well as covenants at law) may be used to facilitate the selection of neighbors. Such agreements will generally be enforced as long as they are reasonable in scope (so that they do not constitute an unreasonable "restraint on alienation") and are not in violation of any anti-discrimination law. [311 - 313]

Example: Each deed executed by a developer provides that the purchaser must become a member of the homeowners' association, and that the purchaser may not sell his land to anyone who is not a member of the association. It also provides that the association has the right of first refusal to buy any property offered by a member. Such restriction will generally be enforced, and will give the association's other members (providing that the association has enough money) the practical ability to keep property out of the hands of anyone deemed undesirable. Such a provision is often used by condominiums and co-ops.

Chapter 10 
ZONING AND OTHER PUBLIC LAND-USE CONTROLS

I. THE "TAKING" CLAUSE, AND LAND-USE CONTROLS AS IMPLICIT TAKINGS

A. The "Taking" Clause generally: State and federal governments may take private property for public use - this is the power of "eminent domain." However, the Fifth Amendment to the U.S. Constitution provides that "private property [shall not] be taken for public use, without just compensation." This is the so-called "Taking" Clause, made binding on the states by means of the Fourteenth Amendment. [321]

1. Land-use control as taking: Normally, land-use controls will not constitute a taking for which the government must pay compensation. But very occasionally, a regulation may so drastically interfere with the private owner's use of his property, or with the value of that property, that the court will conclude that there has been an implicit "taking."

2. Damages vs. injunction: If the court does find an implicit "taking," it will award one or both of the following remedies: (1) it will strike down the regulation, i.e., enjoin the government from enforcing it any more; or (2) it will award damages to the owner for his lost use or value.

B. Taking/regulation distinction: If the state merely regulates property use in a manner consistent with the state's "police power," then no compensation needs to be paid, even though the owner's use of his property or even its value has been substantially diminished. Thus zoning regulations, environmental protection rules, landmark preservation schemes, etc., will usually not constitute a compensable "taking." But if the regulation goes too far, it will become a "taking" even though the state calls it a regulation. Here are some of the principles the courts look to to decide whether a regulation has become a compensable "taking": [322]

1. Substantial advancement of legitimate state interests: The land regulation will be a taking unless it "substantially advances legitimate state interests."

a. Broad range of legitimate interests: A broad range of governmental purposes constitute "legitimate state interests." These include maintaining residential uses (often done by zoning), preserving landmarks, protecting the environment, etc.

b. Tight means-end fit: There must be a fairly tight fit between the state interest being promoted and the regulation chosen (more than a mere "rational relation" between means and end).

2. Deprivation of all use: If a regulation is found to deny the landowner of all economically viable use of his land, this will make the regulation a "taking." (Example: Regulations prevent a particular owner of vacant land from building any structure on the property. This will probably deprive him of all economically viable use, and will thus be a compensable taking unless necessary to serve some overriding governmental interest, such as prevention of flooding or erosion.)

3. Physical use: If the government makes or authorizes a permanent physical occupation of the property, this will automatically be found to constitute a taking. (Example: The state orders O to give the public a permanent easement across his property so that the public can get to a beach - this would be a permanent physical occupation, automatically amounting to a compensable taking.)

4. Diminution in value: The more drastic the reduction in value of the owner's property, the more likely a taking is to be found. This "diminution in value" standard is probably the single most important factor. (Example: Particular land is valuable mostly for the coal to be found under it. The state bars the owner of the mineral rights from doing any coal mining under the land. Held, the value of the mining rights was so completely impaired as to amount to a taking.)

5. Prevention of harm: A taking will probably not be found where the property use being prevented is one that is harmful or "noxious" to others. (Example: A zoning ordinance may properly prevent the operation of a steel mill in the middle of a residential neighborhood.)

C. Damages for temporary taking: If a land-use regulation is so broad that it constitutes a taking, the owner may bring an "inverse condemnation" suit. Under such a suit, he may receive damages for the temporary taking (temporary because the regulation is struck down by the court). See First English Evangelical Lutheran Church v. L.A. County. [327 - 328]

II. ZONING

A. Generally: The main type of public land-use regulation is zoning. Zoning is generally done on the local, municipal, level. The municipality's power to zone comes from the state "police power," or power to act for the general welfare, which is delegated by state statute to the municipality.

1. Use zoning: Most zoning is "use zoning," by which the municipality is divided into districts, in each of which only certain uses of land are permitted (e.g., a residential-only district, a commercial district, etc.) [328]

2. Density controls: Other zoning laws govern the density of population or construction. Thus a town might establish a minimum lot size for single-family homes, minimum set-back requirements (requiring a certain amount of unbuilt land on some or all sides of the structure), minimum square footage for residences, and height limits. [329]

B. Legal limits on zoning:

1. Constitutional limits: Several different federal constittional provisions may limit a city's ability to zone in a particular manner:

a. Taking Clause: First, the Fifth Amendment's "Taking" Clause means that if a zoning regulation is so overreaching that it deprives the owner of all economically viable use of his land, or is not substantially related to some legitimate public purpose, the zoning will be treated as a taking for which compensation must be paid. (See the discussion of the Taking Clause above.)

b. Procedural due process: The Fourteenth Amendment's Due Process Clause imposes certain procedural requirements on the zoning process. For a zoning action that is administrative rather than legislative (e.g., the granting of a variance or special-use permit for a particular property), an owner is entitled to a hearing, an impartial tribunal, and an explanation of the government's decision. [329]

c. Substantive due process: If the zoning law fails to bear a rational relation to a permissible state objective, it may violate the substantive aspect of the Due Process Clause. (Example: A zoning law that limits a district to single-family occupancy, and defines "family" so as to exclude most extended families, violates substantive due process. See Moore v. City of East Cleveland.) [331 - 333]

d. Equal protection: A zoning law that is adopted for the purpose of excluding racial minorities will trigger strict judicial scrutiny, and will probably be found to be a violation of the Equal Protection Clause of the Fourteenth Amendment. [333]

2. Aesthetic zoning: Most courts hold today that aesthetic considerations may constitute one factor in a municipality's zoning decision. But aesthetics may not be the sole factor. (Example: A city provides that only Georgian Colonial-style houses may be built, because these structures are the most beautiful. A court would probably strike down this regulation on the grounds that although aesthetics may be one factor, they may not be the sole factor.) [334 - 335]

C. Administration of zoning:

1. Bodies involved in: Several governmental bodies generally get involved in zoning: [335]

a. Town council: The zoning code is enacted by the municipal legislature. Usually this is the town council.

b. Board of zoning appeals: A "board of adjustment" or "board of zoning appeals" usually exists to award or deny variances, and to hear appeals from the building department's enforcement of the zoning laws.

c. Planning or zoning commission: The town council generally appoints a planning commission or zoning commission. The commission generally advises the town council on (but does not independently determine) the contents of the zoning code.

2. Variances: Virtually all zoning ordinances have a provision for the granting of variances, i.e., relief in a particular case from the enforcement of an ordinance. [338 - 340]

a. Requirements for: Most states impose these requirements for a variance: (1) denial would result in "unnecessary hardship" to the owner; (2) the need for the variance is caused by a problem unique to the owner's lot (not one shared by many lots in the area); and (3) the variance would not be inconsistent with the overall purpose of the ordinance, or inconsistent with the general welfare of the area.

3. Special uses: Zoning ordinances also usually provide for "special use" permits. Typically, a special use permit must be obtained for such things as private schools, hospitals and churches. Generally, an applicant is not entitled to a special use permit "as of right," but only in the discretion of the zoning board; however, usually no showing of "special hardship" has to be made (as is the case for a variance). [340]

4. Conditional zoning: Many ordinances provide for "conditional" zoning. Under this device, the rezoning of a particular parcel is made subject to the developer's promise to comply with certain conditions, which will protect neighbors. (Example: O owns a parcel in an area zoned residential-only. If the ordinance allows for conditional zoning, the town might rezone O's parcel for light industry, but only if O agrees to large set-backs, a low floor-space-to-land-area ratio, or other condition.) [343]

5. Non-conforming uses: When a zoning ordinance is enacted or made more stringent, the pre-existing uses that are now banned by the ordinance are called "non-conforming uses." Virtually all ordinances either: (1) grant a non-conforming user a substantial period within which he may continue his use; or (2) let him continue that use indefinitely. [344 - 346]

a. Constitutional issue: Probably it would be a violation of an owner's due process or other constitutional rights for him not to be given at least a substantial period within which to phase out the non-conforming use.

b. Amortization: If the ordinance does give an owner a substantial period to phase out his use (called an "amortization" provision), most courts hold that no violation of the owner's constitutional rights results from the fact that he must eventually cease the non-conforming use.

D. Exclusionary zoning: "Exclusionary zoning" is the use of zoning laws to exclude certain types of personsand uses, particularly racial and ethnic minorities and low-income persons. [347]

1. Examples of exclusion: A town might exclude certain types of people by putting tight restrictions on the kinds of allowable residential uses. Thus a high minimum-acreage requirement, a ban on multiple dwellings, a ban on mobile homes, or a ban on publicly-subsidized housing are all ways a town could try to keep out poor people (and, to the extent that blacks, say, are on average poorer than whites, a way to keep out black people).

2. Equal Protection law: Exclusionary zoning may be attacked as a violation of the Equal Protection Clause of the U.S. Constitution. An equal protection argument has the best chance of success when it argues that a town is discriminating on the basis race or national origin, since these are "suspect classes"; an attack based on the claim that the town is discriminating against the poor will probably not succeed (because poverty is not a suspect class).

a. Effect vs. purpose: Also, the plaintiff in an equal protection case will probably only win if the court applies "strict scrutiny" to the ordinance. This, in turn, will happen only if the court believes that the town acted with the purpose of discriminating on racial or ethnic grounds, not if the ordinance merely has the effect of making it harder for minorities to live there. [348]

b. Standing: The standing requirements for an equal protection attack in federal court are very difficult. In most instances, P will have to prove that: (1) the zoning rules have prevented a particular project from being built on particular land; and (2) P would probably become a resident of the housing if the zoning limit were overturned and the project built. [351]

3. Federal statutory suits: Zoning may also be attacked in federal court suits based on federal statutory law, especially the Fair Housing Act. Zoning enacted for the purpose of limiting access by racial or ethnic minorities violates the Act. [352]

a. Effect vs. purpose: In a Fair Housing Act suit, P does not have to show a discriminatory purpose behind the zoning enactment. Instead, he merely has to show a discriminatory effect; then, the burden shifts to the defendant town to show that its enactment serves legitimate governmental interests rather than discriminatory ones.

4. State case law: A number of states, by case law, have held that zoning may not be used to exclude the poor.

a. Mt. Laurel cases: The most important such cases are the two Mt. Laurel cases, in which the New Jersey Supreme Court held that a town must allow its "fair share" of the region's demand for low and middle-income housing. According to the Mt. Laurel principle, not only may zoning not be used to keep out the poor, but affirmative measures must be taken by a town to cause such housing to be built (e.g., density bonuses given to developers who build some low inome housing; cooperation with developers seeking federally-subsidized housing; allowing of mobile homes, etc.) Also, builders must be allowed to seek site-specific relief (in which the court orders the builder's parcel to be rezoned to allow the particular project, if the court finds for the developer). [354 - 358]

III. REGULATION OF SUBDIVISION AND GROWTH

A. Subdivision regulation: Towns often extensively regulate the process of subdivision. This is the process of dividing a parcel into two or more smaller ones, for resale to different purchasers. [359]

1. Sewers and water mains: For instance, towns usually have detailed requirements that the developer put in water mains, sewers, gutters, and other drainage facilities.

2. Street design: Similarly, towns regulate street design, and require the developer not only to furnish the land for streets, but to build the streets himself.

B. Growth control: Towns and regions also sometimes attempt to regulate their rate of growth (or the sequence in which the various parcels of land are developed). [360]

1. Generally upheld: Generally, growth-control regulations are upheld so long as they are reasonable. For instance, a town would probably be entitled to prevent premature subdivision and "urban sprawl" by prohibiting residential construction unless various public facilities (e.g., schools, parks, roads, firehouses, sewers, etc.) were in place first.

a. Moratoria and limits: In fact, a town ordinance will probably be upheld if it tries to place an absolute limit on the number of new units that will be constructed during a particular time period. Even a complete moratorium on new residential or commercial construction might be upheld if this was a reasonable way of achieving an important local government goal (e.g., avoiding strain on roads or other public facilities).

IV. HISTORICAL AND ENVIRONMENTAL PRESERVATION

A. Historical preservation: Municipalities often try to protect buildings or districts of great historical or architectural interest. [362]

1. Districts and landmarks: Sometimes, an entire historical district is protected. (For instance, the French Quarter in New Orleans is protected because of its great age, uniformity and architectural significance.) Alternatively, sometimes a particular structure will be protected because of its historical or architectural significance. In either event, historical preservation schemes generally prohibit the owner from altering or demolishing the building without a special permit.

2. Generally upheld: A historic preservation ordinance will generally be upheld so long as: (1) it gives reasonably precise standards to the board charged with enforcement, so that the board does not behave in an arbitrary or discriminatory manner; and (2) it does not constitute a "taking" without compensation, in violation of the Fifth Amendment. [363]

a. Taking: The owner's best chance of attacking a scheme is by arguing that it deprives him of all economically viable use of his land, without compensation, in violation of the Fifth Amendment's Taking Clause. But even such arguments are hard to win. For instance, in the Penn Central case, the Supreme Court held that a New York City ordinance preventing major changes to Grand Central Terminal, but allowing the owners to continue their present use of the property (as a terminal with office space above it) did not amount to a taking. (But a prohibition on all development of a building beyond the current use might be found to deny the owner all economically viable use of the property, in which case the preservation scheme would be a taking for which compensation must be paid.) [363 - 365]

b. Transferable Development Rights (TDRs): Some ordinances avoid "taking" problems by giving the owner "Transferable Development Rights" or "TDRs," by which he may transfer his development rights from the preserved building to other nearby parcels. If in the particular real estate market the TDRs have substantial economic value, this may turn what would otherwise be a "taking" (because the owner is deprived of all economically viable use of his land) into a non-taking. [364 - 365]

B. Environmental preservation: Towns and regions also frequently attempt to protect the environment. Of special interest are regulations that attempt to maintain open areas by limiting or prohibiting certain kinds of development. [365]

1. Urban park land: Occasionally, a city may prohibit the development of privately-owned urban park land. But prohibiting all development of otherwise-valuable vacant land in the middle of a downtown area is likely to constitute a compensable "taking," because the owner is being deprived of all economically viable use of his land. (But the problems might be eased by allowing TDRs, as discussed above.)

2. Wetlands and coastlands: More frequently, towns and regions try to limit or prohibit development on wetlands and coastland. By and large, such preservation schemes have been upheld, on the grounds that preservation of these areas is a goal of great social importance, outweighing the landowner's interest in land development. (But a permanent ban on development might be a compensable "taking," unless the government shows that construction would be dangerous, as in the case of a coastal area subject to heavy flooding and erosion.)

V. EMINENT DOMAIN

A. Generally: State and federal governments have the power of eminent domain, i.e., the power to take private property for public use. Usually this is done through condemnation proceedings, in which the government brings a judicial proceeding to obtain title to land that it needs for soe public use. Alternatively, the government occasionally simply makes use of a landowner's property without bringing formal condemnation proceedings; here, the landowner may bring an "inverse condemnation" action, in which he seeks a court declaration that his property has been taken by the government and must be paid for. The two requirements for the government to use its eminent domain power are: (1) the property must be put to a "public use"; and (2) "just compensation" must be paid. [368]

B. "Public use": The requirement of "public use" (imposed by the Taking Clause of the Fifth Amendment) is very loosely interpreted. So long as the state's use of its eminent domain power is "rationally related" to a "conceivable public purpose," the public-use requirement is satisfied. (Example: Hawaii condemns lots owned by large landowners, and transfers them to the tenants living on them. Held, because there was tremendous inequality in land ownership in Hawaii, this scheme was a rational attempt to remedy a social and economic evil, and therefore satisfied the "public use" requirement. Hawaii Housing Authority v. Midkiff.) [369 - 370]

1. Urban renewal: Thus as part of an urban renewal project, a city may condemn private land, then turn it back to a private developer for private use. (The renewal program meets the "public use" requirement even if the particular parcel condemned is not a slum.)

C. "Just compensation": In general, the requirement of "just compensation" means that the government must pay the fair market value of the property at the time of the taking. [370]

1. Highest and best use: This fair market value is usually based on the "highest and best use" that may be made of the property (at least under current zoning regulations). Thus if a vacant parcel is zoned for subdivision, the value that must be paid is the value the land would have to a subdivider, not the value based on the current rental value of vacant land.

Chapter 11 
LAND SALE CONTRACTS, MORTGAGES AND DEEDS

I. LAND SALE CONTRACTS

A. Statute of Frauds: The Statute of Frauds is applicable in all states to any contract for the sale of land, or for the sale of any interest in land. Therefore, either the contract itself, or a memorandum of it, must be in writing. [372]

1. Memorandum satisfying: A memorandum of the parties' agreement, summarizing some terms but not the entire oral agreement, will satisfy the Statute if it specifies the following: (1) the names of the parties; (2) the land to be conveyed; (3) normally, the purchase price; and (4) the signature of the party to be charged (i.e., the party against whom enforcement is sought). (Example: Seller writes a letter to Buyer, confirming the provisions of their oral contract for the sale of Blackacre. This letter will constitute a sufficient memorandum if Buyer seeks to enforce the contract against Seller, but not if Seller seeks to eforce it against Buyer.) [372 - 373]

2. Part performance exception: There is one major exception to the Statute of Frauds for land sale contracts: under the doctrine of part performance, a party (either buyer or seller) who has taken action in reliance on the contract may be able to gain at least limited enforcement of it. [373 - 375]

a. Acts by vendor: If the vendor makes a conveyance under the contract, he will then be able to sue for the agreed-upon price, even if the agreement to pay that price was only oral.

b. Acts by purchaser: Courts are split as to what acts by the purchaser constitute part performance entitling him to specific performance.

i. Possession plus payment: Many states hold that if the buyer takes possession, and also makes payments, this will be sufficient part performance that the seller will be required to convey the property.

ii. Improvements: Also, in many states, a buyer who takes possession and then either makes permanent improvements, or changes his position in reliance, can require the seller to convey.

iii. "Unequivocally referable" requirement: Most courts say that the buyer's part performance must be "unequivocally referable" to the alleged contract. Thus the buyer must show that the part performance was clearly in response to the oral contract, and not explainable by some other aspect of the parties' relationship. (Example: D orally promises to convey Blackacre to P if P will move in with D and care for D in his old age. P does so. P is distantly related to D. D dies without ever having made the conveyance. If P sues D's estate to enforce the alleged oral agreement, P will probably lose because P's part performance (moving in and caring for P) is not "unequivocally referable" to the oral contract, since P may have been doing it out of affection for a relative.)

B. Time for performance: In a suit for damages, the time stated in the contract will be deemed to be of the essence, unless the parties are shown to have intended otherwise. (Example: Seller refuses to close on the date specified in the contract. Buyer may bring a suit for damages for the delay, even if it is only a few days.) [376 - 377]

1. Equity: But in a suit in equity (i.e., a suit for specific performance), the general rule is that time is not of the essence. Therefore, even if the contract specifies a particular closing date, either party may obtain specific performance though he is unable to close on the appointed day (so long as he is ready to perform within a reasonable time after the scheduled day). (Example: The sale contract specifies a November 1 closing date. Buyer has trouble lining up his financing, so he can't close on November 1. The contract is silent about whether time is of the essence. By November 15, Buyer has his financing lined up, and asks Seller to close. Seller now refuses. In the absence of strong evidence that the parties intended time to be of the essence, Buyer will probably get a court to order Seller to convey even though Buyer missed the November 1 closing date.)

C. Marketable title: Nearly all land sale contracts require the vendor to convey a marketable title. (Even if the contract is silent on this issue, an obligation to convey a marketable title will be implied by the court.) [377]

1. Definition of "marketable title": A marketable title is one that is free from reasonable doubt about whether the seller can convey the rights he purports to convey. Thus it is not sufficient that a court would probably hold the title good in a litigation. Instead, the title must be free from reasonable doubt so that the buyer will be able to resell in the future. The purchaser is not required to "buy a lawsuit". [378]

2. Defects making title unmarketable: Here are some of the defects that might make title unmarketable: [379]

a. Record chain: First, anything in the prior chain of title indicating that the vendor does not have the full interest which he purports to convey, may be a defect. (Examples: A substantial variation between the name of the grantee of record in one link and the name of the grantor in the following link is a defect. Similarly, a substantial variation in the description of the land between one deed and the next may be a defect.)

b. Encumbrances: Second, even if the vendor has valid title to the property, an encumbrance on the property will normally constitute a defect. [380 - 381]

i. Mortgage or lien: Thus an outstanding mortgage would be an encumbrance making the title unmarketable. (However, the vendor has the right to pay off the mortgage at the closing, out of the sale proceeds.) Similarly, liens (e.g., a lien for unpaid taxes, or a lien gotten by a judgment creditor) are defects.

ii. Easement: An easement will be a defect if it reduces the "full enjoyment" of the premises.

iii. Use restrictions: Similarly, privately-negotiated use restrictions (e.g., a covenant whose burden runs with the land, to the effect that only residential structures will be built) can be a defect.

iv. Land-use and zoning violations: Most courts hold that violations of building codes are not encumbrances on title. But a violation of a zoning ordinance usually is treated as an encumbrance.

3. Agreement and notice: But the parties may agree that certain kinds of defects will not constitute unmarketable title. This agreement will normally take place in the contract of sale. (Example: Buyer and Seller agree that a particular easement held by X across the property will not render title unmarketable. The court will enforce this agreement.) Also, the buyer may be held to be on notice of certain defects, and therefore held to have implicitly agreed to take subject to them (e.g., where a right of way across the property is very visible to anyone who looks even casually at the property).

4. Time for measuring marketability: Unless the contract specifies otherwise, the vendor's title is not required to be marketable until the date set for the closing. Thus the vendor may sign a contract to sell property which he does not yet own (or on which there are several defects in title), and the purchaser cannot cancel the contract prior to the closing date because of this fact. [381]

D. Remedies for failure to perform: Where one party fails to perform a land sale contract, the other party may have two remedies: (1) a suit for damages; and (2) a suit for specific performance. [383 - 385]

1. Damages: If one party breaches a land sale contract, the other may almost always sue for money damages. Generally, P recovers the difference between the market price and the contract price (the "benefit of the bargain" rule).

2. Specific performance: Usually, an action for specific performance may be brought against the defaulting party, whether the defaulter is buyer or seller. Most commonly, the seller changes his mind, and buyer is able to get a decree of specific performance ordering seller to convey the property. (Each parcel of land is deemed unique, so the court presumes that money damages would not be adequate to compensate the buyer.)

3. Deposit: If buyer is unable to close on the appointed date, most courts do not allow him to recover his deposit (on the theory that a suit to recover a deposit is in effect an action at law, and time will be deemed to be of the essence in a suit at law).

E. Equitable conversion: For many purposes, the courts treat the signing of the contract as vesting in the purchaser equitable ownership of the land. (Conversely, the vendor is treated as becoming the equitable owner of the purchase price.) [385]

1. Risk of loss: Most courts hold that since the vendee acquires equitable ownership of the land as soon as the contract is signed, the risk of loss immediately shifts to him. This is true even if the vendee never takes possession prior to the casualty. (Example: S contracts to sell land to B. Prior to the closing, while S is still in possession, a hurricane destroys the house located on the land. Most courts hold that the loss falls upon B - B must still pay the agreed-upon purchase price, and does not receive any abatement of price, nor does he get his deposit back.) [386 - 388]

a. Exceptions: But courts following this majority rule have a couple of key exceptions to it: (1) the vendor bears any loss resulting from his own negligence; and (2) the vendor bears the loss if at the time it occurred, he could not have conveyed title (e.g., because his title was unmarketable).

b. Insurance: But very importantly, courts who place the risk of loss on the purchaser give him the benefit of the vendor's insurance. [388]

II. MORTGAGES AND INSTALLMENT CONTRACTS

A. Nature of mortgage: A mortgage is a financing arrangement, in which the person buying property (or one who already owns property) receives a loan, and the property is pledged as security to guarantee repayment of the loan. [390]

/UL>

1. Two documents: There are two documents associated with every mortgage: (1) the "note" (or "bond"); and (2) the mortgage itself.

a. The note: The note is the buyer's personal promise to make the repayments. If there is a foreclosure against the property and the foreclosure sale does not yield enough to cover the outstanding mortgage debt, the note serves as the basis for a deficiency judgment against the borrower for the balance still due.

b. Mortgage: The mortgage itself is a document which gives the lender the right to have the property sold to repay the loan if the borrower defaults. Since the mortgage in effect gives the mortgagee an interest in the land, the mortgage is recorded.

2. Sale of mortgaged property: Usually, when mortgaged property is sold the mortgage is paid off at the closing. But property can be sold without paying off the mortgage, either by: (1) having the purchaser take "subject to" the mortgage; or (2) having the purchaser "assume" the mortgage. [391]

a. Sale "subject to" mortgage: If the purchaser merely takes "subject to" the mortgage, he is not personally liable for payment of the mortgage debt. True, the mortgagee can foreclose if the buyer does not make the payments. But the mortgagee may not sue the buyer for any balance still remaining on the loan after foreclosure; that is, the mortgagee may not get a deficiency judgment against the purchaser. (But the mortgagee may in this instance sue the original mortgagor for this balance.)

b. Assumption: If the new buyer assumes payment of the mortgage, he is liable, both to the original mortgagor and to the mortgagee, for re-payment of the mortgage loan. Thus the mortgagee can get a deficiency judgment against the assuming purchaser.

3. Foreclosure: Foreclosure is the process by which the mortgagee may reach the land to satisfy the mortgage debt, if the mortgagor defaults. [393]

a. Judicial foreclosure: Usually, foreclosure is judicially supervised - the foreclosing mortgagee must institute a lawsuit, and the actual foreclosure sale takes place under supervision of a government official (usually a sheriff).

b. Private foreclosure sale: Some states allow the mortgage lender to use a document called a "deed of trust" rather than a "mortgage." The deed of trust allows the lender (or a third person) to hold the property as "trustee," and to sell it in a private sale if the borrower defaults. However, the private sale must be held in a commercially reasonable manner so as to bring the highest price possible - if the lender does not do this, he will owe damages to the borrower in the amount that the borrower might have gotten back (representing the borrower's equity above the mortgage amount) had the sale been a commercially reasonable one.

B. Installment contracts: Land can be bought under an installment contract. The buyer makes a down payment, and pays the rest of the purchase price in instalments (usually monthly). Here, the buyer does not receive his deed until after he has paid all (or, sometimes, a substantial portion) of the purchase price. [395 - 396]

1. Forfeiture: If the installment buyer defaults, the seller does not need to go through complex foreclosure proceedings - he can just exercise his contractual right to declare the contract forfeited (in which case the seller theoretically gets to keep whatever has been paid on account). But modern courts often hold that if the buyer has paid a substantial portion of the purchase price, and the seller would be unjustly enriched by a complete forfeiture, ordinary foreclosure proceedings (applicable to mortgages) must be used.

III. DEEDS

A. Nature of deed: The deed is the document which acts to pass title from the grantor to the grantee. [396]

1. Merger: Under the doctrine of merger, most obligations imposed by the contract of sale are discharged unless they are repeated in the deed. (Example: The contract calls for merchantable title, in the form of a warranty deed. Buyer carelessly accepts a "quitclaim" deed which makes no warranties. Buyer will not be able to sue Seller on the contractual provision if the title turns out to be defective - the contractual provisions are extinguished and replaced by whatever provisions are contained in the deed, under the merger doctrine.) [396]

2. Two main types of deeds: There are two basic types of deeds: (1) the quitclaim deed, in which the grantor makes no covenant that his title is good (he merely passes on to the grantee whatever title he in fact has); and (2) the warranty deed, in which the grantor makes one or more promises about the state of the title.

B. Description of the property:

1. Types of description: There are three main ways of describing land in a deed. Their use varies by region and type of land: [397 - 401]

a. Metes and bounds: A "metes and bounds" description begins by establishing a starting point (usually based on a visible landmark or "monument"). Then a series of "calls and distances" is given, each of which represents a line going in a certain direction for a certain distance. (Example: "From the southwest corner of East and Main Street, then running north 50 degrees 26 minutes for 273 feet, then west 59 degrees 8 minutes for 100 feet," etc.) [397]

b. Government survey: In many rural areas, especially west of the Mississippi, the description method uses the U.S. government survey. Land is divided into six-mile-square tracts called "townships"; each township is divided into 36 one-mile-square tracts called "sections"; each section contains 640 acres, each of which can be directly referred to. [397]

c. Plat: The "plat" method relies on the recording of a map or "plat" of property by a developer, in which the plat shows the location of individual lots. [398] (Example: "Lot 2 in Block 5 in Highwood, a subdivision platted on a map filed in the Register's Office of the County of Westchester on June 13, 1910.") [398]

P>2. Interpretation: In interpreting the description of the land conveyed, the court attempts to ascertain the intent of the parties.

a. Construction in grantee's favor: Courts tend to interpret the deed in a way which is most favorable to the grantee (i.e., the document is construed against the grantor, since the grantor usually drafts the deed). [400]

C. Formalities: Deeds must meet certain formalities, which vary from state to state. [401]

1. Signature: The grantor must place his signature on the deed. The signature of the grantee is generally not necessary.

2. Attestation or acknowledgment: In most states, statutes require the deed either to be "attested" to (i.e., witnessed by one or more persons not parties to the transaction) or to be notarized.

D. Delivery of deed: For a deed to be valid, it must not only be executed, but also "delivered." But this "delivery" requirement does not necessarily refer to physical delivery; what is required is that the grantor use words or conduct evidencing his intention to make the deed presently operative to vest title in the grantee. [402 - 407]

1. Not revocable: If the delivery occurs, title passes immediately to the grantee. Thereafter, return of the deed to the grantor has no effect either to cancel the prior delivery or to reconvey the title to him. The only way the title can get back to the grantor is if a new, formally satisfactory, conveyance takes place.

E. Covenants for title in warranty deed: If the deed is a "warranty" deed (as opposed to a "quitclaim" deed, which merely conveys whatever interest the grantor has without making any promises), the grantor is held to be making various promises about the state of his ownership. These promises are called "covenants for title." [407]

1. The covenants: The covenants fall into three basic groups: [407 - 409]

a. Seisin and conveyance: The covenants of "seisin" and of "right to convey" mean that the grantor has an indefeasible estate in the quality and quantity which he purports to convey. (Example: These covenants might be breached if the grantor purported to convey a fee simple absolute, but actually only owned and conveyed a fee simple subject to condition subsequent or a fee simple subject to an executory limitation.)

b. Against encumbrances: The covenant "against encumbrances" is a promise that there are no encumbrances against the property, that is, no impediments to title which do not affect the fee simple but which diminish the value of the land. (Examples: Mortgages, liens, easements and use restrictions are all encumbrances, so if the grantor gives a deed containing a covenant against encumbrances, the existence of any of these will constitute a breach of that covenant.)

c. Quiet enjoyment and warranty: The covenants of "quiet enjoyment" and "warranty" represent a continuing contract by the grantor that the grantee will be entitled to continued ossession of the land in the future. (Example: These covenants would be breached if a third person not only asserted that he had paramount title, but commenced proceedings to eject the grantee.)

2. Present vs. future covenants: Be sure to distinguish between: (1) present covenants; and (2) future covenants. [409]

a. Present covenants: The covenants of seisin, right to convey, and against encumbrances are present covenants. They are breached, if at all, at the moment the conveyance is made. Thus a breach can occur even though there is no eviction - all the grantee needs to do to recover on the claim is to show that title was in fact defective on the date of the conveyance.

b. Future covenants: By contrast, the covenants of quiet enjoyment and warranty are future covenants. They are breached only when an eviction occurs. (Example: Grantor conveys Blackacre to Grantee under a warranty deed. Ten years later, Grantee discovers that X has a paramount title to that held by Grantor. This is a breach of the present covenants (seisin, right to convey and against encumbrances), even though there is no eviction. But it is not a breach of the future covenants (quiet enjoyment and warranty), because X has not tried to evict Grantee.)

3. Statute of limitations: The main reason for distinguishing between present and future covenants involves the statute of limitations. The statute starts to run on a present covenant at the time the conveyance is made. It starts to run on a future covenant only when an eviction occurs.Therefore, if many years pass from the time of the conveyance, and the grantee discovers that someone has paramount title, the grantee is likely to be out of luck: the time for suing on the present covenants is likely to have passed (since that clock started running at the time of the conveyance), yet there will be no breach of the future covenants if the holder of the paramount title has not attempted to eject the grantee. (Thus on the facts of the above example, Grantee is likely to be out of luck, with his present covenants time-barred and his future covenants not yet breached due to the absence of any ejectment action by X.) [409]

4. Enforcement by future grantee (running of covenants): A second reason for distinguishing between the present and future covenants concerns whether the covenant runs with the land, i.e., whether it is enforceable by subsequent grantees. [410]

a. Present covenants: The present covenants usually do not run with the land.

b. Future covenants: But the future covenants do run with the land.

Example: O conveys to G1 under a warranty deed. G1 conveys to G2. G2 discovers that X has always held a paramount title superior to O's. G2 cannot sue O on the present covenants (seisin, right to convey and against encumbrances), because these do not run with the land. But he may sue O for breach of the future covenants (warranty and quiet enjoyment). (But remember that these future covenants will not be breached unless X actually sues to eject G2.)

5. Measure of damages: If the grantor breaches any of these warranties, the grantee's recovery is generally limited to the purchase price paid - the grantee may not recover for any appreciation in the value of the land since the conveyance. [411]

F. Warranty of habitability: Most courts today recognize an implied warranty of habitability on behalf of the purchaser of a new residence against a professional builder who built the house. (Example: Developer, who is in the business of building homes, sells a home to P. Shortly after P moves in, he discovers that the foundation is cracked and the roof is structurally unsound. In most states, P may sue Developer for breach of the implied warranty of habitability.) [412]

1. Used homes: The buyer of a used home cannot sue the prior "amateur" owner. But the second buyer may, in most states, sue the original builder for breach of the implied warranty of habitability, provided that: (1) the defect was not obvious at the time of the second purchase, and (2) the defect occurred within a reasonable time after construction of the house. (Example: On the facts of the above example, if P sold the house to P1, P1 could sue Developer if the foundation and roof problems were not obvious at the time of the P-P1 sale, and occurred within a reasonable time after Developer built the house.) [413]

G. Co-ops and condos:

1. Co-ops: The term "co-operative" or "co-op" usually refers to a means of owning an apartment house. The building is owned by a co-operative corporation. What the lay-person thinks of as an "owner" of an individual apartment unit is really a shareholder in the corporation. Each shareholder is entitled to enter into a "proprietary lease," in which the corporation is lessor and the shareholder is lessee. The lessee is generally required to pay his portion of the building's mortgage interest and principal, and various "carrying charges" used to defray the maintenance and operating costs of the building. [415]

2. Condominium: The condominium or "condo" is a form of ownership in which each individual resident holds a fee simple in a certain physical space or parcel, but all the residents collectively own certain "common areas." In the typical "horizontal" condo structure (e.g., two-story townhouses spread over a large parcel), each individual resident might own the soil upon which his townhouse stands, but he would not own the surrounding lawns, swimming pool, etc. - these would be held by the condominium association. [415]


 

Chapter 12 
THE RECORDING SYSTEM AND TITLE ASSURANCE

I. RECORDING STATUTES

A. General function of: The main function of recording acts, which are in force in every jurisdiction, is to give a purchaser of land a way to check whether there has been an earlier transaction in the property inconsistent with his own. Even if there has been an earlier transaction, if it is not recorded the later purchaser will generally gain priority - thus the recording acts give a buyer a way to be sure that he is getting good title. [421]

1. Relations between original parties: Recording acts only govern the relationship between a grantee and a subsequent purchaser of the same property. They do nt govern the relation between the grantor and the grantee under a particular conveyance.

Example: D conveys Blackacre to P. D then conveys it again to X, who doesn't know about the D-P conveyance. X records his deed before P can record his. Because of the recording act, X's deed takes priority over P's. P sues D for his double-dealing. P will be able to recover against D, because the recording act has no effect upon the relations between both parties to a particular deed (i.e., P and D), only the relationship between two grantees under different deeds (i.e., P and X).

B. Different types of acts: There are three basic types of recording acts: (1) "pure race" statutes; (2) "pure notice" statutes; and (3) "race-notice" statutes. [421]

1. Pure race statutes: A race statute places a premium on the race to the recorder's office. The subsequent purchaser must record before the earlier purchaser, but he is protected regardless of whether he has notice of the earlier conveyance. Very few pure race statutes remain on the books.

2. Pure notice statute: A pure notice statute provides that an unrecorded instrument is invalid against any subsequent purchaser without notice, regardless of whether the subsequent purchaser records prior to the first purchaser.

3. Race-notice statute: A race-notice statute protects the subsequent purchaser only if he meets two requirements: (1) he records before the earlier purchaser records; and (2) he takes without notice of the earlier conveyance.

Illustration: In 1985, O conveys Blackacre to A. In 1986, O conveys to B. In 1987, B records. In 1988, A records. Here is how the rights of A and B to Blackacre would be resolved under various types of recording acts: Race: Under a pure race statute, B wins automatically, without regard to whether he had actual notice of the earlier conveyance to A - B recorded his deed before A did, so that is the end of the matter. (Had A recorded in 1987 and B in 1988, A would have won, even though at the time B took, he had no way to find out about the earlier conveyance to A.)

Notice: Under a pure notice statute, B wins. In fact, B would have won even if he never recorded at all, or recorded after A - the mere fact that B took after A, and without notice of A's interest, would be enough to give him the victory.

Race-notice: Under a race-notice statute, B will win only if he took without actual notice of A's interest. Furthermore, if B had recorded after A (instead of before A, as really happened), B would have lost due to his late recording even if he took without actual notice of A's interest. So under the race-notice statute (probably the most common kind of statute), the subsequent purchaser (here, B) has two obstacles to overcome: (1) he must record first; and (2) he must take without actual notice of the earlier interest.

C. Mechanics: Here is a summary of the mechanics of recording: [423 - 424]

1. Deposit: The grantee (or the grantee's title insurance company) brings the deed to the recording office (usually located in the county where the land lies). The recorder stamps the date and time of deposit, and then places a photocopy of the deed in a chronological book containing all recorded deeds.

2. Indexing: Then, the deeds are indexed. Usually there is both a grantor index (enabling a searcher to find all conveyances made by a particular grantor) and a grantee index (permitting the searcher to find all conveyances made to a particular grantee).

D. What instruments must be recorded: Recording acts generally allow (and in effect require) the recording of every instrument by which an interest in land, whether legal or equitable, is created or modified. Thus not only fee simple conveyances, but also life estates, mortgages, restrictive covenants, and tax liens, are all required to be recorded. [424 - 425]

1. Not recordable: Some types of interests are usually not recordable:

a.Adverse possession: Thus titles based upon adverse possession are usually not recordable (since there is no instrument to record).

b. Some easements: Similarly, an easement by implication or necessity usually does not have to be recorded (since it does not give rise to a recordable document). (But in some instances, a conveyance of the property to a bona fide purchaser who takes without notice of the easement may cut the easement off.) On the other hand, an express easement is recordable.

c. Short leases: In many states, a short term lease (e.g., less than three years) may not be recorded. If so, that lease will be valid against a subsequent bona fide purchaser.

d. Contracts: Similarly, some states do not allow executory contracts of sale to be recorded. (But the vendee's rights will be subordinate to that of a subsequent claimant who actually buys the property.)

E. Parties protected: The subsequent grantee, to get the protection of the recording act against a prior grantee, must either be: (1) a "purchaser for value" or (2) a creditor meeting certain standards. [425 - 427]

1. Purchaser for value: In most states, a grantee gets the benefit of the recording act (i.e., he takes priority over an earlier unrecorded conveyance) only if he gives value for his interest. [425]

a. Donee: Thus a donee is usually not protected by the recording act. (Example: O conveys to A. O then purports to give the property, for no consideration, to B. B records, A never does. Under most statutes, B still loses to A, because B - although he is a subsequent grantee who recorded first - did not give valuable consideration.)

b. Less than market value: Although consideration is required, it does not have to be an amount equal to the market value of the property (but it must be more than nominal consideration). (Example: On the facts of the above example, if B had paid half the market value of the property, he would probably have prevailed against A; but if he only paid $1, he would not.)

c. Purchase from or through grantee: One who purchases for valuable consideration from the record owner is of course protected. But also, one who buys from the heirs or devisees of the record owner will also be protected. (Example: O conveys to A. O then conveys to B for value. B records, A does not. B then bequeaths the property to C. C conveys to D. D will prevail against A - even though B in one sense took "nothing," his right to prevail under the recording act against a prior unrecorded deed is itself devisable.)

2. Creditors: A landowner's creditors may also receive the protection of the recording act. [427]

a. Mortgage: If a creditor receives a mortgage from the landowner, he is treated as a "purchaser," and he must generally meet the consideration requirement. This means that if he is giving something of new value (e.g., canceling part of the debt in return for the mortgage, or extending the owner's time to pay), he will probably be deemed to have given consideration, and will thus be protected against a prior unrecorded conveyance. But if he merely retains the same rights he always had (to be paid the full amount of his debt, at the time promised), then he is not giving new value, and his mortgage will not be protected against a prior unrecorded conveyance.

b. Judgment and execution creditors: A creditor who obtains a judgment, or who is allowed to attach his debtor's property at the beginning of the lawsuit, gets a lien against the debtor's property. This lien may or may not be protected under the recording act against a prior unrecorded purchase, depending on how the statute is drafted. (If the statute only protects "purchasers," the lien creditor probably does not get protection against the prior unrecorded deed.)

3. Eligible to be recorded: The subsequent purchaser who wants the protection of the recording act must record his own deed, and that deed must be one which is in fact eligible to be recorded. If it is not, the purchaser will not be protected even if the recording clerk makes a mistake and accepts the document. [429]

a. Must record whole chain: Also, the subsequent grantee must see to it that his entire chain of title is recorded. (Thus if one of the subsequent grantee's predecessors in interest submitted, say, an improperly-notarized document that was therefore not eligible for recording, the subsequent grantee would lose.)

F. Notice to subsequent claimants: In virtually all jurisdictions (that is, jurisdictions having notice or race-notice statutes, but not those very few having pure race statutes) the subsequent purchaser will lose if he was on notice of the earlier deed. A purchaser can be on notice in three ways: (1) actual notice; (2) record notice; and (3) "inquiry" notice. [429]

1. Actual notice: If the subsequent purchaser is shown to have had actual notice of the existence of the prior unrecorded interest, he will not gain the protection of the recording act in a notice or notice-race jurisdiction.

2. Record notice: The subsequent grantee is deemed to have "record" notice if the prior interest is adequtely recorded. However, the mere fact that a deed is recorded somewhere in the public records does not mean that the recording is "adequate" - the document must be recorded in a way that a reasonable searcher would find it. [430 - 437]

a. Defective document: A document which is not entitled to be recorded will not give record notice, even if it is mistakenly accepted for recording. (Example: If the jurisdiction requires the deed to be notarized, and it is not, it will not give record notice. However, states often treat certain formal defects in deeds as being "cured" after the passage of a certain amount of time.)

b. Imputed knowledge: If proper recording of the earlier document took place, subsequent purchasers are on "record notice" even if they never actually see the document that has been filed. That is, the court imputes to the subsequent purchaser the knowledge which he would have obtained had he conducted a diligent title search.

c. "Chain of title": Therefore, the recording of an instrument gives record notice to a subsequent searcher only if that searcher would have found the document using generally-accepted searching principles (use of the grantor and grantee indexes). A recorded instrument which would not be found by these principles is said to be outside the searcher's "chain of title," and prevents the giving of record notice. [432 - 437]

Example: O conveys to A; A never records. A then conveys to B; B records. O conveys the same property to C; C records. Assume that C has no knowledge of the O-to-A or A-to-B conveyances. C will have priority over B, even though B's interest is recorded. This is because C, when searching title, has no way to know of the A-to-B deed - C would never find the original O-to-A conveyance, and thus cannot know to look under A's name in the grantor index to discover whether he ever conveyed to anyone else. (Nor would C have any way to know to look for B's name in the grantee index.) The A-to-B deed is said to be "outside C's chain of title"; C is therefore not on record notice of the A-to-B deed, and will take priority over B.

3. Inquiry notice: Even if a purchaser has neither record notice nor actual notice of a prior unrecorded conveyance, he may be found to have been on "inquiry" notice of it. Inquiry notice exists where a purchaser is in possession of facts which would lead a reasonable person in his position to make an investigation, which would in turn advise him of the existence of the prior unrecorded right. Such a person is on inquiry notice even if he does not in fact make the investigation. (But the purchaser is responsible only for those facts which the investigation would have disclosed.) [438 - 442]

a. Possession: Thus if the parcel is possessed by a person who is not the record owner, this will place a subsequent purchaser on inquiry notice. That is, the purchaser must: (1) view the property, to see whether it is in the possession of someone other than the record owner; and (2) if there is such a possessor, he must inquire as to the source of the possessor's rights in the property. (Example: Same facts as above example. C had a duty to inspect the property - if inspection would have disclosedthat B (or someone claiming under B) was in possession of the property, C would be held to be on "inquiry notice" of B's interest. Since C could then have learned B's name, he could have checked back in the records to find the A-to-B deed, and perhaps might have discovered the O-to-A unrecorded deed. If a judge decided that this investigation would have enabled C to trace B's interest all the way back to O, C would lose in a contest with B because of the inquiry notice principle.)

4. Timing of notice: In order for a subsequent purchaser to be protected by the recording act, she must have made substantial payments before being on notice of the prior conveyance. [441 - 442]

a. Installment contract: Where the subsequent purchaser is buying under an installment contract, if she receives record notice (but not actual notice), she is protected as to payments she makes. (Example: O conveys to A, who does not record. O conveys to B under an installment contract. After B has started making payments, A records. B doesn't learn of the recording, and keeps making payments. Most courts hold that B is protected as a b.f.p. as to payments made before and after A's recording, as long as the payments are made before B received actual notice of the prior conveyance to A.)

5. Purchaser from one without notice: If a purchaser who takes without notice of a prior unrecorded instrument resells the property, the new purchaser is treated as one who may claim the benefit of the recording act, even if he buys with actual notice. This is done to protect the earlier (innocent) purchaser's market for the property. [442]

II. TITLE REGISTRATION (THE TORRENS SYSTEM)

A. How the system works: In some parts of the U.S., the "title registration" system or "Torrens" system is available as an option. This system enables the owner of a parcel to obtain a certificate of title, similar to an automobile certificate of title. When the holder of the certificate wishes to sell, his prospective purchaser merely has to inspect the certificate itself (on which nearly all encumbrances must be noted) - a lengthy title examination is unnecessary. [442 - 443]

1. How it works: The registration process begins with an application by a person claiming ownership of a parcel to have it registered. Notice is given to anyone shown on the ordinary land records as having an interest in the property. Then, a court hears any claims regarding the property, and if satisfied that the applicant indeed has good title, orders a certificate of title to be issued. [443 - 445]

B. Where used: The Torrens system is never required, but is available as an option in 11 states. In only a few areas does the system account for a significant portion of the land area (e.g., Hawaii, Boston, parts of Minnesota and parts of Ohio.) [443]

III. TITLE ASSURANCE

A. Examination by lawyer: One way the purchaser sometimes assures himself that he is getting valid title is to have a title examination performed by his lawyer. Usually, the lawyer does not directly search the records; instead, he orders an "abstract" of title from an abstract company and reviews that abstract. The lawyer then gives his client a written opinionas to the state of the title. The lawyer is liable for his own negligence in rendering an opinion on the title as presented in the abstract (but not liable for any mistake in the abstract itself - here, the abstract company might be liable). [446]

B. Title insurance: The leading means by which a buyer of property can assure himself of a good title is title insurance. [447 - 451]

1. Covers matters not shown in title search: Title insurance will protect the buyer against many risks that would not be disclosed even by the most careful title search. For instance, the buyer would be covered if title turns out to be bad because of forgery of an instrument in the chain, fraudulent misrepresentation of marital status by a grantor (so that the spouse's inchoate right of dower persevered), defects in a prior grant due to lack of delivery, etc. Also, the policy usually covers the insured's litigation costs in defending his title even if the defense is successful.

2. Scope: But title policies usually contain a number of exceptions, including the following: [447 - 448]

a. Facts which survey would show: Policies usually exclude facts which an accurate survey of the property would disclose. Thus encroachments (either by the insured onto adjacent property or vice versa) and violations of set-back rules are generally not covered.

b. Adverse possession: Also, the title policy does not protect against a claim of adverse possession, at least if the physical possession exists at the time the policy is written. Therefore, the buyer must still inspect the property.


 

Chapter 13 
RIGHTS INCIDENT TO LAND

I. NUISANCE

A. Defined: A landowner may sue another person for "private nuisance." Private nuisance is an interference with a landowner's use and enjoyment of his land. [456]

1. Substantial interference: The interference with the plaintiff's use and enjoyment must be substantial. Thus if P's damage consists of his being inconvenienced or subjected to unpleasant smells, noises, etc., this will be "substantial" damage only if a person of normal sensitivity would be seriously bothered.

2. Defendant's mental state: There is no rule of "strict liability" in nuisance. P must show that D's conduct was negligent, intentional or abnormally dangerous.

a. Intentional: If P wants to show that D's conduct was "intentional," P does not have to show that D desired to interfere with P's use and enjoyment of his land. P merely has to show that D knew with substantial certainty that such interference would occur. (Example: D, a factory owner, knows that his plant is spewing pollutants and smoke into the air over P's property. P can sue D for "intentional" nuisance so long as P can show that D was on notice of what was happening, even if D did not "desire" thisresult to occur.)

3. Unreasonableness: Even if D's conduct is intentional, P will not win in nuisance unless he shows that D's actions were "unreasonable." In determining what is reasonable, the nature of the neighborhood is likely to be quite significant. (Example: A steel mill located in an otherwise completely residential area is much more likely to be found an "unreasonable" interference than is a steel mill in the middle of an industrial park.)

B. Remedies: P has a chance at either or both of the following remedies: [458]

1. Damages: If the harm has already occurred, P can recover compensatory damages.

2. Injunction: If P can show that damages would not be a sufficient remedy, he may be entitled to an injunction against continuation of the nuisance. To get an injunction, P must show that the harm to him actually outweighs the social utility of D's conduct. (Example: D operates a large cement plant employing hundreds of people. The Ps sue D for nuisance because of dirt, smoke and vibrations, which interfere with their nearby property. A court might not issue an injunction even though nuisance occurred, because the harm to the Ps may be found not to outweigh the job-creation and other economic utility of D's plant. But in that event, D would still have to pay money damages for the harm, no matter how socially useful D's conduct.)

II. LATERAL AND SUBJACENT SUPPORT

A. Generally: Every landowner is entitled to have his land receive the necessary physical support from adjacent and underlying soil. The right to support from adjoining soil is called the right of "lateral" support. The right to support from underneath the surface is known as the right to "subjacent" support. [458]

B. Lateral support: The right to lateral support is absolute. That is, once support has been withdrawn and injury occurs, the responsible person is liable even if he used utmost care in his operation. (Example: A and B are adjoining landowners. A very carefully constructs a large excavation extending almost to the edge of his property. This causes B's soil to run into A's excavation, impairing the surface of B's property. B's right to lateral support has been violated, and he may recover damages.) [459]

1. Building: But the absolute right to lateral support exists only with respect to land in its natural state. If the owner has constructed a building, and the soil under the building subsides in part due to the adjacent owner's acts, but also in part because of the weight of the building itself, the adjacent owner is not liable unless he has been negligent. (If P's building is damaged, and he can show that his land would have been damaged even with no building on it, courts are split as to whether D is liable in the absence of negligence.)

C. Subjacent support: The right to subjacent support arises only where sub-surface rights (i.e., mineral rights) are severed from the surface rights. When such a severance has taken place, the owner of the surface interest has the right not to have the surface subside or otherwise be damaged by the carrying out of the mining. [460]

1. Structures existing: The surface owner has the absolute right tosupport, not only of the unimproved land, but also support of all structures existing on the date when the severance took place.

III. WATER RIGHTS

A. Drainage: Courts are split as to the rights of an owner to drain surface water from his property onto the property of others. In general, courts seem to be moving to a rule that an owner may do this only if his conduct is "reasonable" under all the circumstances. [460]

B. Streams and lakes: States are sharply split as to when and how a landowner may make use of waterfront streams and lakes that abut his property. [461 - 463]

1. Common law approach: In all parts of the country except for about 17 western states, courts apply the common-law "riparian rights" theory. Under this theory, no advantage is gained by priority of use. Instead, each riparian owner is entitled to only so much of the water as he can put to beneficial use upon his land, with due regard for the equal rights of the other riparian owners, and without regard to how long the owner has been using the water. (Example: A and B each own property that abuts a river. A is upstream from B. Under the common-law "riparian rights" theory, A may make "reasonable use" of the water - for instance, to irrigate his crops - but reasonableness will be determined by reference to B's reasonable needs as well as A's. The fact that A has been using the river for a particular use longer than B, or vice versa, is irrelevant.)

a. Riparian only: Only riparian owners are entitled to make use of the water, under this doctrine. That is, the owner's land must abut the stream or lake, at least in part. So one whose land is not contiguous with the water may not carry the water by pipe or ditch to his property.

2. Prior appropriation doctrine: Seventeen arid states (all west of the Mississippi) adopt a completely different theory, called the prior appropriation doctrine. In many of these states (e.g., California), an owner must apply for a permit to use the water; if the application is accepted by the government, the user's priority dates from the time of the application.

a. Riparian ownership not required: Under the prior appropriation system, water may be appropriated by a non-riparian owner.

C. Ground water: In most American states, an owner may make only "reasonable use" of ground water drawn from under his property. For instance, he may generally use as much of the water as he wishes for applications on the parcel which sits on top of the pool, but he may not divert the water to other properties which he may own. [463 - 464]

IV. AIR RIGHTS

A. Airplane flights: [464]

1. Direct overflights: If an airport permits flights to occur directly over an owner's property, and within the "immediate reaches" of his land, the landowner may sue in trespass. But flights beyond a certain height are not deemed to be in the "immediate reaches," so no trespass suit may be brought.

2. Adjacent areas: If flights occur at low altitude on property adjacent to P's property, ome states may permit him to bring a suit for nuisance if the flights are low enough, frequent enough and noisy enough to substantially interfere with his use and enjoyment of his land. Also, a court may let such an owner bring a suit in "inverse condemnation," to establish that the interference is so great that it amounts to a "taking" for which compensation must be given under the U.S. Constitution.

B. Other air-rights issues: [465 - 466]

1. Tall buildings: An owner generally has the right to build as high a building as he wishes (assuming that it satisfies all applicable zoning requirements and building restrictions). Thus if two owners are adjacent to each other, one cannot object to the other's tall building on the grounds, say, that it ruins the quality of radio and television signals.

2. Right to sunlight: Generally, a landowner has no right to sunlight. For instance, an owner almost never acquires an easement of "light and air" by implication or even by necessity. So if A and B are adjoining owners, B can, without liability, build in such a way that A's sunlight is blocked. (But if A uses sunlight as a source of solar energy, it is possible that he might have a claim - perhaps in nuisance - against B for blocking that energy source by a tall building.)