Florida International University Property Condemnation Paper

Debate This: Property condemnation Vern Shoepke bought a two-story home in Roche, Maine. The warranty deed did not specify what covenants would be included in the conveyance. The property was adjacent to a public park that included a popular Frisbee golf course. (Frisbee golf is a sport similar to golf but using Frisbees.) Wayakichi Creek ran along the north end of the park and along Shoepke’s property. The deed allowed Roche citizens the right to walk across a five-foot-wide section of the lot beside Wayakichi Creek as part of a two-mile public trail system. Teenagers regularly threw Frisbee golf discs from the walking path behind Shoepke’s property over his yard to the adjacent park. Shoepke habitually shouted and cursed at the teenagers, demanding that they not throw the discs over his yard.Two months after moving into his Roche home, Shoepke leased the second floor to Lauren Slater for nine months. The lease agreement did not specify that Shoepke’s consent would be required to sublease the second floor. After three months of tenancy, Slater sublet the second floor to a local artist, Javier Indalecio. Over the remaining six months, Indalecio’s use of oil paints damaged the carpeting in Shoepke’s home. Using the information presented in the chapter, answer the following questions.What is the term for the right of Roche citizens to walk across Shoepke’s land on the trail?What covenants would most courts infer were included in the warranty deed that Shoepke received when he bought his house?Can Shoepke hold Slater financially responsible for the damage to the carpeting caused by Indalecio? Explain.Could the fact that teenagers continually throw Frisbees over Shoepke’s yard outside the second-floor windows arguably be a breach of the covenant of quiet enjoyment? Why or why not?Debate This:Under no circumstances should a local government be able to condemn property in order to sell it later to real estate developers for private use. 42
Learning Objectives
The four Learning Objectives below are designed to help improve your under- standing. After reading this chapter, you should be able to
answer the following questions:
1.
2.
3.
4.
What is a fixture, and how does it relate to real property rights?
What is the difference between a joint tenancy and a tenancy in common?
What are the requirements for acquiring property by adverse possession?
What are the duties of the landlord and the tenant with respect to the use and main- tenance of leased
property?
Real Property and Landlord-Tenant
Law
“The right of property is
the most sacred of all the rights of citizenship.”
From earliest times, property has provided a means for sur- vival. Primitive peoples lived off the fruits of the
land, eat- ing the vegetation and wildlife. Later, as the vegetation was cultivated and the wildlife
domesticated, property provided farmland and pasture.
Throughout history, property has continued to be an indicator of family wealth and social position. Indeed,
an individual’s right to his or her property has become, in the words of Jean-Jacques Rousseau, one of the
“most sacred of all the rights of citizenship.”
994
Jean-Jacques Rousseau
1712–1778
(French writer and philosopher)
In this chapter, we examine the nature of real property and the ways in which it can be owned and
transferred. We even consider whether the buyer of a haunted house can rescind the sale in this chapter’s
Spotlight Case. We also discuss leased property and landlord-tenant relationships.
42–1 The Nature of Real Property
Real property consists of land and the buildings, plants, and trees that are on it. Real property also includes
subsurface and airspace rights, as well as personal property that has become permanently attached to the
real property. Whereas personal property is movable, real property—also called real estate or realty—is
immovable.
ligonography/iStock/Getty Images
42–1a LandandStructures
Land includes the soil on the surface of the earth and the natural or artificial structures that are attached to it.
It further includes all the waters contained on or under the surface and much, but not necessarily all, of the
airspace above it. The exterior boundaries of land extend down to the center of the earth and up to the
farthest reaches of the atmosphere (subject to certain qualifications).
42–1b AirspaceandSubsurfaceRights
The owner of real property has rights to the airspace above the land, as well as to the soil and minerals
underneath it. Limitations on either airspace rights or subsurface rights normally must be indicated on the
document that transfers title at the time of purchase. When no such limitations, or encumbrances, are noted, a
purchaser generally can expect to have an unlimited right to possession of the property.
Airspace Rights Disputes concerning airspace rights may involve the right of commer- cial and private
planes to fly over property and the right of individuals and governments to seed clouds and produce rain
artificially. Flights over private land normally do not violate property rights unless the flights are so low and
so frequent that they directly interfere with the owner’s enjoyment and use of the land. Leaning walls or
buildings and projecting eave spouts or roofs may also violate the airspace rights of an adjoining property
owner.
Subsurface Rights In many states, land ownership may be separated, in that the surface of a piece of land
and the subsurface may have different owners. Subsurface rights can be extremely valuable, as these rights
include the ownership of minerals, oil, and natural gas. Subsurface rights would be of little value, however, if
the owner could not use the surface to exercise those rights. Hence, a subsurface owner has a right (called a
profit, to be discussed later in this chapter) to go onto the surface of the land to, for instance, discover and
mine minerals.
When ownership is separated into surface and subsurface rights, each owner can pass title to what she or he
owns without the consent of the other owner. Of course, conflicts can arise between the surface owner’s use
of the property and the subsurface owner’s need to extract minerals, oil, or natural gas. In that situation, one
party’s interest may become subservient (secondary) to the other party’s interest either by statute or by case
law.
If the owners of the subsurface rights excavate (dig), they are absolutely liable if their excavation causes the
surface to collapse. Many states have statutes that also make the excavators liable for any damage to
structures on the land. Typically, these statutes provide precise requirements for excavations of various
depths.
42–1c PlantLifeandVegetation
Plant life, both natural and cultivated, is also considered to be real property. In many instances, natural
vegetation, such as trees, adds greatly to the value of the realty. When a parcel of land is sold and the land has
growing crops on it, the sale includes the crops, unless otherwise specified in the sales contract. When crops
are sold by themselves, however, they are consid- ered to be personal property, or goods. Consequently, the
sale of crops is a sale of goods and thus is governed by the Uniform Commercial Code (UCC) rather than by
real property law.1
42–1d Fixtures
Certain personal property can become so closely associated with the real property to which it is attached that
the law views it as real property. Such property is known as a fixture—an item affixed to realty, meaning that
it is attached to the real property in a permanent way.
“The meek shall inherit the earth, but not its mineral rights.”
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Who owns airspace above residential land?
J. Paul Getty
1892–1976
(American entrepreneur and industrialist)
Fixture An item of personal property that has become so closely associated with real property that it is legally regarded as part of that
real property.
1. See UCC 2–107(2).
RSnapshotPhotos/Shutterstock.com
Learning Objective 1
What is a fixture, and how does it relate to real property rights?
Under what circumstances is an industrial-quality irrigation system considered a fixture?
Robert G. Ingersoll
1833–1899
(American politician and lecturer)
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UNIT SEvEN: Property and Its Protection
FeeSimple Anownershipinterest in land in which the owner has the greatest possible aggregation of rights, privileges, and power.
“Few … men own their property. The property owns them.”
The item may be embedded in the land, or permanently attached to the property or to another fixture on the
property by means of cement, mortar, bolts, nails, roots, or screws. An item, such as a statue, may even sit on
the land without being attached, as long as the owner intends the property to be a fixture.
Fixtures are included in the sale of land if the sales contract does not provide otherwise. 2 The sale of a house
includes the land and the house and any detached garage on the land, as well as the cabinets, plumbing, and
windows. Because these are permanently affixed to the property, they are considered to be a part of it.
Certain items, such as drapes and window-unit air conditioners, are difficult to classify. Thus, a contract for
the sale of a house or commercial realty should indicate which items of this sort are included in the sale.
Example 42.1 Rosemary & Sage Farm has an eight-tower center-pivot irrigation system that is bolted to a
cement slab and connected to an underground well. The bank holds a mort- gage note on the farm secured by
“all buildings, improvements, and fixtures.” Later, when Rosemary & Sage files for bankruptcy, a dispute
arises between the bank and another creditor over the irrigation system. In this situation, a court is likely to
find that the irrigation system is a fixture because it is firmly attached to the land and integral to the
operation of the farm. Therefore, the bank’s security interest will have priority over the other creditor’s
interest. ■
42–2 Ownership Interests and Leases
Ownership of real property is abstract and differs from ownership of personal property. No one can actually
possess or hold a piece of land, the airspace above it, the earth below it, and all the water contained on it. The
legal system therefore recognizes certain rights and duties that constitute ownership interests in real
property.
Traditionally, ownership interests in real property were referred to as estates in land, which include fee
simple estates, life estates, and leasehold estates. We examine estates in land, forms of concurrent ownership,
and certain other interests in real property in the following subsections.
As you will see, ownership of real property (as well as personal property) can be viewed as a bundle of rights,
including the right to possess the property and to dispose of it by sale, gift, lease, or other means. A person
can own either the whole bundle of rights (a fee simple) or only a part of the rights. When only some of the
rights are transferred, the effect is to limit the ownership rights of both the transferor of the rights and the
recipient.
42–2a OwnershipinFeeSimple
One who possesses the entire bundle of rights is said to hold the property in fee simple (usu- ally referring to
fee simple absolute), which is the most complete form of ownership. An owner in fee simple is entitled to use,
possess, or dispose of the property as he or she chooses during his or her lifetime. The owner has the rights of
exclusive possession and use of the property. The owner can give the property away, sell it, or lease it.
Duration On the fee simple owner’s death, the interests in the property descend (pass down) to his or her
heirs, even if the owner has not executed a will. Thus, a fee simple is potentially infinite in duration and is
assigned forever to a person and her or his heirs without limitation or condition.
Limitations on Use The rights that accompany a fee simple include the right to use the land for whatever
purpose the owner sees fit. Of course, other laws, including applicable zoning regulations, noise regulations,
and environmental laws, may limit the owner’s ability to use the property in certain ways. A fee simple owner
cannot build a manufacturing plant on the property if doing so would violate applicable city or county rules
and regulations, for
2. Trade fixtures, which are items installed by a tenant for a commercial purpose (such as a walk-in cooler for a restaurant), are an exception and do not
become part of the landowner’s real property.
Songbird839/iStock/Getty Images
instance. Also, a person who uses his or her property in a manner that unreasonably inter- feres with others’
right to use or enjoy their own property can be liable for the tort of nuisance. Spotlight Case Example 42.2
Nancy and James Biglane owned and lived in a building in Natchez, Mississippi. Next door to the couple’s
property was the Under the Hill Saloon, a popular bar that featured live music. During the summer, the
Saloon, which had no air- conditioning, opened its windows and doors, and live music echoed up and down
the street. Although the Biglanes installed extra insulation, thicker windows, and air-conditioning units in
their building, the noise from the Saloon kept them awake at night. Eventually, the Biglanes sued the owners
of the Saloon for nuisance. The court held that the noise from the bar unreasonably interfered with the
Biglanes’ right to enjoy their property and
prohibited the Saloon from opening its windows and doors while playing music.3 ■ 42–2b LifeEstates
A life estate is an estate that lasts for the life of some specified individual. A conveyance, or transfer of real
property, “to Alex Munson for his life” creates a life estate. In a life estate, the life tenant’s ownership rights
cease to exist on the life tenant’s death.
The life tenant has the right to use the land provided that he or she commits no waste (injury to the land). In
other words, the life tenant cannot use the land in a manner that would adversely affect its value. Example
42.3 Julian, a life tenant on Blazin Acres, can use the land to harvest crops. If mines and oil wells are already
on the land, Julian can extract min- erals and oil from it, but he cannot drill new oil wells or excavate mines on
the property. ■
The life tenant also has the right to create liens, easements (discussed shortly), and leases, but none can
extend beyond the life of the tenant. In addition, with a few exceptions, the owner of a life estate has an
exclusive right to possession during her or his lifetime.
Along with these rights, the life tenant also has some duties. He or she must keep the prop- erty in repair and
pay property taxes. In short, the owner of a life estate has the same rights as a fee simple owner, with a few
exceptions. The life tenant must maintain the value of the property during her or his tenancy and he or she
cannot sell the property or leave it to his or her heirs.
The distinction between a life estate and a fee simple determined the result in the fol- lowing case.
3. Biglane v. Under the Hill Corp., 949 So.2d 9 (Miss.Sup.Ct. 2007).
Case 42.1
Life Estate An interest in land that exists only for the duration of the life of a specified individual, usually the holder of the estate.
Conveyance Thetransferoftitle to real property from one person to another by deed or other document.
Waste Theuseofrealpropertyin a manner that damages or destroys its value.
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Background and Facts When Sidney Solberg died, 100 mineral acres—that is, the right to all of
the minerals under a certain 100 acres—and other real property in his estate were dis- tributed to
his widow, Lillian, for her life. The remainder interest (the right of ownership after Lillian’s interest
ended) was conveyed to their four children, including Glenn Solberg.
Later, Lillian married Lyle Nelson. When Lillian passed away, a codicil (addition) to her will
allegedly gave the 100 mineral acres to Glenn. The codicil also purported to create for Glenn an
option
to buy the other real property she had inherited from Sidney. When Lyle Nelson died, Glenn filed a
claim in a North Dakota state court against Nelson’s estate. Glenn claimed that under the terms of
the codicil to Lillian’s will, he was entitled to the ownership of the 100 mineral acres and the right
to buy the other property. The court dismissed Glenn’s claim. He appealed to the state supreme
court.
In the Words of the Court
JENSEN, Justice. *** *
In the Matter of the Estate of Nelson
North Dakota Supreme Court, 2018 ND 118, 910 N.W.2d 856 (2018).
(Continues )
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UNIT SEvEN: Property and Its Protection
Our law regarding the rights of someone who holds a life interest in property is * * * well
established. It is well-settled [that] a life estate holder is entitled to both the possession and the use
of the property, * * * including the right to rents, issues, and profits generated by the parcel * * *. A
life tenant is entitled to possession and enjoyment of the property as long as the estate endures; he or
she may convey or lease his or her interest, but may not disregard the rights of those who take when
the life estate ends. * * * No future interest can be defeated or barred by any alienation [voluntary
transfer of real property] or other act of the owner of the [life] interest. [Emphasis added.]
In this case, Lillian Nelson obtained a life estate interest in the 100 mineral acres and in the option
property * * * from Sidney Solberg’s estate. The codicil relied upon by Glenn Solberg itself identifies
Lillian Nelson’s interest as being limited to a life estate. As a life tenant she was limited to conveying
an interest in her property only to the extent of her life and she could not make any transfers that
would disregard the rights of those who would take the property when her life ended. As such,
Lillian Nelson’s attempt to provide an interest in the 100 mineral acres to Glenn Solberg in her * * *
will is invalid because it disregards the rights of those who would take the property when her life
ended. Similarly, her
attempt to convey a right of first refusal to the option property * * * is also invalid because it
disregards the rights of those who would take the property when her life ended.
Upon Lillian Nelson’s death * * * her life interest ended and the 100 mineral acres and the option
property became the property of her four children as the holders of the remainder interest. * * *
The Lyle Nelson Estate did not hold, and Lyle Nelson never held, an interest in the 100 mineral
acres or the option property. * * * Glenn Solberg could not recover property from the Lyle Nelson
Estate if Lyle Nelson never held an interest in the property.
Decision and Remedy The North Dakota Supreme Court affirmed the dismissal of Glenn’s claim.
“The [lower] court prop- erly concluded that, with certainty, it would be impossible for Glenn
Solberg to obtain the relief he requested from the Lyle Nelson Estate.”
Critical Thinking
• What If the Facts Were Different? Suppose that Sidney Solberg had disposed of his entire
estate in fee simple before his death. Would the result have been different? Discuss.
ConcurrentOwnership Joint ownership.
TenancyinCommon Joint ownership of property in which each party owns an undivided interest that passes to his or her heirs at
death.
JointTenancy Jointownership
of property in which each co-owner owns an undivided portion of the property. On the death of one of
the joint tenants, his or her interest automatically passes to the surviving joint tenant(s).
42–2c ConcurrentOwnership
Persons who share ownership rights simultaneously in particular property (including real property and
personal property) are said to have concurrent ownership. There are two principal types of concurrent
ownership: tenancy in common and joint tenancy. Concurrent ownership rights can also be held in a tenancy
by the entirety or as community property, but these types of concurrent ownership are less common.
Tenancy in Common The term tenancy in common refers to a form of co-ownership in which each of two
or more persons owns an undivided interest in the property. The interest is undivided because each tenant
shares rights in the whole property. On the death of a tenant in common, that tenant’s interest in the property
passes to her or his heirs.
Example 42.4 Four friends purchase a condominium unit in Hawaii together as tenants in common. This
means that each of them has a one-fourth ownership interest in the whole. If one of the four owners dies a
year after the purchase, his ownership interest passes to his heirs (his wife and children, for instance) rather
than to the other tenants in common. ■
Unless the co-tenants have agreed otherwise, a tenant in common can transfer her or his interest in the
property to anyone without the consent of the remaining co-owners. In most states, it is presumed that a cotenancy is a tenancy in common unless there is specific language indicating the intent to establish a joint
tenancy (discussed next).
Joint Tenancy In a joint tenancy, each of two or more persons owns an undivided interest in the property,
but a deceased joint tenant’s interest passes to the surviving joint tenant or tenants.
Right of Survivorship. The right of a surviving joint tenant to inherit a deceased joint tenant’s ownership
interest—referred to as a right of survivorship—distinguishes a joint ten- ancy from a tenancy in common.
Example 42.5 Jerrold and Eva are married and purchase a
house as joint tenants. The title to the house clearly expresses the intent to create a joint tenancy because it
says “to Jerrold and Eva as joint tenants with right of survivorship.” Jerrold has three children from a prior
marriage. If Jerrold dies, his interest in the house automatically passes to Eva rather than to his children from
the prior marriage. ■
Termination of a Joint Tenancy. A joint tenant can transfer her or his rights by sale or gift to another without
the consent of the other joint tenants. Doing so terminates the joint tenancy. The person who purchases the
property or receives it as a gift becomes a tenant in common, not a joint tenant. Example 42.6 Three brothers,
Brody, Saul, and Jacob, own land as joint tenants. Brody is experiencing financial difficulties and sells his
interest in the prop- erty to Beth. The sale terminates the joint tenancy, and now Beth, Saul, and Jacob hold
the property as tenants in common. ■
A joint tenant’s interest can also be levied against (seized by court order) to satisfy the tenant’s judgment
creditors. If this occurs, the joint tenancy terminates, and the remaining owners hold the property as tenants
in common. (Judgment creditors can also seize the interests of tenants in a tenancy in common.)
Tenancy by the Entirety A less common form of shared ownership of real property by married persons
is a tenancy by the entirety. It differs from a joint tenancy in that neither spouse may separately transfer his or
her interest during his or her lifetime unless the other spouse consents. In some states in which statutes give
the wife the right to convey her property, this form of concurrent ownership has effectively been abolished. A
divorce, either spouse’s death, or mutual agreement will terminate a tenancy by the entirety.
Community Property A limited number of states4 allow married couples to own property as community
property. If property is held as community property, each spouse technically owns an undivided one-half
interest in the property. This type of ownership applies to most property acquired by either spouse during
the course of the marriage. It generally does not apply to property acquired prior to the marriage or to
property acquired by gift or inheri- tance as separate property during the marriage. After a divorce,
community property is divided equally in some states and according to the discretion of the court in other
states.
42–2d LeaseholdEstates
A leasehold estate is created when a real property owner or lessor (landlord) agrees to convey the right to
possess and use the property to a lessee (tenant) for a certain period of time. The tenant has a qualified right
to exclusive possession. It is qualified because the landlord has a right to enter onto the premises to ensure
that no waste (damage or destruction) is being committed.
The temporary nature of possession under a lease is what distinguishes a tenant from a purchaser, who
acquires title to the property. The tenant can use the land—for instance, by harvesting crops—but cannot
injure it by such activities as cutting down timber for sale or extracting oil.
Fixed-Term Tenancy A fixed-term tenancy, also called a tenancy for years, is created by an express
contract by which property is leased for a specified period of time. Signing a one- year lease to occupy an
apartment, for instance, creates a fixed-term tenancy. The term need not be specified by date and can be
conditioned on the occurrence of an event, such as leasing a cabin for the summer or an apartment in New
Orleans during Mardi Gras.
At the end of the period specified in the lease, the lease ends (without notice), and posses- sion of the
property returns to the lessor. If the tenant dies during the period of the lease, the lease interest passes to the
tenant’s heirs as personal property. Often, leases include renewal or extension provisions.
4. These states include Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Puerto Rico allows property to
be owned as community property as well.
Tenancy by the Entirety Joint ownership of property by a married couple in which neither spouse can transfer his or her interest in
the property without the consent of the other.
Community Property A form of concurrent property ownership in which each spouse owns an undivided one-half interest in
property acquired during the marriage.
Leasehold Estate An interest in real property that gives a tenant a qualified right to possess and/or use the property for a limited time
under a lease.
Fixed-Term Tenancy A type of tenancy under which property is leased for a specified period of time, such as a month, a year, or a
period of years. It is also called a tenancy for years.
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Learning Objective 2
What is the difference between a joint tenancy and a tenancy in common?
1000
UNIT SEvEN: Property and Its Protection
Periodic Tenancy A lease interest for an indefinite period involving payment of rent at fixed intervals, such as week to week, month to
month, or year to year.
Periodic Tenancy A periodic tenancy is created by a lease that does not specify how long it is to last but
does specify that rent is to be paid at certain intervals. This type of tenancy is automatically renewed for
another rental period unless properly terminated. Example 42.7 Kayla enters into a lease with Capital
Properties. The lease states, “Rent is due on the tenth day of every month.” This provision creates a periodic
tenancy from month to month. ■ This type of tenancy can also extend from week to week or from year to
year.
Under the common law, to terminate a periodic tenancy, the landlord or tenant must give at least one period’s
notice to the other party. If the tenancy extends from month to month, for instance, one month’s notice must
be given prior to the last month’s rent payment. Today, how- ever, many states’ statutes require a different
period for notice of termination in a periodic tenancy.
Tenancy at Will With a tenancy at will, either party can terminate the tenancy without notice. This type of
tenancy can arise if a landlord allows a person to live on the premises without paying rent or rents property
to a tenant “for as long as both agree.” Tenancies at will are rare today because most state statutes require a
landlord to provide some period of notice to terminate a tenancy. States may also require a landowner to
have sufficient cause to end a residential tenancy.
Tenancy at Sufferance The mere possession of land without right is called a tenancy at sufferance. A
tenancy at sufferance is not a true tenancy because it is created when a tenant wrongfully retains possession
of property. Whenever a tenancy for years or a periodic ten- ancy ends and the tenant continues to retain
possession of the premises without the owner’s permission, a tenancy at sufferance is created.
42–2e NonpossessoryInterests—Easements,Profits,andLicenses
In contrast to the types of property interests just described, some interests in land do not include any rights
to possess the property. These interests are known as nonpossessory interests and include easements, profits,
and licenses.
An easement is the right of a person to make limited use of another person’s real property without taking
anything from the property. An easement, for instance, can be the right to walk or drive across another’s
property. In contrast, a profit5 is the right to go onto land owned by another and take away some part of the
land itself or some product of the land.
Example 42.8 Shawn owns The Dunes. Shawn gives Carmen the right to go there to remove all the sand and
gravel that she needs for her cement business. Carmen has a profit. ■
Easements and profits can be classified as either appurtenant or in gross. Because ease- ments and profits are
similar and the same rules apply to both, we discuss them together.
Easement or Profit Appurtenant An easement or profit appurtenant arises when the owner of one
piece of land has a right to go onto (or remove something from) an adjacent piece of land owned by another.
The land that is benefited by the easement is called the dominant estate, and the land that is burdened is
called the servient estate.
Because easements appurtenant are intended to benefit the land, they run (are conveyed) with the land when
it is transferred. Example 42.9 Taylor has a right to drive his car across Green’s land, which is adjacent to
Taylor’s land. This right-of-way over Green’s property is an easement appurtenant to Taylor’s property and
can be used only by Taylor. If Taylor sells his land, the easement runs with the land to benefit the new owner.
■
Easement or Profit in Gross In an easement or profit in gross, the right to use or take things from
another’s land is given to one who does not own an adjacent tract of land. These easements are intended to
benefit a particular person or business, not a particular piece of land, and cannot be transferred.
The lease agreement for the apartment in this building states that rent is due on the first of each month. What type of
tenancy is created?
TenancyatWill Atypeoftenancy that either the landlord or the tenant can terminate without notice.
Tenancy at Sufferance A tenancy that arises when a tenant wrongfully continues to occupy leased property after the lease has
terminated.
NonpossessoryInterest Inthe context of real property, an interest that involves the right to use land but not the right to possess it.
Easement Anonpossessoryright, established by express or implied agreement, to make limited use of another’s property without
removing anything from the property.
Profit In real property law, the right to enter onto another’s property and remove something of value from that property.
5. As used here, the term profit does not refer to the profits made by a business firm. Rather, it means a gain or an advantage.
Jitalia17/iStock/Getty Images
Example 42.10 Avery owns a parcel of land with a marble quarry. Avery conveys (transfers) to Classic Stone
Corporation the right to come onto her land and remove up to five hundred pounds of marble per day. Classic
Stone owns a profit in gross and cannot transfer this right to another. ■ Similarly, when a utility company is
granted an easement to run its power lines across another’s property, it obtains an easement in gross.
Creation of an Easement or Profit Most easements and profits are created by an express grant in a
contract, a deed, or a will. This allows the parties to include terms defining the extent and length of time of
use. In some situations, an easement or profit can also be cre- ated without an express agreement.
An easement or profit may arise by implication when the circumstances surrounding the division of a parcel
of property imply its existence. Example 42.11 Mathews divides a parcel of land that has only one well for
drinking water. If Mathews conveys the half without a well to Dean, a profit by implication arises because
Dean needs drinking water. ■
An easement or profit may also be created by necessity. An easement by necessity does not require a division
of property for its existence. A person who rents an apartment, for instance, has an easement by necessity in
the private road leading up to the apartment building.
An easement or profit may arise by prescription when one person uses another person’s land without the
landowner’s consent. The use must be apparent and continue for the length of time required by the applicable
statute of limitations. (In much the same way, title to property may be obtained by adverse possession,
discussed later in this chapter.)
Case Example 42.12 Junior and Wilma Thompson sold twenty-one of their fifty acres of land in Missouri to
Walnut Bowls, Inc. The deed expressly reserved an easement to the Thompsons’ remaining twenty-nine
acres, but it did not fix a precise location for the ease- ment. James and Linda Baker subsequently bought the
remaining acreage of the Thompsons’ land. Many years later—on learning of the easement to the Bakers’
property—a potential buyer of Walnut Bowls’ property refused to go through with the sale.
Walnut Bowls then put steel cables across its driveway entrances, installed a lock and chain on an access gate,
and bolted a “No Trespassing” sign facing the Bakers’ property. The Bakers sued. Ultimately, a state
intermediate appellate court found that an easement existed and instructed the trial court to determine its
location. An easement can be created by deed even though its specific location is not identified. If the
easement is not identified by agree- ment between the parties or inferred from use, then a court must
determine its location.6 ■
Termination of an Easement or Profit An easement or profit can be terminated in several ways.
The simplest way is to deed it back to the owner of the land that is burdened by it. Similarly, if the owner of an
easement or profit becomes the owner of the property burdened by it, then it is merged into the property.
Another way to terminate an easement or profit is to abandon it and create evidence of intent to relinquish
the right to use it. Mere nonuse will not extinguish an easement or profit unless the nonuse is accompanied by
an overt act showing the intent to abandon.
License In the context of real property, a license is the revocable right to enter onto another person’s land.
It is a personal privilege that arises from the consent of the owner of the land and can be revoked by the
owner. A ticket to attend a movie at a theater or a concert is an example of a license.
In essence, a license grants a person the authority to enter the land of another and perform a specified act or
series of acts without obtaining any permanent interest in the land. When a person with a license exceeds the
authority granted and undertakes an action that is not permitted, the property owner can sue that person in
tort law for trespass.
Know This
An easement appurtenant requires two adjacent pieces of land owned by two different persons, but an
easement in gross needs only one piece of land owned by someone other than the owner of the easement.
CHAPTER 42: Real Property and Landlord-Tenant Law
1001
If an easement’s location is not precisely fixed, is the easement still valid?
License In the context of real property, a revocable right or privilege to enter onto another person’s land.
6. Baker v. Walnut Bowls, Inc., 423 S.W.3d 293 (Mo.App. 2014).
woodygraphs/Shutterstock.com
1002 UNIT SEvEN: Property and Its Protection
Case Example 42.13 Richard and Mary Orman purchased real property owned at one time by Sandra Curtis.
Part of the garage extended nine feet onto Curtis’s neighboring property. In an agreement on file with the
deed, Curtis had given the Ormans permission to use the garage as long as it continued to be used as a garage.
After the Ormans moved in, they con- verted the garage’s workshop into guest quarters but continued to use
the garage as a garage.
A dispute arose over the driveway shared by Curtis and the Ormans, which straddled the property line. The
Ormans filed a suit claiming that Curtis left “junk objects” near the driveway that impeded their access. Curtis
countered that the permission she had given the buyers to use the garage was a license. She claimed that the
Ormans, by converting the workshop into living quarters, had exceeded their authority under the license,
which she could therefore revoke. The court looked at the agreement’s wording, which clearly gave the
Ormans the right to use the garage but did not mention the workshop. The court concluded that because the
Ormans were continuing to use the garage as a garage, Curtis could not revoke their right to do so. 7 ■
Exhibit 42–1 illustrates the various interests in property discussed in this chapter.
42–3 Transfer of Ownership
Ownership interests in real property are frequently transferred (conveyed) by sale, and the terms of the
transfer are specified in a real estate sales contract.
Real property ownership can also be transferred by gift, by will or inheritance, by adverse possession, or by
eminent domain. When ownership rights in real property are transferred, the type of interest being
transferred and the conditions of the transfer normally are set forth in a deed executed by the person who is
conveying the property.
42–3a RealEstateSalesContracts
In some ways, a sale of real estate is similar to a sale of goods, because it involves a transfer of ownership,
often with specific warranties. A sale of real estate, however, is a more com- plicated transaction that involves
certain formalities that are not required in a sale of goods. In part because of these complications, real estate
brokers or agents who are licensed by the state generally assist the buyers and sellers during a real estate
sales transaction.
Usually, the parties to a sale of real estate enter into a detailed contract setting forth their agreement. The
contract includes such terms as the purchase price, the type of deed the buyer will receive, the condition of
the premises, and any items that will be included.
7. Orman v. Curtis, 54 Misc.3d 1206(A), 50 N.Y.S.3d 27 (2017). Exhibit 42–1 Interests in Real Property
1.
2.
Fee simple—The most complete form of ownership.
Life estate—An estate that lasts for the life of a specified individual.
3. Concurrentownership—Ownershipbytwoormorepersonswhohold
Ownership Interests
Leasehold Estates
Nonpossessory Interests
title to property together. Types of concurrent ownership are as follows:
1.
2.
3.
4.
Tenancy in common
Joint tenancy
Tenancy by the entirety
Community property
1.
2.
3.
4.
Fixed-term tenancy (tenancy for years)
Periodic tenancy
Tenancy at will
Tenancy at sufferance
1. Easements 2. Profits
3. Licenses
Unless the buyer pays cash for the property, he or she must obtain financing through a mortgage loan. Real
estate sales contracts can be made contingent on the buyer’s ability to obtain financing at or below a specified
rate of interest. The contract may also be contingent on certain events, such as the completion of a land
survey or the property’s passing one or more inspections. Normally, the buyer is responsible for having the
premises inspected for physical or mechanical defects and for insect infestation.
ImpliedWarrantiesintheSaleofNewHomes Moststatesrecognizeawarranty—the implied warranty
of habitability—in the sale of new homes. Because the warranty is implied, it need not be included in the
contract of sale or the deed to be effective.
Under this warranty, the seller of a new home essentially warrants that it is in reasonable working order and
is of reasonably sound construction. Thus, the seller is in effect a guar- antor of the home’s fitness. In some
states, the warranty protects not only the first purchaser but any subsequent purchaser as well.
Seller’s Duty to Disclose Hidden Defects In most jurisdictions, courts impose on sellers a duty to
disclose any known defect that materially affects the value of the property and that the buyer could not
reasonably discover. Failure to disclose such a material defect gives the buyer the right to rescind the contract
and to sue for damages based on fraud or misrepresentation. The buyer generally must bring such a suit
within a specified time.
Example 42.14 Matthew Newson partially renovates a house in Louisiana and sells it to Terry and Tabitha
Moreland for $68,000. Two months after the Morelands move in, they discover rotten wood behind the tile in
the bath- room and experience problems with the plumbing. The state statute specifies that the Morelands
have one year from the date of the sale or the discovery of the defect to file a lawsuit. Therefore, the
Morelands must file suit within twelve months of discovering the defects (which would be fourteen months
from the date of the sale). ■
In the following Spotlight Case, the court had to decide whether the buyer of a “haunted” house had the right
to rescind the sales contract.
Spotlight on Sales of Haunted Houses: Case 42.2
Implied Warranty of Habitability
An implied promise by a seller of a new house that the house is fit for human habitation. Also, the implied promise by a landlord that
rented residential premises are habitable.
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1003
If this homeowner discovers numerous defects in her recently purchased house, can she wait years to attempt to rescind
the contract?
Stambovsky v. Ackley
Supreme Court, Appellate Division, New York, 572 N.Y.S.2d 672, 169 A.D.2d 254 (1991).
When will a buyer of a house that is allegedly haunted have the right to rescind the deal?
Background and Facts Jeffrey Stambovsky signed a contract to buy Helen Ackley’s house in
Nyack, New York. After the contract was signed, Stambovsky discovered that the house was widely
reputed to be haunted. The Ackley family claimed to have seen poltergeists on numerous occasions over the previous nine years. The Ackleys had been interviewed about the house in both a
national publication (Reader’s Digest ) and the local newspaper. The house was included on a
walking tour of Nyack, New York, as “a riverfront Victorian (with ghost).”
When Stambovsky learned of the house’s repu- tation, he sued to rescind the contract, alleging that
Ackley and her real estate agent had made material misrepresentations when they failed to disclose
Ackley’s belief that the house was haunted. Ackley argued that she was under no duty to disclose to
the buyer the home’s haunted reputation. The trial court dis- missed Stambovsky’s case, and
Stambovsky appealed.
In the Words of the Court
Justice RUBIN delivered the opinion of the Court. * * * *
(Continues )
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RuslanDashinsky/E+/Getty Images
1004
UNIT SEvEN: Property and Its Protection
While I agree with [the trial court] that the real estate broker, as agent for the seller, is under no
duty to disclose to a potential buyer the phantasmal reputation of the premises and that, in his
pursuit of a legal remedy for fraudulent misrepresentation against the seller, plaintiff hasn’t a ghost
of a chance, I am nevertheless moved by the spirit of equity to allow the buyer to seek rescission of
the contract of sale and recovery of his down payment. New York law fails to recognize any remedy
for damages incurred as a result of the seller’s mere silence, applying instead the strict rule of
caveat emptor [Latin for “let the buyer beware”]. Therefore, the theoretical basis for granting relief,
even under the extraordinary facts of this case, is elusive if not ephemeral [short-lived].
*** *
The doctrine of caveat emptor requires that a buyer act prudently to assess the fitness and value of his
purchase and operates to bar the purchaser who fails to exercise due care from seeking the equitable
remedy of rescission. * * * Applying the strict rule of caveat emptor to a contract involving a house
possessed by poltergeists conjures up visions of a psychic or medium routinely accompanying the
structural engineer and Terminix man on an inspection of every home subject to a contract of sale.
It portends that the prudent attorney will estab- lish an escrow account lest the subject of the
transaction come back to haunt him and his client—or pray that his malpractice insurance coverage
extends to supernatural disasters. In the interest of avoiding such untenable consequences, the
notion that a haunting is a condi- tion which can and should be ascertained upon reasonable
inspection of the premises is a hobgoblin which should be exorcised from the body of legal
precedent and laid quietly to rest. [Emphasis added.]
*** *
In the case at bar [under consideration], defendant seller delib- erately fostered the public belief
that her home was possessed. Having undertaken to inform the public at large, to whom she has no
legal relationship, about the supernatural occurrences on her property, she may be said to owe no
less a duty to her contract vendee. It has been remarked that the occasional modern cases which
permit a seller to take unfair advantage of a buyer’s ignorance so long as he is not actively misled
are “singularly unappetizing.” Where, as here, the seller not only takes unfair advantage of the
buyer’s ignorance but has created and perpetuated a condition about which he is unlikely to even
inquire, enforcement of the contract (in whole or in part) is offensive to the court’s sense of equity.
Application of the remedy of rescission, within the bounds of the narrow exception to the doctrine
of caveat emptor set forth herein, is entirely appropriate to relieve the unwitting purchaser from
the consequences of a most unnatural bargain.
Decision and Remedy The New York appellate court found that the doctrine of caveat emptor
did not apply in this case. The court reinstated Stambovsky’s claim for rescission of the purchase
contract and the down payment.
Critical Thinking
• Ethical Assuming that Ackley’s behavior was unethical, was it unethical because she failed to tell
Stambovsky something about the house that he did not know, or was it unethical because of the nature
of the information she omitted? What if Ackley had failed to mention that the roof leaked or that the
well was dry—conditions that a buyer would normally investigate? Explain your answer.
Deed Adocumentbywhichtitleto real property is passed.
KnowThis
Gifts of real property are common, and they require deeds even though there is no con- sideration for the gift.
42–3b Deeds
Possessionandtitletolandarepassedfrompersontopersonbymeansofa deed—theinstru- ment of conveyance of
real property. Unlike a contract, a deed does not have to be supported by legally sufficient consideration. To
be valid, a deed must include the following elements:
1. Thenamesofthegrantor(thegiverorseller)andthegrantee(thedoneeorbuyer).
2. Wordsevidencingtheintenttoconveytheproperty(suchas,“Iherebybargain,sell,grant,orgive”). No specific words are
necessary. If the deed does not specify the type of estate being transferred, it is presumed to transfer the property in fee
simple absolute.
3. Alegallysufficientdescriptionoftheland.Thedescriptionmustincludeenoughdetailtodistinguish the property being
conveyed from every other parcel of land. The property can be identified by ref- erence to an official survey or recorded
plat map, or each boundary can be described by metes and bounds. Metes and bounds is a system of measuring boundary
lines by the distance between two points, often using physical features of the local geography—for instance, “beginning at
the south- westerly intersection of Court and Main Streets, then West 40 feet to the fence, then South 100 feet, then
Northeast approximately 120 feet back to the beginning.”
4.
5.
Thegrantor’s(andoftenherorhisspouse’s)signature.
Deliveryofthedeed.
Different types of deeds provide different degrees of protection against defects of title. A
defect of title exists, for instance, if an undisclosed third person has an ownership interest in the property.
Warranty Deeds A warranty deed contains the greatest number of covenants, or promises, of title and
thus provides the greatest protection against defects of title. In most states, special language is required to
create a general warranty deed. Warranty deeds commonly include the following covenants:
1.
2.
A covenant that the grantor has the title to, and the power to convey, the property.
Acovenantofquietenjoyment(awarrantythatthebuyerwillnotbedisturbedinherorhispossession of the land).
3.
Acovenantthattransferofthepropertyismadewithoutknowledgeofadverseclaimsofthirdparties.
Generally, the warranty deed makes the grantor liable for all defects of title during the time
that the property was held by the grantor and previous titleholders. Example 42.15 Mandal sells a two-acre lot
and office building by warranty deed to Flash Technologies, LLC. Sub- sequently, Perkins shows that he has
better title to the property than Mandal had and evicts Flash Technologies. Here, Flash Technologies can sue
Mandal for breaching the covenant of quiet enjoyment. Flash Technologies can recover the purchase price of
the land, plus any other damages incurred as a result. ■
Special Warranty Deeds A special warranty deed, or limited warranty deed, in contrast, warrants only
that the grantor or seller held good title during his or her ownership of the property. In other words, the
grantor does not warrant that there were no defects of title when the property was held by previous owners.
If the special warranty deed discloses all liens and other encumbrances, the seller will not be liable to the
buyer if a third person subsequently interferes with the buyer’s ownership. If the third person’s claim arises
out of, or is related to, some act of the seller, though, the seller will be liable to the buyer for damages.
Quitclaim Deeds A quitclaim deed offers the least amount of protection against defects of title. Basically, a
quitclaim deed conveys to the grantee whatever interest the grantor had. Therefore, if the grantor had no
interest, then the grantee receives no interest.
Quitclaim deeds are often used when the seller, or grantor, is uncertain as to the extent of his or her rights in
the property. They may also be used to release a party’s interest in a particular parcel of property, such as in
divorce settlements or business dissolutions when the grantors are dividing up their interests in real
property.
Recording Statutes Every state has a recording statute, which allows a deed to be recorded for a fee.
Deeds are recorded in the county where the property is located. Recording a deed gives notice to the public
that a certain person is now the owner of a particular parcel of real estate. By putting everyone on notice as to
the true owner, recording a deed prevents the previous owners from fraudulently conveying the land to other
purchasers. Thus, prospective buyers can check the public records to see whether there have been earlier
transactions creating interests or rights in specific parcels of real property.
42–3c WillorInheritance
Property that is transferred on an owner’s death is passed either by will or by state inheritance laws. If the
owner of land dies with a will, the land passes in accordance with the terms of the will. If the owner dies
without a will, state inheritance statutes prescribe how and to whom the property will pass.
Warranty Deed A deed that provides the greatest amount of protection for the grantee. The grantor promises that she or he has title
to the property conveyed in the deed, that there are no undisclosed encumbrances on the property, and that the grantee will enjoy quiet
possession of the property.
Special Warranty Deed A deed that warrants only that the grantor held good title during his or her ownership of the property and
does not warrant that there were no defects of title when the property was held by previous owners.
Quitclaim Deed A deed that conveys only whatever interest
the grantor had in the property and therefore offers the least amount of protection against defects of title.
Recording Statute A statute that allow deeds, mortgages, and other real property transactions to be recorded so as to provide notice
to future purchasers or creditors of an existing claim on the property.
CHAPTER 42: Real Property and Landlord-Tenant Law
1005
1006
AdversePossession The acquisition of title to real property through open occupation, without the consent of the owner, for a period
of time specified by a state statute. The occupation must be actual, exclusive, open, continuous, and in opposition to all others, including
the owner.
UNIT SEvEN: Property and Its Protection 42–3d
AdversePossession
A person who wrongfully possesses the real property of another (by occupying or using it) may eventually
acquire title to it through adverse possession. Adverse possession is a means of obtaining title to land without
delivery of a deed and without the consent of—or payment to—the true owner. Thus, adverse possession is a
method of involuntarily transferring title to the property from the true owner to the adverse possessor.
Essentially, when one person possesses the property of another for a certain statutory period, that person
acquires title to the land. The statutory period varies from three to thirty years, depending on the state, with
ten years being the most common.
RequirementsforAdversePossession Forpropertytobeheldadversely,fourelements must be
satisfied:
1. Possessionmustbeactualandexclusive.Thepossessormustphysicallyoccupytheproperty.This requirement is clearly met if
the possessor lives on the property, but it may also be met if the posses- sor builds fences, erects structures, plants crops,
or even grazes animals on the land.
2. Possessionmustbeopen,visible,andnotorious,notsecretorclandestine.Thepossessormust occupy the land for all the world
to see. The obviousness requirement ensures that the true owner is on notice that someone is possessing the owner’s
property wrongfully.
3. Possessionmustbecontinuousandpeaceablefortherequiredperiodoftime.Thisrequirementmeans that the possessor must
not be interrupted in the occupancy by the true owner or by the courts. Continu- ous does not mean constant. It simply
means that the possessor has continuously occupied the property in some fashion for the statutory time. Peaceable
means that no force was used to possess the land.
4. Possessionmustbehostileandadverse.Inotherwords,thepossessorcannotbelivingontheprop- erty with the owner’s
permission and must claim the property as against the whole world. (See this chapter’s Business Law Analysis feature for
an illustration.)
Learning Objective 3
What are the requirements for acquiring property by adverse possession?
When Possession of Property Is Not “Adverse”
Business Law Analysis
prevented others from doing so, includ- ing the Finleys.
2. Their possession was open and visi- ble because they made improvements to the beach and
regularly kept their belongings there.
3. Their possession was continuous and peaceable for the required ten years. They possessed the
property for more than four decades, and they even kept a large float there during the winter
months.
T
he McKeag family operated a marina on their lakefront property in Bolton, New York. For more
than forty years, the McKeags used a section of property belong- ing to their neighbors, the Finleys,
as a beach for the marina’s customers. The McKeags also stored a large float on the beach during
the winter months, built their own retaining wall, and planted bushes and flowers there. The
McKeags prevented others from using the property, including the Finleys. Nevertheless, the
families always had a friendly relationship, and one of the Finleys gave the McKeags permission to
continue using the beach. He also reminded them of his ownership several times, to which they
said nothing. The McKeags also asked for
permission to mow grass on the property and once apologized for leaving a jet ski there. Can the
McKeags establish adverse posses- sion over the statutory period of ten years?
Analysis: There are four requirements to acquire title to property through adverse possession.
The possession must be (1) actual and exclusive, (2) open and obvi- ous, (3) continuous for the
required period of time, and (4) hostile and adverse.
Result and Reasoning: The McKeags satisfied the first three requirements for adverse
possession:
1. Their possession was actual and exclu- sive because they used the beach and
CHAPTER 42: Real Property and Landlord-Tenant Law 1007
Nevertheless, the McKeags’ possession was not hostile and adverse, which is the fourth
requirement. The Finleys provided substantial evidence that they had given the McKeags
permission to use the beach.
Rather than reject the Finleys’ permission as unnecessary, the McKeags sometimes said nothing
and other times seemingly affirmed that the property belonged to the Finleys (by asking
permission to mow grass,
for instance). Thus, because the McKeags did not satisfy all four requirements, they cannot
establish adverse possession.
Case Example 42.16 Leslie and Ethel Cline owned a 141-acre property to the south of State Route 316 in Ohio.
Rogers Farm Enterprises, LLC, owned 399 acres to the north of State Route 316. When the Clines bought
their farm in 1987, they believed that State Route 316 was the dividing line between their property and
Rogers Farm. Later, a survey showed that a 3.95-acre strip of land on the Clines’ side of the road, which the
Clines had been farming, actually belonged to Rogers Farm.
In 2013, the Clines filed a suit claiming that they had acquired title to the property through adverse
possession. The court granted title to the Clines. Rogers Farm appealed. An Ohio state appellate court
affirmed. The Clines had been openly and continuously farming on the disputed strip of land for the requisite
period of time under Ohio’s statute (twenty-one years) and legally owned it.8 ■
The following case raised the question of whether the owner of land next to a railroad line could acquire a
portion of the right-of-way by adverse possession.
8. Cline v. Rogers Farm Enterprises, LLC, 2017 -Ohio- 1379, 87 N.E.3d 637 (Ohio App. 2017).
Case 42.3
Background and Facts The Capital Crescent Trail is a well- known hiking and biking route that
runs between the District of Columbia and Silver Spring, Maryland. The path was formerly used as
a railroad line and was later sold to Montgomery County, Maryland, for $10 million. The county
planned to use the Maryland portion of the property for the proposed Purple Line, a commuter
light rail project.
Ajay Bhatt owns a residence backing on the county-owned property. He purchased the residence in
2006 from his aunt, who had owned it since the 1970s. Montgomery County issued a civil citation
to Bhatt for having a shed and a fence on his property that was within the former railroad line’s
right-of-way. The county had obtained the right-of-way from the railroad company pursuant to the
federal Rails-to-Trails Act. A state district court found Bhatt guilty and ordered him to remove the
fence and shed.
Bhatt appealed, claiming that he owned the encroached-upon land by adverse possession. Because
a fence had been standing in its cur- rent location (beyond the property line) since 1963, Bhatt
argued that
he had met the state’s twenty-year period for adverse possession. A circuit court vacated the
district court’s decision and held that Bhatt had a credible claim for adverse possession. The county
appealed.
In the Words of the Court
Glenn T. HARRELL, Jr., J. [Judge]
Driving that train, high on cocaine,
Casey Jones, you better watch your speed. Trouble ahead, trouble behind,
And you know that notion just crossed my mind.
— The Grateful Dead, Casey Jones, on Workingman’s Dead (Warner Bros. Records 1970).
Although the record of the present case does not reflect a comparable level of drama as captured
by the refrain of “Casey Jones,” it hints at plenty of potential trouble, both ahead and behind, for a
pair of public works projects (one in place and the other incipient [in development]) cherished by
the government and some citizens of Montgomery County.
Montgomery County v. Bhatt
Court of Appeals of Maryland, 446 Md. 79, 130 A.3d 424 (2016).
(Continues )
1008
UNIT SEvEN: Property and Its Protection
****
* * * The County contends * * * that, because this Court has considered previously a railroad line to
be analogous to a public highway for most purposes, the land in question is not subject to an
adverse possession claim.
* * * Bhatt rejects the public highway–railroad line analogy because the land was in private, not
public, use during its opera- tion as a rail line.
*** *
A railroad is in many essential respects a public highway, and the rules of law applicable to one are
generally applicable to the other. Railroads are owned frequently by private corporations, but this
has never been considered a matter of any importance * * * because the function performed is that
of the State. Railroad companies operate as a public use and are not viewed strictly as private
corporations since they are publicly regulated common carriers. Essentially, a railroad is a highway
dedicated to the public use. [Emphasis added.]
* * * Nothing is more solidly established than the rule that title to property held by a municipal
corporation in its governmental capacity, for a public use, cannot be acquired by adverse posses- sion.
[Emphasis added.]
*** *
* * * Because time does not run against the state, or the pub- lic, * * * public highways are not
subject to a claim for adverse possession, except in the limited circumstances of a clear abandonment by the State. By parity [equivalence] of reasoning applied to the present case, railway lines
[are] also not * * * subject to a claim for adverse possession, without evidence of clear abandonment or a clear shift away from public use.
*** *
Because no evidence was presented by Bhatt to show that * * * the Railroad or the County
abandoned the right-of-way, no claim for adverse possession will lie.
DecisionandRemedy Astateintermediateappellatecourt reversed the lower court. Railroad
companies operate as a public use. Land that is held by government for public use cannot be
acquired by adverse possession unless the government has clearly abandoned its right to the land.
Critical Thinking
• Legal Environment Bhatt claimed to have met all of the requirements to acquire land through
adverse possession. Based on the facts provided, which element would a court likely find was lacking?
EminentDomain Thepowerofa government to take land from private citizens for public use on the payment of just compensation.
CondemnationProceedings The judicial procedure by which the government exercises its power
of eminent domain. It generally involves two phases: a taking and a determination of fair value.
Purpose of the Doctrine There are a number of public-policy reasons for the adverse pos- session
doctrine. These include society’s interest in resolving boundary disputes, determining title when title to
property is in question, and ensuring that real property remains in the stream of commerce. More
fundamentally, the doctrine punishes owners who do not take action when they see adverse possession and
rewards possessors for putting land to productive use.
42–3e EminentDomain
No ownership rights in real property can ever really be absolute. Even ownership in fee simple absolute is
limited by a superior ownership. In the United States, the government has an ultimate ownership right in all
land. This right, known as eminent domain, is sometimes referred to as the condemnation power of
government to take land for public use. It gives the government the right to acquire possession of real
property in the manner directed by the U.S. Constitution and the laws of the state whenever the public
interest requires it. Prop- erty normally may be taken only for public use, not for private benefit.
The power of eminent domain generally is invoked through condemnation proceedings that occur before a
judge. For instance, when a new public highway is to be built, the government must decide where to build it
and how much land it needs. After the government determines that a particular parcel of land is necessary for
public use, it will first offer to buy the property. If the owner refuses the offer, the government brings a
judicial (condemnation) proceeding to obtain title to the land. Condemnation proceedings usually involve two
distinct phases—the first to establish the government’s right to take the property, and the second to
determine the fair value of the property.
Should eminent domain be used to promote private
development? Issues of fairness often arise when the government
takes private property for public use. One issue is whether it is fair for a government to take
property by eminent domain and then convey it to private developers. For instance, suppose a city
government decides that it is in the public interest to have a larger parking lot for a local, privately
owned sports stadium or to have a manufacturing plant locate in the city to create more jobs. The
government may condemn certain tracts of existing housing or business property and then convey
the land to the privately owned stadium or manufacturing plant. Such actions may bring in private
developers and businesses that provide jobs and increase tax revenues, thus revitalizing
communities. But is the land really being taken for “public use,” as required by the Fifth
Amendment to the U.S. Constitution?
In 2005, the United States Supreme Court ruled that the power of eminent domain may be used to
further economic development.9 At the same time, the Court recognized that individual states have
the right to pass laws that prohibit takings for economic development. Since then, the vast majority
of the states have passed laws to curb the government’s ability to take private property and
subsequently give it to private developers. Nevertheless, loopholes in some state legislation would
still allow takings for redevelopment of slum areas. Thus, the debate over whether (and when) it is
fair for the government to take citizens’ property for economic development continues.
The Taking When the government takes land owned by a private party for public use, it is referred to as a
taking. Under the takings clause of the Fifth Amendment to the U.S. Constitution, the government may take
private property for public use with just compen- sation to the property owner. State constitutions contain
similar provisions. In the first phase of condemnation proceedings, the government must prove that it needs
to acquire privately owned property for a public use.
Example 42.17 Franklin County, Iowa, engages Bosque Systems to build a liquefied natu- ral gas pipeline
across the property of more than two hundred landowners. Some property owners consent to this use and
accept Bosque’s offer of compensation. Others refuse the firm’s offer. A court will likely deem Bosque’s
pipeline to be a public use. Therefore, the gov- ernment can exert its eminent domain power to “take” the
land, provided that it pays just compensation to the property owners. ■
The Compensation The U.S. Constitution and state constitutions require that the govern- ment pay just
compensation to the landowner when invoking its condemnation power. Just compensation means fair value.
In the second phase of the condemnation proceeding, the court determines the fair value of the land, which
usually is approximately equal to its market value.
Taking The taking of private property by the government for public use through the power of eminent domain.
Know This
Sound business practice dictates that a lease for commercial property should be written care- fully and
should clearly define the parties’ rights and obligations.
CHAPTER 42: Real Property and Landlord-Tenant Law
1009
Why does the U.S. Constitution require that a government tak- ing, such as the acquisition of private land for a gas
pipeline, be for “public use”?
42–4 Landlord-Tenant Relationships
A landlord-tenant relationship is established by a lease contract. In most states, statutes require leases for
terms exceeding one year to be in writing. The lease should describe the property and indicate the length of
the term, the amount of the rent, and how and when it is to be paid.
State or local law often dictates permissible lease terms, particularly in residential leases. For instance, a
statute or ordinance might prohibit the leasing of a structure that is not in compliance with local building
codes. As in other areas of law, the National Conference of Commissioners on Uniform State Laws has issued a
model act to create more uniformity in the laws governing landlord-tenant relationships. The Uniform
Residential Landlord
9. See Kelo v. City of New London, Connecticut, 545 U.S. 469, 125 S.Ct. 2655, 162 L.Ed.2d 439 (2005).
Ethical Issue
drnadig/E+/Getty Images
Learning Objective 4
What are the duties of the landlord and the tenant with respect to the use and main- tenance of leased
property?
1010
UNIT SEvEN: Property and Its Protection
Eviction Alandlord’sactof depriving a tenant of possession of the leased premises.
ConstructiveEviction Aformof eviction that occurs when a landlord fails to perform adequately any of the duties required by the
lease, thereby making the tenant’s further use and enjoyment of the property exceedingly difficult or impossible.
Know This
Options that may be available to a tenant on a landlord’s breach of the implied warranty of hab- itability
include repairing the defect and deducting the cost from the rent, canceling the lease, and suing for damages.
and Tenant Act (URLTA), which was issued in 1972, has been adopted in some form by twenty-one states. A
revised version of the act was issued in 2015, but no states had adopted it prior to the publication of this text.
42–4a RightsandDuties
The rights and duties of landlords and tenants generally pertain to four broad areas of
concern—the possession, use, and maintenance of the leased property and, of course, rent.
Possession A landlord is obligated to give a tenant possession of the property that the tenant has agreed to
lease. After obtaining possession, the tenant retains the property exclu- sively until the lease expires, unless
the lease states otherwise.
Quiet Enjoyment. The covenant of quiet enjoyment mentioned previously also applies to leased premises.
Under this covenant, the landlord promises that during the lease term, nei- ther the landlord nor anyone
having a superior title to the property will disturb the tenant’s use and enjoyment of the property. This
covenant forms the essence of the landlord-tenant relationship, and if it is breached, the tenant can terminate
the lease and sue for damages.
Eviction. If the landlord deprives the tenant of possession of the leased property or inter- feres with the
tenant’s use or enjoyment of it, an eviction occurs. A constructive eviction occurs when the landlord
wrongfully performs or fails to perform any of the duties the lease requires, thereby making the tenant’s
further use and enjoyment of the property exceedingly difficult or impossible. Examples of constructive
eviction include a landlord’s failure to provide heat in the winter, electricity, or other essential utilities.
Use of the Premises The tenant normally may make any use of the leased property, provided the use is
legal and does not injure the landlord’s interest. The parties are free to limit by agreement the uses to which
the property may be put.
Maintenance of the Premises The tenant is responsible for any damage to the premises that he or she
causes, intentionally or negligently, and may be held liable for the cost of returning the property to the
physical condition it was in when the lease began. Unless the parties have agreed otherwise, the tenant is not
responsible for ordinary wear and tear and the property’s consequent depreciation in value.
Landlords must, of course, comply with any applicable state statutes and city ordinances regarding
maintenance and repair of buildings. In some jurisdictions, landlords of residential property are also required
by statute to maintain the premises in good repair.
In addition, the implied warranty of habitability discussed earlier may apply to residen- tial leases. The
warranty requires the landlord to ensure that the premises are habitable— that is, a safe and suitable place
for people to live. Also, the landlord must make repairs to maintain the premises in that condition for the
lease’s duration.
Generally, this warranty applies to major, or substantial, physical defects that the landlord knows or should
know about and has had a reasonable time to repair—such as a large hole in the roof or a broken heating
system. Example 42.18 Carol and Ken Galprin own a house within the city limits of Redmond. A city regulation
states that a residence must be con- nected to the city sewer system before anyone, including tenants, can live
in the residence. The Galprins’ house is not connected to the city system. Thus, it is not legally habitable, and
they cannot lease it to tenants. ■
Rent Rent is the tenant’s payment to the landlord for the tenant’s occupancy or use of the land- lord’s real
property. Usually, the tenant must pay the rent even if she or he refuses to occupy the property or moves out,
as long as the refusal or the move is unjustified and the lease is in force.
Example 42.19 Lifetime Insurance Agency enters into a lease with Mallory for a suite of offices in Mallory’s
building. Lifetime’s revenue is less than managers had projected, however, and the rent is now more than the
company wants to pay. Lifetime vacates the offices before
the end of the lease. In terms of the landlord-tenant relationship, the move is unjustified, and the lease
remains in force. Lifetime must continue to pay the rent. ■
Under the common law, if leased premises were destroyed by fire or flood, the tenant still had to pay rent.
Today, however, if an apartment building is destroyed, most states’ laws do not require tenants to continue to
pay rent.
In some situations, such as when a landlord breaches the implied warranty of habitability, a tenant may be
allowed to withhold rent as a remedy. When rent withholding is authorized under a statute, the tenant must
usually put the amount withheld into an escrow account. The funds are held in the name of the tenant and are
returned to the tenant if the landlord fails to make the premises habitable.
Commercial Lease Terms State statutes often allow tenants and landlords more flexibility in
negotiating the terms of a commercial lease. Case Example 42.20 Lynwood Place, LLC, owned an office
building in Newtown, Connecticut. Sandy Hook Hydro, LLC, agreed to lease a part of the building containing a
hydroelectric turbine. The lease required Sandy Hook to pay a base annual rent, plus an additional amount of
rent equal to 6 percent of any increase in operating expenses incurred by the landlord. “Operating expenses”
included all costs of maintenance and repair related to the premises.
When Sandy Hook did not pay the additional rent due under this provision, Lynwood Place filed a suit in a
Connecticut state court to take immediate possession of the property. The court issued a judgment in the
landlord’s favor. The tenant appealed, but the reviewing court affirmed. The court concluded that Sandy Hook
had signed the lease, which clearly indicated that the rent was subject to a 6 percent increase for operating
expenses. Therefore, even though Sandy Hook occupied only part of the building, the lease gave the landlord
the right to increase its rent by that amount.10 ■
42–4b TransferringRightstoLeasedProperty
Either the landlord or the tenant may wish to transfer her or his rights to the
leased property during the term of the lease. If a landlord transfers complete
title to the leased property to another, the tenant becomes the tenant of the new
owner. The new owner may collect subsequent rent but must abide by the terms of the existing lease. A
tenant’s transfer of rights in the leased property may result in an assignment or a sublease.
Assignment The tenant’s transfer of his or her entire interest in the leased property to a third person is an
assignment of the lease. Many leases require the landlord’s written consent for an assignment to be valid. The
landlord can nullify (avoid) an assignment made without the required consent and evict the assignee. State
statutes may specify that the landlord may not unreasonably withhold consent, however. Also, a landlord who
knowingly accepts rent from the assignee may be held to have waived the consent requirement.
When an assignment is valid, the assignee acquires all of the tenant’s rights under the lease. Nevertheless, an
assignment does not release the original tenant (the assignor) from the obligation to pay rent should the
assignee default. In addition, if the assignee exercises an option under the original lease to extend the term,
the assignor remains liable for the rent during the extension, unless the landlord agrees otherwise.
Subleases The tenant’s transfer of all or part of the premises for a period shorter than the lease term is a
sublease. Many leases also require the landlord’s written consent for a sublease. If the landlord’s consent is
required, a sublease without such permission is ineffective. Also, like an assignment, a sublease does not
release the tenant from her or his obligations under the lease.
Example 42.21 Derek, a student, leases an apartment for a two-year period. Although Derek had planned on
attending summer school, he decides to accept a job offer in Europe
Sublease Atenant’stransferofall or part of the leased premises to a third person for a period shorter than the lease term.
CHAPTER 42: Real Property and Landlord-Tenant Law
1011
If a lessee agrees to rent a part of a building that houses a turbine, what happens when the lessee doesn’t pay the
agreed-upon annual increase in lease payments?
10. Lynwood Place, LLC v. Sandy Hook Hydro, LLC, 150 Conn.App. 682, 92 A.3d 996 (2014).
BanksPhotos/iStock/Getty Images
Russian Proverb
Practice and Review
Vern Shoepke bought a two-story home in Roche, Maine. The warranty deed did not specify what
covenants would be included in the conveyance. The property was adjacent to a public park that
included a popular Frisbee golf course. (Frisbee golf is a sport similar to golf but using Frisbees.)
Wayakichi Creek ran along the north end of the park and along Shoepke’s property. The deed
allowed Roche citizens the right to walk across a five-foot-wide section of the lot beside Wayakichi
Creek as part of a two-mile public trail system. Teenagers regularly threw Frisbee golf discs from
the walking path behind Shoepke’s property over his yard to the adjacent park. Shoepke habitually
shouted and cursed at the teenagers, demanding that they not throw the discs over his yard.
Two months after moving into his Roche home, Shoepke leased the second floor to Lauren Slater for
nine months. The lease agreement did not specify that Shoepke’s consent would be required to
sublease the second floor. After three months of tenancy, Slater sublet the second floor to a local
artist, Javier Indalecio. Over the remaining six months, Indalecio’s use of oil paints damaged the
carpeting in Shoepke’s home. Using the information presented in the chapter, answer the following
questions.
1.
2.
What is the term for the right of Roche citizens to walk across Shoepke’s land on the trail?
What covenants would most courts infer were included in the warranty deed that Shoepke
received when he bought his house?
3.
4.
Can Shoepke hold Slater financially responsible for the damage to the carpeting caused by Indalecio?
Explain.
Could the fact that teenagers continually throw Frisbees over Shoepke’s yard outside the second-floor
windows arguably be a breach of the covenant of quiet enjoyment? Why or why not?
Debate This
Under no circumstances should a local government be able to condemn property in order to sell it
later to real estate developers for private use.
1012
UNIT SEvEN: Property and Its Protection
“Even in Hell the peasant will have to serve the landlord, for, while the landlord is boiling in a
cauldron, the peasant will have to put wood under it.”
for the summer months instead. Derek therefore obtains his landlord’s consent to sublease the apartment to
Ava. Ava is bound by the same terms of the lease as Derek, and the landlord can hold Derek liable if Ava
violates the lease terms. ■
42–4c TerminationoftheLease
Usually, a lease terminates when its term ends. The tenant surrenders the property to the landlord, who
retakes possession. If the lease states the time it will end, the landlord is not required to give the tenant
notice. The lease terminates automatically.
A lease can also be terminated in several other ways. If the tenant purchases the leased property from the
landlord during the term of the lease, for instance, the lease will be termi- nated. The parties may also agree
to end a tenancy before it would otherwise terminate. In addition, the tenant may abandon the premises—
move out completely with no intention of returning before the lease term expires.
At common law, a tenant who abandoned leased property was still obligated to pay the rent for the full term
of the lease. The landlord could let the property stand vacant and charge the tenant for the remainder of the
term. This is still the rule in some states. In most states today, however, the landlord has a duty to mitigate his
or her damages—that is, to make a reasonable attempt to lease the property to another party. Consequently,
the tenant’s liability for unpaid rent is restricted to the period of time that the landlord would reasonably
need to lease the property to another tenant. Damages may also be allowed for the landlord’s costs in leasing
the property again.