978-0077733711 Chapter 24 Lecture Note

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Chapter 24 – Real Property

CHAPTER 24

REAL PROPERTY

I. OBJECTIVES

This chapter is designed to teach students about the nature of real property, the basic

rights and responsibilities that attend real property ownership, the ways in which interests

in real property may be transferred, and government regulation of the use of real property.

After reading the chapter and attending class, a student should be able to:

A. Define real property and explain what is included in the concept of real property.

B. Provide several examples of property that would be considered to be a fixture and

explain the significance of classifying an item of property as a fixture.

C. Explain and distinguish among the various forms of ownership of real property.

D. Explain the legal effects of easements and restrictive covenants as well as the

duties of property owners toward third persons.

E. Distinguish the various ways in which ownership of real property is transferred

and how title to property can be assured.

F. Distinguish the different types of deeds, explain the purposes of recording deeds,

and describe how state law determines priorities among those who claim

competing rights in a parcel of real property.

G. Explain governmental powers to control and purchase private land and the

constitutional limits on those powers.

II. ANSWER TO INTRODUCTORY PROBLEM

A. The answer to this question requires a determination whether the items are fixtures.

This depends on attachment, adaptation, and intent. You might want to have students

think of examples of lamps and custom bunk beds that would and would not be

fixtures.

B. Because Joyce and John are married, they could take title as tenants by the entirety or

as community property in states that recognize those forms of ownership.

C. The steps involved in purchasing property are overviewed on pages 682-687.

D. The Fieldings may have acquired an easement by prescription, depending on how

long and under what circumstances they have been using the property.

E. They may be liable for a failure to use reasonable care toward persons who are

foreseeably present on their property.

F. Both zoning laws and restrictive covenants may limit the uses that John and Joyce

make of their property. For example, either type of legal restriction might prohibit

Joyce from operating her day care center on this property.

G. It is difficult to argue that dumping your refuse on your neighbor’s land is ethical

under any ethical theory. It’s of doubtful legality (probably trespassing) and violates

the property rights of their neighbors. No one other than the Fieldings would be

benefited by this practice, so it seems unlikely that it would pass muster under a

utilitarian theory.

III. SUGGESTIONS FOR LECTURE PREPARATION

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Chapter 24 – Real Property

A. Introduction

1. Emphasize the economic, historical, and practical importance of land in our

society. Note that the importance of land has led to the formulation of special

rules for it (e.g., special tax laws, rules regarding inheritance and transfer of land,

contract rules such as the land provision of the statute of frauds and the rule that

buyers under contracts for the sale of real estate may obtain specific performance

against breaching sellers).

2. Distinguish real property from other types of property. State why the distinction is

important.

3. Discuss what is included within the definition of real property. Note the classical

formulation that real property was owned “ad coelum” (to the heavens) and “ad

inferos” (to the depths). (You may want to add that this notion of property had to

be adjusted in an age of air travel.) Note that real property consists of the earth’s

crust and everything firmly attached to it.

B. Fixtures

1. Explain the meaning of the term “fixture.” Emphasize the importance of the

classification of an item as a fixture: if an item is a fixture, it will pass with real

property even if no mention is made of the item in the parties’ contract or deed.

2. Discuss the three factors used to determine whether an item is a fixture:

attachment, adaptation, and intent.

Examples: Problem Cases #1 and 9.

3. Discuss the exceptions to the normal fixture rules made in cases involving

contrary agreements between buyer and seller, and in cases involving trade

fixtures. Define and discuss trade fixtures. Emphasize that even a trade fixture

can become a permanent fixture if removal would harm the landlord’s reversion or

if the tenant does not remove the trade fixture within the appropriate time.

Mogilevsky v. Rubicon Technology, Inc. (p. 668): The Mogilevskys bought a

warehouse, which they leased to a company that they controlled and that

produced sapphire crystals. In order to produce the crystals a new electrical

system and extensive heating and cooling system was installed in the building.

Moffitt loaned the company money to secure and install the heating and cooling

system. Moffitt never believed the system would stay with the building because

the lessee had purchased it. The Mogilevskys, in contrast, assumed that the

system would remain with the premises because the company only paid for the

system for tax reasons. After a new lease agreement with a reorganized version of

the company and assignment of that lease from the reorganized LLC to successor

corporation, the lease ultimately terminated according to its terms around ten

years after the initial lease was entered. The successor corporation surrendered

the building having removed the above-ground portions of the heating and

cooling system and having removed the electrical system that was installed at the

beginning of the lease. There were holes in the walls and floors, and the

Mogilevskys could not continue to use the building to produce alumina as they

had planned. They sued the company for $950,000 in damages for breach of

contract and conversion. The jury awarded $22,000 for breach of contract,

representing the cost to repair the holes. But the jury found that there was no

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conversion because the components of the heating and cooling system were trade

fixtures that belong to the company. The Mogilevskys appealed. The appellate

court affirmed the jury verdict.

Points for Discussion: Note the three factor fixture text, but supplement it with a

discussion of what differentiates a trade fixture from a permanent fixture. What

was it about the system that led the court to determine that the jury’s conclusion

that the system was a trade fixture? What could the Mogilevskys have done to

better protect their interests? Does the $22,000 recovery for breach of contract

make the Mogilevskys whole?

4. Briefly note basic concepts associated with obtaining security interests in fixtures.

C. Rights and Interests in Real Property

1. Tell the students that real property ownership should be conceived of as a “bundle

of rights” and that the nature of a person’s rights will depend on the type and

extent of his interest in the land.

2. Explain the concept of an estate in land. Explain the two most common types of

estates: fee simple absolute and life estate. To show how complicated real

property rights can be, you may wish to allude to the less common types of estates

(fee tail, fee simple defeasible) and to note that it is also possible for a person to

own a future interest under which he may have the right to future possession.

Then again, you may decide to leave well enough alone.

3. Note that a fee simple owner has the whole bundle of rights and that she may

transfer many of these rights without giving up her fee simple ownership (e.g., a

fee simple owner may lease her land, grant an easement in it, sell mineral rights,

etc.).

D. Forms of Co-ownership

1. Explain and give examples of the three traditional forms of co-ownership

(tenancy in common, joint tenancy, and tenancy by the entirety). Compare and

contrast the three. Emphasize that joint tenancy and tenancy by the entirety

involve the right of survivorship. To demonstrate the significance of the right of

survivorship, give a simple example contrasting joint tenancy or tenancy by the

entirety with tenancy in common. Note that tenancy by the entirety is not

recognized in a number of states.

Example: Problem Case #10.

a. Note that co-owners must be married in order to be tenants by the entirety.

There have been a number of cases in which an alleged tenancy by the entirety

failed because the co-tenants’ marriage was invalid. See, for example,

Thurmond v. McGrath, 334 N.Y.S.2d 917 (N.Y. Sup. Ct. 1972) (husband was

never divorced from “first” wife and was never married to “second wife” who

was his purported co-tenant by the entirety; the tenancy was held to be a

tenancy in common).

2. Discuss the fact that co-ownership entitles all co-owners to possession of the

property. Emphasize that each co-tenant owns an “undivided interest” in the

whole property, rather than separate physical parts of the property. To explain

undivided interest, you might compare it to owning a share in a corporation: the

shareholder owns part of the entire corporation, not just a specific part of it.

a. Discuss co-tenants’ rights and responsibilities concerning profits and repairs.

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Also discuss creditors’ rights to reach joint property.

Tkachik v. Mandeville (p. 671): Janet and Frank, a married couple, owned

their property as tenants by the entirety. Frank was often out of the country for

extended period of time during the last decade of their marriage, and he was

absent for the 18 months preceding Janet’s death from cancer, even though he

knew she was ill. In his absence, Janet paid the mortgage, property taxes, and

expenses of the house herself. Before dying, Janet told her family that she

wanted to disinherit Frank and she tried to defeat the right of survivorship by

transferring her interest in the properties by a quitclaim deed. Upon Janet’s

death, Frank became the sole owner in fee simple absolute. Janet’s sister sued

Frank on behalf of the estate to try and effectuate her

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sister’s intent to disinherit him and to seek contribution from Frank for the

expenses Janet had paid alone. The court pointed out that entireties property

passes by right of survivorship and is not part of an estate. However,

contribution can be required when one co-tenant has been forced to bear more

than his share of a common burden, and the court permitted the estate’s claim

for contribution.

Points for Discussion: How does a tenancy by the entirety differ from a joint

tenancy? Contribution is an equitable remedy based on justice, so was it

relevant that Frank didn’t visit his wife when she was dying and was often out

of the country?

3. Explain how the traditional forms of co-ownership may be severed.

a. Note that joint tenancy can be severed during life by a tenant’s transfer of his

interest.

b. Explain the right of partition.

4. Discuss the typical features of community property. Explain the concept of

separate property. If your state has a community property system, you may wish

to spend more time on it, and use your state’s community property statutes as

examples.

5. Briefly discuss tenancy in partnership, or note that it will be covered with

partnership materials.

6. Compare and contrast condominium ownership with cooperative ownership. Note

that cooperative ownership in itself is not really an interest in land; rather, it is an

interest in a corporation that owns land. The cooperative owner does obtain a

leasehold interest under his long-term proprietary lease, however.

E. Interests in Property Owned by Others

1. Note that it is possible for a person to have a legally protected right to enter, use,

or control the use of land that belongs to another person. Give some simple

examples, such as utility easements or neighbors sharing a driveway. By the same

token, it is quite possible in our system of property ownership for a property

owner to give away or sell a number of rights in her land without giving up her

basic ownership. Thus, the landowner may grant someone else a right to enter or

use her land or the right to control the way she uses her land without surrendering

her ownership.

2. Easements

a. Explain what an easement is. Emphasize that it does not constitute a

possessory interest. Distinguish between negative and affirmative easements.

Describe how easements appurtenant are transferred with the land.

b. Discuss the creation of easements through express grant or reservation. Note

that such transactions are within the statute of frauds.

c. Discuss the creation of easements by implication. Distinguish easements by

necessity from easements by prior use.

d. Discuss the creation of easements by prescription. Note that if the property

owner fails to object to another person’s using his land for a period of time

specified by statute, the trespasser may gain the right to continue using the

land.

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Example: Problem Case #3.

e. Briefly note what profits are and that they generally are governed by the same

rules applicable to easements.

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3. Licenses

a. Note that unlike easements, licenses are not really interests in land. They are

temporary, less formal than easements, and do not have to be created in

writing. Licenses give the licensee the (generally) revocable right to enter

property without committing trespass. Give some examples, such as social

guests. Discuss the situations in which licenses are not revocable at the will of

the licensor.

4. Restrictive Covenants

a. Note that restrictive covenants are contract rights that may, if certain

requirements are met, run with the land and bind subsequent parties.

Ethics in Action: The ethical issue most prominently in play here is whether a

loophole or technicality is an ethical basis for knowingly ignoring the intent

and desire of the counterparty. Misita likely clearly knows that his “sign”

compromises the express interest of the Wilsons and, subsequently, the Conns.

These facts are based on Misita v. Conn, 138 So. 3d 138 (Miss. 2014).

b. Discuss the requirements for a binding covenant. Note that a covenant will

not be enforced if it violates public policy. For example, covenants that

purport to prohibit the sale of property to persons of certain races violate

public policy and have been held unenforceable on that basis. (Such covenants

have also been held invalid on constitutional grounds. See Shelley v. Kraemer,

334 U.S. 1 (U.S. Sup. Ct. 1948)).

Example: Problem Case #4.

c. Discuss the significance of a covenant’s running with the land. Explain the

elements that must be present for a covenant to bind subsequent parties.

Wykeham Rise, LLC v. Federer (p. 676): A School sold its property to an LLC

subject to a set of restrictive covenants that purported to run with the land.

The property then changed hands a couple of times until the plaintiff owned it

and intended to develop the land in a way inconsistent with the restrictive

covenants. A neighboring landowner, Read, who was a member of the

school’s board of trustees at the time the restrictive covenants were first

included in the land’s deed, subsequently sold his land to his daughter and

son-in-law, the defendants. They sought to block the issuance of permits for

the aforementioned development. The plaintiff sought a declaratory judgment

that the covenants were invalid and that, regardless, they did not run with the

land. The defendants counterclaimed seeking to enjoin the development. The

plaintiff moved for summary judgment on its claim and the counterclaims,

which the court granted. The appellate court reversed the summary judgment

and remanded the case for further proceedings. The appellate court

determined that the covenants were valid when created and that they may be

enforceable as between the parties to the case.

Points for Discussion: The court looks both at whether the burdens of the

covenants could potentially apply to the plaintiff, as a subsequent landowner

and nonparty to the original coventants, and whether the benefits passed to the

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Chapter 24 – Real Property

defendants to enforce and enjoy, despite the fact that they are potentially

subsequent third parties. As to the former, the burdens only apply if the

covenants run with the land. How is that determination made? Explore with

the students the distinction in the case between legal and equitable

considerations in determining whether the covenants run with the land. Intent

is a vital consideration in this inquiry. What are indications that the covenants

were intended to run with the land? As to the benefits analysis, on what basis

might the defendants be considered the successors to the original beneficiaries

of the covenants? Note that the school ceased to exist (was administratively

dissolved) and how that affects the analysis. The defendants’ father (-in-law)

may have been the initially intended third party beneficiary. What evidence

supports that? Why would that be relevant to the defendants’ claim?

d. Note that covenants are construed narrowly. Ambiguous language in a

covenant is usually construed in favor of the less restrictive interpretation. Ask

your students why.

e. Discuss the ways in which covenants may be terminated.

Example: Problem Case #6.

F. Acquisition of Real Property

1. Discuss the various methods by which property may be acquired. Group these

methods by sale and non-sale transactions. Note that acquisition by purchase

is the most common method of transfer.

2. Discuss acquisition by adverse possession. Emphasize that adverse possession

occurs because the original owner is prevented by the statute of limitations

from asserting his action for eviction. Discuss the rationale(s) for adverse

possession.

a. Go through the elements of adverse possession. If you like mnemonic devices

better than this author does, you may wish to share this one with the class: the

elements of adverse possession spell the acronym “POACH.” P=possession

that is exclusive for the statutory period, O=open, A=actual, C=continuous,

and H=hostile.

Stratford v. Long (p.681): Stratfords bought land in 1976 and immediately

believed a disputed piece of land was theirs. The neighboring landowner

never disputed the claim. The Stratfords improved their land, including

improvements that encroached on the disputed land. And they fenced a

portion of the disputed land to keep the neighbor’s cattle from grazing on it.

Much of the land was rugged, though, and the Stratfords did not spend time on

it or otherwise develop it. When the Longs bought the neighboring land, they

disputed the Stratfords’ ownership of the strip. The Stratfords’ claim to quiet

title was unsuccessful in the trial court, so they appealed. The appellate court

reversed, finding that the Stratfords had fulfilled the elements of adverse

possession.

Points for discussion: The court determined that rugged land is not subject to

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Chapter 24 – Real Property

a strict “actual possession” requirement. So, the fact that the Stratfords used

did not “use” the entire parcel was not sufficient to defeat their claim to the

land. What indicators of actual possession did the court find? Are there (or

should there be) limits to how lax the actual possession requirement is for

wild, undeveloped land? How widely does the adverse possessor’s claim to

land have to be known in order to be considered open and notorious

possession?

Additional Example: Problem Case #2.

b. Note that the uses of successive possessors may be tacked together to fulfill

the requirements of adverse possession.

3. Transfer by Sale

a. Give a brief overview of the typical steps in the transfer of property by sale.

You might wish to direct students to the website cited in Log-On (p. 682) for

more information about purchasing real estate.

b. Discuss the role of real estate brokers in sale transactions. Note that brokers

are held to a duty of loyalty toward their clients, and that they must meet

certain licensing requirements in order to practice their profession. A broker is

entitled to receive a commission when she produces a ready, willing, and able

buyer on the seller’s terms. Discuss and distinguish the various types of listing

agreements. Note that a number of states require such agreements to be in

writing.

c. Emphasize that for the most part, real estate sales contracts are governed by

the general contract law principles discussed in earlier chapters of the text.

Note the need for such contracts to meet a writing requirement.

d. Discuss the rationale and provisions of the Fair Housing Act. Emphasize the

implications of the 1988 amendments, which added handicap and familial

status to the statute’s previous list of prohibited bases of discrimination.

e. Explain the function of a deed and discuss the matters of form and execution

generally necessary for the creation of a valid deed. You might bring in a

sample of a deed that would be sufficient under your state’s laws. Highlight

the important features of the deed.

1) Explain and contrast warranty deeds, quitclaim deeds, and deeds of

bargain and sale. Distinguish special warranty from general warranty

deeds.

f. Explain why a system of recording deeds is necessary. Discuss the function of

recording statutes, and explain the different types of recording statutes. You

may wish to discuss the type of recording statute your state has enacted.

Emphasize the importance of promptly recording deeds (and other recordable

instruments affecting title to real property).

g. Discuss the various methods of assuring title to real estate. Explain why

assuring title is an important step in the acquisition of property. You may wish

to emphasize the title assurance method(s) used in your state.

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h. Discuss the implied warranty of habitability that applies to the sale of

residential property by builder-vendors. Explain what “habitability” is.

Emphasize that this is a guarantee imposed by law even if the contract does

not contain any language guaranteeing the condition of the property. Note that

this is a relatively recent doctrine. Prior to the late 1960s, the doctrine of

caveat emptor held sway. The purchaser of a can of deodorant had more legal

protection regarding the quality of what he had bought than did the purchaser

of a $100,000 house. Note also, however, courts’ consistent holdings that

ordinary sellers (sellers who are neither developers nor builders) do no make

this implied warranty and hence are not bound by it.

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1) There appears to be a trend toward permitting subsequent purchasers of

relatively new (though used) homes to sue builders for breach of warranty.

An interesting question is the potential liability of renovators. Given the

current interest in renovating old buildings and converting them to

condominiums, will the developer or contractor responsible for such a

renovation be bound by the implied warranty of habitability? At least one

court has said “yes.” See Licciardi v. Pascarella, 476 A.2d 1273 (N.J.

Super. 1983).

2) Note that warranty liability imposes, on home builders and developers,

fairly rigorous, long-term exposure to liability. It seems likely that builders

and developers with any legal sophistication will attempt to disclaim

warranty liability through contract clauses to that effect. Should such

clauses be enforceable? If so, what should it take in the way of contract

language to get rid of the implied warranty of habitability? Indiana has

enacted a statute that codifies the conditions under which such a clause

will be enforceable. See Ind. Code Ann. 34-4-20.5-9.

i. Discuss the growth of the duty to disclose. You may wish to refer to

the Reality of Consent chapter. What are the preconditions for the

existence of a duty to disclose? Why is this duty expanding now? Note

that this duty is imposed on ordinary home sellers as well as on

builder-vendors and developers.

Example: Problem Case #7.

G. Other Property Condition-Related Obligations of Real Property Owners and

Possessors

1. Note that the obligations discussed in this section are in addition to the sale-

related property condition obligations discussed earlier (the implied warranty of

habitability and the duty to disclose). The obligations discussed here arise outside

the sale setting and are, in general, of a continuing nature.

2. Discuss (review?) general principles of premises liability under the law of

negligence. (You may wish to refer to Chapter 7 and its discussion of the levels of

duty owed by property owners and possessors to the different classes of persons

who come upon the property.) Note courts’ increasing tendency in recent years to

expand the circumstances in which premises liability may be imposed on a

property owner or possessor. Most importantly, this expansion has included the

setting involving third parties’ foreseeable criminal acts, as to which the property

owner or possessor failed to take reasonable security precautions. What policy

rationales support this expansion?

a. Emphasize the foreseeability prerequisite to the property owner’s or

possessor’s duty in this context. Present the class with various hypotheticals to

explore this prerequisite. Note that the so-called duty to take security

precautions is simply part of the overarching duty to exercise reasonable care.

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Chapter 24 – Real Property

b. Discuss the causation issues arising in the premises liability cases involving

failures to take security precautions regarding third parties’ foreseeable

criminal acts. (Once again, you may wish to refer to Chapter 7’s discussion of

causation in negligence cases.) Note that though the property owner’s or

possessor’s failure to use reasonable care is not the sole cause of the plaintiff’s

injuries–indeed, the third party’s criminal act is a very direct cause–it need

not be the sole cause. If the property owner’s or possessor’s failure to use

reasonable care is a substantial factor leading to the plaintiff’s injuries, that is

enough to give rise to liability. Also explain why the foreseeable criminal act

of a third party cannot be a superseding (intervening) cause that relieves the

property owner or possessor from liability.

3. Discuss the property-related provisions of Title III of the Americans with

Disabilities Act. Explain that the duties created by these provisions apply when

property amounts to a place of public accommodation. Note the broad range of

examples of places of public accommodation, as set forth in the text.

a. Discuss, in general, the sorts of property modifications that may be required to

avoid violating the ADA’s rules against discrimination against disabled

persons and against conditions that prevent such persons from having the full

enjoyment of a place of public accommodation. Note, however, the ADA’s

provisions to the effect that otherwise necessary modifications are not

required if they would fundamentally alter the enterprise conducted on the

property, would result in an undue burden, or are not readily achievable.

b. Note the ADA requirements regarding new construction of buildings

amounting to places of public accommodation. Briefly discuss the

enforcement mechanisms and remedies for violations of the ADA.

Additional Example: Problem Case #5.

H. Land Use Control

1. Emphasize that even if a person holds the highest form of ownership possible in

our system of property, his rights are still subject to land use controls exerted by

the government and private individuals. Land use controls are becoming more

complex all the time, with more people living in close proximity to each other,

natural resources becoming scarcer, and threats to the environment increasing.

Knowing what real property is and how it is acquired is only part of what a

businessperson needs to know about real estate. It is also important to have a

basic understanding of the limitations on land use.

a. Note that some land use controls are exerted by the government (e.g., zoning),

whereas others are initiated by private individuals (e.g., private nuisance

suits). Note that restrictive covenants, studied earlier, are a further type of

private control on land use.

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2. Nuisance

a. Give some examples of uses that would probably constitute nuisances. Note,

however, that there is no set definition of nuisance. This area of the law

attempts to balance the competing rights of landowners.

b. Discuss the difference between private nuisance and public nuisance.

c. Discuss the factors courts consider when determining whether an activity is a

nuisance. Ask why the social utility of the parties’ uses is considered. Note

that the law does not protect a person’s right to maintain an unusually sensitive

use (“delicate use”) on his land.

3. Eminent Domain

a. Discuss the significance and effect of the power of eminent domain: the

government can obtain title to private property so long as it does so for public

use and pays just compensation. This is so even if the owner of the property

does not want to “sell out” to the government. Note that in recent years, courts

seem to be taking a loose approach to what constitutes a public use. See the

discussion of this issue in Chapter 3.

1) You may want to note that eminent domain is not limited to government

acquisition of real property (though that is the usual use of the power).

Eminent domain apparently may also be used to acquire ownership of

intangible personal property, such as football team franchises.

b. Discuss the concept of public use.

Kelo v. City of New London (p. 691): Attempting to reverse decades of

economic decline and a high unemployment rate, state and local officials

targeted the City of New London for re-development. A private non-profit

group, NLDC, was reactivated and empowered to help in this effort. NLDC

negotiated the purchase of much of the property needed for the project, but a

group of nine landowners refused to sell. NLDC then brought condemnation

proceedings. The nine landowners claimed that taking their land would violate

the public use language in the Constitution. The Supreme Court stated that

while the government cannot take private property for the sole purpose of

transferring it to a private party, it can do so if use by the public is the primary

reason. The case turned on whether there was an actual public purpose for the

exercise of eminent domain. The court decided that economic development

goal in this case was a public purpose, and the exercise of eminent domain

was not unconstitutional.

Points for Discussion: Ask your students why they think this case has been so

controversial. What would be some examples of the use of eminent domain

that would be unconstitutional because it would not be for a public use? What

factors persuaded the court that the City of London had an actual public

purpose here?

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Chapter 24 – Real Property

b. Provide an overview of the official proceedings conducted under your state’s

law when the state formally exercises the eminent domain power.

c. Introduce the notion that government takings of private property sometimes

occur even though the government has not initiated formal eminent domain

proceedings. Discuss inverse condemnation, giving examples of when it arises

and distinguishing it from instances in which the government formally

exercises the eminent domain power. Emphasize that when inverse

condemnation has occurred, the government must, of course, pay

compensation for having committed a physical taking of private property.

Note that other government actions, including certain land use restrictions of

an extreme nature, may amount to regulatory takings for which the

government must pay compensation. (Regulatory takings will be examined

later in the chapter.)

4. Zoning

a. Explain the philosophy underlying zoning and why society has an interest in

the way in which land is used. Give examples of the types of controls that are

commonly included in zoning schemes. Explain that a government’s power to

zone is part of its police power.

Example: Problem Case #8.

b. Major ethical considerations suggested by attempts to place group homes in

certain areas despite contrary language in restrictive covenants or zoning

ordinances: Are private property rights subject to being overridden by parties

who put a “human dignity” spin on their countervailing rights? Must the

government’s police power yield to such assertions of human dignity rights?

How should the balance be drawn between the interest in integrating mentally

retarded and disabled persons throughout society and the interest of some

individuals in choosing the sorts of persons with whom they come in contact

in the vicinity of their homes?

c. Discuss nonconforming uses and the “grandfathered” status they hold. Note,

however, that this status does not necessarily mean that the use will be

permitted in perpetuity. An ordinance may provide for amortization (although

this has been held to be unconstitutional in at least one state), or the right to

continue the use may be lost by abandonment or substantial change.

d. Discuss the various ways of obtaining relief from a zoning ordinance. You

may wish to set up a simple example in which a developer wishes to construct

apartment buildings on a tract of land not presently zoned for this use. How

might the developer achieve this goal? (Of course, note that in many

situations, one cannot obtain relief from a zoning ordinance.)

e. Discuss constitutional challenges to the validity of zoning ordinances. First

Amendment-based challenges such as those in the Playtime Theatres and

FW/PBS cases (referred to in the text) should make for interesting discussion.

Constitutional challenges may be grounded on constitutional provisions other

than the First Amendment. For example, the Cleburne Living Centers case,

also referred to in the text, involved an equal protection challenge to a zoning

ordinance that specifically excluded homes for the “feebleminded” from a

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Chapter 24 – Real Property

zone in which other group living arrangements were permitted. The Supreme

Court held that the ordinance’s requirement of a special permit for the group

home in question was a violation of the equal protection clause.

f. Certain applications of zoning ordinances may also raise questions under the

Fair Housing Act.

g. Discuss the potential relationship between land use regulation and taking (a

topic also discussed in the Business and the Constitution chapter). This

relationship has become especially important recently, as the Supreme Court

has decided a number of cases dealing with supposed regulatory takings.

Emphasize that the vast majority of land use regulations will not be extreme

enough in their effect to amount to takings for which the government must

pay compensation. Discuss the risks of establishing too low or too high a

“trigger point” for what constitutes a prohibited regulatory taking.

1) Use Nollan v. California Coastal Commission (discussed in the text) as an

example of a prohibited regulatory taking. Note this apparent underlying

premise of the Supreme Court’s ruling: that the easement the Coastal

Commission attempted to acquire for the public by way of land use

regulation was the very sort of thing for which the power of eminent

domain (which requires payment of just compensation) was meant to be

used. If the U.S. Constitution requires the government to pay in order to

obtain “admission” through the “front door” marked eminent domain, the

government should not be able to obtain admission but evade the payment

obligation by selecting the “back door” marked land use regulation. The

analysis suggested in Nollan was developed further in Dolan v. City of

Tigard, which will be discussed shortly.

2) Explore the issue of regulations that allow property owners no

economically beneficial use of their property, as in Lucas v. South

Carolina Coastal Commission (discussed in the text). Review the facts of

Lucas, noting that most land use regulations will not impose restrictions as

severe as those present in Lucas. Also emphasize the familiar rule that the

government need not pay compensation every time its land use regulation

denies a property owner the “highest and best (most profitable) use” of her

property. Note that even though the Supreme Court reiterated this rule and

spoke, in Lucas, of regulations denying “all economically beneficial use”

of property, the Court nonetheless offered hints that certain less-than-total

takings (in terms of economically beneficial uses) might sometimes trigger

a compensation right. Lucas therefore seems likely to continue spawning

regulatory taking litigation, in which property owners allege that the

government has gone “too far” with a certain land use regulation. Courts

must then decide not only where to draw the line on how far the

government may go, but also whether that line has been crossed.

3) Contrast the regulatory takings cases just discussed with the physical

takings cases discussed previously in connection with the inverse

condemnation doctrine (where the government action constitutes an actual

physical invasion or occupation of the property owner’s land). Because the

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Chapter 24 – Real Property

government is allowed considerable latitude in regulating land uses,

regulatory takings cases involve a matter of degree: has the government

gone too far with the particular regulation at issue? The outcome of a

given regulatory takings case may therefore be difficult to predict.

Physical takings cases, on the other hand, do not involve the “matter of

degree” analysis used in the regulatory takings cases. If a physical

invasion or occupation by means of authorized government action is

proven, the government is expected to pay for the physical taking. The

Supreme Court has sometimes used the term per se takings to refer to

physical takings cases.

Additional Example: Lingle v. Chevron U.S.A., Inc., 544 U.S. 528 (2005):

Hawaii enacted a statute (Act 257) to protect independent gasoline dealers

that limited the rent that an oil company could charge a lessee-dealer,

among other provisions. Chevron filed suit against the state claiming that

the statute constituted a taking. Lower courts, using the “substantially

advances” test (i.e., that a regulation constitutes a taking if the regulation

does not substantially advance legitimate state interests), held that the

statute effected a taking in violation of the Fifth Amendment. The U.S.

Supreme Court reversed on the ground that the “substantially advances”

test is the incorrect test to apply in a takings case because it does not test

for the “magnitude or character of the burden a particular regulation

imposes upon private property rights.” This case attempts to clarify the

framework that is to be used in determining whether a law that has a

negative effect on a property owner constitutes a taking such that the

government is required to compensate the property owner. As of the time

of this writing, Lingle is the Supreme Court’s most recent opinion on

regulatory takings.

IV. RECOMMENDED REFERENCES

A. EDWARD H. RABIN, FUNDAMENTALS OF MODERN REAL PROPERTY LAW (3d ed.

1992).

B. ROGER BERNHARDT & ANN M. BURKHART, REAL PROPERTY IN A NUTSHELL

(5th ed. 2005).

C. Lynda J. Oswald, Property Rights Legislation and the Police Power, 37 AM. BUS.

L.J. 527 (2000).

D. Richard Epstein, Kelo: An American Original: Of Grubby Particulars & Grand

Principles. 8 Green Bag 2d 355 (2005).

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