Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
in whole or in part.
CHAPTER 29
REAL PROPERTY AND
LANDLORD-TENANT LAW
in whole or in part.
CHAPTER 29: REAL PROPERTY AND LANDLORD-TENANT LAW 3
in whole or in part.
to a natural gas pipeline provides a direct benefit to the community. As the court noted, the
potential for cheaper natural gas may spur growth and provide the city with an advantage in
recruiting industries to the area. These benefits may be substantial and obviously would justify
the condemnation. But what happens if Midland never actually acquires gas through the
pipeline? Then the city has condemned property without providing a benefit to its citizens. The
court dismissed this argument because the agreement gave Midland a right to access the
pipeline, and presumably this means that the city intends to do so at some point.
3A. The town of Midland—and its taxpaying citizens—had to pay fair value to fifteen
property owners for property it acquired through eminent domain. Is it right to make the
citizens of one town pay for a pipeline constructed for another town? Explain. In times of
recession, the people of Midland would likely complain about footing the bill for a pipeline
expansion that will not provide them with any financial benefit in the short term. Even if the
properties involved had a relatively low value, such as $100,000 each, Midland would still have
to pay the fifteen owners a substantial amount (for the $100,000 example, $1.5 million). While it
does not seem right to make Midland residents pay for the costs of acquiring property for a
pipeline to run to another town, it is an investment in Midland’s future. If, indeed, the availability
of gas through the pipeline spurs Midland’s growth and brings more industry to the area, the
entire town of Midland will benefit financially. It is always expensive to invest in infrastructure
necessary to develop natural resources. But the end result may pay off in cheaper natural gas (if
Midland does tap into the pipeline) and increased growth (if it brings new industries to the town).
Moreover, there was no discussion in the opinion of how much Monroe was paying to construct
the pipeline, and that amount could have greatly exceeded the cost of acquiring the fifteen
properties. In that event, it may have been a bargain for Midland to pay for the properties and
receive the associated benefits.
4A. Suppose that Midland had used its eminent domain authority to acquire property
for the town to lease to a private resort that would provide a large number of jobs and
bring tourist dollars into the community. What are the arguments for and against this use
of the power of eminent domain? Under the U.S. Constitution, the government has the right to
acquire possession of real property for public use. The power of eminent domain is limited to the
taking of property for public use, though the United States Supreme Court has allowed the
taking of private property to further economic development in blighted, or distressed, areas. The
idea is that allowing the government to take private property and give it to private developers
benefits the public by revitalizing the community. Many people and courts, however, feel that it
is unfair for the government to take one person’s property and give it to another.
In favor of this action, it might be argued that promoting economic development is a
traditional and long accepted function of government. When economic development benefits a
community, there is almost no way to distinguish it from other public purposes. Condemning a
blighted area so that it can be redeveloped commercially, for example, is a mix of private use
and public benefit.
Against this use of the power of eminent domain, it might be argued that a local
government body could then use the power to replace a business that it does not favor with
4 UNIT SEVEN: PROPERTY AND ITS PROTECTION
in whole or in part.
some other business that it regards more favorably, notwithstanding the owner’s right and desire
to use the property as he or she sees fit. The beneficiaries are likely to be citizens with
disproportionate influence and power in the local political process, including large corporations
and real estate development firms.
ANSWERS TO QUESTIONS IN THE REVIEWING FEATURE
AT THE END OF THE CHAPTER
1A. Citizens’ right
Here, the right conveyed by the deed is nonpossessory and gives citizens a limited right to
travel on a trail over Shoepke’s land. Therefore, it is an easement.
2A. Deed’s covenants
A warranty deed conveys the most covenants, or promises of any other deed. The seller
promises that he or she has title to the property, the power to convey it, that there are no
encumbrances against the property, and that the buyer will not be disturbed in her or his
possession (i.e. quiet enjoyment).
3A. Homeowners’ agreement
A promise between a group of landowners protecting the interests of individuals who come onto
the land and the interests of the owners of nearby land is called a restrictive covenant. The
agreement may “run with the land” even if Shoepke was not a party to it.
4A. Tenant’s responsibility
When Slater sublet the apartment, she remained liable under the lease agreement. If a
subtenant fails to pay the rent or causes damage to the premises, the landlord can still hold the
original tenant financially responsible for the rent payments or cost of repairing the damage.
Hence, Slater can be held liable for the damage Indalecio caused (beyond ordinary wear and
tear).
ANSWER TO DEBATE THIS QUESTION IN THE REVIEWING FEATURE
AT THE END OF THE CHAPTER
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. The Constitution’s Fifth
Amendment is clear about giving the power of condemnation to government. Such power can
only be used to take private property for public use (and with appropriate compensation, of
course). When a local government uses this taking power to condemn property that it later sells
to private developers for a shopping mall development or nicer houses and apartments, that
government is acting in violation of our Constitution.
CHAPTER 29: REAL PROPERTY AND LANDLORD-TENANT LAW 5
in whole or in part.
Sometimes, local governments face tough economics times and must do what they can
to raise more taxes. If a blighted area is never going to “upgrade” itself, then local governments
should be able to step in and speed up the process by a taking, as provided for in the Fifth
Amendment to the U.S. Constitution. The public good will be served in two ways: the blighted
area will be transformed for the better and the local government will obtain more taxes revenues
from the businesses located in this area.
ANSWERS TO ISSUE SPOTTERS IN THE EXAMPREP FEATURE
AT THE END OF THE CHAPTER
1A. Bernie sells his house to Consuela under a warranty deed. Later, Delmira appears,
holding a better title to the house than Consuela has. Delmira wants to have Consuela
evicted from the property. What can Consuela do? . This is a breach of the warranty deed’s
covenant of quiet enjoyment. The buyer can sue the seller and recover the purchase price of the
house, plus any damages.
2A. Grey owns a commercial building in fee simple. Grey transfers temporary
possession of the building to Haven Corporation. Can Haven transfer possession for
even less time to Idyll Company? Explain. Yes. An owner of a fee simple has the most rights
possible—he or she can give the property away, sell it, transfer it by will, use it for almost any
purpose, possess it to the exclusion of all the world, or as in this case, transfer possession for
any period of time. The party to whom possession is transferred can also transfer his or her
interest (usually only with the owner’s permission) for any lesser period of time.
ANSWERS TO BUSINESS SCENARIOS AND BUSINESS CASE PROBLEMS
AT THE END OF THE CHAPTER
29-1A. Property ownership
(Chapter 29—Page 570)
land. When Rafael properly recorded the quitclaim deed, it served as notice to all future pur-
chasers of her interest in the property. Thus, Madison could not transfer any interest in the land
29-2A. Eviction
(Chapter 29—Page 578)
in whole or in part.
in whole or in part.
8 UNIT SEVEN: PROPERTY AND ITS PROTECTION
in whole or in part.
free lease of the property under the garage ended. Mansell never notified the previous owner or
Hunter that she was claiming adverse possession so that the hostile possession time would
begin. Hunter had objected to the possession in 2003. So Mansell’s garage was trespassing on
Hunter’s property. Hunter may agree to sell Mansell the property, but need not do so, in which
case the garage must be removed to end the continuing trespass.
29-8A. SPECIAL CASE ANALYSIS—Eminent Domain
Case No. 29.3
Town of Midland v. Morris
Court of Appeals of North Carolina, 2013.
agreement, Midland could—if it chose—tap the line at a discounted price. Midland used its
eminent domain authority to condemn the property. Fifteen property owners challenged the
action in a North Carolina state court. The court ruled in Midland’s favor. The owners appealed,
claiming that Midland's condemnation was not for public use or benefit, because the town had
CHAPTER 29: REAL PROPERTY AND LANDLORD-TENANT LAW 9
in whole or in part.
The public use test asks whether the public has a right to a definite use of the
condemned property. The public benefit test asks whether some benefit accrues to the public as
a result of the desired condemnation.
(c) Applying the Rule of Law: How did the court apply the rule to the facts in this
case? The court broadly interpreted the relevant state statutes to find that a city has the power
to establish a public utility when it plans to develop the infrastructure and capability even if it has
no plan to furnish the service.
In applying the public use test, the court noted that “there was nothing to indicate that gas
services—were they to be provided by Midland—would be available to anything less than the
spur growth and provide advantages to the city in attracting industry. “These opportunities must
be seen as public benefits accruing to the citizens of Midland, such that Midland's
condemnations are for the public benefit.”
(d) Conclusion: What did the court conclude? Why? The trial court in the Town of
growth, as well as provide the town with an advantage in attracting new industries. These
opportunities were for the public benefit of the citizens of Midland.
29-9A. A QUESTION OF ETHICS—Seller’s duty to disclose
(a) The court concluded that Armstrong was not required to disclose Ring’s failure to
pay rent, because that was not one of the “conditions affecting the property or transaction,” and
dismissed the suit. The Kailins appealed to a state intermediate appellate court, which reversed
the physical real estate,” but include those that have an “effect on the value of the property.” As
to whether Ring’s delinquency and default affected the value of the property, the court explained
“that failure significantly reduces the income received from the property while Ring Karate
remains a tenant without meeting its obligation; an expenditure of funds is likely required to evict
in whole or in part.
in whole or in part.
CHAPTER 29: REAL PROPERTY AND LANDLORD-TENANT LAW 3
in whole or in part.
to a natural gas pipeline provides a direct benefit to the community. As the court noted, the
potential for cheaper natural gas may spur growth and provide the city with an advantage in
recruiting industries to the area. These benefits may be substantial and obviously would justify
the condemnation. But what happens if Midland never actually acquires gas through the
pipeline? Then the city has condemned property without providing a benefit to its citizens. The
court dismissed this argument because the agreement gave Midland a right to access the
pipeline, and presumably this means that the city intends to do so at some point.
3A. The town of Midland—and its taxpaying citizens—had to pay fair value to fifteen
property owners for property it acquired through eminent domain. Is it right to make the
citizens of one town pay for a pipeline constructed for another town? Explain. In times of
recession, the people of Midland would likely complain about footing the bill for a pipeline
expansion that will not provide them with any financial benefit in the short term. Even if the
properties involved had a relatively low value, such as $100,000 each, Midland would still have
to pay the fifteen owners a substantial amount (for the $100,000 example, $1.5 million). While it
does not seem right to make Midland residents pay for the costs of acquiring property for a
pipeline to run to another town, it is an investment in Midland’s future. If, indeed, the availability
of gas through the pipeline spurs Midland’s growth and brings more industry to the area, the
entire town of Midland will benefit financially. It is always expensive to invest in infrastructure
necessary to develop natural resources. But the end result may pay off in cheaper natural gas (if
Midland does tap into the pipeline) and increased growth (if it brings new industries to the town).
Moreover, there was no discussion in the opinion of how much Monroe was paying to construct
the pipeline, and that amount could have greatly exceeded the cost of acquiring the fifteen
properties. In that event, it may have been a bargain for Midland to pay for the properties and
receive the associated benefits.
4A. Suppose that Midland had used its eminent domain authority to acquire property
for the town to lease to a private resort that would provide a large number of jobs and
bring tourist dollars into the community. What are the arguments for and against this use
of the power of eminent domain? Under the U.S. Constitution, the government has the right to
acquire possession of real property for public use. The power of eminent domain is limited to the
taking of property for public use, though the United States Supreme Court has allowed the
taking of private property to further economic development in blighted, or distressed, areas. The
idea is that allowing the government to take private property and give it to private developers
benefits the public by revitalizing the community. Many people and courts, however, feel that it
is unfair for the government to take one person’s property and give it to another.
In favor of this action, it might be argued that promoting economic development is a
traditional and long accepted function of government. When economic development benefits a
community, there is almost no way to distinguish it from other public purposes. Condemning a
blighted area so that it can be redeveloped commercially, for example, is a mix of private use
and public benefit.
Against this use of the power of eminent domain, it might be argued that a local
government body could then use the power to replace a business that it does not favor with
4 UNIT SEVEN: PROPERTY AND ITS PROTECTION
in whole or in part.
some other business that it regards more favorably, notwithstanding the owner’s right and desire
to use the property as he or she sees fit. The beneficiaries are likely to be citizens with
disproportionate influence and power in the local political process, including large corporations
and real estate development firms.
ANSWERS TO QUESTIONS IN THE REVIEWING FEATURE
AT THE END OF THE CHAPTER
1A. Citizens’ right
Here, the right conveyed by the deed is nonpossessory and gives citizens a limited right to
travel on a trail over Shoepke’s land. Therefore, it is an easement.
2A. Deed’s covenants
A warranty deed conveys the most covenants, or promises of any other deed. The seller
promises that he or she has title to the property, the power to convey it, that there are no
encumbrances against the property, and that the buyer will not be disturbed in her or his
possession (i.e. quiet enjoyment).
3A. Homeowners’ agreement
A promise between a group of landowners protecting the interests of individuals who come onto
the land and the interests of the owners of nearby land is called a restrictive covenant. The
agreement may “run with the land” even if Shoepke was not a party to it.
4A. Tenant’s responsibility
When Slater sublet the apartment, she remained liable under the lease agreement. If a
subtenant fails to pay the rent or causes damage to the premises, the landlord can still hold the
original tenant financially responsible for the rent payments or cost of repairing the damage.
Hence, Slater can be held liable for the damage Indalecio caused (beyond ordinary wear and
tear).
ANSWER TO DEBATE THIS QUESTION IN THE REVIEWING FEATURE
AT THE END OF THE CHAPTER
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. The Constitution’s Fifth
Amendment is clear about giving the power of condemnation to government. Such power can
only be used to take private property for public use (and with appropriate compensation, of
course). When a local government uses this taking power to condemn property that it later sells
to private developers for a shopping mall development or nicer houses and apartments, that
government is acting in violation of our Constitution.
CHAPTER 29: REAL PROPERTY AND LANDLORD-TENANT LAW 5
in whole or in part.
Sometimes, local governments face tough economics times and must do what they can
to raise more taxes. If a blighted area is never going to “upgrade” itself, then local governments
should be able to step in and speed up the process by a taking, as provided for in the Fifth
Amendment to the U.S. Constitution. The public good will be served in two ways: the blighted
area will be transformed for the better and the local government will obtain more taxes revenues
from the businesses located in this area.
ANSWERS TO ISSUE SPOTTERS IN THE EXAMPREP FEATURE
AT THE END OF THE CHAPTER
1A. Bernie sells his house to Consuela under a warranty deed. Later, Delmira appears,
holding a better title to the house than Consuela has. Delmira wants to have Consuela
evicted from the property. What can Consuela do? . This is a breach of the warranty deed’s
covenant of quiet enjoyment. The buyer can sue the seller and recover the purchase price of the
house, plus any damages.
2A. Grey owns a commercial building in fee simple. Grey transfers temporary
possession of the building to Haven Corporation. Can Haven transfer possession for
even less time to Idyll Company? Explain. Yes. An owner of a fee simple has the most rights
possible—he or she can give the property away, sell it, transfer it by will, use it for almost any
purpose, possess it to the exclusion of all the world, or as in this case, transfer possession for
any period of time. The party to whom possession is transferred can also transfer his or her
interest (usually only with the owner’s permission) for any lesser period of time.
ANSWERS TO BUSINESS SCENARIOS AND BUSINESS CASE PROBLEMS
AT THE END OF THE CHAPTER
29-1A. Property ownership
(Chapter 29—Page 570)
land. When Rafael properly recorded the quitclaim deed, it served as notice to all future pur-
chasers of her interest in the property. Thus, Madison could not transfer any interest in the land
29-2A. Eviction
(Chapter 29—Page 578)
in whole or in part.
in whole or in part.
8 UNIT SEVEN: PROPERTY AND ITS PROTECTION
in whole or in part.
free lease of the property under the garage ended. Mansell never notified the previous owner or
Hunter that she was claiming adverse possession so that the hostile possession time would
begin. Hunter had objected to the possession in 2003. So Mansell’s garage was trespassing on
Hunter’s property. Hunter may agree to sell Mansell the property, but need not do so, in which
case the garage must be removed to end the continuing trespass.
29-8A. SPECIAL CASE ANALYSIS—Eminent Domain
Case No. 29.3
Town of Midland v. Morris
Court of Appeals of North Carolina, 2013.
agreement, Midland could—if it chose—tap the line at a discounted price. Midland used its
eminent domain authority to condemn the property. Fifteen property owners challenged the
action in a North Carolina state court. The court ruled in Midland’s favor. The owners appealed,
claiming that Midland's condemnation was not for public use or benefit, because the town had
CHAPTER 29: REAL PROPERTY AND LANDLORD-TENANT LAW 9
in whole or in part.
The public use test asks whether the public has a right to a definite use of the
condemned property. The public benefit test asks whether some benefit accrues to the public as
a result of the desired condemnation.
(c) Applying the Rule of Law: How did the court apply the rule to the facts in this
case? The court broadly interpreted the relevant state statutes to find that a city has the power
to establish a public utility when it plans to develop the infrastructure and capability even if it has
no plan to furnish the service.
In applying the public use test, the court noted that “there was nothing to indicate that gas
services—were they to be provided by Midland—would be available to anything less than the
spur growth and provide advantages to the city in attracting industry. “These opportunities must
be seen as public benefits accruing to the citizens of Midland, such that Midland's
condemnations are for the public benefit.”
(d) Conclusion: What did the court conclude? Why? The trial court in the Town of
growth, as well as provide the town with an advantage in attracting new industries. These
opportunities were for the public benefit of the citizens of Midland.
29-9A. A QUESTION OF ETHICS—Seller’s duty to disclose
(a) The court concluded that Armstrong was not required to disclose Ring’s failure to
pay rent, because that was not one of the “conditions affecting the property or transaction,” and
dismissed the suit. The Kailins appealed to a state intermediate appellate court, which reversed
the physical real estate,” but include those that have an “effect on the value of the property.” As
to whether Ring’s delinquency and default affected the value of the property, the court explained
“that failure significantly reduces the income received from the property while Ring Karate
remains a tenant without meeting its obligation; an expenditure of funds is likely required to evict
in whole or in part.
