Business Law Chapter 50 Homework The Implied Warranty Habitability Requires The Landlord

CHAPTER 50

REAL PROPERTY AND

LANDLORD-TENANT RELATIONSHIPS

ANSWERS TO QUESTIONS

AT THE ENDS OF THE CASES

CASE 50.1—QUESTIONS (PAGE 978)

THE ETHICAL DIMENSION

At one point, the Biglanes blocked off two parking lots that served the Saloon. Was this an unreasonable

interference with the Saloon’s rights? Explain. The Saloon claimed that the Biglanes’ act was “a tortious

interference with a business relationship.” This requires an act that is intended to, and does, damage a

business, “without right or justifiable cause” (i.e., with malice). The trial court ruled in favor of the

THE LEGAL ENVIRONMENT DIMENSION

Could repulsive odors emanating from a neighbor’s property constitute unreasonable interference with

a property owner’s rights? Discuss. Yes (for example, a property owner might be overwhelmed by the

CASE 50.2—QUESTIONS (PAGE 988)

WHAT IF THE FACTS WERE DIFFERENT?

Suppose that Rollins had not paid any taxes on the disputed land and that Scarborough had done so.

Would the result have been different? Explain. Probably not. The payment of taxes would have lent

support to Scarborough’s claim, but it would not have sufficiently undercut Rollins’s proof of her claim

to succeed. Without an exercise of use over the property on Scarborough’s part, it would have been

THE E-COMMERCE DIMENSION

How might the Internet have facilitated either party’s claim to the disputed property? Depending on the

CASE 50.3—QUESTIONS (PAGE 990)

1A. Why did the United States Supreme Court grant certiorari in this case, and what did the Court

hold with respect to the principal issue? The Court “granted certiorari to determine whether a city’s

decision to take property for the purpose of economic development satisfies the ‘public use’

requirement of the Fifth Amendment.” The United States Supreme Court agreed with the result in the

lower courts. The Supreme Court held that economic development can constitute “public use” within

the meaning of the Fifth Amendment’s takings clause to justify a local government’s exercise of its

power of eminent domain to take private property. In this case, the condemnations were part of a

comprehensive plan to provide a “distressed municipality” with increased tax revenue, new jobs, and

other benefits. The Court reasoned that the plan “unquestionably serves a public purpose,” even though

this result would also benefit private parties.

2A. Considering the impact of the majority’s ruling, what are some arguments against this decision?

442 UNIT TEN: PROPERTY AND ITS PROTECTION

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

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 50: REAL PROPERTY AND LANDLORD-TENANT RELATIONSHIPS 443

444 UNIT TEN: PROPERTY AND ITS PROTECTION

ANSWERS TO QUESTIONS AND CASE PROBLEMS

AT THE END OF THE CHAPTER

50-1A. Property ownership

(Chapter 50—Page 985)

Linda cannot claim title to the land over Rafael’s quitclaim deed. A quitclaim deed conveys whatever

50-2A. Eviction

(Chapter 50—Page 993)

The issue centers on whether Juan was constructively evicted and whether James breached the lease’s

covenant of quiet enjoyment. Under the covenant of quiet enjoyment, the landlord promises that

50-3A. QUESTION WITH SAMPLE ANSWER: Deeds

Wilfredo understandably wants a general warranty deed, as this type of deed will give him the most

extensive protection against any defects of title claimed against the property transferred. The general

warranty would have Patricia warranting the following covenants:

50-4A. Implied warranty of habitability

(Chapter 50—Pages 993 & 995)

At common law the landlord was under no duty to repair the leased premises or to warrant that the

premises were habitable. The tenant took the property “as is” and assumed the obligation to make

50-5A. CASE PROBLEM WITH SAMPLE ANSWER: 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 (in the Kelo decision) has allowed the taking of private property to further

50-6A. Ownership in fee simple

(Chapter 50—Pages 976–978)

The rights that a property owner enjoys include the right to do with the property whatever the owner

sees fit, subject to the restriction, among other laws, that prevent the owner from interfering

unreasonably with others’ use and enjoyment of their property. In this case, the court acknowledged

50–7A. Commercial lease terms

(Chapter 50—Pages 993 & 995)

Park might seek to recover from Landmark for breach of its lease obligation to provide a roof “in good

repair” and to provide the tenant with the quiet enjoyment of the premises. Landmark might assert that

50-8A. Adverse possession

(Chapter 50—Pages 986–988)

No. The appeals court affirmed that the property belonged to Hunter and ordered the encroaching

structure removed because it was a continuing trespass. Since Mansell initially occupied the property

under an informal agreement by the original owner of the property, adverse possession never started.

Mansell was a lessee. When Hunter bought the property, the 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

50-9A. 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 this part of the

lower court’s judgment. The appellate court concluded that “a reasonable person would view the

amount of rental income the owner receives as critical to valuing this property” and that this would

include “rent delinquencies that would significantly reduce the value of the property to a reasonable

person.” Armstrong argued that he was required to disclose “only conditions that affect the physical real

448 UNIT TEN: PROPERTY AND ITS PROTECTION

owners of Ring have a similar sense of ethics, they may also feel obligated to pay the unpaid rent to the

appropriate landlord and otherwise “make good” on the default under their lease.

50–10A. SPECIAL CASE ANALYSIS: Eminent domain

Case No. 50.3

Kelo v. City of New London, Connecticut

Supreme Court of the United States, 2005.

545 U.S. 469,

125 S.Ct. 2655,

(b) Rule of Law: What does the Fifth Amendment to the U.S. Constitution, which the Court

applied, require, with respect to the legal issue in this case? The Fifth Amendment to the U.S.

Constitution requires that condemned property serve a public purpose. In this case, the owners claimed

that the taking of their properties would violate the “public use” restriction in the Fifth Amendment. The

United States Supreme Court agreed to determine whether the city’s decision to take property for the

purpose of economic development satisfies this requirement.

(c) Applying the Rule of Law: How did the Court apply the rule of law to the facts of this

case? The Court explained the governing rule, discussed how it had been applied in previous cases,

reviewed the circumstances of this case, and set out the reasons for its conclusion. The Court reviewed

the principle underlying the plaintiffs’ challenge to the city’s action and briefly explained how and why

the rule had changed from “long ago.” The Court also noted that the condemnations were part of a

comprehensive plan to help a “distressed municipality” economically.

(d) Conclusion: What was the Court’s conclusion? The Court concluded that the power of