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Real and Personal Property Chapter 8 Law of Property Oldest part of common law Concepts from common law developed in England from 12 th to 16 th centuries.

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Presentation on theme: "Real and Personal Property Chapter 8 Law of Property Oldest part of common law Concepts from common law developed in England from 12 th to 16 th centuries."— Presentation transcript:

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2 Real and Personal Property Chapter 8

3 Law of Property Oldest part of common law Concepts from common law developed in England from 12 th to 16 th centuries Right guaranteed and protected by government Real Property: immovable (i.e. land, trees, houses) Personal Property (chattel): moveable (i.e. furniture and clothing) Contract law is used to make arrangements about the property use

4 Real Property Land –under - oil, minerals –attached - buildings, trees Property - legally protected expectation of being able to use a thing for ones advantage. Owner has a bundle of legal rights. Governmental regulations may restrict property owners common-law land use rights –(i.e. Endangered Species Act re: rare plants and animal protection)

5 Ownership of Land Deeds Most common way to transfer ownershipwarranty deeds most popular ID original owner, describe land, ID new owner & state that ownership is transferred, possibly subject to certain conditions Titles Comes from receipt of valid deed; is means by which owner has legal possession of the property Formal right of ownership–sell, use, give–control it Titles are recorded by state officials (usually county) When property is transferred, usual to obtain title insurance (depends on state)

6 Forms of Ownership Fee Simple - indefinite time and right to dispose of it up in the air to the skies down to the core to the center of the earth –these rights can be sold separately –subsurface mineral rights (profits) often legally separated –in all other countries, mineral rights belong to government Can be inherited, transferred, sold in part or in whole

7 Forms of Ownership Joint tenancy –Each tenant has same interest in undivided possession of property –Right of survivorship – if one tenant dies, ownership passes to other owner –Joint tenants can force an end to joint tenancy by transferring an interest into a tenancy in common Tenancy in Common –Each tenant (owner) has undivided interest in property –If one tenant dies, that interest passes to estate/heirs Tenancy by the Entirety –Available only to married couples; available in ½ of the states –One tenant cannot force an end to it except by divorcing the other Life Estates –Have use of land for life of tenant for life- but cant ruin it.

8 Trusts Form of ownership through common law Separates legal and beneficial ownership of property Settlor (grantor) places property into a trust (often through what is call a deed of trust). Trustee owns legal title. Beneficiary holds an equitable title to the property. Trustee has a duty to manage the property for benefit of the beneficiary Business Trusts often used in place of partnerships or corporations –Beneficiaries receive certificates of beneficial ownership –Can be traded like stocks & bonds

9 Evolving Property Law: Condominiums Not seen much before 1960s Fee simple estate applies Living space in building is owned in fee simple (numerous conditions attached) BUT land building sits on, as well as elevators & lobbies, are held in common (for condo owners) by another person (business) Most states have statutes to simplify the legal process of modern living arrangements consistent with traditional property law.

10 Servitudes –property requirements imposed by an owner –positive and negative requirements –easements and covenants most important servitudes Easements –right to enter land of another and make use of it or take something –example: sidewalks, utilities –becoming common in connection with solar and wind energy Neighbors cannot block sunlight or solar collectors. Cant block wind from turbines.

11 Adverse Possession Must be: –Actual - does in fact possess property –Open - visible so owner is on notice –Hostile - without consent of owner –Exclusive - not shared with others who have no right –Continuous - goes on without major interruption –State laws vary on time required – from 5-20 years

12 Moran v. Sims Sims owned property for decades surrounded by Moran property. Sims built a home in Had access to property by driveway across the property bought by Moran in Sims asked the court to grant him an easement. Trial court held that Sims has a prescriptive easement; allowed use of driveway on Morans property. Moran appealed. HELD: Affirmed. Elements of adverse possession proven. Use of the property was –Open and visible: Sims used the driveway since 1985 –Hostile: No proof Moran consented for Sims to use drive –Claim of Ownership: Sims bought gravel for drive & hired it spread –Exclusive: Driveway used by Sims family & those they permitted to use it –Peaceful: No evidence of dispute of use of driveway –Continuous/Uninterrupted for 10 years+

13 Covenants Covenants or Covenant Running With the Land –Not actual legal interest in an estate –More like a contract with an estate –Most residential subdivisions have covenants –May burden or benefit the land –Tool for developing real estate –Goes with the estate from owner to owner Covenant runs with the land

14 Powell v. Washburn 1988, Washburn, real estate developer, recorded Declarations of Covenants, Conditions and Restrictions (CC&R) for Indian Hills Airpark, an aviation-related community. Referenced incorporation of the La Paz County zoning ordinances Zoning permitted 3 residential uses: mobile or manufactured homes, constructed homes, and hanger-houses (homes incorporating an airplane hanger). In 1996, County amended ordinances to permit use of recreational vehicles (RVs) as residences. In 2002 Powell sued Washburn requesting injunction against use of RVs as residences within the Airpark. Trial Court held CC&R did not permit RVs as residents. Appeals court reversed. Decision appealed to state supreme court. HELD: Vacated and affirmed the trial court No RVs permitted as residences Look at the intention of the parties that created a restrictive covenant The plain intent of the CC&Rs was to limit residents to mobile or manufactured homes, constructed homes or hanger-homes.

15 Landlords & Tenants Landlords and tenants –rented property is called a leasehold –landlord has interest of some length –tenant possesses estate for a fixed period or at will as determined by landlord –Leased property is assumed at law to have an implied warranty of habitability.

16 Lease Can be commercial or residential ID parties describe premises being leased state how long in effect state how much rent is to be paid does not have to state a specific end –can go month to month usually also: –who pays utilities, taxes, insurance –where/when rent is paid –terms of damage deposit –who is responsible for repairs/maintenance –subleasing –termination provision

17 Rights/Duties of a Tenant Right of possession during lease Can exclude other parties Landlord must make essential repairs or may have constructive eviction Cant: –abuse property –commit waste –remove valuable property –be nuisance to neighbors –engage in illegal activities on property

18 Commercial Leases Commercial leases often drafted by the lessors legal department Based on state law requirements and experiences with previous tenants Tend to be long Cover many issues in detail Description of leased space is often defined by terms used by the Building Owners and Mangers Association (BOMA) –Recognized authority in setting standards for commercial leases

19 Nielson v. Golds Gym Peterson signed lease with Nielsen to lease premises in a strip mall for a gym for 3 years at $0.85 annual per square foot. Nielsen still building at the time of the lease. Contractor told Peterson it would cost $168,000 to improve the building shell for the gym. Peterson discussed with Nielsen who would pay for the interior improvements. Couldnt reach agreement. Peterson walked away. Nielsen leased to another party. Nielsen sued for $112,000 for breach of contract & loss for renting space for less than Peterson had agreed to. Court held lease was unenforceable: no agreement of the nature and extent of property to be leased. Appeal.

20 Nielson v. Golds Gym HELD: Affirmed. Lease unenforceable for lack of mutual assent to terms of who will pay for the improvement. Building was a shell when lease was signed. Not clear from the lease who would pay for modifications. No evidence of industry standards of who would be responsible for payment in this situation. Costs of improvements would have consumed more than half the rent over the 3-year lease term. Payment for improvements is not essential to every commercial lease agreement. HOWEVER, here it was an essential part of the bargain to be reached. Missing term creates an ambiguous lease and no mutual assent by the parties.

21 Public Control of Real Property Eminent Domain –Government can force sale of property or granting of easement without consent of owner –Must prove need for a public purpose –5th Amendment requires just compensation Police powers –Control land use with regulations (i.e. zoning) –Is there compensation? Maybe, but when property loses value, compensation may not appear to be just to an owner. –Sometimes negotiated & sometimes statutes help court or jury decides amount to be paid

22 Saadala v. East Brunswick Zoning Board of Adjustment 7-Eleven has a store with 6 parking spaces on ½ acre lot in NJ Part of lot is zoned residential, but store existed before zoning Store was grandfathered in as a preexisting nonconforming use Next to 7-Eleven is vacant Shell gas station also grandfathered in 7-Eleven wanted to take over the gas station property and build retail gas operation Requested preexisting nonconforming use be extended Saadala, area resident, opposed classification Zoning Board approved it anyway Decision affirmed by County Trial Court Saadala appealed

23 Saadala v. East Brunswick Zoning Board of Adjustment HELD: Judgment reversed. 7-Eleven loses. Court looked at N.J. statute re: repair and restoration of structure existing at time of passage of new ordinance Purpose of limited nonconforming uses is to prevent any increase or change in nonconformity Under 7-Elevens redevelopment plan, new business operation would involve construction of 3 new islands to dispense gas and a kiosk, as well as 11 new parking spaces This is not simply an expansion of the convenience store or former Shell gas station; it is a substantial change in use of the properties 7-Eleven failed to show the property peculiarly fitted for a mini- mart Failed to show special reasons for approval of a use variance for its redevelopment plan; proposal rejected

24 Torts Against Property Trespass to Land: Unauthorized intrusion that interferes with anothers peaceful enjoyment of their property –Belief by trespasser that property belongs to him/her is not relevant -- still a trespass –Property owner may not intentionally harm trespasser or set a trap – but usually no duty to warn of dangerous conditions on the property Private Nuisance: interference with use & enjoyment of land –Destruction of crops, causing health risks from pollution, throwing objects on the land, using the neighboring house for drug deals Public Nuisance: Interference with a right held in common by general public –Illegal gambling, bad odors, obstruction of a highway Trespass to Personal Property: Interference with the right of an owner to the exclusive use and enjoyment of property Conversion: Unlawful control of anothers personal property Misappropriation: Invasion of property rights such as trademarks or trade secrets

25 Smith v. Kulig Kulig owns building with apartments on second floor. Back of building is a fire escape. Tenants are not to use fire escape unless an emergency. Smith visited Wolf at his apartment in the building. Smith went on fire escape; collapsed; Smith fell to his death. Estate sued Kulig. Trial court dismissed, holding Smith was a trespasser. Appealed. Held: Affirmed. Wrongful death action dismissed with prejudice. Trespasser is person who enters premises without privilege/consent. Building contained no trespass signs, as did door leading to and from fire escape. Ladder to the fire escape had no trespassing sign. Smith did not have the right to use fire escape–no emergency. Landowner owes no duty to trespasser other than not harming him in wanton or willful manner.

26 Atkinson v. City of Pierre Tour Ice produced ice at its plant in business district of Pierre for years. Trucks come and go.. Atkinson moved into apartment across street from ice plant. Complained to Tour Ice and City about noise– got nowhere. Sued for nuisance. Trial Court held for defendants. Atkinson appealed. HELD: Affirmed. Business is not a nuisance. There were no other complaints from any other residents near the plant. City has authority to declare what constitutes a nuisance. Citys decision was reasonable.

27 Torts Against Property Owners Is a person harmed on the property a trespasser or an invitee? Customers are invitees, not trespassers. What duty of care must property owners take to insure safety on their property? In business, a major tort is premises liability.

28 Premises Liability Accidents that result from negligence of the business Common are slip-and-fall cases Duty to keep premises reasonably safe under the circumstances Duty to inspect premises for dangers and correct problem or warn invitees If a danger is obvious, people have duty to protect themselves by acting reasonably. See Campisi v. Acme Markets, Inc.

29 Campisi v. Acme Markets, Inc. Blind employee worked at Acme grocery store. Was walking, using his white aluminum cane. Campisi walking down another aisle; rounded the corner; tripped over cane; suffered injuries. She sued Acme for premises liability based on negligence: store should post a sign that it had a blind employee using cane, then customers would be more cautious. Jury awarded a verdict for Campisi. Trial Court granted Acme judgment notwithstanding the verdict. Campisi appealed. HELD: Affirmed. Verdict in favor of Acme. Businesses owe invitees high duty of care for known or reasonably foreseeable risks or dangers. Customers must be aware of sudden occurrences in shopping markets – shopping carts, other customers foot, someones cane, or obstacles when exiting an aisle. Duty of ordinary care includes looking what is in the aisles. No award to Campisi.

30 Premises Liability Accidents that result from negligence of the business Common are slip-and-fall cases Not providing sufficient security to prevent crimes from occurring on the property –Problems are especially in high crime areas –Issue: Owner knew or should of known of problem in the area –Issue: Did owner act reasonably to protect patrons? –Ways owners may protect themselves: lighting, safety patrols, posters, warnings

31 Erichsen v. No-Frills Supermarkets of Omaha Erichsen went grocery shopping at No-Frills. Returned to her car, assaulted, beaten, robbed, dragged a mile hanging from the car of assailant. Suffered serious injuries. Sued No-Frills and owner of shopping center for negligently failing to warn of criminal activity. Said defendants failed to protect her from foreseeable criminal activities (10 criminal events within 16-month period). Trial court held defendants did not violate duty of care to Erichsen. She appealed. HELD: Remanded back to trial court for further proceedings. Property owner is not an insurer of safety until he knows that acts of 3 rd persons are occurring or could occur. If owner has reason to know, from past experience that there is danger, he has a duty to take precautions: warnings or guards. One incident not enough to create danger. However, here there were many prior criminal events in the area. Erichsen can go to trial with facts of the case against defendants.


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