1. Real and Personal Property
Chapter 8

2. Law of Property Real Property: immovable (i.e. land, trees, houses)
Oldest part of common law
Concepts from common law developed in England from 12th to 16th 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

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

4. Ownership of Land Deeds
Most common way to transfer ownership—warranty 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)

5. 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

6. 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 can’t ruin it.

7. 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

8. 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.

9. Servitudes 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.
Can’t block wind from turbines.

10. 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

11. 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 1996.
Sims asked the court to grant him an easement.
Trial court held that Sims has a prescriptive easement; allowed use of driveway on Moran’s 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+

12. 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”

13. 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 RV’s permitted as residences
Look at the intention of the parties that created a restrictive covenant
The plain intent of the CC&R’s was to limit residents to mobile or manufactured homes, constructed homes or hanger-homes.

14. 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.

15. 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

16. Rights/Duties of a Tenant
Right of possession during lease
Can exclude other parties
Landlord must make essential repairs or may have constructive eviction
Can’t:
abuse property
commit waste
remove valuable property
be nuisance to neighbors
engage in illegal activities on property

17. Commercial Leases
Commercial leases often drafted by the lessor’s 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

18. Nielson v. Gold’s 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.
Couldn’t 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.

19. Nielson v. Gold’s 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.

20. 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

21. 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

22. 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-Eleven’s 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

23. Torts Against Property
Trespass to Land: Unauthorized intrusion that interferes with another’s 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 another’s personal property
Misappropriation: Invasion of property rights such as trademarks or trade secrets

24. 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.

25. 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.
City’s decision was reasonable.

26. 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.”

27. 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.

28. 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 customer’s foot, someone’s cane, or obstacles when exiting an aisle.
Duty of ordinary care includes looking what is in the aisles. No award to Campisi.

29. 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

30. 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 3rd 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.