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Property Outline

The law and landlord and tenant

the nature of the lease and the covenant of quiet enjoyment
Definition of a lease: a conveyance in which the owner of real estate transfers the right to exclusive
possession of land to another person for some length of time, in return for which the tenant becomes
obligated to pay rent.
the dual nature of modern leases
blend of contract and property law: Privity of Contract vs. Privity of Estate
Limitations on Leased Property:
Landlords: implied warranty of quiet enjoyment
Tenants: Limitations on rights to sublease
the covenant of quiet enjoyment: When noting quiet enjoyment, always ask if there was constructive
definition: a promise to the tenant that neither the landlord, nor anyone acting by or through
the landlord, nor anyone holding paramount title to the landlord will interfere with the tenants
possession of the premises
Fidelity Mutual Life Ins. Co v. Kaminsky: General Rule exception: A landlord is not
responsible for the actions of third parties, applies only when the landlord does not permit the
third party to act.
If landlord doesnt do anything to curb noise, then tenant will be able to recover for
quiet enjoyment.
Generally: criminal acts weight heavily against victim and against landlord
sometimes no claim under quiet enjoyment but may be liable under tort action
Kawinsky: Does not need to actively participate to interfere, but just not do anything is the
same as interfering
Rightful: the tenants estate is divested and the tenant has no legal recourse to
recover possession
Wrongful: the tenant can either sue to recover possession or terminate the lease
If Landlord wrongfully evicts a tenant, T can sue:
(1) Recover possession
(2) Terminate the lease
Constructive eviction: other conduct by which a landlord or its agents substantially
interfered with a tenant's ability to enjoy its bargained-for right of possession
Tenant must show
active interference with its possession or interference that results from the
landlords inaction in the fact of a legal duty to act
the interference is attributable to the landlord, the landlords agent, or a
paramount title holder
the interference must be: intentional, substantial, permanent
distinguishing the lease from nonpossessory interests
license: a revocable grant of permission to go onto land in possession of another person for a
specific purpose
easement: permits its holder to enter onto and make a particular use of land in possession of
another person
differences between license and easement
licenses are often temporary and short-term in nature, while easements are typically
easements are real property interests and a licensee typically cannot obtain injunctive
relief to prevent the licensor from interfering with or terminating a license.

Cook v. University Plaza: whether a contract is a lease or a license is not to be determined from
the language that the parties choose to call it but from the legal effect of its provisions
types of leasehold estates
tenancy for years
for any fixed term or duration
expires on its own at the end of the fixed term
periodic tenancy
measured by successive identical periods of time
automatically renews for successive periods, unless one of the parties gives proper notice to
terminate the tenancy.
tenancy at will
without a fixed duration and without any defined renewable periods
lasts as long as both parties wish it to last and it terminated when either party demonstrates
an intent to discontinue the tenancy
tenancy at sufferance
a label given to the situation that arises when a tenant holds over in possession after the
lease has expired
David Properties, Inc. v. Selk:
When a landlord demands a different rent for continued possession of property it owns, and a
tenant received that demand and thereafter continues on in possession without protest, the tenant
impliedly agrees to pay the rent demanded. (Timely)
landlord remedies for hold over tenants
landlord could treat the holdover as a trespasser and seek to evict him
could recover damages equal to the reasonable rental value of the premises for the
period during which the holdover remained in possession
landlord and unilaterally bind the tenant to a new term
courts are reluctant to impose a new term in cases where the tenants holdover is de
minimis or unintended
some states have statutes allowing the landlord to recover double or treble from holdover
Crechale v. Smith: Once a landlord elects to treat a tenant as a trespasser and refused to
extend the lease on a month-to-month basis, but fails to pursue his remedy of ejecting the
tenant and accepted monthly checks for rent due, he in effect agrees to an extension of the
lease on a month-to-month basis.
American Rule: landlord may lease the property to a new tenant even though a
holdover tenant remains in possession of the leased property
English Rule: landlord must evict a holdover tenant. The new tenant is excused from
paying rent until the landlord successfully evicts the holdover tenant. The landlord
only must make the leased property physically available for the tenant to occupy on
the first day of the lease term. Thereafter, it is the tenants responsibility to ward off
trespassers and defend the tenants legal right to possession and use of the leased
Terminating periodic tenancy
at common law--> either the landlord or the tenant could terminate a periodic tenancy by
giving the other part at least one periods notice (or six month notice in the case of a year to
year tenancy)
the termination date had to coincide with the natural end of the period.
modern view--> notice given in the middle of term is only sufficient for a termination of the
next term.
Tenancy at Will, or Freehold Estate?
at common law -->either the landlord or tenant could terminate a tenancy at will.

Extensions and Renewals
leases can provide a tenant the ability to renew the lease for an additional term or extend it for
a defined period
some case law recognizes a distinction between extensions and renewals
an extension does not contemplate that the parties will execute a new lease
while a renewal (because it is a new grant) does contemplate that the parties
will execute a new lease
to extend or renew a lease is a function of the leases express terms
sometimes a lease may provide that the tenants action of remain in possession
and paying rent following expiration gives rise to an extension or renewal.
more often--> a lease may provide that it will be automatically renewed for an
additional term unless the tenants notifies the landlord that she will not renew
(typically, by a fixed a date during the original lease term)
more frequently leases provide that a tenant can extend a renew the lase only
by giving effective prior notice to the landlord.
shaping the modern lease: selected problem areas in negotiating, drafting and interpreting leases

Definition Notice to Terminate? Effect of Death? Only one party can

terminate prior to
end of lease term?

Term of A term of years lasts No notice is required to Death of the If yes, the
Years for a fixed period of terminate a term of years landlord or the arrangement is a
Tenancy time. The beginning lease. The lease expires tenant has no terminable term of
and ending date are automatically at the end of effect on a term years
stated or can be the term of years lease.
ascertained The deceased
tenants estate is
responsible for
rent and other
lease obligations
for the duration of
the term

Periodic A periodic tenancy The terminating party must Death of either If yes, the
Tenancy lasts for a fixed give notice to terminate a the landlord or arrangement is a
period that periodic tenancy the tenant has no determinable
automatically Termination date must be effect on a periodic tenancy
renews until specified in notice: The periodic tenancy.
terminated by giving notice of termination must Unless the
notice. No final specify that the lease will deceased tenants
termination date is be terminated on the last estate wants to
stated in the lease, day of the period. If the maintain the
which can be notice does not specify the lease, the
renewed indefinitely last day of the period as personal
the termination date, the representative
court will either treat the must give the
notice as effective as of the notice to
end of the next period, or terminate
treat the notice as
ineffective to terminate the
lease at all.
Advance Notice to
terminate year-to-year
tenancy: six months

advance notice of
termination is required
Advance notice to
terminate month-to-month
tenancy: one months
advance notice of
termination is required
Advance notice to
terminate other periodic
tenancies: advance notice
of termination equal to the
length of the period is
required, but no longer
than six months

Tenancy A tenancy at will In a true tenancy at will, Death or either If the duration of the
at Will lasts so long as both either the landlord or the the landlord or lease is unspecified
landlord and tenant tenant can terminate the the tenant and the court rules
mutually agree. The tenancy effective automatically that only the tenant
key characteristic of immediately without terminates a may terminate, the
a tenancy at will is providing advance notice of tenancy at will tenant has a
that the lease has no the termination determinable life
fixed duration or estate
period. Both parties
must have the right
to terminate the
lease for a tenancy
at will to exist

Tenancy at A tenancy at sufferance arises when the tenant remains in possession after the
Sufferance lease term expires
(Holdover Landlord must irrevocably elect to either evict the tenant or renew the original
Tenant) lease
Eviction option: the landlord evicts the holdover tenant and sues for damages
for lost rent.
Renewal option: the landlord treats the original lease as renewed. The terms
and conditions of the original lease govern during the renewal period
o The majority rule treats the renewed lease as a periodic tenancy (notice must
be given later to terminate). The minority rule treats the renewed lease as a
term of years (no notice required to terminate at the end of the renewed term)
The renewal period is determined either by how rent is paid in the original lease,
or the length of the original term. Under either approach, the maximum renewal
period is for one year

Other Party Language that appears to create a lease may instead create a different type of
Arrangement property arrangement between the two parties. The numerous clauses principle
supports characterizing the partiess arrangement as a standardized form of
property rights to minimize transaction costs.
Determinable life estate: in a determinable life estate, the owner grants another
person the right to occupy the property for life or until that person decides to
License: in a license, the owner grants another person permission to enter
and/or use the owners land. A license is revocable by the owner and is not
transferable by the licensee to another person without the permission of the

Easement: in an easement, the owner grants another person the right to ingress
and egress across the owners land
Profit: in a profit, the owner grants another person the right to enter the owners
land and remove a natural resource (water, timber, coal, fish, wild game, etc.)

transfer of the leasehold

Assignments - the right to possession for the full balance of the lease term, Landlord has no
reversionary interest
The assignee can be sued for rent due, but only for the period beginning when the assignment
occurred until the end of the lease term. This result occurs because an assignee is in privity of
estate with the landlord
The assignee of commercial property can be sued for failure to make repairs necessary to
maintain the ocndition of the leased premises (known as the covenant of good repair). The
covenant of good repair is implied by law whenever two parties are in privity of estate
For assignee of residential property, the covenant of good repair is eliminated by the implied
warranty of habitability, which requires the landlord to make necessary repairs.
Kendall: Facts: Pestana had no obligation to accept the assignment
Majority of courts allow arbitrary withholding of consent but will soften it with estoppel
In CA: need to put it in express terms that says L can unreasonably withold
Insert majority v. minority view of Pestana
Majority: where a lease contains an approval clause the lessor may arbitrarily
refuse to approve a proposed assignee no matter how suitable the assignee
appear to be and no matter how unreasonable the lessors objection
1. a lease is a conveyance of an interest in real property, and
the lessor, having exercised a personal choice in the selection
of a tenant and provided that no substitute shall be acceptable
without prior consent, is under no obligation to look to anyone
but the lessee for the rent.
2. an approval clause is an unambiguous reservation of
absolute discretion in the lessor over assignments of the lease.
the lessee could have bargained for the addition of a
reasonableness clause to the lease.
3. the courts should not depart form the common law majority
rule because many leases now in effect covering a substantial
amount of real property and creating valuable property rights
were carefully prepared by competent counsel in reliance upon
the majority viewpoint
4. any increase in the market value of real property during the
term of a lease properly belongs to the lessor, not the lessee.
Minority: where a lease provides for assignment only with the prior consent of
the lessor, such consent may be withheld only where the lessor has a
commercially reasonable objection to the assignment, even in the absence of a
provision in the lease stating that consent to assignment will not be
unreasonably withheld.
is a question of fact, factors to consider
financial responsibility of the proposed assignee
suitability of the use for the particular property
legality of the proposed use
need for alteration of the premises

nature of the occupancy
Residential leases: higher percentage of the investors portfolio, should have
higher control
Commerical real estate: insert justification see slides and example Pg. 448
Landlord may restrict:
prohibitory restriction: cannot do this
Permissive restriction: can ONLY be residential
Subleases- transfers LESS than entire remaining interests
Note: A sublessee who does not assume the terms of the original lease cannot be sued for
money. The landlords only option is to evict a sublessee who is in possession without paying
Ernst v. Conduit:
Can ignore words that say its a sublease
less than her entire interest (convey 1 year out of 3)
What are the landlords rights?
for a sublease, then will have a privity of contract and a privity of estate
American law of property:
cannot sue sublease for rent but can assert statutory lien against him
Some states, per statutory provision, allows to pursue rent from sublease
Landlord & Lessee= Privity of Estate
Reversion Immediately follows
Landlord & Sublessee = No privity of estate
Landlord & Associate = Privity of Estate
Always Privity of Contract between L and & T, then T & ST
If Sublease - no privity
If Assignment - privity
Court looked at documents to infer parties intentions
Express intention has no validity --> says nothing, then court will look further
past language
Court didnt state there was a sublease
Direction of privity

General Rule: there is always a privity between any two parties

Always a privity of contract between landlord and original tenant and landlord and third party
Does not always have privity of estates
Implied provision:

Duty to mitigate:
Vacate tenant
Rule: English and American Rules are good because it gives efficient and legal enforcement
American Rule (Common law):Only have legal right, doesnt need to give actual possession
English Rule (Restatement): have to give both actual and legal right
Policy reason:
landlord knows the status of lease better than tenant
Landlord knows, whether persons in possession are properly or improperly on
Prior to beginning of lease, landlord only person to evict
Hannan v. Dusch: Does the landlord have the duty to provide the right to possession v. the legal right?
Holding: landlord has no duty (apply American Rule)
Tenant in actual possession still obligated to pay rent, regardless having the legal right or not
Lease is not only a contract, but also a conveyance. Exists in 2 distinctive worlds:
Someone with legal possession have rights (can enforce) regardless of whether he is
there or not (actual possession)
ROL: The tenant must protect himself against intruders, landlord has no duty against 3 rd parties
California specific:
Burden transfers with consent of the parti. Tenant can transfer to Tenant 1 with
consent of the Landlord
May transfer the benefit, but not without the consent of the parties
issues concerning the use of the premises
Prohibitory: it may prohibit the tenant from making certain uses of the premises (e.g.
forbidding a commercial tenant from selling alcoholic beverages)
Permissive or Authorizing: permitting the tenant to make ONLY certain defined uses (e.g. an
apartment lease that states that the tenant is limited to residential use only or operate a
restaurant only).
Piggly Wiggly:
Holding: any other lawful business as contained in the lease, clearly constitutes a
business use covenant giving PWS the option to either use the premises for its
supermarket or to use it or sublease it for some other lawful business use which would
generate sales or other income.
Implication of a Continuous Covenant - ROL: there is no requirement that a T actually
use or occupy the lease premises in the customary fashion, it is the Ts prerogative
unless otherwise stated in the lease
Exclusives: L may agree to protect a commercial retail T against potential competitors
by granting that T either a true exclusive or a limited exclusive
landlords remedies for tenant breach
the defaulting tenant in possession
L could simply choose to leave T in possession and sue for the unpaid rent as it comes due
landlord can recover possession either through the judicial proceeding of ejectment or by
exercising self-help to regain possession without judicial process
Self help:
Person enforcing self help must have right to do so
Must do so without breaching the peace
If police is to get involved, need to do it because court said so, not because landowner
said so.
Berg v. Wiley: Entry was not peaceful. Court reasoned that if the tenant was there,
when he changed the lock, it definitely would NOT be peaceful

Self Help Requires:
(1) actual right to do so
(2) Does so w/out breaching the peace
invoke police b/c you think there will be violence --> so take
proper judicial processes
CL ROL: self -help is never available to dispossess a tenant who is in
possession and has not abandoned or voluntarily surrendered the premises.
CL - L may rightfully use self-help to retake the lease premises from a tenant in
possession w/out incurring liability for wrongful eviction based on:
(1) L is legally entitled to possession
(2) L means of reentry are peaceable
ROL: any self help reentry against a tenant in possession is wrongful under the
modern doctrine that a L must always resort to judicial proceedings to enforce
his statutory remedy against a T.
Policy: it is legislative policy to protect the long-term tenant. The availability of
temporary restraining orders, temporary injunctions against waste, & eventful
damages for unlawful detainer or unpaid rent provides an adequate
compensating remedy to the L for any delay in obtaining possession during
judicial proceedings
Forceful & detainer statutes prevent certain acts of forcible entry
Gorman ROL: a provision in a lease contract, may confer upon the lessor the
right to enter which according to the statute, exempts the L from liability for
forcible entry
self help action by the L is prohibited as the L retaking the land by force is a
policy that is enacted behind forcible entry & detainer statutes
Abandonment by the Tenant - i.e. Vacates the premises and ceases to pay rent - prior to the end of the
lease term
Public Policy
(1) no economic value obtained from property not in use and being wasted
(2) the physical damages to the property through accident or vandalism is
increased in vacant property
The Landlords Option:
(1) Minority: allow the premises to remain vacant & collect rent from the tenant as it
(2) accept the tenants surrender & thereby terminate the lease (and the tenants
liability for rent) with any re-letting occurring on the Landlords behalf
(3) Majority: Re-enter and Re-let the premises for the Ts account, w/the tenant
remaining liable for rent (and thus responsible for any deficiency between the stated
rent & the amount collected from the 3rd party)
Liability L= ((y-x) + z - c (marketable)
y=reasonable rent
x=reasonable rental value
z=consequential damages
c=costs avoided
Reasonable Market Value
Actual Re-Rental Value
Market value @ time of breach
L=((y+z) - c)) (unmarketable)
Anticipatory Repudiation Damages: permitted the landlord to collect damages for the tenants
repudiation of the lease prior to the expiration of the lease term. Permitting the landlord to

recover anticipatory repudiation damages is an exception to the rule of landlord-tenant law
that rent is owed only as it becomes due under the term of the lease.
the physical condition of the leased premises
habitability--from caveat lessee to implied warranty
CL: such conditions did not permit the tenant to raise a constructive eviction claim,
unless the landlord had made express covenants in the lease regarding the condition
of the premises.
Caveat lessee:only in a few limited circumstances did the common law place any
implied obligation upon the landlord regarding the condition of the premises
if the property suffered from latent defects of which the landlord knew or
should have known, and which the tenant could not be expected to notice by
inspection, the landlord was obligated to disclose such defects
the landlord was responsible for maintaining the physical condition of common
areas under the landlords control
if the landlord contractually agreed to perform any repairs, the landlord was
obligated to perform that agreement
if the lease was a short-term lease for the rental of furnished premises, the
landlord was responsible for the physical condition of the premises
if the parties entered into a lease for a building under construction, the courts
concluded that the lease contained an implied covenant by the landlord that
the premises, when completed, would be fit for the purposes for which the
tenant entered into the lease
CL: did not require a warrant of the condition of the premises or repair the
premises if damage or destruction occurred during the lease term
the landlords tort liability due to property conditions
Note: implied warranties: doesnt have to expressly say it: is just there

Actual Eviction: see slides for def. Constructive Eviction

Overt action by Landlord - you have to Implied circumstances - landlord has NOT done
longer something specific

Tenant deprived of Possession - immediate now Tenant remain in possession though he may
(immediate leave) voluntarily suspend - does not force tenant to
Action at landlord does not say tenant
has to leave immediately
Tenant can stay for a period of time
under adverse conditions

Intentional interference w/use of property

Conduct of landlord could be active or passive

May permanently deprive the tenant of use

Tenant must vacate in a reasonable time

The Defaulting Tenant in Possession

traditionally a landlord could recover possession either through the judicial proceeding of
ejectment or by exercising self-help to regain possession without judicial process.
self help sometimes led to violent confrontations that resulted in serious personal
injury, as angry unpaid landlords confronted hard-pressed desperate tenants being put
out of their homes

many states in the 19th century have enacted legislation, typically designated forcible
entry and detainer (FED) statutes, had two objectives
1- to limit the landlords use of force in self help eviction and
2- to provide a more streamlined judicial process for eviction, thereby giving
impatient landlords a more appealing alternative to self-help repossession
Eviction statutes vary from state to state
essentially the land lord must give the defaulting tenant a notice of default and
a defined number of days to cure the default
if the tenant does not leave or cure the default nor voluntarily vacates the
premises, the landlord then files an action seeking an expedited statutory
eviction of the tenant
this procedure typically provides the tenant with a relatively short period of
time in which to response the the complaint
Tenant may assert affirmative defenses to their default but not a counterclaim
If the tenant does not answer the landlords receives a default judgement
entitling it to possession.
if the tenant does not leave the premises voluntarily after judgment for the
landlord, the landlord may obtain a writ of possession from the court and the
sheriff or other public official may then serve the tenant with a notice to vacate
the property
if necessary the sheriff may forcible evict the tenant
The Physical Condition of the Leased Premises
Habitability-- from Caveat Lessee to Implied Warranty
At common law, did not impliedly warrant that the lease premises were suitable for any
particular purpose.
Tenant could not raise a constructive eviction claim, unless the Landlord had made
express covenants in the lease regarding the condition of the premises
Most states imply a warranty of habitability that the premises are habitable and/or complies
with the provisions of the local housing codes
also implies that the landlord will imply a covenant that the landlord will maintain
(repair) the premises to assure that throughout the term the premises meet the
to breach this warranty, the defect must be of a nature and kind as to render the premises
unsafe, unsanitary, or unfit for residential purposes.
if the tenant and landlord enter into a lease of premises that are uninhabitable at the time the
lease term commences, the lease may be illegal if, under local law, it is specifically made
illegal to rent premises that are uninhabitable.
Pugh v. Holmes
the tenants obligation to pay rent and the landlords obligation imposed by the implied
warranty of habitability to provide and maintain habitable premises are, therefore,
dependent and a material breach of one of these obligations will relieve the obligation
of the other so long as the breach continues
tenant must prove he or she gave notice to the landlord of the defect or condition, that
he (the landlord) had a reasonable opportunity to make the necessary repairs, and that
he failed to do so.
tenant may vacate the premises where the landlord materially breaches the
implied warranty of habitability
the implied warranty of habitability may be asserted as a defense
repair and deduct
tenant may perform it at his own expense and deduct the cost of his
performance from the amount of rent due

must give proper notice to landlord of the defect which includes the
specifications of what steps will be taken by the tenant to correct it if
the landlord has not corrected the defect within a reasonable time
repairs must be reasonably priced and cannot exceed the amount of
the rent available to apply against the cost.
other traditional contract remedies such as specific performance
Underlying basis for implying the warranty:
the modern apartment dweller is a consumer of housing services
they seek a well known package of goods and services-- which includes
not merely walls and ceilings, but also adequate heat, light and
ventilation, serviceable plumbing facilities, secure windows and doors,
proper sanitation and proper maintenance
designed to insure that a landlord will provide facilities and service
vital to the life, health, and safety of the tenant and to the use of the
Notes from the understanding series:
Implied covenant of quiet enjoyment
Reste Realty Corp. v. Cooper: ROL: any act or omission of the landlord or anyone who
acts under authority or legal right from the landlord, or of someone having superior
title to that of the landlord, which renders the premises substantially unsuitable for the
purpose for which they were leased, or which seriously interferes with the beneficial
enjoyment of the premises, is a breach of the covenant of quiet enjoyment and
constitutes constructive eviction of the tenant.
Implied Warranty of Habitability: assigns the burden of repairing of residential premises to the
landlord as a matter of law regardless of the provisions of the lease. Under this doctrine, each
residential lease is deemed to contain an implied warranty that the landlord will deliver the
premises in a habitable condition, and maintain them in that condition during the lease term.
In most jurisdictions, this warranty cannot be waived.
Policy: Dominant goal of the typical modern tenant is to secure housing as a package,
including adequate heat, light, and ventilation, secure windows and doors, adequate
plumbing facilities, etc. Todays tenants usually lack the skills needed to effect repairs
to complex modern buildings. Also, because affordable housing is in short interest,
landlords usually offer only adhesion contracts, so this puts the tenants in a position of
unequal bargaining power
Test: usually objective of whether the defects must be so serious that a reasonable
person would find the premises uninhabitable.
Remain in possession and withhold rent: usually the most effective remedy for
breach of implied warranty. Tenant can place economic pressure on the
landlord to repair the premises and gives the landlord financial incentive to
avoid rent withholding by maintaining leased premises in habitable condition.
Remain in possession and use repair and deduct remedy: cost of repair must
be reasonable in light of the rent amount due
Remain in possession and sue for damages: where the tenant remain in
possession of the premises, continue paying rent, and sue the landlord for
damages (3 ways to calculate damages)
1. Difference between agreed rent and fair market value as is
2. Difference between fair market value as warranted and fair market
value as is
3. Percentage diminution in agreed rent
Terminate lease and sue for damages: damages are calculated by the ways above
Note: breach of implied warranty of habitability is a defense to a summary
eviction action and an action to collect back rent

Allocating Responsibility for Damage or Destruction of the Premises
Hadian v. Schwartz -
six factors considered by the court
1. the relationship of the cost of the curative action to the rent reserved
2. the term for which the lease was made (short term v. long term)
3. the relationship of the benefit to the lessee to that of the reversioner
4. whether the curative action is structural or nonstructural in nature
5. the degree to which the lessees enjoyment of the premises will be
interfered with while the curative action is being undertaken
6. the likelihood that the parties contemplated the application of the particular
low or order involved.
the destruction of leased premises traditionally did not alleviate a tenant from
responsibility to pay rent
however the modern rule seems to alleviate the harsh rule in favor of
Notice that where the tenant commits affirmative waste, he does continue to
bear a duty to repair or rebuild
often these things are mitigated ny insurance which off-sets tenants
obligations and may be subrogated to the landlord
Most Lease provisions regarding repair simply require tenants to return
the premises to the condition in which it was leased.
Doctrine of Impracticability: where a contract is made, a partys performance is made
impracticable w/out his fault by the occurrence of an event the non-occurrence of
which was basic assumption on which the contract was made, his duty to render that
performance is discharged, unless the language, unless the language or the
circumstances indicate the contrary
Frustration of purpose: After a K is made, a partys principle purpose is substantially
frustrated w/out his fault by the occurrence of an event the non-occurrence of which a
basic assumption on which the contract made, his remaining duties to render
performance are discharged, unless the language or the circumstances indicate the
The Landlords Tort Liability Due to Property Conditions
General Rule: landlords were not liable in tort of personal injuries suffered by tenants or third
parties on the premises, or for damage to the tenants personal property, occurring as a result
of the condition of the party.
Similar to Caveat Lessee rule: landlord had no responsibility for the condition of the
premises; landlord had no duty to protect the tenant or 3rd parties from such personal
injury and/or property damages.
Ransburg v. Richards
three situations where courts have refused to enforce private agreements on public
policy grounds
agreements that contravene statute
agreements that clearly tend to injure the public in some way
agreements that are otherwise contrary to the declared public policy of Indiana
five factors
1. the nature of the subject matter of the contract
2. the strength of the public policy underlying the statute
3. the likelihood that refusal to enforce the bargain or term will
further that policy

4. how serious or deserved would be the forfeiture suffered by
the party attempting to enforce the bargain.
5. the parties relative bargaining power and freedom to
Discrimination in Leasing
At common law, the landlord generally could choose to lease (or not to lease) to any tenant for any
such discretion was considered a necessary component of the right to exclude--> the essence
of property ownership
The Federal Housing Administration was established in 1934 to promote the availability of home
mortgage financing and more widespread home ownership legal
the FHA is aimed at landlords who act with discriminatory motives in making leasing decisions.
Recognizing that P may have a difficult burden if forced to prove subjective discriminatory
motive, courts have held that a P need only prove discriminatory effect or disparate treatment
to establish a prima facie case
this might include a landlord denying an apartment to a qualified minority applicant
and thereafter leasing it to another party or allowing it to remain vacant
Once the P establishes a Prima facie case the D must then justify the action
the justification must one taken pursuant to a rational and necessary business purpose
If the D provides a neutral justification for the decision, the burden then shifts back to the
plaintiff to demonstrate that the stated justification was pretextual

just a neutral excuse used to enable the D to engage in discrimination on illegal
CHAPTER 10. GOVERNMENTAL LAND USE CONTROLS: Judicial Doctrines & Legislative Regulation
A. The Law Nuisance
What is a Nuisance? Ds interference w/the Ps interest
A private nuisance consists of conduct that interferes with the use and enjoyment of land.
A public nuisance is conduct that causes public injury generally
821 Significant Harm
There is a liability for a nuisance only to those to whom it causes significant harm, of a
kind that would be suffered by a normal person in the community or by property in
normal condition and used for a normal purpose
822 General RUle
One is subject to laibility for a private nuisance3 if, but only if, his conduct is a legal
cause of an invasion of anothers interest in the private use and enjoyment of land,
and the invasion is either
a) intentional and unreasonable, or
b) unintentional and otherwise actionable under the rules controlling liability
for negligent or reckless conduct, or for abnormally dangerous conditions or
825 What constitutes intentional invasion
An invasion of anothers interest int eh use and enjoyment of land or an interference
with the public right, is intentional if the actor
a) acts for the purpose of causing it, or
b) knows that it is resulting or is substantially certain to result from his conduct
826 Unreasonableness of Intentional Invasion
An intentional invasion of anothers interest in the use and enjoyment of land is
unreasonable if
a) the gravity of the harm outweighs the utility of the actors conduct, or

b) the harm caused by the conduct is serious and the financial burden of
compensating for this and similar harm to others would not make the
continuation of the conduct not feasible
827 Gravity of Harm: Factors involved
In determining the gravity of the harm from an intentional invasion of anothers
interest int eh use and enjoyment of land, the following factors are important:
a) the extent of the harm involved
b) the character of the harm involved
c) the social value that the law attaches to the type of use or enjoyment
d) the suitability of the particular use or enjoyment invaded to the character of
the locality; and
e) the burden on the person harmed of avoiding the harm
828 Utility of conduct: factors involved
In determining the utility of conduct that causes an intentional invasion of anothers
interest in the use and enjoyment of land, the following factors are important:
a) the social value that the law attaches to the primary purpose of the conduct
b) the suitability of the conduct to the character of the locality and
c) the impracticability of preventing or avoiding the invasion
829 Gravity vs. utility - conduct indecent or malicious
An intentional invasion of anothers interest in the use and enjoyment of land is
unreasonable if the harm is significant and the actors conduct is
a) for the sole purpose of causing harm to the other; or
b) contrary to common standard of decency
829A Gravity v utility - severe harm
An intentional invasion of anothers interest in the use and enjoyment of land is
unreasonable if the harm resulting form the invasion is severe and greater than other
should be required to bear without compensation
ROL: (1) Neighbors can pay the facility for the right to be free from pollution; conversely, the
neighbors have the right to be free from pollution but the facility places greater vlaue on
having the (2) the right to pollute, the facility can buy this right from the neighbors
Public Nuisance (Boomer v. Atlantic): an unreasonable interference w/a right comment to the general
public, and may unreasonable may be if it
(a) involves a significant interferences w/public safety, health, peace, comfort, or convenience
(b) violates a statutes, ordinance, or administrative regulation
(c) is of continuing nature or has permanent effects & D knows of their conduct significant
effect upon the public right
Nuisance is ambiguous - prone to be used in destructive ways and in positive ways (Morison v.
Decision Tree (Roarks slides)
Ps will not be entitled to any relief if:
Ps cannot show significant harm (section 821); or
Ps can show significant harm but the utility of the Ds conduct outweighs the gravity of
the harm to the Ps. (Carpenter and section 826(a))
Ps can show serious harm such that the gravity of the harm likely outweighs the
utility of the Ds conduct but where imposing an injunction or requiring compensation
would put the D out of business, and the court concludes that preserving the social
value inherent in maintaining the business as a going concern is more important to
society than compensating the Ps for the harm they have suffered and are suffering as
a result of Ds operations (section 826(b))

Gravity of Harm factors (section 827)
the extent of the harm involved
the character of the harm involved
the social value that the law attaches to the type of use or enjoyment invaded
the suitability of the particular use or enjoyment invaded to the character of the
locality; and
the burden on the person harmed of avoiding the harm
Utility of Conduct (section 828)
the social value that the law attaches to the primary purpose of the conduct
the suitability of the conduct to the character of the locality; and
the impracticability of preventing or avoiding the invasion
P will likely he entitled to monetary damages if
Ps can show significant harm and the gravity of the harm outweighs the utility of the
conduct of the harm goes uncompensated, but the utility of the conduct outweighed
the gravity of harm if the conduct were to be enjoined (Boomer), or
Ps can show serious harm and the financial burden of compensating for this and
similar harm to others would not make the continuation of the conduct not feasible.
(section 826(b))
Ps can show severe harm greater than the Ps should be required to bear without
compensation (section 829(a))
P will likely to be entitled to conjunctive relief if
Ps can show significant harm and the gravity of the harm clearly outweighs the utility
of the conduct (section 826(a)); or
Ps can show significant harm and show that the Ds conduct was solely for the purpose
of causing harm to the Ps (section 829)


Servient estate: estate that is burdenen
Dominant estate: estate receiving the benefit
Definition: temporary invitations by an owner of real property to another to enter his land. This
invitation may be revoked by the owner. Consent is a defense to a trespass claim.
Licenses: resembles easements, except that a true license is revocable by the servient owner, while an
easement is generally irrevocable property right
Definition: a servitude that gives the right to pasture cattle, dig for minerals, or otherwise take away
some part of the soil
Profit appendant: a profit annexed to land by operation of law
Profit appurtenant: a profit annexed to land by the operation of the parties
Profits (closely related to easements): the right to detach and remove something (eg. timber,
minerals, ice) inherently attached to the land of another
Reservations: provisions in a deed creating some new servitude which did not exist before as an independent
Restrict transfer of reservation of easements in third parties: because third party had no interest in the
land at the time of the conveyance
Exceptions: provisions in a deed that exclude from the grant some existing servitude on the land

Creating an easement

Easements - Easements: is a non-possessory interest in land that gives its holder the right to use land owned by
another person. The easement holder does not get the full rights of possession, but merely the right to use anothers
land for a particular purpose
Def: a nonpossessory right to use land in the possession of another. Does not give its holder any right to possession of
land. Easement holder merely has the right to use the land for a limited purpose, usually for access to another
Usually viewed as an interest in land, not simply a contract right.
Grant of an easement is subject to the Statute of Fraud
Easement burdens land that is possessed by another person, typically an owner.
A person cannot hold an easement in his own land
Must be either Affirmative or Negative
Affirmative easement:
they authorize the holder to confer upon the right to make some limited affirmative use of land
possessed by another, such as crossing over it to gain access to an adjacent tract of land
Negative easement: entitles the dominant owner to prevent the servient owner from doing a particular act on
the servient land
Negative Easements: involve a very limited catalogue of limitations on the use of anothers land -
easements preventing a neighbor from obstructing light, air, or view from blocking an aritifical stream
or from removing a bldgs support
Negative Easements would reasonably burden the alienability of landMust also be in appurtenant or in
Conservation Easement: imposes limits on the use of the servient land so as to preserve its
availability for forest, recreational, or agricultural use; to protect natural resources
Promissory Servitudes: are enforceable promises between a land owner and someone else
Negative covenants: promises that restrict the owner of the land from making certain uses of servient
Affirmative Covenants: obligate the promisor to undertake affirmative acts (such as a covenant
requiring a landowner to pay a neighborhood subdivision assessment)
Servient Estate (or burdened estate): typically must suffer the burden of allowing the easement holder
to enter onto and cross the servient estate to obtain access to adjacent land. The burden of the
servitude runs with the land
The dominant estate is the one which benefits
Appurtenant: benefits a parcel of land, it attaches to the ownership of an estate in land the
dominant estate and provides the owner of the dominant w/the right to use or restrict the
use of hte servient land
apparent & visiblity are not synonmous
Ex. Van Sandt v. Royster
Gross: one that beneifts someon w/out regard to her ownership of any parcel of land -- is
purely personal to its holder. it is not attached to ownership of an estate in land, gives its
holder rights in the servient land regardless of the holders ownership of any other parcel of
Easements are usually created by express grant or reservation
Grant: the grantor (the owner of the servient land) executes & delivers to the grantee
an instrument conveying an easement over the servient land
Reservation: the grantor executes & delivers a deed conveying a possessory estate in
the servient land to the grantee but reserves or retains in herself an easement over
the servient land
Restatement: In determining whether the circumstances under which a conveyance of
land is made imply an easement or a profit, the following factors are important:
(a) whether the claimant is the conveyor or the conveyee,
(b) the terms of the conveyance,
(c) the consideration given for it,
(d) whether the claim is made against a simultaneous conveyee,
(e) the extent of necessity of the easement or the profit to the claimant,
(f) whether reciprocal benefits result to the conveyor and the conveyee,
(g) the manner in which the land was used prior to its conveyance, and
(h) the extent to which the manner of prior use was or might have been known
to the parties."
applying the restatement
Notice to Purchaser - are they bona fide pruchasers for value -
Apparent terms
Bona Fide Purchase (see slide)
Warranty Deed (see Slide) - if the warranty deed has
been violated - will excuse be allowed by court/law -
should have known about notice
1. Express easement: voluntarily created in a deed, will, or other written instruments and usually arises either by grant
or by reservation
Grant: created when a grantor conveys or grants an easement to another person and must satisfy the
Statute of Frauds requirement: (Must be in writing, Must identify the grantor and grantee, Contain words
manifesting an intention to create an easement, Must describe the affected land, Must be signed by the
Alft v. Stewart:
Express Grant: Also conveyed herein is the right of egress and ingress over a damn and the
Charles Clayton driveway
Court held: construction of a clause creating an easement appurtenant rather than an
easement in gross is favored. An easement will never be presumed to be a personal right (in
gross) when it can be fairly construed to be appurtenant to some other estate.
Traditional inference: reflects the traditional inference that an easement granted in conjunction with a land
transfer will be construed as creating an appurtenant easement unless there is
Reservations: when grantor conveys land to another but retains or reserves an easement in the land
Willard v. First Church of Christ, Scientists
Holding: abandoned traditional rule that an easement could only be reserve in favor of the
Reasoning: the old common rule was applied when the courts refused to allow a reservation in
favor of a third person in order to discourage the use of livery or seisin. But today, the deed is
the standard method to transfer interests in real property, and there is no justification for
ignoring the grantors clear intent to create an easement
Policy Rationale: Two reasons why courts should recognize express easements
1. Enforcement of an express easement respects the personal liberty of landowners to
act as they wish.
2. The law presumes that honoring such easements will facilitate the efficient use of
2. Implied Easement:
Def: intent to create easement inferred from the presence of an existing use
Created: by either grant or by reservations
Required elements in creation of implied easements(3)
1. Severance of title to land held in common ownership: a tract of land held in common ownership
must be divided into two or more parcels; at least one parcel must be transferred to a new owner and
at least one must be retained by original owner
2. Exiting, apparent, and continuous use when severance occurs: while the common owner still owns
both parcels, he or she must use one parcel in a manner that benefits the other parcel. This
preexisting use must be so apparent and continuous that the parties presumable intended it to

Implication (Quasi-Easements and Easement by Necessity): Quasi easement is an apparent
and continuous use which the parties would reasonably expect to continue when the land is
Van Sandt v. Royster:
Quasi-Easement: when one utilizes part of his land for the benefit of another part, it is
frequently said that a quai-easement exists, the part of the land which is benefited being
referred to as teh quasi dominant tenement and the part which is utllized for the benefit of the
other paty being referred to as the quasi-servient tenement
owner may make on part of his land for the benefit of another part - creates a fiction
b/c you cannot create an easement on your own property
English Rule: reciprocal obligation and holds that reservation (could have implied, but
made it expressed)
American Rule: (1) necessity (2) quasi-easement
why make a reservation of use of land when you have that use, so use a quasi-
easement - manifests into an implied easement which grants an interest when
a 3rd party may buy interest
in order to establish an easement by implied reservation in favor of grantor the
easement must be one of strict necessity
Bobs Ready to Wear: The easement by implication would be of mutual benefit to grantors and
grantees only so long as a public parking lot was maintained on the property to the rear of Bobs Store.
The easement by implication existed to require the trial judge to find that that an easement by
implication existed, balancing the interest of both parties.
3. Easement by necessity: Defined as the name suggests.
Different from implied easements: implied easements require an existing use before the severance of title.
Easement by necessity requires a high degree of necessity when title is severed but no prior use is needed.
Reasonable necessity for the use at time of severance: Most states require a showing a reasonable necessity,
which is that the easement must be convenient or beneficial to the use and enjoyment of the dominant
tenement, but need not be absolutely necessary. This standard is usually met if the owner of the dominant
tenement would be forced to expend substantial money or labor in order to provide a substitute for the
Policy: justified in terms of party intent. If an existing use is sufficiently apparanet and continuous when a
parcel is divided, the parties were on notice of the use and presumably expected or should have expected
that it would continue. The utilitarian theory serves the policy goal of promoting the productive use of land.
Servient owner: permitted to select the location for the road easement, as long as is reasonable
Time: easement endures only for so long as the necessity itself
Creating an easement of necessity:
1. Severance of title
2. Strict necessity
Traditional view: strict necessity is required
Minority view: only requires reasonable necessity must be convenient or beneficial to the
normal use and enjoyment of the dominant land
Public Policy:
Societys utilitarian interest in encouraging productive use of land
Parties presumed intent: presume that grantor presumably intends to convey everything that
is necessary for the grantee to make beneficial use of the land
4. Prescriptive Easement: Kind of like Adverse Possession, where they believe that rights in the land of another can be
acquired by conspicuous, long-term use, but the end result for AP is receiving title to the land while PE is receiving an
Creation of Easements:
1. Open and notorious
2. Adverse and under a claim of right

3. Continuous and uninterrupted for the statutory period
4. Exclusive/actual use
Public Policy: Facilitates the productive use of land by protecting the industrious claimants use
After period of use, the dominant estate obtains an entitlement that is enforceable against the servient estate
Melendez v. Hintz: prescriptive easement is not determined by what is necessary but by the use made during
the prescriptive period. It is presumed to be permissive when the servient land is wild, unenclosed, or
5. Irrevocable Licenses or Easement by Estoppel
Time: only lasts so long as necessary to allow the licensee to recover the value of his or her investment
Ex: such as when licensee expends substantial money or labor in reasonable reliance on the license
and the licensor should reasonably expect such reliance, the licensor is stopped to revoke it
Express Easement - under the Statute of Frauds intended an easement would be invlaid b/c of the lack of a
writing. If the landowner thereafter allows the grantee of the invalid easement to use the land, the law
typically will characterize the user as a licensee.
1. A license, typically for access purposes;
May be express or implied
2. A licensees expenditure of substantial money or labor in good faith reliance; and
Usually shown by improvements of servient land
Reliance is more likely to be found reasonable if the parties clearly intended to create a
permanent right of access
3. The licensors knowledge or reasonable expectation that reliance will occur
Public Policy: explained in terms of equity, where it would be unfair to allow the licensor to
revoke the license after the licensee has substantially relied to his detriment and also
facilitates the productive use of land
Easement appurtenant: benefits the easement holder in using the dominant land, and is usually seen as
attached to the land (applies usually when there is a dominant/servient estate). It does not transfer with the
holder (stays with the land)
Ex: access easements: they facilitate the holders use of a particular parcel of dominant land
Ex: Usually appurtenant if the easement contributes to the use or enjoyment of a particular parcel
owned by the holder.
Courts: usually favor easement appurtenant over the easement in gross because this facilitates the
productive use of land
Easement in gross: is personal to the holder, so benefits the holder in a personal sense, whether or not he
owns any other parcels of land (usually applies when no dominant land exists)
Henley v. Continental Cablevision:
Intentions of parties: usually determines whether a particular easement is in appurtenant or in gross. Absent
such clear evidence, courts determined intent based on the circumstances surrounding the creation of the
Maintanence of Easements (Schluemer v. Elrod):
(1) If the servient owner does not use the easement, then the easement holder is responible for
maintaining the easement
(2) if the serivent owner also uses the easement along with the easement holder, however, they both
share the responsibility and expense associated with maintaining the easement
Termination of Easements:
Written conveyance or Release


Def: a promise concerning the use of land that 1. Benefits and burdens the original parties to the promise and
also their successors and 2. Is enforceable in an action for damages
A promisors duty to perform the promise is commonly called the burden
A promisees right to enforce the promise is commonly called the benefit
Note: covenants run with an estate in land
Requirements for Burden to Run with the land and thereby binding the promisors successors
1. The covenant must be in writing
Covenants are generally set forth in a deed, lease or other written instruments between the
covenanting parties.
2. The original parties must intend to bind their successors
May be expressed or inferred by the nature of the restrictions, the situation of the parties, and
the other circumstances surrounding the covenant, even if the covenant contains no express
3. The covenant must touch and concern the land
Usually means that the burden of the covenant must relate to use of the land
the promise must exercise direct influence on the occupation, use or enjoyment of the
4. Horizontal Privity must exist
Def horizontal privity: special relationship between the original covenanting parties. There are 3 types of
horizontal privity
1. Mutual interest: promisor and promisee who hold mutual interests in the same land
2. Successive interest: when a covenant is created in a transaction involving the conveyance of an
interest in land between the covenanting parties
3. No horizontal privity required: in a number of states, horizontal privity is not required.
4. Vertical privity must exist
Def vertical privity: special relationship between eh original covenanting party and his
Vertical privity exists: If the successor succeeds to the entire estate in land held by the
original covenanting party
Vertical privity does not exist: if the successor acquires less than the entire estate
5. The successor must have notice of the covenant
Satisfied by: actual, record, inquiry, or imputed notice
Requirements for benefits to run
1. The covenant must be in writing
2. The original parties must intend to benefit successor
3. The benefit of the covenant must touch and concern the land
4. Vertical privity must be present
Note: in order for the promisees successor to enforce the covenant against the promisors successors, both
the burden and the benefit must run.
Termination of Real Covenants:
1. Abandonment: when the conduct of the person entitled to the benefit of the covenant demonstrates the
intent to relinquish his or her rights
2. Changed conditions: a covenant becomes unenforceable when conditions in the neighborhood of the
burdened land cannot be substantially changed that the intended benefits of the covenant cannot be realized

Equitable Servitudes Real Covenants

Enforced on the concept of fairness Enforceable at law

Parties must intend the covenant to run Purchaser intends that the covenant runs to


Purchaser has actual or constructive notice Required privity of estate

Touches and concerns the land Touches the land

Sometimes vertical privity is required for the Must be in writing

benefit to run

Privity required for a covenant to run with the land

Burdens: for a burden to be enforceable against a sucessor to a covenant, there must be both vertical
and horizontal privity and vertical privity
Benefits: Neither horizontal nor vertical privity would be required if a successor owner of a benefited
parcel sought to enforce the covenant against the original covenantor
Restatement 3rd
Note that the restatement has largely done away with the requirement of vertical privity and horizontal
privity towards the running of benefit and burdens
the Restatements third of property: Servitude's would greatly simplify this area by combining
the real covenant and the equitable servitude into one doctrine--> the servitude
Under this approach, a contract or conveyance creates a servitude if (1) the parties so
intend (2) it complies with the statute of Frauds and (3) it is not illegal,
unconstitutional, or violates public policy.
3.1 Validity of Servitude: general rule
A servitude is valid unless it is illegal or unconstitutional or violates public policy, servitude's
that are invalid because they violate public policy include, but are not limited to:
1. A servitude that is arbitrary, spiteful and capricious
2. A servitude that unreasonably burdens a fundamental constitutional right;
3. A servitude that imposes an unreasonable restraint on alienation under R3.4 or R3.5
4. A servitude that imposes an unreasonable restraint on trade or competition under
5. A servitude that is unconscionalbe under 3.7
Neponsit Property Owners Association Inc. v. Emigrant Industrial Savings Bank
Test: To determine whether the charges on the estate touch or concern the real property, ask does the
covenant alter the legal realtions (the legally enforceable advantages and burdens) of the parties as
owners of interest in the land?
ROL: The benefit of an equitable servitude is enforceable only by a person who has succeed to some
possessory interest of the original promisee
Caullett v. Stanley Stilwell & Sons, Inc.
Facts: Developer conveyed a parcel of land to P subject to the covenant that the grantor reserves the
right to build or construct an original dwelling. Developer sold the land with the expectation that he
would be able to build the purchasers home/the price of the lot reflected that expectation.
Court refuse to enforce the provision: because its too ambiguous. It is not a real covenant or an
equitable servitude because it does not touch and concern the land.
Test whether touch and concern the land: must exercise direct influence on the occupation, use
or enjoyment of the premises. It must be a promise respecting the use of the land that is, a
use of identified land which is merely casual and which is merely an incident in teh
performance of the promise.
Holding: to qualify as a covenant properly affecting the subject property, the deed provision must
define in some measurable and reasonably permanent fashion the proscription and limitations upon
the uses to which the premises may be put.