first-year law review

Just another WordPress.com weblog

Nov. 28 Property: Recording Statutes

                Now for the next exciting property topic: recording statutes. The nonstatutory rule is first in time, first in right. That means the first one to record gets the property. That doesn’t mean that a deed isn’t valid, just that if you record it second, you lose your right to the property. Recording statutes, however, govern how things work in America. There are three kinds of statutes: race, notice, race-notice. A race statute is just what it sounds like; you record first, you get the property just like the nonstatutory rule. On the other end of the spectrum we have notice statutes. In a jurisdiction with a notice statute, it’s immaterial who wins the race to record. A second grantee who takes without notice of a previous grant will prevail. A nice hybrid of the two is the race-notice statute. In such a jurisdiction, the second grantee has to record before the first grantee and purchase without notice of the first grantee in order to prevail over the first grantee.

                In the cases we read, the moral of the story was to check the chain of title. In Jefferson County v. Mosley Dillard conveyed a right of way (ROW) to the county, but the conveyance wasn’t recorded. The deed that Dillard conveyed to Mosley had an exception that the property was subject to public rights of way. Mosley then conveyed the property to two other people. A road had been built on only part of the ROW. The question was if Mosley was an innocent purchaser without notice. The court held that the exception in the lease was enough to lead Mosley to at least ask. If a second purchaser with notice acquired title from a first purchaser who didn’t have notice, he succeeds to all the rights of the immediate grantor. In this case, however, Mosley, the first purchaser, didn’t have the right to convey the property without the ROW.

                You can check the chain of title, but there are cases where a title search won’t reveal everything. In Sabo v. Horvath Lowery conveyed land to Horvath before he received the patent for the land from the government. After he received the patent, he conveyed the property to Sabo. The court held that the deed to Horvath was valid, but it only gave him the interest Lowery had in the land at the time. Because of this, the deed was a “wild deed” outside the chain of title. Wild deeds don’t give constructive notice, and because Sabo recorded first, Sabo gets the land. Horvath should have rerecorded right when Lowery got the patent.

                So title searches may not reveal everything, but if you do your best (usually a search back 60 years is enough) and there’s no notice, you’re okay.

Advertisements

November 28, 2006 Posted by | Property | Leave a comment

Nov. 27 Property: Delivery of Deed

                We’ll begin today with delivery of deeds and delivery without escrow in particular. Here, deeds were draw up, but didn’t use an escrow agent to deliver the deed. This is problematic because then you have to ask if the grantor really intended to convey the property. For instance, in Williams v. Cole Johnnie offered Cole the deed but Cole said that Johnnie should keep it. Cole never saw the deed, and it was never recorded. The court held that if a deed is unrecorded and in the grantor’s possession, then nondelivery of the deed is presumed. The moral of the story, if you don’t want to take or give possession to the grantee, use an escrow agent. Because of a principle called “relation back” the deed is deemed to have been delivered when it was delivered to the agent.

                 Now we’ll look at two cases dealing with safety deposit boxes. The first is Kresser v. Peterson. Here, a woman with two children of her own and two step-children sidestepped her husband’s will when she executed a warranty deed naming herself and her two boys as grantees with a right of survivorship. She recorded the deed and left it in a safety deposit box to which only her and her sons had access. The court held that delivery was reflected in recording the deed and with the woman’s written authority that any of the grantees had exclusive access to the box. Contrast this result with the one in Lenhart v. Desmond. Lenhart executed a deed that was to go to his daughter, Desmond, after his death. He put the deed in a safety deposit box with some insurance policies. Lenhart was in an accident and Desmond went to get the policies. The deed disappeared, but was recorded several months later. When answering the question of if there was actual or constructive delivery, the court said that at the time of delivery, the grantor’s intent is of primary and controlling importance. In Lenhart, he didn’t want his daughter to have the deed until his death, so there was no intention to deliver before the death. In Kresser, her intention can be shown in the fact that the deed was recorded, the deed gave a right of survivorship to the sons, and the box was only in the grantees’ names.

                 Now on the topic of escrows, let’s discuss death escrows. The idea here is that in order to have an effective death escrow, the deed has to be irrevocable. In Vasquez v. Vasquez Juanita left a deed conveying the property to her brother with her attorney with instructions to deliver it after his death. In Rosengrant v. Rosengrant, Harold took the defendant to the bank, showed him the deed, the defendant handled the deed, then they left it with the bank. It was put in an envelope with Harold’s name on it. The court held that because of that, the right of retrieval was retained, and since Harold continued to use the land as if no transfer had taken place, Harold’s actions were nothing more than an attempt to employ the deed as if it were a will.

November 27, 2006 Posted by | Property | Leave a comment

Nov. 14 Property: Requirements of Written Instruments

I’ll tell you up front that the moral of today’s lesson is USE A GOOD CONTRACT! The question of the day is what’s required of a written instrument conveying property? Let’s find out. Our first case is Bowlin v. Keifer. Guy Wade executed and delivered an instrument to Keifer saying that he conveyed all of his rights, title, and interest in his father’s estate to Keifer. The court held, however, that a contract for the sale of land will not be enforced unless the description disclosed therein is as definite and certain as that required in a deed of conveyance. Wade should have included at least some description of the property, although there’s some question in my mind as to whether the court could have just looked at his father’s will. That doesn’t seem out of the ordinary to me, but oh well.

The next case is Harris v. Strawbridge. Edward’s only heirs were his sister’s children so he made a will conveying property to them, but then a decade later he made an instrument conveying the property to Strawbridge. Even though the document didn’t use words like “grantor,” “grantee,” and “deed,” the court held that if from the whole instrument the court can ascertain a grantor and a grantee and there are operative words or words of grant showing an intention by the grantor to convey title to land which is sufficiently described to the grantee, and it is signed and acknowledged by the grantor, it is a deed. So I guess there’s some saving grace for those of us who don’t like to use lawyers or who want to do things simply. You still should have that description though. On that note, we should review the requirements of the usual Statute of Frauds. The Statute of Frauds usually requires grantor/grantee names, a description of the property, a statement of intent to convey, and a signature. Every state has a Statute of Frauds that may vary a little bit, but these requirements are pretty universal. Make sure that any instrument conveying property has these elements. More preferably at least get a title agent or someone to do. Most preferably, get a lawyer.

November 15, 2006 Posted by | Property | Leave a comment

Nov. 13 Property: Adverse Possession

With a general idea of adverse possession, let’s examine some of the requirements more closely. First up is exclusive possession. In ITT Rayonier, the court held that use alone doesn’t constitute possession. The ultimate test of exclusivity is the exercise of dominion over the land in a manner consistent with actions a true owner would take. 

Next up is open and notorious. In Marengo Cave v. Ross, the court held that possession is open and notorious if its nature and character is such as is calculated to apprise the world that the land is occupied and who the occupant is. A visitor has to be able to see that the owner’s rights are being violated. For possession to be notorious, it has to be so conspicuous that it is generally known and talked of by the public. The statute of limitation doesn’t begin to run until the injured party discovers or should have discovered the facts constituting the injury and cause of action.

 

Finally, we consider continuous possession. There can be cases where, although I’ve only owned a parcel of land for, say, five years, I can tack on the previous owner’s time (or even multiple prior owners) to my own to meet the requirement for adverse possession. In Howard v. Kunto, there was a pretty convoluted problem with deeds being different from the place where the homes were located. The court held that where several successive purchasers received record title to tract A under the mistaken belief they were acquiring tract B, and there possession of tract B is transferred and occupied in a continuous manner by successive occupants, there is sufficient privity of estate to permit tacking and establish adverse possession.

 

Next time we’ll talk about written instruments if we’re lucky.

November 13, 2006 Posted by | Property | Leave a comment

Nov. 9 Property: Adverse Possession

Moving on to adverse possession… There are six general requirements that need to be met: hostility, claim of right, actual possession, openness and notoriety, exclusivity, and continuity. We’ll look at three cases now, and a few more tomorrow. The first is Tioga Coal v. Supermarkets General. Tioga Coal tried to get title of a street that ran between Tioga’s property and Supermarkets General’s property. Tioga Coal took possession of the street by locking a gate at the beginning of the street. The issue was whether hostility must be directed at the true owner (T.C. thought the government owned the street, but S.G. did). The court held that if the true owner hasn’t ejected the interloper within the time allotted for an action in ejectment, and all other elements of adverse possession have been established, hostility will be implied, regardless of the subjective state of mind of the trespasser. The reason for this holding is that the true owner could have initiated an action of ejectment, but didn’t. So if you don’t know who’s land you’re on, you’re okay.

 

The next case is Halpern v. The Lacy Investment Corp. The holding in this case expresses the minority view. When Halpern moved into his residence, he wanted to add some land to his backyard. He contacted the owner who rejected purchase offers, so he razed the land and took possession of it. Lacy subsequently purchased the land from the original owner. The court held that the plaintiff has to have a good faith claim of right to proceed in an adverse possession action. Thus, you have to think that the property is yours instead of knowingly taking it. I like this rule because you couldn’t just steal property. Like I said, however, this is the minority rule.

The final case is ITT Rayonier v. Bell. The holding in this case expresses the majority view. The court held that the hostility/claim of right element requires only that the plaintiff treat the land as his own as against the world. The nature of the possession is to be determined solely on the basis of the manner in which he treats the property instead of his subjective belief. I don’t like this for the obvious reason that you could just take land. It does, however, put the landowner on notice to keep tabs on his/her land.

November 9, 2006 Posted by | Property | Leave a comment

Nov. 7 Property: Dedications and the Public Trust Doctrine

So let’s look at dedications a little more before moving onto the public trust doctrine. I learned something yesterday that put some of my concerns about dedications to rest. A city can’t just ask for a dedication. There has to be some reason that the city is concerned about the development—maybe there will be a lot of people move in and there isn’t the infrastructure in place, or maybe some housing will be razed to make room for the new office building. If there is a reason, the dedication has to have a logical nexus with the development’s accompanying problem and there has to be rough proportionality between the dedication and the proposed development. Further, the dedication the city asks shouldn’t be related to the project as a whole, but rather the concern they have. For example, Say an office building will be built which will take the place of some low-income housing. The city is concerned that they don’t have more low-income housing for those displaced so they require land which is worth a certain percentage of the proposed building. The value of the land is much more than it would cost to provide the low income housing. Such a dedication probably wouldn’t be upheld because the value is compared to the development and not the city’s concern.

 

We now turn to the public trust doctrine. Briefly stated, the public trust doctrine says that the state is the trustee for the state’s navigable waterways and the land underneath the water to the high-water mark. The state is the trustee for the public. In one case, the Supreme Court of New Jersey expanded the public trust doctrine to include not only the “wet sand” but the dry sand (including rights of access) so that the public can actually exercise their rights as the public. The court held that private land isn’t immune from a possible right of access to the foreshore for swimming or bathing purposes, nor is it immune from the possibility that some of the dry sand may be used by the public incidental to the right of bathing and swimming. They held this so that the rights of the public wouldn’t be extinguished. So thanks to the public trust doctrine, we can all enjoy the ocean, lakes, and beaches.  There will be more on the public trust doctrine later.

November 8, 2006 Posted by | Property | Leave a comment

Nov. 6 Property: Development Dedications

Today we started on exactions or dedications. They go something like this: say a developer wants to put in 1,000 homes. The city may come back and say, “Okay, we’ll grant the permit if you donate 10 acres for x.” That’s a dedication. The city can’t do this discriminately, however. In Dolan v. Tigard, the Supreme Court said that the city has to show a logical nexus between the dedication and the development and rough proportionality between the required dedication and the impact of the proposed development. Let’s look at our example above. If the city wanted a zoo, there wouldn’t be a logical nexus because it’s hard to see how 1,000 homes and a zoo relate. Further, there isn’t rough proportionality either for the same reason. If the city were to say they wanted 10 acres for a school, however, the story would be different. 1,000 homes and a school are related. The logical nexus is in the children that will move into the area and with so many new kids, there’s almost certainly a need for a new school. 

In Dolan, the city said that the plaintiff could expand her store and pave her parking lot if she kept the floodplain behind the store open and dedicated a bike path. The kicker was that the city already had an ordinance that 15% of the property had to be kept as open space (the floodplain would have been 10%), and the city wanted title to the property. The court didn’t go for that because 1) it would be a taking, and 2) the court didn’t see how making the property available for recreation was connected to its purposes of preventing flooding. 

So there you have it kids. The city can require dedications, but they have to be related to the development.

November 6, 2006 Posted by | Property | Leave a comment

Nov. 2 Property: Regulatory Takings (cont.)

So what happens when you buy a property from an owner and the property is subject to a regulation that subjects your property to a taking? My initial thought is that it’s like coming to the nuisance and the purchaser would be out of luck. Palazzolo v. Rhode Island didn’t quite turn out that way though. The Court held that future generations/owners have a right to challenge unreasonable restrictions on the use and value of the land. So why did the holding go this way? The big reason is that if this weren’t the case, it would be like if the State put an expiration date on the Takings Clause. Say the State passes a law that takes away all the value of my property, but I never go to court to be compensated and I sell the land to someone else. If the court held that the purchaser couldn’t challenge the law, the State affected a taking of the property without compensation. Thinking that way, the Court’s holding makes a lot of sense. Fortunately, the justices are a lot smarter than I am.

November 3, 2006 Posted by | Property | Leave a comment

Oct. 31-Nov. 1 Property: Regulatory Takings

The main factors in deciding if a regulation is a taking are:

  • Degree of diminished property value
  • Remaining economic viability
  • Degree to which investment-backed expectations have been thwarted
  • Character of the government’s action
  • Whether the regulation affords a reciprocal advanatage to the owner

Let’s see how these play out in a few cases.

The first case is Pennsylvania Coal v. Mahon. In this case, the Penn Coal wanted to mine coal from under Mahon‘s house. Penn Coal had subsurface rights and Mahon had surface rights. There was a regulation that said mining couldn’t occur under a human-habited structure to avoid sinking. Penn Coal argued that the regulation was a taking because it didn’t have access which meant the diminution was substantial. It didn’t have the coal to sell and that was the coal’s only benefit. The Supreme Court held that while governments to have the police power (the authority to control the actions of others), that power can be streteched too far. The instant case is an example of police power gone too far. Even if the government doesn’t actually take title of the property, it can still be a taking if it completely devalues the property.

The next case is Pennsylvania Central Transportation v. New York. In this case, Penn Central sold the airspace rights above Penn Central station to a company to build a twenty-story tower. The New York Landmark Commission, however, designated the train station a landmark which meant Penn Central had to get permission to go forward with its plan. The court focused on the character of the regulation and on the nature and extent of the interference with rights in the parcel as a whole when deciding if the regulation effected a taking. The Court said that the restrictions were for the general welfare and they permitted the owners to enhance the building and other properties to get the value. The Court said that the original purpose of the station wasn’t interferred with, nor did the regulation prohibit Penn Central from maximizing the profit to be gained from the building as it presently stood. If the Court had looked at only the airspace rights, they may have found a taking since the plans to build the tower were frustrated. The Court, however, looked at the entire parcel and said there was still plenty of value. The Court also said they could transfer their property rights. To get the value out of the airspace, the Court said they could sell their airspace to other developers so they could build their buildings higher than would ordinarily be allowed.

The point of all this is that you have to do a balancing test with several different criteria. The Penn Central analysis will come into play later. It’s also good to know that the Court declined to set a brightline rule, preferring instead to look at things on a case-by-case basis using the Penn Central analysis.

The next case is Lucas v. South Carolina Coastal Council. Here, Lucas had a couple of waterfront properties that were rendered valueless by a regulation passed by the SCCC which said you couldn’t put structures in a critical area which was a certain distance from the beach. The regulation was to prevent erosion, but it also prevented Lucas from doing anything with the land. The Court said that when the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good, that is, to leave his property economically idle, he has suffered a taking. This ruling and Loretto make the only two brightline rules that the Court has set forth as far as takings go. Thus, for Lucas if all value is lost, the government has to compensate the owner for the loss. The only way for the government to get out of compensating the owner is if the regulation takes away a right that the owner didn’t have in the first place.

 

 

November 1, 2006 Posted by | Property | Leave a comment

Oct. 30 Property: Physical Takings

Property

We’ve been discussing physical takings by the government. It’s something that was a hot-button issue for me, especially after the Kelo decision, but I’ve changed my mind somewhat after studying the issue a bit. In Loretto v. Telepromter Manhattan CATV Corp., the plaintiff was suing the defendant after she bought an apartment building that the defendant had installed cable equipment on. There was a statute that said owners couldn’t collect from cable companies for the use of space on their buildings. The plaintiff said this amounted to a physical taking without just compensation. The court held that permanent physical occupation is a taking because it takes away the important rights of possession, use, and disposition of a thing. Even though the space was minimal, there was still a taking and the plaintiff was entitled to just compensation.
Physical takings can also be when the government takes the property or when the government authorizes a thid party to permanently occupy the property. These things seem simple, but it gets difficult when it comes to a regluation. Can a regulation be a physical taking?
The answer is yes. If the regulation is permanent, it may be a physical taking. If the regulation isn’t permanent, you have to do a balancing test. You can look at things like whether there are exceptions or how long the regulation is in effect. You always need to consider if there’s just compensation if there is indeed a physical taking. To illustrate this, we can look at Yee v. Escondido. In Yee, the plaintiff owned a trailer park. A combination of statutes, a rent control act and an act addressing trailer parks, basically meant that the owner didn’t have control over what to charge people for rent, nor did the owner control who the tenants were. The owners contended that the combination of the statutes constituted a physical taking, but the court said there wasn’t a taking because the city left the option open that they could evict people, with notice of course, and change the use of the property.
Thus, whenever there’s a permanent physical occupation, there’s a physical taking and just compensation is required. Regulations can affect a physical taking, but you have to look carefully at the regulations effects.

November 1, 2006 Posted by | Property | Leave a comment