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Real Property

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  • 1. CHAPTER 24 Real Property and Environmental Law
  • 2.
    • What can a person who holds property in fee simple do with the property? Can a person who holds property as a life estate do the same?
    • How can a ownership rights in real property be transferred?
    • What are the respective duties of the landlord and tenant concerning the use and maintenance of leased property? Is the tenant responsible for all damages that he or she causes?
    • What is contained in an environmental impact statement and who must file one?
    • What major federal statutes regulate air and water pollution? What is Superfund, and who is potentially liable under Superfund?
    Learning Objectives
  • 3. Nature of Real Property
    • Real property is immovable and includes:
      • Land.
      • Buildings.
      • Airspace.
      • Plant Life and Vegetation.
      • Subsurface (mineral) rights.
      • Fixtures  .
  • 4. Fixtures
    • A fixture is personal property that becomes permanently affixed to real property.
      • Intent that it become a fixture is necessary.
      • Intent is determined by:
        • The fact that the property cannot be removed without causing damage to the realty.
        • The fact that the property is so adapted to the realty that it has become part of the realty.
        • In re Sand & Sage Farm & Ranch, Inc. (2001).
  • 5. Fixtures
    • Trade fixtures: installed for commercial purposes by a tenant.
    • They remain the property of the tenant and can be removed when tenant leaves, repairing any damage caused by removal.
  • 6. Ownership Interests in Real Property
    • Ownership interests are classified as either Possessory or Non-Possessory:
        • A Possessory interest such as a fee simple, life or leasehold estate, gives the owner a right to possess the land.
        • A Nonpossessory interest such as an easement, profit or license, does not give the owner a right to possess the land.
  • 7. Ownership in Fee Simple
    • The Fee Simple (sometimes called fee simple absolute) gives the owner the greatest aggregation of rights, powers and privileges possible under American law and can assigned to heirs.
      • A “conveyance” (transfer of real estate) “from A to B” creates a fee simple. A is the Grantor and B is the Grantee .
    • Fee Simple Defeasible: grants conditional ownership to Grantee as long as he complies with condition. “A to B as long as ….”
  • 8. Life Estates
    • Estate that lasts for the life of some specified individual. “A grants Blackacre to B for B’s life” grants B a life estate in Blackacre.
    • When B dies, Blackacre returns to A or his heirs or assigns, or a third party in the same condition, normal wear and tear excepted.
    • Grantor A retains a “future interest” in the property.
    • During B’s life, she can possess, use, and take the fruits of the estate, but not take from the property itself.
  • 9.
    • An easement is a right of a person to make limited use of another person's real property without taking anything from the property.
    • A profit is the right to go onto land in possession of another and take away some part of the land itself or some product of the land.
    • Property that is benefited by easement/profit carries the the interest with the sale of land.
    Non-Possessory Interests
  • 10. Transfer of Ownership
    • Ownership in real property can be transferred by:
      • A written Deed.
      • A Gift.
      • A Sale.
      • An Inheritance.
      • Adverse Possession.
      • Eminent Domain.
  • 11. Deeds
    • A Deed is the instrument setting forth the interests in real property being transferred.
    • Necessary components of a Deed:
      • Names of Grantor and Grantee.
      • Words evidencing intent to convey.
      • Legally sufficient description of the land.
      • Grantor’s signature.
      • Delivery of the Deed.
  • 12. Types of Deeds
    • Warranty Deed.
      • Special Warranty Deed.
    • Quitclaim Deed.
    • Grant Deed.
    • Sheriff’s Deed.
      • Period of redemption.
  • 13.
    • Recording a deed ( or any interest in real property ) puts the public on notice of the new owner’s interest in the land and prevents the previous owner from fraudulently conveying the same interest to another buyer.
    • Race statute.
      • Pure notice statute.
      • Notice-race statute.
    Recording Statutes
  • 14. Will or Inheritance
    • Owner of real property dies, his property is transferred by:
      • Will (testate).
      • Without Will (intestate).
    • Title is transferred at the time state law so provides in its testate and intestate laws.
  • 15. Adverse Possession
    • One person possesses the property of another for a certain statutory period of time, that person automatically acquires title to the land, just as if there had been a conveyance by deed. Must be:
        • Actual and exclusive.
        • Open, visible and notorious.
        • Continuous and peaceable.
        • Hostile and adverse.
  • 16. Eminent Domain
    • Rights in property are not absolute. They are constrained by federal and state laws, e.g., nuisance, tax and environmental.
    • A “Taking” By Eminent Domain : The 5 th amendment gives the government the right to “take” private land for public use with just compensation.
  • 17. Leasehold Estates
    • Anyone who rents housing to the public for commercial purposes subjects herself to various state and federal Landlord-Tenant laws.
    • Owner of the property is the LESSOR and Tenant is LESSEE; the contract is called the LEASE. The property interest is called a leasehold estate.
  • 18. Tenancy Interests
    • Tenancy for Years.
      • Created by an express contract.
      • Property is leased for a specified period of time.
    • Periodic Tenancy.
      • Does not specify how long lease lasts.
      • But rent paid at certain intervals.
    • Tenancy at Will.
      • For as long as both agree.
    • Tenancy at Sufferance.
      • Wrongful possession without the right to possess.
  • 19.
    • Lease Agreement can be oral or written (oral may not be enforceable). Lease gives Tenant the temporary right to exclusively possess the property.
    • Sources of Law:
      • Common Law.
      • State and Local Statutes, and
      • The Uniform Residential Landlord and Tenant Act (URLTA) which has been adopted by 1/4 of the states.
    Landlord-Tenant Relationships
  • 20. Lease Agreement
    • Form of the Lease:
      • Must express intent to establish the lease.
      • Provide for transfer of possession to the Tenant.
      • Provide for the Landlord’s “reversionary” interest.
      • Describe the property.
      • Indicate length of the term, amount of rent, when and where rent paid.
      • Illegality.
        • Osborn v. Kellogg (1996).
  • 21.
    • Trend in the law is to curtail, by contract and real estate law, the immense freedom that Landlords had in the past.
      • Possession.
      • Using the Premises.
      • Maintaining the Premises.
      • Rent.
    Rights and Duties
  • 22. Rights and Duties
    • Landlord has a duty to deliver actual physical possession under URLTA or legal right to possession (“American” rule).
    • Tenant’s right to exclusive possession is only subject to Landlord’s limited right to come unto the property.
    • Tenant has a “covenant of quiet enjoyment” by which Landlord promises Tenant’s peace and enjoyment of the property.
  • 23. Rights and Duties
    • Eviction occurs when Landlord:
      • Deprives Tenant of possession of the leased property; or
      • Interferes with this use or enjoyment of the property to the extent that Tenant cannot use or enjoy.
    • Constructive eviction occurs when Landlord:
      • Breaches lease or covenant or quiet enjoyment; and
      • Makes it impossible for the Tenant to use and enjoy the property.
  • 24.
    • Residential property -- Landlord must furnish premises in habitable condition.
    • Landlord is responsible for maintaining common areas such as stairs, parking lots, elevators and swimming pools.
    • Commercial property -- may still require Tenant to maintain depending on the lease.
    Rights and Duties
  • 25. Rights and Duties
    • Implied Warranty of Habitability applies to major (substantial) defects if Landlord knew or should have known about & he had a reasonable time to repair.
    • To determine breach, Courts consider:
      • Whether Tenant caused damage.
      • How long defect existed and age of building.
      • Defects impact on Tenant’s safety and health.
      • Whether defect contravenes relevant statutes.
  • 26.
    • Rent is Tenant’s payment to the Landlord for the Tenant’s occupancy or use of the Landlord’s real property.
      • Payment based on agreement, custom, state statute, waiver.
    • Security Deposits.
      • A deposit by Tenant which Landlord may retain for non-payment of rent or damage to premises.
      • URLTA has specific provisions as to when it may be kept and when it must be returned.
    Rent
  • 27.
    • If Landlord breaches the warranty of habitability, depending on state law, Tenant may:
      • Withhold rent -- put in escrow.
      • Repair and Deduct -- notify, repair, and deduct repair from rent.
      • Cancel the Lease -- must be constructive eviction or breach of habitability.
      • Sue for Damages -- difference between what paid for and what received.
    Tenant’s Remedies
  • 28. Transferring Rights to Leased Property
    • Transferring Landlord's Interest.
      • Landlord may sell any and all of his rights in the real property.
      • New owner buys “subject to the lease,” if lease is recorded.
    • Transferring Tenant’s Interest.
      • Landlord’s consent may or may not be required by statute or the lease itself.
  • 29.
    • Transferring the Tenant’s Interest ( cont’d )
      • Assignments: Tenant transfers his entire interest in the lease to a third person. Original Tenant is not released from liability under the lease.
      • Subleases: Tenant transfers all or part of his interest in the lease for a shorter period of time than the lease. Original Tenant is not relieved of liability under the lease.
    Transferring Rights
  • 30. Environmental Law
    • The principal sources of environmental law are:
      • State and Local Regulation.
      • Federal Regulation.
  • 31. State and Local Regulation
    • States regulate the degree to which the environment may be polluted.
    • City, county, and other local governments control some aspects of the environment.
        • Local zoning laws.
        • Methods of waste and garbage removal.
        • Location and conditions of parks, streets and other public areas.
  • 32. Federal Regulation
    • Federal environmental policy is achieved through federal agencies:
      • Example: Environmental Protection Agency [ http://www.epa.gov ] (EPA).
      • Regulatory agencies must take environmental factors into consideration when making significant decisions.
  • 33. Federal Regulation
    • National Environmental Policy Act (NEPA).
      • Does not directly deal with pollution control.
      • Require preparation of an environmental impact statement (EIS) when major federal action in the environment is to be undertaken.
    • Media Specific Pollution Control Legislation.
  • 34. Environmental Impact Statement
    • An EIS must analyze:
      • The impact of the proposed action on the environment.
      • Any adverse effects of the action and alternatives to the action.
      • Any irreversible effects the action might generate.
  • 35. Air Pollution
    • Clean Air Act .
      • This act provides the basis for issuing regulations to control pollution coming primarily from stationary (factories) and mobile (cars) sources of air pollution.
      • It prescribes the use of pollution control equipment that represents the maximum achievable control technology.
  • 36. Air Pollution
      • Clean Air Markets Group v. Pataki (2002).
      • Hazardous Air Pollutants.
      • Violations: civil penalties up to $25,000/day. Willful violations carry criminal penalties and fines.
  • 37. Water Pollution
    • Clean Water Act’s goals :
      • Safe swimming and drinking water.
      • Protection of fish and wildlife (wetlands).
      • Elimination of the discharge of pollutants into waterways (navigable waterways).
    • Pollution control is largely achieved through the use of the best available control technology.
  • 38. Noise Pollution
    • Noise Control Act.
      • Establishes noise emissions standards (maximum noise levels below which no harmful effects occur from interference with speech or other activity).
      • Prohibits distributing products manufactured in violation of the noise emission standards.
  • 39.
    • Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).
      • Regulates the use of pest control chemicals in the process of food growth to food packaging, to minimize their presence in foods consumed.
    • Toxic Substances Control Act.
      • Requires anyone planning to use chemicals first determine their effect on human health and the environment.
      • Require special labeling, limit the use of substance, set production quotas, or prohibit the use of a substance altogether.
    Toxic Chemicals
  • 40. Hazardous Waste Disposal
    • Resource Conservation and Recovery Act.
      • Authorizes the EPA to issue regulations for the monitoring, transporting, storage, treatment, and disposal of hazardous substances.
    • CERCLA.
      • Designed to ensure the clean-up of hazardous waste sites and to assign liability for the costs of the cleanup operations.
      • Joint and Several Liability for cleanup costs can be assigned to any potentially responsible party (PRP).