Chapter 24


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Chapter 24

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