1. © 2007 by West Legal Studies in Business / A Division of Thomson Learning CHAPTER 19 Land-Use Control and Real Property

2. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 2 The Nature of Real Property Real property (also called real estate or realty) is immovable. Real property includes land, subsurface and air rights, plant life and vegetation, and fixtures.

3. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 3 Ownership of Real Property Ownership of property is an abstract concept that cannot exist independently of the legal system. Property ownership is often viewed as a bundle of rights.

4. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 4 Ownership in Fee Simple Fee simple absolute: The most complete form of ownership. Fee simple defeasible: Ownership in fee simple that can end if a specified event or condition occurs.

5. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 5 Life Estates An estate that lasts for the life of a specified individual; ownership rights in a life estate are subject to the rights of the future-interest holder.

6. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 6 Nonpossessory Interests An interest that involves the right to use real property but not to possess it. Nonpossessory interests include: –Easements. –Profits. –Licenses.

7. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 7 Transfer of Ownership Ownership of real property can pass from one person to another in a number of ways: –Deed. –Will or inheritance. –Adverse possession.

8. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 8Deeds When real property is sold or transferred as a gift, title to the property is conveyed by means of a deed. A warranty deed warrants the most extensive protection against defects of title.

9. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 9Deeds A quitclaim deed conveys to the grantee whatever interest the grantor had; it warrants less than any other deed. A deed may be recorded in the manner prescribed by recording statutes in the appropriate jurisdiction to give third parties notice of the owner’s interest.

10. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 10 Will or Inheritance If the owner dies after having made a valid will, the land passes as specified in the will. If the owner dies without having made a will, the heirs inherit according to state inheritance statutes.

11. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 11 Adverse Possession When a person possesses the property of another for a statutory period of time (3– 30 years, with 10 most common), that person acquires title to the property, provided the possession is actual and exclusive, open and visible, continuous and peaceable, and hostile and adverse (without the permission of the owner).

12. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 12 Leasehold Estates A leasehold estate is an interest in real property that is held only for a limited period of time, as specified in the lease agreement. Types of tenancies relating to leased property include the following: Tenancy for Years Tenancy at WillTenancy at Sufferance Periodic Tenancy

13. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 13 Types of Tenancies Tenancy for Years. –Tenancy for a period of time stated by express contract. Periodic Tenancy. –Tenancy for a period determined by the frequency of rent payments; automatically renewed unless proper notice is given. Tenancy at Will. –Tenancy for as long as both parties agree; no notice of termination is required. Tenancy at Sufferance: Possession of land without legal right.

14. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 14 Landlord-Tenant Relationships Landlord-tenant relationships have become subject to specific state and local statutes and ordinances as well.

15. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 15 Creating the Landlord- Tenant Relationship The landlord-tenant relationship is created by a lease agreement. State or local laws may dictate whether the lease must be in writing and what lease terms are permissible.

16. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 16 Rights and Duties The rights and duties that arise under a lease agreement generally pertain to the following areas: Rent Use and Maintenance of the Premises Possession

17. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 17Possession The tenant has an exclusive right to possess the leased premises, which must be available to the tenant at the agreed-on time. Under the covenant of quiet enjoyment, the landlord provides that during the lease term neither the landlord nor anyone having superior title to the property will disturb the tenant’s use and enjoyment of the property.

18. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 18 Use and Maintenance of the Premises Unless the parties agree otherwise, the tenant may make any legal use of the property. The tenant is responsible for any damage that he or she causes. The landlord must comply with laws that set specific standards for the maintenance of real property. The implied warranty of habitability requires that a landlord furnish and maintain residential premises in a habitable condition.

19. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 19Rent The tenant must pay the rent as long as the lease is in force, unless the tenant justifiably refuses to occupy the property or withholds the rent because of the landlord’s failure to maintain the premises properly.

20. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 20 Transferring Rights to Leased Property If the landlord transfers complete title to the leased property, the tenant becomes the tenant of the new owner. The new owner may then collect the rent but must abide by the existing lease. Generally, tenants may assign their rights under a lease contract to a third person. Tenants may also sublease leased property to a third person, but the original tenant is not relieved of any obligations to the landlord under the lease. In either case, the landlord’s consent may be required.

21. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 21 Land-Use Control The Law of Torts. –Owners are obligated to protect the interests of those who come on the land and those who own nearby land. Private Agreements. –Owners may agree with others to limit the use of their property.

22. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 22 Police Power A state can regulate the use of land within its jurisdiction. A state authorizes its city or county governments to regulate the use of land within their local jurisdiction.

23. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 23 Government Plans Most states require that local land-use laws follow a general plan.

24. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 24 Zoning Laws Laws that divide an area into districts to which specific land-use regulations apply. Districts may be zoned for residential, commercial, industrial, or agricultural use. Within all districts there may be minimum lot-size requirements, structural restrictions, and other bulk zoning regulations.

25. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 25 Zoning Laws Variances allows for the use of property in ways that vary from the restrictions. Case 19.1 Richard Roeser Professional Builder, Inc. v. Anne Arundel County (2002).

26. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 26 Subdivision Regulations Laws directing the dedication of specific plots of land to specific uses within a subdivision.

27. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 27 Growth-Management Ordinances Limits on, for example, the number of residential building permits.

28. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 28 Limitations on the Exercise of Police Power Due process and Equal Protection. –Land-use controls cannot be arbitrary, unreasonable, or discriminatory. Case 19.2 MacPherson v. Department of Administrative Services (2006).

29. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 29 Limitations on the Exercise of Police Power Just Compensation. –Private property taken for a public purpose requires payment of just compensation. –“Taking” for a public purpose includes enacting overly burdensome regulations.

30. THE LEGAL ENVIRONMENT TODAY Miller Cross 5 th Ed. © 2007 by West Legal Studies in Business / A Division of Thomson Learning 30 Eminent Domain Condemnation power. –Governments have the inherent power to take property for public use without the consent of the owner. Limits on the power of eminent domain. –Private property taken for a public purpose requires payment of just compensation. –Due Process and Equal Protection. –Case 19.3 Kelo v. City of New London, Connecticut (2005).