1. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved Slides developed by Les Wiletzky PowerPoint Slides to Accompany ESSENTIALS OF BUSINESS AND ONLINE COMMERCE LAW 1 st Edition by Henry R. Cheeseman Chapter 23 Real Property and Environmental Protection Chapter 23 Real Property and Environmental Protection

2. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 2 Real Property  The land itself as well as buildings, trees, soil, minerals, timber, plants, and other things permanently affixed to the land: Land Buildings Subsurface Rights Plant Life and Vegetation Fixtures Air Rights

3. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 3 Estates in Land  Ownership rights in real property  The bundle of legal rights that the owner has to possess, use, and enjoy the property  The type of estate that an owner possesses is determined from the deed, will, lease, or other document that transferred the ownership rights to him or her

4. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 4 Freehold Estate  An estate where the owner has a present possessory interest in the real property  Estates in Fee Fee simple absolute Fee simple defeasible  Life Estates Estate pour autre vie

5. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 5 Estates in Fee Fee Simple Absolute  Highest form of owner-ship of real property  Ownership: Is infinite in duration Has no limitation on inheritability Does not end upon the occurrence or non- occurrence of an event Fee Simple Absolute  Highest form of owner-ship of real property  Ownership: Is infinite in duration Has no limitation on inheritability Does not end upon the occurrence or non- occurrence of an event Fee Simple Defeasible  Grants owner all of the incidents of a fee simple absolute except that it may be taken away if a specified condition occurs or does not occur Fee Simple Defeasible  Grants owner all of the incidents of a fee simple absolute except that it may be taken away if a specified condition occurs or does not occur

6. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 6 Life Estate  Interest in property that lasts for the life of a specified person  A life estate terminates upon the death of a named person and reverts back to the grantor or his or her estate or other designated person

7. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 7 Concurrent or Co-ownership  When two or more persons own a piece of real property  Forms of concurrent ownership: Joint tenancy Tenancy in common Tenancy by the entirety Community property

8. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 8 Summary: Concurrent Ownership (1 of 2) Form of OwnershipRight of SurvivorshipTenant May Unilaterally Transfer His or Her Interest Joint TenancyYes. Deceased tenant’s interest automatically passes to co-tenants. Yes. Tenant may transfer his or her interest without the consent of co- tenants. Transfer severs joint tenancy. Tenancy in CommonNo. Deceased tenant’s interest passes to his or her estate. Yes. Tenant may transfer his or her interest without the consent of co- tenants. Transfer does not sever tenancy in common.

9. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 9 Form of OwnershipRight of SurvivorshipTenant May Unilaterally Transfer His or Her Interest Tenancy by the Entirety Yes. Deceased tenant’s interest automatically passes to his or her spouse. No. Neither spouse may transfer his or her interest without the other spouse’s consent. Community PropertyYes. When a spouse dies the surviving spouse automatically receives one-half of the community property. The other half passes to the heirs of the deceased spouse as directed by a valid will. No. Neither spouse may transfer his or her interest without the other spouse’s consent. Summary: Concurrent Ownership (2 of 2)

10. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 10 Condominium  Common form of ownership in a multiple- dwelling building  Purchasers of a condominium: Have title to their individual units Own the common areas as a tenant in common with the other condominium owners  Owners may sell or mortgage their units without the permission of the other owners

11. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 11 Cooperative  Form of co-ownership of a multiple-dwelling building A corporation owns the building The residents own shares in the corporation  Each cooperative owner then leases a unit in the building from the corporation under a renewable, long-term, proprietary lease

12. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 12 Future Interest  The right to possess property in the future  The interest that the grantor retains for him- or herself or a third party  Reversion  Reversion – a right of possession that returns to the grantor after the expiration of a limited or contingent estate  Remainder  Remainder – a right of possession that goes to a third party upon the expiration of a limited or contingent estate

13. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 13 Transfer of Ownership of Real Property: Sale of Real Estate  The passing of title from a seller to a buyer for a price conveyance  Also called a conveyance  Closing  Closing – the finalization of a real estate sales transaction that passes title to the property from the seller to the buyer

14. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 14 Transfer of Ownership of Real Property: Deed  A writing that describes a person’s ownership interest in a piece of real property Warranty Deed Quitclaim Deed  Grantor  Grantor – the party who transfers an ownership interest in real property  Grantee  Grantee – the party to whom an interest in real property is transferred

15. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 15 Transfer of Ownership of Real Property: Recording Statute  A state statute that requires the mortgage or deed of trust to be recorded in the county recorder’s office of the county in which the real property is located  Quiet title action  Quiet title action – a party concerned about ownership rights in a parcel of real property can have a court determine the extent of those rights

16. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 16 Transfer of Ownership of Real Property: Marketable Title (Good Title)  Title that is free from any encumbrances or other defects that are not disclosed but would affect the value of the property  The three most common ways of assuring marketable title: Attorney’s Opinion Torrens System Title Insurance

17. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 17 Transfer of Ownership of Real Property: Adverse Possession (1 of 2)  Occurs when a person who wrongfully possesses someone else’s real property obtains title to that property if certain statutory requirements are met  Property owned by federal and state governments are not subject to adverse possession

18. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 18 Transfer of Ownership of Real Property: Adverse Possession (2 of 2)  To obtain title under adverse possession, the wrongful possession must be: 1. 1. For a statutorily prescribed period of time 2. 2. Open, visible, and notorious 3. 3. Actual and exclusive 4. 4. Continuous and peaceful 5. 5. Hostile and adverse

19. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 19 Easements  A given or required right to make limited use of someone else’s land without owning or leasing it: Easement Appurtenant Easement Appurtenant – created when the owner of one piece of land is given an easement over an adjacent piece of land Easement in Gross Easement in Gross – authorizes a person who does not own adjacent land the right to use another’s land

20. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 20 Zoning (1 of 3)  Local laws are adopted by municipalities and local governments to regulate land use within their boundaries  Adopted and enforced to protect the health, safety, morals, and general welfare of the community  Zoning is the primary form of land use regulation in the United States

21. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 21 Zoning (2 of 3) Zoning ordinances Zoning ordinances generally: 1.Establish use districts within the municipality (e.g., residential, commercial, or industrial) 2.Restrict the height, size, and location of buildings on a building site 3.Establish aesthetic requirements or limitations for the exterior of buildings

22. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 22 Zoning (3 of 3) Variance  An exception that permits a type of building or use in an area that would not otherwise be allowed by a zoning ordinanceVariance Nonconforming Uses  Uses and buildings that already exist in the zoned area that are permitted to continue even though they do not fit within new zoning ordinances Nonconforming Uses  Uses and buildings that already exist in the zoned area that are permitted to continue even though they do not fit within new zoning ordinances

23. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 23 Landlord-Tenant Relationship (1 of 2) landlord tenant  A relationship created when the owner of a freehold estate (landlord) transfers a right to exclusively and temporarily possess the owner’s property to another (tenant)  Nonfreehold Estate  Nonfreehold Estate – an estate in which the tenant has a right of possession of the property but not title to the property

24. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 24 Landlord-Tenant Relationship (2 of 2)  Leasehold  Leasehold – a tenant’s interest in the property  Landlord  Landlord – the owner who transfers the leasehold  Tenant  Tenant – the party to who the leasehold is transferred

25. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 25 The Lease  A transfer of the right to the possession and use of the real property for a set term in return for certain consideration i.e., the rental agreement between a landlord and a tenant  Leases can be either oral or written Statutes of Frauds  Most Statutes of Frauds require written leases for periods of time longer than one year

26. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 26 Types of Tenancy (1 of 2) Type of TenancyDescription Tenancy for YearsContinues for the duration of the lease and then terminates automatically without notice. It does not terminate by the death of either party. Periodic TenancyContinues from payment interval to payment interval. It may be terminated by either party with adequate notice. It does not terminate upon the death of either party.

27. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 27 Types of Tenancy (2 of 2) Type of TenancyDescription Tenancy at WillContinues at the will of the parties. It may be terminated by either party at any time with adequate notice. It terminates upon the death of either party. Tenancy at Sufferance Arises when a tenant wrongfully occupies real property after the expiration of another tenancy or life estate. It continues until the owner either evicts the tenant or holds the tenant over for another term. It terminates upon the death of the tenant.

28. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 28 Duty to Pay Rent  Rent  Rent – an agreed-upon amount the tenant pays the landlord for the leased premises at the agreed upon time  Generally, rent is payable in advance  Unlawful detainer action  Unlawful detainer action – a legal procedure a landlord can bring to evict a tenant for non- payment of rent

29. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 29 Sublease  Occurs when a tenant transfers only some of his or her rights under the lease  Sublessor  Sublessor – the original tenant in a sublease situation  Sublessee  Sublessee – the new tenant in a sublease situation  No legal relationship is formed between the landlord and the sublessee

30. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 30 Implied Warranty of Habitability  A warranty that provides that the leased premises must be fit, safe, and suitable for ordinary residential use  If the landlord’s failure to maintain or repair the leased premises affects the tenant’s use or enjoyment of the premises, state statutes and judicial decisions provide various remedies

31. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 31 Environmental Protection: Environmental Protection Agency  An administrative agency created by Congress in 1970 to coordinate the implementation and enforcement of the federal environmental protection laws  The EPA has broad rule-making powers  The EPA has adjudicative powers  The EPA can initiate judicial proceedings in court against suspected violators of federal environmental laws  An administrative agency created by Congress in 1970 to coordinate the implementation and enforcement of the federal environmental protection laws  The EPA has broad rule-making powers  The EPA has adjudicative powers  The EPA can initiate judicial proceedings in court against suspected violators of federal environmental laws

32. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 32 Environmental Protection: National Environmental Policy Act (NEPA)  A federal statute enacted in 1969 that mandates that the federal government consider the adverse impact a federal government action would have on the environment before the action is implemented Council on Environmental Quality  Created the Council on Environmental Quality  Does not apply to action by state or local governments or private parties  A federal statute enacted in 1969 that mandates that the federal government consider the adverse impact a federal government action would have on the environment before the action is implemented Council on Environmental Quality  Created the Council on Environmental Quality  Does not apply to action by state or local governments or private parties

33. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 33 Environmental Impact Statement (EIS) (1 of 2) environmental impact statement (EIS)  The NEPA and rules adopted thereunder require that an environmental impact statement (EIS) must be prepared for all proposed legislation or major federal action that significantly affects the quality of the human environment  The purpose of the EIS is to provide enough information about the environment to enable the federal government to determine the feasibility of the project

34. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 34 Environmental Impact Statement (EIS) (2 of 2)  The EIS is also used as evidence in court whenever a federal action is challenged as violating the NEPA or other federal protection laws  Once an EIS is prepared, it is subject to public review  Most states and many local governments have enacted laws that require an EIS to be prepared regarding proposed state and local government action as well as private development

35. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 35 Air Pollution: Clean Air Act air pollution  A federal statute enacted in 1963 to assist states in dealing with air pollution Pollution caused by factories, homes, vehicles, and the like that affects the air Clean Air Act  The Clean Air Act, as amended (1970, 1977, 1990), provides comprehensive regulation of air quality in the United States

36. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 36 National Ambient Air Quality Standards national ambient air quality standards (NAAQS)  The Clean Air Act directs the EPA to establish national ambient air quality standards (NAAQS) for certain pollutants  Standards are set at two levels: Primary Primary – to protect human beings Secondary Secondary – to protect vegetation, matter, climate, visibility, and economic values

37. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 37 Water Pollution (1 of 3)  Water pollution Pollution of lakes, rivers, oceans, and other bodies of water  Federal Water Pollution Control Act (FWPCA) of 1948 (as amended): Clean Water Act of 1972 Clean Water Act of 1977 Clean Water Quality Act of 1987

38. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 38 Water Pollution (2 of 3)  Point sources of water pollution Sources of water pollution such as paper mills, manufacturing plants, electric utility plants, and sewage plants  Thermal pollution Heated water or material discharged into waterways that upsets the ecological balance and decreases the oxygen content

39. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 39 Water Pollution (3 of 3)  Wetlands Areas that are inundated or saturated by surface water or ground water that support vegetation typically adapted for life in such conditions Clean Water Act Army Corps of Engineers The Clean Water Act forbids the filling or dredging of wetlands unless a permit has been obtained from the Army Corps of Engineers

40. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 40 Toxic Substances  Chemicals used for agricultural, industrial, and mining uses that cause injury to humans, birds, animals, fish, and vegetation  Toxic Substances Control Act of 1976 A federal statute that requires manufacturers and processors to test new chemicals to determine their effect on human health and the environment before the EPA will allow them to be marketed

41. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 41 Hazardous Waste (1 of 2)  Hazardous Waste Solid waste that may cause or significantly contribute to an increase in mortality or serious illness or pose a hazard to human health or the environment if improperly managed  Land Pollution Pollution of the land that is generally caused by hazardous waste being disposed of in an improper manner

42. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 42 Hazardous Waste (2 of 2)  Resource Conservation and Recovery Act (RCRA) of 1976 Federal statute that authorizes the EPA to regulate facilities that generate, treat, store, transport, and dispose of hazardous wastes States have primary responsibility for implementing the standards established by the Act and EPA regulations

43. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 43 Comprehensive Environmental Response, Compensation and Liability Act (1980) “Superfund”  Commonly called “Superfund”  Significantly amended in 1986  Administered by the EPA  Gives the federal government a mandate to deal with hazardous wastes that have been spilled, stored, or abandoned

44. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 44 Superfund (continued)  The Superfund requires the EPA to: Identify sites in the U.S. where hazardous wastes have been disposed, stored, abandoned, or spilled, and Rank these sites regarding the severity of risk The hazardous waste sites with the highest ranking are put on a National Priority List The law provides for the creation of a fund to finance the cleanup of hazardous waste sites

45. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 45 Endangered Species Act of 1973 (as amended) endangeredthreatened  Protects endangered and threatened species of animals endangeredthreatened  The Secretary of the Interior is empowered to declare a form of wildlife as endangered or threatened critical habitats  The Act requires the EPA and the Department of Commerce to designate critical habitats for each endangered and threatened species taking  The Act prohibits the taking of any endangered species

46. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 46 Other Federal Laws That Protect Wildlife:  Migratory Bird Treaty Act  Bald Eagle Protection Act  Wild Free-Roaming Horses and Burros Act  Marine Mammal Protection Act  Migratory Bird Conservation Act  Fishery Conservation and Management Act  Fish and Wildlife Coordination Act  National Wildlife Refuge System  Migratory Bird Treaty Act  Bald Eagle Protection Act  Wild Free-Roaming Horses and Burros Act  Marine Mammal Protection Act  Migratory Bird Conservation Act  Fishery Conservation and Management Act  Fish and Wildlife Coordination Act  National Wildlife Refuge System

47. Copyright © 2006 by Pearson Prentice-Hall. All rights reserved. 23 - 47 State Environmental Protection Laws  Many state and local governments have enacted statutes and ordinances to protect the environment  States are entitled to set pollution standards that are stricter than federal requirements  Some states have enacted special environmental statutes to protect unique areas within their boundaries e.g., Florida has enacted laws to protect the Everglades e.g., California has enacted laws to protect its Pacific Coastline  Many state and local governments have enacted statutes and ordinances to protect the environment  States are entitled to set pollution standards that are stricter than federal requirements  Some states have enacted special environmental statutes to protect unique areas within their boundaries e.g., Florida has enacted laws to protect the Everglades e.g., California has enacted laws to protect its Pacific Coastline