Real Property and Environmental Law

1. BUSINESS LAW TODAYEssentials 9th Ed.Roger LeRoy Miller - Institute for University Studies, Arlington, TexasGaylord A. Jentz - University of Texas at Austin, Emeritus Chapter 24 Real Property and Environmental Law

2. Learning Objectives • What can a person who holds property in fee simple do with the property? • What are the requirements for acquiring property by adverse possession? • What limitations may be imposed on rights of property owners? • What is a leasehold estate? What types of leasehold estates, or tenancies, can be created when real property is leased? • What are the respective duties of the landlord and tenant concerning the use and maintenance of leased property?

3. Nature of Real Property • Real property is immovable and includes: • Land & Permanent Buildings. • Airspace & Subsurface Rights. • 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.

5. Trade 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 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.

7. 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.

8. Nonpossessory Interests • An easementis a right of a person to make limited use of another person's real property without taking anything from the property. • A profitis 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.

9. Creation of an Easement or Profit • Easements or profits can be created by: • Deed (physical delivery is sufficient). • Will (at Grantor’s death). • Contract between Grantor and Grantee. • Implication: circumstances surrounding creation of easement imply its creation. • Necessity. • Prescription: easement by adverse possession.

10. Termination of an Easement or Profit • By deed back to owner of the land burdened by it. • Owner of easement or profit becomes owner of the land burdened with it. • Abandonment by the owner of the right.

11. License • Revocable right of a person to come unto another’s land without removing anything from the land. • Personal privilege that arises from the consent of the owner of the land that can be revoked. • CASE 24.1Roman Catholic Church of our Lady of Sorrows v. Prince Realty Management, LLC (2008). License to install temporary plywood fence around construction site, does not extend to more permanent structures such as steel piles and beams.

12. Transfer of Ownership • Ownership in real property can be transferred by: • A written Deed. • A Gift. • A Sale. • An Inheritance. • Adverse Possession. • Eminent Domain.

13. 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.

14. Types of Deeds • Warranty Deed. • Special Warranty Deed. • Implied Warranties in New Homes. • Quitclaim Deed. • Grant Deed. • Sheriff’s Deed. • Period of redemption.

15. Recording Statutes • 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.

16. 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.

17. 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.

18. 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 5th amendment gives the government the right to “take” private land for public use with just compensation. • CASE 24.2Drake v. Walton County (2009). The Drakes reasonably relied on a stabilized drainage system when they purchased property. When the county permanently changed the drainage, a portion of Drake’s property was taken without just compensation.

19. 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.

20. 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.

21. Landlord-Tenant Relationships • 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.

22. Rights and Duties • 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.

23. 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.

24. 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 • Landlord makes it impossible for the Tenant to use and enjoy the property.

25. Implied Warranty of Habitability • Implied Warranty of Habitability: 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.

26. Implied Warranty of Habitability • To determine whether a breach has occurred, 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.

27. Rent • 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.

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 Rights • 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.

30. Environmental Law • The principal sources of environmental law are: • Common Law Actions.  • State and Local Regulation.  • Federal Regulation. 

31. Common Law Actions • Nuisance. • Person liable if they use their property in a manner that unreasonably interferes with others’ rights to use or enjoy their own property. • Negligence and Strict Liability. • Business or person alleged failure to use reasonable care toward a party whose injury was foreseeable and, or course, caused by the lack of reasonable care.

32. Federal, State, and Local 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. Water Pollution • Clean Water Act goals: • Safe swimming and drinking water. • Protection of fish and wildlife (wetlands). • Elimination of the discharge of pollutants into waterways (navigable waterways). • Established national permitting system for regulating discharges from “point sources.” • What about comparable economic costs of power plants? • CASE 24.3Entergy Corp. v. Riverkeeper, Inc. (2009). EPA has the power to do a cost-benefit analysis to determine whether a plant has the “best technology available for minimizing adverse environmental impact.”

37. Water Pollution • Drinking Water. • Safe Drinking Water Act of 1974, amended in 1996. • Ocean Dumping. • Marine Protection, Research, and Sanctuaries Act of 1972, amended in 1983. Establishes a permit program of toxic waste. • Oil Pollution. • Oil Pollution Act of 1990.

38. Toxic Chemicals • 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.

39. 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.

40. CERCLA - Superfund • 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).