copyright 2006 by pearson prentice-hall. all rights reserved slides developed by les wiletzky...

Slides developed byLes Wiletzky Copyright © 2006 by Pearson Prentice-Hall. All rights reserved

PowerPoint Slides to AccompanyESSENTIALS OF BUSINESS AND

ONLINE COMMERCE LAW1st Edition

by Henry R. Cheeseman

Chapter 23Real Property and Environmental Protection

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


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


Freehold Estate An estate where the owner has a present

possessory interest in the real property

Estates in FeeEstates in Fee Fee simple absolute Fee simple defeasible

Life EstatesLife Estates Estate pour autre vie


Estates in FeeFee Simple AbsoluteFee 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 DefeasibleFee 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


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


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


Summary: Concurrent Ownership(1 of 2)

Form of Ownership Right of Survivorship Tenant May Unilaterally Transfer His or Her Interest

Joint Tenancy Yes. 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 Common No. 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.


Form of Ownership Right of Survivorship Tenant 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 Property Yes. 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)


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


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


Future Interest The right to possess property in the future The interest that the grantor retains for him- or

herself or a third party ReversionReversion – a right of possession that returns

to the grantor after the expiration of a limited or contingent estate

RemainderRemainder – a right of possession that goes to a third party upon the expiration of a limited or contingent estate


Transfer of Ownership of Real Property: Sale of Real Estate The passing of title from a seller to a buyer for

a price

Also called a conveyanceconveyance

ClosingClosing – the finalization of a real estate sales transaction that passes title to the property from the seller to the buyer


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

GrantorGrantor – the party who transfers an ownership interest in real property

GranteeGrantee – the party to whom an interest in real property is transferred


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 actionQuiet title action – a party concerned about ownership rights in a parcel of real property can have a court determine the extent of those rights


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


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


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 time2.2. Open, visible, and notorious3.3. Actual and exclusive4.4. Continuous and peaceful5.5. Hostile and adverse


Easements A given or required right to make limited use

of someone else’s land without owning or leasing it: Easement AppurtenantEasement Appurtenant – created when the

owner of one piece of land is given an easement over an adjacent piece of land

Easement in GrossEasement in Gross – authorizes a person who does not own adjacent land the right to use another’s land


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


Zoning (2 of 3)

Zoning ordinancesZoning 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 site3. Establish aesthetic requirements or limitations

for the exterior of buildings


Zoning (3 of 3)

VarianceVariance An exception that

permits a type of building or use in an area that would not otherwise be allowed by a zoning ordinance

Nonconforming UsesNonconforming 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


Landlord-Tenant Relationship (1 of 2)

A relationship created when the owner of a freehold estate (landlordlandlord) transfers a right to exclusively and temporarily possess the owner’s property to another (tenanttenant)

Nonfreehold EstateNonfreehold Estate – an estate in which the tenant has a right of possession of the property but not title to the property


Landlord-Tenant Relationship (2 of 2)

LeaseholdLeasehold – a tenant’s interest in the property

LandlordLandlord – the owner who transfers the leasehold

TenantTenant – the party to who the leasehold is transferred


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 Most Statutes of FraudsStatutes of Frauds require written leases

for periods of time longer than one year


Types of Tenancy (1 of 2)

Type of Tenancy Description

Tenancy for Years Continues for the duration of the lease and then terminates automatically without notice.It does not terminate by the death of either party.

Periodic Tenancy Continues 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.


Types of Tenancy (2 of 2)

Type of Tenancy Description

Tenancy at Will Continues 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.


Duty to Pay Rent RentRent – 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 actionUnlawful detainer action – a legal procedure a landlord can bring to evict a tenant for non-payment of rent


Sublease Occurs when a tenant transfers only some of

his or her rights under the lease SublessorSublessor – the original tenant in a sublease

situation SublesseeSublessee – the new tenant in a sublease

situation No legal relationship is formed between the

landlord and the sublessee


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


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


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

Created the Council on Environmental QualityCouncil on Environmental Quality Does not apply to action by state or local

governments or private parties


Environmental Impact Statement (EIS)(1 of 2)

The NEPA and rules adopted thereunder require that an environmental impact statement (EIS)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


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


Air Pollution: Clean Air Act A federal statute enacted in 1963 to assist

states in dealing with air pollutionair pollution Pollution caused by factories, homes, vehicles, and the like

that affects the air

The Clean Air ActClean Air Act, as amended (1970, 1977, 1990), provides comprehensive regulation of air quality in the United States


National Ambient Air Quality Standards The Clean Air Act directs the EPA to establish

national ambient air quality standards national ambient air quality standards (NAAQS)(NAAQS) for certain pollutants

Standards are set at two levels: PrimaryPrimary – to protect human beings SecondarySecondary – to protect vegetation, matter,

climate, visibility, and economic values


Water Pollution (1 of 3)

Water pollutionWater 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



Point sources of water pollutionPoint sources of water pollution Sources of water pollution such as paper mills,

manufacturing plants, electric utility plants, and sewage plants

Thermal pollutionThermal pollution Heated water or material discharged into

waterways that upsets the ecological balance and decreases the oxygen content



WetlandsWetlands Areas that are inundated or saturated by

surface water or ground water that support vegetation typically adapted for life in such conditions

The Clean Water ActClean Water Act forbids the filling or dredging of wetlands unless a permit has been obtained from the Army Corps of EngineersArmy Corps of Engineers


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 1976Toxic 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


Hazardous Waste (1 of 2)

Hazardous WasteHazardous 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 PollutionLand Pollution Pollution of the land that is generally caused by hazardous

waste being disposed of in an improper manner


Hazardous Waste (2 of 2)

Resource Conservation and Recovery Act Resource Conservation and Recovery Act (RCRA) of 1976(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


Comprehensive Environmental Response, Compensation and Liability Act (1980) Commonly called “Superfund”“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


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


Endangered Species Act of 1973(as amended)

Protects endangeredendangered and threatenedthreatened species of animals

The Secretary of the Interior is empowered to declare a form of wildlife as endangeredendangered or threatenedthreatened

The Act requires the EPA and the Department of Commerce to designate critical habitatscritical habitats for each endangered and threatened species

The Act prohibits the takingtaking of any endangered species


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


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

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