Welcome to the Deep dive. Today we're tackling a set of
really crucial concepts for any law student.
You know, the ones that can make or break an exam.
We're talking non possessory property, interests, things like
easements, profits, covenants, the whole 9 yards, and also the
government's power of eminent domain.
Yeah, these aren't just, you know, dusty legal ideas.
They genuinely shape how land gets used, how it's bought and
sold and sometimes how it's taken by the government.
Exactly. So think of this this deep dive
as well, maybe a bit of a lifeline for understanding these
often confusing parts of property law, right?
We're going to try and clear up the differences between these
interests, explain the government's taking power, but
also get into the real world consequences, the policy debates
behind them and those constitutional limits, all stuff
that's frankly vital for exam success.
Couldn't agree more, and we've got some solid sources to lean
on. Material from the Lincoln
Institute on servitudes, basics on eminent domain, some good
stuff on fee simple ownership, bits from legal encyclopedias,
even a practical look at zoning reports.
A good mix. So our mission today is pretty
straightforward, give you a clear, concise and hopefully,
you know, actually interesting overview of these topics, really
focused on what you need to nail those exams.
OK. Let's jump in.
Where do we start untangling all this?
Non possessory interests seem like the logical place.
Agreed. Let's kick things off there all.
Right. So the first thing to grasp is
that having rights in land doesn't always mean you possess
it, right? Right.
Traditionally, the law broke these non possessory rights down
into a few main buckets. You've got easements, profits
and covenants, OK. Let's take easements first.
What's the core idea there? An easement really simply is
just the right to use someone else's land for a particular
reason. Think of like a path across your
neighbor's property to get to the lake.
You don't own the path, but you have the right to use it.
Got you. And how does a profit differ?
A profit or profit up Pondra, if you want the fancy term, let's
you go on to someone else's land and take something valuable from
it. So not just using the land, but
removing resources like mining rights, timber rights, that sort
of thing. OK.
Easement is used, profit is used, plus removal makes sense.
Then we get to Tevenance, which honestly, from an exam
perspective often feel like the trickiest part.
Oh, they can be. We're generally talking about
two types here, real covenants and equitable servitudes.
Historically, the big split was about the remedy if someone
broke the promise, right? For a real covenant, it was
usually money damages you'd sue for.
Exactly, but if it was an equitable servitude you could
potentially go to court and ask for specific performance.
Basically an order forcing the other party to actually comply
with the agreement. Like not building that
commercial structure they promised they wouldn't.
So ones about money, the others about making them do or not do
the thing. That was the traditional
distinction, yeah. But what makes it complex, and
what The Lincoln Institute points out, is how blurry these
lines can get. That same agreement not to build
a store. You could argue it's a negative
easement, or an equitable servitude, or a real covenant.
And which label you put on it could actually change the
outcome, like who can enforce it later on?
Potentially, yes, especially when the land changes hands.
This led to, well, a bit of a mess, legally speaking.
Which brings us to the restatement third of property
right, the attempt to clean this up.
Exactly. Back in 2000, the Restatement
proposed this broader category called servitudes.
The idea was to unify easements, profits and covenants under 1
conceptual roof. Kind of saying, look, these are
all fundamentally about one person having a right or
restriction over someone else's land.
Let's just call them servitudes. That's the gist.
It aimed to ditch some of the old, sometimes illogical common
law rules that had built up over centuries.
But, and this is a big but for law students, RE statements
aren't the law itself, are they? Crucially, no.
They're highly influential. Courts look to them a lot,
especially for modernizing the law, but they don't
automatically override existing state case law or statutes.
So you still need to know the traditional categories,
easement, profit, real covenant, equitable servitude.
Because they're definitely still relevant in court and therefore
on your exams. OK, so understand the old and
the new approach. Got it.
Now why do we even enforce these things, especially the covenants
that restrict land use? What are the policy reasons?
Well, a big one is just the basic moral obligation to keep
promises, especially when these agreements are written down,
recorded, and meant to affect future owners.
If someone buys land knowing about a restriction and likely
paid less because of it, letting them ignore it seems unfair,
like they're getting a windfall. Right, like the example you
used, buying a lot with a height restriction, paying a discounted
price, then trying to build higher anyway feels like
cheating the system. Exactly.
Then there's the economic efficiency argument.
These non possessed free interests allow for more
flexible land use. Imagine needing access across a
neighbor's parcel. An easement lets you buy just
that right of way. Instead of having to buy their
whole property, which might be impossible or just way too
expensive. Precisely, it facilitates
development and efficient resource allocation.
This also ties into freedom of contract, letting land owners
customize arrangements for their properties, which is
particularly valued in residential contexts.
People want control over their living environment.
And there's a potential advantage and certainty too,
right, compared to something like zoning?
That's a good point. Zoning laws can change local
government, shift priorities. A recorded covenant in theory
provides a more stable long term expectation for owners and
investors. You know what you and your
neighbors can and can't do. OK, those are strong arguments
for enforcement, but there must be counter arguments, reasons
the law might be hesitant. Oh, absolutely.
There's a long history in common law of distrusting restrictions
that tie up land forever. This is often called the dead
hand control problem or Consenting about Mort, Maine.
The idea that people who died generations ago shouldn't
dictate how land is used today. Basically, yes.
The fear is that old restrictions will prevent land
from being put to its best use as society changes, hindering
progress economic development. And what about making the land
harder to sell? The restraint on alienation
concern. That's another big one.
If land is burdened by too many restrictions, it might become
less attractive to buyers or harder to finance, effectively
taking it off the market. But doesn't the market adapt?
Like, can't people buy their way out of restrictions sometimes?
Sometimes, yes. As the Lincoln Institute source
notes, a market can develop for these partial interests.
A buyer might purchase the restricted land at a lower price
and then separately pay the holder of the restriction, the
neighbor, the HOA to release it. It becomes a 2 step deal.
So it's maybe not an absolute block on selling, but it
complicates things. You can, definitely.
And this complexity leads courts to look beyond just the old
categories. They're increasingly considering
the subject matter of the restriction itself.
Meaning, are some kinds of restrictions more problematic
than others? Exactly.
For instance, how much power should an HOA have to regulate
things like political signs or flags?
This bumps up against ideas of free expression.
Though as you mentioned, the 1st Amendment usually limits
government action, not private HOA rules.
Generally, yes. That's a critical distinction.
Private agreements face different scrutiny than
government ordinances, but courts might still look at
public policy implications. So are there newer ways courts
are thinking about this, Maybe distinguishing between different
types of rules? There's some movement towards
differentiating between rules that regulate external impacts,
things that affect neighbors like noise, architectural
styles, maybe garbage disposal, versus rules that try to control
purely internal conduct or status within a home.
Like who lives there or what someone does inside their own 4
walls? Right.
The idea being that restrictions on things with spillover effects
onto the neighborhood are more justifiable than attempts to
regulate personal life choices within a private residence.
Public policy might favor intervention more in the latter
case, even if it's a private agreement.
OK, that makes sense. Now let's zone in on a specific
type of non possessory interest that's become really important
conservation easements. Ah yes, very significant.
In modern land use, a conservation easement is
essentially an agreement where a landowner gives up certain
development rights on their property to protect its natural,
scenic or historic features. And they give these rights to
whom? Usually to a qualified
conservation group like a Land Trust or sometimes a government
agency, the landowner still owns the property, but the easement
holder has the right to enforce the restrictions preventing,
say, subdivision or extensive building.
And there are often tax benefits for the landowner doing this.
Often significant ones, Yes. It's a way to protect land while
keeping it in private hands, avoiding the management burden
for the government or nonprofit, and keeping the property on the
tax rolls, albeit potentially at a lower assessment.
Sounds mostly positive. Are there downsides or policy
worries? Well, some of the same concerns
we just discussed pop up again. Many conservation easements are
intended to last forever in perpetuity, especially a federal
tax deductions are involved. The dead hand issue again.
Locking up land use based on today's priorities.
Exactly what seems like critical conservation now might conflict
with unforeseen societal needs centuries down the line.
Also, these easements are typically in gross.
Meaning the holder of the right isn't necessarily a neighbor, it
could be an organization based far away.
Right. Historically, the law was more
skeptical of rights held by non neighbors, fearing interference
from distant parties without a direct stake in the local area.
There are also debates about whether these permanent private
restrictions lack sufficient public oversight.
Are they democratic? New courts ever step in if a
conservation easement seems outdated or problematic.
It's rare, but the common law generally allows for
modification or termination if the easements original purpose
becomes impossible or it no longer serves the public
interest. Similar perhaps to nuisance law
principles. There's also growing discussion
about more active oversight by state attorneys general to
ensure these agreements continue to fulfill their public benefit
mission. OK, so before we leave non
possessory rights, let's quickly define the baseline fee simple
ownership. This is what most people think
of as owning property, right? Pretty much fee simple is the
highest form of ownership the law recognizes.
As sources like Rocket Mortgage explain, it means you own the
property completely. The land, the buildings,
everything. You have the right to possess
it, use it, sell it, give it away, leave it in your will.
Subject, of course, to things like zoning and any easements or
covenants that might be attached.
Exactly Now even within fee simple, there's a key
distinction for exams fee simple absolute versus fee simple de
feasible. Absolute means just that,
absolute, no strings attached. Right, complete ownership
forever, no conditions, fee simple de feasible.
On the other hand, does have conditions attached.
If a specified condition occurs or ceases to occur, the
ownership can be lost. Like the classic example to
school district, as long as the property is used for school
purposes. If they stop using it for a
school. Their ownership could end and
there's a further split here. You need to know fee simple
determinable versus fee simple subject to conditions
subsequent. Ah yes, the automatic versus non
automatic distinction. Precisely with fee simple
determinable using words like so long as until during the
ownership automatically reverts back to the original grantor or
their heirs if the condition is broken.
With fee simple subject to conditions subsequent using
words like but if provided that on condition that breaking the
condition doesn't automatically end ownership, the original
grantor has the option the right of entry or power of termination
to take action and reclaim the property.
So 1 happens by itself, the other requires the original
owner to step back in. Crucial difference for analyzing
property disputes. Absolutely critical for spotting
exam issues. OK.
I think that gives us a really solid handle on non possessory
interests and how they contrast with full ownership.
Let's shift gears now to the other major topic, the
government's power to actually take private property.
Eminent domain, right? This is where individual rights
can directly clash with perceived public necessity.
Eminent domain is and inherent power of the government,
federal, state, local. Baked into the system.
Baked in, but it's limited by the Constitution.
The 5th Amendment, applying to states via the 14th, says
private property shall not be taken for public use without
just compensation. OK, three key parts there a
taking public use and just compensation.
Plus due process, right? Fair procedures.
Absolutely. Due process is essential too.
So the government can take your property without your consent,
but only if it's for a legitimate public purpose, they
pay you fairly, and they follow proper legal procedures.
What counts as a taking? Is it just when they physically
occupy your land? That's the most obvious kind of
physical taking. When the government literally
occupies or maybe permanently floods your land even a tiny
bit, that's a taking requiring compensation.
But. It can be less direct.
Yes, that's a regulatory taking. This happens when government
rules or regulations don't physically invade your property,
but restrict its use so much that they effectively destroy
its economic value or utility. The classic phrase is the
regulation goes too far. But just lowering the property
value isn't enough usually. Generally, no.
Mere diminution in value isn't typically a taking.
The regulation has to be extremely severe, leaving
essentially no viable economic use.
And this ties into inverse condemnation.
Exactly. Eminent domain is the government
saying we're taking this property, here's the process.
Inverse condemnation is the property owner suing the
government saying hey, your actions may be a regulation, may
be repeated flooding from a government project have
effectively taken my property even though you didn't follow
the formal process, you owe me compensation.
OK, let's unpack public use. This seems like it could be
controversial. Does the public actually have to
use the property? That's been a huge area of legal
debate. The modern interpretation is
very broad. Public use generally means for a
public purpose or public benefit.
It doesn't necessarily require the public physically accessing
the property. So things like economic
development projects, getting rid of blighted areas, building
roads or schools, those count. Yes, the legislature gets a lot
of deference in deciding what counts as a public use.
Courts will usually uphold that decision unless it's like
totally irrational or clearly just a pretext to benefit a
private party. But what about when they take
property from 1:00 private owner and give it to another private
developer? Like for a shopping mall that
seems less clearly public. That's where the scrutiny gets
higher. Courts look more closely at
those situations to make sure the claimed public benefit, like
jobs or increased tax revenue, is real and the primary motive
not just incidental to benefiting the private
developer. But even many of those takings
have been upheld under the broad definition of public purpose.
It's a really expansive concept now.
All right. And just compensation, What does
that mean in practice? Is it what the government thinks
is fair? Not necessarily.
Just compensation means putting the owner in the same financial
position as if the taking never happened.
The standard measure is fair market value of the property at
the time of the taking. How is fair market value
determined? It's based on the property's
highest and best use, what it could most profitably be used
for legally. Courts look at comparable sales,
market trends, potential development, zoning, all sorts
of factors. It's often a battle of
appraisers. And the owner gets paid
eventually, but they also get interest for any delay.
Yes, that's important. Interest runs from the date the
government takes possession or title until the date payment is
actually made. What kind of property can be
taken? Just land.
No, it's broader than that. It covers real property
obviously, but also personal property, movable things, and
crucially those non possessory interests we talked about like
easements, are property rights. If the government takes land
burdened by an easement or takes the easement itself,
compensation is due. Even intangible rights like
patents can be subject to eminent domain.
What about business losses, like lost profits because your store
was taken? That's generally not considered
part of the property taken, unfortunately for the owner.
Compensation is typically for the fair market value of the
property itself, not consequential business damages,
though some states have specific statutes that might allow for
some relocation assistance or limited business damages.
And courts can review these takings.
Yes, but the review is somewhat limited.
They can check if the government entity actually has the legal
authority to condemn if proper procedures were followed and, as
we discussed, if the public use requirement is met, especially
with heightened scrutiny for private to private transfers.
But they generally won't second guess the wisdom or necessity of
the project itself unless there's clear evidence of fraud,
bad faith or abuse of discretion.
How does payment work? Do you get the money before you
have to move out? The Constitution doesn't
strictly require payment before the taking, but it requires a
reliable mechanism for payment to be available around the time
of the taking. Under federal law, the
government usually has to deposit an estimated amount of
just compensation with the court when they file the condemnation
lawsuit. The owner can often withdraw
this deposit. But taking the deposit doesn't
mean you agree with the amount. Correct.
You can still fight for more compensation in court.
The deposit is just an estimate. There's also something called
substituted condemnation. What's that?
That's where the government condemns property A to exchange
for property B, where property B is needed for the actual public
project. Perhaps because property B is
already in public use, like owned by utility, and can't
easily be condemned directly. It's a way to facilitate complex
projects. Interesting.
So just to recap, compensation, fair market value at the time of
taking highest and best use if they only take part of your
land. Then it's the fair market value
of the part taken plus any decrease in value to the part
you have leftover, what are called severance damages.
And if it's just a temporary taking.
Then the compensation is usually the fair rental value for the
period the government use the property.
We talked about inverse condemnation, the owner suing
the government. When does that typically happen?
It can be a physical invasion the government didn't
acknowledge, like recurring flooding, Or more commonly now
it's a regulatory taking where a new zoning law or environmental
regulation makes your property essentially worthless.
Or sometimes it's when the government demands you give up
part of your land as a condition for getting a building permit,
and that demand is excessive or unrelated to the impact of your
project. If someone feels their property
was taken improperly, what can they actually do?
What are the remedies? Well, the main one is the action
for inverse condemnation. We just discussed suing for
compensation. They could also try to get an
injunction beforehand to stop an illegal taking if the government
just took the land without any process.
Maybe an action for ejectment to get the land back, though that's
less common Sometimes. Mandamus to force the government
to start the condemnation process and against the feds.
There's the Tucker Act for claims over illegal takings or
insufficient payment. OK.
Lots of potential avenues depending on the situation.
Lastly, let's just briefly circle back to zoning.
We've mentioned it as a constraint.
How does it fit in? Zoning is the main tool local
governments use to regulate land use.
They divide the town or city into zones, residential,
commercial, industrial, agricultural, etcetera and set
rules for each zone. Rules like how big buildings can
be, how far they have to be from the property line, what kinds of
businesses are allowed. Exactly.
Setbacks, building height and size limits permitted.
Uses rules about accessory structures like garages or
sheds, Sometimes even rules about preserving sunlight for
neighbors. It shapes the physical character
of a community. And while zoning definitely
effects property value, it's usually not considered a taking
unless it goes way too far, right?
Correct. That's the key distinction.
Normal zoning, even if it reduces your property's maximum
potential value, is generally seen as a legitimate exercise of
the government's police power to protect public health, safety
and welfare. It only becomes a potential
regulatory taking if it denies the owner all or substantially
all reasonable economic use of their land.
Which is why, as one of our sources mentioned, getting a
zoning report is so important when buying property.
You need to know what rules apply.
Absolutely critical due diligence.
You need to know if the current use conforms, if there are any
violations, what you can build or do there in the future.
It impacts value and usability massively.
Wow. OK.
We have covered a lot of ground today from easements and
covenants, those non possessory rights and the policies behind
them, all the way to eminent domain, the government's taking
power and the basics of zoning. Yeah, it's a big slaves of
property law, but understanding these concepts, the
distinctions, the rationales, the constitutional limits is
really fundamental for any law student preparing for exams or
practice. Definitely grasping how we
balance private property rights with public needs through things
like servitudes and eminent domain is well, it's central to
how our legal system deals with land.
It really is. It's about the framework
governing how we use and control perhaps our most essential
resource. So here's something to chew on
as you review this material. Think about this constant
balancing act. Individual rights versus
community needs, reflected in both private agreements like
covenants, and public power like eminent domain.
How might future pressures think climate change adaptation,
demands for more housing, new technologies?
How might those pressures shift this balance?
How might these legal doctrines need to evolve?
That's a great question. It highlights the property law
isn't static. Definitely worth looking into
recent state court decisions or specific state statutes in these
areas to see how things are playing out right now.
Excellent point. Well, thanks for joining us for
this deep dive into non possessory interests and eminent
domain. We hope it was helpful for your
studies.