Tuesday, January 29, 2008

Propertyprof's Lunch with James Krier

I'm experimenting with some new "voices" for blogging.  This one's going to be written in Wall Street Journal Law Blog style.  We'll see how it goes.

Propertyprof blog had the pleasure of lunching with James Krier recently.  (He's visiting at Alabama this semester. Roll Tide!)  Yes, there's reason to be jealous; he's just as interesting (perhaps even more so) as you'd suspect from his casebook.  Like many other property professors, much of what propertyprof knows about property is influenced by his book.  Our students are most fortunate to have him and he's helping all three propertyprofs here to get better.  Our students are blogging about him, too

Propertyprof asked about the inclusion of cases.  Why, for instance, doesn't Dukeminier and Krier include The Antelope?  And when the conversation turned to cases that are in the book, why does the book include our less favorite cases, like Schwartzbaugh v. Sampson?  Well, propertyprof knows that some people find Schwartzbaugh a good teaching device.  But Krier's answer?  "Don't teach it, if you don't find it useful."  Ah, what great advice.  Where propertyprof tends to treat the casebook as our students treat cases more generally (as some form of deity), Krier says make your own way.  How Emersonian!

And then on a recent morning, Krier's advice: teach what you think is important.  Very sage advice.  We'd say that whether or not we thought Krier, like his book, some form of diety.

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January 29, 2008 in Law Schools | Permalink | Comments (0) | TrackBack (0)

The Current State of Post-Kelo Eminent Domain Reform

Over at the VC, Ilya Somin has a post linking to the latest version of his paper on post-Kelo eminent domain reform.  The post also discusses the public's lack of knowledge about eminent domain issues:

In the SCG's 2007 Saint Index survey, conducted last August, only 21% of Americans could correctly answer a question about whether or not their states had enacted post-Kelo eminent domain reform, and only 13% could both correctly answer that question and a follow-up question about whether or not their state's reform law was likely to be effective in curbing economic development takings. Public ignorance about post-Kelo reform - like opposition to Kelo itself - cuts across racial, ethnic, gender, ideological, and partisan lines.

Ben Barros

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January 29, 2008 in Recent Scholarship, Takings | Permalink | Comments (0) | TrackBack (0)

Monday, January 28, 2008

Lehavi on Property and Community

Amnon Lehavi (Interdisciplinary Center Herzliyah - Radzyner School of Law) has posted How Property Can Create, Maintain, or Destroy Community on SSRN.  Here's the abstract:

Property law plays a crucial role in the ability of groups, especially ones composed of geographically-adjacent members, to establish and maintain significant forms of "community" around a social, economic, or ideological shared interest. Property may also have, however, the opposite effect of undermining or even destroying communities, particularly those relying on fragile modes of cooperation.

This paper identifies three major types of territorial communities: (1) Intentional Communities - closely-knit groups that initially organize around a consolidating non-instrumental idea (such as cooperative Kibbutzim or religious communes) and employ sweeping internal norms to validate their commonality. (2) Planned Communities - comprised mostly of residential developments of homeowners associations, which rely on a formal set of conditions, covenants, and restrictions incorporated in the association's governing documents. (3) Spontaneous Communities - clusters of initially unorganized neighbors who succeed in cooperating and coordinating over time. The evolvement of such organizations may be essential to the creation of an interpersonal "social capital" and to a physical and functional improvement of the community's surrounding.

For each one of these types of communities, property law plays a very different role. Thus, while Intentional Communities do not hinge strictly upon the existence of a supportive property system to sprout, Planned Communities cannot be conceived without the security of an overt formal state-backed regime, whereas Spontaneous Communities may often need property law's affirmative backing (providing what I term "Property Tail-wind") to thrive and enjoy the social and economic benefits of sustainable collective action

Ben Barros

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January 28, 2008 in Property Theory, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Barros on Hadacheck v. Sebastian

I've posted Hadacheck v. Sebastian on SSRN.  Here's the abstract:

This short encyclopedia entry discusses Hadacheck v. Sebastian and its relevance to contemporary regulatory takings jurisprudence. The entry describes the Hadacheck litigation and the treatment of Hadacheck in the Supreme Court's more recent regulatory takings cases. It notes four reasons why caution should be used before applying Hadacheck to contemporary regulatory takings issues: (1) the case is ambiguous about the diminution in value actually suffered by the plaintiff; (2) Hadacheck was decided before Pennsylvania Coal v. Mahon, which arguably marked a shift in regulatory takings law; (3) the Court's holding in Lucas v. South Carolina Coastal Council that a total diminution in value is a per se taking undercuts one possible reading of Hadacheck; and (4) that the Court's recent decision in Lingle v. Chevron suggests that the substantive due process analysis in early cases like Hadacheck should not be a part of the regulatory takings analysis.

This really is short, and might be of interest to those of you who teach Hadacheck as part of your takings unit.

Ben Barros

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January 28, 2008 in Recent Scholarship, Takings | Permalink | Comments (2) | TrackBack (0)

Monday Roundup: Federalist Society Panels and Harvard's Atlantic World Seminar

Let me roundup a couple of things propertyprofs might care about this morning.  First, two panels from the Federalist Society's Tenth Annual Faculty Conference:

"Post-Kelo Reform"  with Vanderbilt's James Ely, Northwestern's David Dana, George Mason's Steve Eagle, Yale Law Olin Fellow Dan Kelly, and George Mason's Ilya Somin, as moderator.

And while this isn't quite property, it is prof related:

"American Law Schools: Envy of the World or General Motors Before the Fall?"  with Colorado's Paul Campos, San Diego's Maimon Schwarzchild, Emory's George Shepherd, Boston College's Dean John Garvey, Washington & Lee's Dean Rodney Smolla, and Judge Frank Easterbrook, as moderator.  It's an interesting discussion and, as you might expect, lots of talk about the market and regulation.  I think the moderate and balanced tone of Deans Smolla and Garvey are particularly welcome.

Also, this is where I would be on April 28 if my schedule permitted it:

People and the Land in the Atlantic World, 1500-1825

A Workshop of the Atlantic History Seminar

Harvard University April 26, 2008

This one-day Workshop will examine the practices and theories of people’s engagement with the land: the forms and consequences of land distribution in conquered territories; the different meanings of possession, tenancy, and usufruct; the conflicts among and transformations in European concepts and practices of land management in the Americas; the passion of individual Europeans for free ownership of land in the Americas; and the role of available land overseas in Britain's "Great Divergence." Scholars with an expert knowledge of the field will discuss aspects of the topic; each presentation will be followed by general discussion. The Workshop will include lunch and a reception following the final session.

Attendance at the Workshop and participation in the discussion are open to the academic community. Historians at the beginning of their careers are especially encouraged to attend. Travel and accommodation expenses will be the responsibility of attendees, though the Workshop can provide local lodging information. Pre-registration is required.

More information is available at the conference's website.


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January 28, 2008 in Conferences | Permalink | Comments (0) | TrackBack (0)

Friday, January 25, 2008

Advice to Law Journals: Part 22

Haven't posted anything on law reviews of late (partly because I've been distracted by talk of a lawsuit based on nuisance by Cleveland against subprime lenders).  Congratulations, by the way, to Ben Barros for predicting this back in fall of 2005.  I wish more people had listened to you, Ben.  Perhaps it's time to put up some more advice.  This piece is aimed at faculty: 

22  give the students some autonomy.  This is their journal, after all--so let the students have the final say in how to run the journal.

Alfred L. Brophy
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January 25, 2008 in Law Schools | Permalink | Comments (0) | TrackBack (0)

Thursday, January 24, 2008

More Subprime Litigation Issues

The litigation fall out from the subprime mess is going to be a big topic for property profs.  (Longtime readers might remember that I predicted a part of the mess back in the fall of 2005).  Dave Redden has an interesting post on the subject that highlights some interesting issues regarding underwriting incentives and fabrication of truth-in-lending documentation:

Several volunteers in the Twin Cities area have gathered together to provide legal services to homeowners facing foreclosure. I sat in on their meeting yesterday, which was very instructive, but I heard something that struck me funny. Sometimes clients insist they haven't received a particular letter or form but the attorney is stuck in a situation where there's no real proof. I previously worked for an insurance company owned by a major mortgage lender involved in sub-prime lending and I propose that proving documentation is fabricated may be less difficult than attorneys thinks. I also bet that mistakes like this are going to be widespread such that successful TILA challenges will be fairly common if mortgage documents are given the proper consideration.

That mortgage lenders are fabricating documentation is beyond dispute. Sometimes a watchful eye will catch a tell-tale sign on the letter itself, but most times there doesn't appear to be a way to tell. There is. Most of the major lenders are probably on "paperless" electronic systems where all the documentation is maintained digitally. When documents are stored this way there are two types of information stored: the document itself with all the information on it, and a body of information about the electronic file - metadata. This metadata has information like when the last change was made to the file and, more importantly, when the document was created, or at least imaged into the system. When attorneys request documentation either before or after discovery, they should request metadata on each document, including but not limited to when each document was generated or added to the system, clearly indicating to which document the metadata is referring.

A feature of most digital document management systems is the ability to "annotate" on the digital document - to mark it up and make notes on it like you would with a pen on paper. When the documents are printed to paper during discovery they can be printed with or without annotations. In addition to a clean, non-annotated copy of all documentation, attorneys should request that the mortgage lender print a separate copy of all documents containing such annotation or maybe "all digital notations contained and/or maintained as part of or in connection with the digitally stored subject document."

Lastly, let me tell you why I think TILA violations will be more widespread than you might expect. When I worked in part of this major mortgage lender I sat near the "closing unit." This is the last step in the mortgage process - the broker or loan officer has solicited the loan application, it's made it through document verification and underwriting. The closing unit reviews all the final documentation to make sure everything looks in line then cuts the checks. At this lender it's a pretty young crowd, with lots of people in their early 20's. Many of them are part-time employees. Now that alone doesn't make for an error-prone department, but when you take a minute to examine their incentives you'll understand why I think they are.

Every day I worked next to them I saw they were provided with high-sugar, high-caffeine drinks and snacks. They had all types of soda (tons of Mountain Dew), chips, and such. At lunch time they'd always have pizza, Olive Garden, Mexican food - you name it - brought in and not the cheap stuff either. Real food from sit-down restaurants where you leave tips. It became particularly gluttonous around the end of the month. I asked about it once and was told that most of the restaurant food is provided by loan officers. A lot of times it was a branch office that got together and chipped in to provide lunch to the closers to "show their appreciation." They probably also did it to encourage the closing department to get the loans buttoned up before the end of the month so the loan officers would get their commission on their next paycheck.

Volume was the big driver - they wanted to fund $x,xxx,xxx,xxx of loans that month, beating last month's record. If they did, there would be a tremendous celebration. The department was moved to Arizona from California, because in California you have to pay OT if they work more than 8 hours in a day. In Arizona your employees can work more than 8 hours a day and earn no OT unless they work more than 40 hours in the week. This way they could really stack up the manpower toward the end of the month when they were pushing to meet or beat their goals.

Given the volume they were producing, the people the were using to produce it, and the incentives they had in place, it's hard to imagine that there wasn't a whole lot of stuff slipping by. I don't doubt that the underwriters were subject to similar pressures. I also don't doubt that these were the same sorts of things going on at other banks. In the mortgage business, when it's boom time you have to push people to produce but still encourage a transitory workforce because some day the boom will end. No matter how much lip-service managers pay to it, quality will always take a back seat in these situations, at least to the extent that it doesn't effect the bottom line too much.

Ben Barros

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January 24, 2008 in Real Estate Transactions | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 22, 2008

Buyer Sues Broker for Failure to Disclose Declining Market

From a NY Times article; particularly notable for the impact of the recent shift to buyer's agents:

Marty Ummel believes she paid too much for her house. So do millions of other people who bought at the peak of the housing boom.

What makes Ummel different is that she is suing her agent, saying it was all his fault.

Ummel claims that the agent hid the information that similar homes in the neighborhood were selling for less because he feared she would back out and he would lose his $30,000 commission.

Real estate lawyers and brokers say the case, which goes to trial in North County Superior Court on Monday, is likely to be the first of many in which regretful or resentful buyers seek redress from the agents who found them a home and arranged its purchase.

"When your house appreciates $100,000 in the first six months, you're not quite as concerned that maybe the valuation was $25,000 or $50,000 off," said Clifford Horner of the law firm Horner & Singer. "But when your house goes down, you ask: 'Who might have led me astray here?'"

Agents representing buyers rarely had the opportunity to make mistakes during the last real estate boom, in the late 1980s, because the job hardly existed then. For decades, residential transactions almost always involved brokers who, whatever assistance they gave the buyer, legally represented only the seller. The long boom that began in the late 1990s put an end to that one-sided world. As prices spiked, buyer's agents and brokers became popular as sounding boards, advisers and negotiators. The National Association of Realtors estimates they are now involved in two-thirds of all residential purchases.

That makes this the first housing collapse in which large numbers of buyers had a real estate professional explicitly looking after their interests. The Ummel case poses the question: In a relationship built on trust, where promises are rarely written down and where -- as in this case -- there is no signed contract, what are the exact obligations of these representatives in guiding their clients through a sizzling market?

"Agents have a lot of fiduciary duties, but they don't make money unless they close the sale," said Joel Ruben, a real estate lawyer in Manhattan Beach, Calif. "In an inflated market, there are built-in temptations to cut corners."

Ben Barros

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January 22, 2008 in Real Estate Transactions, Recent Cases | Permalink | Comments (1) | TrackBack (0)

Kent on Regulatory Takings

Michael B. Kent, Jr. (John Marshall - Atlanta) has posted Construing the Canon: An Exegesis of Regulatory Takings Jurisprudence after Lingle v. Chevron on SSRN. Here's the abstract:

Regulatory takings has long been considered one of the more confused areas of constitutional analysis. Since the Supreme Court's opinion in Penn Central Transportation Company v. City of New York, the law of regulatory takings has been characterized by varying analytical tests, competing theories, seemingly results-oriented decision-making, and a conflation with the law of substantive due process. In 2005, however, the Court made substantial strides in bringing some clarity to this area with its decision in Lingle v. Chevron U.S.A., Inc. In that case, the Court unanimously rejected the substantially advances test, demonstrating a rare willingness to discard prior precedent as well as to divorce takings law from that of due process. Moreover, the Court unanimously reaffirmed five other decisions (Penn Central, Loretto, Nolan, Lucas, and Dolan) that now govern the regulatory takings inquiry.

This article argues that these five decisions, along with Lingle itself, should be considered uniquely authoritative (akin to a canon of sacred writings) with regard to takings analysis. By reading this canon exegetically - that is, by divining the intent of the Court through the language and context of the decisions viewed as if they were components of a single, unified text - it is possible to perceive a way out of the takings muddle. Viewing the cases in this manner, the canon presents a clearer picture of the overarching themes and characteristics of regulatory takings, as well as a greater coherence in the frameworks under which takings claims should be analyzed. This article seeks to elucidate those themes and characteristics, explain the analytical frameworks, and raise issues that continue to require the Court's attention.

Ben Barros

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January 22, 2008 in Recent Scholarship, Takings | Permalink | Comments (0) | TrackBack (0)

Monday, January 21, 2008

Body Parts Futures?

From an op-ed by Ian Williams in the Guardian:

In the US, the alleged bastion of property rights, religious obscurantism is robbing American citizens of their birthright. Everyone, no matter how poor, is wandering around with some quarter of a million dollars worth of transplant material: but because of the 1984 National Organ Transplantation Act, they cannot cash in their chips.

The surgeons and hospitals of America can charge an arm and a leg for hoisting out hearts and replanting them, and it seems some morticians can eke out their bottom line on the side, but the donors have no financial incentive whatsoever. Talk about a "death tax!" This no mere Republican rhetorical trope - it's the real thing. The federal government, almost unchallenged, has deprived us of the usufruct of our most personal property.

Adam Smith's invisible hand is just waiting to be transplanted into this field. Of course you may object that it is difficult for a cadaver to take profits from such a sale, but think futures. If bankers can sell stinkers like collateralised debt obligations, they should easily be able to devise an actuarially advised organ options market which would make a return for the living, and help a return to life for those in need of the spare parts.

The principle is the same as the viaticals market in which for example, HIV sufferers were able to cash in their life insurance early so they could enjoy the proceeds while still alive.

The people who would rush to sell organ futures would very likely also be those who are least likely to have a private pension scheme and who would benefit most from topping up their social security funds.

If the government really must get involved, it could help solve the alleged social security crisis by insisting that at least some, if not all, of the proceeds, would be invested in some sort of individual retirement account, but a cash handout would also help boost the recession-verging economy by putting money into the hands of people who would rush out and spend it.

Ben Barros

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January 21, 2008 in Property Theory | Permalink | Comments (0) | TrackBack (0)

Atuahene on Reparation, Restoration, and Property in South Africa

Bernadette Atuahene (Chicago-Kent) has posted the final version of From Reparation to Restoration: Moving Beyond Restoring Property Rights to Restoring Political and Economic Visibility on SSRN.  Here's the abstract:

How does a democratic state legitimize strong property rights when property arrangements are widely perceived to be defined by past theft? The answer, I argue, is through restorative justice measures that redistribute wealth based on past dispossession. This answer, however, leads to two more complex questions: Who gets priority in the restorative process given limited resources and how should the process unfold? The concise answers to these two ancillary questions are:

First, instances of what I call property-induced invisibility should be prioritized as a baseline for achieving legitimacy. When property is confiscated in this manner people are removed from the social contract and made invisible. Widespread invisibility is of particular concern because it can lead to chaos and instability and places the legitimacy of existing property arrangements in serious doubt. Consequently, states must, at minimum, rectify property-induced invisibility in the restorative process.

Second, societies must change the focus from restoration of the physical property confiscated to the larger project of restoring an individual's relationship to society. This will happen if those subject to property-induced invisibility are included in the social contract through a bottom-up process that provides the dispossessed with asset-based choices. The process of allowing people to choose how they are made whole will do a substantial amount of work towards correcting property-induced invisibility and thereby increasing the legitimacy of existing property arrangements.

I use a South African case study to test the practical effect of my theories of invisibility and restoration.

Here's a lengthier description:

In this article I explore two important questions facing countries that decide to give communities and individuals compensation for property stolen in the past:  Who at minimum should be restored; and how should the restorative process transpire?

As to the first question, I argue that, at minimum, the state has a moral obligation to compensate people who have been subjected to severe dehumanization as a result of an uncompensated property confiscation.  My claim is that this confiscation of property results in property-induced invisibility—that is, people are removed from the social contract and made invisible. Instances of property-induced invisibility can be seen throughout history among native peoples whose land was stolen through conquest.  Also, Tutsi and moderate Hutu subjected to property confiscation during the Rwandan genocide, and non-whites dispossessed during the Apartheid government’s incessant campaign of dehumanization would be modern-day examples of victims of property-induced invisibility.   

As to the second question, I argue that societies must redirect their focus from the limited concept of reparations (where the goal is securing compensation for past wrongs but the state does not allow the dispossessed to choose how they are compensated) to restoration.  Restoration is the larger project of restoring a dispossessed group or individual’s relationship to society, including them in the social contract and thereby reversing the condition and effects of property-induced invisibility.  This is accomplished through a bottom-up process that provides asset-based choices, which both allow people to choose how they are made whole and give them viable options from which to choose.  The options can include the return of their property (if possible), alternative property, monetary compensation, free higher education for two generations, priority in an already established housing process, or highly subsidized access to credit, for example.

Finally, I evaluate South Africa’s Land Restitution Program (LRP) to test the theoretical concepts of property-induced invisibility and restoration that I construct.  More specifically, I investigate whether, as a baseline, South Africans subject to property-induced invisibility benefit from the LRP.  In addition, I analyze how the government can transform the LRP from a reparations program to a restoration program.

This article is Part I of a three-part trilogy.  Part II will explore how a state can avoid instability when past property theft causes a significant number of people to believe that the present property distribution is illegitimate.  Part III will examine how far back a state should look in devising a compensation program when there have been multiple layers of property dispossession.

This is a really interesting article.  As Solum says, download it while it's hot!

Ben Barros

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January 21, 2008 | Permalink | Comments (1) | TrackBack (0)

Saturday, January 19, 2008

Purpresture in Hawaii

Thanks to the extraordinary Carl Christensen for calling to my attention what I did not know, but should have:  Hawaii v. Kerr, 16 Haw. 363 (1905), a case about purpresture.  Looks like purpresture may be a piece of aloha jurisprudence.  In this case, a structure encroached on a public beach.  The syllabus to the case states:

The defendant whose lot, as shown by its land commission award, is bounded “along the sea” constructed a concrete wall on the shore in front of his lot between high and low water, a corner of the wall projecting a few feet beyond low water, and was filling the space enclosed by the wall with coral and sand so as to raise the surface above the low water line, with the intention of making a house lot for a seaside residence. Held: Following Gay v. Halstead, 7 Haw. 587 (1889), that the defendant's land extended to and along the line of high water.

The defendant's concrete wall is a purpresture, encroaching upon public territory and rights in the shore. A bill for injunction requiring the removal of the obstruction caused by the wall and enjoining its renewal can be maintained by the Territory under the provisions of section 91 of the Organic Act, giving it the possession, control, maintenance and care of all public property ceded to the United States by the Republic of Hawaii. The bill sufficiently avers irreparable damage.

Time to dust off this doctrine and put it up there alongside spite fences and cemetery access--and, of course, implied trust beneficiaries, as doctrines that protect community rights in property.

Carl writes:

For a look at a modern purpresture case (though it doesn't use the word), also in the beach context, look at Diamond v. State of Hawaii, Board of Land and Natural Resources, 145 P.3d 704 (Hawaii 2006).  Here the unauthorized purpresture is in the form of vegetation artificially induced to grow out onto a publicly owned sandy beach by a shoreline landowner who hopes to gain a more favorable shoreline setback line based on the new vegetation.
In fact, this doctrine is surprisingly vibrant.  Carl continues:

A WestLaw search in the Allstates database on "Purpresture & beach" yields 93 hits, among them Trepanier v. County of Volusia, 965 So.2d 276 (Fla. App. 2007), Lowcountry Open Land Trust v. State, 552 SE.2d 778 (S./C. App. 2001), and Scott v. City of Del Mar, 68 Cal. Rptr. 2d 317 (Cal. App. 1997). 

It seems, one might conclude, that the dern' things pop up all over the place.

Al Brophy
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January 19, 2008 in Recent Cases | Permalink | Comments (1) | TrackBack (0)

Friday, January 18, 2008

Purpresture: What's that?

Kensettbeaconrock I'm working away on "Property and Progress: Antebellum Landscape Art and Property Law" (we've talked about a piece of this before and I'll be blogging more about it in the next few weeks).  I'm interested in the law of beacons in the nineteenth century--they're put up sometimes by the community and at other times by corporations.  And so I'm interested in the law surrounding this public service. 

That's led me to some a word that's new to me (though very old): purpresture.  You ever heard of it before?  I didn't think so.

Here's it in context, in State v. City of Mobile, 5 Port. 279 (Ala. 1837), a case charging that the corporation of Mobile had improperly narrowed a public street:

The obstruction complained of, besides being a nuisance, is also a purpresture. A purpresture signifies “an inclosure;” and is defined to be, where one “by building, inclosing, or unlawfully using any liberty, encroaches upon a highway, public river, &c. of the King, or of another.” ... Judge Story considers a purpresture to be an encroachment upon public property, held by the sovereign for the use of the public, such as highways, rivers, forts, streets and squares.” “Where one takes that to himself, which ought to be common to many.”- [2 Story's Commentaries on Equity, 201, 202.]

We'll be talking some more about this in the near future.

Endnote: The illustration is John Kensett's Beacon Rock, Newport Harbor, from the National Gallery of Art because beacons are what got me started on this little line of inquiry.

Al Brophy
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January 18, 2008 in Property Theory | Permalink | Comments (1) | TrackBack (0)

Thursday, January 17, 2008

Breaking Up a Long Class

A new property prof writes:

My class is an hour and forty minutes twice a week.  While this is good for me (only two times rather than three per week), I know that I need some good ideas for keeping students engaged for that length of time.  I know I can break them into small groups, hand out problems, etc., but I was also thinking about film clips or other sorts of media to break up the standard class.  Do you or any of your colleagues do this?  Any other advice for keeping a long class lively?

I sometimes use small group discussions to break up a long class, but not as much as I could.  Any thoughts?  I'd imagine that Brophy, being a rock star and all, is the master of this kind of thing.

Ben Barros

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January 17, 2008 in Teaching | Permalink | Comments (2) | TrackBack (0)

Tuesday, January 15, 2008

Finding Law in the News

From an AP Story:

A contractor who helped discover bundles of cash totaling $182,000 hidden behind bathroom walls says the homeowner should turn the money over to him — or at least share it.

Bob Kitts said his feud with the owner of the house, a former high school classmate, has deteriorated to the point where they speak to each other only through lawyers.

Kitts said his lawyer has drafted a lawsuit that he hopes will force Amanda Reece to turn over the money she has kept. Meanwhile, Reece accuses Kitts of shaking her down.

Most of the currency, issued in 1927 and 1929, is in good condition, and some of the bills are so rare that one currency appraiser valued the treasure at as much as $500,000, Kitts said.

The fight began in May 2006 when Kitts was gutting Reece's bathroom and found a box below the medicine cabinet that contained $25,200.

"I almost passed out," Kitts recalled. "It was the ultimate contractor fantasy."

He called Reece, who rushed home. Together they found another steel box tied to the end of a wire nailed to a stud. Inside was more than $100,000, Kitts said. Two more boxes were filled with a mix of money and religious memorabilia.

"It was insane," Kitts said. "She was in shock — she was a wreck."

The bundles had "P. Dunne" written on them, probably a reference to Peter Dunne, a businessman who owned the home during the Depression.

Kitts said he took some of the currency for an appraisal and learned that many of the $10 bills were rare 1929-series Cleveland Federal Reserve bank notes, worth about $85 each. There also were $500 bills and one $1,000 bill.

John Chambers, an attorney for Reece, said Kitts rejected his client's offer of a 10 percent finder's fee and demanded 40 percent of the small fortune.

Kitts asserts he found lost money, and court rulings in Ohio establish that a "finders keepers" law applies if there's no reason to believe any owner will reappear to claim it.

I don't know enough about Ohio law to comment on that last sentence.  The prior cases that Kitts referenced may not have presented facts like this one, where the finder was on the property as an agent of the property owner.  Finding cases are all over the place in their results, but this one reminds me of the case involving two workers who found gold on Jann Wenner's property; the judge awarded the gold to Wenner in part because the workers were on the property to act on Wenner's behalf.  These issues are discussed in notes 3 and 4 on p. 106 of the sixth edition of Dukeminier & Krier.

Ben Barros

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January 15, 2008 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Heller and Hills on Land Assembly

Michael Heller (Columbia) and Rodercik Hills (NYU) have posted The Art of Land Assembly on SSRN. Here's the abstract:

Eminent domain for economic development is attractive and appalling. States need the power to condemn because so much land in America is inefficiently fragmented. But public land assembly provokes hostility because vulnerable communities get bulldozed. Courts offer no help. The academic literature is a muddle. Is it possible to assemble land without harming the poor and powerless? Yes. In this Article, we propose the creation of Land Assembly Districts or "LADs." This new property form solves the age-old tensions in eminent domain and shows, more generally, how careful re-design of property rights can enhance both welfare and fairness. The economic and moral intuition underlying LADs is simple: Where the only justification for assembly is over-fragmentation of land, neighbors should be able to decide collectively whether their land will be assembled. Our legal theory solution is equally simple: use property law to retrofit communities with a condominium-like structure tailored to land assembly. Let's try giving those burdened by condemnation a way to share in its benefits and to veto projects they decide are not worth their while.

Ben Barros

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January 15, 2008 in Real Estate Transactions, Recent Scholarship, Takings | Permalink | Comments (0) | TrackBack (0)

Salkin and Lavine on RLUIPA

Patricia Salkin and Amy Lavine (Albany Law School) have posted The Genesis of RLUIPA and Federalism: Evaluating the Creation of a Federal Statutory Right and its Impact on Local Government on SSRN.  Here's the abstract:

In 2000, Congress passed, and President Clinton signed, the Religious Land Use and Institutionalized Persons Act (RLUIPA), designed to provide protection from discrimination for the exercise of religion for incarcerated individuals and for those in need of various municipal permits or approvals in order to exercise their religion. With seven years of experience in the courts, this article examines the impact of RLUIPA on local governments across the country through an analysis of how the courts have been interpreting and applying statutory ambiguities and creating inconsistent doctrine in an effort to define terms and implement RLUIPA's protections. Whether an appropriate Solomon-like balance can be developed under the Act to clearly recognize compelling governmental interests in protecting the public health, safety and welfare through land use planning and various land use and local environmental controls remains elusive at this point in time and may depend upon the wisdom of the individual federal courts.

Section II of this article explores the uncomfortable relationship of government with religion, and the manner in which this relationship has affected the genesis of the constitutional interpretations of the Free Exercise Clause of the First Amendment. What constitutes the establishment of religion and whether RLUIPA aids government in the establishment of religion is beyond the scope of this article and will not be discussed in detail. Section II also examines the precursor to RLUIPA, the Religious Freedom Restoration Act (FRFA), enacted by Congress in 1993 and ruled unconstitutional in 1997. Understanding Congressional motivation for the enactment of RFRA, as well as its constitutional deficiencies, sets the backdrop for the last part of the section, which discusses the Congressional development and enactment of RLUIPA, including why Congress chose land use as a primary focus of religious freedom.

Section III briefly reviews the arguments surrounding the constitutionality of RLUIPA, and while not attempting to fully analyze this issue, the discussion is provided since some believe that the statute's constitutionality as it relates to the land use provisions may be vulnerable to further constitutional attack.

Section IV discusses the operative provisions of RLUIPA, including both the substantial burden rule and the Act's nondiscrimination provisions. It explores how the courts have interpreted RLUIPA and its ambiguous terms, and discusses how various cases have been decided. Attorney's fees are also touched on.

Section V argues why RLUIPA, as drafted, may not necessarily bode well for local governments and their historical use of the police powers to guide community planning and community development. The article concludes with some final comments concerning the propriety of and need for RLUIPA.

Ben Barros

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January 15, 2008 in Land Use, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Monday, January 14, 2008

Requiring Lenders to Maintain Foreclosed Property

A student sent a long a link to an interesting story in Business Week about an effort in Buffalo to require lenders that have foreclosed on a property to maintain it.  An excerpt:

On Dec. 17 in a windowless Buffalo courtroom, Cindy T. Cooper, a prosecutor for the city, buzzes among a dozen men in suits, cutting deals. "You've got to unboard [the house], go in, and clean it out," she tells one. "If all the repairs are done quickly, I wouldn't ask for any fines." To another, she says, "the gutters weren't done right," and asks to see receipts for the work. It's "Bank Day" in Judge Henry J. Nowak's housing courtroom, more typically a venue where landlords and tenants duke it out over evictions and back rent. Instead, Cooper is asking lawyers for CitiFinancial (C), JPMorgan Chase (JPM), and Countrywide Financial (CFC) to fix problems like peeling paint, broken masonry, and overgrown or trash-filled yards at houses the city says the banks are responsible for maintaining. It may be surprising to find these financial-services giants hauled before this obscure local tribunal. In fact, Cooper and Nowak are at the forefront of a pioneering effort to deal with a vexing problem: the surging number of vacant and abandoned homes resulting from the mortgage market meltdown. The vacancies occur when lenders bring foreclosure suits against delinquent borrowers. Mere notice that such an action might be filed often sends residents packing. In Buffalo and other Rust Belt cities, the problem has been particularly acute, because in many cases banks are abandoning the houses, too, after determining that their value is so low that it's not worth laying claim to them. When city officials try to hold someone responsible for dilapidated properties, they often find the homeowner and bank pointing fingers at each other. Indeed, the houses fall into a kind of legal limbo that Cleveland housing attorney Kermit J. Lind calls "toxic title". While formal ownership remains with a borrower who has fled, the bank retains its lien on the property. That opens up a dispute over who is responsible for taxes and maintenance. Even when lenders do complete the foreclosure, they may walk away from the property, leaving it to be taken by a city for unpaid taxes, a process that can take years. Orphaned properties quickly fall into disrepair, the deterioration sometimes hastened by vandals who trash the interiors, lighting fires and ripping out wiring and pipes to sell for scrap. Squatters or drug dealers may move in. . . .

In Buffalo, prosecutor Cooper is bringing lenders before Judge Nowak to hold them accountable. Wielding the threat of liens, which can hold up the lenders' other real estate transactions, she aims to make banks keep foreclosed homes in good condition until a buyer can be found. As an alternative, Cooper or Nowak may try to get lenders to donate properties to community groups or to pay for demolition when houses are beyond repair. "At least in Buffalo," says Cooper, "the days are gone when you can do a foreclosure and walk away without taking care of the property." . . .

The industry denies responsibility for properties to which it has not taken title. "The notion that a mortgage company has an obligation to make repairs on a property that it doesn't even own is very hard to comprehend," says Marco Cercone, a Buffalo attorney who represents a range of lenders before Nowak in the courtroom. . . .

In 2004, New York State amended the definition of "owner" in its property maintenance code to include not just titleholders but others who had "control" over a premises.

While the statute makes no reference to lenders, Nowak contends that the letters banks send to defaulting homeowners threatening to boot them from their houses show that they have begun to "assert some measure of control." On this premise, Nowak says, Buffalo began contacting banks "en masse" about foreclosed properties, but "a lot of times we'd just be rebuffed and ignored."

Ben Barros

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January 14, 2008 in Real Estate Transactions | Permalink | Comments (1) | TrackBack (0)

Immigration Law Enforcement vs. Private Property Rights

I've posted before on the intersection between immigration law and property law.  It is an important yet overlooked relationship that has interested me for some time and one that I have been focusing on as of late.   

The New York Times recently ran an interesting story that further explored this convergence.  In particular, several homeowners have protested the federal government's proposal to build a fence at the border between the U.S. and Mexico.  Some have complained that the fence would separate parts of their land, cut off their access to the Rio Grande for livestock and crops and take away access to water. Others have refused to allow the federal government from conducting surveys of their land (because they won't get compensated) while there are those who worry that their properties, which will only be partly fenced, would provide new access to migrants who want to violate immigration law.

Here's the link to the full story.

Regardless of where one stands on the building of this new fence (or "the wall" to many South Texans) in particular or heightened immigration law enforcement more generally, there is no doubt that immigration law enforcement has raised complicated questions and issues that concern property rights.

One troubling effect of the broad authority of immigration law enforcement, as also reported by the New York Times, is the federal government's power to go to a person's home without a warrant. Click here for the story.

Rose Cuison Villazor

January 14, 2008 | Permalink | Comments (0) | TrackBack (0)

Monumental Silence in Spain

Tomb_of_francisco_franco Continuing with our occasional theme of monument law (and thanks to a pointer from Carl Christensen), here's a New York Times story on Spain's recent actions regarding monuments to Franco and the Spanish Civil War.  The article begins:

Last month Spain passed a law that doesn’t make much sense, on its face, but says quite a lot about Europe in the new century.

The Parliament, fulfilling a campaign promise from 2004 by Prime Minister José Luis Rodríguez Zapatero, ordered that families wanting to unearth bodies of relatives killed during the Spanish Civil War of the late 1930s or who suffered as a political consequence of General Francisco Franco’s four-decade-long regime should get full cooperation from the state, and at the same time that every province in the country must remove remaining monuments to Franco.

The public domain image is of the Valle de los Caídos (the Valley of the Fallen), which Franco ordered built as a monument to those who died in the Civil War.  As the Times article describes the monument, "During the 1950s thousands of prison laborers tunneled hundreds of yards into a solid granite mountain ridge to build one of the world’s biggest and most lugubrious basilicas and a Civil War memorial, beneath a cross nearly 50 stories high."  It is considered to be mostly a monument to the Nationalists; however, some Republicans are buried in the valley.  It is from our friends as wikipedia.

Al Brophy
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January 14, 2008 | Permalink | Comments (0) | TrackBack (0)