PropertyProf Blog

Case Western Students Smack Property Fraudsters (Civilly)

Congrats to students from Case Western's Milton A. Kramer Law Clinic Center, who successfully sued a fraudulent home repair financing company preying on Cleveland homeowners, obtaining a whopping $1.1M in damages.

According the Cleveland Plain-Dealer,

The verdict itself was unusual -- a Cleveland family winning $1.1 million after they were ripped off in a home-repair and financing scheme.

But if you consider who handled the case  --  two law students -- it was almost unheard of.

Now, the reality is that they'll be lucky to collect any of it, since the defendant is now out of business.  But, at the very least, that verdict gives predatory and fraudulent financing companies a good reason to hesitate before they go looking for victims in Cleveland.  There's real (albeit limited) value in that.  And that's enough. 

Good work, Case Western students!

Mark A. Edwards

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Rule on Airspace in a Green Economy

Troy A. Rule (Missouri) has posted Airspace in a Green Economy on SSRN.  Here's the abstract:

The recent surge of interest in renewable energy and sustainable land use has made the airspace above land more valuable than ever before. However, a growing number of policies aimed at promoting sustainability disregard landowners' airspace rights in ways that can cause airspace to be underutilized. This article analyzes several land use conflicts emerging in the context of renewable energy development by framing them as disputes over airspace. The article suggests that incorporating options or liability rules into laws regulating airspace is a useful way to promote wind and solar energy while still respecting landowners' existing airspace rights. If properly tailored, such policies can facilitate renewable energy development without compromising landowners’ incentives and capacity to make optimal use of the space above their land. The article also introduces a new abstract model to argue that policymakers should weigh the likely impacts on both rival and non-rival airspace uses when deciding whether to modify airspace restrictions to encourage sustainability.

Ben Barros

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Famous Objects From Classic Movies

Ji Lee's addictive game, Famous Objects from Classic Movies, is one part hangman, one part movie trivia, and one part commentary on how property gives meaning to our experiences.

The game is simple.  It displays a silhouetted image of an object and asks the player to determine what movie it comes from. Three wrong answers and you fail (and there are currently over 60 movies in the game's catalogue). 

I find it wonderfully surprising how the dark silhouette of a piece of property can serve as a shortcut for a whole range of sensory experiences and memories.  Strangely, I even managed deciphered a bunch of answers to movies that I've never seen.  We do see the world through property-shaped lenses.  

Steve Clowney 

 

 

A House With a History

The New York times ran a story on Sunday about a "psychologically impacted" home in Windsor Terrace, Brooklyn.  Four months ago, the owner was stabbed to death by her son.  The article asks whether, "[i]n a city with a relative shortage of good housing, [does] the fact that someone has recently died in a home barely elicits a shrug from buyers"? 

According to James Larson and Joseph Coleman, the answer is probably, "Yes."  Laresen and Coleman, business professors at Wright State, conducted a study of 100 psycologicall impacted homes - places that had been the site of a murder, suicide or illness.  They found that such properties take 50 percent longer to sell than comparable homes and bring in an average of 2.4 percent less.  All good facts for the next time I teach Stambovsky.

Steve Clowney

Odinet on International Real Estate Transactions

Christopher Odinet (Phelps Dunbar) has posed Towards a Convention for the International Sale of Real Property: Challenges, Commonalities, and Possibilities (Quinnipiac Law Review) on SSRN.  Here's the abstract:  

In a world that is increasingly global in scope, society has come to view the ever-growing body of international commercial laws as being exceptionally important. This is evidenced through the adoption of several high profile pieces of legislation over the past several decades: International Interest in Mobile Equipment - Study LXXI, the EU’s Draft Common Frame of Reference, the EU Directives on Consumer Protection, and, most noteworthy of all, the Convention for the International Sale of Goods (CISG).

As raised by Professors Sprankling, Coletta, and Mirow, what has been conspicuously absent from this growing body of laws is an international framework for the sale of real property across national borders. This absence is not surprising, considering the way society has historically conceptualized property law. Real property is local and individualistic in nature. The laws governing real property vary from country to country and even region to region. Property law is both rigid and inflexible, thus there is very little opportunity for the parties to a real estate transaction to materially modify or shape the contract. However, times have changed and so has the way people think about real property transactions. The sale of real property increasingly reaches across these national borders. The purchasing of vacation homes in other countries, the acquisition of real property for those who live near border areas, and the acquiring of real property by multi-national and international companies is an undeniable part of the global economy. Society has come to realize the integral part that real estate transactions play in a robust global economy.

The time has come for a rethinking of the way society views real property. This involves a questioning of the current legal patchwork governing real estate transactions that an international buyer must navigate in order to consummate the sale. In so doing, jurisdictions should take the next step on the road toward an ever-more vibrant global economy: the creation and global adoption of a framework for the international sale of real property.

This article begins a discussion of whether a convention for the international sale of real property, akin to the highly successful and somewhat similar CISG, could realistically be developed and, in doing so, hopes that future scholars and policy-makers will continue to explore the possibility of such a system. This is accomplished by reviewing three common features of all real property contracts - contract formalities, warranties of title, and security financing - and discusses their importance to an international investor. It further examines how three different countries currently which are highly engaged in international business and investment - the U.S., China, and France - view contract formation requirements, warranties, and security financing, and determines, based on general comparisons, whether a convention for the international sale of real property could be developed for each basic real property contract provision. Finally, this Article concludes by arguing the many existing shared contract principles in each of the subject countries makes an international framework, at least with regards to these particular provisions, very promising.

Steve Clowney

Teaching the Rule Against Perpetuities

Over at Prawfsblawg, Dave Fagundes has a post outlining the debate over teaching the Rule Against Perpetuities.  Although the post and the comments are a thoughtful contribution to this topic, I do take issue with one small bit of Fagundes' argument.  He writes:

There are some plausible reasons to be skeptical that the RAP belongs on a modern property syllabus.  First, many states have abolished the RAP by statute, so it’s not even law in many jurisdictions.  Moreover, the RAP is complex enough that teaching it well takes, I’ve found, at least four full class-hours, and given that property is often hard enough to cover (at least if you have only four credits to do it), this time could be allocated to other issues that people may find more instinctively interesting or important. 

The notion that the RAP takes four class hours to teach needs to be challenged - it sets up a false choice between not covering the rule at all or sinking an entire week into the abyss of medieval times.  For example, here's a great post by Mary Sarah Bilder on how to teach the RAP in one hour.  The easiest way to save time on the RAP is to give students problem sets to do as homework (as opposed to doing them in-class).  The reading in the future interests section of most property textbooks is pretty light, so the additional work isn't much of a burden.   

For my part, I think teaching the Rule Against Perperuities in first year property remains important.  It conveys, like no other subject, that the law is actually quite difficult and takes a lot of work to master.  I see too many students who think that being a lawyer resembles being a elementary school librarian - you just need to mosey through the shelves, find the relevant case, and present its clear rule to the client.

Steve Clowney

Kieff on Removing Property Rules from Intellectual Property

Scott Kieff (George Washington) has posted Removing Property from Intellectual Property and (Intended?) Pernicious Impacts on Innovation and Competition SSRN.  Here's the abstract:

Commentators have poured forth a loud and sustained outcry over the past few years that sees property rule treatment of intellectual property (IP) as a cause of excessive transaction costs, thickets, anticommons, hold-ups, hold-outs, and trolls, which unduly tax and retard innovation, competition, and economic growth. The popular response has been to seek a legislative shift towards some limited use of weaker, liability rule treatment, usually portrayed as “just enough” to facilitate transactions in those special cases where the bargaining problems are at their worst and where escape hatches are most needed. This essay is designed to make two contributions. First, it shows how a set of changes in case law over just the past few years have hugely re-shaped the patent system from having several major, and helpful, liability-rule-pressure-release-valves, into a system that is fast becoming almost devoid of significant property rule characteristics, at least for those small entities that would most need property rule protection. The essay then explores some harmful effects of this shift, focusing on the ways liability rule treatment can seriously impede the beneficial deal-making mechanisms that facilitate innovation and competition. The basic intuition behind this bad effect of liability rules is that they seriously frustrate the ability for a market-challenging patentee to attract and hold the constructive attention of a potential contracting party (especially one that is a larger more established party) while preserving the option to terminate the negotiations in favor of striking a deal with a different party. At the same time, liability rules can have an additional bad effect of helping existing competitors to coordinate with each other over ways to keep out new entrants. The essay is designed to contribute to the literature on IP in particular, as well as the broader literatures on property and coordination, by first showing how a seemingly disconnected set of changes to the legal rules impacting a particular legal regime like the patent system can have unintended and sweeping harmful consequences, and then by exploring why within the more middle range of the spectrum between the two poles of property rules and liability rules, a general shift towards the property side may be preferred by those seeking an increase in access and competition.

Steve Clowney