From The Oxford Companion to American Law

PROPERTY, REAL. The rules of property regulate human relationships that involve things of value. In the *common-law system, these rules are di­vided into those applying to personal property, meaning movable assets (intangible or tangible), and those applying to real property, assets re­garded as immovable, notably land. This distinc­tion was based on the view of land as a sufficiently unique asset to warrant separate legal treatment. Unlike chattels (tangible, movable property), land is deemed to endure forever, and thus it requires a legal system that accounts for future interests in a far more complex fashion than does personal property law. And the immobility of land—the impossibility of moving it from one jurisdiction to another—gives the rules of real property a flavor that is both more insular and less responsive to demands for national uniformity than is so for many other branches of the law.

“Land” is frequently used as a synonym for “real property,” but in terms of legal principles it is not to be confused with the soil located on the land in that place. Soil is readily removed and canbe taken elsewhere and so is only an approximate equivalent of the land where it is situated. Real property, or land, is best understood in terms of spatial dimensions, measured above and below the surface and along compass lines on the surface itself. Because rights in land extend “to the heav­ens above and the depths below,” ownership may be above or below the surface (as in a second floor condominium or a basement garage) as well as at ground level, and trespasses may occur by unper­mitted overhead or underground activity (air flights or slant wells) as well as by surface entries.

Real property also includes “fixtures,” chattels that were personal property until they became af­fixed to land in a permanent fashion so as to thereafter be recharacterized as land. A convey­ance (transfer) of title (legal ownership) to land carries with it not only the soil within the de­scribed boundaries but also the structures built thereon, as well as built-in fixtures, even when none of these are mentioned in the deed. Crops grown on the land represent a reverse transition from real to personal property, once they are severed.

Estates in Land. As real property has dimin­ished as the dominant form of wealth in the United States, and as land is regarded more as a commodity than as the primary vehicle for pre­serving and transmitting wealth to future genera­tions, both the forms and the rules of “estates” in land have been considerably simplified.

To say that a person “owns” land means more precisely that he has an estate in that land. From a commercial point of view, what is most impor­tant is the location and spatial dimension of the land; but from a legal perspective, the temporal element is more important: the duration of one’s interest in the land whether for five years, or life, or potentially (through heirs) forever. The same rules are generally as applicable to a small parcel of land as to an extensive area. Thus, the major categories of ownership interests in land have al­ways involved time.

Depending on whether a person is entitled to present or only future possession of some land, her interest is referred to as a “present estate” or a “future interest” in that land. “Future” is some­what misleading, since the interest has a present value and may be sold or transferred (much as a stock option); it is only the right of possession of the property that is postponed.

Present estates in land were traditionally divided into “freeholds” and “nonfreeholds” and subject to different rules and judicial procedures. Consis­tent with the primacy of temporal considerations, only freehold estates were regarded as featuring a lack of any ascertainable termination date. Thus, an estate for life was deemed a freehold and therefore more valuable than a nonfreehold estate of a fixed term, even though that term might be 999 years. The law of nonfreehold estates has de­veloped into *landlord-tenant law.

The present freehold estates in land consist of the “fee simple,” inheritable by the heirs of the owner, and the “life estate,” which terminates on the death of the owner. (An earlier intermediate estate, the “fee tail,” inheritable only by the lineal descendants of the owner and not by her general heirs, has almost entirely disappeared from the American estate system.) Future interests arise whenever the present estate held by the owner does not constitute the complete (absolute) fee simple. Thus if 0, owning a fee simple absolute, conveys a life estate to A, 0 retains a future in­terest—known as a reversion—that entitles 0 (or her heirs) to take possession of the property upon the death of A. If, instead, 0 conveys her fee sim­ple estate “to A for life, and then to B and his heirs,” B’s future interest is called a remainder (in fee simple) and replaces the reversion held by 0 in the first example.

Future interest may be conditional, as in “to A for life and then to B and his heirs if B is married at the time of A’s death.” In this case, B has a “contingent remainder” (rather than a vested re­mainder), because it is uncertain whether B will ever be entitled to take possession of the property. Remainders are also considered to be contingent when they are given to unascertained persons, as in “to A for life and then to his widow.” A future interest that is not vested may be subject to legal destruction if its remoteness (in time) makes title to the property too unmarketable for present pur­poses, such as the ability to convey it or to borrow money on it. The Rule against Perpetuities (1682) invalidated any interest that was capable of vesting more than twenty-one years after some life then in being, as in “to A for life and then to her first child who marries,” since that child might be as yet unborn and might not marry thereafter until A has been dead for more than twenty-one years. Because the common-law version of the rule too often frustrated legitimate goals, it has been widely replaced by new versions that invalidate future in­terests only when they fail to vest within ninety years (and “wait and see” whether that will hap­pen) or that abolish the old rule altogether.

Co-ownership. When two or more people share concurrent ownership of the same land, special rules regulate the many aspects of their relation­ship. Although such rules often appear compli­cated and unnecessary, they eliminate the need for the parties to draft lengthy agreements covering all possible future contingencies. The American le­gal system has created several forms of concurrent ownership of land. The two usual forms are “ten­ancy in common” and “joint tenancy.” (These in­terests can be held by more than two persons—that is, title can be held by three or four tenants in common or joint tenants—but for convenience co-ownership is treated here as encompassing only two.) When the two parties are married to one another, they may have the further options of holding the land as “tenants by the entirety” or as “community property.”

Tenancy in common is the loosest and most general form of co-ownership. Any two or more persons may hold title in this way, and this is the form of ownership presumed to exist unless an­other concurrent interest is expressly indicated. Although the interests of tenants in common are undivided—that is, none can claim that any par­ticular part of the land belongs to him rather than the others—the fractional shares are separately owned, e.g., if A and B are tenants in common, on the death of A, her interest will pass only to her heirs or devisees, free of any ownership claim by B. The shares of each tenant are independently transferable, and there is no requirement that they be equal.

A condominium project generally involves par­ticipants who share ownership of the common fea­tures of the project (external walls, common hall­ways) as tenants in common and at the same time separately own an individual unit, which may itself be owned in tenancy in common or otherwise. For example, A and B may own unit 101 as joint ten­ants among themselves, while owning the com­mon parts of the entire project as tenants in com­mon with the owners of all the other units. In a cooperative project, title to an entire apartment building generally is held by a corporation, and owners acquire the right to possess individual units through acquisition of stock in the corpo­ration together with proprietary leases to those units.

Joint tenancy creates a closer relationship be­tween owners by imposing the principle of survi­vorship at death: the share of the first joint tenant to die belongs to the surviving tenant, even if an­other party may have been named in the will or qualified as the heir of the decedent. Joint tenancy generally requires explicit language identifying it as such in the creating document. Individual joint tenants, like tenants in common, may convey (transfer) their interests without the consent of the other; however, a conveyance by one joint tenant to a third party severs the joint tenancy, and the new owner becomes a tenant in common with the existing other owner.

Tenancy by the entirety is a form of joint ten­ancy between married tenants. The unity of per­son that characterized the marital state in com­mon law, combined with the unity of title in joint tenancy, creates an even more intertwined estate. Tenants by the entirety cannot sever their estate by unilateral conveyance to a third party; the es­tate terminates only on *divorce (when it becomes either a joint tenancy or tenancy in common). This type of estate has been eliminated in many jurisdictions, especially those adopting community property principles.

Community property is an alternative system for spouses to hold title; it is borrowed from French and Spanish law and applies in seven west­ern states and in Louisiana. In community prop­erty jurisdictions, spouses may continue to take title as tenants in common or as joint tenants, but there is a presumption that any property they ac­quire during the *marriage (except that acquired from gift, devise, or descent) is community rather than separate property, even though the nominal title may suggest otherwise. Like tenancy by the entirety, such shared ownership is terminated only by divorce, and any deed or mortgage must be executed by both spouses to be effective. Some nonwestern jurisdictions have created a somewhat comparable form of ownership through adoption of a Marital Property Act.

As is evident, then, the various types of estate co-ownership differ in terms of what happens to ownership on death, on transfer while living, and on divorce. These differences are of considerable significance to creditors, whose ability to reach all or half (or none) of the title of an asset held by both parties to satisfy a debt incurred by one of them may depend on the form of title. For in­stance, community property is generally liable for the debts of either spouse, whereas, conversely, tenancy by the entirety may be immune from the reach of creditors of either spouse (see DEBTOR AND CREDITOR).

Co-ownership also has consequences for ac­countings. Income received by one co-tenant for rental of the entire property is generally regarded as belonging to all the co-owners, but each co-owner is entitled to free possession of the entire property and is not liable for rent to the others for such sole occupancy. With regard to expendi­tures, a co-owner who pays expenses necessary topreserve the property (such as property taxes and joint *mortgage payments) is generally allowed to recover a proportionate share from the other own­ers, although perhaps only by way of a deduction from rental income received or from proceeds arising from sale or division of the property. Re­covery for repairs and improvements is less likely, although, again, such expenditures may be taken into consideration if there is income to be distrib­uted or if the property sells for an increased amount because of these improvements.

“Partition of the title” between the owners may result from an agreement between them or by court order when the parties can no longer man­age the property in unison. “Partition in kind” oc­curs when each owner receives some physical part of the common property (thereby transforming the parties from undivided owners of a larger par­cel into neighboring, separate owners of adjacent smaller parcels). If such physical partition is not possible, a court may order the property sold and the sale proceeds divided instead.

Landlord and Tenant. Current landlord-tenant law is far removed from its feudal origins, which treated the lease as a conveyance of a nonfreehold estate in land from landlord to tenant. Today, the lease is viewed as a *contract more than a con­veyance, a contract involving an exchange of rent from the tenant in return for possession of the property and related services from the landlord. For residential leases, however, legislation and ju­dicial intervention go well beyond even that ap­proach, generally rejecting the notion of freedom of contract in the context of scarce urban housing.

The two basic types of nonfreehold estate in common law were the “term of years” and the “periodic” tenancy (a third category, the “tenancy at will,” has no real legal significance). These differ in their method of termination: the term of years ends automatically on the termination date stated in the lease (a week, a month, ten years, etc.), whereas the periodic tenancy is automatically re­newed at the end of each period unless proper notice of termination was given by either side. However, the “just cause” requirement of many rent-control ordinances may eliminate all right of a landlord to terminate an existing residential ten­ancy, either at the end of the lease term or, in the case of periodic tenancy, by advance notice; this has, de facto, created a new form of tenancy.

With the common-law emphasis on treating a lease as a conveyance of an estate in land, it was generally irrelevant whether the tenant stayed in possession during the lease term. A tenant who abandoned during the term of the lease could generally be held liable for the rent for the entire bal­ance of the term (as it fell due) on the ground that the abandonment did not terminate the tenant’s leasehold estate in the land. Correspondingly, the landlord was not entitled to relet the premises to a third party after abandonment, since the aban­doning tenant still officially held the possessory estate in the property. Modern contract analysis of this situation frequently requires a landlord to mitigate damages by attempting to relet after ten­ant abandonment.

The converse situation occurs when the tenant fails to leave at the end of the tenancy. Common law gave the landlord the right to compel a “hold­over” tenant to stay for another entire term, usu­ally as a periodic tenant, regardless of how long the initial holdover lasted; this remedy does not receive much judicial acceptance today. The land­lord’s alternative right is to compel a holdover ten­ant to vacate the premises. Statutes in every juris­diction generally deny the landlord the right to evict the tenant himself (self-help eviction) but make available a speedy action (usually known as “summary dispossess” proceedings) to accomplish this. Such actions are brought either when the ten­ant holds over after the natural termination of the term of years or periodic tenancy or when the ten­ant’s estate is terminated prematurely by the land­lord because of a default, usually in the payment of rent. The abbreviated nature of the proceedings has generated constitutional concerns about whether the tenant has been denied due process with regard to potential defenses.

The common-law view of the lease as a con­veyance implied that the landlord had no obliga­tions to the tenant for the condition of the prem­ises. There was no liability for preexisting defects, since the principle of caveat emptor required the tenant to make an inspection before taking the lease; conversely, the obligation to correct prob­lems that arose during the term of the lease fell on the tenant, since he was the one in possession. The only exceptions to these general principles of landlord nonliability were fraud and express war­ranties. Even when the landlord breached actual promises about the condition of the premises, however, the common-law doctrine that covenants in leases were independent meant the tenant was not entitled to quit or terminate the lease for that reason. This consequence has been mitigated through the judicial fiction of constructive evic­tion, which treats the landlord’s failure to honor covenants in her lease as a breach of her covenant of quiet enjoyment and allows the tenant to quitand terminate her interdependent covenant to pay rent.

The tenant’s obligations for the condition of the premises were determined by the doctrine of “waste,” which compelled a tenant to treat the premises in a prudent way and to repair damage caused by his own activity (active waste) or dam­age arising from external causes but for which a small repair would have avoided a larger loss (pas­sive waste), such as failing to board up a broken window during a rainstorm. In the residential field, an implied warranty of habitability is now a matter of public policy (i.e., without regard to what the lease provides) and entitles a tenant re­siding in substandard housing to withhold all or part of the rent (based upon diminution of value) for as long as the condition goes uncorrected.

When personal injuries resulted from a condi­tion of the premises, the landlord historically had no liability because of the lack of any basic duty to repair. However, so many exceptions to this rule now exist—for example, where the landlord concealed the defect from the tenant, or promised to repair or was required by local law (building codes) to repair, or where injury occurred in a common area or common facility—that landlord liability is generally more common than nonlia­bility. Commercial landlords especially are at risk for failing to protect their tenants from assaults and accidents occurring even outside the premises (such as in the building’s parking garage) that might have been avoided by better security sys­tems or other protective steps.

Leasehold transfer is one feature of landlord and tenant law that is not much changed from its feudal origins. As an estate in land, a leasehold is freely transferable by the tenant, although contrary restrictions in leases are upheld against charges that they constitute invalid restraints on aliena­tion, at least where the landlord’s power to consent to the transfer is not to be unreasonably withheld.

An “assignment” by a tenant transfers the entire remainder of his leasehold estate to an assignee, creating a new “privity of estate” between landlord and assignee, although not automatically termi­nating the old “privity of contract” between the tenant/assignor and his landlord. Hence, the land­lord may recover rent from the old tenant if the assignee fails to pay it.

A tenant may also sublease his premises by giv­ing a shorter term to the transferee than he holds himself (thereby technically retaining a reversion). When property is sublet, there is no direct land­lord—tenant relation between the landlord and the subtenant, and their rights and duties may need to be enforced indirectly through the me­dium of the tenant.

A landlord is generally free to transfer (or en­cumber) her reversion, without requiring the ten­ant’s assent, although it is common for the tenant to “attorn,” i.e., acknowledge and accept, the new party. A transfer of leased property has no effect on the leases themselves.

Nonpossessory Interests in Land. The interests in land described thus far may be generally char­acterized as possessory, entitling their holder to occupy land to the fullest extent possible, includ­ing the right to exclude others from the land. But the “bundle of sticks” principle that characterizes most property analysis permits division of rights in land into smaller and more refined categories. It is not uncommon for a nonpossessor to have rights to use the land or to restrict the possessor in his use of the land.

Nonpossessory rights in land are generally termed “servitudes” when they arise from an agreement between the possessor and the holder of the right. When a third person is privileged to perform acts on the land that would otherwise be unprivileged (i.e., trespassory), for example, to walk across it, she is said to have an “easement” in the land. If she is entitled to compel the pos­sessor to perform acts on his land that he would otherwise be free not to perform (e.g., to allow his tree to go untrimmed), she is said to hold a “cov­enant running with the land” (or “equitable ser­vitude” or “restrictive covenant” or “real cove­nant”). If she is entitled to compel the possessor to refrain from performing acts on his land that he would otherwise be privileged to perform (e.g., to erect a structure that would block her view), she may hold either a negative easement or a neg­ative covenant (in the following discussion treated as a covenant rather than an easement).

An easement does not entitle its holder to pos­sess the land involved; it entitles her only to en­gage in some activity on it. The possessor of the property, the “servient owner” (or “servient ten­ant”), thus loses the right to prohibit the “domi­nant tenant” from engaging in that activity. Gen­erally, an easement is created when the servient owner conveys that particular right in land to the other person. If the right may be exercised by the dominant tenant only in conjunction with her ownership of a particular parcel of land—usually neighboring land—her parcel is referred to as a “dominant tenement” and the easement is said to be “appurtenant” rather than “in gross” (meaningthat the exercise of the easement is unconnected with the dominant tenant’s ownership of any par­ticular parcel of land).

Because an easement constitutes an interest in land, its proper creation generally requires com­pliance with the *Statute of Frauds, that is, proper execution and signature of an appropriate docu­ment. If only a revocable or short-term interest in land is intended, such as the right to visit a house for a party or to enter a theater to see a perfor­mance, the interest is referred to as a “license” and a written document is not required. Many ease­ments are created as part of the subdivision of a larger parcel, wherein the subdivider “grants” to the owner of the newly created lot an easement for some use over the subdivider’s retained part; alternatively the subdivider “reserves” from his grant an easement for a use by him over the granted part and for the benefit of his retained part.

When a subdivision has created two or more parcels, courts may infer that the parties intended to grant or reserve easements even though explicit language to that effect is missing from the deeds. Courts may hold that an easement by implied grant or implied reservation has been created when a similar usage (a “quasi-easement”) existed before the land was divided, which was sufficiently obvious and permanent as to justify the inference that the parties intended this arrangement should survive the subdivision. Similarly, if a use was ex­plicitly granted but only orally, so that only a li­cense rather than an easement arose, detrimental reliance by the licensee may bar the licensor from revoking it, thereby converting the license into an easement. Finally, in some cases, although no con­sensual act of creation of an easement may have ever occurred, a wrongful activity on land by a stranger may have continued so long that it has imposed the bar of the statute of limitations on the servient owner, thereby creating for the wrongdoer an easement by prescription, on prin­ciples similar to adverse possession.

For a covenant to bind successor owners of the property (“run with the land”), a court generally must determine that the initial parties intended the covenant to have such an effect and that the covenant “touches and concerns” the land—that is, it relates to the land in such a way as to justify the inference that it should benefit and burden subsequent owners of the parcels involved, even though these owners were not privy to the original contract.

The transfer of the benefits and burdens of ease‑ments occurs automatically in connection with the transfer of the affected estates, especially with re­gard to easements appurtenant. The transferee of the dominant estate receives the benefit of the easement along with the estate itself, and the transferee of the servient estate takes it subject to the burden of the easement.

With regard to real covenants and equitable ser­vitudes, older technical requirements severely im­peded their ability to run with the land and affect successor owners. It was required that the original contracting parties be in “privity of estate” with one another (thus prohibiting ordinary neighbors from creating enforceable covenants). And it was also required that successor owners succeed to their entire estates of the original parties (making it difficult to bind or benefit tenants of the original parties). Courts of equity generally rejected those requirements in cases of equitable servitudes, and the new Restatement of Property (Third)—Servi­tudes formally proposes their elimination. If this policy is accepted, real covenants will bind and burden later owners of land in the same fashion as easements.

Because these situations involve limited usu­fructuary rights (rights of use) rather than unres­tricted possessory rights, the most common dis­putes concern whether either party is violating the easement or covenant. Locational issues are per­haps the easiest to deal with: an easement of de­fined location cannot be enlarged or relocated by the dominant tenant. However, she may subdivide her existing parcel and thereby confer the benefit of the easement upon all of her partial grantees, as long as this does not unreasonably burden the servient tenant. Other claimed violations are hard­er to deal with, such as a dominant tenant’s at­tempt to increase the number of trips and the type of vehicle used for travel. Courts generally assume that the original parties anticipated changes and intended to tolerate such changes as are consistent with normal development in the area and do not unreasonably burden the servient owner. In the case of easements, a servient tenant is considerably less restricted in scope than is a dominant tenant. He is free as a possessor to engage in any lawful activity that does not unreasonably interfere with the dominant tenant’s rights.

The duration of servitudes is not generally dif­ferent from that of possessory interests in land. Easements are commonly held in fee or for a term of years and subject to terminating conditions. When the date or event of termination occurs, the interest ends. Because servitudes always involve the existence of two owners of rights in the sameland, the return of one party’s interest to the holder of the other interest leads to the natural termination of the servitude. Thus an easement is terminated by its conveyance from dominant to servient tenant or by acquisition of the dominant land by the owner of the servient land (a termi­nation by merger), since, by definition, a person cannot have an easement in his own land. The same is true for a release of a covenant executed by covenantee to covenantor, or their successors.

Informal forms of release may also be effective, as when the dominant tenant orally states that she no longer intends to use a right of way and then confirms that statement by constructing a fence blocking the old path. Less certain, but still pos­sible, is a statement of intent to abandon sup­ported by a long period of nonuse. Nonuse alone without the support of confirming words will not terminate the interest, since a person is not re­quired to continue using an easement in order to preserve it, nor is a person required to continue demanding that a covenantor comply with his covenant when there is no indication of any breach of it.

Covenants also terminate when courts deter­mine that enforcement is no longer appropriate. Common situations, especially when subdivision restrictions are involved, include cases in which the enforcing parties are themselves guilty of sim­ilar breaches (“unclean hands”), or have tolerat­ed others’ engaging in similar breaches without complaint (“acquiescence”), or have delayed too long in seeking enforcement (“prescription” or “lathes”). If external developments have made a restriction more burdensome to one party than it is beneficial to the other, the defense of changed conditions may apply.

Robert C. Ellickson, Carol M. Rose, and Bruce A. Ack­erman, eds., Perspectives on Property Law, 2d ed., 1995. Richard H. Chused, ed., A Property Anthology, 2d ed., 1997. Roger Bernhardt and Ann M. Burkhart, The Black Letter Law of Real Property, 3d ed., 1998. G. W. Thomp­son, Commentaries on the Modern Law of Real Property, 2d ed., 1998. John G. Sprankling, Understanding Prop­erty Law, 2000. William B. Stoebuck and Dale A. Whit­man, The Law of Property, 3d ed., 2000. Roger Bern­hardt and Ann M. Burkhart, Real Property in a Nutshell, 4th ed., 2001. Herbert Hovenkamp and Sheldon F. Kurtz, The Law of Property: An Introductory Survey, 5th ed., 2001. Liebman, ed., A Concise Restatement of Prop­erty, 2001. Joseph William Singer, Introduction to Prop­erty, 2001.

Roger Bernhardt