Agriculture Law and Management


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Transferring Real Property other than by Sale

Real property rights also can be transferred by processes other than sale. This chapter introduces concepts relating to bequests, gifts, adverse possession, eminent domain, and escheat.


The previous section generally describes the steps involved in purchasing real property. This section introduces basic principles about other ways ownership of land is transferred.

Land Acquisition by Inheritance

  • Personal representative of deceased landowner prepares a deed of distribution transferring land to heirs according to the deceased landowner's will or intestate succession laws, whichever is applicable.


  • A will isa legal document that disposes of a decedent's estate; that is, a will specifies the heir or heirs whom the decedent wants to receive the property. Restated, a will directs the transfer of a person’s property at their death.
    • Suggestion -- prepare a will. A will can do more than identify heirs; it can also appoint who will administer the estate, who will care for minor children of the decedent, bequeath property to charitable entities, establish a trust, and the list goes on. A well-planned vision for the future, documented in a clearly-stated will, helps assure that the testator's goals are achieved.
  • Individuals can prepare their own will (but that is not recommended); see N.D.C.C. §30.1-08-02. Execution - Witnessed wills - Holographic wills.
    • "2. A will ... is valid as a holographic will, whether or not witnessed, if the signature and material portions of the document are in the testator's handwriting. "


  • A testator's surviving spouse is entitled toat least an intestate share of the estate, unless
    • "It appears from the will or other evidence that the will was made in contemplation of the testator's marriage to the surviving spouse;
    • The will expresses the [intent] that it ... be effective notwithstanding any subsequent marriage; or
    • The testator provided for the spouse by transfer outside the will and the intent that the transfer be in lieu of a testamentary provision is shown by the testator's statements or is reasonably inferred from the amount of the transfer or other evidence." N.D.C.C. §30.1-06-01(1).


  • A child is not protected from being excluded from a parent's will, except if,
    • the child was born or adopted after the execution of the will, or
    • the child was excluded from the will because the parent believed, at the time the will was executed, that the child was dead. N.D.C.C. §30.1-06-02.


  • An heir must survive the decedent by more than 120 hoursto inherit the property; N.D.C.C. §30.1-09.1-02.
    • If an heir does not survive the decedent by more than 120 hours (this includes an heir predeceasing a decedent), the decedent's property passes according to the "residuary clause" in the decedent's will, or if there is no residuary clause, the property passes according to the laws of intestate succession. The property will not pass to the heirs of the predeceased heir. See Estate of Mygland, 421 N.W.2d 816 (N.D. 1988).
  • A person will not inherit from the estate of a former spouse if the will of the former spouse had not been revised since the time of the divorce; (N.D.C.C. §30.1-10-04(2)(a)).
  • A person who murders another will not inherit from the victim's estate; N.D.C.C. §30.1-10-03(2).


  • Nonexoneration:  an heir, who receives a specific bequest, will receive the property subject to an existing encumbrance unless the will specifies differently; (N.D.C.C. §§30.1-09-09 and 30.1-19-14). For example if the deceased landowner's will specifies that you are to receive a tract of land but the land is encumbered by a note and mortgage, you will be responsible for paying the debt (unless the will specifies differently). If you do not want to inherit the encumbered land, you can disclaim the inheritance (see next point).
    • Nonexoneration resolves an issue among the heirs of "whose pays the debt owed by the decedent."  For example:  Fred dies owning land valued at $100,000 and personal property worth $70,000; Fred also owes $10,000 and this debt is secured with a mortgage against the land.  Fred's will bequeaths the land to Mary and the personal property to Joan.  Generally, the decedent's debt is paid from the personal property, which means Joan would receive only $60,000 and Mary would receive the land without debt.  Nonexoneration, however, imposes the debt associated with the land on Mary (as the heir to the land) and Joan would receive $70,000.  Either way, the creditor is paid; the difference is which heir has their inheritance reduced by the amount of debt.
  • An heir can disclaim (refuse to accept) all or part of an inheritance/bequest; N.D.C.C. §30.1-10.1-02(1). For example, an heir may decide to disclaim an inheritance if the amount of debt encumbering the property is about the same as the value of the property.


  • Intestate succession laws are used to distribute property that is not disposed of by a will; N.D.C.C. §30.1-04-01. Restated, any property for which an heir has not been specified in the decedent's will, must transfer according to the state's intestate succession statute.
    • Suggestion -- A residuary clause in a will directs who should receive any property in the estate that is not transferred by some other directive within the will; this clause prevents any property (including disclaimed property) from passing by intestate succession or escheating to the state.
    • N.D.C.C. §30.1-04-01(2). " A decedent, by will, may expressly exclude or limit the right of an individual or class to succeed to property of the decedent passing by intestate succession." See Estate of Samuelson, 2008 ND 190. The testator's will "provided: 'I have intentionally failed to provide for my half sister .. '" This statement, however, did not disqualify the half sister's heirs from taking a share of the testator's estate because the testator had not "expressly exclude[d] the [half sister's] heirs."


  • Receiving an inheritance is not "income" to the heir; that is, it is not subject to income tax.
    • An estate is not subject to an estate taxunless the estate is worth more than $5.3 million dollars, but with some planning, owners of larger estates can take steps to minimize taxes (such as dividing ownership between married spouses) -- see an appropriate professional.
      • For decedents dying in 2019, $11,400,000 of property is exempt from estate tax.
      • Likewise, estates of decedents survived by a spouse may elect to pass any of the decedent’s unused exemption to the surviving spouse. Thus a married couple can bequeath more than $22.8 million without incurring an estate tax.
      • See Estate Tax at
  • Another question with respect to taxes and inherited property is "does the heir pay income tax on the capital gains when the property is sold after it is inherited." The general answer is that property which passes through an estate receives a "step-up" in basiswhich prevents many heirs from having to report any capital gains on inherited property that is sold soon after the property is inherited. For example, individual A purchased a tract of land for $15,000 in 2000; that amount ($15,000) would be the basis in the land for A. When A dies in 2007, the land has a value of $22,000 and B receives the land as an inheritance from A. Under federal income tax land, the basis in the land for B is "stepped up" to $22,000; that is, the value for the purpose of A's estate. If B then sells the land for $22,000 (its value), B has no capital gain (taxable income) from selling the inherited property (the selling price of $22,000 minus the basis of $22,000 results in no taxable gain). This tax outcome is different than if A had gifted the land to B in 2007 -- as described in the next section.
    • Alternative scenario: If A had not died but instead sold the land in 2007 for $22,000, A would have had $7,000 taxable income ($22,000 selling price minus the $15,000 basis). Thus a statement that is sometimes made is "pass appreciated property through an estate in order to get a step up in basis" to minimize income tax.
    • Another scenario: If the land appreciates between the time that B inherits it and sells it, B would have capital gain on that amount. For example if B sold the inherited land for $23,500, B would have a gain of $1,500, that is, the difference between the stepped up basis of $22,000 and the selling price of $23,500.
  • Note, there is a difference between income and estate taxes.


A personal example.  Please allow me to share a personal experience from 1983 that illustrates several of these concepts.  My mother had three siblings, including a brother (my uncle) and a sister (my aunt) who never married.  My uncle and aunt died in an un-witnessed accident so the tragic event "had to be pieced together."  It was concluded that my aunt most likely died first and my uncle died several minutes later.  The property of my uncle and aunt then needed to be divided among their heirs.

My uncle had a will that left most of his property to his three sisters (which included my mother, his deceased sister, and a third sister).  Because the deceased sister had not survived my uncle by 120 hours (in fact, she probably died before him), his estate would be divided among his two surviving sisters, that is, my mother and the third sister.  The portion of the estate that was directed to the deceased sister was divided between the two surviving sisters according to the residual clause in his will.

My aunt had not prepared a will, thus her estate was intestate.  North Dakota intestate succession law directs that property should be divided among siblings if there is no surviving spouse, children, or parents.  Because my uncle (her brother) had not survived her by 120 hours, my aunt's estate was divided between her two surviving sisters (that is, my mother and the third sister).

Hopefully this family experience illustrates the application of several of the concepts introduced in this section.


Land Acquisition by Gift

  • A landowner can give the land to another person by preparing and delivering a deed to the donee or an agent of donee.
  • The donee or agent of the donee must be aware of the transfer and the deed must not be recallable (revocable) by donor (N.D.C.C. §47-09-06).
    • This rule impacts attempts to transfer ownership of land at time of death by using a deed previously prepared by the owner/decedent, rather than using a will.
  • A gift is considered complete only when the "sticks in the bundle" have transferred to the new owner; that is, the new owner knows he or she is the owner, has taken possession of the property, is deciding how the property should be used and who will use it, etc.  Without a change in who makes the decisions about the property, the gift is not considered as having occurred. Restated, the donee needs to be aware of the gift and needs to "accept" the gift by assuming the responsibilities of ownership.
    • "We have said a valid gift requires an intention by the donor to give property to the donee, coupled with an actual or constructive delivery of the property to the donee and acceptance of the property by the donee."  Doeden v. Stubstad, 2008 ND 165, 755 N.W.2d 859.
  • The consequence of an incomplete gift is that the "donor" is still the owner -- not the donee -- and this can lead to some undesired consequences.  For example, Person A intends to give a tract of land to Person B and to have a will that leaves all of A's remaining property to Person C.  A attempts a gift of the land to B, but the gift fails for some reason.  Upon A's death, A is still the owner of the land and the land will transfer to C (based on A's will).  B would not be the ultimate owner of the land (as A intended) because A's gift to B failed to meet the legal definition of a gift.


  • Receiving a gift is not "income" to the donee; that is, it is not subject to income tax.
  • A gift will not be considered a "taxable gift" if total gifts from the donor to the donee are less than $15,000 for the year (this is the "annual exclusion for 2014). There are other important provisions in gift tax law that minimize the amount of tax that will result from giving property (such as, gifts between spouses are exempt from gift tax) -- see an appropriate professional.
  • Another question with respect to taxes and gifted property is "does the donee pay income tax on the capital gains when the property is sold after it is received as a gift." The general answer is that property which is given to another person has a "carry over" basis. For example, individual A purchased a tract of land for $15,000 in 2000; that amount ($15,000) would be the basis in the land for A. If A gives the land to B in 2007 when the land has a value of $22,000, B's basis in the land would be carried over from A; that is, B's basis would be $15,000. If B then sells the land for $22,000 (its value), B has $7,000 taxable income from selling the gifted property (the selling price of $22,000 minus the basis of $15,000). This tax outcome is different than if the land had passed to B as an inheritance from A -- as described in the previous section.
  • Note, there is a difference between income tax, estate tax and gift tax.


Adverse Possession and Prescription (N.D.C.C. §47-06-03)

Many people find it interesting that landowners can lose some or all of their "sticks in the bundle of rights" to another individual.

  • Adverse possession -- the legal concept that a person can acquire ownership of land from another person by continuous use of that other person's land -- "squatter's rights?"
  • Prescription-- likewise, a person can acquire an easement (right to use) on another person's land by continuous use of the easement, for example, a pathway.
    • For both of these concepts, a key point is that the continuous use must be without the landowner's permission. If you are using my land without my permission, you are trespassing. As the landowner, I would have the legal right to take action against you because you are trespassing. The law, however, holds that if I do not stop your trespassing, I am not acting like a landowner (it is presumed that a landowner will take legal steps to stop trespassing).
    • If I do not act like the owner and the other person acts like the owner by using the land, the law will eventually recognize the trespasser as the owner, rather than the current owner who is not acting like an owner. This is the foundation for the legal concepts of adverse possession and prescription.
  • North Dakota law:  the trespasser must use the land or the right for 20 years to acquire ownership or an easement; except, the period of time will be only 10 years to acquire ownership (i.e., adverse possession) if the possessor:
    • is on the land under a color of title (a writing which appears to convey ownership), and
    • has paid all taxes assessed on the land.
  • Montana law on adverse possession is based on a period of 5 years; see Part 4 of Chapter 70-19.
  • Essential Elements of Adverse Possession
    • Actual possession - appropriate for the land and locality
    • Exclusive possession - keep all others off the land including true owner
    • Open - visiting owner would know (could see) that someone else is using/claiming the land
    • Notorious - known to neighbors that you are in possession of the land
    • Continuous - as appropriate for land and its use
    • Hostile or adverse - on the land without the permission of the real owner, or on the land intending to claim ownership
      • Will renting land for an extended period (for example, more than 20 years) entitle the tenant to claim ownership through adverse possession? Why?
      • Does a hunter in North Dakota have the landowner's implied permission to be on the land if the land is not posted?
    • "To acquire ownership of property by adverse possession the property of another must be held by open and hostile possession for a specific time... Under N.D.C.C. §28-01-04 the required period is twenty years. Under N.D.C.C. §47-06-03 one can acquire title by adverse possession after ten years if the possession is under color of title coupled with the payment of taxes. A deed constitutes color of title only as to the land described in it, and land occupied under the mistaken belief it is encompassed in the deed does not confer adverse possession under color of title... Adverse possession may be asserted where there has occurred an encroachment over a boundary line, whether or not the encroachment is the result of an intentional action." State Bank & Trust of Kenmare v. Brekke, 1999 ND 212, 602 N.W.2d 681


    • Again -- adverse possession can be described as " my presence on your land is a trespass and you can bring a lawsuit seeking to remove me from your land. Adverse possession states that if I trespass on your land for 20 years and you do not take action to remove me, the legal system is going to give me ownership of the land because I am acting more like the owner (by using the land) than you are."
    • Adverse possession does not require the landowner to use the land, but does require that the landowner protect his or her right to be the exclusive possessor of the land.
  • To defend against adverse possession, the real owner should be:
    • certain to inform users that the use is by permission and subject to termination (sounds like a license as discussed in a previous section), and
    • prepared to regain possession by court action, if necessary.
      • Does the transfer of land that is being adversely possessed terminate the adverse possessor claim to the land?  Why?
  • Adverse Possession is not applicable against:
    • Public property
    • Future interest because an adverse possessor acquires no more property interests than the party with current possessory interest
  • Tacking of time is recognized -- "where successive adverse occupants hold in privity with each other under the same claim of title, the time limit for maintaining an action may be computed by the last occupants from the date the cause of action accrued against the first adverse user." James v. Griffin, 2001 ND 90, 626 N.W.2d 704
    • Example, if my parent trespassed on (adversely possessed) your land for 15 years, died, and I inherited my parent's estate and immediately began trespassing on your land, I only need to trespass for another 5 years to reach the total of 20 years.
    • Visit Dictionary to find a definition of privity:  "connection or mutual interest between parties"
  • A quiet title actionis the process by which a successful adverse possession is documented.

    As described on another web page:

    A quiet title action is a court proceeding wherein a person who has an interest in real property is willing to invest the time and cost to assure the ownership of the land is accurately understood and documented.  This person would initiate a lawsuit (a legal proceeding in court) that includes advertising that all persons claiming an interest in the tract of land are required to indicate to the court that they believe they have a legal interest (a stick in the bundle) in the real property.

    At an announced time, the court will hold a hearing to review all the ownership claims (including all evidence the interested parties provide for the court's (judge's) consideration).  After reviewing the evidence, the judge will announce (make a ruling) as to who owns which legal rights (sticks in the bundle).  This ruling will be recorded with the register of deeds and from that time forward, that decision will be the basis for determining the ownership of that land.

    A quiet title action can be expensive so it is not used unless necessary, but it is the process by which our legal system documents that someone has acquired an interest in a tract of land by adverse possession or prescription.  For example, the adverse possessor will provide the court with evidence that the land has been used for 20 years without permission of the owner (as well as evidence that all the elements of adverse possession have been met).  If the judge is convinced that the evidence credible and that all the requirements for adverse possession have been met, the judge will rule that the adverse possessor now has an ownership interest in the land.  The public record will then be updated to document that the adverse possessor has an ownership interest.


  • Excerpt by Robert P. Achenbach, Jr., Agricultural Law Update 23:9, September 2006. ADVERSE POSSESSION -- CEMETARY. The plaintiff's predecessor in interest had sold a portion of a farm but reserved a two-acre parcel for use as a cemetery. The parcel was sold to subsequent buyers until the defendants purchased a portion of the original parcel which included the cemetery. None of the deeds in the subsequent sales mentioned the reservation of the cemetery but the deeds did reference earlier deeds. The owners of the main parcel [defendants] had farmed the land up to about 30 feet of the cemetery and had cut the weeds and brush in the cemetery. No burials had taken place in the cemetery after 1946. The plaintiff sought to quiet title to the cemetery and the defendant claimed title by adverse possession. The plaintiff argued that the defendant did not meet the test of exclusive possession because the cemetery was occupied by the graves. The court rejected this argument as without precedent and upheld the jury verdict for the defendant's acquisition of title to the cemetery by adverse possession. Jernigan v. Herring, 2006 N.C. App. LEXIS 1901 (N.C. Ct. App. 2006). End of excerpt. See



  • If no one else owns the property or the property interest, the state becomes the owner. N.D.C.C. §47-01-10.
  • U.S. Supreme Court decision that may be of interest -- Delaware v. New York, 507 U.S. 490 (1993).
    • Note that this case illustrates that property does not "end up without an owner" only when someone dies without heirs; property also escheats when owners forget that they own some property, such as a forgotten bank account or investment fund.
    • Note that this case was "tried" before the U.S. Supreme Court. This is the only court that can hear a case that involves states suing each other. Otherwise, the U.S. Supreme Court rarely "tries" a case; instead, it primarily serves as an appellate court.
  • In North Dakota, property that escheats to the state is used in support of education. N.D.C.C. §15-01-02(1)(b).


The principles of adverse possession and escheat are intended to clarify the ownership of property rights, which in turn, maintains the marketability of land and assures it is available for economic use.  If the ownership of land is not clear, people are likely to not use it or improve it because they do not know whether they will still have the land in the future (thus risk not having an opportunity to recover their investment).  Accordingly, legal mechanisms to clarify ownership of land are important in encouraging investment and economic use.


Abandonment of other property rights:

  • Also see N.D.C.C. chapter 38-18.1 wherein "Any (severed) mineral interestis, if unused for a period of twenty years ... deemed to be abandoned, unless a statement of claim is recorded in accordance with section 38-18.1-04. Title to the abandoned mineral interest vests in the owner or owners of the surface estate in the land in or under which the mineral interest is located on the date of abandonment."

    See Spring Creek Ranch v. Svenberg, 1999 ND 113, 595 N.W.2d 323

  • Also see N.D.C.C. §§61-04-23 When an appropriator fails to apply water to a beneficial use or ceases to use it for a beneficial use for three successive years, the state engineer may declare the water permit forfeited, unless the failure to use the water was due to unavailability of water, a justifiable inability to complete the water works, or other good and sufficient cause. After forfeiture, state government is authorized to reappropriate the water right to another user based on the normal legal process of appropriating water rights and granting water permits.


Eminent Domain

  • Authority granted to governmental units and certain public utilities allowing them to force individual to sell land for use by the public (government) or utility.
    • N.D.C.C. chapter 32-15
    • Eminent domain is not authorized in the Constitution, nor is it explicitly prohibited.  Therefore, it could be described as implicitly permitted.  Thereafter, statutory laws were enacted to explicitly authorize government (and others) to use eminent domain to acquire property for public use.  However, the Constitution does explicitly require that when eminent domain is used (that is, private property is taken), the property owner must be compensated.
  • The proposed use must be a public or beneficial use.
    • "Eminent domain is the right to take private property for a public use. N.D.C.C. §32-15-01(1). Private property cannot be taken for a public use without payment of just compensation to the owner. N.D. Const. Art. I, § 16; N.D.C.C. § 32-15-01(2). Before an authorized entity may take private property for public use, the proposed use must be authorized by law and the taking must be necessary for the public use. N.D.C.C. §32-15-05." City of Medora v. Golberg
    • June 2005 -- US Supreme Court decided Kelo v. New Londonaddressing public use.
      • "the city has invoked a state statute that specifically authorizes the use of eminent domain to promote economic development. Given the plan’s comprehensive character, the thorough deliberation that preceded its adoption, and the limited scope of this Court’s review in such cases, it is appropriate here ... to resolve the challenges of the individual owners, not on a piecemeal basis, but rather in light of the entire plan. Because that plan unquestionably serves a public purpose, the takings challenged here satisfy the Fifith Amendment."
  • A property owner is entitled to be justly compensated(that is, paid the fair market value) for property that is taken. This statement means:
    • The owner must be compensated for all property that is actually taken for the public use.
    • A landowner also is compensated for the reduction in value of the owner's remaining property especially if the remaining tract is small and difficult to use because it has been severed (that is, it is now separated) from the owner's other remaining land.
    • Landowner, however, are generally NOT compensated for consequential damages resulting from the public use of the land that has been taken, such as noise and odors from a new road.
  • Some states offset the amount of damages (that is, the amount of payment to the land owner) by the amount that the owner's remaining land increases in value due to the public use; see N.D.C.C. §32-15-22(4). This helps reduce the cost to the public entity that is acquiring the land through eminent domain.
  • The public entity can acquire title or an easement (an easement is the right to use property).
  • The public entity has a duty to negotiate with owner and submit a written offer to the landowner. Rejecting the offer entitles the public entity to initiate a condemnation proceeding in court.
  • A situation where an individual can exercise eminent domain:
    • N.D.C.C. 61-01-04. "The United States, or any person, corporation, limited liability company, or association may exercise the right of eminent domain to acquire for a public use any property or rights existing when found necessary for the application of water to beneficial uses ... "


Inverse Condemnation

There have been situations where government action has "taken" an individual's property but the government did not perceive the action to be a "taking" and therefore had not compensated the property owner. The legal concept of inverse condemnation allows an uncompensated individual whose property rights have been taken to initiate a legal action to demand payment for the "taking."

  • Inverse condemnation is a court proceeding initiated by property owner rather than condemnor -- as the name implies, the process feels like "it is upside down."  Inverse condemnation is a common law (court-made) remedy.
  • Inverse condemnationarises when a public entity engages in an activity which amounts to a taking of private property without permission of the owner or an effort by the taking entity to compensate the owner.
    • " The purpose of an inverse condemnation action is to allow a landowner whose private property has been taken for public use to secure the just compensation which he should have received in proceedings instituted by the public entity under Chapter 32-15, N.D.C.C., prior to the taking or damaging of the property." Arneson v. City of Fargo, 331 N.W.2d 30 (N.D. 1983).


  • The concept of inverse condemnation recognizes that property can be "taken" through possession, interference, and regulation.
    • Example of physical interference -- "[the landowners] proceeded on a theory that the Defendants, through the construction and use of the Sheyenne River Diversion Project, caused a permanent taking of a flood easement upon the Arneson farmland entitling the [landowners] to compensation for the diminution in value of the farmland resulting from that taking." Arneson v. City of Fargo, 331 N.W.2d 30 (N.D. 1983).
      • Another example -- regulationsthat eliminate nearly all economic value, in some situations, have been often considered a "taking."
        • Word of caution -- this topic requires consideration of an even more abstract legal idea; that is, a law (e.g., a government regulation) may be a "taking" entitling the property owner to be compensated. For example, a regulation prohibiting me from burying nuclear waste on my land "takes" a "stick from my bundle of rights." Am I entitled to be compensated because the government has "taken" this legal right from me?
        • Let's review -- a regulation imposed through the proper exercise of police power is not a "taking."
          • Police power can be exercised to promote the safety, health and general well-being of society. Zoning is an example of police power.
          • It certainly appears that it is in the public interest to regulate/control where nuclear waste is buried. So that example appears to be a proper exercise of police power not entitling landowners to be compensated.
  • Restated, when are regulations that restrict property rights an exercise of police power and when do they become a taking that requires compensation or elimination of the regulation?
  • The general answer is "if the regulation leaves the property without economic value, the regulation has gone beyond being a proper exercise of police power and has become a taking that requires the landowner to be compensated.


  • When does a property right no longer have an economic value? When does a regulation that restricts individual liberties extend beyond "proper exercise of police power?"
  • The following US Supreme Court decision offers some ideas on this difficult question.


    • Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992) (USSCt)
      "In 1986, petitioner Lucas bought two residential lots on a South Carolina barrier island, intending to build single-family homes such as those on the immediately adjacent parcels. At that time, Lucas' lots were not subject to the State's coastal zone building permit requirements. In 1988, however, the state legislature enacted the Beachfront Management Act, which barred Lucas from erecting any permanent habitable structures on his parcels. He filed suit against respondent state agency, contending that, even though the Act may have been a lawful exercise of the State's police power, the ban on construction deprived him of all "economically viable use" of his property, and therefore effected a "taking" under the Fifth and Fourteenth Amendments that required the payment of just compensation. See, e.g., Agins v. Tiburon, 447 U.S. 255, 261. The state trial court agreed, finding that the ban rendered Lucas' parcels "valueless," and entered an award exceeding $1.2 million. In reversing, the State Supreme Court held itself bound, in light of Lucas' failure to attack the Act's validity, to accept the legislature's "uncontested . . . findings" that new construction in the coastal zone threatened a valuable public resource. The court ruled that, under the Mugler v. Kansas, 123 U.S. 623, line of cases, when a regulation is designed to prevent "harmful or noxious uses" of property akin to public nuisances, no compensation is owing under the Takings Clause regardless of the regulation's effect on the property's value.

      "1. ...
      "2. ...
      "(a) Regulations that deny the property owner all "economically viable use of his land" constitute one of the discrete categories of regulatory deprivations that require compensation without the usual case-specific inquiry into the public interest advanced in support of the restraint. Although the Court has never set forth the justification for this categorical rule, the practical -- and economic -- equivalence of physically appropriating and eliminating all beneficial use of land counsels its preservation. Pp. 1014-1019 .
      "(b) ...
    • "(c) Rather, the question [of whether the landowner is to be compensated] must turn, in accord with this Court's "takings" jurisprudence, on citizens' historic understandings regarding the content of, and the State's power over, the "bundle of rights" that they acquire when they take title to property. Because it is not consistent with the historical compact embodied in the Takings Clause that title to real estate is held subject to the State's subsequent decision to eliminate all economically beneficial use, a regulation having that effect cannot be newly decreed, and sustained, without compensation's being paid the owner. However, no compensation is owed -- in this setting as with all takings claims -- if the State's affirmative decree simply makes explicit what already inheres in the title itself, in the restrictions that background principles of the State's law of property and nuisance already place upon land ownership.
    • "(d) Although it seems unlikely that common law principles would have prevented the erection of any habitable or productive improvements on Lucas' land, this state law question must be dealt with on remand. To win its case, respondent cannot simply proffer the legislature's declaration that the uses Lucas desires are inconsistent with the public interest, or the conclusory assertion that they violate a common law maxim such as sic utere tuo ut alienum non laedas, but must identify background principles of nuisance and property law that prohibit the uses Lucas now intends in the property's present circumstances."


  • We stated (during other discussions in this course) that one cannot transfer property rights they do not own. Note in paragraph (c) of the Lucas syllabus that the state does not have to compensate you for rights it "took" before you became owner. Therefore the question becomes "did the state take the right (that you claim was taken) before you became owner of the land;" if yes, you are not entitled to be compensated for the taking because you should have accounted for the lack of that right in the price you paid for the property.


  • A regulation that is determined to be a "taking" must either be eliminated or the person whose rights have been taken has to be compensated. The agency that was engaged in the "taking" then has to decide whether to 1) discontinue its effort to regulate the activity, 2) modify its regulation so it would no longer be a taking (but instead would be a proper exercise of police power), or 3) compensate the person whose rights have been taken. If many people are affected by the "taking," certainly the cost of compensating the affected persons becomes a consideration in the agency's decision on how to proceed.
  • An example of a developer arguing that a city has "taken" the developer's property rights (excerpt from Fargo Forum, May 29, 2014): 
    • "In a years-long legal dispute with the Fargo City Commission over land, a residential developer says it feels a bit like Charlie Brown. And the city, the developer alleges, is Lucy. In a series of lawsuits, Highland Park Properties LLC has claimed the city pulled away the football – three plots of land north of Fargo controlled by the City Commission the company purchased for future development.  After receiving initial approval in 2006 from the city to build, the commission in 2012 passed a setback ordinance – essentially “do-not-build” zones – along the Red River. Highland Park Properties alleges that amounted to taking its land away. Earlier this year, the developer sued the city for the second time, claiming the ordinance – and the commission’s decision not to give it a waiver from the set-back ordinance – deprived Highland Park Properties of all reasonable economic use of its property."


Summary of Key Points

  • Property rights transfer by means other than a buy-sell agreement. They also transfer as an inheritance, a gift, through adverse possession and prescription, by escheat, and eminent domain.
  • Heirs are identified in the property owner's will or by the intestate succession law if the property owner did not have a will specifying an heir for the property.
  • The recipient of a gift must be aware of the gift and begin acting as the owner in order for the gift to be considered complete; that is, the sticks in the bundle of rights have transferred.
  • If a property owner does not stop a trespasser, the law may grant the trespasser legal rights in the property if the trespass continues for an extended period of time.
    • Property owners must act like the owner to retain their ownership; this includes taking action to remove trespassers.
  • If no one else owns the property, the state will assume ownership.
    • The law presumes that it is in society's best interest to have our natural resources put to use, that the owner is the individual entitled to use the property, and the law will identify an owner if ownership is not clear; hence the legal concepts of adverse possession and escheat.
  • Even though property owners can be required to sell their land for a public purpose, they are entitled to be compensated.
  • A government regulation may amount to a "taking" if the regulation has gone beyond "a proper exercise of police power."


The next topic is creating and terminating easements.

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