Judicially Created Property Rights; Art Update

The Court of Appeal recently provided a reminder that the courts can and will use their powers of equity to fashion interests in land belonging to another. In Tashakori v. Lakis, the owners of a landlocked undeveloped lot brought an action for rights of ingress and egress over a shared driveway on their neighbor’s property so they could access their property from the street. (196 Cal.App.4th 1003). The Court of Appeal upheld the lower court’s decision to create an equitable easement across a portion of the Lakises property, in this case the “burdened owner”, on behalf of the Tashakoris, or the “benefitted owner”.

The Test

The court applied a three part “relative hardship” test to determine whether an equitable easement would be created in this instance, without the burdened owner’s approval:
First, the benefitted owner must be innocent. More specifically, his or her encroachment must not be willful or negligent. Here, the benefitted owner made a diligent and good faith effort to determine whether their lot had an easement to access the street. The court determined that the benefitted owner reasonably relied on inaccurate representations by the real estate broker and prior owner that such an easement existed benefitting their property.

Second, unless the rights of the public would be harmed, the court should enjoin the encroachment if the burdened owner would suffer irreparable injury regardless of the injury to the benefitted owner. Here, the burdened owner never used the shared driveway and did not pay for the upkeep of the driveway. Furthermore, the shared driveway was used for ingress and egress by two other single family residences. Therefore, the court said that use by one additional family (the benefitted owner) would not provide a significant burden on the land on which it was located.

Third, the hardship to the benefitted owner must be greatly disproportionate to the hardship caused to the burdened owner by the continuance of the encroachment and this fact must be proved by the benefitted owner. In this case, the benefitted owner proved they would be irreparably harmed because their lot would essentially be unusable as they would not be able to legally walk onto their own land.

No Damages?

The burdened owner not only appealed the decision granting the easement itself, but also the lower court’s decision not to award any damages to the burdened owner for granting such a property right to the benefitted owner. The Court of Appeal acknowledged that typically when the court creates an easement, the burdened owner is normally entitled to damages. However, in this case the burdened owner did not demonstrate that their property would suffer any diminishment in value as a result of permitting the benefitted owner to use their shared driveway to access the benefitted owner’s property.

The Holding

The Tashakori decision highlights that the courts will use their equitable powers to create property rights in lands of another, by weighing the level of harm to the parties. Furthermore, the courts will not necessarily compensate the burdened owner, unless such party can demonstrate actual damages. As San Francisco properties can have easements burdening and benefitting them, or more often than not no easements in place but a clear need to have access to a neighbor’s property (for example to do repairs or maintenance on a property where there is no side yard and the building is built to the property line), this case makes it clear that if necessary courts are willing to impose burdens on properties over the objection of their owners.

Art Update

The Planning Commission voted unanimously last week to recommend approval of the Chiu/Lee ordinance with the changes recommended by staff. Staff recommendations included elimination of art commission review for art included in development projects. They also make clear that any in lieu fee is an option to be exercised by developers, i.e. not mandatory. The Mayor and Sup. Chiu agreed to the changes.

Staff also recommended that the fee be expanded to commercial developments over 25,000 s.f. in the Eastern Neighborhoods and South of Market districts. Representatives of the Mayor, Sup. Chiu, and the Arts Commission said they wanted time for more outreach before moving forward with this component. The Commission did not formally recommend the wider fee be included, but “strongly recommended that the Board consider” including a citywide art requirement that would apply to both residential and commercial developments larger than 25000 sq. ft.

The issues discussed in this update are not intended to be legal advice and no attorney-client relationship is established with the recipient. Readers should consult with legal counsel before relying on any of the information contained herein. Reuben & Junius, LLP is a full service real estate law firm. We specialize in land use, development and entitlement law. We also provide a wide range of transactional services, including leasing, acquisitions and sales, formation of limited liability companies and other entities, lending/workout assistance, subdivision and condominium work.

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