Also known as: property rights · proprietary right
Written by attorneys — see sources below.
A legally enforceable interest in tangible or intangible property that is protected against interference by others. The interest may arise from ownership, possession, or a vested right to continue or complete a use of land. It supplies standing to sue for invasions such as private nuisance and limits government power to eliminate established uses without compensation or a reasonable phase-out period.
Philip Powell operated a small machine shop on land zoned industrial when the city later rezoned the area residential. The city ordered immediate closure. Powell continued operations because the shop was a lawful nonconforming use. The city could not eliminate the use without first satisfying the requirements for abandonment or a reasonable amortization period.
Perry Pratt leased farmland and a farmhouse from the owner. An adjacent hog operation released dust and odors that made living and working on the leased property unpleasant. Pratt sued the operator for private nuisance. The operator moved to dismiss on the ground that only the fee owner could sue. The court denied the motion because Pratt held a possessory property right in the land that nuisance law protects.
Parker Phillips was a well-known local athlete. A beverage company used his name and likeness in an advertising campaign without permission. Phillips sued for misappropriation. The company argued that no property interest existed because the use was not defamatory. The court held that Phillips possessed a property right in the commercial value of his identity that the unauthorized exploitation violated.
Pedro Pacheco obtained a building permit and began constructing a commercial structure under the existing zoning. After substantial foundation work and material purchases, the city rezoned the parcel to prohibit the project. Pacheco sought to complete construction. The city could not revoke the permit because Pacheco had acquired a vested property right through good-faith reliance and substantial expenditures.
Pearl Porter owned a billboard that became nonconforming after a zoning change. The ordinance allowed five years to remove or convert the sign. Porter challenged the requirement as an immediate taking. The court upheld the ordinance because the five-year period was reasonable given the modest investment and the public interest in eliminating the use.
Prism Analytics owned Grand Central Terminal. New York City designated the building a landmark and denied permission to build a large office tower above it. The company claimed the restrictions destroyed valuable property rights. The Court examined whether the regulation went too far by analyzing the economic impact, interference with investment-backed expectations, and the character of the government action.
In 1965 New York City enacted the Landmarks Preservation Law, which created an eleven-member Landmarks Preservation Commission and authorized it to designate buildings at least thirty years old that possess special historical or aesthetic interest. The law required owners of designated landmarks to obtain Commission approval before altering exterior architectural features and imposed an affirmative duty to keep those features in good repair. In August 1967 the Commission designated Grand Central Terminal a landmark and the city tax block it occupies a landmark site; the Board of Estimate confirmed the designation the following month. Penn Central Transportation Co. and its affiliates owned the Terminal, an eight-story Beaux-Arts structure completed in 1913 that served as the main station for the New York Central and Harlem lines. On January 22, 1968, Penn Central entered a fifty-year renewable lease with UGP Properties, Inc., under which UGP agreed to construct a multistory office building cantilevered above the Terminal and to pay Penn Central at least three million dollars annually after construction. Penn Central and UGP submitted two plans prepared by architect Marcel Breuer: Breuer I, a fifty-five-story tower resting on the Terminal roof, and Breuer II Revised, a fifty-three-story building that would have removed part of the 42d Street facade. After four days of hearings at which over 80 witnesses testified, the Commission denied this application as to both proposals. Penn Central filed suit in New York Supreme Court, Trial Term, seeking a declaratory judgment, injunctive relief, and damages for a temporary taking. The trial court granted the injunctive and declaratory relief. The Appellate Division reversed, holding that Penn Central had failed to prove deprivation of all reasonable beneficial use. The New York Court of Appeals affirmed, concluding that the Terminal could still earn a reasonable return and that transferable development rights provided significant compensation. The Supreme Court noted probable jurisdiction.
View caseOnly persons who hold property rights or privileges in the use and enjoyment of the affected land may sue. That category includes owners, tenants in possession, and holders of easements. A person who merely lives nearby without a possessory interest lacks standing.
A landowner acquires a vested right when, in good-faith reliance on a permit or existing zoning, the owner makes substantial expenditures or otherwise changes position so that denying the right would be inequitable. Jurisdictions differ on whether a valid permit plus substantial construction is required or whether a balancing test applies.
No. The owner generally holds a vested right to continue a use that was lawful when established. The right may be lost only through abandonment, discontinuance for the statutory period, or, in some jurisdictions, a reasonable amortization ordinance.
No. Under the Model Business Corporation Act a shareholder has no vested property right resulting from any provision in the articles of incorporation or bylaws, including those concerning purpose, management, or capital structure.
Footnotes : The court below seemed to think that the frontage of this property on Euclid Avenue to a depth of 150 feet came under U-1 district and was available only for single family dwellings. An examination of the ordinance and subsequent amendments, and a…