Also known as: property rules
Written by attorneys · grounded in primary & secondary sources — see below
A rule of property law whose underlying purpose is weighed when choosing which state's law governs an issue involving property interests. The interest of any state in having its rule applied turns on that purpose and on the state's connection to the thing and the parties.
The Green River Conservancy claims a perpetual conservation easement over riverfront land in State B under an agreement made with a prior owner. Current owner Lopez sues in State B court to invalidate the easement. The court weighs the purposes of each state's property rules and the states' respective connections to the land and parties before selecting the governing law.
Stop the Beach Renourishment challenges a state court's decision that altered longstanding beachfront property boundaries. The owners argue the ruling effectively transfers their dry-sand rights without consent or compensation. The Court examines whether the judicial change violates the Takings Clause by overriding the owners' ability to set terms for their land.
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The Brandt trust holds land crossed by an abandoned railroad right of way. The United States claims a retained reversionary interest that survived the railroad's abandonment. The trust contends that common-law property rules extinguished the easement upon abandonment, restoring full title without any further transfer.
Landlord Sommer sues former tenant Kridel for unpaid rent after Kridel abandoned the apartment. Kridel argues the landlord failed to mitigate by not seeking a replacement tenant. The court decides whether traditional property rules or ordinary contract principles govern the landlord's remedial options.
A property rule is evaluated by its purpose and the relation of each interested state to the property and parties. A liability rule is not at issue. The Restatement focuses on which state's property rule applies under the most-significant-relationship test.
Supporting sources
Courts do not choose between property-rule and liability-rule protection under the Restatement. Instead they determine the state of most significant relationship by examining the purpose of each state's property rule and that state's connection to the thing and the parties.
Supporting sources
The Restatement section states a principle applicable to all things and all interests in things. It therefore covers both immovables and movables. The analysis focuses on the purpose of each state's rule and the relation of the states to the thing and the parties regardless of the type of property involved.
The purpose sought to be achieved by each state's property rule is a central factor in determining the state of most significant relationship. A state where land is located has an obvious interest in rules that limit the period of inalienability. The same state may have little interest in rules that restrict charitable bequests when all parties are connected to another state.
…contract principles in other conflicts between landlord and tenant there is no sound reason for a continuation of a special real property rule to the issue of mitigation. [138 N.J. Super. at 273-74; citations omitted] We granted certification. 70 N.J. 145 (1976). II As the lower courts in both appeals found,…