Waste (law)

Waste is a term used in the law of real property to describe a cause of action that can be brought in court to address a change in condition of real property brought about by a current tenant that damages or destroys the value of that property. A lawsuit for waste can be brought against a life tenant or lessee of a leasehold estate, either by a current landlord or by the owner of a vested future interest. Please note, however, that the holder of an executory interest has no standing to enforce an action for waste, since his future interest is not vested.

There are three kinds of waste under the law:
#"Voluntary waste" (sometimes called "affirmative waste") is any structural change made to the estate that intentionally or negligently causes harm to the estate or depletes its resources, unless this depletion is a continuation of a pre-existing use. Some jurisdictions follow what is called the open mines doctrine, which permits continued excavation from any mine on the property that is already open, but prohibits the opening of new mines. However, the majority of jurisdictions now follow a doctrine that allows "any" activity necessary to continue the exploitation of a particular resource, if the land has already been used for that purpose.
#:Example: If there is a copper mine on the land, the current tenant can continue the mining operation to the point of extracting all available copper. If there were no such mine there originally, excavating property would constitute waste.
#"Permissive waste" is failure to maintain the estate, both physically and financially. Rather than requiring some bad act on the part of the tenant, this requires a failure to make ordinary repairs, pay taxes, or pay interest on the mortgage. If the property is owned under a lease which places the burden of making physical repairs on the landlord, the tenant still has a duty to report the need for such repairs to the landlord. For the owner of a life estate, the tenant's obligation is limited to the amount of income derived from the land (if it is being put to commercial use), or to the reasonable rental value of the land (if it is being used as the life tenant's residence). The tenant is under no obligation, however, to buy insurance for the property.
#"Ameliorative waste" is an improvement to the estate that changes its character, even if the change actually increases its value. Under English common law, where ameliorative waste has occurred, the interested party can recover from the tenant the cost of restoring the land to its original condition. This is based on traditional common law jurisprudence presuming that the grantor intended the property to be kept in its original condition. If a tenant tears down an old house on the property, and replaces it with a factory, then the landlord future interest holder can sue for the destruction of the original character of the estatendash even if the factory is worth much more. In the United States, damages for ameliorative waste are generally not given, especially if the improvement to the property is likely to last a long time. The policy behind this change in common law is to encourage improvements and economic development, even at the cost of historical change.
#:There is an exception to this doctrine where a long-term tenant makes a change that increases the value of the property in a way that "reflects a change in the nature and character of neighboring properties". If a tenant tears down a house and builds a factory on property in an area where residences have generally been replaced with industry, the tenant will not be liable for waste.

#"Equitable Waste", under English and Australian law, is waste that a life tenant has a right to commit at common law, but will be restrained by a court of equity. This doctrine fits under the broader framework of equity, where a legal right to do something is not so without restraint that the right may be abused. A life tenant who is granted an estate "without impeachment of waste" (may not be sued for waste) can not commit acts of flagrant destruction which is inconsistent with the fruitful use of the land. For example, a mansion may not be stripped of its glass, timber or pipes ("Vane v Lord barnard"), nor can trees of an ornamental value be cut down by the life tenant ("Turner v Wright").

Remedies for waste

Where a court finds that a tenant is engaging in waste, there are a number of possible remedies which can be taken:
#The court may award "money damages" in an amount sufficient to compensate the injured party for the loss resulting from the waste.
#The court may directly require the party responsible for the waste to restore the property to its original condition.
#The court may "accelerate" the passage of title in the land, divesting a tenant or life estate holder of the property and vesting it in the landlord or remainderman.The U.S. state of Kentucky has a particularly harsh remedy for voluntary waste. There, a person found to have committed voluntary waste without the written permission of the holder of the future interest is forced to pay treble damages to the holder of the future interest, and his or her present interest (whether a life estate or a lease) is automatically terminated. [Kentucky Revised Statutes Annotated § 381.350 (2006).]

The U.S. state of Missouri also has two statutes that prescribe a harsh remedies for waste. There, a person found to have committed voluntary waste without the written permission of the holder of the future interest holder is forced to pay treble damages. In some cases, the plaintiff has been able to recover triple damages twice--once for voluntary waste and again for wantonly committed waste. [Missouri Revisited Statutes 537.420; 537.490 (for wantonly committed waste)]

If the plaintiff can show that the defendant is currently engaged in voluntary or permissive waste of the land, the court may enjoin the activity complained of; however, courts are reluctant to enjoin ameliorative waste unless the property being destroyed has some unique historic value.

References


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