Also known as: property rule
Written by attorneys · grounded in primary & secondary sources — see below
A body of substantive rules governing interests in property whose purpose and connection to the thing and parties a court weighs when identifying the state of most significant relationship for choice-of-law purposes.
Piper Patel, a State A shipping firm, bought coastal land in State B under a contract naming State A law. Jeremy, a State B oyster operator, claimed a prescriptive easement from decades of use. The court examined the purpose of each state's property rules on servitudes and the parties' ties to the land, concluding that State B's rules controlled because the physical use occurred entirely there.
Phoebe Park held land crossed by an abandoned rail corridor located in State A. The United States asserted a retained reversionary interest under federal law while Park claimed the easement ended under State B common-law property rules. The court weighed each sovereign's purpose in its rules and the parties' ties to the land to decide which state's property rules supplied the applicable law.
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Pierce Patterson owned oceanfront lots in State A whose dry-sand area the state sought to enlarge through beach renourishment. Patterson argued the project altered established property rules on accretion under State B law. The court assessed the purpose of each state's rules and the parties' connections to the land to determine which property rules governed the ownership question.
Paige Porter leased an apartment in State A to Pedro Pacheco for two years. Pacheco vacated early and stopped paying rent. Porter sued for the full remaining term without attempting to relet. The court applied the purpose of each state's property rules on surrender and mitigation and the parties' ties to the premises to decide which law controlled recovery.
A court identifies the state of most significant relationship by weighing the purpose of each interested state's property rules and the relation of that state to the land and the parties. The state where the land sits usually has the strongest interest when the rule concerns local use or alienation limits.
The interest of a state in applying its rule depends on what the rule is designed to achieve and how closely the state is connected to the land and parties. A rule limiting suspension of alienation, for example, gives the situs state a clear interest that a rule restricting charitable bequests may not.
Courts are not required to decide every issue under the law of a single state. Each issue receives separate consideration when the potentially interested states would resolve it differently under their own property rules.
For immovables the reference is to the totality of the law of the situs state, including its choice-of-law rules, so that the forum reaches the same result a court of the situs would reach.
…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,…